Sarepta Therapeutics Inc (SRPT) 2009 Q3 法說會逐字稿

Welcome to the AVI BioPharma third-quarter 2009 financial results conference call. At this time all participants are in a listen-only mode. Following management's prepared remarks we'll 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, November 10, 2009. I would now like to turn the call over to Julie Rathbun, in Investor Relations at AVI. Please go ahead.

Thank you for participating on this morning's call. Earlier this morning we released our financial results for the third quarter of 2009. The press release with some of the detail is available on our website at www.AVIbio.com and the 10-Q has been posted. If you'd like to be placed 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'd 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'd 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, November 9, 2009. The Company undertakes no obligation to revise or update any statements to reflect events or circumstances after the conference call. I should now like to turn the call over to our CEO, Les Hudson.

Thanks, Julie, and good morning, everyone, for joining us this morning. I shall begin as usual to provide a review of recent corporate highlights and updates and then turn the call over to David Boyle, our CFO, who will review the second-quarter financial results. After that I shall come back to comment on some of the upcoming corporate milestones towards the end of this year and then we'll have an open call for questions.

Since our last quarterly call we've had significant progress in our muscular dystrophy research program and also in our biodefense program, in particular in both the antivirals dealing with Junin, Ebola Marburg and influenza. Before I provide you more details on these topics, however, I'd like to provide an update on the Cook medical trial.

As announced in this morning's press release, we believe that further clinical development of the next-generation drug-eluting stent using AVI-5126, which is licensed to cook Global Therapeutics, a Cook medical company, has been discontinued because of an unexpectedly high rate of restenosis in the current active trial. The final patients in the ongoing trial of the drug-eluting stent, which is being conducted in Germany by Cook, are expected to be closed out within the next several weeks.

Recruiting of additional participants in the trial was terminated by Cook during the third quarter when we believe the sponsor intended to reevaluate the clinical study after more six-month follow-up data had been collected. Cook is currently following up patients who have not yet reached the final assessment point at six months post treatment. Once follow-up and analysis have been completed AVI will have access to the clinical data.

We will not know the detailed findings from the trial until the final patient has been followed up and the data is analyzed. However, Cook informed us last week that regardless of the outcome of that analysis, they have made a business decision not to undertake any further development work with AVI-5126 on their cobalt chromium stent.

Turning to Duchenne muscular dystrophy, our DMD program has shown good progress during the quarter and we have been quite active in our scientific publications in providing updates on the status of this program at scientific meetings. These incremental advances help solidify both the interest in and the importance of exon skipping as a promising therapeutic approach for this patient population in such dire need of treatment interventions.

The Dutch company, Prosensa, recently announced a partnership with GSK approximately six months after they had completed, we believe, their Phase 2 trial for their exon 51 skipping drug. To have a large pharma company such as GSK reenter this field of genetic diseases is extremely encouraging.

In biodefense we have an expanded contract funding approximately an additional $11.5 million which was received from DTRA, the Defense Threat Reduction Agency's transformational medicine new technologies initiative to support development of the investigational new drug package for our drug candidate, AVI-7012 to treat Junin virus infections.

Our contracted efforts with the Department of Defense to examine the antiviral efficacy on rapid mobilization of our RNA-based therapeutics through important pathogens which show genetic high variability, in this case starting with H1N1, have continued to progress. Research work is being performed under AVI's contract with the US Defense Threat Reduction Agency for the development of RNA-based candidate drugs targeting H1N1, also called swine flu. The Company is proceeding with mouse and ferret studies to select the drug candidates.

Now, David Boyle will provide you with an overview of our financial results and I shall return to talk about some of the upcoming milestones. Dave?

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

As reported in the release, revenues for the third quarter of 2009 were $6.3 million compared with $5.2 million in the prior year period, reflecting increases in research contract revenues of $1.1 million. Revenues for the nine months of 2009 were $12.4 million compared to $15.8 million in the first nine months of 2008 reflecting decreases in research contract revenues of $3.4 million.

