Vaxart Inc (VXRT) 2014 Q4 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Biota Pharmaceuticals fourth-quarter 2014 financial results conference call.

(Operator Instructions)

I would like to introduce your host for today's conference call at the Biota team. You may begin.

Thank you. My name is Tricia Truehart of The Trout Group.

I would like to welcome you to the Biota conference call and webcast to review the Company's fourth-quarter and FY14 financial results, and to provide an update on a number of recent corporate developments. With me today from Biota are President and CEO, Russ Plumb; and Executive Vice President of Corporate Development and Strategy, Dr. Joseph Patti.

Before we begin the call, I would like to remind you that today's discussion will contain forward-looking statements that involve risks and uncertainties. These risks and uncertainties are outlined in today's press release and in the Company's recent filings with the Securities and Exchange Commission, which we urge you to read. Our actual results may differ materially from what is discussed on today's call.

I will now turn the call over to Biota's CEO, Russ Plumb.

Thanks, Tricia, and thank you all for joining us this morning. As you can see from the two press releases we issued today, we have a number of recent developments to cover this morning, in addition to our quarterly and FY14 earnings.

I thought we'd start the call with the Management and Board changes we announced today, and then briefly cover the financial highlights for the fourth quarter and year end, then provide more color on the status of the closeout of the BARDA contract, the transition of our operations to the US, and then Joe will update you on our near-term strategy and development programs.

Let's start with changes we announced to Management and our Board today. First, let me state a decision to relinquish my CEO role and reduce my daily responsibilities at Biota was my decision alone, and was based solely on personal reasons. My decision was not a result of any disagreements with the Board or Management in respect to the direction of the Company, and this transition is very amicable.

Based on the Board's confidence in Joe's experience, his capabilities, and overall knowledge of the space, he's been appointed as the new President and CEO of Biota Pharmaceuticals, effective October 1. At the same time, Jim Fox, who has been our Chairman since the merger in 2012, and was the chairman of our predecessor company, Biota Holdings Limited, for 3 1/2 years prior to that, has indicated a desire to reduce his ongoing Board commitments; therefore, I have accepted the role of Executive Chairman.

In my new role, I'll continue to have certain responsibilities at Biota beyond the typical chairman role over the next year. These responsibilities will include a couple of legacy issues, namely, facilitating the successful and timely completion of our restructuring and transition plan that we announced in June, and the negotiation of the termination settlement with BARDA. I'm pleased to have the opportunity to continue to work with and support Joe, the Board and Management in implementing our strategic plan and creating value for our shareholders.

On behalf of the Company and the Board, let me also take time to thank Richard Hill, who has been a director of Biota and its predecessor since 2008, for his service, commitment and contributions to the organization over the years. Richard has decided to not seek renomination as the Director of Biota at the upcoming annual meeting in November.

Turning to a brief overview of our financial results, I want to point out that it may be a little hard to compare the fourth quarter 2014 with the same quarter last year, due to the impact of how we are now accounting for contract revenue under our contract with BARDA, that as you recall, was terminated in May 2014. I'll go into more details of where we are with BARDA in a few minutes, but as highlighted in our press release this morning, in the fourth quarter 2014, we deferred the recognition of $3.7 million in revenue from BARDA.

About one-half of that amount represents reimbursement for costs that we have incurred after the May 7 termination date associated with completing the various clinical trials that were ongoing at the time of BARDA's notification of the termination for convenience, while the other half represents our overhead and fixed fee charges on expenses and activities that were incurred before the termination date that we've not yet been reimbursed for by BARDA.

We believe that we are entitled to receive this revenue under the terms of our BARDA contract, and pursuant to government regulations, and we intend to pursue full reimbursement vigorously; however, BARDA has not yet formally approved or paid these amounts, and we cannot determine if and when it will, or whether we may have to pursue dispute resolution mechanisms available to us under government regulations in order to recover some or all of these amounts.

So as you look at our financial results, please note that $3.7 million in revenue from services rated costs that we have fully expensed and accrued for under the BARDA contract is not included in our income statement or balance sheet as an accounts receivable at June 30, 2014. With that in mind, let me quickly run through a few financial highlights.

During the fourth quarter, we recorded a loss of $10.2 million, which accounts for a majority of our $11 million loss for all of FY14. As I just mentioned, does not include the $3.7 million in revenue that we have deferred, that we believe we're entitled to, but we've not yet recorded. Also, I want to remind you that due to the seasonality of our royalty revenue, it's not unusual for our fourth quarter to reflect a notable loss from operations.

