Oncternal Therapeutics Inc (ONCT) 2010 Q4 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the fourth quarter 2010 GTx, Inc. earnings conference call. My name is Chanelle, and I'll be your operator for today.

(Operator instructions).

As a reminder, this conference is being recorded for replay purposes.

I would now like to turn the conference over to your host for today, Dr. Mitchell Steiner, CEO of GTx. Please proceed.

Thank you, and welcome to the GTx fourth quarter and full year 2010 corporate results and conference call.

I will be making forward-looking comments during today's call, and I direct you to the Form 10-Q we filed November 9 with the SEC, where we discussed in detail the risks and uncertainties that affect our business.

GTx has made great progress advancing our pipeline product candidates into late-stage clinical programs. Capesaris, also called GTx-758, is being developed for first-line treatment of advanced prostate cancer, and Ostarine, also called GTx-024, is being developed for the prevention and treatment of muscle wasting in patients with cancer. We have significant -- we will have significant news flow out of both programs in 2011. Furthermore, GTx is in active discussions with potential strategic partners about both of these late-stage product candidates.

Capesaris is a selective estrogen receptor alpha agonist which is being developed as the first member of a new class of agents for first-line androgen deprivation therapy for advanced prostate cancer. Capesaris has been designed as an oral agent to address the limitations and safety concerns of current ADT products. Such products include Lupron, Zoladex, Trelstar, Eligard and Degarelix.

We met with FDA earlier this month and confirmed that the primary endpoint for approval for Capesaris in this indication is serum total testosterone, to assess the ability of Capesaris to achieve and maintain castration. With FDA clarity for the path to approval, and having already concluded four clinical trials involving 256 patients, including a proof-of-concept Phase II clinical study, I want to take a few moments to describe the reasons why Capesaris is an important medication that represents a significant improvement in the management of advanced prostate cancer.

First, let me explain how Capesaris fits into treatment paradigm for advanced prostate cancer. Currently, there are a number of prostate cancer drugs that are either newly approved or under development, all of which are for second- or third-line treatments for patients who have failed first-line ADT because they have progressed to castrate-resistant prostate cancer. Examples of these therapies include abiraterone plus prednisone, MDV3100, XL 184, TAK-700, Provenge and cabazitaxel. The size of the market these agents are targeting is approximately 50,000 patients in the United States.

By contrast, GTx is alone in developing a new product as an improved first-line therapy for advanced prostate cancer to replace LHRH agonists, LHRH antagonists and surgical castration therapies. In the United States there are 700,000 men with advanced hormone-sensitive prostate cancer. First-line treatment is a large market. Worldwide ADT sales currently exceed $3 billion with established agents, which have nearly indistinguishable mechanism of action and administration and virtually identical side effect profiles.

What are the clinical problems with current first-line ADT that Capesaris could potentially address? Here's the current situation. LHRH agonists like Lupron and Zoladex became the standard of care in the 1980s when patients with advanced prostate cancer only had a life expectancy of approximately two years. Advanced prostate cancer is now being detected earlier, thanks to serum PSA and better imaging tests, and, as a result, patients with advanced prostate cancer are initiating ADT sooner and receiving treatment for a longer period of time. The good news is castration remains an effective therapy, and many patients are now living 10 to 20 years on ADT.

As mentioned, currently available LHRH agonists and antagonists effectively reduce testosterone to castrate levels. However, the unintended but potentially serious clinical consequence of all these forms of ADT is severe estrogen deficiency. In men, estrogen is derived from testosterone. Accordingly, castrate levels of testosterone results in low levels of estrogen. Estrogen deficiency side effects include symptomatic side effects like hot flashes and loss of sexual interest and more serious side effects like bone loss and increased risk of fractures, adverse lipid changes and fatty body composition changes, increased risk of metabolic syndrome, diabetes and cardiovascular disease. In fact, patients with advanced prostate cancer are now more likely to die of complications related to ADT side effects than from the prostate cancer itself.

Nonetheless, ADT remains the only effective therapy for advanced prostate cancer, and even when the patient develops castrate-resistant prostate cancer -- that is, when the prostate cancer comes out of remission and starts growing again -- ADT is not stopped. Instead, other drugs, including chemotherapy, are added to ADT to treat castrate-resistant prostate cancer. To emphasize, ADT is the cornerstone for the first-line treatment for advanced prostate cancer, and this therapy is always continued while second- and third-line therapies are administered.

