輝瑞 (PFE) 2010 Q2 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the second quarter 2010 Icagen Inc.

earnings conference call.

My name is Francine, and I am your operator for today.

(Operator Instructions).

I would now like to turn the presentation over to your host for today's call Dr.

Rich Katz, Executive Vice President and Chief Financial Officer.

Doctor, please proceed.

Thank you, operator.

Good morning, everyone, thanks for joining us today to discuss our corporate research and clinical progress as well as our financial results for the second quarter.

With me here today is Kay Wagoner, our CEO, Seth Hetherington, our SVP of clinical and regulatory affairs, and Doug Krafte, who heads up our biology and pharmacology area.

Kay will begin the call today with a general overview, Seth will provide an update on our clinical programs.

I will briefly review our financial results and all of us will be available to answer your questions.

Doug is joining us today, as he is one of the key people involved in the Pfizer collaboration for which we had some recent news, and he'll be happy to take your questions with regard to that program.

Before we begin, I would like to read the following regarding forward-looking statements that we may make today.

Various remarks that we may make about the Company future expectations, plans and prospects constitute forward-looking statements for purposes of the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995.

Actual results may differ materially from these forward-looking statements as a result of various important factors, including those discussed in our most recent quarterly report on Form 10-Q as filed with the SEC.

In addition, any forward-looking statements represent our views only as of today, and should not be relied upon as representing our views as to any subsequent date, while we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our estimates do change and therefore, you should not rely on these forward-looking statements as representing our views as of any date subsequent to today.

Let me now turn the call over to Kay.

Thank you, Rich, and thanks for joining us on our quarterly call this morning.

This has been a very good quarter.

We are very pleased with the progress we have made in a number of our programs, particularly in the Pfizer collaboration, and in our KCNQ epilepsy pain program.

We have also seen an improvement in our financial position.

Seth will talk about the 105665 program in a little bit more detail in a few minutes, and Rich will give you the details of the financials, but let me just give you a brief overview of where we have been and where we are.

With regard to the sodium channel pain collaboration with Pfizer, I'm sure some of you saw that we recently initiated an exploratory clinical study.

That study is in healthy volunteers, and primarily to invest the pharmacokinetics of multiple compounds.

This collaboration has been really interesting and extremely productive.

We have taken a very broad approach to studying channel targets, and a very broad approach to chemistry for leads.

For that, I mean, we have various interesting leads that take us in to various different chemical spaces for our targets.

On each of these leads our chemotized test, differing properties.

And the current clinical study will provide a lot of incite that can be used by the collaboration to make informed decisions about compounds and dose selection for all of the targets.

Particularly in this current clinical study, for Nav1.7, which is also called SCN9A.

This will help us de-risk future clinical studies around this target.

The plan going forward would be to use the data derived from the study to select the best candidates for further clinical development.

As I noted this trial that's ongoing now is targeting Nav1.7, SCN9A, and as if of you probably know this is believed to be one of the most promising pain targets in the industry.

It has been linked to human pain disorders, as well, if it is not functioning, to the lack of pain perception.

So the idea is that inhibitors or blockers of this channel would be novel treatment for pain.

We are working as we talked about on other study channel targets in this collaboration with Pfizer, we're making substantial progress on those as well.

I would hope to update you on those target areas in future calls.

Let me turn just a moment to our epilepsy and pain program with KCNQ agonist.

This, we have ongoing extension studies in our photosensitivity epilepsy area, and the multiple ascending dose study, with ICA-105665, and those studies are proceeding as we had planned them.

Both of these studies should be completed by the fourth quarter this year, and will serve to further evaluate the safety and efficacy of our compound as well as to inform dose selection for future studies.

I think it's really important for us not to underestimate photosensitivity epilepsy study and the importance of this program.

earlier part of the photosensitivity epilepsy study that ICA-105665, gets into the brain and engages the target and produces a reduction in neuro-excitability by looking at the EEGs of these individuals who have photosensitive epilepsy and who have changes in their EEGs when they see flashing lights.

