Oruka Therapeutics Inc (ORKA) 2006 Q4 法說會逐字稿

Good day, ladies and gentlemen. Thank you for your patience. And welcome to Nuvelo fourth quarter 2006 and year-end results and accomplishments conference call. My name is Bill and I will be your conference coordinator for today. (OPERATOR INSTRUCTIONS). As a reminder, today's conference is being recorded for replay purposes.

On the call today are Dr. Ted W. Love, Chairman and Chief Executive Officer; Dr. Michael Levy, Executive Vice President Research and Development; and Ward Wolff, Senior Vice President of Finance and Chief Financial Officer.

Before we begin the conference today, the host Company has asked me to read the following forward-looking statement. Presentations by Nuvelo management on this conference call will include statements regarding our anticipated use of cash and financial results in the fiscal year 2007, the success of our collaboration with Bayer Healthcare AG, the timing and progress of Nuvelo's clinical stage and research programs, the potential markets for our clinical stage compounds, and the expenses, revenues and potential for profits from sales of any drug, product resulting from such programs, which statements are hereby identified as forward-looking statements for purposes of the Safe Harbor provided by the Private Securities Litigation Reform Act of 1995.

Such statements are based on our 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, enrollment rates for patients in our clinical trials, changes in relationships with strategic partners, and dependence upon strategic partners for the performance of critical activities under collaborative agreements, stock market conditions, the impact of competitive products and technological changes, and uncertainties relating to our ability to obtain funding.

These and other factors are identified and described in more detail in the Nuvelo filings with the SEC, including without limitation, Nuvelo's quarterly report on Form 10-Q for the quarter ended September 30, 2006 and subsequent filings.

We disclaim any intent or obligation to update these forward-looking statements. I would now like to turn the call over to your host for today's presentation, Dr. Ted W. Love, Chairman and Chief Executive Officer. Please proceed, sir.

Thank you all for joining us today. We are pleased to share with you our fourth quarter and year-end financial results and accomplishments. Following my introductory comments, Dr. Michael Levy, our Executive Vice President of R&D, will discuss our research and development programs. And then Ward Wolff, our Senior Vice President of Finance and Chief Financial Officer, will provide an overview of our 2006 fourth quarter and year-end financial results, as well as guidance for 2007. Finally, I will conclude with an overview of the corporate and clinical milestones that are ahead of us in 2007.

In 2006 we made significant progress toward building a fully integrated biopharmaceutical Company. The disappointing outcome from our two Phase III alfimeprase trials should not obscure the many accomplishments of the past year. In 2006 we moved several products forward into clinical development, formed a strategic partnership with Bayer, completed two large Phase III trials and started two others. Each of these demonstrates the capabilities of our first rate development organization. Let me touch on several of the significant 2006 corporate accomplishments.

We expanded our development efforts with rNAPc2, a novel anticoagulant that we're testing in both cardiovascular disease, as well as cancer. As you may recall, we completed and presented Phase II proof of concept data with rNAPc2, evaluating its potential in the treatment of patients with acute coronary syndromes. Then in late 2006 we initiated a Phase II trial of rNAPc2 in metastatic colorectal cancer, exceeding our target of beginning the trial in the first half of 2007.

Also this past year we announced an expanded collaboration with Archemix for the discovery of short-acting aptamers for use in medical or surgical procedures. Simultaneously, we nominated NU172, a direct thrombin inhibitor, as a development candidate.

We see a great opportunity for anticoagulants that have a rapid onset and offset of action, given unmet medical need for an anticoagulant with fewer side effects and more predictable dosing than Heparin combined with its anecdote Protamine.

We also have strengthened and expanded our Board of Directors and senior management team, including key additions in Human Resources, Business Development, Finance, Manufacturing and R&D.

Importantly, in 2006 we entered into a collaborative agreement with Bayer for alfimeprase. And while the results were not what we had hoped for, the alfimeprase Phase III programs in acute PAO and catheter occlusion helped demonstrate our ability to execute complex global clinical trials.

