Oruka Therapeutics Inc (ORKA) 2003 Q4 法說會逐字稿

Good afternoon and welcome, ladies and gentlemen, to the Nuvelo Fourth Quarter and Year-End 2003 and 2004 Forward Outlook Conference Call. At this time, I would like to inform you that this conference is being recorded and that all participants are in a listen-only mode. At the request of the company, we will open up the conference up for questions and answers after the presentation.

At the request of the Management and Nuvelo the following statement is being read; statements contained in this conference call which are not historical in nature are intended to be and are hereby identified as forward-looking statements for purposes of the Safe Harbor provided by the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by words such as "believe," "expect," "anticipate," "should," "may," "estimate," "goals," and "potential," among others. Such statements are based on management's current expectations and involve risks and uncertainties. Actual results and performance could differ materially from those projected in the forward-looking statements as a result of many factors including without limitation, uncertainties relating to drug discovery, clinical development processes, and the development and commercialization of our molecular diagnostics technology, changes in relationships with strategic partners and dependence upon strategic partners for the performance of critical activities under collaborative agreements; the impact of competitive products and technological changes; uncertainties relating to patent protection and regulatory approval; and uncertainties relating to our ability to obtain substantial additional funds required for progress in drug discovery and development. These and other factors are identified and described in more detail in Nuvelo and Hyseq filings with the SEC, including without limitation Nuvelo's annual report on Form 10-K and the related Form 10-K/A for the year ended December 31, 2002 and Nuvelo's quarterly report on Form 10-Q for the quarter ended September 30, 2003. We disclaim any intent or obligation to update these forward-looking statements. I will now like to turn the conference over to Dr. Ted W. Love, President and Chief Executive Officer of Nuvelo. Please go ahead, sir.

Thank you and welcome everyone to the call. My name is Ted. W. Love, I am President and CEO of Nuvelo, and it’s a real pleasure today to be here to be able to discuss the success and the achievements we have had over the past year, and to give some guidance about what you all can expect from Nuvelo in 2004.

Today we've got a probe and I think, very exciting agenda. We want to first begin by discussing some of our key achievements over the past year. Then move on to talk about our recently expanded cardiovascular portfolio. We would like to briefly discuss some of our research efforts, which we think are critical towards building a long-term [feat] of the Company. We will finish with Pete Garcia, our CFO reviewing our financials and giving some guidance for 2004.

So let us start with 2003, accomplishments. We think it was a very exciting year, starting number one, with the completion of the merger with Variagenics that resulted in a company that was well capitalized and able to execute on the development of Alfimeprase, which we are very proud, to update you on today. We changed our name to Nuvelo, we think that was a meaningful change, and it reinforced our singular focus on bringing biotherapeutics to the market for unmet medical needs. We completed our Phase I program with Alfimeprase, and then we rapidly turned to two Phase II trials one in peripheral arterial occlusion, the other in catheter occlusion. We gained sell-side analyst coverage from two institutions and in October of last year we raised $26m. Overall we think we are making great progress, on building a compelling company and a product portfolio in the eyes of investors, analyst as well as major product leaders in medicine and healthcare.

Now let us turn briefly to our goals for 2004. I’ll say our overriding goal is to rapidly establish Nuvelo as a premier acute cardiovascular medicine franchise. Our [Amgen] deal which we announced approximately 2 years ago provided our lead candidate Alfimeprase; we announced the deal in January with Archemix where we gain access to ARC183. Finally yesterday we announced to be over Dendreon, where we acquired worldwide rights to rNAPc2. Now let me talk to each -- let me talk about each of these in a little bit more detail staring with Alfimeprase. First I’d reiterate that we feel very excited that are Alfimeprase will be the ideal local delivery thrombolytic. We think it will act faster to develop clot and we think it will be safer then any other thrombolytic ever produced. This molecule is in a fifty-fifty collaboration with Amgen within two Phase II indication; the first indication being peripheral arterial occlusion. I'd like to refer to PAL as the heart attack of the leg, so these are patients coming in at risk of actually loosing their leg. We initiated study in this patient population about 7 to 8 months ago in this trial. And in September after the first 36 patients had been treated, we analyzed the data with the [DF] and Data Safety Monitoring Committee, and they were encouraged and advised that we continue studying all three doses.

