Seagen Inc (SGEN) 2008 Q2 法說會逐字稿

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to the Seattle Genetics Second Quarter 2008 Financial Results conference call. (OPERATOR INSTRUCTIONS) This conference is being recorded today, Tuesday, July 22, 2008. I would now like to turn the conference over to Peggy Pinkston, Director of Corporate Communications. Please go ahead, ma'am.

Great. Thank you, Operator. I would like to welcome you all to Seattle Genetics' Second Quarter 2008 conference call. With me today are Clay Siegall, President and Chief Executive Officer; Todd Simpson, Chief Financial Officer; Eric Dobmeier, Chief Business Officer; and Tom Reynolds, 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 affect the Company.

I'll now turn the call over to Clay.

Thanks, Peg, and thank you all for joining us this afternoon. We had a great second quarter with significant progress across our product pipelines. We now have 11 ongoing clinical trials of our three lead programs - SGN-40, SGN-33 and SGN-35 - and plans to move a fourth product candidate SGN-70 into the clinic this year.

We also recently announced a new antibody-drug conjugate deal with Daiichi Sankyo and we are in a strong financial position to continue advancing our pipeline.

Today I'll update you on our clinical programs and collaborations. Then I'll turn the call over to Todd to discuss our financial results, after which we'll open the call for your questions.

Let me begin with an update of our SGN-40 and SGN-33 programs which are steadily advancing. During the second quarter we and Genentech initiated two additional clinical trials with SGN-40. Now all six planned SGN-40 trials for non-Hodgkin lymphoma and multiple myeloma are ongoing. We reported final data from our phase I SGN-40 clinical trial in non-Hodgkin lymphoma at the International Conference on Malignant Lymphoma in June demonstrating multiple objective responses at well-tolerated doses.

We also recently completed enrollment in the phase II single-agent clinical trial in diffuse large B-cell lymphoma and plan to submit an abstract of presentation at the American Society of Hematology, or ASH, Annual Meeting in December.

With SGN-33, our three ongoing trials in acute myeloid leukemia and myelodysplastic syndromes are progressing well. We are particularly enthusiastic about the potential role of SGN-33 in the treatment of older patients with AML where median survival with current therapies is less than six months and patients are in dire need of more effective and better tolerated treatments.

This is the basis for our phase IIb randomized trial of low-dose cytarabine plus or minus SGN-33 which is on track for data in late 2009 or the first half of 2010. We expect to complete accrual to our phase Ib single-agent trial in AML and MDS this year and report data in 2009 and our Revlimid combination trial in advanced MDS is underway.

I'd like to focus the bulk of my comments today on SGN-35, an antibody-drug conjugate, or ADC, targeted to CD30. The positive SGN-35 data presented at the American Society of Clinical Oncology Annual Meeting and at the International Conference on Malignant Lymphoma Conference in June were the highlight of our second quarter.

At these conferences we reported data on 39 patients, primarily with Hodgkin lymphoma who were treated with single-agent SGN-35. Patients have received a median of three prior treatments and three-quarters have received prior stem cell transplants.

At doses of 1.2 milligram per kilogram and higher administered every three weeks, 45% of patients had objective responses including 23% with complete responses. SGN-35 was generally well tolerated and notably 81% of patients with at least one post-baseline tumor assessment had reductions in tumor volume.

We recently completed enrollment to this trial and multiple patients continue on treatment. We plan to submit an abstract for presentation of additional data at ASH.

These impressive data support aggressively advancing this program to address the unmet medical need in relapse and refractory Hodgkin lymphoma and CD30 positive T-cell lymphomas. We believe that the strong response rate, including durable CRs at well tolerated doses, are the caliber of data not often seen in phase I clinical trials particularly given the heavily pre-treated patient population in the study.