Let me now turn to our 2007 outlook. During the first half of the year we will continue to work with our partner Bayer to determine next steps for alfimeprase. In order to make the most informed decision that is in the best interest of patients and our shareholders, we're conducting a very thoughtful process of gathering and analyzing data from the NAPA and SONOMA trials.

We are also making good progress in our meetings with our DSMB advisory committee and experts. As an example, we recently held a meeting with our stroke advisory committee. After sharing with them all of the available alfimeprase data today, the committee encouraged us to continue to pursue alfimeprase in stroke. To be clear, we have not made any decisions about moving forward in this area, and we will still need to complete our conversations with our partner Bayer, outside advisers, regulatory agencies, including the FDA. While there are additional steps we need to take before making any alfimeprase development decisions, we're encouraged by this initial feedback with regard to stroke.

We estimate that it will take several months to complete this process, and look forward to sharing our strategy for alfimeprase in the first half of this year.

In addition to alfimeprase, we're moving several acute cardiovascular and oncology product candidates through development. These opportunities have the potential to bring significant value to both patients and shareholders. Michael will elaborate on these programs.

We're also committed to building and further developing our pipeline, and are working on the business development front to pursue opportunities that leverage our cash position, our clinical assets, and our team's depth and expertise.

We remain focused on building our pipeline with cardiovascular and cancer products, as well as other products that could be sold by a specialty salesforce.

On the financial and operational side, we built our 2007 budget to reflect our commitment to progress our promising development programs, including rNAPc2, NU206 and NU172, and to take into account recent developments with alfimeprase. Ward will elaborate on this toward the end of the call.

We continue to be dedicated to our corporate vision of building a fully integrated biopharmaceutical Company. We look forward to sharing our alfimeprase strategy with you in the coming months, and keeping you apprised of our clinical advances with our multiple programs.

I will now turn the call over to Michael to discuss these programs in more detail.

Let me echo Ted's comments and expand on his remarks. Beginning with alfimeprase we're conducting a comprehensive thorough review of all of the data from the NAPA peripheral arterial occlusion and SONOMA catheter occlusion trials, and look forward to sharing our strategy for alfimeprase in the first half of this year.

As part of our analysis we are simultaneously examining the implications of these data for our other indications and opportunities, including stroke and DVT. Each indication has a different dosing, delivery and risk benefit profile. And we're taking all of these factors into consideration as we evaluate the potential development options.

In the stroke indication, we have been encouraged by the recent meetings of our stroke advisory committee and their interest in the clinical development of alfimeprase for this large, unmet medical need. However, the programs we have in place for each indication remain on hold until we complete this analysis. We need to complete this process before making a final decision on moving alfimeprase development forward on an indication by indication basis. And we look forward to sharing this with you in the coming months.

Before I turn to rNAPc2 for both the cardiovascular and cancer indications, let me first touch on NU172, NU172, a compound we nominated as part of our collaboration with Archemix, is a short-acting, direct thrombin inhibitor for potential use as an anticoagulant for patients undergoing medical or surgical procedures. We're excited about the prospects for this drug candidate, because animal models suggest that NU172 may be a potent anticoagulant that offers the potential for predictable anticoagulant effects, rapid onset and offset of action, reduced bleeding complications, and no risk of Heparin-induced thrombocytopenia.

NU172 is currently being evaluated in R&D-enabling studies, and we expect to initiate a Phase I trial with NU172 in the fourth quarter of 2007 or first quarter 2008.

We're also working with Archemix to identify additional candidates that act upon other targets along the coagulation cascade.

Let's now turn to our development programs with rNAPc2, and let me provide a quick review. RNAPc2 is a factor VIIa/tissue factor inhibitor. And the potential anticoagulant effect of rNAPc2 results from its ability to block the factor VIIa/tissue factor protease complex, which is responsible for the initiation of the process leading to blood clot formation.