Following that meeting our lead investigators and our operations committee suggest that we focus on two doses the 0.3 mg/kg and the 0.6 mg/kg doses and eliminate the 0.1 mg/kg dose. As a result, we estimate that the final trial will be approximately 115 patients. I have given you a little bit of flavor about the status. So far we have treated about 80 patients in this trial, the enrollment have been accelerating recently which is very common as one comes towards the end of these kinds of trials. Consistent with our announced goals we expect completion of this trial in the March, April timeframe of this year. I can end by saying that so far, we and our investigators are highly encouraged by what we are seeing and we are gearing our efforts towards our Phase III program.

Now turning catheter occlusion and just reminding you about the trial design; this trial is blinded, it actually controlled with TPA or activate. It’s also designed to be a trial of approximately 100-150 patients. We initiated this trial also about seven to eight months ago and we’ve had slower than expected enrollment due partly to trial logistics. I am happy to say that we’ve made progress on those trial logistics and things are moving forward now. This trial is blinded but I can say that we know that three-quarters of the patients are being treated without Alfimeprase and one quarter of the patients are being treated with activates and the overall findings for safety and efficacy are quite encouraging. Our goal remains to complete an interim analysis of the first approximately 50 patients in this trail by the March-April timeframe.

Finally a few comments about ARC183, we think that ARC83 or 183 will be the ideal anticoagulant for medical indications. And just to kind of put things in the perspective, today I think it’s widely recognized by physicians, that Heparin is not an ideal drug for a number reasons and for number of side effects. Heparin is typically reversed the protamine, which is [inaudible] drug that has a significant influence or side effects. Despite that today in the United States, we administer Heparin-protamine in approximately 2m patients. And the reason we do that is because there really is not an alternative. ARC183 is a molecule, which is thrombin inhibitor so it’s a validated target for anticoagulation obviously, it’s been demonstrated to have a very rapid onset for anticoagulation, and it is spontaneously rapidly reversed. We think that is a profile that suits for replacement of Heparin-protamine. In addition the dosing is expected to be predictable making it much easier to administer in the hospital than it is to administer Heparin, and obviously we will not be introducing the [well described] any side effects of Heparin and protamine.

Lastly I will mention this is an area where the animal models again are quite compelling. Essentially what we have been able to do is bypass surgery on dogs, and dialysis on sheep, and we have been able demonstrate pre-clinically already with this molecule the characteristics that we are striving for, and now obviously the goal is to move this into the clinic and document the same in men. In terms of the deal structure this is a fifty-fifty partnership with Archemix and Boston, we are proud of that relationship that we have already initiated early this year. We expect to be moving this program collectively with our partner into Phase I clinical trails in the second half of this year.

Now let us turn to rNAPc2. Yesterday we announced that we acquired 100% ownership worldwide rights for all indication of our rNAPc2 from Dendreon. Dendreon had actually acquired rNAPc2 when they acquired Corvas and Dendreon being a company focused on cancer was obviously interested in out licensing -- out licensing that compound, we approached them and yesterday we announced the acquisition. Why do we think rNAPc2 is important? What I think it’s important, it is a [potent] tissue factor inhibitor and tissue factor just to provide people from sweating it’s the first step of the coagulation cascade. But this really has the potential to be a drug which essentially stops clot formation before it even starts. It’s currently in Phase II trials been done in Boston with the TIMI Group led by Dr. Eugene Braunwald in patients with acute coronary syndromes. That trial is expected to be about a 125 patients and 5 in about 35 patients have been treated so far. In terms of data prior to this trial that we were able to look at before we did the deal, there have been more than 500 subjects or patients exposed to rNAPc2 and the overall combined safety and efficacy of the compound was certainly very promising. There are a number of indications that one could go after because of the activities of tissue factor has in a number of diseases. Some of the indications that we are focused on at this stage includes acute coronary syndrome, [inaudible] from both its [inaudible], Ebola virus infection, as well as, cancer indication. I reiterate our immediate goal is to reinitiate the Phase IIa trial being led by the TIMI Group as quickly as possible.

So to kind of summarize on the development [performance] of the research, we’re pretty excited that we have built a very, very impressive cardiovascular portfolio. We think this is important because it's focused in an area of our expertise. All these products are acute hospital-based products which should be synergistic with the sales force that we plan to build, to sell Alfimeprase, and lastly, I'll stress that these are molecules which have an unusually high probability of success because in most of the situation you are not actually even carrying a disease, you are simply creating a pharmcodynamic impact of the blood that allows you to create anti-coagulant state or to chew of a blood clot.