When you are able to reduce the neuro-excitability, that's an important finding.

Because that's the common underlying action of any antiepileptic drug, irrespective of its mechanism.

So it is very important for us to show this with 665 since it is very well tolerated and we have never seen a maximum tolerated dose or dose limited toxicity.

So that was an important study, we're continuing that, and Seth will give you the details of that in a few minutes.

Before he does that, though, I do want to highlight the trip A-1 program.

Trip A-1 is a really an interesting channel target.

It is excavated by external and internal inflammatory irritants.

It's also recently in 2010, there is a nice publication of associated disk channel web and episodic pain syndrome in man.

So if you have a gain-of-function of this channel, you have a specific episodic pain syndrome, that together with the fact that it is activated by these inflammatory irritants gives us belief that inhibitors to the channel may be useful in a treatment of conditions such as chronic inflammatory pain.

Recently we have had some breakthroughs in this area, which have enabled us to file a patent application to cover our discoveries.

We potent select compounds, we have demonstrated activity in relevant animal models, and we're very excited about the recent findings, and the ability we have to potentially build a nice program, and perhaps a partnership in collaboration with a large pharma company.

So without further adieu, let me turn it over to Seth.

He will give you more details of 105665 program, and then Rich will update you on the financials.

Thanks very much, Kay.

Our clinical plan for the development of 665 is proceeding along the time lines that Kay just reviewed.

The extension of the multiple-doze study in healthy volunteers is approximately halfway through the enrollment.

Just to remind you that study is a blinded placebo-control study, it enrolls two cohorts of 16 healthy volunteers each to study total doses of 500 milligrams and 600 milligrams per day for seven days.

Results from the study will provide safety and pharmacokinetics data that is relevant for future studies, not only epilepsy but for other neuro-excitable syndromes as well.

The photo sensitivity study is also enrolling.

We'll be adding some additional sites soon to give us access to new patients.

In that study, it will enroll 12 patients with photosensitive epilepsy divided in to two cohorts to investigate 500 milligrams or 600-milligrams as a single dose.

Along these lines, we are making plans for a Phase II study in patients with partial onset seizures.

This will explore the efficacy in a target population for our first anticipated clinical indication in epilepsy for 665 and it will have the standard end points that are used in Phase III trials for regulatory approval, one is reduction in seizure frequency and the other is reduction in responder rate.

We're continuing to plan for the study but we anticipate it will be a placebo-control study, power to see clinically meaningful changes in the primarily end points and be conducted primarily in the US.

We're targeting a cost of closer to $5 million than to $10 million, with the study start by early next year, and a completion in about 12 months.

So after that summary, I'll turn this back over to Rich now.

Thanks.

I'm going to focus my comments on the year-to-date results, and be happy to take questions related to the quarterly results during the Q&A.

Revenues for the first six months of 2010 were $3.7 million, this compared to $6.0 million during the same period of '09.

However, the '09 number included approximately $3 million related to the amortization of the up-front payment that we had received from Pfizer, which became fully amortized during the third quarter of '09.

Also of note, the second quarter figure of 2010 included $1 million that we received as a payment from AGTC related to the sale of a non-core asset.

For the first six months of 2010 operating expenses were $9.1 million.

This was a significant decrease from the $11.9 million for the same period of '09.

And the decrease was the result of a variety of cost-containment efforts that we have undertaken, over the past year or so, including focusing our development efforts on 665 and not pursuing semiconductor senicapoc for asthma as well as a work force reduction was implemented during '09 and other cost-containment efforts.

Putting it all together, net loss for the first six months in 2010 was $5.4 million, this compared to $6.0 million during the same period of '09.

On a cash basis, net cash used in operating activities was $5.2 million for the first six months of 2010, and that compared to $9.6 million for the same period of 2009.

So a significant decrease in terms of cash, cash usage.

Again, the decrease in cash use in operations was driven by the focus on 665, and the -- on the clinical side, and the cost-reduction efforts that we have put forth elsewhere in the Company as well as the sales of the non-core asset that I mentioned previously.

