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Allos Therapeutics, Inc. (NASDAQ:ALTH)

Q4 2008 Earnings Call Transcript

March 3, 2009 4:15 pm ET

Executives

Heather Rowe – IR

Paul Berns – President and CEO

Pablo Cagnoni – SVP and Chief Medical Officer

Jim Caruso – EVP and Chief Commercial Officer

David Clark – VP, Finance

Analysts

Mark Monane – Needham & Company

Charles Duncan – JMP Securities

Kia Calfer [ph] – Citi

Michael Yee – RBC Capital Markets

Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Allos Therapeutics 2008 results conference call. During today's presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be open for questions. (Operator instructions). This conference is being recorded March 3, 2008. I would now like to turn the conference over to Heather Rowe. Please go ahead.

Heather Rowe

Thank you. Welcome to our year-end 2008 financial results conference call.

On the call today from Allos are President and CEO, Paul Berns; Chief Medical Officer; Dr. Pablo Cagnoni; Chief Commercial Officer, Jim Caruso; and Vice President of Finance, David Clark. A press release was issued after market closed today, a copy of which can be found in the investor media section at our website, www.allos.com.

Before we begin, please note that during the course of this call we may make forward-looking statements concerning our company, that are not historical facts. These forward-looking statements may include, but are not limited to statements concerning our intent and projected timeline for submitting New Drug Applications for pralatrexate as a treatment for patients with relapsed or refractory PTCL; the potential for pralatrexate to offer new treatment options for patients with relapsed or refractory PTCL; our financial guidance for 2009; and our plans related to the potential marketing and commercialization of pralatrexate and other statements that are of other than statements of historical facts.

Such forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties that may cause actual results to differ materially from those anticipated by the forward-looking statements. Additional information concerning these risks and uncertainties is contained in the "Risk Factor" section of the company's quarterly report on Form 10-Q, for the quarter ended September 30, 2008, and in the company's other periodic reports and filings with the Securities and Exchange Commission. The company cautions investors not to place undue reliance on these forward-looking statements. All forward-looking statements are based on information currently available to the company on the date hereof and the company undertakes no obligation to revise or update these forward-looking statements to reflect events or circumstances after the date hereof, except as required by law.

I will now turn the call over to Paul Berns.

Paul Berns

Thank you, Heather. Hello, everyone, and thanks for joining our call.

2008 was a productive year for Allos and we are off to a strong start in 2009. Our lead product candidate, pralatrexate, is a novel targeted antifolate designed to accumulate preferentially in cancer cells. We believe pralatrexate has potential utility in both hematologic malignancies and solid tumors. We recently reported the final results from our pivotal Phase 2 PROPEL trial that we believe support our decision to seek FDA approval for pralatrexate for the treatment of patients with relapsed or refractory peripheral T-cell lymphoma.

PTCL is comprised of a biologically diverse group of blood cancers that account for approximately 10% to 15% of all cases of non-Hodgkin's lymphoma diagnosed each year in the United States. There are currently no FDA-approved agents for patients with PTCL, either in the first line or relapsed or refractory setting.

Some other highlights of the past year included the presentation of interim results from ongoing studies of pralatrexate in hematologic malignancies at the American Society of Hematology annual meeting or ASH in December. Specifically, data were presented demonstrating activity from our Phase 1 single agent study of pralatrexate in patients with relapsed or refractory cutaneous T-cell lymphoma and our Phase 1/2a combination study of pralatrexate and gemcitabine in patients with relapsed or refractory non-Hodgkin's lymphoma or Hodgkin's lymphoma.

We advanced our pralatrexate clinical development program in solid tumor indication by initiating patient enrollment in two new studies and we obtained orphan drug designation for pralatrexate for the treatment of patients with follicular lymphoma and diffuse large B-cell lymphoma.

In addition, we strengthened our balance sheet through an underwritten public offering in May resulting in net proceeds of approximately $65.2 million. 2009 is an important year for Allos as we prepare a New Drug Application or NDA for submission to the FDA in the first half of this year and continue to advance our commercial planning, and preparation for the potential launch of pralatrexate for the treatment of patients with relapsed or refractory PTCL. Importantly, we maintain worldwide rights to pralatrexate for all indications. Pralatrexate has orphan drug designation and fast-track designation in the United States for the treatment of patients with T-cell lymphoma and orphan medicinal product designation in Europe for the treatment of PTCL.

I will now turn the call over to Pablo, who will provide a brief recap of the top-line results of the PROPEL trial and other highlights of the clinical development program for pralatrexate.

Pablo Cagnoni

Thank you, Paul, and good afternoon, everyone.

