Novavax Inc (NVAX) 2017 Q1 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Novavax First Quarter 2017 Earnings Conference Call.

(Operator Instructions) As a reminder, this conference call is recorded.

Now I would like to introduce your host for today's conference, Buck Phillips, Chief Financial Officer and Treasurer.

Please go ahead.

Thank you, operator.

This is Buck Phillips.

I'm the Chief Financial Officer and Treasurer here at Novavax.

Before we start our formal business, I would like to recognize Andrea Flynn, Novavax Director of Investor Relations, who's typically with us on these calls, but will be unable to join us today.

We'd like to congratulate Andrea and husband, Mark, on the arrival of their brand-new baby girl, Sydney.

Okay.

Starting the call, I'd like to thank everyone for joining us today to discuss our first quarter 2017 financial results.

A press release about earnings is currently available on our website at novavax.com.

And an audio archive of this conference call will be available on our website later today.

Joining me on today's call is Novavax President and CEO, Stan Erck; together with our President of Research and Development, Dr. Gregory Glenn.

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 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'll now turn the call over to Stan to begin today's discussion.

Thanks, Buck.

So good afternoon, everyone, and thanks for taking the time to dial-in to our call today.

As usual, I'll begin the call with an overview.

Then Greg will provide an update on our pipeline.

And then next, Buck will review our financial results.

And after that, I'll open it up to Q&A.

So first, I'd like to take a few minutes to set the tone of our communications for the rest of this year and beyond.

Starting in the third quarter of last year, following the release of our Phase III RSV trial data in older adults, we made a deliberate decision to hold back on press releases and other public communications until we were able to take the time to sort through our very large set of clinical data and exhaustive review of published literature and meetings with KOLs.

The goal of conducting this thorough analysis for the E301 trial and other previous trials is to better understand some very important questions, including: what is the impact of our vaccine on various measures of immune response and how does it differ with an adjuvant is used; what is the impact of a second those of vaccine; how do immune responses differ in older adults compared to a younger population; and through the analysis all of our RSV clinical trial samples, can we identify the factors that are useful indicators of a reduction of risk of RSV disease.

Our goal was to answer these questions and apply our learnings to the unblinding of data from our current Phase II trial in older adults, which we call our E205 trial.

I'm pleased to say that we're on track to meet or beat our commitment to announce top line results from this trial in the third quarter.

Also when we announce these data, we expect to be able to give context around the magnitude of the immune responses we see and, of critical importance, the quality of the immune responses our vaccine elicits in older adults.

We plan to announce these top line data in a conference call within the next 90 days, so that we have time to discuss the full implications of our findings with you.

Of course, we will also plan to present these data at scientific conferences over the remainder of the year and beyond, and to submit aspects of these data in peer-reviewed publications.

With this extensive analysis of our Phase III trial and with our E205 data expected soon, I am pleased and eager to be back in front of our investors and potential partners in the near future.

Before I talk about our Prepare trial, which is the global Phase III RSV clinical trial for infants via maternal immunization, I wanted to provide some preliminary information about market dynamics.

In the 3 major markets, meaning the U.S., Europe and Japan, RSV infection is the leading cause of hospitalization in infants with the greatest risk of hospitalization occurring in infants 0 to 6 months.

In the U.S. alone, there are over 1.4 million infections per year, resulting in excess of 400,000 medical interventions and an annual economic burden of over $770 million.

As you know, we expect our vaccine to be administered to all pregnant women in their third trimester.

We currently estimate our global peak revenues to be $1.5 billion just for the maternal product.

In terms of the Prepare trial and its ongoing execution, we have currently met the regulatory requirements in 10 countries around the world to conduct this trial and have been actively enrolling and vaccinating third-trimester pregnant women on an unprecedented scale.

It is our policy not to publish or comment on specific enrollment numbers or case acquisitions, but I will say here that I'm very pleased with our enrollment activities.

We have mentioned that we are working closely with the FDA, as we conduct the Prepare trial and that we recently engaged the FDA regarding the possibility of conducting an informational analysis timed around the end of 2017.

The goal would be to understand whether the Prepare trial data would provide an indication of the RSV F vaccine's potential efficacy against the trial's primary endpoint, while maintaining the trial's blinded nature.