Considering that there are limited alternative therapies in this setting, we plan to advance SGN-35 as rapidly as possible toward registration. We have received orphan drug designation for SGN-35 in Hodgkin lymphoma and intend to collaborate closely with the FDA to determine our pivotal trial strategy. We expect to provide more information about our development plans for SGN-35 later this year.

Meanwhile, our phase I weekly dosing clinical trial of SGN-35 is ongoing. This study is designed to further explore the potential of our ADC technology by evaluating alternative dose and schedule regimens.

Our near-term focus with SGN-35 is on the relapse and refractory lymphoma setting where we believe both a rapid registrational pathway and a substantial commercial opportunity exists. Although frontline therapies for Hodgkin and T-cell lymphoma can achieve cures or long-term remissions, it's important to note that a significant number of patients require additional treatments including stem cell transplants and other chemotherapy regimens.

Based on our market research, we project worldwide sales potential for SGN-35 in relapse or refractory Hodgkin and anaplastic large-cell lymphoma of $300 million to $400 million annually. We also believe there is significant upside to SGN-35 commercial opportunity in several ways.

First, SGN-35 has potential in the frontline lymphoma setting in combination with or as an alternative to chemotherapy. Conventional frontline therapy regimens expose patients to significant toxicities and can result in secondary malignancies. Consequently, oncologists are looking for new agents to supplement or decrease the intensity of these regimens to improve patient outcomes.

Second, SGN-35 may have applicability in other sub-types of non-Hodgkin lymphoma where CD30 is expressed such as some B-cell or -- and cutaneous lymphomas.

And third, SGN-35 may also have application in the treatment of autoimmune disease indications and graft versus host disease through a potential to deplete activated but not resting T-cells that are responsible for these conditions without broadly suppressing the immune system.

Our future clinical development activities will examine ways to broaden the utilization of SGN-35 into these additional areas of patient need which can further increase its market potential.

SGN-35 is an exciting program that we believe has a rapid development pathway and we look forward to updating you on our progress during 2008.

The next product candidate we plan to advance into the clinic is SGN-70, a humanized antibody targeting CD70. In our pre-clinical models, antibody targeting of CD70 selectively depletes activated T- and B-cells and is an effective treatment for autoimmune disease at well tolerated doses.

We have completed the pre-clinical studies and regulatory filings necessary to enable us to initiate a phase I clinical trial during the second half of this year in healthy volunteers. The trial is designed to evaluate the safety and pharmacokinetics of SGN-70 in humans and will serve as a foundation for future clinical trials in patients with autoimmune disease.

We are also advancing three pre-clinical ADCs that provide us with IND candidates over the next several years. These are SGN-75 for CD70 positive hematologic malignancies and solid tumors, an anti-CD19 ADC for hematologic malignancies and AGS-5 ADC for solid tumors which we are developing in collaboration with Agensys, a subsidiary of Astellas Pharma.

Our positive SGN-35 clinical data has enhanced the value of our ADC technology to empower antibodies. This was demonstrated by our recent ADC deal with Daiichi Sankyo, one of the largest pharmaceutical companies in Japan, and our seventh active ADC collaborator.

Under the agreement, Daiichi Sankyo paid us an upfront fee of $4 million for access to our ADC technology for a single antigen expressed on solid tumors. Seattle Genetics is also entitled to receive annual maintenance and research and support fees, progress dependent milestone payments and mid-to-single-digit royalties on net sales of resulting products. The financial terms of the Daiichi Sankyo deal are substantially higher than our past ADC license agreements reflecting the increasing value of our technologies.

Progress by our ADC collaborators is also providing further scientific and clinical validation of the technology. For example, during the second quarter CuraGen initiated two phase II clinical trials with CR011 ADC for melanoma and breast cancer and we achieved two milestones under our ADC deal with Genentech including one trigger by its IND filing for an ADC utilizing our technology.

We also extended the research term under our ADC collaboration with Bayer for which we received a payment of $1 million.

Over the past several years we've raised a significant amount of capital, more than $65 million, through ADC technology licensing deals with leading companies such as Genentech, MedImmune, Bayer, CuraGen, Progenics and now Daiichi Sankyo.