As of June 30, we had cash and cash equivalents of roughly $12.5 million.

This figure does not include, does not include, $3 million of milestone payments that we are expecting to receive from Pfizer as a result of the achievement of the milestones that Kay described.

So some key points, burn is being managed downwards.

We did have some decrease in our work force and other cost-control measures that have accomplished that, and our focus, of course, on our three key programs, the Pfizer program, the epilepsy program, and the trip A-1 program.

As Seth mentioned, we're looking closely at the cost for the Phase IIa, as we think about initiating that trial later this year or early next.

And we are targeting a figure that would be closer to $5 million than the $10 million we're still, as Seth mentioned, working on that design, but we're hoping to keep that cost in a manageable range.

Also just want to highlight some significant opportunities we have for additional non-dilutive financing.

One, is with regard to our Pfizer collaboration, there is the potential for additional milestone payments similar to the ones we recently achieved as a result of moving comp counts forward, both against the target, Nav1.7, as well as the other two targets that we're working on there.

So potential additional milestones, potential additional renewal from Pfizer.

As everyone will recall the collaboration was renewed last year, and we're in discussions regarding a potential further renewal.

We also have applied for the government grant that's available for therapeutic discovery projects that need appropriate qualifications, and we think we have a very good package that we submitted with regard to that, and we'll hear about that in October.

And then finally, we do have opportunities, of course, trip A-1, and our epilepsy and pain program are unpartnered today, and so as we have in the past, we will explore partnership opportunities with regard to those programs as well.

Not including any of the potential elements that -- factors for non-dilutive financing they I just mentioned, we believe that we have cash to operate in to the first quarter of 2011, and clearly with a partnership, the cash runway would be extended well beyond that and potentially through the completion of the Phase IIb.

So let me stop there, and we'll be happy to answer your questions.

(Operator Instructions).

Our first question comes from the line of Chris James from MLV.

Hi, good morningKay and Rich, Seth, and Doug, and thanks for taking my questions.

Absolutely, Chris.

And congrats on your progress, particularly with the SCN9 pain program with Pfizer.

I noticed in the press release, unless I missed it, there was no mention of potential sale of the Company or either raising additional cash, either dilutively or non-dilutively.

Has that goal changed with the additional funding or expectation of funding from Pfizer?

Well, Chris, I think that as we have reported previously, we have our JPMorgan to help us looking at a range of options including potential sale of the Company and/or partnerships as well.

We're continuing to look closely at opportunities for partnerships in particular.

I think we are certainly open to an acquisition, although I think that at this time, given where we are in the clinical-development cycle with 665 coming to the middle, there's a couple of key trials right now, I think that that's probably less likely in the near term, but it's something that we will certainly consider at an appropriate time.

In terms of, equity financing, I think is the other half of your question, Chris, obviously the receipt of the $3 million, and the expectations for renewal of the collaboration have put us in a much better financial position, and so I think that we'll certainly consider what the appropriate financing strategy is of the Company going forward.

I do think as I mentioned there are a number of different opportunities that we have in addition to Pfizer for non-dilutive financing, and we're going to be looking at those.

I'm not going to rule out the possibility that at some point down the road we could raise equity capital, but I think that there are other ways to fund the Company as well, and we're going to be exploring all avenues.

Great, Rich, that's really helpful.

You mentioned the potential milestones from Pfizer, could you give us an idea of how much that could amount to and timing around those additional milestones?

Chris, I can't give you specific details.

The -- as compounded are selected in advance, obviously we receive milestones and remember that this is a multi-target deal, so the milestones can come in another target area, as we are making great progress in other areas, as well as the Nav1.7 area.

Typically as you know at this development stage,the milestones are in the single-digit range as you saw in the press release.

And we would hope that we would get additional early-stage milestones this year or next year.

Later milestones are much larger, beginning at Phase II, but obviously, it's difficult to comment on the timing of Phase II milestones when you are in Phase I.

