Verastem Inc (VSTM) 2013 Q4 法說會逐字稿

Thank you for holding. And welcome to the Verastem Yearend 2013 Investor conference call, on March 6, 2014. At this time, all participants are in a listen-only mode. There will be a question and answer session to follow.

(Operator Instructions)

Please be advised that this call is being recorded at the Company's request and will also be available on the Company's website through a period of two weeks from today. At this time, I would like to introduce Mr. Brian Sullivan, Director of Corporate Development of Verastem. Please go ahead sir.

Welcome and thank you for joining us to discuss Verastem's financial results and corporate highlights for the year ending on December 31, 2013.

My name is Brian Sullivan, and Director of Corporate Development. And I'm joined today by Dr. Christoph Westphal, our Executive Chairman, Mr. Robert Forrester, our President and Chief Executive Officer, Dr. Joanna Horobin, our Chief Medical Officer, and Mr. Jack Green, our Chief Financial Officer.

I hope you've had the opportunity to review the yearend results press release we issued earlier this morning. Before moving into discussion of the yearend results, please note that in this call we'll be making remarks about our strategy, future operations, future financial position, 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 review you to the risk-factor section of the annual report of Form 10K for 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 the 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.

Mr. Forrester will provide an overview of accomplishments for 2013 and discuss upcoming plans. Dr. Horobin will discuss recent clinical developments. And Mr. Green will discuss the Company's financial results for the year. Following some closing remarks, we will then conclude today's call with a question and answer session. Please go ahead, Christoph.

Thank you, Brian. My name is Christoph Westphal, and I am the Executive Chair of Verastem. In 2013, we made significant progress in our mission to provide new treatment options to cancer patients. We believe we have the opportunity to make a significant difference in many patients' lives by specifically killing cancer stem cells.

As many of you know, patients undergoing cancer treatments, often become resistant to standard therapies which results in disease progression. At Verastem, we believe this is due to the presence of cancer stem cells and tumors. Cancer stem cells can resist chemotherapy and have the ability to feed new tumors leading to disease recurrence following treatment.

Building on the research of our scientific founders, Professors Bob Wineberg and Eric Lander of the Whitehead and Broad Institutes at MIT and Harvard, we have identified and are now clinically developing drugs that are designed to kill these cancer stem cells to achieve a more durable clinical response, 2013 was a year of strong clinical execution.

As promised, we successfully initiated several clinical trials for our compounds targeting cancer stem cells. Looking ahead, we are planning for multiple date readouts this year. The first of which occurred yesterday in Japan. With that, I'll turn the call over to our Chief Executive Officer, Robert Forrester, to provide a more detailed overview of our corporate initiatives and accomplishments. Robert.

Thank you, Christoph. Good morning everybody. Thanks for joining the call. In 2013, we made significant progress towards bringing new treatment options to cancer patients. We achieved numerous critical regulatory and clinical milestones. And we now have three product candidates in various stages of clinical development, including the registration-directed command study for patients with mesothelioma.

These [small] molecular compounds, 6063, 4718, and 5584, have all demonstrated activity in killing cancer stem cells. Our most advanced (inaudible) program is the pro-cohesion Chinese program where they have two molecules -- two small molecule inhibitors, 6063 and 4718, in clinical development.

In September last year, we initiated Command, which at the registration-directed study on 6063 in patients with mesothelioma, a highly aggressive form of lung cancer with a high percentage of cancer stem cells. Unfortunately, the incidence of mesothelioma continues to rise worldwide and will pose a significant health risk for years to come.

There's only one approved treatment, Lilly's ALIMTA, which is used as first-line therapy in combination with cisplatin. Mesothelioma is an orphan disease where we may be able to rapidly deliver new treatment options to patients. Yesterday, we reported the successful data from our Phase 1 study of 6063 in Japanese subjects.

We went from conception to our first patient on trial in less than five months. We now have report of data only six months later. We achieved this fast timeline due to the efforts of our team and our collaborators in Japan. It does, of course, raise my expectations for all future trials overlooking ahead. Ms. Joanna, who is now smiling and so I think probably reminds me of the no-good-deed-goes-unpunished.