Capesaris has been designed to be differentiated from LHRH agonists and antagonists in three ways -- one, its mechanism of action and potential for greater efficacy; two, a more favorable safety profile; and, three, an oral mode of administration. Capesaris achieves castration by binding specifically to the estrogen receptor alpha in the pituitary, which causes the pituitary to decrease LH secretion by feedback inhibition. Lack of LH causes the testes to stop production of testosterone. With this mechanism of action, there is no initial testosterone surge.

In addition, Capesaris has the ability to induce the production of a liver protein called sex hormone-binding globulin, or SHBG. SHBG is an important regulator of testosterone levels. SHBG binds directly to testosterone to take free testosterone out of circulation from the blood. As a consequence of higher SHBG induced by Capesaris, there are lower levels of free testosterone, below what is usually achieved by castration alone. Because free testosterone is the only available form of testosterone that the prostate cancer cells are able to utilize for growth, less free testosterone may indeed improve efficacy.

Another important differentiator of Capesaris is the expected safety profile. Again, Capesaris was designed to specifically and preferentially target the estrogen receptor alpha. This allows Capesaris to bind to ER alpha in the brain, bone and liver while avoiding ER beta subtype. The ER beta subtype is the only estrogen receptor type on platelets, and binding to this receptor would result in enhanced platelet aggregation. This is why our team designed Capesaris to bind ER alpha while avoiding ER beta. By acting through the estrogen receptor, Capesaris has the potential to achieve medical castration without causing bone loss, fractures, hot flashes, loss of libido, adverse lipid changes and increases in body fat composition.

Unlike the LHRH agonists and antagonists, which are all injectables, Capesaris is an oral drug. The field of oncology is moving to oral chemotherapy agents to be more convenient for the patient in a home setting. Having an oral formulation also provides greater control in the administration of ADT. LHRH agents are given as one-month to one-year depot formulations. If a patient gets into trouble, it's impossible to retrieve the drug to stop therapy.

In summary, the target product profile for Capesaris is an orally available small molecule which achieves and maintains medical castration without the estrogen deficiency side effects such as bone loss and fractures, hot flashes, loss of libido and adverse lipid changes with an increase in body fat composition and without enhancing platelet aggregation. To date, we have evaluated Capesaris in three Phase 1 clinical trials and in a proof-of-concept Phase II pharmacokinetic and pharmacodynamic clinical trial in healthy young males.

Last week we met with the FDA to discuss the Capesaris clinical development program. We now have confirmation that the primary endpoint for the Capesaris clinical trials for approval is serum total testosterone, a reliably measured laboratory value. We will need to show as clinical benefit that Capesaris is able to achieve and maintain castration, which is attained by maintaining serum total testosterone levels at less than 50ng/dL. This is the same efficacy hurdle that was required for LHRH agonists and antagonists. This is in contrast, however, to second- and third-line therapies, where progression-free survival and overall survival endpoints are required for approval.

We will initiate an open-label Phase IIb Capesaris clinical trial next quarter. We will randomize 156 patients with advanced prostate cancer who are initiating ADT to one of two doses of Capesaris or to Lupron. The primary endpoint of this study is the proportion of patients that achieve total testosterone levels less than 50ng/dL by 60 days. Patients will continue in this study through 12 months to assess maintenance of castration and safety. We're also including a Lupron arm as a safety comparator, to gather data which will differentiate Capesaris from Lupron and other LHRH agonists. We plan to use the safety effect size data to power for possible comparator claims in our Phase III Capesaris clinical trials planned for next year. We expect to have efficacy data from the Phase IIb study in the fourth quarter of 2011.

As for our Ostarine program, we continue to make good progress and expect to initiate a Phase III clinical trial early in the third quarter for the prevention and treatment of muscle wasting in patients with non-small cell lung cancer. To date, Ostarine has been evaluated in eight clinical trials involving approximately 600 subjects, including three efficacy studies. The results of the efficacy studies have been remarkably similar, with the Ostarine-treated group gaining lean body mass and having improvements in physical function compared to the placebo group.

