Verastem Inc (VSTM) 2012 Q4 法說會逐字稿

Welcome to the Verastem year-end 2012 investor conference call on March 27, 2013. At this time all participants are in a listen-only mode. There will be a question-and-answer session to follow. Please be advised that this call is being recorded at the Company's request and will be available on the Company's website for two weeks from today. At this time I would like to introduce Mr. Brian Sullivan, Manager Corporate Development of Verastem. Please go-ahead.

Welcome and thank you for joining us to discuss Verastem's financial results and corporate highlights for the year ending on December 31, 2012. My name is Brian Sullivan, Manager of Corporate Development, and I am joined today by Dr. Christoph Westphal, our Chairman and Chief Executive Officer; Mr. Robert Forrester, our President and Chief Operating Officer; Dr. Joanna Horobin, our Chief Medical Officer; and Mr. Paul Brannelly, Vice President Finance.

I hope you've had the opportunity to review the year-end results press release we issued earlier this morning. Before moving in discussion of the year-end results please note that in this call we will been making remarks about our strategy, future operations, future financial positions, future expectations and plans and prospects for our Company that constitute forward-looking statements within the meaning of the Safe Harbor provisions of Section 21E of the Securities Exchange Act of 1934.

All forward-looking statements are subject to risks and uncertainties. We prefer you to the risk factors section of the annual report on Form 10-K for a discussion of important factors that could cause actual results to differ materially from these forward-looking statements. We caution listeners not to place undue reliance on any forward-looking statement as there are no assurances that matters contained in such statements will be achieved.

In addition, these forward-looking statements represent our views only as of today. Subsequent events and developments may cause our views to change. Although we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so.

With that said, Dr. Westphal will make some summary comments on the Company's activities; Dr. Horobin will discuss recent clinical developments and upcoming plans; and Mr. Forrester will comment on corporate operations and financials. We will conclude this morning's call with a question-and-answer session. Please go ahead, Christoph.

In 2012 we made significant progress in our mission to bring new treatment options to patients with serious cancers. We believe the resistance to therapy and eventual progression of disease observed in clinical practice is due to the presence of cancer stem cells in tumors. We have identified and are now clinically developing drugs that are designed to kill these cancer stem cells to hopefully achieve a more durable clinical response.

Last year we progressed our understanding of signaling pathways in which cancer stem cells depend. We now have the three products in pre-clinical or clinical development that inhibit these pathways. These compounds have demonstrated activity in killing cancer stem cells and are either currently or are expected to be in clinical development during 2013.

Our most advanced therapeutic program is the focal adhesion kinase, or FAK inhibitor, VS-6063. We are currently evaluating the anticancer effects of VS-6063 in combination with Paclitaxel for ovarian cancer and we are on track to initiate a potentially pivotal study of VS-6063 for mesothelioma midyear.

We have met with regulatory authorities in the US and UK. They are supportive of our approach and, based on our discussions, we believe that this study, if positive, will enable us to seek regulatory approval.

Mesothelioma is an aggressive cancer with limited treatment options, yet it appears to be highly sensitive to FAK inhibitors and therefore represents an indication where we may be able to rapidly deliver a new treatment option to patients. We believe the mesothelioma trial is a path to potential early regulatory approval.

Mesothelioma is the first of many tumors where VS-6063 could be used. We may be able to broaden the label for VS-6063 with other indications as evidenced by our clinical trial in ovarian cancer.

In addition, there has been significant interest in the therapeutic targeting of the PI3 kinase pathway as Pharmcyclics, [Bio], Gilead and Infinity all have recently reported impressive results in hematological malignancies from early-stage clinical trials.

In multiple tumor models our compound, VS-5584 has demonstrated potent and selective activity. We are encouraged by the pre-clinical data generated to date and anticipate starting clinical development of VS-5584 in the second half of the year.

There is strong support and increasing interest in targeting cancer stem cells. We presented at major scientific conferences last year and will continue to disseminate our research and further the scientific understanding of the ultimate role cancer stem cells play in disease progression.