Strategically, this trial is important because it supports our application to Japan's pharmaceuticals and medical devices agency for the potential initiation of additional Command clinical sites in Japan. If approved, we currently anticipate adding these sites in the second half o 2014. Our goal is for parallel development on 6063 mesothelioma in many countries worldwide, including the US, Europe, and Japan.

To achieve our mission of developing new treatment options for patients by being leaders in the cancer stem cell field, we have assembled an extraordinary team of people around the world. We recently appointed Jose Baselga as Senior Medical Advisor. Jose is physician and Chief at Memorial Sloan-Kettering Cancer Center. And he's one of the most innovative translational researchers in oncology.

We also recently expanded our research collaboration with Eisai to generate mobile inhibitors or WNT, B-Catenin and signaling, 2013 was an incredibly productive year for us thanks to the extraordinary effort by our team. Our focus for 2014, will continue to be on clinical execution for each of our product candidates. It is our goal to change the way cancer is treated to deliver a more durable clinical response from patients. Now I'd like to turn the call over to one of our wonderful team members, our Chief Medical Officer, Dr. Joanna Horobin, to provide more detail around our ongoing clinical programs.

Thank you, Robert. And good morning everybody, 2013, was indeed a very busy year. We initiated clinical trials in multiple indications and multiple geographies. And we are expecting several data readouts from these trials in 2014. As Robert mentioned, the Command study in mesothelioma is now well underway with our lead FAK inhibitor, VS-6063.

Command is expected to enroll approximately 350 to 400 patients at clinical sites in 11 countries, including the US, the UK, Australia, Canada, South Africa, New Zealand, and countries in Mainland Europe. And, of course, as you just heard we hope to be able to add Japan to that list as well. The Command study is enrolling patients immediately following first-line therapy with ALIMTA plus Platinum. Currently, there are no approved therapeutic options following first-line treatment.

So patients essentially wait with no further therapy until their disease progresses. We hope to prolong the disease-free period for these patients following that front-line therapy, as well as potentially the period of overall survival. Command is a double-blind, placebo-controlled trial that incorporates the opportunity to enrich for patients with tumors that are low in the biomarker Merlin.

Research has demonstrated the fat inhibitors, such as VS-6063, have increased activity in tumors with low Merlin levels. The Command study, therefore, stratifies patients according to the Merlin status of their tumors. The design of the study also incorporates an interim analysis which may result in the selection of patients with Merlin-low tumors as the primary patient population.

So at the time of the interim analysis, based on the observed affect on progression-free survival, the Independent Data Monitory Committee will recommend whether the accrual should continue with either all patients -- that is with both Merlin low and high tumors. Or continue with patients with Merlin-low tumors only.

If the trial continues with patients with Merlin-low tumors only, the sample size will be re-estimated. And this is to ensure that there will be adequate power for the primary analysis of progression-free survival. Now while the exact timing of the interim analysis is, of course, dependent on enrollment and the response to treatment, we are currently expecting it to occur approximately in mid-2015.

And we will give an update on our projections for this at R&D Day later this year in July -- on July 10th in New York. Prior to commencing Command, we met with regulatory agencies to discuss our plans for 6063 and mesothelioma. And these interactions were very collaborative. And they all agreed that there's a large on that medical need and this disease.

Based on these discussions, we elected to choose the co-primary endpoints of both overall survival and progression pre-survival. But we were encouraged to seek accelerated approval on the PFS outcome if the data is supported of that, 6063 has received Orphan Drug Designation in both the US and Europe for the use of -- for the use in treatment of mesothelioma.

And this Orphan Designation is designed to help us encourage development of drugs which may provide significant benefit to patients suffering from such rare diseases. Now, I'd like to discuss the results of our Phase I study of 6063 in Japanese subjects, which were announced yesterday and presented here at the Targeted Anti-Cancer Therapies Conference in Washington, D.C.