Turning to research; we are very, very excited and very pleased with the activities and the successes of our people in research. Our research is focused in two main areas; they include secreted protein and antibody targets. On the secreted protein front, we now have a number of proteins which are under therapeutic investigation in real animal models that we are trying to cure disease because we have been able to make significant findings about what these proteins do and file patents on those discoveries as well.

On the antibody target front, we are now working very diligently on approximately 18 targets. 7 of these are targets in blood cancers, 11 of these are targets in solid tumors. We have advanced from the previously announced four antibody targets and pre-clinical programs to now 7. Our goal overall in research is to advance at least one of these opportunities into IND enabling studies in 2004.

On the business development front, our goal is to secure a partner for some of these research activities, ideally in secreted proteins or antibody targets. In addition, as we previously announced, we’d like to monetize some of our non-core assets that don’t relate to our focus one therapeutic drugs. At this stage we are in vast discussion with a select number of companies in a number of areas. I’d like to end by expressing my personal enthusiasm for the announcement of the addition of Barry Zubrow to our Board. As many of you may know Barry retired recently as a Senior Executive at Goldman Sachs and brings a great deal of financial expertise as well as relationships to our Board. We also want to thank Thomas McCarter who served on the Board for a number of years and served in the audit committee for his contributions over the years. I’d now like to turn things over Pete Garcia, our CFO to discuss our financials and our 2004 outlook.

Thanks Ted. Good afternoon everyone. I’ll take this time to discuss the financial results for 2003 and the financial outlook for 2004 including the financial impact of our recently announced programs.

Turning to our 2003 results. For the three months ended December 31, 2003 we reported a net loss of 9.4m or 12 cents per share compared to a net loss of 16.5m or 72 cents per share. Besides from lower expense numbers in 203, the loss per share number was impacted as a result of additional shares issued through our acquisition of VARIAGENICS in January of 2003.

For the fourth quarter, research and development expenses decreased by 2.6m or 28% in the fourth quarter of 2003 compared to the same period in 2002. This decrease was due to a decline in the research activity from our external research collaborations and a reduction in staffing levels announced earlier last year. For the same period, G&A expenses decreased by 6.2m over the same quarterly periods, primarily due to a one-time lease termination cost incurred in the fourth quarter of 2002. It was about $6m.

For the full year 2003 results, we reported a net loss of 50.2m or $0.79 per share compared to a net loss 45m or $2.08 per share. A reduction in revenue of approximately 24m in 2003 was due to the completion of our gene sequencing service contract with BASF in January of 2003. For the full year, research and development expenses decreased by 17m or approximately 34% in the 12-months ended December 31 compared to the same period in December of 2002. The decrease in 2003 was primarily due to non-cash expense item in 2002 related to our collaboration on Alfimeprase with Amgen. Also, a reduction in expenses due to the completion of our contracts with BASF, and reductions in our facilities cost in 2003. G&A expenses decreased by approximately 1m in the 12 months ended December 31. This decrease was primarily due to reductions in expenses for facilities legal headcount cost from our Sunnyvale location slightly offset by increases resulting from early merger in 2003 with VARIAGENICS.

While our financial results are not a measurement by which we currently base our success, we have made great strides in 2003 in reducing our burn rate without compromising our development efforts on Alfimeprase.

At this time, I’d like to give financial guidance on our 2004 operating results and set expectations on our 2004 burn rate. On the revenue side, we have developed a conservative financial plan that allows for a tremendous up side; we have assumed modest revenues in the low-to-mid seven figure range based upon the potential deal value, of our non-core assets. As Ted mentioned, while we continue to seek and fully expect to announce revenue generating partnering opportunities on our research and preclinical programs, for planning purposes we haven’t included any of these types of revenue in our budget.

Turning to expenses, we are comfortable with an estimated operating expense run rate of $9-10m in expenses per quarter, excluding our recently announced transactions which I will describe separately. And the potential for one-time item, this also would equate to about $8-9m in burn rate -- in cash burn rate per quarter. These expenses will include the assumption of the initiation of a Phase III trial in Alfimeprase in the second half of 2003, and the assumption that Amgen will begin to reimburse Nuvelo for 50% of the cost to develop Alfimeprase, late in the second half of this year. Based upon these estimates, our net cash burn rate again excluding our recently announced transactions should be about $30-32m in 2004. As Ted has gone through on our recently announced deals, we have just announced two very promising compounds and I would like to say, first that we are still in the process of evaluating the resources needed for these programs at this time, but we expect neither of these programs will inhibit our ability to fund the development efforts on Alfimeprase, and Alfimeprase continues to be our lead product candidate.

