Sarepta Therapeutics Inc (SRPT) 2009 Q2 法說會逐字稿

Good day, everyone, and welcome to today's AVI BioPharma second-quarter 2009 financial results conference. At this time all participants are in a listen-only mode. Following management's prepared remarks we will hold a Q&A session. (Operator Instructions) As a reminder, this conference is being recorded and will be available for replay both by phone shortly after this call and on the Company's website beginning tomorrow August 11, 2009.

I would now like to turn the call over to your host for today, Julie Rathbun, in Investor Relations at AVI. Please go ahead, ma'am.

Good morning and thank you for participating in today's call. Earlier this morning, we released our financial results for the second quarter of 2009. The press release with some other details is available on our website at www.abibio.com and the 10-Q has been posted. If you would like to be posted on AVI's press release distribution list, please e-mail me directly at Investor Relations at avibio.com.

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

Before we begin, 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 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 life broadcast, August 10, 2009. The Company undertakes no obligation to revise or update any statements to reflect events or circumstances after this conference call.

I should now like to turn the call over to our CEO, Les Hudson.

Thanks, Julie, and good morning, everyone, and thank you for joining us. This is our first earnings call from our new corporate headquarters in Seattle. This time I shall briefly review our most recent achievements of the Company, and then David Boyle, our CFO, will review the second-quarter financial results. I'll come back for some very brief comments on our upcoming corporate milestones, and then we'll leave as much time as possible for the Q&A.

So looking at the second quarter and recent corporate highlights, first of all our drugs for Duchenne muscular dystrophy. As you know, we have two in development, AVI-4658 and AVI-5038. Both have shown good progress during the quarter.

So in the first case, all patients are enrolled in the current dose range of the systemic study of AVI-4658. That dose range, as you remember, is from 0.5 up to 4 milligrams per kilogram. We've also had a pre-IND meeting with the FDA for AVI-5038.

We announced additional financial support for these DMD programs, both from Charley's Fund, which already had been supporting the development of 5038; from the National Children's Hospital in Washington DC; and also from Action Duchenne in the United Kingdom. In total this is about $7 million of new financial support for our DMD programs.

Our clinical goals for DMD are to complete the systemic study of AVI-4658 in Europe; complete the preclinical studies to release the IND hold in the US; and to complete the preclinical studies required to file the IND for AVI-5038.

In commercial terms, we've begun outsourcing the supply of active pharmaceutical ingredient, as soon the supply requirements for AVI-4658, we believe, will exceed our in-house manufacturing capacity.

We remain committed to partnership as a means of bringing each of the main five exon-based drugs to market as closely as possible to each other as we build the franchise for DMD.

Our candidate drug, as you know, for 5126 for the prevention of restenosis is outlicensed to Cook Medical and is in clinical trial in Germany. When Cook started the trial in the fourth quarter of '08 they indicated that they expected a data update in 4Q '09. This expectation remains unchanged, and we have no additional operational details from Cook for public release.

In our biodefense programs undertaken under contract with the Defense Threat Reduction Agency, DTRA, we have received additional contracts for H1N1 as well as additional contracts for our ongoing Ebola and Marburg programs. To date, we've received an additional $11 million; and although we still expect additional funding for our Junin program as previously announced, as yet we have not yet received the contract in that regard.

Our goals for H1N1 is to assess the efficacy of our test drugs up to the ferret animal model. In the case of Ebola and Marburg, we are going to advance the animal efficacy testing which, as you will remember, is key for approval under the animal rule.

In corporate terms, we have closed our former offices in Portland, Oregon. We our focused our Corvallis, Oregon, site on biodefense and manufacturing technologies. And as I said earlier, we've opened now, and it's beginning to be functional, the new corporate R&D headquarters in Bothell, Seattle. Growth of our clinical, commercial, and discovery efforts will be focused in Seattle.

Now, David Boyle, our CFO, will provide you with an overview of our financial results, and I'll return briefly to talk about the upcoming milestones for the balance of the year. Dave?