This would give us confidence to accelerate other components of this program's development.

Our communications with the FDA have progressed and, as a result, we are preparing revised study documents that align with the FDA's recommendations related to the statistical methodology for such an analysis.

From my perspective, I'm confident that we will be able to appropriately conduct this informational analysis.

So let me turn now to the potential partnering of our RSV programs.

Last year, I told you that we had a goal to develop a global commercialization plan with a pharmaceutical partner.

We made a lot of progress in those discussions last year.

However, based on the outcome of the Phase III trial in older adults last September, these discussions were necessarily put on hold, pending further data.

Now with the analysis we've done over the last 9 months, combined with the data from the E205 trial, I expect to resume those discussions.

Our objective is to find the best partner to support the remainder of our older adult and maternal trials, and support the global commercialization effort going forward.

With respect to our RSV franchise, I would point out that we remain the leader in this very important field.

In maternal immunization, we're in a Phase III trial, while to our knowledge, no other company has even started vaccinating pregnant women with an RSV vaccine candidate.

We also continue to lead development in a vaccine for older adults.

As the industry leader in RSV vaccine development, we recognize the importance of delivering on clinical trial results that support global licensure, and are working efficiently do that and maintain our competitive advantage.

Outside of RSV, I'd like to mention that we continue to move forward aggressively with 2 vaccine programs based on our recombinant nanoparticle technology.

Versus a Zika program, the second is a novel influenza vaccine program.

Both programs have goals of initiating Phase I clinical trials later this year.

Before I turn the call over to Greg to review the pipeline in detail, I want to highlight another important component of our business, our proprietary saponin-based adjuvant, Matrix-M.

Use of Matrix-M is expanding significantly and is becoming an increasingly valuable part of our portfolio.

One example is its use in the therapeutic genital herpes vaccine being developed by Genocea Biosciences.

Genocea's HSV vaccine was recently awarded the World Vaccine Congress 2017 Industry Excellence Award for Best Therapeutic Vaccine.

And Genocea expects to enter Phase III human clinical testing in the fourth quarter of this year.

Our Matrix-M adjuvant is an important component of this vaccine, and we are pleased to be collaborating with Genocea on the continued development to support the new vaccine product.

So in addition to the Genocea trial, Matrix-M is currently, or is expected to be in the near term, involved in a number of clinical trials including our own Phase II RSV clinical trial in older adults, the E205 trial I just mentioned; our Phase I seasonal nanoparticle flu trial also in older adults; our Zika Phase I clinical trial; a one-dose rabies vaccine being developed by CPLB, which our Indian joint venture with Cadila Pharmaceuticals.

And in a recent development, researchers at the Jenner Institute at Oxford University are conducting a human challenge trial with a novel malaria vaccine candidate that uses Matrix-M as a critical component.

I note that this trial is being funded by the Wellcome Trust.

This growing body of development and clinical experience is validating Matrix-M within the industry and opening up opportunities for future collaborations and value creations.

With that, I'll now turn the call over to Greg to give more detail about our programs.

Thanks, Stan, and good afternoon to everyone on the call.

Let me begin with an update on our Prepare trial, the Phase III trial of our RSV F vaccine that's designed to demonstrate protection of infants via maternal immunization through a minimum of 90 days of life.

I'd like to remind you all that RSV is the most common cause of lower respiratory tract infections and the leading viral cause of severe lower respiratory tract disease in infants and young children worldwide.

Despite the induction of post-infection immunity, repeat infections and lifelong susceptibility to RSV is common.

And currently, there is no approved RSV vaccine available.

The Prepare trial is supported by a grant of up to $89 million from the Bill & Melinda Gates Foundation.

The Prepare trial is a randomized, observer-blinded, placebo-controlled trial that utilizes a group sequential design, offering flexibility in trial size that is responsive to the rate of endpoint event and evolving evidence of efficacy, while maintaining the integrity of the blinded trial.

The trial includes a single injection of our aluminum adjuvant RSV F vaccine given between 28 and 36 weeks of estimated gestational age.

The primary objective of the Prepare trial is to determine the efficacy of maternal immunization with our RSV F vaccine against symptomatic RSV lower respiratory tract infection, with an objective measure of medical significance in infants through a minimum of the first 90 days of life.