Turning to our collaboration with Archemix on ARC183, as Ted mentioned this is the 50-50 collaboration. The upfront payment that we made to Archemix was $3m in cash. This payment has already been made and will be recognized as an R&D expense in our quarter one financials. In addition, we have agreed to pay that first 4m of preclinical development cost and clinical manufacturing expenses. On a going forward basis, we expect a 100% of that contribution to be met early in the second half of this year when ARC183 is in Phase I. At that point, Archemix will begin to contribute 50% of the cash to develop ARC183 through the development of the program.

Turning to our just announced licensing deal with rNAPc2, as described in yesterday’s press release, we made a 4m upfront payment in the form of $500,000 in cash and the remainder in value of Nuvelo common stock based upon our most recent 20 days holding price average. This equated to about 790,000 shares of registered common stock which we issued to Dendreon. We will recognize the $4m as an R&D expense in Q1, although the cash impact to Nuvelo will be about $500,000. In acquiring the rights to rNAPc2, we are assuming a Phase II program with prepaid clinical expenses and a supply of research grade and clinical GMP grade manufactured product. We anticipate that this will significantly reduce our initial development costs and our completion of the Phase IIa trial.

To summarize the impact -- of the financial impact of these two new programs ARC183 and rNAPc2, they will add approximately $12-14m of additional operating expenses in 2004. This includes $7m in expense to be recognized in Q1 for the upfront payments. Assuming they move forward as anticipated, the full year cash impact of these programs will add between $8-10m to our burn rate. Given these financial estimates, our current cash balance, the availability of our recently filed shop registration statement and the positive environment for public company financing, we fully expect to be opportunistic in accessing the capital markets. We are excited about the opportunities that lie ahead for Nuvelo as we look to build on the success of 2003 and we continue to build a formidable product focus via pharmaceutical business.

Before I turn it back over to Ted, I would like to take a moment to response to questions that we -- Nicole, Ted, and I frequently get from shareholders. The question is about the potential for a reserve stock split. Just to remind everyone, at the last annual meeting our shareholders voted allow Nuvelo Board of Directors to implement a reverse stock split at their discretion. While the reverse stock split has not yet been implemented; the potential for a reverse stock split can be implemented any time prior to our next annual meeting. After careful consideration, the Board of Nuvelo has decided that it is in the best interest of the company and shareholders not to pursue a reverse stock split, and at this time we do not expect a reconsideration of a reverse stock split at the upcoming annual meeting. With that I'll turn it back over to Ted.

Thank you, Pete. [inaudible] share our enthusiasm for 2004, as we've discussed we’re committed to achieving several key milestones within the next several months from our clinical, research, and business development efforts. We are now happy to open it up for questions and we'd like to close with remarks at the end.

Thank you, sir. The question-and-answer session will begin at this time. If you are using a speakerphone, please pick up the handset before pressing any numbers. If you have a question, please press "*" "1" on your pushbutton telephone. If you wish with draw question, please press "*" "2 ". Your question will be taken in the order that it is received. Please standby for your first question. Our first question comes from Mark Monane with Needham & Company. Please state your question.

Hi thank you for taking the question and good afternoon. Couple of questions, one concrete, one more abstract. Could you please go over the outcome expected or that are being tested in the Phase II trials for PAO and catheter occlusion and I am asking you be concrete here about what you are expecting for the outcomes and how that outcome will influence the Phase III trial design? And then would you please step back for us for a moment and describe the changes in therapy for acute coronary syndrome and how Nuvelo’s potential medicine could fit in nicely with those changes in care practices including coated stents.

Sure. Mark, we are happy to answer those questions. Lets start with the question about Alfimeprase and the Phase II trial end points, both of those trials have very clear end points and end points that have been, [inaudible] in studies in the past. In POA, the major end point is to look at the rate of re-channelizing or reopening the occlusive clot for the patient presents obviously within an occlusive clot the drug is given and at four hours following initiation of the drug, we make a determination of whether or not blood flow has been restored, so that’s really the key end point. Our expectation and goal is that our drug will be comparable at getting the ultimate aspect that you can get with other drugs which typically are given much, much longer period to work out to 24-36 hours and again we are only giving our drug 4 hours to work, and obviously we are looking at the safety of our compound. It's the safety -- our confrontations are treated with tPA or Urokinase, are well described in terms of intracerebral hemorrhage in approximately 1-2% of patients, and major life threatening bleeds in approximately 5-15% of patients. We think that our Alfimeprase can improve on that and that is our expectation.