I would also like to congratulate our scientific co-founders, Drs. Bob Weinberg and Eric Lander, who each received the Inaugural Breakthrough life-sciences prize for their tremendous contributions to the understanding of human disease. We've built a strong foundation to translate this groundbreaking research to clinical practice, and believe that 2013 will be an important year for Verastem.

We believe that investing in the recruitment of exceptional employees, management, directors and advisors is critical to our leadership in the cancer stem cell field. 2012, we welcomed Dr. Joanna Horobin as Chief Medical Officer. Joanna is a tremendously successful drug developer with over 30 years of experience overseeing the development and introduction of 10 marketed compounds, including Taxotere and Camptosar.

We continue to recruit exceptional clinical advisors to guide the development of our programs, and named Drs. Richard Sackler and Max Wicha to our Scientific Advisory Board. We've also recruited industry leaders to our Board of Directors.

Allison Lawton has global operations expertise and leadership experience in regulatory affairs, manufacturing and commercialization through her service at Genzyme and sanofi. Louise Phanstiel is a former partner of PWC, former President of WellPoint and a Director of Myriad Genetics. Dr. Michael Kauffman is the CEO of Karyopharm and former Chief Medical Officer of Onyx and has introduced multiple drugs to the market including Kyprolis. And Dr. Steven Sherwin is an oncologist who is also a Director of Biogen Idec and a former Chairman of Bio.

Joanna Horobin our cheap medical officer will now discuss our upcoming clinical plans.

Thank you, Christoph. We have had a very productive first quarter. The Phase 1/1b trial of our lead FAK inhibitor, VS-6063, in combination with Paclitaxel for patients with ovarian cancer is open and enrolling at all sites. This trial will give us an early look into the effect of combining a cancer stem cell inhibitor with standard chemotherapy in an attempt to achieve better disease control and hopefully enable a more durable clinical response.

Additionally, the results from this trial may provide the necessary safety information for us to expand into additional tumor types. Paclitaxel is a commonly used agent in many solid tumors where cancer stem cells may play a role in disease progression. We believe the combination of the cancer stem cell inhibitor with existing therapies may be a more effective treatment than just chemotherapy on its own as we will be targeting both the cancer stem cells and non-stem cells in a tumor.

We're also on track to initiate a potentially pivotal trial for VS-6063 in mesothelioma midyear. We believe that mesothelioma is an orphan disease and we have filed for orphan drug designation in both the US and the European community.

Mesothelioma is an aggressive disease with a poor response to chemotherapy and a high proportion of chemo resistant cancer stem cells that we believe lead to tumor progression. Sadly as most patients present with advanced disease, the median survival time from diagnoses is often only 12 months. In our pre-clinical models of mesothelioma there is a demonstrable sensitivity of cancer stem cells to VS-6063 in contrast to chemotherapy.

There is a lack of innovation of novel therapies in mesothelioma, and we believe the cancer stem cell targeting effect of FAK inhibition by VS-6063 has the potential to bring new hope to these patients. We recently met with the FDA and MHRA to discuss our clinical plans for VS-6063 in mesothelioma. The interactions with both agents have been very collaborative and they agree that there is a large unmet medical need in this disease.

Based on these discussions our endpoints are both overall survival and progression free survival. And they have encouraged us to seek regulatory approval on the progression free survival outcome if the data are supportive.

The trial will enroll patients following first-line therapy of Alimta, or pemetrexed, plus platinum therapy where there are no currently approved therapeutic options. Currently patients are sent home with no further therapy and wait essentially for the disease to progress.

We believe our approach using 6063 after chemo has produced disease control will target the cancer stem cells that remain or may even be enriched following chemotherapy. We hope to prolong the disease-free period for these patients following frontline therapy as well as the period of overall survival.

We are working with LabCorp to develop the clinical test for a companion diagnostic to VS-6063 that may aid with patient selection in the mesothelioma trial. The trial has an adaptive design element that will allow us to evaluate the effect of VS-6063 on either the overall patient population or the subset delineated by the selection marker.

We presented data on our second FAK inhibitor, VS-4718, at multiple scientific conferences throughout 2012. These presentations demonstrate the potent cancer stem cell targeting ability of VS-4718 across multiple tumor types. We've conducted IND-enabling studies on VS-4718 and we expect to initiate a Phase 1 trial in advanced solid tumors during the first half of this year.