In addition to the up front payments, these deals have the potential to generate future revenue streams from milestones and royalties as our collaborators advance their ADC programs into and through clinical trials. We intend to continue to do ADC deals that include either strong financial terms or the ability to obtain product rights through co-development or opt-in rights.

Looking ahead, our key milestones of the remainder of 2008 and into the first half of 2009 include for SGN-40 reporting phase II single-agent data from our diffuse large B-cell lymphoma trial at ASH, continuing to advance our five other ongoing clinical trials and reporting additional data in 2009.

For SGN-33, completing our phase Ib single-agent trial, advancing the Revlimid combination trial in MDS and moving our global phase IIb trial in older AML patients toward completion in late 2009 or the first half of 2010.

For SGN-35, presenting additional data at ASH, finalizing our development and regulatory strategy during 2008 and planning to initiate pivotal trials in the first half of 2009.

And for SGN-70, initiating a phase I trial for autoimmune disease this year.

With that, I'll turn the call over to Todd to discuss financial results.

Thanks, Clay, and thanks everyone for joining in on the call this afternoon. Our second quarter 2008 financial results were in line with our expectations and reflect increases in both our revenue and our expenses resulting from the expanded activities in our pipeline that Clay just described.

For the second quarter of 2008 we posted record revenues of $10 million, 78% higher than revenues in the second quarter of 2007. Revenues for the year-to-date in 2008 were $17.1 million compared to $9.9 million for the first six months of 2007.

These revenues primarily reflect amounts earned under our SGN-40 collaboration with Genentech which increased year-over-year. Our ADC collaborations also contributed to revenues during the second quarter in a significant way including milestones achieved with CuraGen and Genentech as well as an extension of our ADC collaboration with Bayer.

Operating expenses in the second quarter of 2008 increased to -- were $27.6 million and $53.7 million for the year-to-date, compared to $18 million for the quarter and $32.6 million for the year-to-date in 2007.

These planned increases reflect higher R&D expenses which were $45.7 million for the year-to-date in 2008 compared to $27 million for the year-to-date in 2007.

The principal drivers of this increase are as follows. First, clinical development expenses for SGN-40, SGN-33 and SGN-35 increase reflecting the eleven clinical trials that are now ongoing.

Second manufacturing costs for SGN-40 increase related to campaigns underway to ensure an uninterrupted supply of clinical materials for trials.

Similarly, manufacturing activities are now underway and will continue through the remainder of the year for SGN-35 and SGN-33 product supply.

Lastly, employee cost increase driven by growth in our clinical and development groups, total operating expenses include non-cash share based compensation expense of $5 million for the year-to-date in 2008 compared to $3.4 million for the same period in 2007.

And just as a reminder, SGN-40 collaboration costs including the manufacturing and clinical trial costs that I mentioned are included in our expenses but are fully reimbursed by Genentech under the collaboration.

From a cash standpoint we ended the second quarter of 2008 with approximately $198 million in cash and investments to fund our development programs. For the year-to-date we have received approximately $27 million in milestone and other payments under our SGN-40 and ADC collaborations including the upfront payment from our recent ADC deal with Daiichi Sankyo. These dollars represent non-diluted capital that partially offsets the investment in our pipeline.

We continue to expect to end 2008 with more than $140 million in cash and investments.

And with that I'll turn the call back over the Clay.

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

(OPERATOR INSTRUCTIONS) Mark Monane, Needham.

Good afternoon and greetings from New York City; very hot day in New York City and seventh day in a row of temperatures over 90. So let's talk about the hot SGN-35 which you seem very excited about.

Is there a potential for this -- can you outline again for us the strategy in recurrent disease? Is there a sequencing event that makes 35 more likely to work in patients who have failed frontline therapy and is there a potential for moving this into frontline therapy later?