Thanks, Les. Earlier this morning, AVI issued a press release highlighting our second-quarter 2009 financial results. A report on Form 10-Q has been filed with the SEC and will be available later today.

As reported in the release, revenues for the second quarter of 2009 were $2.9 million compared to $5 million in the prior-year period, reflecting decreases in research contract revenues of $1.9 million. Revenues for the first half of 2009 were $6.1 million compared to $10.6 million in the first half of 2008, also reflecting decreases in research contract revenues of $4.5 million.

The net loss for the second quarter of 2009 was $19.7 million or $0.23 per share compared with a net loss for the second quarter of 2008 of $1.8 million or $0.02 per share. The net loss for the second quarter of 2009 includes a non-cash expense for warrant liability of $14.6 million compared to a net gain of $3 million during the second quarter of 2008.

For the six months ended June 30, 2009, the Company reported a net loss of $20.6 million or $0.25 per share compared with a net loss for the comparable period in 2008 of $16.8 million or $0.25 per share. The net loss for the six months ended June 30, 2009, includes a non-cash expense for warrant liability of $12 million compared to a gain of $1.6 million during the same period of 2008.

The increase in warrant liability is a non-cash expense and is a result of the increase in the Company's share price subsequent to the issuance of warrants as part of the equity financing that closed in January 2009. The increase or decrease in the warrant liability fluctuates as the price of the Company stock fluctuates.

Research and development expenses for the second quarter of 2009 decreased to $5.8 million from $7.7 million during the second quarter of 2008. R&D expenses for the first six months of 2009 decreased to $10.3 million from $14.6 million in the prior-year period.

The decrease in R&D expenses for the second quarter and the six months of 2009 were due primarily to decreases in government research contracting costs associated with the decline in government research contract revenues. R&D expenses for the second quarter and the first six months also include higher expenses to advance the progress on AVI's Duchenne muscular dystrophy projects.

General and administrative expenses for the second quarter of 2009 were $2.2 million, unchanged from $2.2 million in the prior year's second quarter. G&A expenses for the first six months of 2009 decreased to $4.4 million from $4.7 million in the prior-year period. The G&A expense decrease for the first six months was due primarily to stock compensation expenses incurred in the prior-year quarter related to the Ercole acquisition.

Net interest income declined primarily due to declines in market rates of interest on the Company's interest-earning investments. AVI had cash, cash equivalents, and short-term securities of $20.2 million as of June 30, 2009, an increase of $8.7 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 $6 million and property and equipment and patent related costs of approximately $700,000.

For 2009, we confirm our guidance for expenditures for operations, net of government funding and other collaborative efforts, to be approximately $10 million to $12 million. We believe we will receive additional funding from government and other sources to pursue the development of product candidates and have assumed certain revenues from these awards 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 this guidance.

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

Thanks, Dave. So I'd briefly now like to pick our way through the various clinical trials and candidate drugs that we have in development. Let's start with Duchenne muscular dystrophy. I'm going to pick out really the key goals for the balance of the year for the Company.

So let's start with AVI-4658, the intramuscular study that was carried out in Europe, and this was Study 33. So we heard last week this has been accepted for publication in the Lancet, in Lancet Neurology. There will indeed be an electronic publication so it should be faster than the hardcopy journal. As yet we don't know what the expected date for publication will be, but as soon as we know we'll make that available on our website.

Then let's turn to AVI-4658, the IV systemic study, which is being conducted in Europe. This is Study 28. You remember this is the first Company-sponsored study. The study has now fully enrolled. We will dose the final patient in cohort 4 at 4 milligrams per kilogram later this week. As you will realize, for a 40-kilogram boy, at this dose level it would be equivalent to a cumulative dose exposure of 1,600 milligrams over 12 weeks.

We also have submitted a dose-range amendment so that we can actually go up to 10 and 20 milligrams per kilogram for the same study. And I'm happy to say we've received MHRA approval. We believe that GTAC approval, which is very necessary before we escalate up to 10 and 20 milligrams, we believe that GTAC approval will be forthcoming shortly.

