Seagen Inc (SGEN) 2007 Q4 法說會逐字稿

Good afternoon, ladies and gentlemen, and thank you for standing by. Welcome to the Seattle Genetics fourth-quarter and year-end 2007 financial results conference call. (OPERATOR INSTRUCTIONS). This conference is being recorded today, Thursday, February 7, 2008.

At this time I would like to turn the presentation over to the Associate Director of Corporate Communications, Peggy Pinkston. Please go ahead, ma'am.

Thank you, operator. I would like to welcome all of you to Seattle Genetics fourth-quarter and year 2007 conference call. With me today are Clay Siegall, our President and Chief Executive Officer; Todd Simpson, Chief Financial Officer; Eric Dobmeier, Chief Business Officer, and Tom Reynolds, our Chief Medical Officer.

Today's conference call will include forward-looking statements based on current expectations. Such statements are only predictions, and actual results may vary materially from those projected. Please refer to the documents that we file from time to time with the SEC and which are available on our website for information concerning the factors that could affect the Company.

With that, I will turn the call over to Clay.

Thanks, Peg, and thank you all for joining us this afternoon. 2007 was a year of confirmed progress for Seattle Genetics. We entered into an SGN-40 collaboration with Genentech, a deal with a potential value of more than $860 million that allowed us to broaden the clinical development program for SGN-40. We reported multiple complete remissions with SGN-33 at well-tolerated doses in AML and leukemia that is in dire need of therapies and can extend survival.

We reported multiple objective responses in a dose escalation Phase I trial of SGN-35 in Hodgkin's lymphoma, demonstrating not only the significant antitumor activity of SGN-35 but also the therapeutic potential of our proprietary ADC technology to empower antibodies.

We advanced several preclinical programs towards future clinical trials, notably SGN-70 which we plan to move into the clinic later this year. And we were nearly $40 million cash flow positive from operating activities during 2007, which includes more than $95 million generated from licensing and collaborations.

We ended 2007 with a cash position of $129 million, which was bolstered by the $97.5 million in net proceeds from our recently completed financing. This provides us with the financial strength to aggressively advance our pipeline, including commitments to manufacturing and clinical trials that are necessary to position SGN-33 and SGN-35 for regulatory approval and ultimately commercial launch.

Today I will highlight the progress we are making on our programs, and then Todd will go over the financial details for the fourth quarter and year 2007, as well as our financial outlook for 2008. Then we will open the line for questions.

I will move on now to -- I will start with SGN-40, the humanized antibody targeted to CD40 that we are developing under a worldwide collaboration agreement with Genentech. Our current clinical development efforts are focused on non-Hodgkin's lymphoma and multiple myeloma.

During the fourth quarter of 2007 and early 2008, we initiated three combination clinical trials of SGN-40, triggering a combined 20 million in milestone payments from Genentech. Initiation of these trials bring our SGN-40 clinical program to four ongoing trials.

First, Phase II single agent trial in relapsed or refractory diffuse large B-cell lymphoma. We anticipate that enrollment will be completed in this study during 2008.

Second, a Phase IIb trial of Rituxan and ICE plus or minus SGN-40 in second-line diffuse large B-cell lymphoma. This global study is randomized, double-blind and placebo-controlled in over 200 patients. Third, a Phase Ib trial of SGN-40 plus Rituxan in follicular and marginal zone non-Hodgkin's lymphoma. And fourth, a Phase Ib trial of SGN-40 plus Revlimid dexamethasone in relapsed or refractory multiple myeloma.

Within the next few months, we and our collaborators, Genentech, expect to initiate two additional clinical trials. A Phase Ib trial of SGN-40 plus Rituxan and Gemzar for relapsed or refractory diffuse large B-cell lymphoma patients who are not eligible for intensive therapy and a Phase Ib trial of SGN-40 plus Velcade for relapsed or refractory multiple myeloma.