As Paul mentioned, we recently reported the final results of the PROPEL trial, which is a pivotal Phase 2 international multi-center open-label single-arm trial designed to evaluate the efficacy and safety of pralatrexate in patients with relapsed or refractory PTCL. The PROPEL trial is being conducted under an agreement reached with the FDA under its Special Protocol Assessment or SPA, process. This process allows for the FDA evaluation of the clinical trial protocol intended to form the primary basis of an efficacy claim in support of a New Drug Application and provides an agreement of the trial design, including trial size, clinical end points and data analysis are acceptable to the FDA.

25 sites enrolled a total of 115 patients in the trial. We believe that this makes PROPEL the largest prospectively designed single-agent trial conducted to date in patients with relapsed or refractory PTCL. The diagnosis for peripheral T-cell lymphoma was confirmed by independent pathology review and patient responses were determined by central independent oncology review.

The primary end point of the trial is the response rate as it says by central independent oncology review using international workshop criteria. Duration of response is a key secondary end point. It is important to note that 79% of the evaluable patients enrolled in the PROPEL trial had received two or more prior systemic therapies. In fact, patients received a median of three prior systemic treatment regimens with a range of one to 12.

Additionally, more than 50% of the patients had no response to the previous line of therapy and nearly 25% had never responded to any prior treatment. Given this patient population and the rigorous nature of the project time [ph] and execution, we are encouraged by the results of the PROPEL trial.

In summary, we found that 29 of 100 evaluable patients or 27%, achieved their response as assessed by central independent oncology review. 42 of 109 evaluable patients or 39% achieved a complete or partial response as assessed by PROPEL investigators.

The Kaplan-Meier estimate for the median duration of response is 287 days or 9.4 months. Durational response is measured from the first day of documented response to progression of disease or death. The most common grade 3/4 adverse events were thrombocytopenia, which was observed in 32% of patients; mucosal inflammation in 21% of patients; neutropenia in 20% of patients; and anemia in 17% of patients. We believe that these results support our decision to seek FDA approval for pralatrexate for the treatment of patients with relapsed or refractory PTCL.

In addition to the PROPEL trial, we are committed to evaluating pralatrexate both as a monotherapy and in combination with other anti-cancer agents in a variety of hemologic malignancies and solid tumor indications. And now the T-cell malignancy with pralatrexate has shown promising results within relapse or refractory cutaneous T-cell lymphoma or CTCL. We're conducting a Phase 1 single-agent, open-label, multi-center trial of pralatrexate in patients with CTCL.

At ASH in December, we reported interim data from 22 evaluable patients who completed at least one cycle of treatment. Patients received a median of four prior systemic therapies. Responses were observed in 55% of evaluable patients, including one complete response and 11 partial responses. The most common adverse events were mucosal inflammation. However, there was no Grade 4 mucosal inflammation and no thrombocytopenia above Grade 1. Up to 56 evaluable patients will be enrolled in this study with the objective of determining the optimal dose and schedule for pralatrexate in this patient population.

Also presented at ASH were interim data from an ongoing Phase 1/2a combination trial of pralatrexate and gemcitabine in patients with relapsed or refractory non-Hodgkin's lymphoma or Hodgkin's lymphoma. Data were presented and 22 evaluable patients were enrolled in eight cohorts with different doses and schedules. Partial responses were observed in six of 22 evaluable patients, including five patients on a sequential dosing schedule and one patient on a same-day dosing schedule.

Patients received a median of three prior systemic regimens and four of the responses were observed with patients with Hodgkin's lymphoma. The most common adverse events were thrombocytopenia and the maximum tolerated dose with sequential dosing schedule was established as 10 mg/m2 of pralatrexate followed by 400 mg/m2 of gemcitabine, once every two weeks. Enrollment in the trial is ongoing to determine the maximum tolerated dose for the same-day dosing schedule.

In solid tumor indications, we are particularly pleased with the progress of our Phase 2b head-to-head trial comparing pralatrexate and erlotinib in patients with previously treated stage IIIB and IV non-small cell lung cancer who are, or have been, cigarette smokers. We prospectively designed the trial to allow for investigation of the treatment effects in certain key subsets where we feel pralatrexate has the most potential for benefit relative to erlotinib. Once the study is complete, we will evaluate the results according to the analysis plan. Future development of pralatrexate in this indication will be based on observing a clinically significant treatment effect between the two arms.

The trial was initiated in January 2008, with a goal of enrolling approximately 160 patients worldwide. We are pleased to report that we are recruiting patients in this trial faster than we originally anticipated. Based on the current rate of enrollment, we expect to complete patient enrollment in this trial in the third quarter of 2009. We are also investigating pralatrexate in a Phase 2 open-label, single-arm, multi-center study in patients with advanced or metastatic relapsed transitional cell carcinoma of the bladder. Patients accrual in this trial continue to advance.