We believe that we'll be able to continue to these higher doses without loss of momentum in the current trial. And our safety experience, at least to date, suggests that we should be able to go through our after review by the DSMB to reach a total 800 milligrams exposure at the top dose over eight weeks.

We'll analyze all the biopsies -- that is, up to the current dose range of 4 milligrams per kilogram -- as a single blinded batch. So we should have data on dystrophin expression over the current dose range around about December this year. We will look at the other drug doses and regimens irrespective of the outcome of this initial dystrophin analysis, as we wish to fully understand the dose-response curve prior to selecting a single dose for advanced development studies.

Let's now turn to the US, AVI-4658, an IV systemic study. As you know, the IND is currently on hold. No patients have ever yet been dosed in the US with this drug. The FDA asked for three additional studies -- a three-month mouse tox study in normal mice; a biological toxicity study for dystrophin expression in MDX mice; and also normal tox studies in nonhuman primates, all of three-month duration.

This would place the lifting of the IND hold around about the second-quarter 2010 in the US. Once we have the data from Europe, from the IV Phase 2 study, we intend to work with the FDA to try and improve upon the timing of the lifting of this clinical hold.

AVI-5038, this is our exon 50 drug, the PPMO. That Study 201 is in preclinical development and the studies are underway to support this new class of drugs going into man with an IND data package which we will be available in the second half of 2010. We intend, at current planning at least, to make this a worldwide filing, not just in the US.

As you know, just finishing up on DMD, Paul Medeiros is our new Chief Business Officer and head of Business Development. Paul came from Schering-Plough recently and he's hard at work with our DMD franchise to secure what we consider to be a central route to full commercialization through partnerships.

We briefly now turn to our anti-infectives programs. H1N1, the initial anti-influenza virus studies will be carried out in the mouse model to select candidates to be progressed to the H1N1 infected ferret. The ferret, as you know, is a good model for human influenza as it can basically be run with a largely unadapted, non-animal-adapted virus strain. We do not expect data from this latter model, the ferret model, before the end of 2009.

Looking at biodefense, AVI-6002; this is our Ebola drug. The monkey dose titration studies for anti-Ebola efficacy have been completed at USAMRIID. We believe this was the largest single study of an Ebola therapeutic ever conducted in nonhuman primates.

The previous data, which we fully communicated, suggesting between 60% to 70% survival when Ebola-infected monkeys were treated with 30 milligrams per kilogram for 14 days, have been confirmed. Importantly, and compared to some of the recent data seen for example for siRNA in virus infection treatment, the nonhuman primates in our case treated with scrambled control died at the same time and the same rate as untreated animals. So there is no off-target or interferon-mediated nonspecific effects.

AVI-6003, our anti-Marburg drug, this study is using the same Level 4 facilities as the Ebola drug, and so clearly we had to complete one before we could start the other. So that dose titration for efficacy is now underway. As you will know, the dose titrations are very important because approval will come under the animal rule.

AVI-7012, which was our recently selected preclinical development candidate for Junin, is being looked at from ongoing studies. Further studies, though, under this contract await the bridging contract that both David and I referred to earlier.

So that's my overview of the balance of the year. What I'd like to do now is to take questions. Thank you for listening. I shall hand over control of the Q&A session to our operator, Sara, and come back right at the end to sign off. Sara, please?

(Operator Instructions) Yale Jen, Maxim Group.

Hey, Leslie, good morning. Yes, just to try to get a little bit more color in terms of the DMD program regarding whether there's potentially any other clinical presentation or development in second half of this year, in addition to the December data release you anticipate to provide.

Yes, that's a good question, Yale. Thanks for that question. As you will know I'm sure, there is a meeting of the World Muscle Society later this year. I think it's around in the middle of September, probably about the 12th in Geneva. That's probably going to be a key meeting for us. We are going to present abstracts there. And of course, we don't know yet whether they're going to be accepted, because it's going to be in the latebreaking news section.

