Novavax Inc (NVAX) 2013 Q4 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Novavax fourth-quarter and year-end earnings conference call.

(Operator Instructions ).

I would like to remind everyone that this conference call is being recorded.

I would now like to turn the call over to your host for today's conference, Mr. Buck Phillips, Chief Financial Officer. Sir, you may proceed.

Thank you. Good afternoon. This is Buck Phillips, Chief Financial Officer of Novavax, and I would like to thank everyone for joining today's call to discuss our fourth-quarter 2013 financial results. Today's earnings release is currently available on our website at Novavax.com, and an audio archive of this conference call will be available on our website later this evening.

Joining me on today's call is Novavax's President and Chief Executive Officer, Stan Erck, and Novavax Senior Vice President of Research and Development, Doctor Greg Glenn, as well as other members of our executive team.

Before we begin our prepared remarks, I need to remind 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-related matters, including expectations regarding revenue, operating expenses, cash usage, and clinical developments and anticipated milestones, are 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.

I will now turn the call over to Stan Erck, President and CEO.

Thanks, Buck, and good afternoon, everyone.

We will be following our standard earnings call format today. I will begin with a few remarks to review recent developments and business highlights, and then I will turn the call back over to Buck to go over the financials. We will then open the line to take any questions you have.

So starting with 2013, Novavax made substantial progress. Our vaccine pipeline took major steps forward, with multiple clinical vaccine programs demonstrating proof of concept and high levels of immunogenicity. Notably, we reported data from to two RSV F vaccine trials during the year; one in 330 women of childbearing age, and the other in 220 elderly adults.

To remind everyone, both of these trials demonstrated the safety of our vaccine candidates and both resulted in post-vaccination anti-body levels which are several-fold level of antibody that would be predicted to be protective. The results represent a breakthrough and encourage us to move ahead with the RSV vaccination programs for the maternal immunization, pediatric, and elderly indications in 2014.

During 2013, we were also able to demonstrate our platform's capabilities with regards to pandemic preparedness. In April, less than 10 days after Chinese health authorities announced an outbreak of H7N9, we were able to commence production of a recombinant vaccine, and shortly thereafter, initiate a clinical development program for it, the first in the world to do so.

By July, the first doses of our H7N9 vaccine were injected in humans. Our vaccine proved capable of producing levels of antibodies that predict protection following vaccination, and we were proud to see these results available online in November and published in the December 26, 2013 edition of the New England Journal of Medicine. This is the first and, to date, the only published data showing the ability to produce protective antibody levels against H7N9 in a high percentage of the population.

On the strategic front, Novavax further expanded it's platform during 2013 with the completed acquisition of Isconova, now referred as Novavax AB. This acquisition brought in a novel safanin-based vaccine adjuvant technology, Matrix-M, which has been a natural and highly complementary fit for our recombinant vaccine platform. While Novavax has initiated it's H7N9 clinical trial using Matrix-M, I should remind everyone that the US-based biotech company Genocea reported the successful use of matrix-M with their HSV-2 vaccine candidate in a Phase I/II trial under a US IND in 2013.

Also in 2013, our capital position has improved considerably. We ended the year with more than $130 million in cash, due in large part to a successful secondary offering of $100 million that took place this past fall.

Now, looking ahead to 2014, we believe this year holds the potential for even greater strides forward as a leader in recombinant vaccine development. We've already made some important progress during these first few months. Last month, we were happy to announce that our influenza contract with HHS BARDA, along with its access to $97 million in funding, was extended beyond the original termination date of February 2014.

And also, and new this morning, we are announcing the initiation of a Phase I/II clinical trial of our H7N9 avian influenza VLP vaccination candidate and our Matrix -- using the Matrix-M adjuvant technology. This trial will enroll 610 healthy subjects to evaluate safety and immunogenicity response to the vaccine and adjuvant. This trial will evaluate three different dose levels of the antigen and two dose levels of the Matrix-M adjuvant.

We expect the top-line safety data and safety and immunogenicity data will be reported in the fourth quarter. This trial will lead to a dose confirmation trial in healthy and elderly adults, followed by Phase III immunogenicity trial.