Over the past several months results from the Phase II proof of concept trials evaluating rNAPc2 in patients with acute coronary syndromes, or ACS, have been presented at the World Congress of Cardiology, TCT and American Heart Association meetings. And we expect the first publication of these data to appear in the Journal of the American College of Cardiology in the first half of 2007.

In the Phase II trial treatment with rNAPc2 added to standard anti-thrombotic therapies resulted in a dose-related inhibition of thrombin generation, and a concomitant reduction in ischemia, without a statistically significant increase in bleeding in patients with ACS. In addition, rNAPc2 with either half dose or no Heparin, also resulted in a decrease in thrombin generation and reduced ischemia. Again, without a statistically significant increase in bleeding. We're encouraged by the signals we saw in this trial, and since expanded the rNAPc2 program into cancer.

Tissue factors are over expressed in many cancers, such as colorectal, melanoma, lung and pancreatic cancers. And the interaction of tissue factor with factors 7a has been shown to put a critical role in the cellular signaling of both metastases and angiogenesis in a variety of cancers.

As rNAPc2 is a tissue factor inhibitor, we're investigating the potential role of rNAPc2 as a cancer therapy. There has been increasing interest in the field regarding the role of tissue factor in cancer. And last December at the [ASH[ meeting we made our first scientific presentation of rNAPc2 pre-clinical data in cancer, which received an overwhelming response.

At the end of last year we initiated a Phase II program studying rNAPc2 as a second line therapy in metastatic colorectal cancer. This two-stage trial will enroll up to 100 patients to determine the safety and efficacy of twice weekly subcutaneous rNAPc2 in combination with 5-fluorouracil-based chemotherapy regimens.

The first stage will evaluate the safety and activity of rNAPc2 in a three tiered dose escalation format. The second stage will randomize patients to receive either placebo or doses of rNAPc2 that were determined safe during the first stage in conjunction with standard chemotherapy regimens.

Efficacy endpoints will include progression free survival, metastasis free survival, and overall survival. Our excitement related to rNAPc2 in cancer grows as we continue our research into both the compound and the role of tissue factor in cancer. As such, we began to expand our focus beyond our current Phase II trial, metastatic colorectal cancer, and are preparing for possible additional cancer trials. Once we have further understanding of the potential therapeutic application of rNAPc2 in cancer, we will formulate our partnering strategy for rNAPc2 in both cardiovascular and the cancer indications.

Further expanding our pipeline, we're developing NU206, a growth factor that has the potential to be a highly specific and potent stimulator of the gastrointestinal epithelial cells. NU206 is active in multiple animal models of human disease, including radiation therapy or chemotherapy-induced mucositis, inflammatory bowel disease, and short bowel syndrome. We expect to initiate a Phase I program the first half of 2007. In addition, scientific interest in NU206 continues to grow, and we expect to publish additional data on NU206 in Gastroenterology and other publications in the coming months.

Let me conclude by saying that is our belief that we have several quality programs in development, and that we've assembled a group of talented and experienced clinicians and scientists who have proven their ability to move promising drug candidates through clinical development. I will now turn the call over to Ward.

Good afternoon everyone. After the close of the market today we released our financial results for the fourth quarter and full year 2006, and I will cover some of the highlights of those results.

With respect to our consolidated statement of operations for the fourth quarter of 2006, we reported a net loss of $65.3 million, or $1.23 per share, compared to a net loss of $21.5 million, or $0.50 per share, for the fourth quarter of 2005. Please note that the 2006 loss included two non-cash charges that I will explain momentarily.

The weighted average number of shares outstanding used in the calculation of net loss per share was 53 million shares for the fourth quarter of 2006, and 42.9 million shares for the same period in 2005. On December 31, 2006 there were 53.2 million shares outstanding.

