Sarepta Therapeutics Inc (SRPT) 2009 Q1 法說會逐字稿

Good morning, ladies and gentlemen, and welcome to the AVI BioPharma, Inc. first-quarter 2009 financial results conference call. As a reminder, today's call is being recorded and will be available for replay both by phone shortly after this call and on the Company's website beginning tomorrow, May 12.

Now for opening remarks and introductions, I would like to turn the conference to Ms. Julie Rathbun of investor relations at AVI. Please go ahead, ma'am.

Thank you. Thank you for participating in today's call. Earlier this morning we released our financial results for the first quarter of 2009. The press release with some of this detail is available on our website at www.AVIbio.com, and the 10-Q has been posted. If you would like to be placed on AVI's press release distribution list, please email me directly at investor relations at AVIbio.com.

Joining me this morning from AVI BioPharma are Dr. Leslie Hudson, President and CEO; David Boyle, Chief Financial Officer; and Dr. Steven Shrewsbury, Chief medical officer.

Before we begin though, I would like to remind you that comments made by management during this conference call will include forward-looking statements within the meaning of federal securities laws. These forward-looking statements involve material risks and uncertainties. For a discussion of risk factors, I would encourage you to review the AVI BioPharma annual report on Form 10-K and subsequent reports as filed with the SEC.

Furthermore, the content of this conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, May 11, 2009. The Company undertakes no obligation to revise or update any statements to reflect events or circumstances after this conference call.

I should not like to turn the call over to our CEO, Les Hudson.

Julie, thanks very much, and good morning, everybody, and thank you for joining us. I would like briefly to review our most recent achievements since the beginning of the year and then will ask Dave Boyle, our CFO, to go over the first-quarter financial results. After a very brief comment on some of the corporate milestones coming for the remaining of the figure, Steve Shrewsbury, Dave Boyle, and I will be available to answer your questions.

So first of all in terms of the details, most of these are exactly the same as you find in the press release. I'm just going to just simply hit the really high level headlines. First of all, you will have seen the announcement of a $2.5 million DoD contract. The importance of that for Duchenne muscular dystrophy, you'll remember that Duchenne has now become a national priority for the Department of Defense funding alongside breast cancer and prosthetic cancer. In our case, this is a particularly important piece of funding as it is to actually carry out GLP toxicology studies for AVI-4658 in Duchenne muscular dystrophy, which we believe will be important to release the current clinical hold on the US IND.

We have also in this first quarter received the key patents on our drug candidate AVI-6002. This is the PMOPlus which targets Ebola Zaire virus. The interesting thing about it -- and we actually put out a separate press release on this -- is that that technology based on the PMOPlus compounds is particularly applicable to viruses whose replication is error prone. It is very good at being able to combat viruses that have a high mutation rate and so try to escape the effects of the drug.

We announced in the first quarter the beginning of the trial, the intravenous trial study 28, where we dosed the first patient with AVI-4658. That was early in the quarter. Now we are well on course for evaluating the drug in multiple infusions over 12 weeks of ascending doses of AVI-4658 as we move through the different cohorts.

We also announced the successful completion of a single injection dose escalation. We tested two doses, Phase I trial of AVI-4658 for the treatment of DMD by exon skipping. What we saw by intramuscular injection of a single dose of the drug either 0.09 or 0.9 milligrams in total, we saw that in those fibers that were actually positive in the muscle bundles, we actually saw up to 80% of fibers develop dystrophin. And that was important because in fact it's 80% against a background of virtually 20%. So where the drug contracted of fibers, we saw almost uniform expression.

Equally importantly, individual fibers shown new protein expression showed dystrophin levels in individual fibers up to 40% of normal, so a high level of expression per cell and then a very high percentage of positive fibers across the bundles into which the drug had been injected. Importantly there was no immune response to the protein and no serious treatment related side effects were observed.

We also announced changes in senior management and in the Board. Steve Shrewsbury joined us as Chief Medical Officer in this quarter and was actually on our last call, you will remember. And also we announced the appointment of Chris Henney and Kathy Behrens to the Company's Board of Directors, both of whom are extremely well-established figures in the biotechnology small pharma field and extremely successful track record. We are very pleased to have them both join us.

Now I would like to head over to Dave Boyle to take us through our financial results. I will return afterwards to talk about our upcoming milestones. Dave?