This trial is designed to establish the recommended Phase 2 dose to initially evaluate the safety profile of VS-4718 and subsequently expand the enrollment in a subset of patients to evaluate initial clinical signs of activity.

In 2012 we generated and presented exciting data on our dual PI3K mTOR inhibitor, VS-5584, relating to the cancer stem cell targeting ability of this compound in breast cancer. In addition, IND-enabling studies were started late last year and we are targeting the second half of 2013 to initiate clinical development through a Phase 1 trial in advanced cancers.

I will now hand it over to Robert Forrester, President and Chief Operating Officer, to discuss the corporate operations.

Thank you, Joanna. Thank you all for joining this call this morning. It is great to have so many people on the call. So I will briefly review the 2012 financials. Obviously we are delighted to have completed our IPO last year and to have attracted such a world-class set of investors.

As of December 31, 2012 Verastem had cash, cash equivalents and investments of $91.5 million compared to $56.8 million on December 31, 2011. Net loss for 2012 was $32 million as compared to $13.7 million for 2011. The 2012 net loss includes a $3.6 million license fee payment of cash and stock to Pfizer and non-cash stock-based compensation expense of $7.4 million. Therefore the actual cash burn for 2012 was $22.9 million and excluding the $1.5 million Pfizer upfront payment it was $21.4 million.

Research and development expense for 2012 were $21.7 million and general and administrative expenses for the year were $10.5 million. Based on current operating plans we expect to have sufficient cash to fund the development of our programs and operations into the second half of 2015. We believe that we have the capital, product and team in place to execute on our mission and believe that 2013 will be an important year.

In particular, we are focused on achieving the following clinical milestones this year -- initiate mid-year the potentially pivotal trial in mesothelioma for 6063; secondly, complete the safety portion of the Phase 1/1b trial of 6063 plus Paclitaxel in ovarian cancer; and then begin enrollment of the expanded cohorts in the ovarian trial; fourthly, initiate Phase 1 clinical development of 4718 in the first half of 2013; and finally, initiate the Phase 1 clinical development of 5584 in the second half of this year.

We will give an update at our R&D day on Thursday, July 11 from 10 to 1 p.m. in New York. I will now ask operator to open up our call and we're happy to answer any questions you might have.

(Operator Instructions). Matt Roden.

Hi, good morning, everybody. It's [Leah Bakowitz] in for Matt Roden. First of all I wanted to say congratulations on all of the process -- or progress you guys have made over the past year. I have two questions for you.

Firstly for 6063, is there in mechanistic rationale for the sequential therapy following Alimta in mesothelioma versus looking at the combination therapy in the ovarian trial? And have you looked at differences between sequential versus combo therapy and what is your thinking there?

And secondly, also regarding meso, I know that you guys have mentioned that you have met with both regulatory agencies in the US and the UK. Can you comment on that regarding other countries in the EU? Is that sort of an IRB thing that you are still thinking about needing approval for or can you please just elaborate on the for us? Thanks.

So, this is Joanna answering those questions. So first let's take the question about the use of 6063 in the sequential setting. The reason why we've chosen to do this is that our data shows very clearly that in fact drugs like Alimta, pemetrexed and platinum, which is used in the frontline setting of this disease actually increase the proportion of cancer stem cells in mesothelioma tumors.

So our view is that as these drugs actually achieve some degree of clinical control, what we then want to do is come in and eliminate the cancer stem cell population so that we can extend that control and hopefully extend progression free survival. Does that answer your question, Leah?

Yes. And then any thoughts on frontline as well?

So the question is about going into frontline therapy? I think that --.

Yes, sorry, I didn't -- I think I didn't elaborate on that. But sort of what are your plans there and then potential comparators?

Certainly. In the longer-term one could envisage the idea of going into frontline therapy combining with platinum and/or Alimta in that setting. But I think the first step is to actually see if we can improve the progression free survival -- bearing in mind that there is a treatment in frontline therapy, but there are no treatment options for patients beyond frontline therapy.

So this is really a truly unmet need. And I think that then keys into the regulatory questions, because obviously in a disease where there is no unmet need the regulators are very I think collaborative in working with companies in order to find ways to bring new options to patients.