The Company currently has a total of $61.7 million of contracted development studies. As noted in the press release, as of September 30, 2009, $44 million of this had been billed of which $38.3 million had been received in cash and $5.7 million is in accounts receivable. The Company has $17.7 million in development contracts remaining that have not yet been completed and have not been billed.

The operating loss for the three months ended September 30, 2009 decreased to $2.9 million from an operating loss of $5.9 million from the same period in the prior year. The operating loss for the nine months ended September 30, 2009 decreased to $11.6 million from $24.6 million for the prior year. The operating loss for the third quarter declined as a result of lower general and administrative costs associated with the resignation of former executive officers and relocation costs of new executive officers in 2008.

Additionally, the operating loss for the nine-month period reflects the $9.9 million expense for acquired in process research and development from the Ercole acquisition only in 2008, and lower spending in 2009 on research and development related primarily to government research contracts.

The net loss for the third quarter of 2009 was $8.1 million or $0.08 per share compared with a net loss for the third quarter of 2008 of $6 million, also $0.08 per share. The net loss for the third quarter of 2009 includes a non-cash expense for a warrant valuation liability of $5 million compared to an expense from the same source of $0.2 million during the third quarter 2008.

For the nine months ending September 30, 2009 the Company reported a net loss of $28.7 million or $0.33 per share compared with a net loss for the comparable period in 2008 of $22.8 million or $0.33 per share. The net loss for the nine months ending September 30, 2009 includes a non-cash expense for the warrant valuation liability of $17 million compared to a gain of $1.4 million during the same period in 2008.

The increase in warrant valuation is a non-cash expense and results from the increase in the Company's stock price subsequent to the issuance of warrants as part of the equity financings that closed in January and August of 2009. The increase or decrease in the warrant valuation will fluctuate as the market price of the Company's stock fluctuates.

Importantly, the warrant valuation liability is a non-cash liability and the Company is not required to expend any cash to settle this warrant valuation liability.

Research and development expenses for the third quarter of 2009 decreased to $7.5 million from $7.7 million during the third quarter of 2008. R&D expenses for the nine months ending September 30, 2009 decreased to $17.8 million from $22.3 million in the prior year period. The decrease in R&D expenses for the three- and nine-month periods ending September 30, 2009 was due primarily to decreases in government research contracting costs associated with the decline in government research contract revenue.

General and administrative expenses for the third quarter of 2009 decreased to $1.8 million from $3.4 million in the comparable period in 2008. G&A and expenses in the nine months ending September 30, 2009 decreased to $6.2 million from $8.2 million in 2008. The G&A expense decreased for the current year compared to the 2008 periods is due primarily to stock compensation expenses incurred in the 2008 periods related to the Ercole acquisition and the resignation of former executive officers as well as the relocation costs of new executive officers.

AVI had cash, cash equivalent and short-term securities of $50.4 million as of September 30, 2009, an increase of $38.9 million from December 31, 2008. This increase was primarily due to two equity financings that raised net proceeds of $47.8 million, partially offset by cash used in operations of $7.7 million, property and equipment and patent-related costs of approximately $1 million and all other cash usage of $0.2 million.

For 2009 AVI confirms its guidance for expenditures for operations net of government funding and other collaborative efforts to be approximately $10 million to $12 million. The Company believes it will continue to receive funding from government and other sources to pursue the development of product candidates and has assumed certain revenues from these awards in providing this guidance. If the Company does not continue to receive the funding from its current contracts this might have a negative impact on this guidance. Les?

Thanks, Dave. Let's now look briefly at the highlights for the balance of 2009. First of all, with Duchenne muscular dystrophy, our ongoing study in Europe, the Systemic Intravenous Administration of AVI-4658, so-called study 28 -- this is for exon 51 and the skipping is being caused by a candidate drug based upon PMO -- is on course for intermediate laboratory data to be announced we believe before the end of the year. We will be announcing data we believe on RNA and protein levels from patients from the dose groups of 0.5 milligrams up to 4 milligrams per kilogram.