So I wish I could give you more details than that, but the program is on track and going really well, and multiple target areas.

Okay.

Great.

That's helpful.

Thanks, Kay.

Just a few more.

How will you amortize the $3 million from Pfizer, and perhaps I missed it, but will you be providing any financial guidance, particularly on the expense side for the second half?

Chris, the -- on the first part of your question, the Pfizer milestones are recognized as received, and so they won't be amortized.

They will actually be recognized during the third quarter.

On the second half of your question, expenses expected during the second half, I think it's a little bit premature to say too much about that today, Chris.

I think that there are a number of factors that are in flux right now, and we want to wait and see how things settle out.

So we haven't provided guidance for the second half, we may be able to do that, provided guidance for the fourth quarter, when we talk with you next quarter.

I think that you can look at our burn during the second quarter as probably being relatively indicative of what it is likely to be over the next couple of quarters, although we are looking at opportunities to further reduce costs, and we are certainly mindful of the importance of conserving cash during this period.

So I don't think you would see a substantial increase in the burn.

You may see some decrease, but it would be premature perhaps to say too much more about that today.

Sure.

Thanks, Rich.

That's helpful.

Sure.

With respect to the government grant, I think you said you are going to hear back in October.

Could you give us a range of what that could be?

The maximum that any company is able to receive is $5 million, and the way that the program is structured, you submit expenses for your key programs, which we have done, and then you are eligible for reimbursement of up to 50% of your expenses regarding -- relating to those programs, and those are then judged by the authorities, appropriate authorities, and a certain number -- this is again our understanding how the process works in general, not specific to Icagen, but a certain number of applications will be accepted and approved.

There is a total amount of money that can be distributed, which is $1 million -- I'm sorry $1 billion -- and our understanding is that it will be distributed evenly among all accepted applications, so depending upon how many applications are accepted, there will be a per-application figure.

We have heard numbers that are in the range of $0.5 million or so per application.

We don't know if that's right or not.

It's just numbers that we heard from people who seem to be knowledgeable in this area at accounting firms and elsewhere.

So I'm not expecting that the number will be $5 million.

I'm expecting, perhaps in the $1 million to $2 million range, but that's speculative at this point.

We don't know until -- and I don't think anyone will know until late October when it is announced.

Great.

Thank you.

It's nice that you are able to sell off some of your assets.

Do you have any other non-core assets that you may be able to monetize in the near term.

We do have a very broad IP portfolio, Chris, the CNG3B license was kind of a unique opportunity where there is a company pursuing gene therapy in that area, and wanted to obtain rights to use our IP.

I can't tell you that we have anything ongoing in terms of another discussion like that at the moment, but I can tell you we have a very -- as very robust IP portfolio, and would not be surprising to me if other opportunities emerged over time to do similar types of transactions, but I would not factor that in terms of a financial model as an ongoing, re-occurring type of revenue stream.

I think it will be very opportunistic, but we are going to continue to, one, be responsive, and then, two, think about where we might be proactive in terms of monetizing our IP portfolio to the extent that we can do so.

And then let me just say a word about that one.

In this particular area that we did this in it was interesting, because this group was interested in eye diseases, which is not something that we are pursuing, but having said that we maintained the license rights to use it for small molecules, so from my perspective, it was a win-win.

It was an important thing for them.

It was cash in our pockets, and also we didn't lose the rights to use it for small molecules if we ever in the future want to do that.

Great.

Just one last -- maybe three-part question.

Could you describe your partnership discussions about ICA-665, and then on the trip 1-A pain program, when do you think you can go in to man with that, and then with the CN9.

So on 105665, and also we have a very strong backup program or follow on -- let me call it a follow on program, where we have some interesting compounds that we have selected for further studies.

We're talking to a lot of companies about that program, and trying to find the right fit, trying to find the right timing for the studies.

Clearly we would like to add a as much value as possibility to this program before it is partnered, but those discussions take a long time, so you start early and you continue to move those along as you go, and judge the value to the shareholders of keeping it versus the value of partnerships, so those are ongoing.