Our collaboration with Genentech entered into a year ago has been extremely positive for the program. We are excited by the progress of the partnership and the robust joint development program to evaluate the potential of SGN-40 in non-Hodgkin's lymphoma and multiple myeloma, both as a single agent and in combination with standard regiments.

I will move onto SGN-33, our humanized antibody targeting CD33. At the American Society of Hematology meeting in December, we reported in our Phase I dose escalation trial seven of 17 patients with AML achieved objective responses, including four complete remissions, one complete remission with incomplete platelet recovery and two partial remissions. SGN-33 was well-tolerated at doses ranging from 1.5 to 8 milligrams per kilogram with no dose-limiting toxicities or immunogenicity identified.

We were also pleased to demonstrate that this SGN-33 dosing regiment resulted in 90% saturation of bone marrow blasts at the 8 milligram per kilogram dose. Based on these promising data, we are enrolling patients on a single agent Phase Ib trial that will further evaluate the activity of SGN-33 at 8 milligram per kilogram. We are well on our way towards accruing 50 AML and MBS patients in this study and anticipate reporting data in the second half of 2008.

In the fourth quarter of 2007, we initiated a Phase IIb study of low-dose Cytarabine plus or minus SGN-33. This trial will accrue approximately 210 AML patients, 60 years of age or older. Older AML patients have limited treatment options, particularly because many of them cannot tolerate the side effects of intensive chemotherapy regiments. Their medium survival form diagnosis is less than six months, evidence that there is an unmet need for therapies in the patient population. The primary endpoint of this randomized Phase IIb trial is overall survival.

In addition to developing SGN-33 for older versions with AML, we're planning additional studies of this agent for the treatment of MDS and younger patients with AML.

Our third clinical program is SGN-35, a proprietary antibody drug conjugate that is in a Phase I clinical trial for patients with Hodgkin's lymphoma or CD30 positive T-cell lymphoma.

In November 2007 we reported interim data, including multiple objective responses at well-tolerated doses. Notably more than 75% of patients treated with SGN-35 across all dose levels had measurable reductions in tumor volume. We plan to report further clinical data from this trial, including additional objective responses during the first half of 2008.

Our clinical data suggests that SGN-35 has strong therapeutic potential for the treatment of Hodgkin's lymphoma and other CD30 positive malignancies. We intend to aggressively move this product candidate forward, including initiation of a second Phase I clinical trial this quarter that will evaluate weekly dosing of SGN-35.

During 2008 we also expect to lay out our clinical development pathway for SGN-35, including our registration strategy.

Our next product candidate, which we plan to advance into clinical trials during 2008, is SGN-70, a humanized antibody targeted to CD70. We believe that SGN-70 has significant application for the treatment of autoimmune disease due to the expression of CD70 on activated but not resting T and B-cells. We have generated compelling data in preclinical models of autoimmune disease and expect to report these data later this year.

SGN-75, an ADC targeted CD70, and our anti-CD19 ADC are two additional programs we are advancing toward clinical trials. Our preclinical efforts insure continued pipeline depth, and we look forward to updating you on these exciting therapies as they move forward.

There are a number of milestones planned across our portfolio over the course of 2008. For SGN-40 we and Genentech will initiate two additional combination clinical trials for a total of six ongoing trials in non-Hodgkin's lymphoma and multiple myeloma. For SGN-33 we expect to report data from the Phase Ib single agent trial later this year, advance the Phase IIb trial in AML and pursue additional combination studies for SGN-33 for the treatment of MDS.

For SGN-35 we plan to report additional objective responses from the ongoing Phase I trial, initiate a weekly dosing trial and provide our development strategy later this year. And for SGN-70 we plan to initiate a Phase I trial for autoimmune disease.

2007 was a year of great progress for Seattle Genetics. We now have three clinical stage programs that have each shown single agent objective responses at well-tolerated doses. We demonstrated that our ADC technology can empower antibodies as therapeutics for cancer, and we continue to advance our preclinical programs to ensure future pipeline strength. We look forward to keeping you updated on our progress in the year ahead.