Participants are being recruited and vaccinated at global clinical sites based on the timing of each region's RSV season.

And the trial will include a minimum of approximately 4,600 participants.

We are in the process of completing the second year of Southern hemisphere enrollment in South Africa, Australia, New Zealand, Argentina and Chile.

Although another batch remains blinded, the trial is being monitored in an unblinded manner by the Data Safety Monitoring Board, or DSMB.

The DSMB's primary mandate is to look at evolving aggregate safety data during the trial execution.

To date, this group of 9 international pediatricians and obstetricians have met 12 times on a scheduled basis, most recently in April of 2017.

The formal recommendation made by the DSMB after review of the data at each meeting is then to continue the trial, which signals that the DSMB has no safety concerns.

Safety evaluations by the DSMB, along with enrollment, represent important milestones for the Prepare trial as we begin to initiate enrollment in the third global season.

And we know what Stan said earlier, as we have as planned, added additional global sites in U.S, Europe and the Philippines.

I'll now move on to our RSV program in older adults.

In January, we initiated a Phase II clinical trial in this population, which as Stan noted, we refer to as E205.

The objective of this trial is to assess safety and immunogenicity to 1- and 2-dose regimens of the RSV F vaccine, with and without aluminum phosphate or our proprietary Matrix-M adjuvant.

The trial is a randomized, observer blinded, placebo-controlled trial that has enrolled 300 older adults in the Southern hemisphere.

The trial is being conducted in the Southern hemisphere to avoid the ongoing RSV season in the Northern hemisphere and to ensure that the immunogenicity results from the trial are solely resulting from the vaccine and not from natural infection from circulating virus.

We expect the trial will determine the effect of adjuvantation and/or a 2-dose regimen on the quality and quantity of the RSV-related immune response in older adults.

Top line results from this study are expected in the next 90 days.

As Stan mentioned, results from this trial will be interpreted in the context of our learnings from previous -- from the previous RSV F Phase II and Phase III trials as well as ongoing epidemiology studies and significant discussions with key opinion leaders in the field.

We expect to use the E205 results in augmented epidemiology data to map our path forward.

And as Stan has also mentioned, we plan to host a conference call within the next 90 days to review these data in detail.

Now moving on to our other programs.

Regarding our Zika vaccine, we are currently conducting preclinical animal studies to establish an understanding of the potential of the vaccine to protect against infection.

And we are focused on initiating a Phase I clinical trial by the end of this year.

Regarding seasonal influenza, as you know, we are continuing to develop our recombinant nanoparticle flu vaccine.

We believe this construct will have numerous advantages over our previous VLP flu vaccine, including greater purity, stability and, importantly, the ability to stimulate broadly neutralizing antibodies.

We are developing an adjuvant formulation using our own Matrix-M adjuvant that could compete or be differentiated from licensed influenza vaccine that target older -- the older adult market.

Initial preclinical data have, developed these in our nanoparticle flu, have demonstrated the we can induce broadly neutralizing antibodies.

We plan to do this program into a Phase I clinical trial by the end of this year.

Finally, I want to briefly expand on Stan's comments about our ongoing collaborations to support the development of a malaria vaccine undertaken with Jenner Institute of Oxford University.

The investigators are leading experts in malaria vaccine and have undertaken clinical and preclinical studies with antigens discovered, manufactured and tested at the Jenner institute.

They are using Matrix-M, and it's a critical component of their candidate malaria vaccine.

They recently published promising preclinical data in the Nature Publishing Group Scientific Reports, which showed enhancement of immunogenicity and efficacy of their vaccine candidate based on the use of Matrix-M.

As a result, they progressed to a Phase II challenge trial in that study.

Along with Genocea HSV vaccine development program, these data provide additional external validation of the value of Matrix-M as an adjuvant for improving outcomes during the development of a wide array of vaccines.

Thank you, and I'll now turn the call over to Buck to review our financials.

Thank you, Greg.

Today, we announced financial results for the first quarter ended March 31, 2017.

Summary financial statements can be found in today's earnings press release.

We recorded a net loss of $43.9 million or $0.16 per share for the first quarter of 2017.