Trip A-1, I can't give you a clinical time line as far as getting in man.

But as I said, we -- this has been a tough target area for the industry, and we have made some significant breakthroughs recently, which should increase the speed with which we can get to the place that we can begin to identify time lines and milestones for getting into the clinic.

So I'll hold off on saying more about that for a little while, but I think we have made some substantial breakthroughs recently, that is beginning to give us a view of where we can go with that program.

And then the SCN9A?

When can that go in to demand?

The SCN9A is the program we have with Pfizer and that is in man, that is the --

Oh, okay.

I missed that.

Okay.

That's the clinical Pfizer program that we had the press release about recently.

So that is in human subjects.

Okay.

Great.

Thanks for taking my questions.

Sure, just to follow-up on your question, and I think -- I think you might have -- so we had talked a little bit about this before, and maybe I mislead you.

As Kay mentioned, SCN9A program we are in man now, but these are early studies, and maybe your question was when would we expect to start full Phase I studies?

Healthy volunteers.

Right.

So that -- depending upon the results of the studies that are ongoing now, there will be an evaluation.

I think as Kay mentioned a little bit earlier in her comments, an evaluation of the compound for going through the study that is ongoing now, and looking at the -- particularly the PK properties of these compounds, and then a decision will be made, and we don't have the exact timing because it's under Pfizer's control, but a decision will be made as to whether to advance one or more of those in to traditional Phase I type studies that would occur presumably towards the end of the year, although, again, all of this is under Pfizer's control not ours.

Great.

Thanks.

I'll jump back in the queue.

Okay.

Our next question comes from the line of Chris Richard from Merlin Excess.

Thank you, and good morning.

Seth the retigabine briefing documents came out yesterday and I was wondering if there were any lessons to be learned for the 665 program, and any surprises on the safety side of that retigabine program?

We are going to be watching that advisor committee with a lot of interest tomorrow, obviously.

We think a positive opinion for reigabine is going to be positive for 665.

The questions that are proposed in draft form, at least to the committee, I think indicate where the FDA has its -- not concerns, at least where they want to focus on the safety issues.

But we believe ultimately, 665 is going to be differentiated from agabine, which is the new name for retigabine.

And I think that's about all we can say at this point in time.

We'll see how that briefing goes -- the advisory committee goes tomorrow?

But no changes in your Phase II plan?

No, I don't think it impacts us at all.

I think the distinguishing characteristics of our compound is what is going to drive us forward and make it successful, and those characteristics are going to be revealed and explored in Phase II and beyond that.

And my final question, just correct me if I'm wrong, there's no urinary signal with 665, like has been shown in these doc's with retigabine?

We have noneAny of these studies we have done so far.

Okay.

Thank you, Seth.

And I should point out one thing, that the urinary excretion is specific to agabine.

We do not have that kind of urinary excretion.

In what they are seeing, at least according to the briefing documents, looks like Crystalluria, so there may be some local effect.

Either mechanical or by high concentration of [vazelagabine] in the urine.

We'll just have to see how the hearing goes and plays out, and what the reviewer and the experts in urology have to say.

Okay.

Thank you, Seth.

(Operator Instructions).

We have a follow-up question from the line of Chris Richard from Merrilyn Nexus.

Yes, hi is this not Chris.

It is Dominick Simone.

Hi, Dom, how are you?

Good.

Good.

Thank you.

So just a follow-up question on retigabine.

Please remind us, has retigabine ever been tested in pig models?

That's the first part of the question.

And then could you perhaps give us remote color on the strategy collection, to push 665 at higher doses in this epilepsy model, while the proof of concept has already been established, and why not consider instead engaging or re-engaging the pain study you had started at higher doses?

Right.

Well, let's see there are a couple of parts to the question, the first has to do with retigabine in pain studies.

I -- somebody else may want to comment on any pre-clinical data, maybe Doug will start with that, and then I can comment on clinical data.