Revenues in the fourth quarter of 2006 were approximately $900,000 compared to $200,000 for the same period in 2005. The increase was primarily due to the $50 million upfront payment we received from Bayer in the first quarter of 2006, of which we recognize approximately $800,000 as revenue in the fourth quarter. This upfront license fee is recorded as deferred revenue, and recognized on a straight line basis over the performance period under the agreement, estimated to be until September 2020, when the last significant alfimeprase-related patent has expired.

Operating expenses for the fourth quarter of 2006 were $70.5 million compared to $22.1 million in the 2005 quarter, with the increase primarily due to two non-cash charges. The first was a $21.2 million charge to expense previously capitalized clinical trial supplies, principally related to alfimeprase, but also to our other drug programs.

In light of the Phase III trial results for alfimeprase, we reviewed our assumptions related to the accounting for such cost, which in the past had been capitalized in accordance with the accounting rules, where multiple applications exist for their use, and then expensed when they were shipped for use in clinical trials or testing. As a result of this review, we determined that a more conservative approach for products in clinical development would be to expense these costs as they are incurred.

This is a much more commonly applied approach in the industry. And we continue to carry our existing stock of alfimeprase and our other drug supplies that can be used for clinical or non clinical purposes, despite their evaluation being at 0 on the balance sheet.

The second non-cash charge in the quarter was for $24.5 million to account for future expenses related to a facility in Sunnyvale, California that we stopped using in December 2006 and no longer intend to utilize. This charge calculated primarily as the present value of remaining lease-related payments, is shown as a separate line item within operating expenses in the financial statements.

Research and development expenses were $39.4 million in the 2006 quarter, and $17.4 million in the prior year quarter, with the increase primarily due to the non-cash charge of $21.2 million related to clinical trials supplies, as previously mentioned. Increases in clinical trial, drug manufacturing, and R&D personnel costs of $70.5 million in the fourth quarter of 2006 compared to the prior year quarter, including $1 million of non-cash employee stock-based compensation expense, were offset by an increase in cost-sharing credits billable to collaboration partners of $7.4 million.

General and administrative expenses were $6.6 million for the fourth quarter of 2006, compared to $4.6 million for the 2005 quarter, with the increase primarily due to precommercial activities for alfimeprase and non-cash employee stock-based compensation expense of $1.1 million.

For the year ended December 31, 2006 the net loss was $130.6 million, or $2.54 for per share, compared to a net loss of $71.6 million, or $1.73 per share, for the full year 2005. Revenues for the full year 2006 were $3.9 million compared to $500,000 for 2005, with the increase being primarily due to the recognition of the Bayer upfront license fee.

Total operating expenses for 2006 and 2005 were $144.5 million and $73.6 million, respectively, with the increase primarily due to the charges for clinical trial supplies and the facility exit as previously described, as well as an increase in clinical trial drug manufacturing, and R&D personnel costs, and precommercial activities for alfimeprase.

Stock-based compensation expense for the full year 2006 was $4.6 million in the research and development line item, and $6.6 million in the general and administrative line item.

With respect to the balance sheet, we ended the fourth quarter 2006 with cash, cash equivalents and short-term investments of $153.1 million. This amount includes $10 million of our equity line with Kingsbridge Capital that we drew down in October. This resulted in our issuing approximately 568,000 shares of common stock to Kingsbridge, as disclosed in our filing with the SEC. Under this three-year facility, which expires in October of 2008, we continue to have the ability to sell up to 5.7 million shares to Kingsbridge, subject to a cap of $50.6 million in proceeds.

Our net cash used in operating activities was $15 million for the fourth quarter and $37.1 million for the full year 2006. Cash burn, a non-GAAP measure as defined and reconciled in the press release issued today, was $14.1 million for the fourth quarter 2006, and $39.3 million for the year. These measurements of cash consumption were net of the $50 million upfront payment received from Bayer in the first quarter of 2006.

I would now like to turn to our financial guidance for 2007. Over the past months we have undertaken a thorough review of all of our operating expenses and activities in order to arrive at an appropriate budget for 2007. In doing so, as described by Ted and Michael in their comments, we factored in a range of potential outcomes for alfimeprase, as well as our commitment to aggressively pursue our other promising development programs, including rNAPc2, NU206 and NU172.