Thanks, Les. Earlier this morning AVI issued a press release highlighting our first-quarter 2009 financial results and filed a report on Form 10-Q with the SEC, which is now available online. As reported in the release, revenues for the first quarter of 2009 were $3.2 million down from $5.6 million in the first quarter of 2008 reflecting a decrease in research contract revenues of $2.4 million. The net loss for the first quarter of 2009 was $0.9 million or $0.01 per share compared with a net loss for the first quarter of 2008 of $15 million or $0.23 per share.

The Company's total operating expenses decreased by $12.7 million to $6.7 million in the first quarter of 2009 compared with the first quarter of 2008 due to a $9.9 million reduction from the acquired in process research and development expenses in the prior year quarter associated with the Company's acquisition of Ercole Biotechnology, Inc. and the positive impact of increased drug pipeline focus and other operational improvements.

Research and development expenses for the first quarter of 2009 decreased to $4.5 million from $6.9 million during the first quarter of 2008. The decrease in R&D expenses was due primarily to decreases in government research contracting costs in line with the decline in government research contracts revenues.

General and administrative expenses for the first quarter of 2009 decreased to $2.2 million from $2.6 million for the first quarter of 2008 primarily due to a one-time non-cash stock compensation increase that occurred in the prior year related to the Ercole acquisition.

Net interest income declined in relation to declines in market rates of interest on the Company's interest-earning investments. The gain on warrant liability of $2.6 million was the result of the decline in the Company's stock price subsequent to the issuance of warrants as part of the equity financing that closed in January, 2009. The gain or loss on the warrant liability contribution to the Company's financial statement fluctuates with the price of the Company's stock and I want to remind everyone that this charge or credit is a non-cash item.

AVI had cash, cash equivalents, and short-term securities of $25 million as of March 31, 2009, an increase of $13.5 million from December 31, 2008. This increase was due primarily to the equity financing that raised net proceeds of $15.5 million, partially offset by cash used in operations of $1.6 million and property and equipment and patent-related costs of approximately $300,000.

I confirm our guidance for 2009 for expenditures for operations net of government funding and other collaborative efforts to be approximately $10 million to $12 million for the full year. The Company believes it will be awarded certain government contracts to pursue the continued development of its antiviral compounds and has assumed a revenue contribution from these contracts in providing this guidance. Should the Company not receive the additional contracts or should their timing be delayed, they may have a negative impact on these projections.

I would now like to turn the call back over to Les.

Thanks, David. So looking forward then for the balance of 2009, clearly the study 28 for AVI-4658, our PMO, is really very important. Our major focus will be to complete this IV trial. As you know, this will go up to 4 milligrams per kilogram, which for a 30 kilogram boy, that's a cumulative drug exposure of approximately 1500 milligrams over 12 weeks per patient. That really is we believe a very, very good range over which we will be actually testing the drive for efficacy, although of course as you know, the primary intent of the trial is to establish the drug safety.

Similarly we have our second-generation chemistry, the PPMO chemistry, moving through pre-clinical development, so our lead compound there, which has been selected already for development, AVI-5038. The studies in pre-clinical government are now underway in support of this new class of drugs and we are expecting the IND data package to be available in the second half of 2010.

AVI-5126, our C-MYC drug candidate, which is in the clinic with our partners of scope, Global Therapeutics within Cook Medical, that drug is in the clinic for the prevention of restenosis and is delivered by a drug-eluting stent. We have no change in the guidance but we expect a major data update in the fourth quarter 2009. That was the target set by Cook. As you know, Cook is actually fully supporting this trial and we expect it to stay on course.

The DoD bridge funding from TMTI for Ebola, Marburg, and Junin has not been received but is still expected as you heard from David, and this will enable work with USAMRIID on animal efficacy studies prior to us carrying out work under the NDA that we hope to get from the advanced development part of the Department of Defense. The public solicitation period for the Ebola Marburg NDA contracts has now ended. You may well have noticed that the solicitation has gone from the DoD site. We believe that AVI is well placed to take part in the bidding for these contracts.

David referred to certain contracts being assumed in our financial guidance. That related to the bridge funding which we've already spoken about previously on one of these calls earlier in the year. This does not include any assumptions around those very large contracts with the NDA.

I think the final highlight is beginning -- for AVI to start looking at outsourcing of some of its API -- active pharmaceutical ingredient supply. We are able to produce GMP material, our Corvallis manufacturing site up to the end of Phase II. That is both in terms of high quality and also in terms of quantity. Once you start getting into Phase III and eventually go to market supply for API, active pharmaceutical ingredient, outsourcing is really quite important and we've been engaged on that since the end of the last quarter and that is now starting to really gain momentum as we start looking at external supplies for these drug products.