Certainly retigabine has (inaudible) variety of models from (inaudible) so I think that's consistent with what we believe a compound (inaudible) should do.

So we fully expect to go from (inaudible) variety of pre-clinical models and hopefully overall.

There was one study in man --

We really don't have the primary data from the post-trapatic neurology study that was done with retigabine.

So, I think we have ecoploise as to weather or not that study was adequate to demonstrate any pain epicacy.

We due know that flupirtine which is very similar to retigabine has been tested in pain, and is approved for pain used in several European countries.

So again, I think the sum total of the data points to the direction that this channel is a reasonable target for pain, and actually has been proven to be effective for pain.

The retigabine specific data in post-trapatic neurology again, I think there's ecoploise, we just don't know enough about that study to say one way or another.

The otherpart of your question was about the rational on doses, as Kay mentioned, we don't have a maximum tolerated dose or don't have any dose limiting toxicity.

We have seen some efficacy in some of the doses, for the photosensitivity study that we have run before.

What we want to do is just complete out to what we believe is a reasonable range of doses in the photosensitive study and then translate that study into a Phase II study for partial (inaudible).

And I think that's a reasonable thing that do.

We don't want to shortchange our dosing.

It may also, as I mentioned before, be important to explore a higher dose range for application in other indications such as pain or other neurological syndromes.

Did I get all three parts of your question?

I think I did.

Did I miss anything?

No.

Yes, you did.

I was just wondering whether -- keeping in mind that the ultimate goal for the program is partnering here, since the Company, I guess, is in no shape to even enter Phase III development, at least now.

That begs the question should -- would the partner-ability of the program be enhanced by acquiring data in pain at higher doses?

I mean, I'm certainly not questioning the strategy or questioning the notion that going at higher doses since you can is the right thing.

Now the question is indication.

Wouldn't the establishment of proof of concept in pain be more desirable than additional epilepsy data for just partnering objective?

Sure, it's a reasonable question to ask.

There's a lot of excitement around epilepsy for 665.

There is a great opportunity, we have terrific pre-clinical data.

And we have already started down the path showing efficacy in man.

So with the extension of the photosensitivity study in epileptic patients, I think that will actually build our case and provide sufficient data for excitement among partners.

There is still a clear need for additional agents that are safe and effective for the treatment of epilepsy, and we still think there is significant commercial opportunity for new drugs that have the right characteristics, and so far we believe that 665 is showing those characteristics.

Yes, other indications will be pursued down the road.

I think it's a matter of likelihood of success, that we have the clearer signal to go for epilepsy first.

And once you get proof of concept there, I think we will get a lot more interest in potential partners for other indications as well.

I don't think proof of concept in epilepsy, limits you or limits the interest to just epilepsy alone.

If I can just add to what Kay -- what Seth just mentioned, I think that -- I understand the interest in pain as an area.

It's less con -- in other words the pre-clinical evidence that we have today is as Seth mentioned, strongest in epilepsy.

We do have some very nice pre-clinical data in pain as well, but clearly now we have shown efficacy in man, and we have to continue to show that.

So I think -- Seth was driving the point probability of success.

We have to consider that.

Now that's not to say that pain is not an avenue that we could also explore, and certainly getting the ability to go to higher doses, the 5 and 600 milligram doses, were testing the 500 now we hope to be testing the 600 soon.

That will increase the likelihood of success in the pain studies as well.

So that certainly is something that we're going to think hard about.

But one thing I want to make sure that you and others on the call understand, is there seems to be a bit of a view that epilepsy is not an attractive place to be, and I fundamentally disagree with that, and I would point people towards the success of [la cosa mied], also called [vim pad], which was launched about a year ago by UCD, and it is doing very well.

It is indicated for treatment-resistant partial onset seizures, so the narrow label if you will to begin with, although they are doing studies now to expand that to mono-therapy as well as generalized seizures, as well as pediatric patients, so there is a broadening of the development program plan, but their initial indication, just on the basis of that, is launching very well.