Turning to catheter occlusion, it’s a very straight forward end point, its simply where you are able to restore a function of the catheter, so these are patients who typically have had a catheter inserted to administer a drug chronically, and the catheter has occluded, so it is not longer usable. And what we do here is exactly what is currently done in the market with tPA. We administer either one or three doses of Alfimeprase or tPA and at the end of that trial we expect to see an opening rate of these catheters which is comparable to tPA. We are also looking very early on with the believe that it is possible that Alfimeprase will open these catheters more rapidly than tPA, but clearly our goal is to be at least to get tPA at restoring function in these catheters.

I think, I did touch upon, kind of the expectation. I think that our goal is to meet those expectations, to support on moving either above the programs into Phase III.

Now turn back to Acute Coronary Syndromes. Mark, you know Dr. Braunwald are very well versed well as I do if not better, and I am sure you have heard, Dr. Braunwald talk in great detail about all the progress that we have made in Cardiovascular medicine over the last several decades, including some of the things that you mentioned around stents and around other drugs, but beside all of that, there continues to be at least in my view and also Dr. Braunwald's view, an unacceptable incident of death, current in my and other untoward outcomes. We think that part of the issue could be addressed by a superior anti-coagulant, an anti-coagulant that acts early in the clotting cascade to really prevent the generation of thrombin [layer] perturbing or totaling blocking the instance. That could be a more difficult challenge, so I would say the fundamental goals here is to study rNAPc2 as an anti-coagulant that could be more potent and could also be safer because of where it’s working in the clotting cascade then the current agents which we use which include Heparin as well as other thrombin inhibitors.

Thank you. Our next question comes from Frank Petronas (ph.) of with Prudential Securities. Please state your question.

Hi guys. This is directed to Mr. Garcia. As far as the burn rate and the shelf registration of 75m, my last calculations were 20m or so in cash but 24 from the October financing. With all that’s going on in the burn rate at its current rate which is lower, my question is why do we shelf registration and why not if you have a 68 institutions more or less following you, would you only go for 75m and not maybe 200m and that’s the first part of the question and so that’s on the -- on the financing part and why would one reverse split of stock if you are looking to raise more money on the basis as you are going. I mean, I am very pleased to hear that you are not going to reverse split the stock and that’s my question? Thank you.

Okay, maybe I’ll take your second question first which was why reverse stock split. So, originally when we did file our proxy, I believe, I am almost certain, I have to look back there, our stock tends be lower dollar and obviously we were concerned for the [dealers] they last, this would have been early last year that was put on the ballot it was voted on, and it allowed the ability for the Board to act on that. We’ve kept that option open, but at this point in time given -- the number of questions that we get on just the uncertainty there, we just wanted to basically identify that we are no longer pursuing that. So, at the time it was looked at that as an opportunity to reverse split and get the stock over a dollar, some people would say you want to get the stock over $5 to bring in different institutions. We’re just obviously making some finality on the previously Board approved shareholders vote on that. With regard to the financing as Ted and I can both attest to in the last three years, you know Nuvelo and Hyseq have been through some difficult times, we obviously are not in the business of turning down money. At the same time, we would like to raise money when the environment is right, which we think is positive now, but we also need to temper that with our current market cap and dilutive effects to our current shareholders. So I -- we feel that at $75m a shelf will allow us to raise enough money this year to potentially get the product Alfimeprase through Phase III and at that point in time, you could potentially see us raise additional capital as other biotech companies were always going to be raising capital at opportune times, but we also want to make sure that we do it on the hills of positive news and success.

Thank you our next question comes from Charles Duncan with JMP Securities. Please state your question.

Hi, good afternoon gentlemen. Congratulation on what has been a transformational year and of course it an excellent. Couple of quick questions I am wondering if you could share with us your early thought on the design of the Phase III program for Alfimeprase, specifically the size, the type of outcome measures, and then also share with us how, you know, what you've learned about dosing in the PAO trial that can help you, help better enable the design of that trial?