With respect to the preclinical studies requested for the US IND, we've completed the in-life portion of the three-month studies in normal and mdx mice as well as in non-human primates. We believe we're still on track to submit the data package to the FDA early in 2010. And we're planning for the US study to start as soon as the FDA have completed their review of this additional data, which is expected approximately 30 days on average after the review has been taken place at the FDA. We will also make the FDA aware of the human data that we'll be announcing towards the end of this year from the study 28.

For AVI-5038, our PPMO for exon 50, the preclinical development studies are underway to support this new class of drugs. And following a productive pre-IND meeting with the FDA, we believe the IND package will be available towards the end of the second half of 2010 -- excuse me, in the middle of 2010 towards the beginning of the second half of 2010.

Anti-infective programs, H1N1, the preclinical work continues in the mouse and ferret models of human influenza. We believe we will complete the first round of ferret screening by the end of 2009 for communication most likely early in 2010. The other thing on the anti-infectives program which many of you will actually be aware of is our expectation that there should be a request for proposals and RFP for Ebola and Marburg. We believe this announcement still might be a 2009 event, but clearly, like everybody else, we recognize we are in November and the end of the year is rapidly approaching.

In terms of personnel, just a very brief side note, in the context particularly of this analyst and investor call I'm pleased to announce that David Walsey, formerly of Arena Pharmaceuticals, will be joining us shortly as Senior Director of Investor Relations.

We will now take your questions. Thank you very much for listening and I shall hand over control of the Q&A part of our session to our operator, Ben. Ben, please.

(Operator Instructions). Yale Jen, Maxim group.

Good morning, Leslie, (inaudible). A few quick questions. The first one is that -- is for the exon skipping program that after this year's -- the fourth-quarter data announced, what should we anticipate for against future data announcement given that the one announced in the fourth quarter is interim analysis of -- not complete data of patient groups yet?

Thanks, Yale. As you say quite rightly, our first announcement towards the end of this year we believe will be for laboratory measures of RNA expression and also protein expression of dystrophin. Clearly even for the group that we'll be looking at in the interim analysis the clinical data will not be available before the end of the year.

We expect to have complete data from the whole systemic trial, so this is for the groups all the way up to 20 milligrams per kilogram and the first members of those groups now are being dosed, we probably will have that by the beginning of the third quarter 2010.

So currently we plan to review the preliminary data on dystropin expression from the boys who complete 12 weeks of dosing in the first four cohorts by the end of 2009 and then we'll review the dystropin data from all six cohorts who have completed 12 weeks of dosing up to the top cohort probably by about the second quarter 2010.

And then once we've carefully reviewed all the collective data prior to each dose escalation decision and then sort a review from the Independent Drug Safety Monitoring Board, the complete data will only be available after completion of the full 26-week observation period for all subjects. As I said, Yale, that will be probably about 3Q 2010.

So, let me just recap that. In the second quarter of next year you will also have second interim analysis data to be presented as a first look at the outcome from all patient groups but not necessarily the final follow-up post treatment?

Yes, it will not be the final follow-up; it will be essentially the same data that we will be looking at this year for the intermediate step which will be RNA-based data and dystropin protein expression data.

Okay, great. And as you know, Prosensa has indicated they would start a pivotal study early next year. And given that you guys are going to -- I mean have a little bit -- are sort of a little bit behind this process, but nevertheless -- how should we see that -- any potential benefit the AVI product would have in the ultimate race for this to reach the market?

Yes, that's a good question. I think if one looks at the execution of the clinical trials to date, it's certainly true that we believe that Prosensa had their clinical data probably six or seven months ago from their Phase 2 trial, which they're using to I believe select the dose for their pivotal trial.

We're at a point where we will be having that data next year, as we've indicated. I think between now and final NDA registration of one, both or neither drugs, I think there are many opportunities for us to be able to continue closing the gap.

And that would be obviously dependent upon the quality of the data, but particularly not just the efficacy but also the safety profile, and also our ability to interact productively with the regulatory authorities both in Europe and also in the US. And that has been going extremely well.

As you can imagine, in a disease like Duchenne muscular dystrophy where there's no disease modifying therapy available, there's a lot of interest in being able to progress these drugs to the market place.