As you know, the ongoing study in Europe, Study 28, is an open-label study. By that time in September we will not have the dystrophin data though we will have the muscle enzyme data. We actually may well be able to present that there.

That could well be a key meeting. I believe that some of the [Prevenza] Phase 2 data may be presented there as well. Obviously we are quite anxious to see what they've got, because clearly this is going to add interest to our program. And the reason for saying that, I think there's a general acceptance that the potency of the 2'primo-methyls don't compare that well to the PMOs that we have been working with.

But even so, this is an area where there is no disease-modifying therapy currently, and so competition is a good thing. Because the aim of both companies really is to bring out therapeutics which will actually help DMD patients.

Great, and just shifting to the biodefense or the anti-infective program. I just want to be certain that the data for the ferret study will not be released until end of this year; or end of next year? I missed that earlier.

This is Dave, Yale, and we would expect that that data would be available at the end of this year.

Okay, great.

These are short-term studies, really in live Phase 3 animals only a few days with dosing of four to five days.

So I guess the only caution on that, obviously as you know we are very early stages, as Dave understands as well as I do. We're going through mice at the present time. And from mice we escalate to ferret, and it's only when we do that escalation and get the data -- so the end of the year is not that far away. But if we can, clearly, we will get that data out.

Part of the reason for saying that is this contract was given under the rapidly mobilizable technologies pocket of the Department of Defense. So to be able to actually get that data through quickly is clearly a part of our clinical focus here.

Finally just a follow-on, on this development. Should the data, as we anticipate, it could be very robust -- if that will be the case, what ultimately will be the follow-up? Do you have any sort of clarity on that moving to next year?

Obviously, clinically, you can imagine that that would be a very exciting observation. The current efficacy of the vaccines are only about 50%, looking at -- this is seasonal influenza. So a therapeutic -- albeit in the ferret model -- would obviously be very, very exciting observation for us to make, particularly for an RNA-based therapeutic.

Currently, though, and I'm going to let Dave comment on this, as far as DTRA is concerned, I think like us they would want to see the data.

I think that's a fair statement. I think data could mean a lot of different things.

As part of this program, we actually have weekly operational meetings with DTRA in the Department of Defense. They're very excited about the program, as you might imagine, and are we as well.

We've talked about various scenarios as to how we could move forward. But again each of these scenarios would be very much data-driven.

Okay, great. Thanks a lot. I'll get back to the queue. Appreciate it.

(Operator Instructions) Rodman & Renshaw, Ren Benjamin.

Hi, good morning, everyone, and congratulations on the progress. A couple of quick questions.

One, with the IM study about to be published in Lancet, clearly we've seen a lot of the -- I guess a lot of the data. We've talked about it. Could you give us a sense as to what, if anything, new we might see in the Lancet journal publication?

Well, I mean, clearly the dystrophin data, the laboratory data has been pretty well disclosed. The first disclosures came out, as you know, at a series of scientific meetings staring with the Medical Research Council meeting in the United Kingdom earlier this year.

The publication will come out and will have the opportunity to include data which is from the, if you like, the clinical parameters which had not been closed out when we made the previous updates. And so that's probably the major thing that will actually be there.

We had not, by that stage, closed out all the studies. I would tell you, though, there is no surprises. Basically the study performed well.

The major point of the study, as you remember also, was for the monitoring of either a T or a B cell immunological response, and we found no such response.

Can you just review for me, Les, if you know offhand, the clinical parameters that we should be looking at? And of the ones that are mentioned, is there anything, is there any one that we should focus on?

Yes, I mean these are the normal physical clinical types of measurements and examinations that are actually done just looking at the general health of the patient. These are not specific parameters related to the specifics of Duchenne muscular dystrophy.

The reason for that -- for example, you wouldn't look at heart rate or respiratory function, because this was an intramuscular injection confined to the foot. So, clearly, they really are just general health parameters.