Our R&D expense increased by $600,000 in the fourth quarter compared to last year, due to an increase of about $1.4 million rated to direct costs of advancing vapendavir and our RSV program, as well as a $1 million charge for severance costs associated with the planned closure of our Melbourne facility. These increases were largely offset by significantly lower ongoing personnel costs.

You'll note our ongoing G&A costs also continued to climb in the fourth quarter, as well, largely due to a significant decline in personnel costs, as well. Finally, you'll also note that the gain or loss we record on our income statement related to foreign currency fluctuations, which is an accounting convention in essentially, in our case, a non-cash item, swung from a gain of $1.8 million last year to a loss of $800,000 this year.

In the interest of time, I'll not restate the other financial details from the press release today, as they are fairly extensive, but I did want to highlight three additional items. First, at June 30, we held it $91.7 million in cash, cash equivalents and long-term investments, which is about $25 million more than the $66.8 million we held at the end of June last year.

As you may recall, we raised about $27 million in January 2014 of secondary offering. So, net of those proceeds, we burned about $2 million in cash in all of FY14 to support our operations. This low net burn rate reflects the impact of our fiscally responsible operating plan and philosophy.

Second, I also wanted to point out that for transparency, we have separated out in our balance sheet the accounts receivable and accounts payable associated with the BARDA contract. As of June 30, 2014, we recorded an accounts receivable balance of $17.8 million due from BARDA, which again does not include $3.7 million in unrecognized revenue.

We had $18.6 million in payables and accrued expenses pursuant to related costs related and incurred under the BARDA contract. Therefore, in our view, in the event that this $3.7 million is not ever recognized or reimbursed to us, we estimate that as of June 30, the accounts receivable collected to us under the contract should approximate the amounts we would owe subcontractors and further internal costs we incurred to support the contract.

The last financially-related item I wanted to point out that is not evident from our financial statements is that the vast majority of our agreements we have with our subcontractors who performed work under the BARDA contract contain terms and conditions that state that we are generally obligated to pay their invoices if, and to the extent, we are reimbursed from BARDA. In other words, we are generally not required to pay our vendors for work performed and allowable under the BARDA contract until, and only to the extent, that we get reimbursed from BARDA.

Notwithstanding these provisions, and the potential that we may ultimately not be contractually or legally obligated to make all of these payments, in our balance sheet, we have expensed and accrued all amounts due to our subcontractors for all work performed through June 30, 2014.

That's all I really wanted to highlight in our financial results this morning. I'd be happy to answer any questions you may have regarding these results or financial conditions during the Q&A session at the end of the call.

Let me take a few moments to comment on where we stand with BARDA. One of the reasons we have not been able to provide you with an update on this topic is that until recently, we had not received formal instructions from BARDA as to how it wanted to handle the mechanics of invoicing costs incurred under the contract and the final termination settlement process.

To further complicate matters, a new contracting officer was appointed to our contract in August, who wanted to approach things a bit different from his predecessor. Over the past month, we've been able to get more formal feedback from BARDA on a number of fronts, and we now believe we have a much clearer picture of how the closeout process of the contract should and will proceed.

As by way of background, for convenience termination, the government is generally obligated to reimburse its contractors for costs incurred up to the termination date, the cost of any activities the government specifically allows to continue under the contract after the termination date, which I will refer this morning to as excluded activities, in that they're excluded from the termination. And then any wind-down costs and other commitments associated with terminating subcontracts, such as breakage fees, capacity commitments, storage costs, severance costs of affected employees, et cetera.

Accordingly, after vacillating a few times, BARDA has indicated to us that we are to invoice it in three separate buckets as follows. The first bucket is for all costs incurred prior to May 7. We are to submit these in the normal course as an invoice under the contract.

The second bucket is for costs incurred for these excluded activities, which again are those activities that BARDA specifically allowed or directed us to continue after the termination date. We are to invoice these separately. Finally, all other costs incurred after the termination date, such as those associated with the completion of the Phase 2 IGLOO trial and the wind-up of the contract, are to be submitted as part of a final determination settlement.

We initially submitted invoices to BARDA in the normal course in May and June for costs incurred prior to May 7. Unfortunately, in July, BARDA rejected these invoices, citing a lack of documentation supporting whether these costs were incurred before or after May 7.