Mark, this is Clay. We're sorry about the heat in New York. It's very, very pleasant in Seattle. Although SGN-35 is hot, I will agree with that.

We'll start off by saying that so far in our trials we've only used patients that are relapse refractory. We've not had -- it's not a frontline trial that we have and perhaps, Tom, would you like to comment a little bit more on Mark's question?

So we believe that the biggest unmet need in Hodgkin lymphoma is the unmet need of relapsed refractory lymphoma either following transplant or those patients who can't tolerate transplant and we clearly address that in our phase I data and look toward that for our initial registration studies as a strong potential there.

We've got a lot of interest across the world from investigators and cooperative groups in moving this up toward frontline and have a number of proposals that we're already starting to talk about, about how to do that.

What's clear there is that although frontline therapy is one of the success stories of modern medicine in treating cancer, it's not the final answer and we see now a lot of these patients do have late relapses; we see secondary malignancies and other comorbidities that come along with the therapy. We think 35 offers the potential for a less toxic therapy based on the data we've seen so far and we're looking forward to moving this quickly into the frontline setting with our investigators and collaborators.

And does 35 have the potential to be the first Seattle Genetics drug to the market?

Yes. I think it does have that potential. We're working very hard on it, we're excited. As we said in the prepared remarks, you don't often see data like this in a phase I product. And as a result, we have put a lot of attention and time to it and are working hard right now to develop a strong pathway toward registration that will update the -- update everyone later this year.

A lot of the patients with Hodgkin lymphoma are children. Would that potentially increase the opportunity here in terms of more favorable or expedient regulatory path?

We believe there's a number of opportunities in the pediatric space and clearly is somewhat of a larger chunk of the market. And we believe those patients will be able to tolerate the product well and have just as much potential to respond.

We also think that there's possibilities for pediatric exclusivity that are things that we would look into and obviously will be part of our discussions with FDA and other competent authorities.

And I have -- Glenn has a financial question for Todd.

I have a question on any updates on your 2008 cash burn considering that you're ramping up research and development. And your long-term investments, what do they represent in terms of their components?

Good question. First of all, on burn guidance, we updated our guidance on our last quarterly call to really reflect the expanded activities really across the portfolio but primarily on 35, SGN-35. Our projected cash use in operations this year is in the $75 million to $85 million range and, again, we expect to end the year with north of $140 million in cash and investments on the balance sheet.

With respect to our investment portfolio, we have a very conservative investment policy. It's all high-grade, primarily double-A, triple-A rated paper, no exposure in sub-prime debt, anything like that, just a very high quality investment portfolio.

Thanks for the added information.

[Mona Ashie], JPMorgan.

This is Cory Kasimov. A couple of questions -- so just following up on Mark's question, I understand that you'll be providing more details on the SGN-35 program later in the year but even at this point it would be great to hear your preliminary thoughts on what the trial might look like in terms of what the size might be and also do you think you might need additional data before submitting the FDA? Any thoughts you have on that?

Mona, thank you. This is Clay. Thanks very much for the question. At this point we don't want to be super specific on everything. A couple things that we can tell you, though, because we're in progress with working on this right now we're trying to collaborate with the agency on coming up with an excellent plan for this exciting drug.

But some of the things that I'm excited to share with you are that we are interested in this drug for two different diseases and that would be Hodgkin lymphoma and the T-cell lymphomas that are CD30 positive, most notably anaplastic large-cell lymphoma.

So one of the things that is possible is that we may go after two separate approval pathways. And that's something that is exciting for us.

We also may take advantage of certain different registration pathways that the FDA offers as far as aggressively advancing the program and so there's a variety of different ways that the FDA has outlined in their structure to enable companies to do that. So we are working with them to try to look at different ways to accelerate the development of this program since we're very bullish on the program.

And for now, I really believe that that is the right thing to talk about. I don't think giving you any specifics now while we have not yet had full agreement with the agency -- it's something working -- we're executing very hard trying to make this reality and push this product forward. I don't think it's appropriate to really discuss specifics and try to work through the FDA first before talking about specifics is what really our plan is.