We also recently further strengthened our management team, with the addition of John Trizzino as Senior Vice President, Commercial Operations. John has played key management roles at MedImmune, which manufacturers and markets FluMist and the RSV monoclonal antibody known as Synagis. He worked at ID Biomedicals, which was acquired by GSK for its flu vaccine and at Henry Schein, the largest vaccine distributor in the US. John will play a key role in the developing of our commercialization strategy for both the RSV and influenza markets.

We view this a major addition to the team. Planning and preparing the market for a new product introduction is key to a successful launch. We have confidence in our platform and the data that we have been generating. We look forward to leveraging his work as we continue to move closer to approval with our vaccine candidates.

So the other milestones we expect to reach during the year include top-line data from the ongoing Phase II clinical trial of our RSV vaccine candidate in women of childbearing age. This is currently planned for the second quarter of 2014. As I stated earlier, during the second half, we look forward to top-line data from the recently initiated Phase I/II trial of our H7N9 pandemic influenza vaccine candidate.

In the fourth quarter, we expect to initiate a Phase II trial of our RSV vaccine for the first time in pregnant women. And in addition, we expect to initiate the final Phase II trial of our novel quadrivalent seasonal influenza vaccine candidate.

And, we have not yet set a date, but expect to launch a Phase I trial of our combination vaccine this year. We believe that this vaccine will be the first pentavalent vaccine, which will contain both our RSV vaccine and our quadrivalent influenza vaccine. We're very excited by this program and look forward to reporting data from all of these trials throughout 2015.

And with that, I will turn the call over to Buck to review our fourth-quarter 2013 financial results.

Thanks, Stan.

Before I continue, as was the case last quarter, I must note that the financials I will be discussing here reflect consolidated results inconclusive of our July 2013 acquisition of Isconova AB, now known as Novavax AB. My comments today will primarily focus on fourth-quarter results. Results of the full-year of 2013 are available in the press release we issued this afternoon.

For the fourth quarter of 2013, we reported a net loss of $14.1 million, or $0.07 per share, compared to a net loss of $8 million, or $0.06 per share, for the fourth quarter of 2012. For the full year of 2013, the net loss was $52 million, or $0.31 per share, compared to a net loss of $28.5 million, or $0.23 per share, for 2012.

Novavax had revenue in the fourth quarter of 2013 of $8.7 million, as compared to $4.6 million for the same period in 2012. The increase in revenue is primarily due to the HHS BARDA amendment relating to H7N9 manufacturing and other activities, as well as the PATH amendment to support the Company's Phase II clinical trial in women of childbearing age.

Research and development expenses increased $16.3 million in the fourth quarter of 2013, compared to $9.6 million for the same period in 2012, primarily as a result of the increased costs related to the Company's RSV and H7N9 avian vaccine candidate clinical trials, along with higher employee-related costs. General and administrative expenses increased $4.1 million in the fourth quarter of 2013, compared to $2.5 million for the same period in 2012, resulting primarily from Novavax AB's expenses and higher professional fees.

As of December 31, 2013, the Company had $133.1 million in cash, cash equivalents, and investments, compared to $50.3 million as of December 31, 2012.

Finally, net cash used in operating activities for 2013 was $45.4 million, compared to $18.2 million for 2012. The increase in cash usage from the prior year was primarily due to the higher research and development spending described before, including the Company's RSV and pandemic H7N9 influenza clinical trials, as well as increased employee-related costs as we grow the Company.

This concludes my prepared remarks, and let me hand it back over to Stan.

Thanks. That's all we have for prepared remarks today and we'll turn it -- open it up to Q&A.

(Operator Instructions )

Ted Tenthoff, Piper Jaffray.

Thank you very much, and congratulations on all the progress. It's going to be an exciting year.

I wanted to touch base, if I may, first on the extension of the BARDA contract and a quick related question. Obviously, you know activity is heating up here, but what kind of funds do you still expect to receive under that initial $97 million contract? And that was extended through September of this year, is that correct?