This Phase I study which enrolled nine patients is an open-label, dose-escalation trial designed to affect the safety and pharmacokinetics of single agent 6063 in Japanese subjects. The study results demonstrated that 6063 was well tolerated at all those does levels. There were no serious adverse events, all-dose limiting toxicity. Pharmacokinetic results from the recommended Phase 2 dose of 400 mg B.I.D. which is the dose being used in all of our other studies of 6063, were consistent with previously reported data in non-Japanese subjects.

Side effects were consistent with previously reported results from the US Phase I trial. The Phase I trial is still ongoing with three patients continuing on study drug, including actually one patient who has mesothelioma. And according to the investigator, this patient with mesothelioma is currently in cycle 7 as being on study there for approximately 20 weeks (inaudible) disease stabilization and improvement in symptoms. Recall in the placebo controlled Phase 3 trial of vorinostat in a patient population with recurrent mesothelioma.

The reported median planned progression was just six weeks. Whereas in the Phase I study of the GSK FAK inhibitor in a similar patient population, investigators reported a median time to progression of 18 weeks. So a positive outcome of this Phase I trial supports our application to the Japanese PMDA for the initiation of Command clinical sites in Japan during the second half of 2014, 6063 is also being evaluated in a Phase 2 trial in KRAS mutated non-small cell lung cancer.

Now KRAS mutated non-small cell lung cancer is a highly aggressive disease for which there is not specific targeted therapy. Patients with KRAS-mutated tumors typically progress extremely rapidly and derive limited benefit from chemotherapy. Our collaborators at the University of Texas Southwestern generated intriguing pre-clinical data demonstrating that tumors containing a mutation of the KRAS gene along with an accompanying secondary loss of function, either through a deletion or mutation in either P16 or P53, are particularly sensitive to FAK inhibition.

So our Phase 2 study is designed to test the hypothesis that tumors with mutations in KRAS and a loss of function of P53 or P16 are more sensitive to FAK inhibitor treatment. In the study, there are four arms. The first arm includes patients with non-small cell lung cancer and a KRAS mutation only.

The second and third arms include patients with non-small cell lung cancer whose tumor has a KRAS mutation and loss of function in either P16 or P53, respectively. And then the fourth arm includes patients with non-small cell lung cancer tumors containing a KRAS mutation and loss of function in both P16 and P53.

The trial is currently accruing patients at nine sites in the US and is expected to enroll up to 44 patients, essentially 11 per arm in the first stage of the Simon Two Stage Trial design. And I do think it's important to say that this trial has a very high hurdle for success due to the aggressive nature of this disease.

However, if we see a signal of activity in any of the arms, it would be tremendous first for the patients. And would also provide a clearly defined development path forward in this indication. The trial is also important for our overall development for 6063 because it will add to our safety base -- database for any potential NDA filings based on the results of the Command study in mesothelioma.

We expect to report interim results for this Phase 2 study in lung cancer in the second half o 2014. In 2013, we also reported the successful completion of the dose escalation portion of a Phase I study evaluating 6063 in combination with full dose weekly paclitaxel, in patients with ovarian cancer.

The dose escalation reached the anticipated dose of 400 mg B.I.D. in combination with weekly paclitaxel without any dose limiting toxicities. In total six patients were treated in the dose escalation portion of the trial, and we saw encouraging signs of clinical activity, including a patient with a complete response as we have previously recorded.

This patient was on study drug for a total of 37 weeks. The Phase I B expansion phase of this study is now fully accrued and we plan to report preliminary data from these patients in the second quarter of this year. The primary goal of this trial is to provide the necessary safety information for us to expand into additional tumor types in combination with paclitaxel.

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 existing therapy on its own as we will be targeting both the cancer stem cells and the bulk tumor cells.

A second FAK inhibitor, VS-4718, is currently being studied in a Phase I, open-label, multi-center dose escalation trial that is designed to assess the safety pharmacokinetics -- pharmacodynamics and look for initial evidence of clinical activity in patients with advanced solid tumors.