And so, coming to your second question about our interactions with the agency, I mean the first thing I would say is that we really do feel that they want to work with us to try and bring new options to mesothelioma patients. And I think that is why they were encouraging us in fact to go back with the results from the PFS endpoint even though, as I said in my comments earlier, the overall survival endpoint is indeed the primary endpoint for our Phase 2 study.

On your point about other countries in Europe, one of the things to remember here is that in fact the UK is the country which has the biggest issue with mesothelioma. Unfortunately that disease is more prevalent in that country than anywhere else in Europe. And therefore we selected the MHRA particularly from that point of view as giving us good guidance as to the views of how to treat the disease as well as what sort of options would be potentially approvable in the EU. And we think that the UK is actually a really good surrogate for the EU more generally.

Okay, thank you.

Howard Liang, Leerink Swann.

My first question on the combination trial with Paclitaxel, how are you planning to detect an effect on the stem cell in the combination setting? And you mentioned that if this trial is successful in demonstrating safety you will move to additional settings where Paclitaxel (technical difficulty) where stem cell is (technical difficulty). Can you talk about what other additional settings you might be interested in?

That's a good question, Howard. The study has been designed in such a way that, first of all, we went to rapidly get to a point where we know what dose of VS-6063 to combine with Paclitaxel. So we're going to do a rapid escalation.

Once we have defined the dosing schedule to use in combination with Paclitaxel, the study will then recruit patients in an expanded phase where we will treat patients for two weeks with a FAK inhibitor alone. And before and after administration of the FAK inhibitor we will take biopsies of these patients' tumors. That will allow us to do a number of things.

First of all, it will allow us obviously to confirm the on target effect of our drug. But also, and perhaps more importantly, it will allow us to look for cancer stem cell markers in these tumors and see what impact we have on those cancer stem cell markers.

On the additional indication?

So I think with the additional indications obviously Paclitaxel is a workhorse chemotherapy used in many, many tumor types. And I think the idea here is that once we have shown that we can get these two drugs together there are many places we could go.

I mean, for example, I think we have mentioned before the idea that we could perhaps move into a neoadjuvant setting in triple negative breast cancer where of course there is an early approvable endpoint now that is being defined by the agency in the shape of pathologic complete response. So we think this combination opens up the doors to many different opportunities.

Great. If I can just add another question on the pivotal study in mesothelioma, could you talk about how this study will progress from (technical difficulty) the initial (inaudible) of Phase 2 to Phase -- just how will this trial be progressing over time? Is there a [specific] endpoint that you will be -- you will have?

Are you referring to describing it as a Phase 2 versus a Phase 3? I think the answer is we are designing this as a very robust fashion; we are calling it a Phase 2, in fact it is designed and operating as a Phase 3. And we have had those conversations with the agencies in Europe and the US and, as Joanna said, we had a very collaborative discussion with both of them and they are very supportive of our trial design and encouraged us to come back to seek accelerated approval of PFS.

Thank you.

David Ferreiro, Oppenheimer.

Hi, this is Eric Chang calling in for David. Regarding the approvability of the Phase 2 mesothelioma results, did the FDA set any loose expectations for PFS in the maintenance setting? And secondly, were there any differences in feedback from UK and US regulators?

No, so as we usually expect, the agency response is always it will be a review issue. But of course we discussed what sorts of PFS benefit, what sort of clinical benefit is actually going to lead to a positive review. And clearly a PFS benefit itself is important, but I think in this disease where patients are very symptomatic quality of life is also going to be a very important factor.

And so, we have incorporated into this study a quality of life assessment. And I think that will play very importantly into that designation of benefit.

Great. And would you be able to share the powering for PFS in the Phase 3 trial?

No, for competitive reasons we are not giving all the details of our study.

Got you. And I'm sorry, to go back were there any differences in feedback from UK and US regulators?

No, they were essentially the same feedback.

Great, thank you.

Mike King, JMP.

Let me add my congrats for your progress in 2012. I just wanted to see if I could put a finer point on Howard's question regarding sort of this what is going to inform the potentially pivotal study based on the work that's being done now.

