Repligen Corp (RGEN) 2004 Q2 法說會逐字稿

Good morning, and welcome ladies and gentlemen to the Repligen Corp. second-quarter earnings release and corporate update. (OPERATOR INSTRUCTIONS). I will now turn the conference over to Dr. Walter Herlihy, President and Chief Executive Officer of Repligen. Please go ahead, sir.

Thank you, and good morning. I am joined today by Dr. Perry Renshaw from McClean Hospital, who will provide some perspective on today's announcements.

At the outset, I would like to state that this discussion will contain forward-looking statements. These forward-looking statements are not guarantees of future performance, and they are subject to certain factors that which may cause Repligen's plans to materially differ or results to materially vary from those expected, including market acceptance of our products; unexpected pre-clinical or clinical results or delays; the need for additional research testing; delays in manufacturing by us or our partners; timing of product orders; delays and failure of regulatory approvals; access to capital and funding; adverse changes in commercial relationships; the risk that the results of earlier trials are not necessary predictive of the safety and efficacy results in larger trials; and a variety of other risks set forth from time to time in Repligen's filings with the Securities and Exchange Commission, including, but not limited to, Repligen's annual report on Form 10-K for the year ended March 31, 2003 -- except in circumstances in which prior disclosure becomes materially misleading in light of subsequent events. Repligen does not intend to update any of these forward-looking statements to reflect events or circumstances after the date hereof, or to reflect the occurrence of unanticipated events.

Prior to providing update on our product development programs, I will briefly review our results for the second quarter of fiscal year 2004, ending on September 30th, 2003. For the quarter, we recorded revenues of 1.4 million; expenses of 2.9 million; and a loss of 2.1 million. On September 30th, we had approximately $27.8 million of cash and investments.

During the quarter, we continued observe soft demand for our Protein A products. Product sales were impacted by manufacturing problems experienced by one of our significant value-added resellers of Protein A products. In addition, we experienced a delay in the delivery of a new lot of SecreFlo from the manufacturer, which impacted sales at the end of the quarter. A new lot is currently awaiting release from QC, and we expect to resume shipments in December.

For the current quarter, we expect continued soft demand, with potentially stronger results in the first half of 2004. Nonetheless, our Specialty Pharmaceuticals business has generated $1.9 million in gross profits in the first 6 months of our fiscal year, and we continued to project an operating loss of approximately $8 million for the year and a cash or investments balance of approximately $23 million on March 31st, 2004.

Now, I would like to update our progress in our program-developed RG1068, our secretin product candidate for autism and schizophrenia. In our first Phase 3 trial, all patients have completed dosing, and only two patients are still active. A total of 131 patients are expected to complete all doses and efficacy evaluations. To date, there have been only seven dropouts after initiation of dosing -- a rate of only 5 percent -- and there have been no serious adverse events reported.

We're currently compiling the data, and we expect to complete the process of data validation and cleaning (ph) in about six weeks, at which point we will be ready to unblind the study. Our current plan is to report the topline results by press release and conference call during the week of January 5th. In addition to our co-primary end points -- ADOS (ph) social interaction and clinical global impression -- we will also report the results from two secondary and end points, improvements and expressive language, and secondly, the percentage of patients who are "clinical responders" -- meaning they had at least a three point improvement on the ADOS social interaction scale, and a CGI (ph) rating of very much improved or much improved.

Finally, we have prospectively defined two patient subsets for analysis with the primary end points. Children less than four years of age, and children whose function level is at the median of the group or higher. Subsequently, a detailed analysis of the Phase 3 data will be presented by our clinical investigators at selected autism, neurology, and psychiatric meetings in the spring.