Tom, do you want to add anything on top of that or --?

The only other thing I'd like to just amplify in the anaplastic large-cell lymphoma front is this is clearly an orphan indication and the data that we saw first with SGN-30 where we saw a definite response rate in that sub-population as well as with the CR that we've seen now talked about at ASCO gives us some belief that we're going to be able to really capitalize on this as well as a pathway toward registration in parallel with Hodgkin.

Great. And then I see just following up on something that you talk about earlier and also in your press release beyond the opportunities in relapse refractory Hodgkin's and ALCL, are you saying anything at all about what you're thinking of in terms of timing, about exploring SGN-35, in these other opportunities that you spoke about and the B-cell and coetaneous lymphomas and so on?

Well, I talked about three different opportunities. One is frontline therapy, one is other malignancies that are CD30 positive. CD30 is expressed in a percentage of B-cell lymphomas so that's another opportunity for us.

And then the third opportunity was in autoimmune disease indications. And we have been talking about all three of these and we're not ready at this present time to outline a specific plan. But I can tell you that we're excited about all three opportunities and we think that SGN-35 is a winner. And we think it's going to be a winner in a good commercial opportunity even just in our first indication where we're getting it approved in the relapse refractory setting.

We think it could be a bigger winner by expanding into the other three areas we talked about which is why we brought them up and I think we're working very hard at this and we think that the upside potential of this agent is larger than we first actually considered.

And actually one final question. So on the SGN-35 data ASCO, are you seeing any sort of ramp in the interest in the ADC technology and a related fact for Todd, Todd are you still sticking with your revenue guidance?

Initially - I'll answer the first part of this - is you bet! There's been a lot of interest in our technology and in SGN-35 and absolutely. And I think, Todd, you answered the question about the revenue guidance but perhaps you want to touch on it again.

Our revenue guidance was $30 million to $33 million for the year. We're not changing our guidance right now but clearly our revenues bumped in the second quarter, again, largely the result of the SGN-40 collaboration with Genentech. But we had multiple ADC collaborators hit milestones in the quarter and hopefully that continues. But that explains the bump in revenues in Q2.

Great. One final question, can you talk a little bit about the potential impact if any of the proposed acquisition of Genentech by Roche?

Thank you for brining that up, certainly. We think it's premature for us to see and know whether there can be any specific impact. We fully expect to continue working with our partner, Genentech, on our SGN-40 program and our ADC programs and work with them in a very robust manner as we have been. So we expect really no changes with that and any specific path there concerning Genentech and Roche is just way too premature for us to comment on at all.

Thanks a lot guys.

Jason Kantor, RBC Capital Markets.

Hi, Clay. Congratulations on a lot of good progress. I just want to follow-up on the last question about Genentech. Maybe if you could just review kind of the depth of that relationship. And I know they just recently filed an IND. I wonder if you could tell us anything about that target and also, perhaps, how many other targets they have rights to under your ADC collaboration? Thanks.

Thanks for the question, Jason. I'll turn this over to Eric Dobmeier to address.

Hey, Jason, so as you know we have two collaborations ongoing with Genentech. We have the SGN-40 deal where we have six ongoing trials. We have a joint development committee and multiple sub-teams that meet with them very regularly. So we're talking to them all the time about that program and have a good collaboration ongoing there.

We also have an antibody drug conjugate deal where they have multiple targets, the specific number has not been disclosed, that they are developing. And we did recently announce that they had made their first IND filing for ADC using our technology. And, again, the identity of that target has not been disclosed. That's something that Genentech will disclose when they determine it's the appropriate time to do so.

But, again, that's an active collaboration that's been progressing well. So we have a lot of mutual respect for each other both on the corporate and scientific side and a great relationship with them.

Thank you.

Bret Holley, Oppenheimer & Co.