And one final question on that theme is that Prosensa seems to appear to have a 6 milligram per kilogram dose as the one they will conduct -- they actually are conducting the extension study. Given that you guys presumably could reach up to 20 milligrams, was there anything we can read into that given both products seem to have sort of similar molecular weight?

Yes, that's an important question. As you can imagine, it's something we think about a great deal. What we know, of course, is very limited. Prosensa is a private company and their disclosures have been really relatively few.

We know, for example, prior to their announcement at the World Muscle Society this summer in August, that they had been intending I believe to go up to 10 milligrams per kilogram. In fact, in the end they went only up to 6 and they reported that they had had stable dystropin expression at all doses tested. So from 0.5 milligrams to 6 milligrams per kilogram for five weeks of treatment.

What we don't know, because they didn't actually disclose any of the data, was how much dystropin or how long or any of those sorts of things which obviously will be very important in terms of the ability for the drug to provide clinical benefit.

So basically the situation is the dose response curve, particularly when one is actually putting together a package for registration, the regulatory authorities usually like to see that the company has fully examined both the lower and the upper reaches of the dose response curve. And clearly that is the strategy that AVI has been following.

The animal data suggest that there may be a response sometime, somewhere around the 4 milligrams to 10 milligrams per kilogram and the Company, AVI, believes it's important that we actually know both the effect of lower and higher doses. It's very difficult really to actually comment on the Prosensa data when in fact none of it has ever been disclosed to date.

Okay, great. Thanks. I'll get back in the queue.

Ren Benjamin, Rodman.

Good morning, guys, and thanks for taking the questions. I guess just starting off with the Cook announcement, in the press release you mentioned that you believe that this is Cook's intention. From your discussions with Cook is the program now canceled, it's done, they've returned the rights?

And I guess the follow-up question is, what are the plans with the program as far as AVI is concerned? It seems like sort of the new focus for AVI is, again along the exon skipping, is this a program that can now be shelved and no more investment dollars will be put into it?

Thank you very much indeed for the question, Ren. So first of all, as we said deliberately that we were told that there were no further plans to develop 5126, which means that in fact this has not yet been confirmed in writing, there's been no formalization of those decisions. And the reason for that is that clearly this is still very early days; those discussions took place last week. I think the below circumstances though one would expect this to go forward and basically their decision would indeed be formalized.

The drug itself, if you remember, had been in trial previously for CABG and AVI, in fact, had been the sponsor on that trial. And there was in fact a futility analysis carried out which suggested that if the trend continued then the result was unlikely to be compatible with clinical benefit. I think therefore the Company's intention would be not to continue any further development of 5126 on its own account.

What I would say though is, as you know, AVI-5126 is an anti C-MYK compound based upon an RNA platform. It's been into man and certainly we know for the CABG trial there were no safety issues. It's quite possible that there may be other companies, perhaps a small company, a start up, who would be interested in looking at this. And clearly from a business development point of view, closing out our ability inside AVI to invest any further in this drug doesn't mean that we won't seek other avenues perhaps to be able to get it back into the clinic or at least investigated more correctly for other indications.

Yes. I mean that's a good point. It's just, I just wanted to make sure it was clear for myself as well as investors that no more of your cash resources would necessarily go to this program as opposed to the other programs that are in the developmental queue.

I guess just moving on to the exon skipping technology. You mentioned that we're going to get some lab data by the end of the year, primarily RNA and protein expression data. And this is coming from the first several cohorts. Can you give us an idea as to how long the patients in these cohorts have been followed to date? And would you expect to see or have you seen any sort of clinical benefit from any of the measurements that you've taken? And I guess would you expect to see it at these levels?

Just to answer the first part of your question, by Murphy's Law it will turn out of course that the most informative cohort will be the highest one that we'll be talking about which will be 4 milligrams per kilogram. Those biopsies have only just been taken. And so, we will actually be not at all very far into the clinical follow-up. As you know, it goes all the way through to 26 weeks after the first dose administered to the patient.