Before turning today's announcement, I would like to briefly update the status of three other clinical studies. First, is the subcutaneous trial, which we initiated several weeks ago. The goal of this study is to assess the safety of injecting secretin under the skin, as is done for many peptide drugs, such as insulin or growth hormones, and to establish what does will produce levels of secretin in blood equivalent to what we now achieve with an intravenous injection. We expect to complete dosing this quarter, and analyze the data in Q1 of 2004. If successful, we may use subcutaneous dosing in future clinical trials in schizophrenia or anxiety disorders.

Second, our Phase 3 extension study is an open-label continuation of the Phase 3 trial in which all patients may receive 18 doses of secretin over a one-year period. All 15 sites which participated in the first Phase 3 study have indicated they will continue with the extension study. Patients have begun enrolling at two sites, and our current estimate is at least 100 of the 131 eligible patients will enter this protocol. We expect to have this protocol rolling at all sites by year's end. I should note that this is a Repligen-initiated study, designed to expand our long-term safety database. And it was not requested by FDA for product approval, and will not impact our timelines for filing an NDA.

Third, in August, I discussed our plans to conduct a Phase 2 clinical trial of secretin in schizophrenia to confirm and extend observations recently published by investigators of the University of North Carolina. We now have FDA clearance for our placebo-controlled Phase 2 study in approximately 45 patients at five to six sites. This study will evaluate for doses of secretin versus a placebo, over two weeks, and is specifically designed to examine improvements in the social interaction deficits of schizophrenia. We expect to launch this study later this month.

Now, I would like to turn to the new data released today. Each year in November, we use the Annual Society for Neuroscience meeting to present new data on the neurobiology of secretin to the scientific community. Two years ago, we announced the discovery that secretin was able to activate the amygdala, a brain region implicated in the social interaction deficits of autism. Last year we showed that, by fMRI, secretin potentiated a response (indiscernible) and normal subjects viewed pictures of faces expressing emotion, which is also a known deficit in autism and schizophrenia.

As many of you know, our Phase 2 trial showed that secretin had an impact on social interaction deficits, a finding consistent with it's ability to modulate (indiscernible) activity. We also observed in the Phase 2 trial that this effect was most pronounced in younger children, although at the time, we did not have the plausible biological explanation for this effect. Today we announced that secretin and its receptor are more highly-expressed in the brains of newborn rats than in mature animals. This effect is particularly acute in the amygdala, in which there is a 90 percent decline in the levels of both secretin and its receptor between seven days after birth and 30 days after birth -- a result which is highly statistically significant.

In addition, we found secretin and it's receptor in two additional brain regions, which have been implicated in autism in the hippocampus and the cerebellum. These data suggest that secretin is involved in brain growth and development, and provides the first biological evidence consistent with the clinical trial observation that younger patients responded better than older ones.

Now, I would like to introduce Dr. Perry Renshaw, a consultant to the company, to comment on our second finding, as well as last week's publication of secretin's activity in animal model of anxiety. Dr. Renshaw is an Associate Professor of Psychiatry at Harvard Medical School, and he directs the Brain Imaging center at McClean Hospital, which is Harvard's primary psychiatric teaching hospital. Perry?

Thank you, Walter. As you know, I first became aware of secretin's activity through the study conducted by Repligen at the Brain Imaging Center with my colleague, Dr. Deborah Kahn(ph). As you have mentioned, the results of the study were, at least in my view, remarkable. As they demonstrated in the past, in (indiscernible), there was specific change in brain activity and this persisted long after the secretin had been metabolized. The identification of the amygdala, as primary target of secretin's action, suggested it might also have activity in other diseases for which the amygdala has been implicated, including both anxiety disorders and schizophrenia.

First, I would like to comment on the fear-potentiated startle model of anxiety. This model involves the tearing of an unpleasant stimulus in the sensory cue, resulting in an anticipatory startle when the sensory cue is presented alone. There is a large body of evidence indicating that this behavior is mediated by the amygdala, and drugs that reduce the magnitude of the startle are often effective for the treatment of anxiety disorders. The findings recently reported by Repligen demonstrated significant reduction in the fear-potentiated startle associated with secretin treatment, suggesting it may have activity in anxiety disorders.