Our challenge has been how do you expeditiously develop Ostarine for an indication which represents both an unmet medical need and has a significant market size? The indication that fulfills these objectives is the prevention and treatment of muscle wasting in cancer. Cancer cachexia, a cancer-related symptom, leads to accelerated loss of skeletal muscle that is clinically evident as muscle wasting.

Cancer-induced muscle wasting can begin early in the course of a patient's malignancy, resulting in a decline in physical function and other detrimental clinical consequences, underscoring the importance of preventing and treating this unmet medical need. Studies have demonstrated that cancer patients with muscle wasting are less able to tolerate chemotherapy and other cancer treatments and have worse treatment outcomes, loss of independence and shorter overall survival.

GTx has conducted a Phase IIb clinical trial evaluating Ostarine in 159 patients with non-small cell lung cancer, colorectal cancer, breast cancer or non-Hodgkin's lymphoma. In this study, cancer patients treated with Ostarine compared to placebo had greater lean body mass and demonstrated improvement in the ability to climb stairs. Moreover, patients who had better physical function were also found to have a statistically significant improvement in quality of life, as measured by anorexia and fatigue patient-reported outcome scales. Based on the results of this Phase IIb clinical study GTx is eager to pursue the development of Ostarine for muscle wasting in patients with cancer as the best first indication for a SARM product.

In December 2010 we had an end-of-Phase II meeting with FDA to discuss our Phase III Ostarine clinical development plans. We reached agreement with FDA on the indication we will pursue, which is the prevention and treatment of muscle wasting in patients with non-small cell lung cancer. We plan to initiate a pivotal Phase III Ostarine clinical trial early in the third quarter of this year, following additional input from FDA.

It is important to distinguish our indication of prevention and treatment of muscle wasting in cancer from the indication of cancer cachexia. Cancer cachexia is the term most often associated with end of life. Patients with cancer cachexia have significant weight loss and are often treated palliatively. These are not the -- these patients, excuse me, usually receive appetite stimulants like Megace and Marinol. We believe that cancer patients who have pre-cachexia or early cachexia will benefit most from Ostarine. These are patients who are at high risk for loss of muscle and functional impairment and for whom intervention holds the most promise in improving physical function, and maintaining or increasing muscle are the clinical benefits.

Lung cancer patients are an ideal target population for our first indication for Ostarine. Muscle wasting and physical functional impairment are highly prevalent in these patients. At diagnosis, nearly 50% will have severe muscle loss, and 80% will develop one or more lower body functional limitations. Cancer supportive care is an $11 billion market worldwide. Although there are no drugs approved to prevent or treat muscle loss in patients with cancer, we believe the opportunity for this indication in lung cancer in the United States will exceed $1 billion. We look forward to updating you further on the Phase III clinical program in our next call.

Finally, I want to briefly update you on the status of toremifene 80 mg. After we received the complete response letter from FDA about a year ago, we, along with Ipsen, our European partner, have been busy trying to determine the additional regulatory requirements and to consider what would be the business case to support further development of toremifene 80.

As for the regulatory requirements, we have met with the FDA several times, and we believe we have agreement with the agency on the design of the clinical protocol for a single Phase III clinical trial that will address the two deficiencies cited in the toremifene 80 mg complete response letter. This additional study would evaluate 2,400 patients treated with toremifene 80 mg compared to placebo for up to three years, with efficacy being established at an alpha of 0.05. Data would be available approximately four to five years from the start of the trial.

With the projected third-party cost for this additional single trial exceeding the level stipulated in the amended March 2010 toremifene collaboration agreement with Ipsen, GTx and Ipsen are evaluating the potential impact of the projected current trial cost on the business prospects of the collaboration. GTx and Ipsen will agree how best to move forward or may mutually agree to terminate their partnership.

I will now ask Mark to provide a brief review of our financial results.

Thank you, Mitch.

The details of our financial results for the fourth quarter and year ended 2010 are included in this morning's press release and are available on our website. I will review with you the highlights.

The net loss for the quarter ended December 31, 2010 was $7.5 million, compared to a net loss of $10.9 million for the same period in 2009. Net income for the year ended December 31, 2010 was $15.3 million, compared to a net loss of $46.3 million for the year ended December 31, 2009.