This compares to a net loss of $77.3 million or $0.29 per share in the prior-year period.

Revenue for the quarter was $5.7 million compared to $4.2 million for the same period in 2016.

This 35% increase in revenue in the 2017 period -- or the 2016 period was driven primarily by higher revenue recorded under the Bill and Melinda Gates Foundation grant of $89 million.

As discussed in prior calls, the BMGF revenue is directly related to the operating activity in the Prepare trial, our Phase III trial of the RSV F vaccine to protect infants via maternal immunization.

We continue to expect an increase in BMGF revenue in 2017 relative to 2016, which relates to the continued ramp in enrollment and increased level of activities in the Prepare trial.

R&D expenses decreased 45% to $37.7 million in the quarter compared to $69 million in the same period in 2016.

The decrease in R&D expenses was primarily due to the decrease in RSV vaccine clinical trial activity in Q1 '17 -- of 2017 relative to Q1 of 2016, specifically the fully enrolled older adults Phase II and Phase III studies in the first quarter of 2016.

We also experienced lower employee-related costs in the first quarter of '17 relative to the first quarter of '16.

G&A expenses decreased 16% to $8.9 million in the quarter compared to $10.5 million in the same period in 2016.

This decrease is primarily due to lower professional fees for preclinical commercialization activities.

As of March 31, 2017, the company had $211.2 million in cash, cash equivalents and investments on the balance sheet relative to $235.5 million on December 31, 2016.

The first quarter 2017 reduction in cash, cash equivalents and investments of approximately $24 million is the net result of 2 components: the Q1 '17 cash burn of $39.7 million, which we define as cash used in operating activities plus cash used in capital expenditures, representing a 42% decline to the average quarterly burn in 2016; and the proceeds realized from sales under the ATM Agreement during the quarter.

As fully detailed in our 10-Q filing, the company sold 10.7 million shares of common stock between February 28, 2017 and March 30, 2017, resulting in $4.6 million in net proceeds.

The weighted average sales price achieved during that trading period was $1.43 per share relative to the VWAP over the same period of $1.39 per share.

The highest and lowest weighted average daily sales price per share realized during that trading period was $1.52 on February 28, 2017, and $1.27 on March 21, 2017.

We have not made any sales or advertised any sales under the ATM since March 30, 2017.

We reiterate our 2017 cash burn guidance, which we define as net cash used in operating activities plus cash used in capital expenditures.

We expect cash burn in operations plus cash used in capital expenditures to be $80 million to $105 million lower than 2016.

Based on current operations, we are operating closer to the $105 million reduction target.

This concludes my financial review.

I'll now turn the call back over to Stan.

Thanks, Buck.

So we all remain excited about our pipeline and our prospects for 2017 and beyond, and look forward to updating you on progress throughout the year.

And we'll wrap it up here and open it up to Q&A.

Operator, Q&A please?

(Operator Instructions) And our first question is from the line of Joel Beatty with Citi.

My first question is, do you anticipate the results from the analysis of the E205 study could lead to changes in dosing being needed for the maternal RSV vaccine?

No, I don't think so.

It's -- it won't make any difference for the maternal vaccine at all, I don't think.

So it'll just be to determine what we think, going forward, what the elderly will be.

Okay, great.

That's helpful.

And then just one last question.

Can you just talk a little bit about the information you plan to collect from the informational analysis of the Prepare trial and how it's different -- if it's different from an interim analysis?

Joel, it’s Greg.

The informational analysis will provide us an indication of the potential efficacy against the trial's primary endpoint.

And we're going to use it to provide planning information, so we can deploy our resources in an expeditious way for our development program.

So we can't use it to change either the conduct of the trial or the protocol based on these analyses.

And because of this limitation, it carries no statistical cost or type 1 error.

And we should note that this is being done by the unblinded in -- in an unblinded fashion by the DSMB.

And we simply will get a yes/no answer.

So the interim analysis is obviously different.

It's been in the protocol for some time.

And there, we -- as I think we provided earlier, the formal interim analysis will define success and can alter the trial conduct.

It is conducted with the type 1 error cost.

And the first interim analysis will be conducted after a minimum of 3,000 women have been enrolled.