As we have reiterated earlier in this call, we expect to have further clarity in the future direction of alfimeprase sometime in the first half of this year. The decisions regarding alfimeprase will obviously have an effect on our operating results and cash burn from a clinical trial and manufacturing cost perspective, and will also impact decisions regarding workforce size and allocation.

We must also consider expansion of our product pipeline through potential business development activities. In the meantime, we have realigned our organization and related cost structure wherever possible.

Due to these variables, we have decided to give operating results and cash burn guidance for the first half of 2007, and will expect to give expanded guidance for the full year once we have made decisions with respect to the development pathway for alfimeprase. As such, our current guidance is that we expect both operating expenses and operating use of cash for the first half of 2007 to be in the range of $30 million to $35 million. Ongoing deferred revenue amortization is expected to be in line with amounts recorded in 2006.

In summary, we are prudently managing our business, while holding our strong clinical development and research capabilities intact, and evaluating future allocation decisions with respect to our internal and business development opportunities.

Our headcount stands at approximately 140, with R&D accounting for 75% of the total. Our cost-sharing arrangement with the Bayer remains in place, as we evaluate next steps in the collaboration. Our goal is to have at least two years of cash on hand, and we are currently operating under this assumption.

Thank you. And I will now turn the call back over to Ted.

In closing, I would like to take a moment to review the upcoming milestones and strategy for the Company. Over the next several months we will remain focused on working with our partner Bayer to determine our strategy for alfimeprase. With over $150 million in cash, and an experienced team in place, we believe we have the resources necessary to rapidly move our next generation drug candidates forward.

We're committed to advancing rNAPc2 through the ongoing Phase II trial in metastatic colorectal cancer, and to continuing to evaluate other potential cancer indications. We expect to initiate a Phase I study with NU206 in the first top of 2007, and are progressing in our plan to initiate a Phase I study with NU172 late this year or early next. In addition, we intend to evaluate potential pipeline expansion opportunities that make sense for our business and our shareholders.

The team and I remain committed to our vision of building a fully integrated biopharmaceutical company. And we have the infrastructure, team and expertise, financial resources, and product opportunities needed to pursue this goal. We will continue to make execution of our milestones a priority in 2007, and look forward to reporting our progress throughout the year.

Operator, can you please poll for questions?

(OPERATOR INSTRUCTIONS). Geoff Meacham, JP Morgan.

This is Matt Rodin in for Geoff today. I am just wondering if you could talk about your analysis of the PAO and CO trials, and whether or not it implies anything for potential modifications in the stroke and DVT programs?

Sure, we would be happy to do that. And Michael might want to elaborate further. But there probably isn't too much to add beyond what we have already said, which is we think we have an understanding that the enzyme is obviously an active clot dissolver, based upon the clot dissolution and opening that we saw in catheter occlusions. And that we reconcile the lack of significant clot lysis in the PAO trial as relating to delivery. Specifically that the delivery mechanism facilitated spontaneous clot lysis and also wash out of the drug before it could have a major effect of lysis beyond that of the placebo. So there probably isn't much to add beyond what we have already said along those lines. Michael, feel free to elaborate.

I think you have highlighted the key points is that we are seeing what we can learn regarding delivery of alfimeprase and the optimal way to deliver alfimeprase from the trials we have conducted and applying that knowledge to any possible future trials we would contemplate.

Just a follow-up, if I may, on rNAPc2. You mentioned that you would be potentially exploring this in other cancer indications. I was wondering if you could say what those indications are?

It is too early to share with you definitive plans, but I can tell you that we are very excited, because tissue factor appears to play a role in so many important cancers. And we have discussed a number of them in the past, such as melanoma, lung cancer, pancreatic cancer, etc.