Joanna, you mentioned earlier of both pathologic complete response as well as some biomarker information. And I'm just wondering can you maybe give us some insights as to what you feel is going to be a substantial enough suggestion of activity that you will feel comfortable rolling that into the registration phase of the trial.

So I think if we look historically at what has led to approval in these sorts of settings -- so, for example if we think about the original approval in 2004 for Alimta in mesothelioma, that was on the basis of a three-month improvement in overall survival from nine months to 12 months.

If we look at the approval in the maintenance setting of pemetrexed in non-small cell lung cancer, so a different disease but essentially a similar sort of setting, that was based on a two-month improvement in PFS. So I think we've got benchmarks here that we are being guided by, Mike.

Okay, so I guess the question is then, once you achieve your -- the appropriate dose you will be looking at PFS as your signal to expand into a registration directed trial?

Mike, this whole -- there is only one dose in this trial and that is 400 milligrams. And it is being run as a pivotal trial from start, there's no sort of gating event from one moment to another moment.

Got it, okay. Well, I guess it was just the phraseology of potentially pivotal. And then if I could ask about 4718.

(Multiple speakers), Mike.

Yes, okay. Understood. 4718, can you tell us about your thoughts there and why you feel comfortable now moving forward into this -- in the clinic second half of the year? What you hope to differentiate it with respect to 6063? Maybe just a little color on that.

Yes, no, thanks a lot, Mike, and it is great to have you involved also following us. So we are quite excited about FAK. We have a wealth of data now published by Bob Weinberg recently and the literature showing FAK's key role in cancer stem cells. And based on that we think it is prudent to have a different structural class compound with very nice characteristics moving forward into the clinic in a Phase 1.

So, it is kind of what any large pharmaceutical company would do. We really believe FAK is an interesting mechanism and we want to have another compound to move forward there. Does that answer your question?

I guess. I mean I guess it will -- data will also drive your decision.

Yes, no, I mean we -- a couple people have pointed out and it is smart. I mean FAK may play a role and cancer stem cells, as you know, may play a role in multiple different tumors. Some of those might be much more rare tumors; some of them might be much more common. So it makes a lot of sense, we think, from a strategic and business point of view to have two different molecules moving forward. There might be advantages to that down the road. Obviously we have to see the data play out.

Right, okay. I will get back in queue. Thank you.

Bret Holley, Guggenheim Securities.

I'm wondering if you can comment on the incidence of mesothelioma. I guess the incidence has gone down a bit in the United States and I'm wondering obviously going up a little bit in Australia and the UK. Can you just give us a sense of how you are thinking about that longer term? And you have any idea what -- I guess what kind of sales level Alimta has reached in mesothelioma?

So let me talk about the incidence first. Certainly in the US, you are right, it has become -- it has plateaued here in the US. That means we've got about 2,500 to 3,000 new cases a year. In Europe unfortunately the incidence is actually still increasing, particularly in the UK. And even more importantly it is increasing very rapidly we understand in countries like India and China.

And so, we do believe that whilst it is plateauing here in the US it is increasing worldwide. And as I think we've mentioned, this will be a worldwide study with the intention of getting a worldwide approval in this indication.

And, Bret, maybe just I should comment on the market size that you also I think raised in your question. We see mesothelioma, a strategic perspective, as the first indication for approval for the drug. We see it is the most efficient route to get that early approval. But we do believe this drug will be a drug that can be used in many different tumor types, many different settings.

Mesothelioma just on its own is probably something like a $500 million to $700 million drug opportunity worldwide, which for us as a little company is actually quite appealing, particularly as it is an orphan disease it's one that we could commercialize ourselves with a relatively small sales force, because these patients tend to go to a few centers of excellence across the globe. There is probably 50 to 100 sites worldwide that one would need to really cover to have a decent market penetration.

So we see mesothelioma as an interesting market opportunity in its own right, but we see it as the first step on a path of broadening the indications of the drug into things like lung or breast or prostate, other tumors driven by cancer stem cells.

Great. And I'm wondering -- can you elaborate a little bit on the companion diagnostic? I am curious how you think potentially you could I guess segment out the market in mesothelioma and obviously other cancers as well? I mean -- I guess can you give us some idea of what you are thinking there?