The results of this study should give us the necessary information to determine the future course of clinical development for this drug candidate. We currently anticipate giving an interim update regarding this study in the last part of 2014. In addition to our FAK inhibitors, we are also developing VS-5584, a dual PI3K and mTOR inhibitor. In 2013, we presented pre-clinical research at the AACR-NCI-EORTC Molecular Targets meeting on 5584's ability to preferentially target cancer stem cells.

The data demonstrated that VS-5584 has relative equipotency against all four human class 1 PI3K isoforms and both the mTORC1 and mTORC2 complexes of the mTOR kinase, 5584 decreased cancer stem cells across multiple invitro and in vivo cancer models, including triple negative breast cancer, small-cell lung cancer, and ovarian cancer.

These results were significant because standard care treatment, like chemotherapy, increased the proportion of cancer stem cells which eventually come to treatment resistance. During late 2013, we initiated a Phase I trial evaluating VS-5584, an already available compound in patients with advanced cancer.

This Phase One open-label dose escalation and schedule finding study is designed to assess the safety, pharmacokinetics, pharmacodynamics, and the initial clinical activity of single agent, VS-5584. And we anticipate being able to provide an interim update for this study in the latter part of 2014. I will now hand over to our Chief Financial Officer, Jack Green, to provide an overview of the yearend 2013 financial results.

Thank you, Joanna. And good morning everyone. I'll recap the financials announced today beginning with our cash position. As of December 31, 2013, Verastem had cash -- cash equivalents and investments of $123.7 million, as compared to $91.5 million on December 31, 2012.

Net loss for the year -- year ended December 31, 2013 was $41.2 million as compared to $32 million for the year ended December 31, 2012. Net loss for 2013 includes non-stock base compensation expense of $10.4 million. As compared to $7.4 million for the year ended December 31, 2012.

Research and development expense for the year ended December 31, 2013, was $25.9 million as compared to $21.7 million for the same period -- the same prior year period. General and administrative expense for the year ended December 31, 2013 was $15.4 million as compared to $10.5 million for the same prior year period.

In summary, we are well capitalized and have the resources and momentum to execute on our corporate objectives. Based on our current operating plan, we believe we have sufficient cash to fund the development of our programs and operations into the first half of 2016. Now I'll turn the call back over to Robert, for an overview of our upcoming milestones and closing remarks.

Thank you, Jack. So as you can, 2013 was an important year for Verastem. There continues to be strong support for and growing interest in targeting cancer stem cells. So looking ahead to 2014, we believe we have the product candidates, the capital, and team in place to execute on our goals. In particular, we are focused on achieving the following clinical milestones this year.

First, continuing the clinical execution of the Command study. We will update the projected timing of the interim analysis at our R&D day on July 10, in New York City, at 12.30 pm Eastern Time at the NASDAQ MarketSite Center in Times Square. I do hope you can all join us. We are hopefully going to get to ring the bell at the end of the day. So it'll be a fun day as well as a good update on the Company.

Secondly, assuming approval from the Japanese authorities, we will hopefully initiate the Command Center's studies -- sorry, Command study centers -- if I can get it right, in Japan in the second half of 2014. Third, we will be announcing preliminary data from the Phase I, I-B trial of 6063 in combination with weekly paclitaxel in patients with ovarian cancer during the second quarter of 2014.

Fourth, reporting preliminary data for the Phase 2 study of 6063 in patients with KRAS mutated non-small cell lung cancer in the second half of 2014. And then finally, reporting interim data on the Phase I trials for 4718 and 5584 in the latter part of 2014. So it's going to be a very busy year.

We achieved so much in 2013, but we still have much more to do in this year and beyond. We are passionate about our mission to change the way cancer is treated. And we look forward to updating you on our progress as the year unfolds. I will now ask, [Sue], our especially (inaudible) and British operator to open up our call to any questions you might have.

Thank you. (Operator Instructions)

Your first question comes from the line of Matt Roden, of UBS. Please proceed.

Hi, guys. This is actually, Andrew, in for Matt this morning.