Great. That brings us to the IV study, which would be a little bit more expansive given the systemic exposure. Could you just give us your thoughts on what you think are the most important clinical parameters there?

Well, first of all let me be absolutely clear. This is a safety study. Again, it's a safety study basically where under the rubrics of safety we will be for the first time looking not only general performance criteria, in terms of heart and respiratory performance; we will also be looking at the 6-minute walk test, which basically I think now has started to become accepted as the clinical function in DMD patients, largely because it's being used extensively by PTC -- and I presume actually is going to be used by Prevenza.

Clearly from that point of view, those are ultimately the measures that we'd like to see both in terms of being able to, in an exploratory way, get a feel as to whether or not we're actually getting any changes in those patients.

I think it's unlikely that in such a short-term study we will actually pick up overt clinical changes. The two major reasons -- the safety, clearly, but also the ability to pick a dose of the drug -- probably most likely against the level of dystrophin expression. I think we actually believe that is a good and quantitative objective measure of drug efficacy. As you know, the hypothesis of drug action is very clear here.

Right. When discussing or when talking about the amendment to the protocol and going higher in doses, obviously you can view this in many different ways. Can you give us your thoughts as to why you feel that you should go higher in dosing?

Yes, quite simply -- so first of all, let me make the point, as I know you realize, that we're going higher in dosing before we see any of the data. So this is not any data that we know that suggests that we're in a dose range where there is no response.

Indeed now, I believe going up to 20 milligrams per kilogram with a more potent molecule we are probably exceeding the dose range, I think, that Prevenza are going to be talking about. I think they probably topped out round about 10.

The reason for doing it is from animal models, particularly in the dog, Eric Hoffman's group has actually published data suggesting that there is probably a good physiological reason to be able to actually drive to higher levels of dystrophin expression, if one can safely go to higher and higher drug concentrations that are being delivered to the patient.

We know from the mouse data, the MDX mouse data, if one goes long enough and high enough, one can actually drive 100% of replacement of dystrophin. As you know equally well, all the regulatory authorities want to know that a company that is developing a drug is actually in touch with both the lowest and also the highest ranges of the dose-response curve. So literally we're really looking for both the lower and the upper asymptote here, just to know exactly where we are before we pick the final dose that we will take forward to pivotal trial.

Okay, great. And I guess one question for David. Quite a few programs that are going on in the infectious disease or biodefense division. And you mentioned that there are -- clearly a lot of the expenses here will be offset by government grants.

Can you give us a sense of the grants, or the size of the grants, or maybe even the timing of the grants which you are trying to secure?

Sure. Well, there are a couple of different things. First of all, let me just remind everybody that we've actually received two awards this year for the anti-infective programs in addition to the CMC award which is actually through the Department of Defense as well.

We received a $5.1 million award for the H1N1 work; and we received an initial $5.9 million for the Ebola and Marburg bridge funding, as we call it, work.

We do expect, as Les and I had mentioned in the script, we expect additional bridge funding -- and that's our term, not DTRA's term -- for Junin, to complete that work. We've talked about proceeding that work through to IND as well. I think if you look at TMTI's website you see the commitment that they have to carry forward these programs.

Having said that, you look at their website, there is also commitment to carry these forward through to advance development, through to NDA. That funding will be substantial in nature. Because the funding is substantial in nature the process is a rather lengthy one with the government, and we're not providing any specific projections with respect to the timing of those contracts, although we hope it would be sometime later this year.

So would it be fair, David, to say that the contracts have been applied for?

Well, there is actually a process. With respect to Junin, absolutely. And we would expect that that one should come in the relatively near term; and I use that in quotes, because with the government near-term is something you are never quite sure what it means.

They are very process oriented with the new administration. They're very careful about how they let contracts. And we think that's probably a net good thing for the taxpayers; it does make the contract process rather lengthy, however.

With respect to the advanced development funding, the Company has in the past put in an initial proposal with respect to those. We would expect that there would be a process whereby there would be an RFP, a formal RFP let by the government to which we would officially respond at that point in addition to the proposal already submitted.