Revenue for the quarter ended December 31, 2010 was $1.8 million, compared to revenue of $3.7 million for the same period in 2009. Revenue for the fourth quarter of 2010 included collaboration revenue of $336,000 related to our Ipsen collaboration and $1.5 million of net sales of FARESTON. Revenue for the year ended December 31, 2010 was $60.6 million, compared to $14.7 million for the prior year. Revenue for 2010 included FARESTON net sales of $3.8 million and collaboration revenue of $56.8 million. Collaboration revenue consisted of $1.9 million from Ipsen and $54.9 million from Merck. In March 2010 we and Merck terminated our license and collaboration agreement, and as a result we recognized a $49.9 million of unamortized deferred revenue as well as the final payment from Merck in December 2010 of $5 million of cost reimbursement for research and development activities.

Research and development expenses for the quarter were $5.8 million in 2010, compared to $8.2 million in 2009, and for the full year 2010 were $28.5 million, compared to $32.3 million in 2009.

General and administrative expenses for the fourth quarter of 2010 were $4.5 million, compared to $6.3 million in the fourth quarter a year ago, and for the full year were $17.4 million, down from $27.8 million in 2009.

Additionally, net income for the fourth quarter and full year 2010 included other income of $1.2 million from grants awarded to the Company by the United States government under the Qualifying Therapeutic Discovery Project Program, which was established under the Patient Protection and Affordable Care Act.

At December 31, 2010, GTx had cash, cash equivalents and short-term investments of $58.6 million, with no debt and no warrants.

Now I will turn the call back to Mitch.

Thank you, Mark.

Operator, we're ready for the first question.

(Operator instructions).

Your first question comes from the line of Joel Sendek, Lazard Capital Markets.

Hi. I was wondering on Capesaris, is it still two doses that you're testing, and what -- over what time frame do they have to maintain the reduction in serum testosterone?

Right. So, yes, there's two doses being tested, and at this point now we believe it'll be the 1000-mg and the 1500-mg, but we're doing some formulation studies that will give us more clarity. But from the proof-of-concept the drug castrates, so the next question is, if it castrates, what is, quote, "required"? Well, for the Phase II all we're interested in doing is getting an understanding of which dose, because we're trying to optimize the dose, that we want versus Lupron. And so what we're asking for this study is that we get to less than 50 ng/dL, and when a patient achieves that then they count as being successfully castrated in this trial.

However, we know from previous work in DES and other drugs that once they're castrated they will maintain castration. So what we're doing in this study, even though the primary endpoint is going to be the proportion of patients that castrate by 60 days -- and if it's anything like the Phase II that we just completed in healthy males versus older prostate cancer patients, which should be easier to castrate, we should see most of these patients castrate certainly by one month. But put that aside. Then we're going to continue to -- first going to make a decision which dose, and that will allow us to begin to plan our Phase III.

In the meantime, what we're going to do, Joel, is that patients will stay on the trial literally until the whole program is done, even while the Phase IIIs are going, because we want to capture as much data as we can in terms of the chronic use of this drug. So these 156 patients will be maintained through the whole development period, and that will allow us to get information on the maintenance of castration. What the FDA requires in a Phase III setting is that castration, less than 50 ng/dL, is maintained from day 28 to day 364. And so that is the regulatory requirement for maintenance, and we'll be able to capture that information even in the Phase II even while we're in Phase III.

Okay, got it, and that's consistent with, as you said, consistent with the approval of those other drugs that --

Right. So another drug that was approved recently, December 2008, was Degarelix, and that's exactly the same standard that they were held to. And if people want to get a better sense of the regulatory pathway they just have to go look at the Degarelix medical review, and the FDA is pretty much holding us to that same standard.

Okay. Thanks.

Your next question comes from the line of Eric Schmidt, of Cowen and Company.

Good morning. Thanks for taking my questions. Just on that last point, Mitch, Degarelix' review, can you remind us what the safety database that was required for that compound?

Yes, they just had to have -- they had one year of data in Phase III. And so that -- but I think they did -- most of their trials were Phase IIs, because they were trying to get the dose right because it was an injection therapy. And their actual Phase III program, I think, had basically 400 patients.

Total exposure was where?

Total exposure was probably in the order of about, if you add their Phase IIs, it was probably close to about 1,200.

Okay. So that's where you think you'll need to be again.

Well, no, because they had to do a bunch of Phase IIs. We -- the discussion we had at the agency was that our total exposure had to be in the order of 400 patients for a year.