That's correct. So the way the BARDA contract works is back in, I think it was 2009 and early 2010, we submitted a proposal for five-year research and development plan for, in this case, seasonal and avian influenza. And in that -- and so they approved it and we started the contract in early 2011, and as with any research program things change, the scope changes. We went from a trivalent to a quadrivalent. We used a new adjuvant in the program. So trying to keep track of all those changes and so -- let me back up one second.

The contract is broken in to two pieces: a three-year base period, which was predicted to be worth $97 million; and then a two-year option period to bring it to a total of $186 million. That base period was predicted to end in February of this year, and as it turns out, because of all the scope changes, that base period was -- the work wasn't going to be finished in the base period. The normal way you go about these government contracts is you get to the end of a base period, you resubmit for what's called a no-cost extension to the period in which you think you will use up all $97 million.

We've done that. The answer to your question is, is we expect to use up the entire $97 million and then move into the option period for the additional $87 million.

Excellent. That's helpful.

Related to that, reading the 2014 anticipated events, you say that the goal is to start a Phase II study with a quadrivalent VLP seasonal vaccine in the fourth quarter. Now, is that a push out?

Is that the combo that you're referring to there, or is that the Phase II for just a quadrivalent? Is there some push out considering that will start in the fourth quarter? What will those remaining $30-plus million or so for the BARDA contract go to if the Phase II quadrivalent study doesn't start until the fourth quarter?

All of the activities we are working on right now are an effort to sequence the development of this through to licensure. If you start with licensure and go back, you've got to run a Phase III program, and during that Phase III program you're going to be making your consistency lots. Before you do your Phase III program, you have got to make the lots for Phase III. So all of our -- and then we have to time the last Phase II before the flu season this year so we can begin our Phase III next year.

All of our activities are to scale up the process so that we are confident that the process that we use for this Phase II we can just turn on a dime and start manufacturing Phase III material. That's what we are using the time for. That trial should start before the flu season in the beginning of the fourth quarter.

Excellent. That's very helpful, Stan. Thank you very much.

Bill Tanner, FBR Capital Markets.

Thanks for taking the question. I have a couple of them. Maybe Stan, first one for you.

It looks like a lot of balls moving down the field on the vaccine front. I just wondered if you could touch on how you view the feasibility of moving any of or all of them through registration? And, I guess, really, thinking of it more along the lines of two dimensions; one being the development capacity that you have at the Company and if that's adequate or needs to be expanded; and secondly, as it relates to the capital that might be -- or access to capital, I guess, that would be required to do that?

Yes. So let me take the infrastructure and people part of it first, and really answer the basic question.

We have a very full plate. We've got a lot of successes. We've got, arguably, several different products coming down the platform toward licensure. We've got a quadrivalent seasonal flu; we've got a pandemic or avian influenza vaccine; we've got -- and then three different approaches to RSV in the maternal, pediatric and elderly, and it's possible that we would approach one or more of these with a combination pentavalent respiratory vaccine.

So do we have the capacity to do that? To date we do. We've got 215 people in the Company right now. I think roughly 180 or 185 those people are new within -- since I've been CEO in the last three years.

We've been building up the capability to do all the things that are required, maybe not very sexy but they are required to take a product into licensure, and that includes analytical development, process development, regulatory, clinical quality control, quality assurance and that's where are all our growth has been and it's all focused on being able to take multiple products to licensure. Inevitably, one, when you're trying to work on that many things, times tables change in one program or the other, but right now data -- clinical data drives the clinical timeline.

You also asked about capital. The reason we raise capital, the capital that we did last year, was to be able to give us the runway to get into, get through some critical clinical data points and show proof of concept in a couple of our different programs and initiate a Phase III trial -- our first Phase III trial with flu. So we have capital to do that right now and it's clear in the future we will need to add to that stockpile of capital to be able to take the products through clinical FDA licensure.

Want to add to that, Buck?

Bill, let me just add, I think if you look at our numbers in the past you will see under investing activities in the statement of cash flow, you'll see what we're spending on CapEx on an annual basis. When we talk about our cash runway, we anticipate additional investment into our manufacturing facilities, our process development facilities and equipment so you could assume that when we make statements about our cash runway we are contemplating those investments at this point in time.