Our focus this time around will be to find cancers in which we can get to proof of concept as quickly as possible. But I think that will be the strategy we will use to guide us. But beyond that I don't have much information to share now.

Bret Holley, CIBC World Markets.

Michael, I was just wondering if you could elaborate a little bit on the Phase I plans for NU206? Is this going to be in healthy volunteers?

Well, with NU206 we are currently finalizing the best approach to the Phase I trial. So it is a little premature for me to confirm what patient group we will look at. Certainly what we're considering is either healthy volunteers, or in fact patients with cancer. And we are working through the best approach to that. Beyond that in terms of the design, we will use a very standard Phase I clinical trial design looking at ascending doses, and really focusing on drug safety.

Is it fair to say that you really haven't selected kind of the initial indication at this point? I mean, you mentioned a lot of potential indications, and is there an obvious first pass indication that would be best at this point?

What we're trying to do is to keep our options open with the Phase I program to make sure that it enables us to go forward in any indication. Each of us here I am sure have our own favorite indication, because it looks like NU206 could be a potent and important molecule in a number of indications. But we want to make sure we are well positioned to study every indication that makes medical and commercial sense.

Liana Moussatos, Pacific Growth Equities.

I want a follow-up on the previous question about rNAPc2 in other cancer indications. Do you see yourself starting trials before you have topline data in colorectal cancer? And do you see yourself getting any kind of inkling of data this year or will it be 2008?

Let me answer those questions in reverse order. First of all when we can expect data. It is I will early to say. And the strategy that we have adhered to in the past I think has served us well, is to wait until our trials are well underway, and then we can advise you based on real data as to how long we think patient enrollment will take.

And with respect to starting trials looking at other cancer indications before we complete the first trial, as you know that is very common with the cancer development paradigm. Success or failure in one particular cancer doesn't well predict how a particular agent will do in other cancers, so it is often a good strategy to look at multiple cancers in parallel or close to parallel.

You might be starting some other indications this year?

That's a definite possibility.

A do you expect data from the colorectal this year or unlikely?

We can't really say. What we will do is we will wait to see how well the trial is enrolling. We're optimistic it will enroll well. And when we have a good idea of when it will complete we will get back to you and give guidance on when we think we will have data this year.

Jason Zhang, Prudential.

Could you remind us again your definition of success of this proof of concept on up to colorectal cancer trial? Are you looking at a particular response rate or -- if also I remember correctly, this is a multistage Phase II, so you certainly have early-stage where you look at obviously lower doses, and then you would probably move to a higher dose. And at what stage are you at right now?

I think you have outlined that well. And the principal goal of the first stage is to confirm the safety profile we have already seen with rNAPc2 in other indications. Remember that we have looked at rNAPc2 now in a little over 700 patients. So we want to confirm the excellent safety profile we have seen to date. And then in a second stage, we will be looking at success in terms of cancer chemotherapy. And that success will be based on endpoints including progression free survival, metastasis free survival, and probably most importantly overall survival.

Again, that is compared to a control arm you [gain] or it is going to be historical (multiple speakers)?

I think it is very important to have a placebo control arm, and we will have a placebo control arm. Because the field is so rapidly changing it could be very misleading to look at historical controls.

Caroline Stewart, Piper Jaffray.

Maybe you mentioned this, and I just missed it, but the facility that was closed, what went on in that facility specifically?

Ward may want to add to this, but that was a facility that we had acquired when the Company was in the early stages and was focused on DNA sequencing and doing a lot of work for companies like BASF. So it was a much, much larger Company, and it was expanding. Since then the Company actually moved forward to San Carlos, and had contemplated really what we could do with that facility. And ultimately decided that that facility really doesn't fit with the current structure of the Company.

Right. Just briefly on that, the Company had been using the facility for storage and other things. And as Ted mentioned, it was remote from our current headquarter location so we made a decision during Q4 to exit formally and that is what triggers the accounting event.

Was there any kind of a headcount reduction?

No, that was purely a transaction that related to getting that off of our books because we're not planning on using that facility going forward.