Yes, certainly. So the pre-clinical data as well as the data that Glaxo presented last fall suggested that patients who have tumors that are designated as Merlin low may actually respond better. And so, we think that is worth evaluating.

We don't at this point necessarily think that only those patients are going to respond to this drug in mesothelioma. But if it is indeed what is driving response, we want to make sure that we capture that market segment. And so, that is really the idea of including the diagnostic test in the clinical trial which will allow us to stratify according to Merlin high or Merlin low.

And the adaptive design will allow us to actually re-estimate the sample size in this study so that if all of the effect is coming from patients who are Merlin low, we'll be able to enrich the population for those patients and therefore I think achieve an approval in that patient population from the get go. So that is the thinking.

And, Bret, from a sort of strategic perspective, I mean since the start of this Company we have had a diagnostic effort running in parallel with the drugs. And we see ourselves as the sort of discoverer and early developer of those diagnostic products. But we don't see ourselves necessarily as being the commercializer of it, which is why our collaboration with LabCorp is so helpful to us.

Great. Thanks very much for answering the questions.

Joe Pantginis, ROTH Capital Partners.

Thanks for taking the question as well and congratulations on the progress. A couple questions. I guess first maybe on the diagnostic as well; maybe can you discuss some of the background activities and what is going to be completed in order to have the diagnostic ready to go when the study starts?

Okay, working with LabCorp, I certainly sleep better at night now because obviously I think we are good at the discovery bit, but there's an awful lot of nuts and bolts that go into having the diagnostic ready for the clinical trial, which it will be. So, working with LabCorp now in collaboration working with us to make sure that everything is ready for the start of the trial.

Okay, great. And then I will ask a similar question to Mike's regarding the ovarian study. Obviously the main thing you are doing is to look for the dose and the safety to move on to the [expensing] cohorts. Do you have any potential efficacy gating factors that you are looking at for a minimum level of activity even though this is a dose escalation study?

No, we don't at this time.

Okay, that's helpful. And then I guess the next question I would sort of ask is a sort of forward-looking question -- regarding the overall strategy of the Company. Obviously you are at an important execution stage now for your products. And when you are looking forward now you obviously have other products that you can combine with like the BTK inhibitor with Pharmacyclics. But are you also looking at potentially bringing in other any targeted agents that might complement your current agents?

I think we are -- thanks, Joe, very much for the thoughtful question. I think that we are at a really, really interesting point for this little company. We're well-financed, we have the capital to achieve these value creating events here over the next 12 to 18 months. And in ideal settings for orphan type indications like mesothelioma I think we can go to market on our own.

Obviously we are looking at other alternatives, but we think we have a set of very interesting assets in the Company with multiple shots on goal and some pretty interesting value driving events. So we are not actively looking and thinking that we need anything else.

Okay. And then maybe just lastly -- I appreciate taking the questions here. When you look at the deep science that you guys are conducting right now, you have your follow-on FAK inhibitor. Maybe can you talk to the potential of even combining those two in the future?

Yes. No, sorry I didn't answer that part of your question. Part of what is really exciting here is this idea that we have multiple mechanisms that we believe target cancer stem cells.

And I think it is very thoughtful observation that not only can they be active as monotherapy and could be interesting product opportunities, but there could be very interesting combinations between our agents and between our agents and those of other well-financed cash flow positive companies that are out there. And so, obviously we think about that and other people are thinking about that too.

Great, thanks a lot, guys.

Michael Yee, RBC Capital Markets.

Hi, this is Charmaine on behalf of Michael Yee. Can you remind us of the timelines for the 6063 trial in mesothelioma? Like how does -- how long do you think enrollment would take? And remind us of interim analysis there for the adaptive design.

And the second question that I have is with regards to the mTOR PI3K kinase compound. How do you think your (inaudible) there is more favorable in targeting cancer stem cells and how would that be differentiated from the other PI3Ks that are out there? Thank you.