Okay. And then I had a couple maybe for Greg -- I'm assuming he's there -- as it relates to the H7N9, and Stan touched on what the expectation is for it going forward into a Phase III, but maybe just describing a Phase III. I'm assuming that it is still going to be in healthy volunteers, and the extent that you view the program as being relatively de-risked since I guess you're not really going to challenge anybody with a virus.

And then maybe what -- how you view the competitive landscape and where you guys are relative to competition?

This is Stan. I'm going to turn it over to Lou Fries, who's the head of the flu program and also our Chief Medical Officer. Greg is here and he'll answer any question you want (technical difficulty)

Yes. The H7N9 program will be based on immunogenicity (technical difficulty)

You guys are pretty faint, sorry, by the way.

Is that better?

A little bit better.

(Technical difficulty) Hang on. Is it better?

A little bit.

Hang on one second, Bill. Is this better?

That's much better.

Thank you. Okay.

So H7N9 program is based on immunogenicity. You don't to efficacy with potential pandemic vaccines. So what we will do going forward is, after establishing the least dose necessary, both the antigen and the adjuvant in young adults, is to do a trial in elderly subjects, because it is important to public health authorities to cover the elderly population, and especially with a pathogen like H7N9, which has a predilection to be most lethal in the elderly population.

We will do dose finding in young adults and in older adults and then move forward with those into a Phase III trial that allows us to get a safety database several thousand subjects and also show that our immune response robustly fulfills Sievers criteria for accelerated approval and would, more importantly, make us eligible for emergency use authorization.

Our Phase I data was quite robust for H7N9, which is a notoriously difficult virus to immunize against, and I believe that we should have no difficulty in continuing to show robust immunogenicity, which is the name of the game for avian influenza.

And then at the end of the day -- and I think you anticipate a more muted immune response in the elderly -- would this to be registrable for -- would it be a viable vaccine if it was only for adults, that if the immunogenicity or the safety profile was viewed as maybe not acceptable in the elderly?

I think that there is -- first of all, with adjuvant in vaccines, generally the safety profile is usually superior in the elderly, so I don't have any particular concerns residing there. It's not uncommon for both unadjuvanted and adjuvanted influenza vaccines to have a lesser immune response in the elderly.

I would say that, in our first study, in which we enrolled individuals 18 to 64 years of age, we did look specifically at the stratum between 50 and 64, and their immune response was pretty good. Even over age 64 we have the option of adjusting the adjuvant or the antigen dose to get a better response.

You're not necessarily required to use the same formulation to address young adults and older adults, and so we would do that if necessary so that we that have a product that could provide protection in both age strata.

Okay. And then I did have -- I don't know whether it's you or maybe it's Greg -- just on the RSV. I don't know if anybody can provide any more granularity on the timing in the second quarter, but I guess more importantly really is, what would be the key data points to look for? Clearly safety is one of them, but just in terms of trying to get some better insight into other potential efficacy indicators, how should people be thinking about the data when they come out?

Hi Bill. It's Greg.

We expect to release that data in the second quarter of this year, and it's an important trial. As you know, it's important data that will allow us to go to the FDA and get permission to enter into pregnant women, so the safety data is very important here. As you know, to date we've had quite good safety and we expect that to continue.

We also will be looking at the dosing regimen very carefully and we've done, I think, a very good job of looking at, or at least designing the trial to allow us to look at immune kinetics so that we can dose the regimen during pregnancy to provide peak antibody titers for infants.

We plan on immunizing in the last trimester of pregnancy, which would span from about 28 weeks gestational age out to 40 weeks, so exactly when we immunize is going to be extremely important to decide so that we can time the immunization and get peak antibody titers. We do expect to look at the palivizumab antibodies. Once again, it's very important. We expect that we would like to reproduce the data we had before and the palivizumab, as you know, I think has a -- the levels are important. We have an indication of what would be protective and we look to maximize those, so that when infants are born they have the greatest chance of having protection in high-palivizumab-like antibodies.