Now I will turn the call over to Todd to discuss financial results.

Alright. Thanks, Clay, and thanks, everyone, for joining in on the call this afternoon. Today I will highlight our fourth-quarter and year-end 2007 financial results, as well as provide our 2008 financial outlook.

Revenues tripled in the fourth quarter of 2007, coming in at $7.8 million and more than doubled to $22.4 million for the year-end 2007 compared to 2006 and slightly above our guidance. These increases reflect amounts earned under our SGN-40 collaboration with Genentech, which was signed in January 2007.

Now, as a reminder, milestones payments reimbursements in the $60 million upfront payment from Genentech are recognized into revenue over the six-year development period of the collaboration. During the fourth quarter of 2007, we achieved $16 million in milestones, triggered by SGN-40 clinical trial initiations. From a revenue recognition standpoint, there is a catchup effect for milestones as they are achieved.

Since we are now approximately one year through the six-year development period, Q4 revenues include 1/6 of the $16 million or approximately $2.7 million. The remaining 5/6 of this amount is deferred and will be recognized over the next five years of the collaboration.

Operating expenses, which were in line with our guidance, increased in 2007 and reflect a substantial progress made in our key development programs during the year. Research and development expense in the fourth quarter of 2007 was $20.1 million, up from $11.1 million for the fourth quarter of 2006, and R&D expense was $64.8 million for the year-end 2007 compared to $40.1 million in 2006. These increases were primarily driven by expanded clinical development and manufacturing activities.

Of note are clinical trial costs for SGN-40, SGN-33 and SGN-35 that increased both quarter-over-quarter and year-over-year in 2007, reflecting Phase IIb studies underway for SGN-40 and SGN-33, and rapid patient accruals under our SGN-35 clinical trials.

Also, contributing to the increases in 2007 R&D expenses were manufacturing campaigns for SGN-33 and SGN-70 to provide clinical supply for upcoming trials. Increased employee costs, primarily in our clinical and development groups. SGN-40 development costs, which increased substantially in 2007, are included in our R&D expense, but are reimbursed by Genentech under the collaboration. Non-cash share-based compensation expense for the year-end 2007 was $7.9 million compared to $4.7 million in 2006.

2007 was a strong year for the Company from a financial standpoint. We received more than $110 million in cash payments, including payments received under our SGN-40 collaboration, our ADC collaborations, investment income and other sources. We ended 2007 with $129.6 million in cash and investments. When combined with net proceeds of $97.5 million from our recent common stock offering, the Company now has a cash position of more than $220 million, allowing us to press forward with our development plans and leading to a number of important milestones in 2008 and 2009.

As you heard from Clay, we have an ambitious set of development goals across our pipeline. We expect total manufacturing or total operating expenses in 2008 to be in the range of 95 to $110 million with planned increases over 2007, reflecting the following. For SGN-40, executing on multiple clinical trials under the joint clinical development program with Genentech. For SGN-33, completing the Phase Ib clinical trial currently underway, continuing the Phase IIb clinical trial in combination with low-dose Cytarabine and manufacturing additional drug product to support future trials. And for SGN-35, completing the ongoing Phase I clinical trial, initiating additional clinical trials and manufacturing more drug product.

We expect that research and development expenses will continue to comprise approximately 80 to 85% of our total expenses and that expenses will be comparable quarter-over-quarter.

2008 expense guidance also includes non-cash expenses projected to be in the 12 to $15 million range, the vast majority of which relates to share-based compensation expense. This estimate is based on a number of assumptions including future stock prices and the number of and timing of stock option grants may, therefore, change.

Revenues in 2008 will continue to reflect amounts earned under our SGN-40 collaboration with Genentech and our ADC collaborations. We expect total revenues in 2008 to be in the range of 27 to $30 million.

Lastly, we expect that net cash used to fund our operating activities in 2008 will be in the range of $55 million to $65 million, and we expect to end the year with more than $160 million in cash and investments.

So with that, I will turn the call back over to Clay.