Just had a quick question. You said -- I guess, Clay, you estimated that the potential [peak] sales of SGN-35 and Hodgkin's disease and CD30 [positive] would probably be about $300 million to $400 million. I guess I'm just struggling a little bit with what pricing you might be the [assumptions] there. In our model we have about 10,000 or so new patients, new Hodgkin disease patients per year and I'm assuming a high majority of those actually go on to cure to long-term response given the 85% five year survival. So can you just talk a little bit more about the assumptions that go behind that savings?

Sure. This is Eric. I can talk you through that. So you're right, when you look at incidents of Hodgkin and ALCL you're looking at 10,000 or 11,000 patients per year in the US. But we've been doing a lot of market research on what the prevalent population of patients that need new therapies is and we project that there are over 10,000 patients in the US with relapsed or refractory Hodgkin's or ALCL that are in need of treatment from a prevalence point of view and there are slightly larger numbers in the EU. So there's about 20,000 to 25,000 patients that are in need of therapies.

We've used relatively conservative penetration and pricing assumptions to come up with about 6,000 to 8,000 patients per year that could be treated with SGN-35. Pricing of $40,000 to $50,000 per patient year which for an orphan indication is actually somewhat conservative which leads to the $300 million to $400 million market potential and, as Clay went through earlier, we think there are a number of ways there is significant upside to that by moving into other indications either frontline, other B-cell malignancies or autoimmune disease.

And I guess a follow-up question to that, it may be a little bit premature really to discuss this from Seattle Genetics' point of view, where do you see drug pricing going and how -- when SGN-35 potentially comes to the market there's going to be an acceptance of a $40,000 or a $50,000 a year price tag. I understand some orphan indication; I'm just wondering have you started to develop some perspective on where you might kind of stand on drug pricing when you guys become a commercial entity?

It's a great question and a lot of people have been talking, thinking about that issue. We think it's going to depend on data. So if you've got a therapy that has minimal efficacy and isn't really adding a lot in terms of patient survival or quality of life, then I think there's going to be pricing pressure. But if you've got a therapy that's really leading to long-term remissions and cures, if you look at it from a pharmacoeconomic point of view, there's a strong case to be made for something like SGN-35.

Also, when you look at Hodgkin lymphoma, as was alluded to earlier, there's a bimodal distribution and diagnosis so there are quite a few younger patients who are diagnosed with Hodgkin's as well as ALCL. And when you look at what type of increased survival you can have in younger patients and how long they can live and be productive members of society, there's a larger impact than maybe cancers that are diagnosed in elderly patients.

Thanks a lot. That was very helpful.

David Miller, Biotech Stock Research.

Thanks for taking my questions. I only have a couple left. The first question has to do with SGN-70. You were talking about that you were going to take this into patients, healthy patients. Is that kind of a prep for moving SGN-70 into like phase I and then once you've determined it's safe bring SGN-75 through the process since the ADC technology may have some additional functionality?

Partially you're right. Let me try to clarify it. So SGN-70 we view as a exciting opportunity in autoimmune disease. SGN-75, we're focused on cancer.

So with SGN-70 we want to head down the autoimmune disease path and it's very commonplace with brand new drugs that have never been tested in patients to go into healthy subjects or healthy volunteers prior to autoimmune disease, treating autoimmune disease, because many of those therapies are not life-threatening.

And so I don't want to call it totally standard but it's pretty standard to do this type of thing and quickly in quite a short time frame, much shorter time frame than a standard full phase I that you would see in cancer. In a rather short time frame you get all your results, you get your safety parameters, you get your pharmacokinetics and you really understand the distribution of the drug and you really can learn everything you need so that when you actually go into a phase I setting in autoimmune disease, it actually goes relatively quickly because you know so many of the parameters. So this is really par for the course for autoimmune disease.