I think it is important that we move over to your questions and I will hand over control of the Q&A session to our operator, Augusta. Augusta, please.

(Operator Instructions) Ren Benjamin, Rodman & Renshaw.

Good morning, guys, and thanks for taking the questions. I guess maybe just starting off, I may have missed this in the prepared talks, but have you guys had any talks with the government regarding the H1N1 situation that's ongoing right now -- because I know that you have in the past have been fairly active especially in the bioterrorism situations. Is there any sort of discussions or any thoughts on your part for creating a vaccine or a therapeutic for this potential pandemic?

Certainly not a vaccine. As you know, we are a therapeutics-based company and our RNA-based therapeutics is more suited to the treatment of disease rather than the prevention of disease at least in the way we are currently tackling this. As you might imagine with the PMOPlus technology that we have, which is particularly suited to error-prone viruses, we are very interested in the funding opportunities but at this stage, Ren, we don't have anything to announce.

Okay. Moving on to the DMD program, maybe just starting off with the Phase I IM trial, when -- I know that we were expecting the full data set at some point this year. Do you have any more clarity as to when we might see the full data?

Yes, this is Steve Shrewsbury and good morning. We are currently helping the site by monitoring the data set and then providing it to data management company. We are on target to complete the analysis and to write the study report by the end of this quarter.

Okay and when you say right the study report, is that -- can I assume that that is a publication in a peer-reviewed journal, or is that something less stringent and you will announce let's say the results at an upcoming conference?

That is more stringent than would be required for a publication. That would be for discussion with regulatory authorities. Publication is also under consideration and hopefully that will also come out in the same timeframe.

Okay, great. And I guess you had provided a little bit of data in the call regarding the expression levels, new protein expression levels that you are seeing and the number of fibers that are being affected. I guess I wanted to see if I could probe little bit deeper into this and ask how long -- do you have any idea as to how long the protein expression lasts? I mean dystrophin not only just a robust protein, but also one that has a pretty long half-life. Is there any way to tell or have you evaluated how long this new protein expression lasts?

We haven't done that in humans, but we have certainly got some impressive animal data suggesting it lasts for many weeks after a series of injections. The purpose of the IM study was not however to test over sustained periods of time. Neither will it be in the ongoing IV study, but certainly something we could look at in the future.

Okay, what is -- was there any way to tell in the IM study if the protein that's being produced, this new protein expression, if it was functional protein?

That's a good question. As you know, Ren, there's really two components to the amount of protein that you get and where it's expressed, and also how long it lasts for. The first is how long does the drug hang around and keep stimulating expression? And then how long does the protein itself remain expressed? So the half-life is exactly as Steve said. In animals at least, it's about four weeks.

The half-life of the drug in the plasma is in a matter of hours. In the tissue compartment particularly the deep tissue compartment, there's a very long delta phase such that in fact you are probably looking at a drug with a tissue half-life measured in days. And that's quite important because when you look at patient's ability to respond to these drugs, probably the cumulative exposure is more important than the amount that you are giving at any one time. It is always important to be able to look at the two under those sorts of circumstances.

In terms of your question as to where the protein is actually being expressed, that's probably the best way of being able to see whether or not it's likely to be functional. Basically the protein by immunofluorescence localization using an antibody against dystrophin shows that the dystrophin is in fact anchored underneath the cell membrane, which is exactly where one would expect to see functional dystrophin. If it is able on the one hand to grab on to actin and then on the other hand to be able to actually grab onto the dystroglycan complex just under the cell membrane.

That's exactly where you would hope to see it if it was going to be functional, but, you know, as Steve obviously has said, we actually will eventually be looking in exploratory way at clinical benefit. That's when we will really see if there's any function.

Is there -- am I reading too much into it if I assume or if I think about the fact that in immunofluorescence studies the antibody can actually recognize the protein and so if it was a misshapen or not a well formed or functional protein that the antibody would not have been able to recognize the protein. Does that sort of makes sense or should I repeat the question?

No, no, I understand what you are saying. So as you -- basically there are some antibodies that can actually pick up what's called a functional epitope. In other words a site to which it binds, which only is recognized if the confirmation, the shape of the protein is if you like in this case in an active confirmation. What we were looking at here, was in fact a monoclonal antibody which is expressed in a truncated form. In other words, there's no danger that we would actually miss the antigenic determinant by looking at a truncated protein.