Thanks Todd. Operator, at this point we would like to open the call for questions.

(OPERATOR INSTRUCTIONS). Richard Smith, JPMorgan.

I just wanted to ask a question about SGN-33, the Phase Ib study you are enrolling at the moment with 50 patients, if you could give us a sense of what the purpose of that study is? Does it allow you to go to develop it in the younger AML with patients, and I'm just trying to get a sense of the reason behind that study?

Sure. This is Clay. Thanks for the question. We were pleased with our single agent response data in our Phase I dose escalation, our Phase I, if you will, Phase Ia dose escalation study, and we wanted to understand a little bit more about the single agent activity. Before we made any formal consideration to go forward on a potential registration track as a single agent, we already had decided to go forward into a large Phase IIb study and a combination agent. And so we wanted more information as a single agent then -- and information at the dose that we are taking to the Phase I -- to Phase II, which was the 8 milligram per kilogram dose level, which we are using in Phase Ib.

In the Phase IIb study, we are using a flat dosing, which represents closely -- closely approximates 8 milligram per kilogram, so we can roughly talk about that dose.

Tom, do you want to add anything more -- Tom Reynolds, our CMO.

Yes, Clay, the only other comment was the Ib study is also an older AML and MDS. So it is really targeting that older population and really trying to clarify whether the response rate that we are seeing is -- how we see that looks with more patients, a better idea of the tolerability profile, and whether it will help us move forward the drug, not only in the elderly population but also understanding how it might apply to the younger population.

And are there any plans to go into younger patients?

Yes, we are actively working on our plans for how to bring this drug forward into younger AML. We think there are chances to use this both in combination with chemotherapy and also in a posttransplant setting. And I think later on in this year as we continue to develop our plan and we will see some more data on the Phase I, we will be able to articulate that and give you more visibility into that, so stayed tuned.

Mark Monane, Needham & Co.

Good afternoon and thanks for reviewing a very productive 2007. You have about it seems six trials planned or ongoing now in 40. And could you talk about -- you must love all your children -- but are there ones that you have more confidence in than others? Clearly some are partnered with Rituxan, so may be of more interest to Genentech. Can you tell us how you think about prioritizing these trials?

Well, I can start that. This is Clay. You know, we don't really view each individual trial as a separate child. Just like we try not to view all our drugs as separate children. You love them all. But with SGN-40 what I can say is that the right study is the biggest and deepest study that we have ongoing. So that one we are quite excited about. It is a Phase IIb study comparing R-ICE, which is a very commonly used second line treatment for patients that have failed frontline R-CHOP with aggressive lymphoma, specifically the (inaudible) as we are focusing on versus the same R-ICE plus SGN-40. We think based on our Phase I data showing nice antitumor activity at a well-tolerated dose, based on our preclinical data which showed that R-ICE plus SGN-40 is considerably better than R-ICE alone, we think we have a great shot at making a big impact here. So that is why we have gone toward a fairly large study in this regard.

So I think that rather than saying what study we like the most, the one that is the biggest and furthest along is our Rituxan ICE study in NHL, and also I have to say that we are incredibly excited about our two myeloma studies -- the ongoing Revlimid study and the one we are just going to announce in the near-term with Velcade. And one of the reasons we're very excited about that is because myeloma is a big unmet medical need. You know, the addition of Velcade and Revlimid to the armamentarium for oncologists is great and very helpful for patients. But it is still an unmet medical need, still will be. Most patients will subcomb to the disease. And when Rituxan was added to CHOP to create R-CHOP for NHL, it really changed the paradigm of how NHL is treated, and now you have a cure rate.

And there really is no cure rate right now with MM. And what we look forward to in the future and the reason we are excited about myeloma with these two agents, Rev and Velcade, is we would like to see if by combining an antibody to one of these cytotoxics, can we provide a cure rate? Is that something we can try to achieve in the future, and that is why -- probably the big reason we are excited about myeloma.

Tom, do you want to add anything to that?