Okay.

So you mentioned that you could get a yes/no answer.

But you will get like a pinpoint of where the primary endpoint is trending?

Or is it just limited to those yes/no answers?

Yes, it's really -- it's a probabilistic statistical approach and we won't be pinpointing any efficacy number.

And our next question comes from the line of Ted Tenthoff with Piper Jaffray.

If you could just talk to us about what's building (inaudible)...

Ted, we're having a little bit of trouble hearing you.

I can't hear you, Ted.

Sorry.

Can you hear me a little better?

Better.

Okay.

Just what needs to be done for the Phase I studies for the Zika vaccine and the flu vaccine?

Now for the Zika vaccine, we're building the IND.

We've got some formulation studies and we're expecting -- we're giving guidance that we ought to be able to start the trial in the latter part of this year.

With flu, it's really kind of the same activity.

We're building the IND for that.

And we have some manufacturing and some preclinical studies that are going to go into that.

So similar activities, preclinical package, talk study package and the manufacturing CMC packages are being built for both those programs.

We expect to start that, again, towards the end of this year.

And how large would you expect those studies have to be?

Well, they're relatively small studies because they're Phase I safety and immunogenicity studies.

And on the order of magnitude of a couple of hundred people each.

And our next question is from the line of Bill Tanner with Cantor Fitzgerald.

Greg, I had a couple for you.

Just as it relates to the 205 data when it comes out, I don't know if you can put some numbers around what would be good result, I guess, especially by comparison with some of the Phase II -- or the Phase II data that you released a couple of years ago.

And just as thinking about, obviously, a couple of either unadjuvanted or adjuvanted with 2 different adjuvants and 1 or 2 doses, I mean, it seems like the sort of the Ockham's razor is that the Matrix-M and 2 doses would be the best.

So just kind of curious what you're looking for there in terms of getting the best response, maybe with the least side effects.

Just couple of those 2 questions.

Yes.

So you pinned down what we're going to look at, the safety and immunogenicity.

It's going to be compared to the reference formulation we've been using in the older adult program since our -- since really our Phase I trial that was also used in the Phase II and Phase III.

So I think when we give the call, we'll get some detail on what we've learned from the Phase III trial in terms of what we think matters.

And they can tell then I don't really have numbers to give you on the kind of movement we're looking for.

I think you'll find the analysis quite interesting and I think we'll look forward to that.

So yes, Matrix-M and the 2-dose regimen is going to be of great interest to us.

I think you pinned it down.

We'll use the immunogenicity and safety data and, again, compare it to our reference formulation to see what we would select for going forward, and in context of our Phase III analysis around the risk reduction with our immune response.

And it relates to the immunogenicity, how does that inform you in terms of going into a pivotal?

I mean, I know the last -- the other pivotal, the Resolve trial, I think it seemed to be beset by the problem of the attack rate was lower.

So I guess, there may be 2 sides of the same coin and one of them is you want to make sure that you've got good immunogenicity.

And then the other, you want to make sure that you've got a good handle on what the attack rate is so that you size the trial appropriately.

Is that kind of the way to look at it?

Yes.

I think we're looking to move the needle in an appropriate fashion for immunogenicity.

And I think our view of a clinical trial as we can adapt to the type of event-driven trial that we have in maternal.

So it can be an event driven, maybe multi-season or Northern and Southern hemisphere design to allow having an event-driven trial and avoid some of the quirks of the seasonality of RSV.

We also expect, in the coming months, to be able to share some very significant epidemiology data through conversations with KOL and new studies.

And I think that, together with our consultation with KOLs, we'll have a better guidance on our plan forward.

And then maybe just the last question is I must confess, I haven't -- I'm not very conversant in malaria vaccinology.

So I mean, I guess, I would think that, that's either been looked at quite extensively in either cracked or maybe it's been intractable.

So just maybe if you could sort of briefly profile where you think the Novavax vaccine has a better shot.

That's a great question.

So there has been a lot of work done.

And frankly, people and the old gray heads in this company have been -- have their finger in some of that work in previous iterations of their jobs.

But there is a vaccine that's shown efficacy.

It was a vaccine using, I would say, a suboptimal antigen and adjuvant.