Clinically, over the last decade, the prevalence in morbidity in anxiety disorders have become more clearly recognized, with an estimated 19 million adults affected in the United States. We have also recognized that there is a significant unmet medical need. The observation of secretin's activity suggests that it may have a role in the treatment of these disorders, particularly in conditions in which there is no satisfactory treatment -- which currently include children and adolescents from existing pharmacotherapies, such as serotonin-specific reuptake (ph) inhibitors, may have limited efficacy, as well as limiting side effects.

In adults, tolerance and dependence are major concerns with respect to the use of the widely-prescribed (indiscernible). In addition, there are many patients who have quite severe and refractory (ph) anxiety disorders, such as obsessive compulsive disorder and post-traumatic stress disorder, and these remaining significant clinical problems with currently inadequate therapies.

Turning now to the other model, pre-pulse (indiscernible) refers to the phenomenon whereby a weak sensory pre-pulse reduces the startle response caused by a sensory stimulus. Impairment of pre-pulse (indiscernible) has been strongly associated with schizophrenia and currently approved antipsychotic medications have been shown to reverse the impairment of pre-pulse (indiscernible) caused by Phencyclidine, or PCP, in animal models. The data presented today at the Society for Neuroscience meeting showed that secretin also reverses this PCP-induced impairment to pre-pulse (indiscernible) and provides additional support for Repligen's evaluation of secretin as a potential therapy for the treatment of schizophrenia.

It's also worth noting that both schizophrenia and autism share some features with respect to emotional expression, providing a common set of symptoms that could be treated using secretin. Existing treatments for schizophrenia are often incomplete and do not fully reverse the negative symptoms of schizophrenia. Negative symptoms, which include a lack of desire initiative, social withdrawal, and (indiscernible) of emotional expressions, are particularly difficult symptoms to treat. Persistent negative symptoms have been associated with (indiscernible) long-term outcome in patients with schizophrenia. The development of drugs that reduce the negative symptoms of schizophrenia would constitute an important clinical advance in the treatment of this serious chronic mental disorder.

Thank you, Perry. That concludes our prepared comments for today. And at this point, we would like to open the call for questions.

(OPERATOR INSTRUCTIONS).

I would like to actually like to start the Q&A portion of the call, while you are queuing up the questions and direct the first question to Dr. Renshaw. Perry, many investors have asked me whether the fact that secretin is an injectable drug, as opposed to a pill, will hinder its acceptance as a therapy for schizophrenia or anxiety disorders? Could you comment on that for us, please?

I think we're in an age were peptide hormone treatments are seen as being a critical advance in the treatment of a number of medical conditions. And so, I believe that if secretin is effective on the disabling symptoms that are refractory to existing therapies, the fact that it might need to be given through a subcutaneous injection should not hinder its acceptance. It is also the case that in medicine we have been using insulin, another peptide compound, for a number of years, and more recently growth hormone has been administered to pediatric populations and in the area of arthritis development of Enbrel has really resulted in a paradigm change. So, I think the development of agents like secretin is very much in the mainstream of -- where we have a lot of hope, in terms of looking at future drug development.

Thank you. So, let's open the call to general questions then.

Allen (ph) Mirpiros (ph), Rodman.

Can you hear me, Walter?

Yes I can.

I was under the impression that the first Phase 3 trial would involve about 150 patients. This number, 131, how did that come about?

Well, let me back up and tell you about the planning of the study. When we planned the study, we, of course, did a power analysis. And without going through the statistical details, the analysis showed that through -- on a sort of work-case basis, have a 95 percent chance of achieving a P-value (ph) of less than 0.05, we needed 120 patients. We applied to the FDA for permission to recruit 150 patients, assuming that we would have dropouts in the range of 10, 15, and maybe even in the worst case, somewhat higher than that percent. As we went through the study, the dropout rate was much shorter than we had thought it would be, despite the fact that it was a very long and fairly onerous study, with 11 clinical visits. And, as we got to our last (indiscernible), that we're going to clearly get past our minimum target of 120, even though we had recorded, I think, at the point -- recruited about 138 for 139 patients. So, we decided to move forward.