This is a very key trial. We expect it to be our last trial in women of childbearing age before entering pregnant women.

Okay, great. Thanks very much.

Kevin DeGeeter, Ladenburg.

First off, I want to offer my congratulations with John. Welcome back to the team. Good to have you back. And maybe two questions on -- well, two-part question on RSV and manufacturing process development.

Can you sort of walk us through with some granularity on the key steps on scale up between now and say initiation of a potential Phase III for RSV vaccine? And just sort of your updated thoughts on a reasonable range for commercial COGS for an RSV standalone vaccine?

For RSV? Okay. So essentially the same production process as for our flu program. And then the question, just like in flu, to treat RSV is another strain and all the strains have different levels of production. Of course, there is different doses in a vaccine, so taking those two into account, how to we predict scalability and the commercial profitability on that?

In flu, as you know, the flu vaccines sell from the wholesaler at somewhere in the range of $10 to $12 per dose, and it's been a trivalent dose with the cost of goods sold and below $5 for the three doses -- for the three strains. If we treat RSV similarly, but assume that the dose is going to be higher, it will be more like a quadrivalent dose, or perhaps a six-valent dose in terms of micrograms per dose, you can get an idea of what we expect for cost of goods sold.

The production levels at the scale that we've been doing this now are higher than any of our individual flu doses. That's what we're shooting for, I'm sorry, not doses but flu strains, and so there's great potential for a standard pharmaceutical margin for an RSV vaccine.

Terrific. And maybe kind of a separate question with regard to the pentavalent respiratory vaccine.

How do we begin to think about potential regulatory endpoints and what that means for the size of potential Phase II and Phase III studies? Specifically, I'm assuming an accelerated approval under an immunogenicity end point is unlikely for a pentavalent vaccine. How to we think about the most relevant clinical endpoint and what that might mean for clinical trials?

Yes, I think I will ask Doctor Flu to talk to this a little bit.

I think the most relevant clinical endpoint for a multivalent respiratory vaccine are going to be efficacy. I think we may be able to, for example, independently show efficacy with the influenza vaccine and then build off of that to demonstrate a correlate of reduced risk which is immunologic, and then do a separate efficacy trial, which involves efficacy for RSV and immunogenicity for flu.

Alternatively, we could do a large single trial that looked at efficacy for both influenza and the RSV components. We're going to have to look at efficacy in both components of the influenza and the RSV in the combination product for sure, but whether it's most opportune to do that sequentially or in one trial, I don't think we determined yet.

Okay, great. And maybe just one point of clarification that -- do you anticipate the target population for a pentavalent vaccine being similar to the RSV elderly population or more akin to an influenza product label, including a broader continuum of age groups?

I think that the potential target population for a combination vaccine could be any of the populations that we are pursuing in the RSV spectrum. Certainly, the elderly would benefit from a vaccine that covers both influenza, which is seen as the major pathogen in the elderly, but which also covered RSV, which is a covert cause of hospitalization.

We know already that pregnant women benefit markedly from influenza vaccine, and if we could add the RSV component to that, then both mothers and infants would be likely to benefit from that, and both RSV and influenza are significant causes of morbidity in children. They have different age peaks within children, but both viruses are important in children, both in terms of causing serious illness and hospitalization and also causing relatively minor illnesses but that have tremendous economic impact based on the burden that they place on parents.

So I think a combination vaccine could be a player in any of the segments where we are looking at RSV vaccine.

Okay. Great. I appreciate the clarity. Thanks a lot. Congrats, guys.

(Operator Instructions )

George Zavoico, HC Wainwright.

Thanks for taking my question. Hi, everyone, and welcome back to John, as well.

I have a question regarding the H7N9. Tomorrow, since it is tomorrow in China already, they announced, the Chinese announced that they are preparing H7N9 vaccines seeds for mass production in case of human-to-human transmission occurs, which I suspect just means that they're getting ready to start some human testing eventually.

What is -- does Novavax have a footprint at all in China, because you're ahead of the Chinese in this regard? And along with that, you have the Korean effort going as well, so perhaps they are involved with the pandemic as well. Could you triangulate China, Korea and Maryland here, and where Novavax could roll, maybe?