While we strongly disagree with this characterization, we nonetheless have worked diligently with our vendors to provide the requested support, and have recently resubmitted all the May and June invoices, as well as additional invoices for July and August, with more backup and analyses supporting which activities occurred prior to May 7, and which occurred after that date. As of today, we have not yet been reimbursed for the vast majority of these invoices we resubmitted, and are awaiting a response from BARDA.

Further, BARDA has indicated it will not reimburse us for any pre-May 7 costs for certain CMC subcontractors and manufacturers until it conducts a technical and on-site audit of those vendors to confirm the work was completed and the materials were produced prior to May 7. We're working with BARDA to schedule those audits, which we currently believe will occur in October.

In a call with BARDA shortly after we received the termination letter in May, we inquired as to why the costs to complete the Phase 2 IGLOO study and the small pediatric study we are conducting were not excluded activities under the termination letter, whereas a completion reporting of the ongoing Phase 1 studies were. BARDA indicated it was not interested in the Phase 2 data and it really have no future value to it.

We reminded BARDA that we collectively have various ethical, moral, and regulatory obligations to the 639 patients that participated in this trial, and to the FDA and similar regulatory authorities in other countries to properly complete the trial and report the safety and certain other data. BARDA did not disagree with this characterization, and asked to submit a proposal to it for the cost to close out the study and prepare a clinical study report. We submitted this proposal to BARDA on May 23.

We at Biota take our moral, ethical, and regulatory obligations of conducting human clinical trials very seriously, and we'll not shun or forego these responsibilities to our patients. Accordingly, while we're awaiting a response from BARDA on our proposal, we continue closing out the Phase 2 IGLOO trial and collecting the requisite data.

In June, BARDA rejected our initial proposal and asked for a new proposal that would cover the costs of an abbreviated clinical study report, which we submitted to BARDA in late June. In August, BARDA rejected this second proposal, saying that costs were greater than they expected.

So, as of today, we have not reached an agreement with BARDA concerning if, and to what extent, it will be willing to reimburse for the costs we incurred after May 7 to complete the Phase 2 IGLOO trial. We believe we are entitled to reimbursement for the reasonable costs to wrap up and report the data from this trial.

We believe the cost to close out the sites and collect the data needed to appropriately file an abbreviated clinical study report to FDA were unavoidable, based upon the timing of the four convenience termination, and, as I mentioned earlier, we intend to include these costs as a component of our final determination settlement. We anticipate being able to submit this final termination settlement to BARDA over the next eight weeks or so, as the final costs of the Phase 2 IGLOO trial are determined as our wind-up costs, and we have additional feedback from BARDA with respect to the status of our outstanding invoices.

Before I turn the call over to Joe, let me provide a brief update on the restructuring and transition plan we announced on June 2. As a direct result of the termination of the BARDA contract, we regrettably had to adopt restructuring plan to reduce the scope of our operations.

The upshot of our plan is to reduce our workforce from 65 employees in June to approximately 20 employees, and when the plan is fully implemented, to close our Melbourne facility by the end of June 2015, and transition all functions and positions to our US corporate headquarters. We're on track with this plan, anticipate that we have approximately -- we will have approximately 30 employees at January 1, 2015, and we'll be down to the targeted 20 at April 1, 2015, respectively, as we wind down the operations in Melbourne.

We've also been fortunate enough to fill several management positions in the US in key functional areas, including drug development, CMC and regulatory affairs, that will transition to the US from Australia over the next several quarters. With that, I'll turn the call over to Dr. Patti.

Thanks, Russ. Let me first say, I'm very excited to have the opportunity to work with the Board, executive team, and exceptional staff as we continue to evolve the Company and advance our pipeline of novel, respiratory antivirals that have the potential to address considerable market opportunities. Notwithstanding a number of challenges that we have had to address over the past four or five months, the effort led by Russ to streamline our pipeline in operations and reduce overhead costs has resulted in a financially strong and agile organization that can effectively deploy its capital in a measured manner to create future shareholder value.

Because today's fourth quarter and fiscal year-end 2014 release was quite in depth on the status of our programs, I don't think it's necessary to reiterate all the details this morning, but rather, I will highlight a few key aspects of our recent corporate developments that Russ didn't discuss. As part of a recently completed comprehensive strategic review of the Company and its programs, the Board has adopted a near-term strategic plan, the central canon of which involves the value creation potential of our vapendavir and RSV programs.

We recently completed two Phase 1 studies of vapendavir, which confirm the drug's favorable safety profile demonstrated to date. Importantly, the drug-drug interaction study demonstrated that vapendavir is a weak to moderate CYP3A4 inducer, and as such, its use for our intended indication in patients with asthma or COPD should not be hampered.