And we were able to -- the program that the Jenner Institute is using that as a comparator with the mind that they need to have an improvement over that formulation.

So it's a vaccine that you would use the immune response to block the infection.

And the testing is going on in animals.

And then they do human challenge studies, so we're quite excited about the results.

The adjuvant seems to be really important that's given along with the antigens, that they've discovered there at the Institute.

And our next question comes from the line of George Zavoico with JonesTrading.

A couple of quick questions, I hope.

The Southern hemisphere season, when does that start?

When does it end?

And compare that to the Northern Hemisphere, so how far along -- how far are we in the Southern hemisphere business?

So just the U.S., for example, it does -- it's somewhat regional.

So -- but roughly speaking, it's November to March.

So around 5 months.

In the Southern hemisphere, it's more or less near as that.

So roughly speaking, it's April through August.

And so in reference to the Phase II trial, we wanted to make sure that the incident of new RSV infections, which due induce an immune response, would not confound our ability to interpret our immunogenicity results, which measure the similar outcomes.

So that was why we [include] Southern hemisphere of that trial.

And when all is said and done with the trial, do you expect to have a pretty good geographical balance between Northern and Southern hemispheres?

Yes.

Are you talking about a maternal trial?

Yes.

I mean, we have regional and local knowledge of the RSV season in all these sites.

And as you probably know, it's such a prominent pediatric disease that the pediatric -- the clinicians there are well aware of what the onset of the season is.

So we have an important customized algorithm for the local sites to use to take in account, both the onset and the termination of RSV season.

And then we are already in the elderly now.

You're talking about [gathering] a considerable amount of data, both epidemiological as well as efficacy and safety of your own vaccine.

So I think you have said -- and 'you're doing this prospectively and somewhat retrospectively to your Phase II data.

This suggests that not a lot of this data is known, so could you put this trial and the work that you're doing in the RSV space, in context to what was known previously in terms of the epidemiology and attack rate?

I mean, we all know it has a big burden, but you're simply be providing for the first time -- or close to the first time, real numbers that can be applied to this.

So I think we're going to have a very detailed presentation to come that will include some of the work on epidemiology, some of the additional conversations we've had with KOLs on epidemiology and then analysis of a very large body of data from our E201 and 301 trial.

And it's because I said, all that will give us a lens on how to interpret the formulation selection we've made and hatch a plan forward.

If I could beg your deference, I think we'll get into that in some detail in the near future here.

Yes, I'm -- I appreciate that, but I was just asking in terms context.

I mean, it sounds like you have a lot of considerable amount of information that nobody really had a handle on before.

You're correct.

That's correct.

We have chartered new waters and we've learned a lot.

And I think it's been very instructive for us, as far as the path forward.

Okay.

Now on the regular flu vaccine, the VLP that you were working with before, I mean, that was -- that included -- in the VLP included the neuraminidase as well as the matrix protein.

The new vaccine is now only going to be -- is not going to include those.

And one of the issues that you had talked about before was providing more universal sort of -- or durable protection if they were anti-immunity antibodies developed as well.

So I guess, this has now fallen off the table, as it were, with the new vaccine.

Is that correct?

It's just your -- it doesn't include [DNA].

Yes, I mean -- yes.

As we've said, the stability and immunogenicity of our now much more pure product is better.

And so we recognize there is some value in an immunization response.

But the HA responses we're getting are broadly neutralizing.

And they're quite protective, at least, in the animal model.

So we felt that, that those trade-offs and then, frankly, the critical component for this is the Matrix-M adjuvant, which does a number of things.

It enhances the immunogenicity overall.

It seems to highlight the broadly neutralizing antibody epitopes quite nicely, so you get more adoption of that type of immune response.

And so given all that, we felt that the product, going forward, was the best choice with the manufacturers leaning into that decision would be an HA-based fluid nanoparticle with Matrix-M.

And it's going to be applicable to all people, the elderly adults, younger people.

Yes.

Right now, we're targeting the older adults.

We want to be competitive, or superior to, the currently licensed products that are targeting older adults.

So that's our first goal.

One would presume that if it works well on that population, it could be extended to other populations.

But our focus now is to get into older adults' arena with our vaccine.