Thanks, George. Let's see how to answer that question.

We've had several trips, and trips planned in the near future, to talk with various parts of China. As you know, there are a lot of different moving parts, but we've had the conversation with the Chinese FDA, the Chinese CDC and we continue to have those. I think it's, in our part, a matter of educating them as to who Novavax is and showing them the data, showing them now that we've got credibility with the US government, we've got publications in the New England Journal showing what our capabilities are, I think we would be -- they would be a potential customer, we would be a potential supplier.

I can't predict how that will go. There are Chinese companies that have been working on H7N9 with the typical -- with the traditional egg-based method and so I think we are an additional player there. Right now the current -- without an emergency need, a need for emergency-use vaccine, you have to manufacture vaccines in China to be able to distribute them in China and we've also evaluated that. We are working all the angles in China, I think. But there's also a lot of other countries that border China that I think have the problem of not having capacity to make H7N9 vaccines, and those are equally likely customers.

With respect to Korea, our partners in Korea, LG Life Sciences, have a license to both seasonal and pandemic and of course if there were a need for H7N9 vaccination they would come to us for the vaccine for the time being, and their expectation, their plan is to build a manufacturing facility in Korea to supply that market in the future, but we are the only source of that right now.

George, this is Greg.

I would like to point out, too, to date we're the only group to have published any clinical data on an H7N9 candidate. It's March; we published at the beginning of November.

I've seen various groups making claims that they have an H7N9 vaccine at various stage of development, and no doubt someone will publish, but to date there has been no peer-reviewed publication of H7N9 data. We have a very good data set.

You're easily 6 to 9 months ahead of anybody else, I presume then, at least.

That's right.

The Chinese press release that it was a genetically engineered vaccine, which I suppose that doesn't necessarily mean that it's not egg-based, right?

That's correct. That still could be an egg-based or artificially constructed strain.

Okay. Thanks for that.

Until it's actually -- until hopefully there never will be, from the health standpoint -- a pandemic HCN9 pandemic, hope it never gets to human-to-human transmission state, but right now there really is no customer for it. Or is there a plan for stockpiling, regardless of whether it's called -- who calls it a pandemic?

As I say, right now, without emergency use being demanded, our plan is to take this product under the BARDA contract through to licensure and once we have licensure, that's when BARDA could make their plans to stockpile.

BARDA, in the past eight or nine years, has stockpiled a couple billion dollars worth of vaccine. On a yearly basis, it has averaged in the $100 million to $200 million, I think, and it's difficult to predict from year to year how much BARDA plans to stockpile, so we can't predict that.

Thanks.

The final question regarding Isconova, or Novavax AB and the Matrix-M, Genocea, you said, had successful results of a trial. Are you still marketing this as a potential adjuvant to other companies and do you expect much revenue from this regard, or pretty much all your resources directed toward what you been talking about all afternoon so far?

It's part of our plan to evaluate that, but right now, we purchased Isconova for the primary purpose of having access to an adjuvant for our vaccines and that justified the entire acquisition. I think that what we found since we've acquired the company is, is that there is a store of pre-clinical data, and some clinical data, suggesting that it might have many applications and we, over the next year or so, will evaluate how to exploit that.

Perfect. Okay. Thank you very much, gentlemen.

Thank you. Bill Tanner, FBR Capital Markets.

Stan, just on the registration. I mean, it sounds pretty clear and feasible that the Company can do what is necessary for registration in the US. As you think about global registration -- and I have to confess, a bit of a neophyte in terms of what might be required by other regions, such as Europe or the rest of the world -- to what extent would it entail having a partner for that, at least just to do the registration purposes?

And then as you look farther out, to what extent would you need a partner really at all, except for maybe ex-US in terms of commercialization?

Yes. The latter question first. We'll need partners for commercialization, clearly, and I think ex-US is the obvious choice for looking for partners. It's possible we would find someone to co-market with in the US, but we haven't made that decision yet.