Congrats on all the progress this year. A couple of quick questions. The first is I've noticed that GSK started a Phase I combo study with their FAK inhibitor with their [MAC] inhibitor. I was wondering if you see a rationale for combining the two and if you have any thoughts on what other mechanisms you think would best combine with FAK, I guess, both in mesothelioma and other tumor types.

And then just related to the Japanese study, it looks like most of the patients were pretreated. But do you know if the mesothelioma study received a (inaudible) prior to coming on drug? And do you have biomarker data on any of the patients -- Merlin status on the mesothelioma and KRAS mutation on the one cancer patient? Thanks.

I think you had a couple of questions there. The first was around combinations, GSK, MAC inhibitors, other cancer combinations. So, you know, no we actually think the idea of combining a FAK inhibitor with a MAC inhibitors is a really, really good one. We've seen very, very strong synergy with those two compound classes.

And so we're enthusiastic as GSK is moving forward with that combination. To me that's a great idea and we look forward to them completing that trial and publishing it. We think we'll learn a lot from that. Secondly, you know, what other combinations? Well we see synergy with a number of different classes of drugs. And you'll see we're doing a paclitaxel trial right now. So we some synergies with some, you know, existing therapies. We also see very, very strong synergy with the [PI3/mTOR] pathway. And so I think at some stage in the vision we would very much like to do something with the 5584 one the FAK inhibitors, nothing planned currently. But in the future, that could be a very interesting combination to pursue. Now the second set of questions were around Japan. And I'll hand that over to Joanna.

Thank you, Robert. Yes, thank you Andrew. So first of all the patients that were treated in the Japanese Phase I were very typical patients in a Phase I study. And so all but one of these patients has had actually a lot of prior treatment. Specifically though to your question about the mesothelioma patient, that patient had received a ALIMTA with Platinum previously and had then progressed. And at the time of progression came into our Phase I study.

And any biomarker data?

We hope that that will be forthcoming. But we haven't got that yet. But we'll certainly look into that and if we have it, we'll report it at some point in the future.

Okay. Great. Thanks. And congrats again on all the progress.

Thank you.

(Inaudible). No more [progress] will be to report. Things like that are assigned to the conferences. So helpfully from a year, we will have some data to do so.

And for your question -- your next question comes from the line of Biren Amin, with Jefferies. Please proceed.

Yes, hi guys. Thanks for taking my questions. I noticed on (inaudible), that you recently started a trial with 6063 in the (inaudible) setting and mesothelioma. I just wanted to understand objectives of this trial and whether you're looking at Merlin status for this study. Thanks.

So thank you there for picking that up. Obviously got eagle eyes. Yes, we have got a small proof or mechanism study that's ongoing in patients with newly diagnosed mesothelioma. And really the opportunity here. It's what we would call a window study. So the opportunity here is to give the drug to patients before undergoing surgery. That allows us to do biopsies before-and-after receiving the drugs.

And it really helps understand in [quality] study the effect of the drug potentially on various biomarkers of interest to us. So, investigator initiative study, but I think one that's quite interesting and presumed to be at some point in the future. Again, that data will be forthcoming and will be presented at a medical meeting.

Okay, and if I could have a follow-up on the KRAS mutation study -- I understand that the Company's planning on an interim data in the second half of this year. Will, you know, the Company also make a decision on dose expansion cohort and proceeding to a dose expansion cohort in the second half of this year as well?

I think it's likely the -- because of the prevalence and the lack of treatment options for this particular disease, this is a study that we anticipate will accrue quite quickly. And as you know, there are predefined criteria for making the decision on expansion. So we'll be following the protocol definitions for that. But as we mentioned before, we do anticipate that that will happen later on this year.

Great, thanks.

Thank you for your question. Your next question comes from the line of Howard Liang, of Leerink Partners. Please proceed.

Hi, this is Rich Goss, calling for Howard. Thanks for taking my question. I was wondering if you could give us a bit more detail on the three patients who are still on the Phase I study. You said that one is a mesothelioma patient but what tumors did the others have? And also, do you expect enrollment of sites in Japan to affect the timing at the Command trial in (inaudible)? Thanks.