In summary, with encouraging results observed in the PROPEL trial for patients with relapsed or refractory PTCL, NDA preparations underway, and a disciplined clinical development plan in both hematologic malignancies and solid tumors, we believe that pralatrexate has the potential to provide a new treatment option for cancer patients.

Now I will turn the call over to Jim, who will provide an update on our commercial planning efforts.

Jim Caruso

Thank you, Pablo. The potential launch of pralatrexate for the treatment of patients with relapsed or refractory PTCL is a first-to-market opportunity for Allos. Currently there are no pharmaceutical agents approved by the FDA for use in the treatment of either first line or relapsed refractory PTCL. This emphasizes the need for new therapies to treat patients with aggressive T-cell lymphoma. According to the clinical literature, patients with aggressive PTCL only have an overall five-year survival rate of approximately 25% after first-line therapy. We are excited by the pralatrexate data for relapsed refractory PTCL generated by the PROPEL trial.

In a recent company-sponsored market research survey of 150 hematologists, oncologists who treat PTCL, response rate, duration of response, and adverse event profile were ranked as three top factors when considering the adoption of a new agent for PTCL. In addition, the anticipated pralatrexate product profile was highly rated for each of these attributes and physicians indicated a strong likelihood of pralatrexate use.

We believe the results of the PROPEL trial support a product profile that aligns with these high prescriber treatment priorities and will support the trial use and adoption of pralatrexate if approved for marketing. Based on our analysis of the literature and FDA data in the public domain, we estimate that patients with PTCL account for approximately 10% to 15% of newly diagnosed cases of NHL in the US, which translates to approximately 5,000 to 6,000 new cases of PTCL per year. In addition, we estimate the annual US prevalence to be approximately 9,500 patients.

Finally, we retain exclusive worldwide commercial rights to pralatrexate for all indications. If approved for marketing, we intend to commercialize pralatrexate by building an oncology-focused US sales and marketing organization. In our view, the potential US market for relapsed or refractory PTCL is highly scalable with sizeable number of patients treated at large cancer centers and institutions. We are also reviewing strategic partnering opportunities for pralatrexate. Our intent is to selectively pursue those partnerships that we believe are in the best interest of the company, customers and shareholders.

I will now turn the call over to David, who will review our financial results.

David Clark

Thanks, Jim. First I'll take a few moments to summarize our results for fiscal year 2008. For the year-ended December 31, 2008, we reported a net loss of $51.7 million or $0.69 per share, compared to a net loss of $39.4 million, or $0.60 per share for 2007. R&D expenses for the year-ended December 31, 2008 were $23.8 million, compared to $17.4 million for the same period in 2007. The increase was primarily due to the expansion of our clinical development program for pralatrexate.

SG&A expenses for 2008 were $23 million compared to $19.7 million for the same period in 2007. This increase was primarily due to pralatrexate portfolio development and commercialization planning activities. We carefully managed our use of cash during the past year. Net cash used to fund our operating activities for 2008 was approximately $42.9 million, lower than our prior guidance of $45 to $49 million. We ended 2008 with cash, cash equivalents and investments in marketable securities totaling $84 million.

For fiscal year 2009, we anticipate that net cash used in operating activities will approximate $50 million to $54 million. Though not inclusive of all costs associated with the potential launch of pralatrexate, this guidance includes the phase-in of certain key investments related to commercial planning, precommercial scale up of manufacturing for pralatrexate, as well as $6.8 million of potential milestone payments under our license agreement for pralatrexate, payable upon FDA acceptance and approval of our NDA.

With that I will now turn the call back to Paul.

Paul Berns

Thank you, David. We entered 2009 with a prioritized product development and commercialization plan for pralatrexate, a solid cash position and a team of dedicated employees focused on delivering new cancer therapies to patients. Before moving to the Q&A portion of the call, I would like to review our key milestones for 2009.

First, we plan to submit an NDA to the FDA for pralatrexate for the treatment patients with relapsed or refractory PTCL in the first half of the year. We expect to announce the presentation of the final results from the PROPEL trial at an upcoming scientific meeting. We will continue to advance our planning and preparation for the potential commercialization of pralatrexate in patients with relapsed or refractory PTCL. We will continue to advance patient enrollment in our ongoing clinical trails evaluating pralatrexate in hematologic malignancies and solid tumor indications, and we expect to complete patient accrual in a Phase 2b clinical trial comparing pralatrexate and erlotinib in patients with advanced non-small cell lung cancer in the third quarter of this year.