Terrific, guys. Thank you very much and good luck.

(Operator Instructions) [Richard Cadrey], private investor.

Good morning, gentlemen. I would like to know about two points I'd like to ask you on. The first one is on the H1N1, which obviously everyone is very excited about. My question on that portion is, there've been studies since September of '06, even -- it's documented in the news archives. All the reports and data that has been taken in the past, hasn't that been provided to the government or the future funders of this program for this drug and for the therapy of this?

This is Dave. I'm not sure exactly what you're referring to, but I can say that we've had a number of meetings with people from the Department of Defense about the work that the Company has done in general on antivirals. The Company has actually addressed, I think, something like 19 of the 21 general viral families, including a number of specific viruses they are in.

We have shared that data with the government. I think they've been very impressed with the base of knowledge that the Company has and the ability to address different viral families.

I think in particular the experience with various influenza viruses in the past, some of which data has been published, prompted them to actually initiate the work that we are now undertaking with them. I think what we're doing is expanding that work to a more specific strain of the H1N1 virus in the currently most accepted animal model, which is the ferret.

So we're actually taking that historical data and hopefully building on that with the current contract.

Okay. The second question is the move to Seattle. Interestingly enough, with the 19,000 square feet I'm curious as to where the employees are going to come from, since when I look on your site there are no current employment opportunities available.

Well, first of all, the reason for moving to Seattle was to have access to a greater employment pool. The employment opportunities that we are in fact offering -- already we have started to recruit here.

When you refer to the site, I guess you mean our site. I think that's probably something for us to actually repair pretty quickly. The cheapest way of advertising positions open is to put it on your own website. Thank you for alerting us to that, Richard.

Oh, okay. Well, thank you very much. I'm a full supporter of you folks, so I wish all of us the best.

Thanks very much.

Indeed, good luck to us all.

Absolutely. Thank you.

Larry Manson [Larry Manson], private investor.

Good morning. It looks like you're making progress. I've got a couple questions here.

Are you seeing any substantial inflow in cash from the exercise of warrants or options since the end of the quarter?

And then the second question is, in your press release it says total current liabilities of $26,288,000. My whole way of looking at a company is take current assets, subtract current liabilities, and I get a pretty good idea of how long a company can function. And I'm having a little trouble understanding this $26 million of current liabilities. Though I realize that GAAP keeps making things more and more confusing in this world.

This is Dave. And yes, I agree very much with that last statement. That's true.

So to answer your first question about the warrants and option exercises, there have actually been minimal exercises. I think there were some exercises from an employee who left the Company; again, not of a substantial amount during the period.

With respect to the other current liabilities -- and I think your GAAP point was very well taken. Of those liabilities, there are two, one for $21.4 million and one for $2.1 million, relating respectively to the warrant liability and deferred revenue. That $23.5 million will not be settled in cash. Therefore when you deduct that from the $26.2 million, you see a very much different picture, and hopefully that settles your nerves a bit.

Absolutely. So you're saying that the --?

$23.5 million of those current liabilities will not be settled in cash.

Okay, that makes me feel much, much better.

Me too. Thanks for the question, though. Because I'm sure -- frankly, a lot of investors probably look at things like the warrant liability and deferred revenue and try to understand really what those mean. But I think it's a very good question to point out, as we did with the income statement charges, that those really are non-cash items.

What makes it work, Larry, is that warrant liability goes up but the share price rises. And it really looks as though it's working against the Company. I think the share price rise and also the huge change in share liquidity on a daily basis has been very important features of the Company gaining traction, we believe.

Absolutely. Thank you very much.

Thanks for your questions.

Dennis Stanek, RBC Capital Markets.

Good morning, guys. Hope you are well. Question. Should we continue to anticipate that AVI is pursuing other viral targets like HCV or dengue?

Also has there been any word on whether priority review vouchers will apply to any of AVI's current programs, particularly Ebola and Marburg?