We are poised to begin a Phase 2b trial in moderate to severe asthmatics in the first part of 2015, and we're also considering starting a Phase 2a HRV challenge study in COPD to patients next year. I would also like to remind everyone that the planned Phase 2b trial will be the third Phase 2 study of vapendavir, the first two of which have successfully achieved their primary endpoints.

We, therefore, believe that meaningful, value-creating clinical data could be forthcoming from the vapendavir program over the next 18 to 24 months. Additionally, we believe the recent outbreaks of enterovirus-associated respiratory infections in the US, which have most severely endangered pediatric and adolescent patients with underlying lung disease, such as asthma, further validates our approach to treat these types of infections in high risk patients, and such, illustrates the potential value of a broad spectrum antiviral, such as vapendavir.

In addition to the clinical advancement of vapendavir, the favorable progression of BTA-C585, or fusion inhibitor, being developed to treat RSV infections from the preclinical stage in non-GLP toxicity studies toward the completion of IND-enabling studies in the planned initiation of a Phase I trial by mid-2015, further solidifies the value proposition of our antiviral pipeline.

Another important component of our operating plan is the reduction of internal overhead costs and closely aligning them with our anticipated royalty revenues, which have ranged from $7 million to $15 million over the past two years. As we indicated in our press release this morning, we anticipate our internal R&D and G&A overhead costs will be approximately $9 million to $10 million once our restructuring plan has been fully implemented.

As mentioned in today's press release, we are considering a wide variety of transactions, including licensing and M&A, with the goal of creating a broader pipeline and accelerating the creation of shareholder value. Our focus is on programs that are clinical stage, and where we believe our development experience can add significant value. Because of the dynamic nature of these types of discussions, we do not comment on the timing or likelihood of success of our business development efforts, except to say that this activity is a high priority for the Company.

The final aspect of our near-term plan is to work with the Daiichi Sankyo to determine the optimal path for the continued development of LANI outside of Japan. Although the prospectively defined primary endpoint was not achieved in our recent Phase 2 IGLOO trial, we believe that the totality of data analyzed today suggests that a single dose of LANI demonstrated robust antiviral activity, and that, in our opinion, LANI works.

We noted a number of statistically significant and clinically meaningful results in various analysis of the trial data, which we highlighted in the release today. Specifically, subjects infected with influenza and dosed, with a single dose of 40 mg of LANI, experienced the following benefit.

A significant shorter duration of the systemic symptoms of flu and cough; significantly fewer days on which flu symptoms were recorded as severe; significantly fewer secondary bacterial infections; significantly lower viral titers and early achievement of viral culture negativity; and finally, lower influenza scores, severity expressed as area under the curve, compared to placebo-treated patients. These data suggest to us that a single dose of LANI exhibited activity similar to that observed in clinical trials of other neuraminidase inhibitors, and should be continued to be developed.

An important regulatory component of the future development program for LANI will require a good understanding of what is the appropriate patient recorded outcome tool, or PRO, and which specific endpoints the FDA would accept for approval of a new antiviral to treat uncomplicated influenza. Accordingly, after the final analysis of the data from the IGLOO 2 is complete, we are currently planning to discuss our results with the FDA. We believe agency input will be important to securing a potential plant partner for LANI going forward.

Finally, I'd like to highlight one other key item. We have received confirmation from GSK that royalties on US Relenza sales will continue to be paid to us while an outstanding patent application is on appeal and remains pending, even though the composition of matter patent expires in the US in December of this year.

We have been advised by patent counsel that a ruling on our appeal is unlikely to occur for at least 12 months. Further, we can't predict the nature of a decision by the US Patent Trial and Appeal Board; however, if our arguments are successful, and the patent claims are awarded, we anticipate that royalties would be paid on net sales of Relenza in the US for an additional 17 years from the date of the allowance.

That concludes our prepared remarks this morning, and now open up for any questions.

(Operator Instructions)

Bret Holley, Guggenheim Securities.

Yes. Thanks for taking the questions. The first question I have is on vapendavir and your confidence that the rate of HRV infection in your Phase 2 trial -- your planned Phase 2 trial will be adequate. How reliable is the historical data on what you should expect as far as the confirmed infection rate?