Yes, Clay, one other thing to point out is that we are doing a relatively good-sized Phase II single agent study, which we are on track to finish enrollment of this year. One of the things that we find very exciting about this with Genentech is that they are applying a lot of their advanced molecular signature techniques and biomarkers to this study to help was us look for prognostic or stratification factors that really help us develop the drug going forward and we think may speed the path to registration.

So from a scientific perspective, that one has got a lot of extra bang for the buck and is one of the real values of having a collaboration with an industry leader like Genentech.

Got it. That was very helpful. And then one question on 33, we noticed from the Analyst Day and some of the presentations we saw at ASH that there was a delayed response in some patients, meaning that some patients may have progressed and then got better or had some evidence of activity much longer or later than one would suspect. Are you dosing people -- with respect to the [ARC] and SGN-33, are you observing any of these effects so far to date? Is it the idea that the ARC will work sooner and that 33 may work later? How should we think about that?

That is a great question. This is Tom. So a couple of reminders about the 33 study with ARC. It is a randomized double-blind and placebo-controlled study. So we cannot really speak much about the efficacy data. What we can tell you is our thinking about this is that AML patients can be quite sick, especially elderly patients. Using ARC, which seems to act pretty quick, in combination with Lintuzumab, which takes a little bit longer in some patients, we think it's a good strategy, and we're treating these patients until they have frank progression or can no longer tolerate the drug or die. So it is a survival endpoint study. So the patients basically stay on drug for the longest period of time, and we think that gives the maximal chance for SGN-33 to add benefit and extend their survival.

Thanks very much for the added information, and congratulations again on a productive 2007. I look forward to 2008.

Bret Holley, Oppenheimer & Co.

I just wanted to clarify something. You said that the enrollment in the single agent refractory NHL trial for SGN-40 would be complete in 2008. Are you still expecting to present some of the data from that trial at the ASH 2008?

You know, that would it is likely be our intention now the ASH abstracts are not yet due. So I cannot commit that we have sent anything in yet because they are not due until midyear. But I think that's a likely scenario.

And that trial was slated I think originally for about 40 patients. Is that still the size of the trial?

Correct.

Okay. And then one other question, has your thinking on potentially moving 40 earlier in therapy in non-Hodgkin's evolved at all? Has Genentech -- their thoughts evolved at all? What likely kind of scenario do you see moving it into earlier line therapy, a combo Rituxan, 40 versus Rituxan-CHOP perhaps?

Right. I think that would you are asking is a very good question, first of all. Do we want to get into frontline therapy? Clearly we have had some cooperative groups talk to us about that. Even from the time before we did the partnership with Genentech, we had people interested in that based on our single agent activity. Afterall R-CHOP really was first presented on the scene 10 years ago now, and there has been really no advance to speak of in frontline treatments for NHL patients past what happened 10 years ago, partially because it's a good regimen, but partially because there has not been anything that is appropriate to add on top of this that would not provide a lot of potential toxicity. So that is a possibility.

As far as our discussions with Genentech about that, we would in the future, if anything changes, we will certainly update you. But right now I don't feel that is appropriate for us to make comments on that without being part and parcel with our partner on that.

David Miller, Biotech Stock Research.

Congratulations on a very productive 2007. Can you talk about why you're exploring weekly dosing for SGN-35?

Sure. I will start that, and then I will turn it over to Tom. Maybe he has some more comments on this. When we started going down the clinical pathway with our ADC technology, we did not know ahead of time what kind of dose regimen would be best. And so this is a first-time we put an auristatin drug conjugate in clinic, and we think that from the get-go we decided that we will start with every third week, and the FDA was clearly comfortable with that and allowed us to go forward on that. And we agreed that once we got some safety data in every third week and looked at this and looked at how the drug was in humans, that we would go ahead and proceed with a weekly study to try to gain that information. And that information could be useful, yes, for SGN-35, but could be useful for any of the other drug conjugates that we are developing and/or our partners.