As we continue our efforts we are enthusiastic about our prospects for a possible first-to-market opportunity with pralatrexate and the potential to make a difference for patients with PTCL and their families. We believe we have established a strong foundation for continued progress and look forward to providing future updates.

We will now take your questions. Operator?

Question-and-Answer Session

Operator

Thank you. (Operator instructions). One moment please for your first question. Our first question comes from the line of Mark Monane with Needham & Company. Please go ahead.

Mark Monane – Needham & Company

Thank you. Good afternoon from a cold but – and still a little snowy New York City.

Paul Berns

Hey, Mark.

Pablo Cagnoni

Good, and how are you?

Mark Monane – Needham & Company

Good. God afternoon. Still a little snowy, I think, in our understanding of what the duration of response curve looks like. Pablo, you nicely described what the median duration of response was, but I guess what I'm interested in is some sort of landmark analysis about how many people were – still had duration response of one year, one year-and-a-half. I'm asking this because I think it has the potential for importance for the review of the NDA but also from a commercial point of view, Jim, am I right to assuming that you keep treating patients as long as they do not respond? Could you comment on that, please?

Pablo Cagnoni

Yes, Mark. This is Pablo. The Kaplan-Meier estimate for percentage of patients in response at six months is 53%, okay? That's the extent of the data we're going to disclose now. As we've discussed before, a lot more data will be presented at a future scientific meeting and we want to reserve some of that data, but that should give you an idea of what the curve looks like.

Jim Caruso

And you're absolutely correct, Mark. Based on market research, advisory board feedback and if you chatted with oncologists who practice out in the community, as well as academic centers, you're 100% correct. They will continue to treat as the patient continues to respond or remain stable.

Mark Monane – Needham & Company

And in the study, you looked at response basically doing central review of the radiology reports. But in the real world, patients don't necessarily get scans, especially if they are feeling well. Can you talk about how that is addressed in the market research, or how that might influence the use of the drug in the real world if it's approved?

Paul Berns

It's a great question. When you look at the rigor of this study, especially relative to other studies ongoing in T-cell malignancies, PTCL in particular, the multi-center design, the types of patients, the third-party independent review, there is a high degree of review of these patients from a histology as well as a response perspective. What we do know, from an investigator perspective, you have this 40% response rate.

And at the end of the day – and these are experts, these are individuals that treat more PTCL patients on average than anyone else, the greatest understanding of the literature and practical hands-on experience in the treatment of this disease. And based on their expertise, their assessment is, about 40% of these patients have responded in a positive way, either with a complete or partial response to pralatrexate.

And to your point, Mark, based on their experience, it clearly indicates, based on market research, again, advisory boards, one-offs with those experts in this area, clearly points to significant trial use and adoption. And this isn't only for experts. This is both community high prescribers, as well as community low prescribers. The pralatrexate product profile tested as well as a new oncology product profile can test in this space. We were very happy with the response to this profile out of PROPEL and from these treaters, low prescribers, high prescribers and experts.

Mark Monane – Needham & Company

That was helpful. And then, David, can you talk about cost of goods and how we should think about the cost of goods here? Is there a build out required in terms of manufacturing or scalability in terms of PDX at the launch versus of PDX potentially a year or so later?

David Clark

Well, I guess as a general comment we think that the manufacturing costs for pralatrexate will be low. We have not given guidance on percentage for gross margins at this time, but you can expect that we'll provide that in the near future.

Mark Monane – Needham & Company

Congratulations on your progress in 2008, and look forward to the upcoming events.

Paul Berns

Mark, thank you.

Operator

Thank you. Our next question comes from the line of Charles Duncan – JMP Securities with JMP Securities. Please go ahead.

Charles Duncan – JMP Securities

Hi, guys. Let me add my congratulations on a good year, and thank you for taking my questions. Paul, I had a quick question regarding the NDA for pralatrexate. Can you give us additional color on some of the governors to completing that NDA? I know it's just around the corner but, for example, from a CMC, or an analysis section standpoint, can you give us some sense as to where you're at on that?

Paul Berns

Well, we've not given and just as a matter of corporate approach we've always been careful not to have people speculate on where we may or may not be as it relates to the timing of certain activities from a regulatory perspective. What I would say, Charles – and I'll certainly have Pablo comment on this – is that we're pretty well passing the appropriate, really production of data and really the – through a collaborative effort, both from our R&D organization and manufacturing group, in the assembly of the submission.