Well, Brett, as you know, similar to influenza, we will be enrolling these patients on a presumptive basis based on symptoms -- signs and symptoms. If one looks at some historical trials -- Phase 3 trials -- that rate was in the 50% to 60% rate, so we believe that should be achievable. Our inclusion criteria that we have put in place for this Phase 2 is suggesting that they have a history -- a recent history of upper respiratory infections, so we're trying to increase that rate as high as we can.

And I guess what internal controls can you actually put in the trials, or really focus on the infection rate, because obviously, that's a key issue with the Phase 2. Correct?

I'm not so sure I'm following you -- what the infection, meaning the infection rate internal controls. We will be doing PCR, right, to confirm HRV infection from two types of nasal samples, versus one that was used previously.

Okay. And then on laninamivir, I just want to understand what the potential timeline is for an FDA discussion. So you have to get the final out at this time, you have to have this discussion.

But obviously, any additional developments on the partnerships/out-licensing side are going to be completely dependent for the outcome of those FDA discussions are. So, I'm just trying to understand the timeline there.

Right. We would hope to have a study report in the fourth quarter. And I believe for the type of interaction that we would be requesting, there's about a 60-day window. So, I would expect probably the first quarter of 2015 is when we could get in front of the FDA, or at least have dialogue with the FDA concerning future development of LANI.

Okay. So, it's not really realistic, pending the outcome of those discussions, to (technical difficulty) development on the laninamivir front before, say, mid-next year. Correct?

Well, the goal would be -- if we can move faster, obviously, we'll go as fast as we can, but there's some just regulatory timing issues there. Ideally, we'd like to have something in place so that the influenza season next year -- so, the fall of 2015, could be captured with a trial with a partner.

Okay. And then I guess, my last question is -- I appreciate the level of detail in the different discussions with BARDA as far as cost offsets. But, I guess, how mechanistically does -- how do dispute -- disputes resolution, how does that work with these government contracts?

Like, if you reach an impasse, does it go to arbitration? Is it lawsuits? How does that work?

Brett, this is a Russ. There's several avenues that -- from in terms of administrative remedies, if there's a dispute.

So, the way it works is, essentially, we don't believe there's any reason -- again, if you look at the nature of the termination, which is for the government's convenience -- if you look at the FARS, read our contract, there's no reason to believe that costs incurred -- any costs incurred -- up to May 7 would be at risk. There's no rationale or basis for that.

I think the question becomes, what happens with the costs after? And, as I said, there's some activities, which we're specifically allowed to continue, and some that we're still, I guess, negotiating with, or discussing with BARDA, and have not reached a resolution.

So, what BARDA -- the way this is worked is at the end -- the things that they have -- any costs up through May 7, we should invoice in the normal course. And again, we don't expect that there's any rationale or reason why those will not be reimbursed ultimately.

For some of the costs that were -- activities that were allowed to continue, we will invoice those separately. But again, there's no rationale. So, I guess the only area of debate where we think -- is these final wind-up costs.

The cost to complete LANI, as I said, we felt we had absolutely no choice, nor would we stop the trial at that point with -- we have obligations. So, we've not reached agreement with them on that.

If -- and there's some other wind-up costs, like severance, we will submit. They may agree with those costs, they may not agree with them fully.

I think to the extent that we go through that discussion and we're not satisfied with the result, and believe that we are entitled to more reimbursement, then there's an administrative mediation process, as well as just a typical legal process, as well. They're convoluted and complicated, but there's avenues allowable under the government regulations to pursue those in the event that we can't reach a satisfactory agreement with BARDA through the final termination settlement process.

Okay. Thanks very much, guys. I appreciate the details.

Thanks.

David Moskowitz, Equities IQ.

Hey, good morning, guys. Thanks for taking the question.

So, just continuing on with that line of questioning we just left with. Could you just clarify for us what the reimbursement that you guys have a high confidence in recovering from BARDA?

And what would be the net after expenses on that? I guess we're talking about pre-May 7. What's that amount?

Well, what we try to do, David, is in our financial statements, obviously, working with our auditors, is to try to determine what we think might be a risk. Again, based upon the totality of our -- of the situation with the billings. I think that the amount that we have -- the revenue that we have not recognized yet, we think is -- conservatively depicts where any risk may be in terms of not getting reimbursed through the final termination settlement process and the normal invoicing process.

That's our best estimate at this time as to where we think conservatively the risk may be. Again, we don't necessarily believe that -- we believe we're entitled to reimbursement. We believe that there will be discussions around it.