Okay. And your Phase II, I'm sorry, I missed it, was it 180 patients in size?

Hundred and fifty-six patients, of which they will randomized one to one to one, two doses of Capesaris versus Lupron. So it'll be Capesaris dose one, Capesaris dose two and Lupron. And that's the number of patients.

Okay, got it.

And then the primary endpoint is proportion of patients that achieve castration by 60 days. And we're doing that very much like the Phase IIs we've done in other studies, because what you're trying to do is find out how many patients castrate around the month mark, but you also want to keep the drug onboard so you know how many patients will eventually castrate if you don't castrate everybody by one month.

Understood. Can we move to Ostarine for a minute?

Sure.

What do you think the primary endpoint will be in the study, and will you be going for an SPA?

Right. So, the primary endpoint of the study, which achieves clinical benefit, is physical function, and physical function measured in our case by stair climb, which is what we've done in all of our studies that showed efficacy. And what we haven't discussed is the -- anything more yet until we have further input.

We're not doing an SPA. Part of it is because we've had excellent dialog with the FDA around trial design and their expectations, and so we're documenting like crazy that. But with that said I will tell you the oncology division has been very collaborative in their approach to this indication.

Okay. And so there's no longer a requirement to show physical function plus lean body mass? It would just be the single endpoint?

Right. And so what we're doing is lean body mass is going to be captured as a secondary endpoint, and as well as other stuff, but clinical benefit is what does the patient feel? And so physical function is an easy clinical benefit endpoint.

Okay. And I think at one point last year you were certainly considering moving into a Phase IIb study as opposed to right into Phase III. Can you just remind us kind of what changed with your thinking there?

Well, what happened in that, our thinking was do you go after one cancer type or do you go after multiple cancer types? And our thinking was if we had to go into multiple cancer types then we would probably have to do a Phase IIb to better understand the impact of the heterogeneous population. Instead, we decided that probably the best way to go forward is, rather than try to do multiple cancer types, go after a homogeneous type, in this case lung cancer patients.

And the other thing that's nice about lung cancer patients, is that these patients, we know they're at risk to lose muscle and to waste, and so you can actually start the medication at the time they start chemo. So that allows you to pick up prevention as well as treatment, which is what the FDA and GTx talked about, and that's the indication that we're pursuing. So the lung cancer patients are best for that, because other cancer types, like, for example, with breast cancer, they can go on for many, many years before they lose weight. Same thing with colorectal cancer. So by picking this patient population is allows us to move into Phase III.

We also have a subtype analyses that we've done with lung cancer in our Phase IIb, and, interestingly, these patients responded very nicely to Ostarine. And so we were able to feel comfortable with our dose and feel comfortable with the effect size and feel comfortable that this is -- this derisks the program by going after a patient group that responded so nicely. So we have good Phase IIb data in this cancer type, and the end-of-Phase II meeting that was confirmed, and so consequently GTx and the FDA are basically talking about the Phase III program now.

Okay, got it. And of the patients in Phase II, can you remind us how many had subtype lung cancer?

Yes, it was about 61.

Okay.

So that's a good number, considering the trial was 159 patients. So you had -- you had more than a third of your patient population that was lung cancer, and so we were able to really model quite nicely.

Okay. And then maybe just a question for Mark, if he's willing to give out some expense guidance for 2011.

Hey, Eric. We're not doing guidance for the year, but let me just give you some clarity so you'll have it. Our guidance, or let me say it differently, our expenses for '11 will be more in line with our fourth quarter run rate that we had for 2010. So about $7.5 million to $8 million is going to be our run rate. I will say this, though. Towards the end of the year, or I guess in the second half of 2011, we'll have a little bit more in expenses on a monthly basis simply because we'll be in the midst of both the Capesaris and the Ostarine studies.

Got it. Thank you.

(Operator instructions).

Your next question comes from the line of Jonathan Eckard, Leerink Swann.

Hello, and thanks for taking the question. With regarding the Ostarine and lung cancer, were most of the patients from the Phase II trial, were they first-line patients, or is there a specific line of therapy where they could gain the most benefit from Ostarine?

Yes, great question. So, what we did is we actually had two Phase II studies to help us guide what our dose should be and what our expectation would be in terms of increasing lean body mass and physical function. One was a study that we did in elderly males and postmenopausal women, and they were treated for 12 weeks, and we showed basically this exact amount of lean body mass, and we showed significant function.