Okay.

And another question about the CMC for the Zika and the flu.

Are you still not running -- going through manufacturing runs?

Or have you completed those or you can't say yet?

Yes, so the -- so we have completed the Zika manufacturing.

And we are building the preclinical use of the rest of the package around that for the IND.

And the flu manufacturing is ongoing.

Yes.

And I think it -- George, Stan.

So the flu is actually, we've made some dramatic improvements in the process in terms of purity and yields, and really quite pleased with where that's going right now.

So we're in the process of making GMP material.

This is now May.

That will be released in the summer.

Okay, cool.

And then probably one last question on the malaria vaccine.

Are these the same folks that were working on the GSK vaccine that we saw the results on?

They have been working on the GSK vaccine, right.

And they are -- the -- as you probably know, the field studies have been promising.

They've got some limitations.

And there's a big appetite to improve the efficacy of those vaccines.

So I'm a believer in the vaccines that have been made.

I think that's a big accomplishment in a very tough area.

I also believe that the vaccines could be improved.

And I think Jenner is making good strides in that direction.

Yes.

And they're developing data that compares ours with the direct makers.

I believe we think the data that going to come out pretty soon in humans.

And so we'll let them determine the timing of that.

But I think it will look quite favorable.

Now are you contributing the Matrix-M to the Wellcome Trust?

Or are they purchasing it?

Well, it's -- I don't know.

Buck, are we selling it to them?

Or are they -- are we giving it to them?

They are purchasing it.

So it's a very early study so it's a small amount.

I beg your pardon?

Small amounts, small.

And our next question comes from the line of Jessica Fye with JPMorgan.

This is Ryan on for Jess.

Appreciate you taking our question.

Stan, I think early in your opening remarks, you said you were pleased with enrollment activities.

And it sounds like this there's a number of sites coming online.

So I know that you're not going to make too many comments on this specifically, but does that -- -- it sounds like you guys are at least on track?

And maybe it sounds like you guys are a little bit even ahead of your expectations.

Is that a fair interpretation of your opening remarks?

Yes.

I guess, as my opening remarks said, we don't comment on numbers of cases and vaccines.

But yes, we've opened up the spigot where the first year was mostly, I would say, an op -- learning the operations of how to do something that's pretty complex.

You've got a mom and you've got a kid being born, you've got to follow everybody.

And just getting that set up in the U.S. and South Africa, which is where we started, was a big effort.

And it's really rolled into a second year that's many-fold times enrollees, over what the first year was, and I expect the same will occur in the third year.

So it's going well.

It -- we're projecting that we will have enough cases by the end of this year to do the informational analysis and for the interim analysis by the end of '18, which could lead us to a great place by the end of '18.

So it's going fine.

Okay, great.

And Buck, maybe a quick question on the cash burn reduction versus '16.

You said you guys are probably closer to the $105 million.

And is there any additional sort of the pushes and pulls that are kind of putting you towards that?

Is that the Phase I studies for the seasonal flu and Zika studies?

Or how do we think about the sort of -- some of those factors that are impacting that, putting you closer to that end of the range?

Yes.

I think when we came out at the beginning of the year, we provided a range, as you know, on the 2016 earnings call on February 28.

We actually upped the range for greater savings relative to last year's burn.

I think, as we work through the year and we get quarters behind us, we're able to get greater granularity and visibility on what that total year number will be.

We do some conservative planning around here.

So obviously, as we execute against that conservative planning and look for other ways to save some money, we do save that money.

I will state that the Phase I Zika and the Phase I influenza trial are included in the guidance that I've provided, the cash burn guidance.

So those expenses are included.

And ladies and gentlemen, this concludes our Q&A session.

I will turn the call back to Stan Erck, President and CEO, for his final remarks.

Okay.

So thanks for listening, number one.

Number two, I -- as I said in the beginning, I'm excited about the rest of the year.

We're going to have a lot of things to talk about in data and progress.

And it's nice to be [at this point again].

So we'll look forward to coming around and seeing some of you folks as we get on the road as well.

So looking forward to it, so thank you.

Ladies and gentlemen, thank you for participating in today's conference.

This concludes the program, and you may all disconnect.

Have a wonderful day.