So even though we don't actually know that the -- even though we actually are in a situation where we believe this will be very early stages for the clinical follow-up, this also is a situation where, in fact, we will be able to --. Sorry, let me start again; I just got myself in a mess.

So the group that we'll been looking at, the 4 milligrams per kilogram, which is the highest dosed intermediate group, will have only just started the clinical follow-up, so it will be really quite early. And so the laboratory data really is being aimed at dose selection. We do not believe it's likely that we will actually see any clinical benefit at that stage. And even if we did it would only be anecdotal and therefore really not at all reliable at this stage.

So the observation phase occurs after the dosing has occurred, is that correct?

We have follow-up, of course, each time the child comes in or the young adult comes in for treatment which at the beginning of the trial is once a week for 12 weeks. And then after the biopsy, which is at week 14, in total we go out for another 12 weeks after the last dose.

And there are several points during that time period where there is clinical examination carried out and also a physical assessment either by the 6-minute walk test or by the so-called Northstar test. This is where the strength of the biceps muscle is measured.

And judging by, again, the very limited data release that came out from Prosensa, they actually did not release any data on clinical benefit, although anecdotally at the World Muscle Society, they pointed to instances where they believed that the antidotes were actually very positive.

Right. Wouldn't it make sense or have you noticed that as you are coming in for -- I guess in the beginning part of the trial when you have assessed baseline values that wouldn't you see your steepest curve or the best sort of improvement during the treatment phase as opposed to, let's say, near the end when you have been off treatment for a little while?

It really depends on the stability of the dystrophin expression on the accumulative effect of the drug and also the cumulation of the expressed protein. Dystropin has a half-life which is being measured roundabout something like four weeks. And so during that time period, I suspect we will have a situation where there will been a continuous build.

I think there are two parts to your question really. The first is if 12 weeks of dosing is enough to actually give clinical benefit, will we detect it? And the answer is yes, we will be measuring continually during the program the ability to actually show clinical benefit. But the second part of your question is then do you think that you may need more extended dosing to be able to find clinical benefit? And of course, that is also possible.

Got it. Okay, that makes sense. Regarding the partnership, clearly at least I'm speaking for myself and it might not have been much of a surprise for you, but it was a surprise for me that GSK went ahead and partnered with Prosensa as opposed to partnering with AVI. And I think at one point in AVI's history GSK was evaluating the morpholino chemistry backbone.

Am I correct in remembering that, or is that incorrect? And I guess the second part of that question is, were you in talks with GSK? If you can say that. And I guess the third part is, have any other partners, once they've seen this sort of excitement by big pharma for an exon skipping technology, have your partnership talks increased at all since the deal?

Thank you. So first of all, the GSK part of your question. It was the case that GSK attempted to form a consortium, almost equivalent to a not-for-profit effort, where they tried to pull in interested parties both from within the large pharma industry and also academic partners and small companies. At that stage they had quite a serious interest in being able to pursue genetic diseases of which DMD was one.

In fact, overall that whole program was unable to gain traction either within GSK or within the industry overall among potential sponsors. And so that consortium really never went forward.

I think in terms of the situation looking at the partnering effects of the deal that Prosensa has announced, you will obviously know from the timing alone that both PTC, who have a drug in the clinic for PMD, and also Prosensa announced their partnership after they had obtained clinical data. PTC partnered with Genzyme and also in the case of Prosensa, as you said quite rightly, GSK partnered with them.

I think this is, first of all, very encouraging that a large pharma company is now interested enough to actually sign a transaction partnership with a company like Prosensa for a disease like DMD, so that's very encouraging.

I think secondly, in terms of the degree of interest, you can imagine that AVI has been spending a lot of time in preparing the groundwork with potential partners quite simply because the transition into being able to show systemic activity in human beings during a clinical trial that leads to dystropin expression I believe could well be a key event in showing the drug might be able to provide ultimate clinical benefit.

And I think that has been something which in a sense Prosensa has actually demonstrated that I presume they got dystropin expression because they announced that they did, even though they didn't show how much, and that was actually then, coincidentally in time at least, a precursory event to them getting the deal with GSK.