So for us it is really a programmatic decision of why we want to go forward and evaluate the weekly dosing strategy.

Now, as far as it relates to SGN-35, we are pretty excited with our data. You can tell that from our data that is out there already. You can tell that we have publicly stated including in this call that we have additional responses we will be presenting midyear at appropriate conferences like an ASCO-type conference. And we are not planning on holding up anything to any potential development plan for our data on the weekly study.

Now, of course, we need to look at the data. It's going to be very important to us and may impact this and other programs. But we're pretty excited with our data on every third weekly, and we think that the right thing to do is to learn what goes on weekly dosing with this technology in this program.

Tom, do you want to add to that?

Yes, just a couple of other things. One is, we are really pleased with the objective responses we are seeing, and we are very much looking forward to updating everybody midyear on that.

One other thing that is emerging over time is what the durability is, and so far we are quite pleased with that. We do anticipate that a number of the chemo regimens that are currently used in this setting are given on a weekly basis. We would really like to know whether our drug at some point in the future might be combinable with those and could be given on a similar schedule to make it easy for patients and doctors. We think there's a lot of reasons to test that weekly to understand what benefits or challenges it might pose for either future drug development at 35 or for our entire ADC portfolio.

And, as Clay said, we are not going to slowdown and wait for those data given what we are seeing with the every three week schedule.

Okay. How does the weekly dose that you are using compare to the dose you're using every three weeks?

Well, we have not started our weekly study yet. But clearly we are going to have to start at a lower dose and escalate up. Tom?

Right, we are still -- you know, we have dosed escalated to 1.8 and beyond every three weeks. We're doing an appropriate dose scaling to a dose that we know is very well-tolerated, and then we will be walking up the dose latter there. And not only evaluating the tolerability of that, but also the pharmacokinetics to do some modeling on that as we go to help us really refine what the best dosing schedule is for patients.

Okay. Can you talk about your business development goals for 2008 as far as in-licensing and out-licensing?

Sure, David, and I think that probably the best person to do that would be the person who heads up our business strategy, and that is Eric Dobmeier.

So there's a couple of areas here. Obviously there's product partnering, and we did report data from SGN-33 and 35 last year that has generated some good interest in those programs. We're in a good position to move those forward ourselves, but we are in some discussions with folks. If we could find a deal that would help us accelerate and expand where those programs were going, we would consider it, especially outside of the US.

So those are discussions that are ongoing. We're not in a big hurry to do a deal unless it makes a lot of sense for us strategically.

On the ADC deal front, we are talking to some folks that the last deal that we did on our ADCs was with Agensys, and now it is a still is Astellas. And that was a codevelopment structure. So looking forward, I would not rule out that we might not do an out-license of our ADC technology, but it would need to be on substantially higher terms than we have done in the past.

And we're also talking to folks about potential codevelopment of our option rights where we get a piece of the product in exchange for the technology, which has a lot more value for us in the long run.

In-licensing, we're always in the market for interesting antibodies either that we can develop as naked antibodies or through conjugates. So we will continue to do some of those deals at an early stage. We're not really actively looking to supplement our pretty robust pipeline with a clinical program, but we will be opportunistic about that.

Okay. And then last question I have is, can you run through where you are thinking currently is for the timing for expected first BLAs for 33 and 40?

Well, sure I will take that at least to begin with, and we will see if there's other comments here. But I think with -- and you said 33 and 40?

Yes.

Okay. I think with 33, let's start there. With 33 we have an ongoing Phase IIb study that we discussed with ARC. So it is ARC versus ARC plus SGN-33 in elderly AML patients that do not qualify for aggressive chemotherapy. And that study is a Phase IIb study, and it is how it has been designed. But it has been designed in registrational format, placebo-controlled, double-blind, randomized.

Our endpoint is survival. If the data are good, and we think we have an excellent chance for that based on everything we have seen to date, the single agent and our preclinical work, but if the data are good, that could lead to substitutive discussions with the agency and potentially could represent a registrational package on its own. It also could represent part of a registrational package depending on what other studies we are pursuing.