That was more important to us this time around than in fact looking at what now is really quite a collection of different monoclonal antibodies. I think what you are alluding to, Ren, is a very important study which clearly we are now well equipped to do, which is looking at the battery of monoclonal antibodies against dystrophin, we in fact will be able to explore the full structural integrity of the protein.

Okay, maybe one last --

I'm sorry to cut you off. We actually have an enormously large queue this morning of about 50 people on the call. Do you mind if actually I make this your last question and then if you could rejoin the queue, I know you will have others?

Sure, okay, I'll give you my last question. Any way to functionally -- any way to gauge the relative amount of antisense uptake in these cells? You mentioned that 80% of the fibers were positive for dystrophin expression. Was there any way to quantitate? Because that's a question that a lot of people usually wind up having and at least in past generations, past generation antisense molecules, whether the cell can actually uptake the therapeutic. Was there any way to quantitate that?

Currently the way we estimate that is essentially to take if you like a biopsy. This has been largely done from animals and then in a functional binding assay look to see how much drug we can reisolate and then look actually fairly indirectly at the amount of drug that you get out from the cell. A better way, which is obviously one of the ways we are planning to do, is to use isotope -- radio isotopically label the drug where you can actually follow the label which is put in a position such that it's not metabolized off the drug, and that will give us a direct measure.

That is definitely in our clinical development pathway to do. But we have not yet done it with the degree of precision that really will be necessary.

All right, great. I will jump back into the queue as you requested, Les.

Yale Jen, Maxim Group.

Good morning, gentlemen. Thanks for taking my questions. I just want to follow-up somewhat on Ren's questions. Regarding the US strategy for the DMD, I know that you have started -- received funding for the preclinical tox study to enable to hopefully sort of remove the clinical hold. But could you give us a little bit more color in terms of the possibilities of timeline for the progression of this current study and as well as sort of future steps you might take if that clinical hold has been removed? Thanks.

Yes, good morning, Steve Shrewsbury again. The data that we are currently preparing from the GLP tox studies require three months exposure in animals. So we hope that once those studies have been completed the data analyzed, and assuming of course that the data is satisfactory, and that has then gone to the FDA, after a period of review that traditionally is 30 days, we would hope that the IND would then be allowed in the US.

In parallel with that review period, we would have submitted a protocol for a first US study and hopefully any comments would have been received as well so that the protocol could be adjusted if necessary prior to the study start.

Okay. And what will be the work afterward with -- in your planning right now if the IND hold will be removed then in terms of let's say the potential trial design, maybe patient size or things to look for of that nature?

Well, the first US study would be a safety study and it would probably be of some escalating dose design and again that would be discussed or reviewed by the agency during that review period. Obviously the results from that study would then factor into the full development program and further subsequent studies in the US and elsewhere.

Lastly, just one follow up on this. First of all is that the preclinical study is already started? And secondly is that in terms of timeline, what do you think the UK study at that stage can feed into the entire discussion package to the FDA?

Yes, so we've started dosing in two separate GLP studies in the US, one in nonhuman primates, one in mice, and yes, we hope that obviously the study in the UK when it completes will feed into our further programs and indeed we will align across both markets.

Okay, great. Thanks and I will get back to the queue.

Yale, just to add in and I will pick it up later, but remember in the mouse studies there are two sorts. The first is the toxicological study, which looks at the chemical toxicity and then the second is a study looking at if you like the biological consequences of long-term expression of new dystrophin. In our case that will be done in MDX mice. So it's not actually with a test drug. It is testing rather the mechanism of intervention for therapeutic effect.

(Operator Instructions) [Larry Manson].

Thank you for taking my call. First question is -- I have only got two -- is the DMD, are you now into treating a second cohort or can you give us a little bit of color as to how we are doing it? At one time this trial as I recall was supposed to have results in the fourth quarter of this year. Is that still on track?

The other thing you mentioned in your earlier remarks was milestones, and I know last year you did a very good job obviously finding milestones. And you had mentioned that you were going to talk more on milestones and so I am wondering, are there milestones that you can share with us that are set out for this year? Thank you.

Thanks very much indeed, Larry. Let me pick those apart then, so that you get actually the full answer that your questions deserve. First of all in terms of DMD, as you know, the Company doesn't give details of the clinical trials simply because in any clinical trial, when the data are coming out from an open label study, the volatility that can be caused in terms of optimism and depression can really show quite wide swings simply because you are looking at four patients per group and the data is best released.