Let us start with the Phase III design trial Alfimeprase, I think I should preface any comment here with something that’s probably obviously to everybody, I know it's obvious to Charles, is the Phase III trial design needs to be negotiated with the Food and Drug Administration and what this traditionally calls in the end of Phase II meeting or a pre-Phase III meeting, so until you have that meeting and gain some agreement from the FDA, it's somewhat speculative. But we've obviously had a great deal of thought and discussion with [product] leaders Luis Pena and I were both at Genentech; what we looked at these kinds of trials, and these kind of issues many times, but I would -- with that caveat I will tell you that our speculative thinking have been that the outcome really ought to be a clinical outcome and one clinical outcome that there has been a lot of enthusiasm about for these kind of drugs in this area is reduction in the need for surgery in these patients. So, that is probably the major variable that we would expect to mitigate. So the patient gets the drug, the clot dissolves, gets a good clinical outcome, as opposed to needing an open surgical procedure to remove the clot, or possibly bypass the leg. In terms of the size, again it's very, very speculative. I think, one of the things that is a fairly a clear point is that the FDA has historically wanted a safety experience of a 1,000-1,500 patients in a registration packet. So we are going to need to get to that kind of number, through our Phase I, II and primarily III program. And that could be a combination, I believe, of patients in catheter occlusion, as well as peripheral arterial occlusion. I think, the other issue that’s relevant to mention is that, we want to do compelling trials, I mean, I think that one of the things I learned at Genentech over the years is that, it doesn’t long term do a company any good to do trials which are not sized to have an outcome which is compelling to investors, as well as compelling to the FDA. So, I think that our trials are likely to be in the range of a 1,000 to more patients. So I think, there will be substantial crowd, I think the end point would be a clinical outcome as I described, and I think we've learned in our Phase II experience, a fair amount about the dosing of the drug that gives us comfort that the way we are dosing patients now, is probably the way that we would dose patients in our Phase III experience.

Okay. And a follow-up on, with regard to collaborative agreement with Amgen in Alfimeprase, can you remind us of, -- if Amgen has to make a decision or has the ability or opportunity to make a decision on whether or not, it would support going forward or accept the royalty and if you've had any discussions about Amgen's upcoming Analyst Day with them and if you are providing information to them?

I have not had any discussion with Amgen regarding their upcoming Analyst Day. I think it's generally been the policy of Amgen to focus more on molecules, which are just a little further along than Alfimeprase at this stage. So, I don't expect that to be a focus on their Analyst Day at this point; maybe they have not indicated that to me. What I would say going back to the early part of your question is that the deal with Amgen, keep in mind with structured when Amgen had actually decided to out license Alfimeprase and we also like did a deal with Amgen where they did not out license Alfimeprase to us, rather they entered into a fifty-fifty collaborative arrangement with us. They did reserve, however, in that arrangement the option to fall back to a licensing arrangement which we were very happy to accommodate and the reasoning for doing that I believe is because they were never sure if they wanted to make a transition into cardiovascular therapeutic area. So, they continue to have that option; they will make that decision within, I believe, 30 days of us presenting them the Phase II data.

And then final question, as you mentioned sales force and possible focus on acute hospital base products can you share with us some thoughts on how you might build such a sales force out, would it be through acquisition or kind of the denovo hiring process?

Gee! I'm so happy that somebody is thinking all the way down to that. I really haven’t given it quite that much thought Charles, but I would tell you that, you know, I probably have certain biases based on my experiences at Genentech, and I would say that, you know, the old fashioned way is to build the sales force, drive and hire the people that you think are good. If there was an opportunity that presented itself when we were at that stage, I think one would have to look at acquiring it but simply not quite at that stage. It's a little bit hard to predict but I would be very happy if we went the old fashioned way, which is build the sales force to sell the drug that I was used to watching at do at Genentech for Ritoxin and for all the other products that we were launching.

Okay, thanks for your clarification.

Thank you.

And your next question comes from David Wood with Rodman & Renshaw. Please state your question.

Hi, guys. Can you hear me better Love?

Yes, and thanks.

Just a couple of questions if I may and then I can get back in the queue to so that you [inaudible] time here. It was catheter occlusion, Ted, when do you think that the Phase II trial would be completed and when you could potentially see assuming positive data a Phase III trial initiating?

What I would say to that is that we don’t want to provide -- we don’t want to ahead of our self. I think our goal has been, David, at this point to get to the interim analysis and once we get to the interim analysis, we will actually likely make some decision that will influence the ultimate trial size. So, it's a little bit hard at this point to speculate about the exact timing of completion of the trial until we get through the interim analysis. So I'll just reinforce that our goal is to get that interim analysis on approximately the first 50 patients sometime in the March to April timeframe, and then I think we can provide a really good estimate of when we would get the entire trial done. But I would tell you that the overall projection -- I would tell you even at this point supports us moving to Phase III in the timeframe that's approximately in the range that we've been planning for Phase III all along. So we'll make better statements and clear statements after we get to that interim analysis would ingredient at what we're going, but there is nothing going on here that I think although undermines our efforts to get the Phase III program going and in a rough timeframe it's in the range of what we have always expected.