Sure. In the second Phase 3 trial that you are conducting, how many patients have been dosed already?

There are about 30 or so patients who have passed all of the screening criteria and entered the dosing phase of that study. What we are doing right now is, as the first study winds down, is bringing additional clinical centers online. And, in fact, two or three of the primary recruiting centers from the first Phase 3 study have expressed an interest in rolling over and becoming participants in the second Phase 3 study. So, that will facilitate quickly, ramping up to additional centers in that study. We would expect that we would be able to recruit patients in that study, and have a efficacy evaluations and safety evaluations by sometime in the second half of 2004.

Is there a reason why you would not be able to pool the data between the two Phase 3 trials?

No, there is no reason. The two Phase 3 studies are designed with identical inclusion criteria, dosing protocols, and evaluation tests. And so, should that opportunity come along to us, we could clearly do that. And, of course, we will evaluate all of our options in January, when we would meet with the FDA -- or I should say, we should send a final statistical report from the first Phase 3 study to the FDA at the end of January, and meet with them shortly thereafter to talk about strategies for NDA submissions.

Sure. Sure. I have two more questions that are somewhat related, and then I will get back in the queue. The first one is, how many doses of secretin has been administered to date in all human subjects? (multiple speakers)

That is a good question.

Do you have that number? It should be over 1000.

It is over 1000; I cannot give you a precise number. It is over 1000. Clearly, as we enter 2004, and if, as the sites tell us, at least 100 patients entered this 18-dose study. That will be an additional 1800 dosings, if they complete that study. So we are pretty much piloting towards -- with all the studies, both autism and non-autism -- having about 3000 treatments. 3000 dosings, I should say, by the end of 2004.

And this extension study, Walter -- have you actually had patients enrolled and being (multiple speakers) actively dosed?

We do.

So two sites are active out of the 15 that gave commitment (multiple speakers)? And probably a handful or so children are already being dosed --? (multiple speakers)

I think it's about a dozen or two children are already on the protocol.

(inaudible) Thank you very much, and I will come back with more. Thanks.

Jason Kantor, WR Hambrecht.

Thank you for taking my call. A couple of questions -- the data coming out in January -- previously you had talked about December, and I guess counting six weeks that you -- somewhere right around Christmastime. How are you going to handle that? You know, is it possible for you to sit on that data for that extra week? Can you talk about that? And also, any updates to the Bristol-Myers Squibb litigation?

Okay. Let me handle that first question first. As you point out, the cleaning and the validation of the database will probably be done about the third week of December, which brings us right into the end of year holiday period. So, we are a little reluctant to release what we think is going to be the most positive event in the company's history during that period. So, we have consciously made the decision to hold off on the unblinding, so there will not be any possibility for leakage. And to analyze the data, probably, over the new year's weekend and release it shortly thereafter. Naturally, we want to have a few days to look at the data ourselves, to make sure that whatever we do release is absolutely correct.

As far as the Bristol-Myers Squibb litigation goes -- as you know, we did file a notice of appeal in October. And, that process is moving forward now. As of this week -- well let me back up. We were represented in the original District Court trial by (indiscernible) Levin (ph) here in Boston. And they certainly did a fine job during the trial. But, looking forward, going to the appeals court, which is a specialized court for patent appeals, we have decided to hire a second firm, who specializes in patent appeal cases. There are two of them who are at the top of the food chain, both in Washington D.C., and we have hired one of them, named Howrey (ph) Simon. You can check them out at howrey.com. The senior partner there, William West, will be representing us -- co-representing us, along with (indiscernible) Levin in the appeals process.