Thank you. So the investigator chose to highlight the patient with mesothelioma in the Phase I study. At this point, we haven't actually disclosed the diseases that the other patients have. But I think Dr. [Schimazu] was particularly intrigued by this particular patient and, therefore, highlighted it in the poster.

In terms of the second question with respect to the inclusion of Japanese subjects in Command, this was obviously part of our original plan. And so I don't think it is likely to speed up in any way the planned accrual which is actually progressing on target at the moment. And so I don't think it's likely to impact dramatically the timing of the interim analysis.

What was important though for us, of course, was to try and make sure a major market like Japan was included early in the study so that the patients included in the interim analysis would be representative of major markets and major territories.

Great, thank you.

Thank you for your question. Your next question comes from the line of Mike King, from JMP Securities. Please proceed.

Good morning guys. Thanks for taking the question. I just wanted to ask a couple of questions about [NF2] and, you know, whether we'll see data this year that, you know, speaks to the prognostic aspects of NF2 in first-line response to ALIMTA. And then I have a related question that I want to ask as a follow-up.

So, it's a really good question, Mike. You know, obviously, in the longer term, I think we'll be able to get that sort of information from the results of the Command study. But that's a little way off. However, we are working with the world's leading experts in mesothelioma, many of whom have significant tissue banks of tissues taken from patients previously treated with (inaudible), ALIMTA [pemetrexed] -- I'm sorry ALIMTA with Platinum.

And so we are aware that there are some pre-clinical projects ongoing at the moment to actually look at the mutation [stasis] of those patients. So while I can't speak for those investigators, we do have the every tried -- every second year meeting of the IMIG, the International Mesothelioma Interest Group, that's going to be later on this year. And so, I think, it's quite likely that some of those investigators would be trying to get that information out. But as I said, I can't really speak on behalf of them. But I do think it's a possibility.

Okay. And then, you know, we're starting to see Merlin pop up in other, you know, tumor types, with respect to resistance and prognosis. And so I was just wondering is there any thought about either, you know, specific clinical studies ahead of Command readout to sort of survey other, you know, NF2, Merlin-low tumor types for further expansion?

You know that's a really interesting question, Mike. And we are aware of some ideas that are in development but might try and link patients with specific mutations to specific target therapies that would be done through, you know, sort of (inaudible) structures, for example. So nothing definitive on that at the moment. But I think your idea is one that many others are thinking about. I think it's possible that we'll see such protocols emerging. And if it's appropriate for our drugs to be put into those protocols. And then, obviously, that is something we would consider.

Okay, and then there's two quick follow-ups on 6063 and KRAS [lung]. I don't know if you can give any thoughts to the current, you know, sort of enrollment progress, you know, there seems to be a lot going on along these days especially with respect to, you know, therapeutics, so just wondering if, you know, if you can speak to expectations for enrollment goals there.

Well you know, obviously, this is a common disease -- KRAS mutation is a common problem as well. There are lots of these patients, you know, we have a number of the big academic sites that are involved with -- during these specific mutational-driven studies in our protocol. So, you know, we're not anticipating any issues with the enrollment of this study.

Okay.

(Inaudible).

I think it is a bad reflection of the disease. I think it's unfortunately all too easy to (inaudible).

Yes, true that. All right and then one final question. On 4718, do you believe when we've got the interim Phase I data in the second half that, you know, we'll start to see the true differentiation of that molecule?

Yes, that's our goal. We're not [regulate] it to about differentiation until we can get it through Phase I and see it has a good therapeutic window. So we'll talk more about it later in the year.

Okay, thanks very much.

Thanks, Mike.

Thank you. Your next question comes from the line of Mara Goldstein, of Cantor Fitzgerald. Please proceed.

I bet we've lost Mara. Do you want to go to the next question?

I'll go to the next question which is from the line of Bret Holley, of Guggenheim Securities. Please proceed.

This is very weird.