Going back to the registration, as part of this great group I just told you about, we have people who have registered products globally in Europe and the US. Both of our Head of Regulatory, Amy Fix and Lou Fries, have been involved in registrations outside of the US, and so we have a lot of expertise in it so we can do that. The question is the timing of when we run those clinical trials and collect the data and file the registration.

That's something we will look at over the next year or two, but we already have the team in place that can lead that effort.

But at least, as it relates to Europe, then the ability to leverage the data set from US clinical trials might be limited, or not?

I don't know why it's limited.

Okay. Thank you.

Vernon Bernardino, MLV & Company.

Congrats on the progress in 2013, and welcome, as well, to John back.

Just wanted to follow up on one of Bill's questions. I didn't quite catch if you had actually given an update as far as the competitive landscape in RSV?

I can give that to you. If I think the competitive landscape to which you're referring is the one that was sponsored under a grant by the Bill and Melinda Gates Foundation and asked PATH, which is a not-for-profit, an NGO in Seattle, to put together an RSV landscape, I think it was December of 2012, which showed, basically, that every company globally that is working on vaccines has some sort of RSV vaccine candidate program, all of which were in pre-clinical trials with two exceptions.

There was Novavax, which was in Phase II's back in December of 2012, way ahead of the industry at that point, and MedImmune, which has been working -- which has had a Phase I/II trial with an RSV vaccine, largely working in conjunction with the NIH. So we were out -- basically out there by ourselves.

I think the only update that I have right now is that GSK has registered on clinicaltrials.gov that they started a trial in August of last year with the expectation that they would report results -- I think it was at the end of this year or something like that. So it's a trial in healthy males --

Adult men.

Healthy adult men.

It's a sub-unit trial in healthy adult men. They don't really disclose -- hi, Vernon, this is Greg -- they don't really disclose the dosage or formulation, but that's where they try to start their trials, in adult men.

I never underestimate the competition, but there are two points from that landscape. One is that, that this is such an important area that everybody is working on some approach to RSV vaccination, number one. And number two, that we remain well out in front of the pack and that's largely why we've chosen to not partner the program, because we think we can progress the vaccine candidates faster through our own efforts than through partnerships.

And as a follow-up, part of my thinking is that you had GSK describe their different approaches to this market as far as RSV and so there's a bit of, if you would also agree, some market-shaping effort and so perhaps just wanted to see how you thought GSK's testing in healthy adult men, for example, for now, what is the approach to shaping this market, as far as the market opportunity?

We've mentioned the three different areas that we are going into.

We have an RSV vaccine alone. I think what we're looking to do -- and that with a novel vaccine, and the only vaccine that is approved at the time of launch, I think the market we've brought on, now, for the first time, a commercial guy to help us do all the pre-commercialization activities to prepare the market by educating the thought leaders, the KOL physician community, the insurance companies and payers, help to design an acceptable target product profile that enjoys marketing input, and then educating groups like the Advisory Committee on Immunization Practices, for instance, and that ACOG, the gynecology group, so that we can have marketing price analysis.

That the effort that we're going into right now, and take it for an RSV vaccination alone, and then factor in having a pentavalent respiratory vaccine, it takes -- it builds not only on the RSV potential demand for market but it encroaches upon this $3 billion flu market too. That's what we're going to be designing.

And bottom line, going forward, you think everyone will have to at least generate data that shows how [palivizumab] antibody generation?

I think it's possible there may be other approaches. I just would point out our approach is highly de-risked and its unique and novel to, I think, any vaccine development program where there's been an activity that's been identified, evaluated in randomized clinical trials and licensed with a level that's known to be protective.

That is completely unique, and I think we felt that, that's a important way to de-risk our programs. So at this point, we view that as, the best way forward is to follow this well-proven route for [FQ] that has, I think become -- has been a very successful product as well.

I agree. Your approach is very exciting. Thank you very much.

I am not showing any further questions in the queue. I would like to turn the call back over to the speakers for any closing remarks.

I have none. It's been a good meeting, good questions. Look forward to talking with you in 90 days. Thanks.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program and you may all disconnect. Have a great day, everyone.