The reason I bring that up is because these are patients that don't have cancer and much -- really no wasting, and they responded. In lung cancer we treated for 16 weeks, but these patients were much sicker. What we said to the clinical investigators is we were trying to get patients that had lost greater than 2% lean body -- greater than 2% of weight. And the reason we picked 2% is we really, really, really were trying to get patients that looked more like that Phase II we did in the otherwise healthy elderly and postmenopausal women.

Because we called it a cancer cachexia study the oncologists actually put patients on that had on average almost 8% to 9% weight loss, so they were significantly sick. And we did not stipulate where in the chemotherapy regimen they would start the medication, and so consequently we got patients that were all over the board. And so they were end of first line, middle of first line, in second line, in third line. It was really a hodgepodge, okay? But nonetheless, even in that hodgepodge where patients were getting all kinds of chemotherapy and different types we did show an increase in lean body mass and we showed a benefit in physical function.

Now, with that information, we are now going back and saying no. If we're going to control for a cancer type we should probably control, especially if you want a prevention and treatment indication, with when the patient starts to get the medication. I do believe that patients that are at the beginning of their chemotherapy, first line, are going to improve more than patients that are third and fourth line, because they would have lost so much weight. By going after pre-cachexia and early cachexia patients, I think that's where we're going to have the most dramatic improvement. They'll be more like the healthies that we looked at in Phase II and less like the patients that were very, very sick, but nonetheless we have activity. What we're trying to do is optimize activity and to figure out what patient population we want to go after.

So in this trial what we're doing is we're taking advantage of the natural first-line chemotherapy timing that these patients get, so they'll have Stage III, Stage IV. Before they initiate their, or should I say at the time they initiate chemotherapy, and it's platinum therapy, first line, we will start Ostarine. They will continue to take Ostarine after they go through their two cycles. And after they go through their two cycles that will put them at about week 12. At week 12 they naturally stop to see whether or not they're responding to the first-line chemotherapy, and typically they get imaging studies and all kinds of other assessments to make a determination whether they're responding to first line. That's when we're doing our first assessment.

So our thinking is, make this a companion product. It starts whether or not they've lost weight at the time they start their chemotherapy, and the assessment will occur at a natural break in their chemotherapy when they're trying to assess whether or not they're responding to the chemotherapy. And then they will continue to take the medication as they move along their course of the disease.

As you know, unfortunately, in lung cancer, their median survival is, depending on their stage, but basically median survival is going to be in the order of eight to 12 months, and so consequently we'll be able to capture survival data. And these are patients that get sick very quickly, and we're trying to show that we can maintain lean body mass and delay the clinical worsening of physical function compared to placebo. Long answer, but I thought I'd give you that information.

Thank you very much. That was helpful. And then for Capesaris, with regards to the 12-month and [kind of] endpoint for the -- what you think's required for regulatory purposes, I know that the Phase II trial will probably answer these questions, but what do you feel from a secondary endpoint some of the benefits that the drug may bring could be captured --

Yes.

-- in that window that could be supportive from a regulatory point of view?

Yes. So you're -- so make sure I understand the question, so you're talking about in the Phase II or the Phase III or both?

Well, it sounds like for the Phase III, like the 12-month trial is required, I'm wondering what secondary endpoints you may be able to capture that could help the regulatory process.

Got you. Okay. The reason I asked that question the way I did is because we also kind of think of the Phase IIb as being your third Phase III trial, because we're going to keep running it while the Phase IIIs are going so we can get additional information. So the question is, what are we going to need to show that we have, quote, "an improvement" in the safety profile, or some kind of profile, that makes it different than, for example, the medications that are out there now, like Lupron? So, what are we going to be able to capture?

Well, the things that we're going to be able to capture is, first of all, we know we're oral, so that's done. Second thing we're going to be able to capture is we'll be able to show we don't have a testosterone surge. We've already seen that in our healthies. We don't have a testosterone surge.