Now you asked about SGN-75. We're extremely excited about that and at one point in the past we considered SGN-70 for cancer. What happened is when we made the ADC and compared it head to head, the ADC out-performed SGN-70 in cancer and we were also gaining data on SGN-35 at the same time in humans.

So we now have human validation that our ADC technology really works well and at well tolerated doses; and so with our pre-clinical package with SGN-75 and our clinical package with ADC with our technology, we thought it prudent to go forward in cancer with this ADC while sticking with the antibodies alone, the unmodified antibody but humanized, I should say, antibody in an autoimmune disease.

You were talking about how you were engaging with the FDA and the conversations about SGN-35. Aside from the weekly dosing trial that's underway, would you expect to bring 35 into the clinic in other indications while waiting for that FDA guidance or is the next 35 trial we're going to see the pivotal program?

I think what we're probably going to do is have a very strong focus on taking this product forward into registration trials. I think that while there are other opportunities, it's not a bad question, there are other opportunities and other things we could consider for SGN-35, we absolutely will consider them in the future but right now we have laser-like focus on trying to go to registration studies.

So at this point with the rest of our pipeline being busy and we're executing on all those trials, with SGN-35 there is going to be nothing in our way between where we stand and registration trials. So aside from the weekly studies, I think it's unlikely we'll do anything prior to getting involved in these registration studies.

And the last question I have, were Roche personnel involved in the SGN-40 negotiations? Or have they been subsequently involved in some of the decisions about the design or indications for the trials for that program?

That's a pretty easy answer. And the answer is we've been working exclusively with Genentech and not Roche.

Great. Excellent job and thank you very much.

Thank you. (OPERATOR INSTRUCTIONS). Katherine Kim, Banc of America Securities.

I have a couple of questions, as well, on SGN-35. Given the difficult environment currently with the FDA in terms of extensions with timelines, are you comfortably able to get through the [FP] process in the second half?

This is Tom Reynolds. So we are only beginning our collaboration with the FDA now. We've had a good dialogue with them throughout the IND process. That's moved along quickly. Our discussions so far are progressing well. We are aware that some companies have had trouble with PDUFA deadlines. We've not seen that yet. We are making sure that we are turning things around quickly at our end. We're making things easy and accessible for FDA and we anticipate that we will be able to move through this rather quickly.

But we do know in a lot of these negotiations that they can take some time but we are pretty confident with what we've seen so far that there's a lot of interest on our side as well as on the FDA's side in thinking about how to get this drug to the patients that need it. So we haven't seen any speed bumps yet and we're hopeful we can navigate that quickly.

So in terms of dissemination to the street, are you going to update us on, let's say, the next quarterly conference call or are you going to wait for getting -- the FDA and then tell us what the trial is going to look like (inaudible)?

Katherine, this is Clay. Since we're doing this all in real time we really can't answer that. We will update the street at the first appropriate opportunity that we have.

And other than the weekly dosing trial, is there any other data that you're waiting for that you would need before meeting with the FDA?

There is not. We are very excited with our package.

And then my final question is, partner opportunities for SGN-35. Can you make some comments?

I'd love Eric to make comments. He's leading our efforts in potential partnering opportunities.

Yes. So we've had interest from partners in, particularly, SGN-33 and SGN-35 and we have gotten some discussions ongoing. I think as I've said on previous calls, our highest level of interest would be in an ex-US partnership where we retain full commercial rights in the US.

That said, we've got a good financial position. We've got the resources to keep these programs moving forward so we're not pressed to do partnerships unless they make sense for us. Both financially and from the point of view of having a partner who is willing to commit to and accelerate what we can do outside of the US.

Thank you very much for answering the questions.

Thank you. And at this time there are no further questions in the queue. I'd like to turn it back to Peggy Pinkston.

Great. Thank you very much, Operator, and thanks everybody for joining us this afternoon. Have a good evening.

Ladies and gentlemen, this concludes the Seattle Genetics' Second Quarter 2008 Financial Results conference call. You may now disconnect. Thank you for using ACT conference.