(OPERATOR INSTRUCTIONS). Shiv Kapoor, Montgomery & Co.

I've got a couple of questions. First on alfimeprase, you mentioned that further development of alfimeprase will impact your operations. Can you clarify what kind of impact that will have on cash flow?

Ward, I don't know if you want to speculate on that, but --.

Sure. As we will be disclosing in the 10-K this week, the expenses related to the alfimeprase program in 2006 were quite significant in terms of our overall R&D spend. Essentially it took 50% of R&D spend level.

As you can imagine, we are also looking to develop the other programs and bring those forward. So I think it is fair to say that in the burn, the cash used from operating activities that we cited for the first half of '07, that alfimeprase will be a smaller percentage of the overall R&D total, especially while we're still evaluating.

But we work closely with our partner Bayer in establishing an annual budget. We have already done that. So now obviously we're refocused on how that budget should be amended. But I think that will give you some sense of the overall alfimeprase effort, at least in the first half of '07.

On NU206 when do you anticipate seeing results from the Phase I study that you might start in the first half of this year?

We haven't given any guidance on that, and right now we're focused on starting the trial and running a high-quality trial. And we haven't even finalized the design, as you heard from some of the earlier questions. But once it is up and running, we will give guidance on how well it is going and when we expect to complete.

[Craig Suvenaja], UBS.

Thanks so much for taking my questions. I've got several. First, could you just remind us what the Company's current thinking is on rNAPc2 in ACS? It sounds like you're kind of waiting to see how it all pans out in the cancer setting and the potential of multiple indications being sought. Can you just remind us what you're thinking is on either potential partnering or moving forward?

Sure. I think at our R&D meeting last year, we essentially outlined the strategy, which is essentially what you just said, which is we had initially been operating on the strategy of understanding the potential of rNAPc2 in ACS. And as you well know, those trials were consistently very encouraging in terms of the drug's potential.

Simultaneously what we had ongoing is efforts to understand pre-clinically, scientifically in animal models the potential of the drug in cancer. And we were encouraged by that data as well. We ultimately recognized that structuring a deal -- and even the company that you might do a deal with might be difficult to identify if the value of the asset was significantly tied to cancer, in addition to the value in ACS. So we decided to essentially take a pause with the ACS partnering efforts until we completed some proof of concept work in cancer.

Another question I have is, could you give any more specific color on the exact reasons why the advisory scientific committee that you had felt it was comfortable to go ahead and advance alfimeprase in the stroke setting?

Well, I can't share much color with you at this stage. But what I can tell you is that we were in a position to share with them all of the data we had generated to date in peripheral arterial occlusion and in catheter occlusion. And to work through that data with them, and of course the pre-clinical data we previously generated in stroke, and reviewing the totality of the data. They were very encouraged by the risk benefit profile, and very, very encouraged with both the potential. And I have to stress, it is the potential, to have an impact on this very serious disease with such a huge unmet medical need.

And maybe the only other things I would add is that I think that those advisers obviously were very focused on the fact that all of our data really was compared to placebo. And we know that there is a long history of using clot dissolvers to treat clots, and that those drugs have never appeared to be comparable to placebo in terms of safety. I think when you put it altogether they were encouraged.

Then my very last question, I know enrollment is relatively early in the rNAPc2 colorectal cancer study, maybe only a couple of months, but do you have a sense of whether enrollment Roman will be complete say by midyear or third quarter this year?

I think you're right. It is early days and really the best thing is for us to wait until we have a couple more months under our belt and have a good idea of how well -- how quickly enrollment is going before we give you any specific guidance, because we want to make sure that what we tell you will hold up.

William Ho, Banc of America.

Following up Craig's great question a bit, I know in stroke you have a high rate of mortality, which changes the risk reward profile. But what is it about DVT that you mentioned -- is it because of the lower amount of pressure involved in the veins versus the arteries?