So those are ongoing, and as far as dates, we have not given any specific dates yet and specific guidance on exactly when that would be expected. I think as we progress and go further, we will start looking at providing more information, more color on that, but right now we have not given any specific dates.

But you could start to look and see the dates that we have been giving, which as we believe that our ARC study is a two-year study and started at the end of '07 with data coming out at the end of '09, and we will be presenting data at appropriate conferences thereafter. So those are the types of timing that we can have information that could lead to a registration package.

As far as SGN-40 goes, that is a little bit different situation. Together with our partner, Genentech, we really have not put out specifics there, and I would be -- I would rather hold off on discussing specifics of any BLA filings or anything to include our partner and get involved in discussions of that. And with time, we will be more clear on that program and with our timing, but for now I would rather hold off on making anymore proclamations on SGN-40.

(OPERATOR INSTRUCTIONS). Jason Kantor, RBC Capital Markets.

A couple of questions. SGN-30 there was I guess a clinical style trial that was stopped. Any update on that program? And is there any interest on your part to develop that further internally, or is that all being done externally now?

Thank you for the question, Jason. There is no more update on SGN-30 and for any of the programs that are -- there's actually two ongoing programs, and we have no update at this conference call.

As far as internal, we had made a corporate decision some time ago that we outlined at the conference calls in the past that we were not going to be developing SGN-30 from a corporate standpoint, that we were going to be working and collaborating with the National Cancer Institute providing drug products to evaluate SGN-30 in some combination with chemotherapy regimens. And that has not changed at all. We have turned our focus to the empowered form of an anti-CD30 antibody, which is SGN-35, which is an ADC that we are excited about our responses. So really from a corporate standpoint, the answer is, we are directly focused on SGN-35.

And on SGN-35, you said that you would be giving some kind of update on the regulatory strategy there. What are the choices that your mulling over at the moment? What are the possibilities of regulatory strategies for that drug?

You know, Jason, we are having internal meetings on that. We're talking with KOLs or key opinion leaders, I should say, for those of you that do know what KOL is. We're also speaking with our Board of Directors about various concepts and thoughts we have. There are a lot of different -- I would not say a lot of different -- there are a few different ways that we could go down this path here, that are emerging to us. And whether we go down one registration path or two or three, I mean there's a couple of different paths we can go down. All of them are potentially ways we can go, and we may choose to go with all of them. But right now for this conference call, I don't really think that we want to start outlining the specifics of this. But I could tell you that it is something that we are spending a lot of time and effort working on, and quite frankly, it's a heck of a lot of fun. It's a good way to spend a lot of hard-working time, is talking about the wonderful problem of having to figure out what type of registration path you're going to go with with a pretty active drug there.

And on SGN-70, what autoimmune indication are you going to be targeting initially? Will you be able to go directly into that patient population, or will you have to run a Phase I in healthy's first? Is this going to be one of these situations where you have to start at sort of vanishing links, low doses and creep up slowly so it might take a long time?

I think, Jason, you have touched on a couple of issues that faced developing anything in autoimmune disease, so you're not naive to that kind of development. I think for specifics of the kinds of things you're asking, at this point for competitive reasons, we would rather not give out specifics.

Okay. I assume you will give out some specifics when you start those trials?

You can bet on that. You can bank on it.

Okay. Thank you.

Management, at this time there are no additional questions. I would like to turn the conference back over to Ms. Pinkston at this time.

Great. Thanks, operator, and thanks, everybody, for joining us this afternoon. That concludes our call.

Thank you, management. Ladies and gentlemen, at this time we will conclude today's teleconference presentation. We do thank you for your participation on the conference call. If you would like to listen to a replay of today's program, please dial 1-800-405-2236 or 303-590-3000 with a access code of 11107375 followed by the #.

We thank you for your participation on today's conference call. At this time we will conclude. You may now disconnect, and please have a pleasant day.