Okay, okay. I guess just one final question not to leave Dave out of the mix. Dave, can you let us know the revenue that you recorded for the third quarter I imagine was quite a bit reimbursement based. And going forward how we should be thinking about those revenues and given the contracts that you have signed?

Right. Well, just to reiterate something we said and I want to point out again, we have, as of September 30, about $17.7 million remaining in contracts that have already been awarded to the Company. The revenues from those contracts, as you'll see later today in our 10-Q, actually extend through 2010 and into early 2011.

Importantly, just to again remention something that we've talked about, we do expect the RFP for the advance development funding for Ebola Marburg to come out hopefully later this year. There's been posted a recent update to the pre-solicitation RFI of which I believe now points to November 20 as a potential date. You may recall from the original posting that was October 16.

It will be here when it gets here. We would expect to respond to that RFP. The bid processing award of the contract would, if we're successful, lead to a potential award maybe sometime in the second half of next year at which point we would begin to recognize revenue from that. But again, those are contracts which we don't yet have, certainly are interested in and feel that we have a good position to compete for. But we do have the $17.7 million of already awarded contracts you would expect to see continuing certainly through 2010.

All right, guys. Thank you very much and good luck.

(Operator Instructions). [Larry Manson].

Thank you for taking my question. Regarding DMD, could you comment please on the IP position? At one time you appeared to be really ahead of the game there with the IP that came from Ercole. Is Prosensa going to have to utilize the IP from Ercole to take their invention or is it -- is that an uncertainty?

Thanks, Larry. I think the fairest way of characterizing how it currently stands -- as you know with IP an ultimate determination would only ever be made if one had to go into litigation to try and establish whether or not either company, both company or in somebody else actually was in a controlling position.

I think the situation is as follows -- that AVI itself is very confident, that it has freedom to operate and that we're actually able to get full intellectual property protection both for the US and also in Europe. As you know, there has been an opposition entered in Europe for the whole process of being able to actually determine whether or not the European patent which Prosensa holds is indeed going to remain in its broadest sense.

These are routine actions which actually are taken by companies at a stage where in fact the intellectual property position is being solidified. I think though in truth the major focus, certainly of AVI and I would imagine for Prosensa too, is really to actually very, very assiduously develop the drug to be in a situation where one in fact can actually progress the clinical program. Once you have freedom to operate determined I think the next requirement then really is to get to market as rapidly, safely and in as timely a way as possible.

Thank you very much. Dr. Shrewsbury made the comment in a conference call recently that there was a 50% reduction in PK levels at 1 milligram dosing, if I recall correctly. Is there -- are you seeing reduction in all the patients treated at 1 milligram and higher?

So, Dr. Shrewsbury made that announcement not only on a conference call, but actually also at two scientific conferences and obviously he made also the caveat that the CK levels, as you know, show quite wide error bars and also can vary on a daily basis even among the same patient.

The finding though is a trend which indeed did go in the direction that you highlighted. The data sets that we announced were in fact up to the level that you identified. And we will in fact continue to look at those measures to really be able to make the assessment once we actually see the full data set.

As you heard me earlier, I characterized that the analysis we'll be giving later this year we expect would probably be limited to RNA data and also protein expression data and the other laboratory and also clinical measures will come out in due course. I think that's the right focus basically -- does the drug to give the right protein, is it spliced in the right way and have we got expression levels that are significant when we actually come to look by antibody both Western blotting and also immunofluorescence.

Thank you very much.

Yale Jen, Maxim Group.

Leslie, thanks for taking the follow-up questions. Just want to get your thoughts about that Prosensa also indicated they're going to start another clinical study for a different exon -- exon 48 possibly later this year as a first clinical study on that compound. Given that ultimately you need to a number of products to cover the whole spectrum of all the different mutations in the DMD, any other thoughts in terms of AVI's effort in terms of whether there will be some sort of parallel process or activities also to expand into other exons given that you already have 51 well underway to advance the product already?