I do apologize. There's a slight technical problem. Bear with me one moment. Okay, thank you for your patience. Mara Goldstein's line is now live in the call.

Yes, can you hear me?

Oh, welcome back.

Oh, thank you. Thank you. I thought you were trying to send me a message.

I thought you were sending us a message.

Just a question. I mean I know that there's a small number of patients in the Japanese study in the Phase I study. But it looks like two out of the three stable disease responses were in the higher group to 600 group. So as it relates to Command (inaudible) being dosed at 400, are you able to speak to that at all?

So I -- the first thing I would thing I would say, Mara is we're talking about a very small group of patients. There's only three patients per cohort because we did not have to expand any cohort.

As I said, we didn't see any dose-limiting toxicity. So there are four numbers first of all. I think there's one thing to point out, of course, is that the patient who's been on study longest -- the patient who is now in cycle 7 with mesothelioma, is actually at the 400 mg B.I.D. dose. So I think it's most unlikely that it's related to a dose affect. I think we have previously demonstrated that doses certainly above 100 mg B.I.D and certainly above 200 mg B.I.D. are biologically active. So I think it's probably the more the [effective] small numbers.

Okay. And then just on the Merlin, I know there's only, or rather on (inaudible) trial, as I know there's only so much information you can disclose at this point. But patients are screened at entry and then they are or do you, I guess, whatever the interim trigger point is or is there biomarker data collected then and there's a biomarker data collected along the way. So you might just be like looking at different time horizons.

Yes, no that would be really interesting wouldn't it to be able to follow any changes in the biomarker. I think that's really not practical in a disease of this -- sorry, in a study like this which is being done in the multi-center basis. I mean factoring a disease where repeat biopsy is actually quite challenging.

So the way we're doing the biomarker pieces that we're collecting either archival tissue or in patients who don't have that we're able to get a new biopsy, we'll take a new biopsy. And it is that original biopsy then that forms the basis of their classification into either Merlin low or Merlin high. We don't do any further biopsies along the way.

And that at the interim analysis, of course, the Company will not see the effect by biomarker status -- the intense of data monitoring committee will see that and they will make a recommendation based on pre-defined -- an algorithm basically as to whether or not we enrich into the Merlin low patients.

Okay.

(Inaudible) that?

Yes, thank you.

Thank you.

Thank you. Your next question comes from the line Bret Holley, of Guggenheim Securities. Please proceed.

Yes, can you hear me?

We certainly can, Bret. Welcome back.

Thank you very much. I've just got a question on what the -- because the projections are for peak mesothelioma incidents in Japan based on their very late removal of asbestos from their country. I mean should it model out very similar to the United States and I guess --common on Europe as well as, you know, when we might actually see that peaking out.

That's a great question. We know that in Japan, they only controlled asbestos in 2006 and so we've seen basically a tripling of the number of patients over the last 10 years. They're at about 1,500 new patients a year and it's increasing rapidly.

They have a very similar problem in Japan as in the UK where asbestos has been used so widely in housing stock, in hospitals, and schools. And it's just basically endemic in every building. And it's really, really hard to get out of the system. So our expectation is somewhat similar to in the -- certainly in the UK where we haven't reached the peak yet in the UK. And we're up to what, 2,500, 3, 000 new patients a year.

Just similar to the US which is a frightening thought in the term right. So I think the answer is in Japan, I think we're still in the early part of that curve. And the peak is probably not for another 10 to 20 years.

So I think the Japanese market is unfortunately from a patient perspective, you know, a really good market for this drug which is why we're so enthusiastic about the progress that we've made in Japan. And the speed at which we've made that progress. And again, I'd like to give credit to Joanna and Mitch and the team in Japan for moving this trial along so amazingly quickly. I've never seen a trial go so quickly in all of my days -- particularly on the other side of the world. So I know it's an very good market for us.

And I guess should the incidence in Japan be disproportionate to the population as it was in UK based on the prevalence of asbestos?

I think you're probably right. Right, Joanna?