Good question. So first of all, the antivirals, as you know -- or maybe you don't know, actually. AVI stands for Antivirals Institute originally. We moved away, again, from that pure antiviral focus. But I mean obviously we have had a great deal of background experience there.

The HCV program that you referred to in particular was in fact something that we did our last capital raise to go back to. We believe that the ability of the PMOplus and possibly the PMO technologies may actually give us better potency and also better mutational resistance there. So absolutely those programs are still alive and well.

With regard to the priority review vouchers, nothing has actually officially emerged. As you know in December last year, I think it was on the 19th of December, we gave testimony to the FDA arguing that if one was going to encourage the development of a dengue therapeutic for civilian application, then by the same argument one should include Ebola, Marburg, and Junin.

We've heard rumors like everybody else that in fact the initial response was positive. But until something emerges from the FDA in their report sheet, clearly nothing will be officially confirmed as yet. It's still out there and we've heard nothing adverse.

Thank you.

Maxim Group, Yale Jen.

Thanks for taking the follow-up questions. This is regarding the up-titration or up-escalating for the DMD program to 20 milligrams per kilogram. In terms of the timeline for the study, would that be something would be carried out this year?

Secondly, would any data from that patient cohorts will be presented, maybe first half of next year? If this timeline seems to be reasonable.

First of all, the ability to escalate to a higher dose depends entirely upon the safety data that we collect from all of the lower doses. As you know, there is a need for the DSMV to meet formally to allow us to escalate.

Because we are already now in the fourth cohort, you can imagine that that escalation and indeed the ability to recruit patients and have a DSMV meeting really has shown very little slippage. So from that point of view, we are going about every six or seven weeks to a new cohort. We will probably go to a larger cohort size at these larger doses, so we'll probably go to four patients per cohort. So from that point of view, it's likely that the data will not be available before the end of the first quarter next year.

But clearly, it is information which we will be extremely interested to see. But I would like also, Yale, if I may, just to re-emphasize. Not only have we not seen any of the earlier data, but we actually also want to look at the regimen and frequency as well as dose-dependence of this drug.

As you know, it is a very novel concept, and dose selection under these circumstances can mean a great deal to the speed of the later program, both for clinical development, approval, and commercialization. This is a franchise, as you know, we are developing here.

Okay, great. Thanks a lot for clarifying that.

I would now like to turn the call back over to Dr. Hudson for closing remarks.

Thanks, Sara. So first of all thank you all for joining us today. I'm glad actually we were able to complete the call without the lights going out again. There's actually all sorts of problems when you move into a new headquarters. It's clearly been -- the gremlins were on our side.

In addition then for, if we look at our key corporate goals, in addition to supporting our outlicensed drug for restenosis, that actually the clinical trial is being conducted by Cook Medical, our corporate focus is squarely on, first of all, advancing the clinical and preclinical studies of our DMD drugs including the additional exons that we actually said we would be doing in the first five.

They are just completing now, screening in discovery research. So we expect to be entering some additional drugs shortly into preclinical development, which will then give us an array of exon-based drugs for exon 5145, 53, 44 and 50.

Partnership for the DMD franchise remains our preferred route to commercialize this franchise. It's very important to get all of those drugs on the market as close to each other as possible.

We, from the point of view of our Marburg and Ebola studies, are committed to complete the efficacy dose titration studies for Marburg; and also as Dave mentioned, to negotiate advanced development funding needed for us to actually start the Phase 1 human studies which are planned under our open INDs for both drugs, both Ebola and the Marburg drug.

And then finally, the examination of the antiviral efficacy and rapid mobilization of our RNA-based therapeutics is very important for pathogens which show high genetic variability. We mentioned HCV; and we actually also currently are focused very much on H1N1. As I mentioned earlier, the fact that we're seeing no off-target effects -- in other words it is drug viral specific -- is very important.

Thank you for listening and we look forward to updating you as we continue to develop our drugs in development. Thank you very much, indeed. Goodbye.

That concludes today's conference. Again, we do thank you for joining us.