Okay, thanks. The second question I have is on the latest product and you had mentioned reinitiating of Phase IIa trial -- the Phase IIa trial. I guess I really don't understand Ted what do you mean -- can you kind of explain what you mean by that and also could you maybe give us a little bit detail on what this trial looks like and what sort of the end points are and how many patients are in this trial?

Sure, very happy to do that. This trial was initially initiated by Corvas and then of course Corvas was acquired by Dendreon, and Dendreon with its focus on Oncology, really did not have any expertise, no interest really in continuing the development of compound. They, I believe it was, approximately in mid-December shutdown enrolment of that trial. The trial that they shutdown enrolment on was a Phase IIa, really safety experience trial in patients with an acute coronary syndrome. It was designed to enroll 125 patients. At the time it was shutdown, 75 patients had been enrolled. And in terms of the design it was also a dose-escalation study where you start with a very low dose of rNAPc2 and escalate up into doses that where you predict you will be highly therapeutic.

The main emphasis of that trial was really to look at safety and the experience so far has been quite safe by the way. There are some other things going on in the trial, which [inaudible] as probably don't really want to talk about them, I am not really sure if it's very compelling because it's really, a safety experience trial, and in the first 75 or 125 patient study, the safety profile was encouraging.

Okay. Thanks. And I guess, the last question, when you look at ARC183, and then the latest product, how do you see yourself positioning? Do you see ARC183 being simply a drug for [inaudible] going forward or was this drug is from more of patients with acute -- with ACS and maybe DVT, I am just wondering if there is any overlap between these two products in terms of their indications, any thoughts on that going forward, would be very helpful?

Well, I don’t see a lot of overlapping, and in fact, that’s one of the, I think, wonderful things about the portfolio. The products really aren’t competing with each other and in many ways the products really aren’t competing at this stage anyway with many other products, because rNAPc2 is going after a novel target. It's certainly the most advanced product that I know of anyway, that’s going after the tissue factor target and again the goal here is to make a product which is more effective and safer then anything currently out there. ARC183 is a short acting thrombin inhibitor. It’s a short acting anti-coagulant. So the real goal here is to create a product which meets [inaudible] it’s a lot of patients, it meets the niche. A situation where you medically must anti-cogulate the patient and at the end of that medical intervention you would like for that anti-coagulant state that you induced to go away and today as I mentioned there are 2m cases each year for a physician that administer heparin followed protamine and I can assure you somebody who used to give a fair amount of [inaudible] and protamine that the only reason that you used that combination is the absolute need to be able to induce anti-coagulation for a short period and has a control of being able to reverse back. We think ARC183 will need that in beautifully and will meet that need based upon lot of extrapolation also based upon lot of animal information. We think it will be a more effective anti-coagulant then heparin. We think it will not have the anti-coagulant side effects that are well documented heparin and we also obviously are also obviously not using protamine, so we will not introduce the well described and serious side effects that potentially occur when you administer protamine to a patient. So, we really don't see these as being a competitive product with each other and again I'd reiterate, I don't think that there are other products out there that are really meeting the profile that we are going after.

Okay great. That’s very helpful. Thank you so much.

As a reminder should you have a question, please press "*" "1" on your pushbutton telephone at this time. Again ladies and gentlemen as a reminder, should you have a question, please press "*" "1". Our next question comes again from David Wood with Rodman & Renshaw.

When you think about reinitiating this trial Ted any guidance on timelines for that?

Well, I would tell you the timeline here for us is always called as soon as possible. We actually had our first interaction with the TIMI Group even before we signed the deal. We had a further interaction with the TIMI Group yesterday and we’ve already agreed with the TIMI Group that we'd like to begin or reinitiate enrolment in the trial as soon as this humanly possible. I don’t think that will take very long, but to do proper diligence to your question. We still have a little bit of work to do to sit down with the TIMI Group and make sure that we like the protocol that maybe some changes that we would want to make, but I wouldn’t expect this will take very long. I think we'll be reinitiating this in a matter of weeks.

So based on those comments, it sounds like that doesn’t need to be lot of changes in terms of regulatory or IRB approval or things like that, I mean you can go to the same sites and use sort of the existing infrastructure for this continuation.