Yes, I mean, I think as Robert pointed out, I think it's more that the problem of asbestos is just more endemic. And I think, certainly, at the moment we believe that the UK leads -- essentially leads the pack in terms of per capita incidents. Or I think Japan is -- Australia is probably not far behind and then Japan is probably moving up in the ranks sadly.

And Holland is not far behind.

And then the countries where we're not conducting the clinical trials we've discussed before -- but those are markets which in the future will unfortunately become, I think, rather important for mesothelioma.

Great, thanks very much.

Thanks, Bret.

Thank you for your question. Your next question comes from the line of Peter Lawson of Mizuho Securities USA.

Hi, just -- on the Command study, and the data and monitoring (inaudible) decision. If they go through the Merlin sublimation, and you have to reassess the patient site, is that likely to delay the trial?

That's a really good question. I think, you know, it depends on a number of things. I mean it obviously depends on just how many patients would be needed to be added. We will have -- we would expect by the time of the interim analysis to have all the sites open, including, of course, you know, the ones that we're adding, the coming on later just because some sites take longer.

So the base of sites that will be accruing will be larger. I think the other thing is, you know, I think the -- as we've already discussed earlier is the incidence of this disease increasing in some of the places where we're doing the study. But the awareness of the study is becoming increasingly understood and well-known.

For example, just last week in the UK where Rare Disease Day focused specifically on mesothelioma, there was extraordinary coverage about the problem of mesothelioma. But also about the prominence of this study to the extent that there were interviews with our lead investigator and one of our second investigators in the UK on evening news on multiple channels.

On February 28, there were also radio interviews where those individuals which were syndicated I think more than 140 times. And, in fact, [Dean Fennell], who's the principal -- or the lead investigator for the UK was also at the House of Lords talking on behalf of a Bill that's being sponsored there to try and get better access for new drugs for the patients with these rare diseases.

So, you know, while on the one hand the patient population would be slightly smaller that we'd be targeting if we have to move to the enrichment, or if we choose to move to the enrichment. I think the awareness of the study and the number of sites that would be open by that time would probably mitigate the fact that we would need to extend the accrual for those particular patients. So I don't it would necessarily extend the duration of the study that long actually.

You assumed that this right 50/50 spread of Merlin low, Merlin high for the recruitment. Or is it drifting away from that?

No, no. It's -- that is directly what we're anticipating. It's, you know, all literature would suggest that the incidence of Merlin low is in that sort of 40% to 50% off the total patient population. And then additional data that we've generated together with collaborators certainly confirms that.

And then for the four arms in the KRAS [5330], I know that's a high risk and a high return study. But which [arms] do you think would be more likely to show a clinical response?

So that's a very good question. So the preclinical data would suggest that the patients with KRAS mutations only are actually unlikely to benefit -- the preclinical data would suggest that it's the patients that have the second mutational deletion of either P16 or P53 that would get benefit.

And frankly, we think that double loss of P16 and P53 is unlikely to be seen very often. So we think it's unlikely that we'll necessarily even accrue that [fourth cohort]. I think we should think about this operationally as a three cohort study in which see three cohorts having the highest potential for benefit.

And then is there anything being sent to the [ACR]?

Yes. (Inaudible) --

Yes there is.

That's being submitted.

Yes.

And then the timeline for the [WNT]. Any update there?

Yes, I believe we announced today we've extended the collaboration with Eisai. We tend to be very interested in that pathway the [WNT] basically continued the pathway. And, you know, hopefully in due courses over the next few years, maybe there'll be some kind that come out of that work that we could consider bringing into the clinic.

Got you. Thank you so much.

Yes. Thank very much as well.

Thank you. (Operator Instructions).

Ladies and gentlemen, that concludes our question and answer portion of the call. I'd like to turn it back over to management now for additional closing remarks.

Thank you, [Sue]. Thank you for joining us this morning. We look forward to catching up with you in due course. Have a good day. Bye.

Ladies and gentlemen. That concludes your conference call for today. We appreciate you participation. You may now disconnect. And have a very good day.