We have a draft brief we are working on, and we would expect to submit our brief, which is the critical document in the appeal process, by the end of this calendar year. Looking forward into 2004, the other side will have a chance to brief, and then there will be a response period. And, following that, oral arguments will take place in Washington. And, it looks like that would happen probably in late April or May, at this point in time.

Thanks.

Paul (ph) Burman (ph), Wachovia Securities.

Walter, looking at the big picture, you have now conducted this long Phase 3 study, with approximately, I guess, 115 children. And, if I understand you correctly, the majority of them want to continue with the protocol. So, even though we do not have the data analyzed, from what you have said today, it seems to me that the majority -- the mass majority of the patients -- would want to, with obviously the guidance from their parents and from their physicians, would want to continue with the study.

That is correct. That is correct. And all 15 sites are going to continue. You know, we had the sites here in Boston about three weeks ago for a kickoff of the extension study. And, I think there is a lot of enthusiasm out there in the field for participating in this study and participating in other studies we would do. And that is based on observations made of clinical changes in children. And we know that there have been clinical changes. We don't know, of course, whether they are on the drug or the placebo arm at this point in time. We did run a test of our database with 19 patients, where we had the full data set -- blinded, of course. There were five children in that 19 who met the full criteria for robust clinical response, meaning a change in ADOS of three points or better and a parent CGI of much improved or very much improve. Both of those conditions were met in five of the 19. And we would assume that of those 19 -- half are drugged and half are placebo. But, again, that is a necessary, but not sufficient condition for success, but there is clearly something going on out there in the field.

And, if you had not done an extension, what would have been the protocol for -- I mean, would there have been an avenue for the children to continue the -- be able to get secretin? Was there any protocol or was it necessary to have another ongoing or extension study?

The alternative would have been to put the children in what is loosely call compassion-use protocol, so their physicians could request the FDA to allow Repligen to issue the drug to them. We did that at the end of the Phase 2 extension study, and in fact, there's a couple dozen kids from the 19 -- 2000 study -- who are still getting drugged from Repligen on that compassionate use. But, we don't track them actively. Just by doing it within the extension study, we get to collect and control data, blood samples every quarter, physical exams every quarter -- that sort of thing, which is highly advantageous versus going the compassionate route.

And, when would the -- could parents come to Repligen now without the Phase 3 study being completed and without the NDA filed? Can they come to Repligen, currently, for compassionate use?

Their physician can approach the FDA and request that the FDA enable Repligen to supply drugs through a compassionate use scheme.

Thank you.

Elemer Piros, Rodman.

I have a question for Dr. Renshaw if he is still online and available.

He is.

Dr. Renshaw, you seem to be very enthusiastic about the potential for secretin in anxiety disorders. Would your optimism be modified should the autism study fail to meet its end point?

You know, I have known folks at Repligen, I guess, for about three years now. And we were initially approached about the possibility of doing an imaging study that I was absolutely certain was not going to work at all. In fact, it had seemed quite unlikely that one would see anything. And yet, with a small number of subjects, there was a very specific response in the amygdala, which, I think, has sort of converted me. I think the findings coming out of Neuroscience today that really focus on first strength test for animal behaviors are used by essentially -- almost all the large drug companies that I have worked with -- they are also quite impressive.

I do know much about the business of selling drugs, but I do know that clinically the markets for people with anxiety disorders and schizophrenia are much larger than the market for providing drugs for autism. So, I would imagine, although this is a little bit outside my area of expertise, that there would be a strong case that could be made for continuing on, independent of what the autism findings turn out to be. I would actually be surprised if there were a negative autism trial, and the company walked away. Because I don't think I would do that.

Okay. (multiple speakers)

And that certainly is not our intention. Clearly, children with autism versus adults with anxiety represent different patient populations neurologically, in terms of their growth and development trajectories. There's a lot of differences, of course.