We actually committed -- when we get into the 2 to 4 milligrams per kilogram range to actually give by that stage a really full update. The reason for that is that -- that's what we believe will be something like the predicted therapeutic range. But let me just give an opportunity of Steve to comment on that, and I will come back on the milestones.

So certainly we are pleased with the progress that the site is making. They are enthusiastic and we are continuing to work with them and so far so good. The study continues on track really towards the milestones that we have set for the study of releasing some data in fourth quarter.

So if we look then at the milestones overall for the year and when we actually do have a full set of milestones, which we will be updating on our website and these have been part of our corporate presentation, let's start than with biodefense, because I think there's -- for each of the programs that we are looking at, biodefense, restenosis, and DMD, there are really quite significant milestones.

So let me hand it over first of all to Dave to actually ask him just to hit the headlines in the milestones for biodefense, please.

So for biodefense in the shorter term, we are looking for what we refer to and have referred to as bridge funding to continue work on dose titration studies for our Ebola and Marburg ferry therapeutic programs. We would expect that bridge funding to come in relatively soon.

We also -- and you will have noticed on the TMTI website the support for the continuing development of the Ebola and Marburg programs through to NDA. There was a solicitation that was out earlier this year which is now cleared. We are optimistic and hopeful that we will be negotiating with the government in the not-too-distant future for that particular opportunity and should that come about, we would expect that to come to fruition probably sometime in early Q3 of this year.

So looking at restenosis, as you know, Larry, Cook actually at the investor meeting that we had last year guided that they were expecting data at the end of this year during the fourth quarter. In the past at least Cook has usually used the TCT conference as a place to give those major data updates. That I think this year is on September 21 or 25 2009 in San Francisco. Clearly that is, though, entirely Cook's choice as to where and when they give the updates. But we are expecting that that trial is actually staying on course.

In terms of DMD, clearly one of the major milestones this year is to complete study 28, the IV study. That's going to be very, very interesting as we get into our predicted therapeutic range, as you saw from the initial quote when I was looking at the headlines for that trial going up to 1500 milligrams per patient in the top dose cohort. We still intend to submit an amendment to actually take us higher simply because we believe the expectation is that more dystrophin the better. If we actually are getting half, almost half dystrophin expression normal levels of the dystrophin expression by direct intramuscular injection, we really would like to try and push our intravenous dose as high as we can, obviously always staying on the right side of safety.

It is by no means finished. We've got to complete and publish study 33, the intramuscular study for DMD. That's very important and we also, as you know, Steve, just mentioned that we will in fact be monitoring that trial. It was actually an investigator-sponsored trial as opposed to the IV trial, which actually is a company-sponsored trial.

And then the third part of it is in fact the PPMO IND data package where we want to complete all of the in life segments during 2009 so we can actually get the submission of that IND during the first half of 2009. So a good focus on PMO. We believe we will know the extent to which those compounds are able to become viable drugs. But obviously the PPMO there either is a second-generation or if required as a backup. Those will all be on our website shortly and we will actually keep them updated as move through the year. Did I answer your question, Larry?

Yes. Thank you very much.

(Operator Instructions) [Dennis Stanek], RBC Capital Markets.

Yes, guys, thanks for taking the call. My question is how big is the market for DMD drugs and would you guys consider partnering with someone in this?

So as you can imagine, as there has never been a drug yet for DMD, what one looks at is how big is the unmet medical need? And then what does the drug pricing look like? What is the likely reimbursable annual cost of treatment? And then also what degree of penetration would for example a company like ours as opposed to all companies likely achieve in this sort of marketplace?

In truth, as you know, we have about a $1.8 billion market five years in after introducing the top five drugs that we are intending to bring in. About 85% of all DMD can be treated by exon skipping and of those, about half of the patients fall into the first five frequency groups, which is where we are aiming our initial efforts. And again, there's an awful lot of detail for this that we put actually recently on our website, and that marketplace is really a conservative estimate. We've assumed that there is a relatively slow introduction of drugs if AVI goes it alone, but has access to the required capital such that the first drug will be introduced probably about two years before the second drug. Then another year before the third drug comes out and so on.