Okay.

And they have said publicly that they expect the compound to do 1.2 billion in euros in annual sales at the peak just based on epilepsy's, and this one of UCBs three major recent product launches that they talk very frequently about.

So I think it's important that the investment community understand that there are 6 million epilepsy patients in the US and Europe, around a third of them are inadequately controlled today.

That's 2 million patients.

It's a very significant opportunity.

Prices for la coast mied that we have seen are quite robust, and it is, in our judgment, a very attractive commercial opportunity.

Now the fact that certain big pharmas may not be interested in epilepsy, I don't think should fundamentally deter us from pursuing a program that we think has great scientific potential, has initially indicated efficacy in the clinic, and we hope to show a lot more of that soon, and in our judgment a robust commercial opportunity.

So the question comes up, how will you fund a Phase III down the road?

And we'll cross that bridge when we come from it.

We're a long way from there today, and while it is very hard for us to imagine funding a Phase III program on our own, sitting here in the third quarter of 2010, might be an entirely different view by the third quarter of 2011, or first quarter of 2012, or somewhere down the line.

We have got robust Phase II data.

It's all conjecture at this point, but we think we're on the right course, and I don't think that we should let the fact that Merck or J&J may say that they are no longer pursuing epilepsy, deter us from what we think is a very exciting opportunity.

Yes, no, Rich.

Agreed absolutely.

And no argument here.

We not only think you are on the right course, we very much share the enthusiasm for all of the programs at Icagen and we certainly don't want to discount the opportunity in epilepsy.

I think my question was more with limited capital you have now, essentially an option to establish proof of -- or let's say affirm the data you have already established in epilepsy or seek possibly a broader set of indications for the molecule, so it a strategy question.

I do not, certainly, intend to diminish the potential of the molecule commercially.

We totally agree with that.

And as a matter of fact, we think Icagen is an incredibly good position from that perspective now.

But, okay, so -- enough.

Thank you very much for a very good answer.

I will take advantage to ask Seth my last question regarding the additional epilepsy study that is, I believe ongoing now or about to start.

Where is the bar set?

You have -- I don't -- in my notes right here under my eyes at that moment, but I think established a response in the -- about 25% response at 400 milligram, if I'm not mistaken, something along those lines in the prior Phase II study, by increasing the dose.

Do you -- should we expect 100% response rate?

Can you kind of handicap a little bit this new extension trial you have to start?

Sure.

It's less important to think about percentages across drugs, it's more important to look at the percentages or the types of responses within the dose range that you are studying, so if we -- and by the way the number for the 400 milligram dose was two out of four, so a 50% response.

But there are other aspects of the response that are a little bit more subjective.

Not just response, yes or no, but the depth of the response, the durability of the response.

Other fine points of reading the EEG, such as spontaneous discharges, which may occur in back ground.

All of this goes into the interpretation that is given to us by our expert reviewers.

So at the end of the day, what we will see is, is there a dose response that we're seeing extend up to 600 milligrams, or are we seeing a maximum type of response that tells us that now we are at the dose we should take forward in to a Phase II.

So it's all of that goes into the mix, and we review upon our expert reviewers to help us design, if you will, what the dose response is, and weather the current 400 dose is sufficient, or weather or not we're going to see potential benefit at a 600-milligram dose.

And that should be expected in first quarter 2011?

No, I think we're going to finish up in the fourth quarter of this year, and then we'll have a decision as to what to do next.

All right.

In the meantime, as I mentioned before in my talk, in the background of all of this, we are putting together a Phase II program that will be finalized but only need really the dose inserted in to the protocols to what we're going study.

Okay.

Great.

Thank you and congratulations for another great quarter.

Thanks, Dominick.

Thank for your questions.

And there are no further questions in the queue.

We appreciate everyone joining us today.

We're excited about our progress during the quarter, and we look forward to updating you again in couple month's time.

Thank you.

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

This concludes the presentation.

You may now disconnect.

Have a great day.