So let me start with the mesothelioma study. We intend to get this study up and running in the middle of this year. We are looking for an accrual time of approximately 18 to 24 months. And the interim analysis to look at the impact on -- of the biomarker piece is likely to happen about halfway to two-thirds of the way through the study. Obviously we have PFS as an endpoint that we will be following, so that is an event driven endpoint rather than the number of patients.

And then to address your question on PI3 kinase, the way to think about Verastem is I think we have quite a powerful discovery engine related to cancer stem cells and it is based on what we think is a unique insight and a unique approach to discovering agents that target cancer stem cells specifically.

And as we employ that we identified several mechanisms, three of them have been disclosed, PI3 kinase is one, FAK is another and Wnt is the third. And within PI3 kinase we of course looked at the various molecules and the various characteristics of those molecules.

And through our unique lens we discovered that 5584 really looked quite interesting in targeting cancer stem cells and we've now generated a wealth of pre-clinical scientific data that's partially published and reported in the literature and at meetings, but obviously we'll continue to publish.

So when we compare our compound versus those of others, we think there is a special angle we have. We do think there are a couple of other compounds that look pretty interesting, we do think some of the clinical results of some of those other compounds, whether it be in hematological malignancies or in solid tumors, we think both of those could be of interest.

And our hope is -- assuming we can go into full-blown Phase 1b in the near-term here, that we can hopefully see some interesting effects not too far away in those kinds of studies. So it's a pretty interesting opportunity and value driver for our Company in the near-term.

Great. Thank you, very helpful.

George Zavoico, MLV & Company.

Thanks for taking the question, congratulations on your progress thus far since your IPO and from before. Two questions, first regarding the diagnostics part of your strategy. Circulating tumor cells are akin to cancer stem cells, at least some people advocate that point of view. Can you use that as a diagnostic, measuring circulating tumor cells to see whether your cancer stem cell therapy approach is working?

We think circling tumor cells have the potential to be very, very useful. I am not sure that we are convinced that the technology is there quite yet, but I think in the future it could well be one of way that we do diagnostics for counting/monitoring cancer stem cells.

Right now we are very much focused on other biomarkers, we talked a bit about Merlin, we also have a gene signature that we are working with as well. I mean our goal is to be able to select the right patients and be able to monitor response.

It will be fabulous at some stage to be able to count cancer stem cells in a similar way that viral load is monitored in hepatitis C. I am not sure we are there quite yet but that is something that we are working on, and that will be a very, very powerful and viable diagnostic.

Are you measuring that in your current trial, are you measuring circulating tumor cells?

We are measuring a number of different potential dynastic endpoints in these trials.

Okay. You mentioned the Wnt pathway, Wnt beta-catenin pathway. This is a particularly -- has been a particularly difficult to pathway to target. And you entered into a research collaboration with Eisai on this as you wrote and as you have disclosed. Could you discuss a little bit about exactly what that research collaboration entails? And what portion of it -- what rights and IP you maintain and what you share with Eisai?

Yes. So we are delighted to have this collaboration with Eisai. As you know, it is a very successful Japanese company. We are also very, very interested in the Wnt pathway; we think it does play an important role in cancer stem cells potentially. And so the collaboration with them is one that is -- they are fully funding all the chemistry work that is being done there. It is a discovery collaboration.

We -- it is making good progress. The nicest structure of the deal is that we own all the IP that comes out from the collaboration. They have a right of first negotiation for a period of time which I think expires in the middle of this year and they have a small royalty back to us if we would ever commercialize the IP.

So they are doing most of the discovery chemistry, most of the medicinal chemistry. I presume you're helping guide the effort there as well?

Yes, they are doing all that chemistry work. And you are absolutely right; we are helping to guide the effort.

Okay, great. Great. And is there a timeline to the collaboration and is there an expiration date?

There is no specific timeline right now. We have an active collaboration going on with them, so it is an ongoing thing.

Okay, thank you very much for taking the questions.

Thank you. Ladies and gentlemen, this will conclude our question-and-answer portion of the call. I would like to turn it back over to Dr. Christoph Westphal for closing remarks.

Thank you very much, I appreciate everybody dialing in and asking thoughtful questions. And we look forward to speaking with each of you in the near future.

Thank you. Ladies and gentlemen, this does conclude the conference call for today. We appreciate your participation and you may now disconnect.