But, again, in terms of pointing to contractual wording and things -- in all things considered, we think this is a reasonable estimate in our potential exposure, if, prior to going into any sort of administrative settlement discussions or any legal remedies later on.

Okay. Great. So that's the -- about the $17 million that you have on the balance sheet in receivables.

And what about the expenses? What would be the expenses, and what would be the net amount of that, should you recover it?

Okay. Yes.

If you look at the balance sheet we included this morning in the press release, you'll see the line item accounts receivable from BARDA. And then on the equities liability side, you'll see contract payables and accrued expenses.

Okay.

Which is of $18.6 million. And that is a number that fully accrued every -- as of June 30, that's the fully accrued number that we would owe to every subcontractor, every cost incurred under the BARDA contract. So you can see that -- my point in the script was that the receivables and the payables are pretty close to a wash.

Okay. Very good. Excellent.

Over to the strategy. Joe Patti.

So, the new assets that you intend to bring in, are you guys intending -- it sounded like in the prepared remarks that you guys are intending to remain an antiviral company. Can you speak to that? And also, are there any other segments that we should think about with regard to Biota?

Yes, David. I think I'd make that a little bit bigger umbrella and call it -- we'd like to remain with our focus in anti-infective, in general.

Obviously, antivirals, if we could bring in other assets in that space, that would be ideal. We're a little bit more open for that class. If something just really made sense that was out of the class, we would -- it's not that we wouldn't consider it, but, I think that's our sweet spot for bringing something in.

And we -- as I mentioned, we wanted to be in clinical stage, so that we can really benefit from the clinical data that would be forthcoming from continued development.

Okay. And the earlier stage antiviral -- let's say you do bring something in that's clinical stage -- would those be out-licensable, or do you fully intend on developing what you have?

Well, I think we definitely want to develop it for some period of time. If it's Phase 1, clearly, we have the capability to take it to Phase 3.

The Phase 3 development costs tend to increase significantly, and that's always a decision we have to make at that point in time of the value of funding the Phase 3 program, or potentially partnering it. We make that decision when we get to that point.

Okay. And one more question on the strategy. Can you talk about -- I know you don't want to give details, and certainly, businesses know that anything can happen, and it can take any timeline.

But, can you talk about the breadth of the program and how long have you been in discussions? Has this project just started? Or do you guys feel like you're pretty far along with certain potential partners or licensors?

Are you talking -- you're not talking particularly about our vapendavir program, correct?

No. About new assets that you intend to bring in.

New assets. Oh, yes. Again, we don't want to get into specifics, but this is something that we've been working on for several months. Suffice to say, we are doing our diligence on the programs.

And in terms of how long you've been at it? Is that -- so you're saying that's something that's been ongoing for a while.

Yes. Yes, it has.

All right. Last question, and this is on LANI. You talked about the highly systematic patients on 40 mg, and a significant reduction in time to resolution of symptoms.

Are you able to tell us what that significant reduction is? Can you quantify that for us?

I think -- I believe it was in the press release. The percent for -- the systemic --

So, if you group the four systemic endpoints together, that was where we have a significant reduction of point -- let me get the exact statistic here, but I believe we put it in -- .007 was the actual statistic of the systemic.

So, we have systemic and we have respiratory. The systemic is -- that group is where we saw the biggest impact.

I think what's meaningful is the number of days, right? Are you able to quantify the number of days in terms of reduction of symptom relative to the comparator?

(multiple speakers) Half a day, it was 14 hours. About half a day.

Yes. About 15 hours. 14, 15 hours. Half a day.

Okay. Great. Thank you.

(Operator Instructions)

I am not showing any further questions at this time.

Okay. Thanks, everyone, for joining us for the call today. And just to summarize a few of the key elements.

One -- both vapendavir and BTA-C585 are progressing well, and in timely fashion. We anticipate initiating a robust Phase 2b trial with vapendavir in the first quarter of 2015. We also anticipate filing an IND for 585 by mid-2015.

We have dramatically reduced our burn to closely align it with anticipated annual royalty revenue, allowing us to deploy our cash for clinical development of our antiviral pipeline more strategically. While our patent application related to Relenza is pending, we expect our royalties from US Relenza sales to continue for at least an additional year, and perhaps longer.

We are considering a variety of transactions that we believe could enhance and accelerate shareholder value. And finally, we continue to discuss with BARDA the timing and nature of our termination settlement.

Thank you for joining us this morning, and we look forward to updating you on future calls.

Ladies and gentlemen, this does conclude today's presentation. You may now disconnect, and have a wonderful day.