Well, I think one of the things I can say is that we have not sat down with DVT advisers, as I think you know the stroke program was far ahead of the DVT program in terms of our process. Recall our effort originally was actually to enroll the patient before the end of 2006. And we were actually on a track to in fact complete that until we announced the data on December 11.

The other thing I really have to emphasize here is that all of the indications that we're looking have different risk benefit profiles. They also have different amounts of dosing that one would imagine. And those are important things to work through. But I do want to make sure that I end by emphasizing that we really haven't made a decision on stroke. What we really trying to do is just provide people with a sense that we are making progress. We are getting some feedback. But we are not making any new decisions, and no decisions will be made until we really complete a thoughtful process.

With respect to rNAPc2, I know you had originally intended to wait until you have the cancer data before you partner, but does the failure of alfimeprase in PAO and CO change that thinking? How do you balance trying to maximize the value of the compound versus getting to a next significant milestone where you can raise additional capital to continue funding operations?

It is a good question, and we probably don't have all the answers to all the hypothetical situations that could come about. What I would say is that we're looking at a variety of decisions that we could make. And all of those decisions would have a major impact on some of the questions that you asked about, in terms of raising capital, in terms of what we will do with kind of the business overall. So they are just more hypothetical than I would feel comfortable going out and answering.

What I can assure you is that we're looking at a lot of exciting options. And we hope that we can pull off some of those exciting options for the benefit of our employees and our shareholders, and ultimately to patients that we think we can benefit by bringing products to the market.

Mark Monane, Needham & Company.

On alfimeprase, the mechanism action depends, or is dependent on the drug being very close to the site of action. There's other delivery systems that are being explored. For example, the use of bubbles and other technologies to get the drug from here to there. Do you have any thoughts at this point about potential use of these alternative delivery methods to get the drug to where it needs to go (indiscernible)?

Michael, you may want to add to this, but I would say you have hit upon some of the important concepts. That is exactly the kind of stuff that we're trying to work through right now in terms of whether or not you can use some of the technology that you refer to, and other technologies, to really deal with some of the issues that we have identified in terms of drug delivery.

But it is still quite premature for us to begin to speculate if we really think that bubbles are a solution here, or balloons are a solution. We have really not worked it all through yet, but I assure you that we will.

That's fair. I know you will. And the other question has to do with the treatment of mucositis. Amgen has a drug, and there are a couple of other drugs that are out there that are being used in mucositis. And the results are interesting or encouraging, but the sales of these drugs are not optimal. Can you comment on what you think is the state of union in terms of management of mucositis, especially radiation therapy or chemotherapy induced mucositis, and where Nuvelo's drug and development may fit into that?

That is a very good question. What I can tell you is that mucositis is clearly a terrible problem that affects a large number of patients. And beyond that it is (indiscernible) side effect of chemotherapy. Meaning there is a huge unmet medical need. It often prevents patients from getting potentially lifesaving chemotherapy.

It is hard for me to speak to why Amgen's drug is successful or not successful. But most people in the field believe that a compound with a good profile will play an important role. And our drug is very different from Kepivance in a number of ways. It has a different mechanism of action, different target cells, and acts on different places within the GI tract. So we remain optimistic that if the potential of the drug holds up and the profile develops in the way that we hope it well, that it could potentially play an important role and be commercially successful.

That is also one of the reasons that we have looked beyond mucositis. And in fact, much of the data that we have generated has been really unprecedented in terms of efficacy in inflammatory bowel disorder, short bowel disorders. There are a range of things that we can go after. And that really drives our excitement about NU206, the consistency and the potency in a range of efficacy models of GI tract integrity.

Thank you very much, sir. I will turn the call back over to our speakers for closing remarks.

I would simply like to close by thanking you all for joining us today. We do hope that we can see many of you at some of the upcoming financial conferences. And I wish you all a good day.

Thank you very much, sir. And thank you, ladies and gentlemen, for your participation in today's conference call. This concludes your presentation, and you may now disconnect. Have a good day.