Walter, do you anticipate any business development activity related to either secretin or CTLA4 to be accomplished before year-end?

No, I don't think so. I think our total focus, as an organization, right now, is to wrap up this Phase 3 and cross every T and dot every I, so that, in all ways, it will serve as a pivotal study when we eventually submit the data to the FDA. We are having discussions, however, with multinational pharmaceutical companies, but those will probably remain discussions through the end of this year.

Okay. And one last thing here -- Phase 2 data publication -- is that anticipated this year?

I don't think it will happen this calendar year. It is in second round of review at the Journal of Autism and Developmental Disorders. In fact, they promised us the feedback from the second round of review next week. (multiple speakers) And if it passes that, then it will go into the queue for actually producing a publication, which takes some months.

Okay. Looking forward to the week of January 5th.

Jason Kantor, WR Hambrecht.

This is also for Dr. Renshaw. Specifically, with regards to schizophrenia or anxiety, how do you think about dosing of this drug? I mean, meaning what does and what schedule there? Has it been a lot of dosing schedule worked for this drug in humans? And maybe, are you learning anything from animals that tells how to optimally deliver secretin?

That is a great question. My clinical focus is in psychiatry, and typically the view is when you try to extrapolate the doses in animals to humans with psychiatric disorders, it is like stepping off a cliff. So, I think that a really positive -- a couple of steps forward -- one is investigating whether subcutaneous dosing will work as well as intravenous dosing, I think is going to be very valuable, because that is certainly very well-tolerated. But I believe the design in the Phase 2 study in schizophrenia does call for a comparison of multiple dosing. The nice thing about schizophrenia, relative to very young patients with autism, is that their symptoms are, I think, somewhat easier to quantify and rate, and we've been in the business of using standardized rating scales for quite awhile. And so, I think, based on studies of multiple dose administration in patients with schizophrenia, one is going to get, I think, a much better sense of what dosage one would need to be using for treating adult psychiatric disorders.

Thank you.

David Jordan (ph), Axiom (ph) Capital Management.

There is something I don't quite understand. If the entry criteria for the two autism studies are identical, why would you do the second one? Originally, I thought the -- it wasn't identical, and I could understand you doing the two of them. But, if they are identical, why would you continue to do the second one?

Well, the reason for that, David, is that we are following a conservative path, vis-à-vis FDA approval process, which is typically -- FDA approval is predicated on two adequate and well-controlled studies. Now, of course, there are many exceptions to that rule. I think we are going to see Genentech get (indiscernible) approved this year on the basis of one very robust study, given the dire need in that clinical indication, which is colon cancer. But, it just didn't seem, when we set out on this path two years ago, that we should be so presumptuous to assume we could predict the FDA's behavior in 2004. So, we started both studies as a hedge, so to speak, and it may well be that if the results of this study are such that the (indiscernible) is a .04 on our primary end points, and we just barely get a win, then FDA will want to see that second study. On the other hand, if we have a very robust result, maybe we will modify that course of action. At the outset, we wanted to take the most conservative course, because if you don't do that, and you don't sequentially, you can add a lot of time to your development time.

Okay. Thank you.

Jeffrey Bennison (ph), Benjamin (ph) Partners.

I guess with the extension trial, the clinical investigators pretty much came to you and said "we would like to keep these kids on the secretin." What kinds of feedback did they give you for the reasons why they wanted to do that?

Well, the history of that is -- we actually had always intended to do an extension study, because of the valuable safety data. So we had originally intended to follow the path we had chose in the Phase 2, which was to wait for the study to be fully completed, a report sent to the FDA with all the safety and efficacy data, and then ask for the extension. What the investigators did was they agitated, basically, and said "no, no, we don't want to wait a year; we want to roll the kids over more quickly than that." And so we went back to FDA and modified that course of action. So, it allowed them to be able to get access to the drug faster, as they are now able to do. So clearly that was a decision that was arrived at, probably from investigator judgment, and I would strongly suspect parental agitation, as well. And, so we responded to that request in order to keep the investigators happy.