The other thing we're going to be able to capture is yes, we're going to show what percentage of patients we castrate, but, more importantly, we're going to be measuring something called free testosterone. Because of SHBG free testosterone will go down even further. That will be captured as a secondary endpoint. And urologists will like that, because we know that lower testosterone ultimately means that the patient should benefit. From a regulatory standpoint, all we have -- the only standard we're held to is the same standard as the other compounds, which is that we have to have a total testosterone less than 50, no matter what happens to free T. But the free T secondary endpoints can be very important as we position our product in the marketplace.

Now, from a safety standpoint, we're going to be able to capture hot flash data. Usually by 12 weeks you can capture that information. We're going to be measuring bone turnover markers as well as bone mineral density. As you know, with the Lupron-type products they lose bone very quickly in the first six months and they continue to lose bone. We know that from the work that we did with toremifene 80. Our compound, being an estrogen to bone, we're not expecting any bone loss. If anything, we expect a little bone increase.

Body composition changes, it turns out that Lupron and other forms of castration like that, patients actually gain fat, and because they gain fat that's the reason why they end up getting metabolic syndrome, insulin resistance, and it's just the body composition that changes when you have low testosterone and low estrogen. What we're expecting to measure, and we will capture this in our clinical trial with a DEXA scan looking at body composition, and we should be able to capture that in that one-year period, is what happens to body composition.

And what we're going to hopefully show, the same thing that we showed in our animal models, in monkeys that were treated long term, we did a head to head with Lupron with Capesaris, and in these monkeys they lost muscle but they also gained fat. With Capesaris they actually did not gain fat. If anything they lost a little fat. And so we expect to see the same thing in humans. And this is the biggest issue with Lupron right now is the whole issue of metabolic syndrome, this fatty body composition, insulin resistance, and the cardiovascular issues that now have become a label -- a new label warning that you see in LHRH agonists. So we'll be able to capture that, as well, in our study.

We're going to measure libido, because it turns out that libido goes away in patients on Lupron and Zoladex. And there was a recent review article in the Journal of Urology last month, I believe, maybe the month before, where they talk about how if you add estrogen back to castrate patients libido comes back. And so we would love to be able to show that in our study that patients on Capesaris were less likely to lose libido than patients on Lupron.

So these are some of the safety -- and I told you we're going to also be able to capture hot flashes -- so if you look at the symptomatic side effects we should be able to measure hot flashes and libido. If you look at the serious side effects, bone loss, we're going to be able to capture the information through BMD and bone turnover markers. And if you look at body composition changes we're going to be able to show less fat, and that's going to be equally as important. So we are looking at all these different safety things to differentiate ourselves, and the fact that we're oral I think will go a long way, as well.

Very helpful. Last question is are you comfortable starting a Phase III for Ostarine without a partner, or is that something that would be contingent on a partner? Thank you very much.

It's not contingent on a partner. We were very fortunate to do a fund raising this past fall, and the fund raising was really focused on Capesaris and on Ostarine. We are getting a lot of interest in both the assets. We want to make sure we start these trials, because we find that when you start trials, have the regulatory clarity, it helps a lot in terms of the valuation of the potential partnership. We are opening to -- we are open to partnerships for both assets. How we do those partnerships all depends strategically on what we want to do ultimately with the assets.

But we do -- the Ostarine trial, right now the Phase III is approximately 300 patients, and it's a size that we can manage. We have the money to start it. And I do think that it's important for us to start the study with or without a partner. The Capesaris study, 150 patients, that study is about a $7 million to $8 million -- $7 million study, Mark? -- over the year and a half, or whatever it is. And, again, we think we're in good position to at least -- that's open label, so that means we're going to be actually getting data second half of the year, and then the 60 days will be done by the second half of this year, so we're going to have the Phase IIb data, primary efficacy data and some safety comparisons with Lupron.

So we think that our valuation as a company and our position in terms of the valuation of the assets are going to be maximized here in a short period of time. And even though we went sort of into a quiet period after we got a complete response we really spent a lot of time taking these two late-stage assets and optimizing the value so that we can have substantial discussions with potential partners and have options to maximize shareholder value.

Thank you very much.

And there are no further questions. I'd now like to turn the call back over to Mr. -- Dr. Mitchell Steiner.

Great. Thank you.

We would like to thank you all for your interest in GTx, and we look forward to providing you with updates on our future progress. Thank you again for joining us on today's call.

Ladies and gentlemen, that concludes the presentation. Thank you for your participation. You may now disconnect. Have a great day.