So the calculation of that $1.8 billion annually assumes a drug price, a reimbursable drug price about $250,000 per year per patient which really when you look at the range of specialty pharmaceutical drugs of the type that was originally pioneered by Genzyme and now has BioMarin, Shire, Genzyme, and Teva bringing out new types of treatment for genetic diseases, those sorts of reimbursement rates particularly for DMD, one is still returning more than half the annual healthcare costs in terms of savings.

The $1.8 billion marketplace assumes we are doing it by ourselves. Clearly the attraction of having a partner is that the partner would actually have both scale and ideally depth of pockets such that in fact our drug introductions could become much more parallelized rather than sequential as we are having to envisage it for ourselves. And that would certainly impact both the steepness of the launch trajectory in terms of revenue generation, but also actually the height of the peak sales five years out.

So there is every reason economically why one should in fact try to seek a partner from that point of view. I think overall AVI would probably get a better return than if we are trying to do it ourselves. But you know, all of these things are actually subject to continual management revision as we are now moving obviously to a key phase where we are really looking primarily now this year at the efficacy of our lead products.

Okay, thank you, Les.

(Operator Instructions) [Greg Davis].

Thank you for taking my call. Just a quick question, maybe a follow-up to what you just said. The question is about partnership and that if AVI were to receive the second tranche of funding to bring Ebola and Marburg to NDA, does that no longer make it a partnership candidate for those therapeutics, or is that something that you would continue to pursue?

And then my second question off on a tangent here, sorry, but there's a concern with -- or are you concerned, I guess I should say, that if NASDAQ reinstitutes its listing requirements, that AVI is going to fall short of qualifying and potentially gets delisted on the market? I will listen to your answers.

Greg, thanks very much indeed for your question. Let me head it over to Dave to actually take the Ebola Marburg piece first.

Sure, well of course we would very much like to get the NDA advance funding as it were for the Ebola Marburg therapeutics. Again, I just want to reiterate that the TMTI website actually expresses their commitment to the funding of those projects through to NDA. And of course we think we are extremely well-positioned to be doing that work for them.

You know, I think clearly those would be fully funded and actually provide a margin to the company. That doesn't mean that the company could not elect to partner those programs at that point. I think that's always something that we take a look at. You know, I think the company believes that the real focus and the value is on our therapeutic programs that are more of a commercial nature. So we are always looking at opportunities to help support those particular programs.

With respect to the listing requirements, as you may be aware, there is a moratorium until I believe July 19 on the share price qualifications, the $1 price from NASDAQ, so we are currently not in violation of any rules. At that time, we would have to assess our situation. The company is not -- we meet all of the other listing requirements currently, which I think puts us in very good stead. And depending on what may happen with NASDAQ at that point, the company has quite a bit of time and a number of options to ensure that it in fact does qualify for continued listing on NASDAQ.

So Greg, your question is very appropriate in that regard. I think a NASDAQ listing of course is important. Usually for any management team though, the feedback on company performance particularly measured as share price comes much sooner from the investors than from NASDAQ. And you know clearly, we have been making a major transformation in this company from one of the antisense pioneers. And although we largely have been concentrating on the senior management team, which is now almost complete in its new form, we have got some major catalysts this year, DoD funding you've heard about, DMD, the Duchenne progrom test of efficacy potential for restenosis update from Cook. And has been alluded to in the not too distant future this year or next year a partnership at least of some of our lead programs including Ebola, Marburg, and Duchenne muscular dystrophy potentially.

I think these are all things which actually go into the hopper for which the management team now realizes that actually delivery becomes very, very important. But this is clearly a company which has really changed itself from being a technology-based company to a product-based company.

Thank you for the answers. Just real quickly, do you envision securing a partnership during calendar 2009?

I think it's -- for example for DMD, there's no substitute for having good clinical data and I think once we get the clinical data that would drive that, then under those circumstances the likelihood of us being able to do a deal which would actually be a transaction of sufficiently attractive economics would be important. A preclinical deal probably would not carry the sort of economics that would attract us.

And so it's really going to be all driven by that data. And having just attracted a really excellent new CMO, we all know exactly what we've got to do.

Okay, well thank you for answering my questions and have a great day.

It appears we have no other questions at this time. I would like to turn the conference back to Mr. Hudson for any closing remarks.

Thanks very much indeed. Thank you all for joining us today to hear about AVI's progress and prospects. I think we look forward greatly to keep you updated as we move to secure the significant milestones that we have laid out for ourselves and we will put them on and we will keep them updated on the company website.

I thank you all very much indeed for joining us and I wish you all a very good day. Goodbye.

That concludes today's conference. Thank you for your participation.