Thanks for your question, Yale. We in fact have been consistent in communicating that we will probably develop about five drugs. We believe that it's possible to address just slightly over 50% of all DMD patients by a combination of five drugs. As you highlighted quite correctly, 51 is already in the clinic, exon 50 is already in preclinical development, and we expect to bring forward those other drugs obviously pending the outcome of the preclinical as well as the clinical data that we're actually expecting shortly. Those are obviously going to be very key observational events in the clinic that will guide the Company's decision-making.

Okay, great. Thanks a lot for taking the questions.

Thanks. Ben, I'm sorry to interrupt you; I see that we still have a very long list of remaining questions, many of which come from private investors. If I may, just because of the passage of time, may I suggest we take perhaps one or two more brief questions and then I would ask all of the other investors in fact if they would be so kind as to contact Julie Rathbun at Investor Relations? I shall make sure that in fact myself and David, with Julie's help, are able to actually make sure all of these questions are answered. So, Ben, may I just hand it back to one or two more brief questions, please?

[Ernest Fernandez].

Thank you for taking my call. I may in fact me a typical investor, I'm 70 years old, I have Parkinson's and I got involved with the stock several years ago and have a six digit loss of the stock and of course am very concerned. I do not understand a lot of the technical questions that have been asked obviously.

And my basic question I guess is, when you get a large pharma stock like Glaxo coming in on Prosensa, it's like one guy having a machine can with the bullets being money and the other one having a pistol. And I just wonder how we can combat the bad guy with the machine gun.

Well, first of all I guess Glaxo -- I understand your analogy, but all analogies obviously have their limitation. Clearly you didn't mean to characterize GSK as a bad guy in that context.

Oh, no, no. I mean from our standpoint as far as not choosing us and us being a smaller company.

Quite so. Well, you know, first of all I think it's very important to recognize that the reliance which is now being placed on the small pharma and biotech industry as a source of innovation, new drugs, new ideas increasingly one is actually seeing those sorts of partnerships. That's very important because basically for our AVI we have been quite consistent in signaling that we believe it will be possible to bring five drugs to the market place with much greater near synchrony than one could by oneself if one had a good partner.

Not just with deep pockets, that's important, you're quite right. But really the other is also the bandwidth. We're a small company and to actually run many clinical trials simultaneously obviously puts enormous pressure -- not just on our current employees but actually our ability to recruit enough employees fast enough. So a larger pharma or biotech company clearly has benefits which are both financial but also in terms of providing bandwidth.

In drug development it's very important to realize that in fact the whole of the competitive stance is at a point where it's really the approval of the drug and the commercialization of the drug which is very important. Looking back where Prosensa stood, where AVI stood, and where we now currently stand, I'm actually in a situation where I feel very pleased about the enormous amount of work that everybody in AVI has actually put into accelerating this program.

We have a new clinical team which is moving this forward and I think it's going to be a very interesting next couple of years to see how we can actually continue the good progress. Sometimes using a pistol, particularly if you're leaping around in a wood full of tigers, it can be quite helpful to actually not just spray your bullets randomly. I like your analogy, but obviously, like all analogies, as you said, it actually has some limitations. But thank you for your question.

Thank you.

And due to time restraints, at this time I would like to turn the call back over to Les Hudson for any additional or closing remarks.

Thanks very much indeed, Ben, and thank you all for joining us today. And let me reiterate, please do ring into our Investor Relations line and we'll make sure we get all your questions answered. We've completed much of the transformation of AVI into a company committed to the development of RNA-based therapeutics, specifically that has been a significant impact on the transformation of our Corvallis site, which is now dedicated to biodefense and manufacturing outsourcing.

The Portland offices that we had have been closed and we've made a strong start in Seattle with the build of our business development, clinical operations, regulatory affairs and also discovery chemistry capabilities. We greatly look forward to the remaining highlights for 2009 and also to an excellent start at the beginning and throughout of 2010. Thank you for your questions, thank you for your attention and thank you for your support. Bye-bye.

And that does conclude today's conference. Thank you for your participation.