Now, wouldn't that also follow -- it seems that, since it's a developmental disorder, and giving the child the secretin, it would have been kind of uncompassionate, I guess, for parents to see an improvement, feel that is working, and then you stop it. And since their brains are developing, and maybe they need the secretin to keep the development going properly, you would have taken that away, and now maybe they would be back to scratch.

I think it is a legitimate question to ask. But, if there is a developmental window for a child -- whether it's ethical to let the window go by or not -- when there is an opportunity, potentially, to have some clinical impact. And I think that is a question we will be asking ourselves, as well, if this study is successful -- about the kids on placebo in second study.

You mentioned that, in the trial, that you did like a 19 trial study. And 5 out of 19 had a robust increase, I guess, with (multiple speakers)

With our two primary end points.

-- in two primary end points. Were there any others that had an increase, but maybe not as much?

I don't know that data, Jeff, with just a 19-patient random sample -- just to check out the database, make sure that all the linkages were right and whatnot. So, we have not done a detailed analysis. Of course, we don't know who's on drug and who's on placebo.

Right.

But we were certainly encouraged at the level of robust responses -- fairly much in line with what we saw in the Phase 2 study for the younger patients.

As far as CTLA4 and the litigation with Bristol-Myers Squibb, I just want to get something straight in my head. The lawsuit was, I guess, you going for composition of matter patents that were in Brisol's name and Michigan Newfield was entitled to be named on that. So if it had been a positive outcome with the judge, the ruling would have meant that you would have had both -- composition of matter and use patents -- and, in that way, you would be able to commercialize it. And Bristol would not have, because they would have been running into your use patents for rheumatoid arthritis, lupus, and such --

The patents that were in suit were both composition and use patents. But the use patents that were in suit were very broad genus patents, covering "immune system diseases," as opposed to the specific species patents that we have on rheumatoid arthritis and whatnot. Anyway you slice it, there is intellectual property sort of interlocking -- grid. Is that clear?

Right. I recently got an analyst research report from Bristol-Myers, where they are saying that Bristol may intend to file an NDA for CTLA4 for rheumatoid arthritis sometime during 2004 or early 2005, in which case, they are still in the same boat that, when if they do this and intend to commercialize it, they are going to run into your patents, and it is not five years away, it is within a year or so.

Well, we certainly have always asserted that we thought that the intellectual property was going to be an asset for the company. The question is how and/or when we might be able to recognize that, the value of that asset?

Okay. Thank you.

Howard Simon, Weston Equities.

Walter, cutting down to the chase -- I mean, are you more enthusiastic going into 2004? Or less enthusiastic? Or about the same for your company, going forward?

Well, I think that over the past year, I have certainly become more enthusiastic about the secretin development program. You may recall, if you have been with us for awhile, that a year ago -- exactly a year ago -- we sat here and the only thing we were talking about was autism. And today, we're talking about autism, clinical and animal model data in schizophrenia, and animal model data in anxiety. So, it would appear to me that secretin is following a path that many of these natural, biological molecules follow -- is that when one starts looking around, one finds a variety of clinical indications, whether you're blocking TNF or promoting growth for the growth hormones, etc. -- there is more than a core application that may be accessible.

As far as the short-term, I am certainly cautiously optimistic about what is going to happen with the Phase 3 study. But, of course, we're all going to have to wait and see in the next 8 weeks what happens there.

Thank you.

(OPERATOR INSTRUCTIONS). If there are no further questions, I will turn the conference back to Dr. Herlihy to conclude.

Okay. Thank you very much for participating in our quarterly update. And we look forward to reporting clinical results to you in early January. If you have questions in the interim, please feel free to contact the company. Goodbye.

Thank you ladies and gentlemen. This concludes our conference for today. Thank you all for participating, and have a nice day. All parties may now disconnect.