That’s correct; when the trial was shutdown, there were approximately 15 sites enrolling in the trial. As I mentioned, the focus on that trial was on safety and the safety observations were excellent. So we don’t think there's any challenge there. The main modifications that we contemplated about the trial and really were early stages have been just around simplification and logistical issues. Basically, the trial is quite well designed, as I think, one would expect from something affiliated with Eugene Braunwald in the TIMI Group, so we don't there is a lot of hurdles but we want to make sure that before we give any clear guidance, we have done the work of sitting down with TIMI Group which we haven’t quite done because we just trying to [deal] about 24 hours here.

Okay, thank you

Our next question comes again from Frank Petronas (ph.) of Prudential Securities. Please state your question.

Yes, on the rNAPc2, I have recently over the last year my mother-in-law like 87 years old with a stroke ended up going in the hospital but we had a window of for 4 hours for the heparin, now my question to you is, you say okay use it and then dissipates and so forth. Now my question is what is your window as far as you know patient laying there say with the stroke and then what are the possibilities of the spinning of the blood and other problems from that side? And my other question is, with all the products how many research scientists do you have PACs working on individual products like you said you have cut down some of the workforce, was that in that area or is that in the -- I don't what like the temporary secretary health kind of thing? And my other question was with the $75m and your burn rate still about 9 or $36m don't you think the numbers to small and that’s it? Thank you.

Let me -- I am not sure where to quite start, but I will try to start with the [scientist] question, I think, our research efforts have been very focused, and quite frankly very thin, that is the way we have run the company. We actually are pleased to be running the company with the focus on being lean and being able to get the job done. The areas of that we are bringing more people though, particularly relate to development of our clinical projects. So those are areas where we actually hiring more people, and as we have more opportunities and maybe some collaborations around our research, we may even bring in more scientist at the research level, but I would reemphasize that on overall level, we do mean to be a lean company, but we also want to make sure that we have structured the company in a way so that we can get the job done, and get the job done appropriately. And I think we are doing that.

Going back to, I don’t know, if was the patient relative with the strokes, I am not entirely sure, you know, what the clinical circumstance were. I am not really necessarily an expert in strokes, I am a cardiologist, but I have obviously treated quite a few strokes over the years. There the window for tPA that’s actually three hours and that’s based upon data which shows that the clinical benefit of tPA was really graded in the first three hours, after three hours there wasn’t a great deal of benefit and there was a substantial increase in the rate of bleeds that were induced in the brain due to tPA, so tPA have a 4 hour -- a 3 hour time window so I am not sure if that was the window that you are referring to. People do sometimes use anti-coagulation, a [inaudible] in stroke treatment. I think the benefit of doing that is somewhat dubious based on my recollection of the literature and how you deal with, you know that situation. Having said that, clearly there is a window for even that because if the stroke is fully completed there is no reason to do it. So, I don't want to be your cardiologist and doctor on the phone, but I would say that I don't think that the window is really something that we will focus but we are not focused on stroke.

And just to answer your question on the cash again, we think that the shelf is adequate size whether or not we raise all 75m in the near-term is yet to be identified realistically. If we did raise say hypothetically 75m along with the current cash that we have on hand that would give us 2.5-3 years worth of cash. At that point in time, we think sometime between in those -- that period of time, we will have accomplished a lot more, hopefully have a higher stock pricing at that time will raise additional capital as needed to continue our programs forward and or commercialize our Alfimeprase.

If there are no further questions, I will now turn the conference back for closing comments.

Thank you. In closing I’d like to thank everybody who stood by the company and believed in our ability to succeed. While we really have not achieved all of our ultimate goals, we are quite confident in our capacity to get the job done. I’d like to thank our investors, our Board, our employees because without the efforts of those people we would not be where we are today. We are well on our way toward creating a company that can one day bring meaningful products to the patient and the providers who care for those patients. This is our vision and Novelo’s mission. We think 2004 is a year for us to deliver, with three potential cardiovascular product candidates and a research engine poised to deliver our first internal clinical opportunity. Nuvelo enters a new era as a maturing biotechnology company. We look forward to sharing our progress with you and on behalf of senior management; I’d like to thank you for you continued support.

Ladies and gentlemen, if you wish to access the replay for this call, you may do so by dialing 1-800-428-6051 or 973-709-2089 with an ID number of 333575. This concludes our conference for today. Thank you all for participating and have a nice day. All parties may now disconnect.