Frankly, people are working as you would anticipate in any organization very, very diligently, very focused, very – a great level of excitement inside the company, I have to say, with the potential for what this product may – means for patients and the opportunity we may have, if approved, downstream to afford patients first a market opportunity in the treatment of this disease, and the – that has fueled the – really the work effort and the focus and the attention to detail in the organization, both on the clinical, as well as the CMC manufacturing components.

We're very pleased. This is a group of individuals here that have had multiple experiences in the compilation, submission, and support of the FDA review of prior positive approvals with other agents that they've worked with and so we feel as though with the internal group, the support of our outside advisors, both on the clinical regulatory and manufacturing piece that we have a – we have very good control in place and process in place in producing a quality document when we ultimately do make that submission. Pablo, any other color commentary?

Pablo Cagnoni

No, I don't have anything to add. Charles, we are – we're moving as quickly as we can through the process of compiling all the different pieces of the NDA in order to submit it as soon as possible, basically.

Charles Duncan – JMP Securities

Good. And then, Pablo, I actually had a question for you. I think there's a market inefficiency around the following point. If you took a look at the response rates – and I'm sure that you're going to present this in a later clinical meeting – but if you look at the response rates as a function even of – if you looked at the short duration responders, say perhaps the one cycle responders, and you remove those – I know that's kind of data dredging, as well – but would you still be satisfied with the response rates that you saw?

Pablo Cagnoni

Yes, of course. I think once all the data as to the durability of individual responses is in the public domain as we expect to do at a future scientific meeting, you will see that we have a substantial number of patients with very long durational response. I'm not concerned about that particular point, Charles.

Charles Duncan – JMP Securities

But even with the short duration responders removed, you'd be still –?

Pablo Cagnoni

Yes, the remaining patients will have more than acceptable response rate, that's not a problem at all.

Charles Duncan – JMP Securities

And one final question with regard to the non-small cell lung cancer study. It is my belief that erlotinib doesn't work very well on smokers, so can you help me understand why there's any reason to believe this is a real high-risk comparison or provide some perspective on that trial?

Pablo Cagnoni

Well – so erlotinib has a label for second and third-line lung cancer. And as we've discussed in previous presentations, we selected erlotinib as a comparator because we think that in the substantive patients that are current or former smokers, we had a opportunity to beat erlotinib head to head. And if that were the case, we think that pralatrexate in a Phase 3 trial were to be positive, in vitro registration certainly pralatrexate can establish itself as an option for patients in second and third-line lung cancer.

Despite of the fact that erlotinib may not work optimally in patients that are current or former smokers, there's no question the drug is being prescribed to those patients. As the revenue numbers from – released recently for erlotinib clearly show, this agent has surpassed the $1 billion mark per year sales, so clearly it's being prescribed not only to never smokers versus the current and former smokers. So we think that by beating it head to head in that subset of patients, we have an opportunity to address that market.

Charles Duncan – JMP Securities

I agree. Okay, congratulations on the enrollment progress with that trial, as well. Thanks.

Pablo Cagnoni

Thank you.

Paul Berns

Thank you, Charles.

Operator

Thank you. Our next question comes from the line of Lucy Lu with Citi. Please go ahead.

Kia Calfer – Citi

This is Kia Calfer [ph] on behalf of Lucy Lu, thank you for taking the question. I just wanted to know the timing of the hiring of the commercialization and marketing staff?

Paul Berns

Sure, I'll turn it over to Jim. We've already started that process in 2008, making certain key commercial infrastructure moves with personnel already. And certainly as David alluded to in his comments around the financial plan for the year, there's key hirings assumed in the guidance that we gave today, as well. But Jim, perhaps you could give a little more color to that?

Jim Caruso

Absolutely. I think it's safe to say that we will phase in commercial headcount over time prior to the launch of the compound, and then phase in additional commercial support, post the launch of the compound, as well. If you look at the guidance that we've provided, the submission will occur in the first half of this year, and so if you assume a review by the FDA in approximately six months or so, that'll give you some estimate as to when the launch would occur. And we fully expect, based on our planning, to be prepared to launch the compound when it is approved by the FDA.

Kia Calfer – Citi

Perfect, thank you so much. And also last question. Has there been any changes to your marketing plan?

Jim Caruso

Well, I will share this with you. We've completed additional rounds of market research and the product profile has tested very, very well, not only as a stand-alone in achieving very high marks across the board, but relative to – obviously relative to agents that are currently being prescribed in the space it tested particularly well. So we are very pleased with that. Our analysis of patients that are treated in a first-line setting was approximately what we had expected, but second and third line and beyond, we are very happy with the percentages of available patients that are in second, third-line and beyond.

And we're also particularly happy about the numbers of patients that are treated from a palliative perspective in this patient population relative to a curative perspective, as well, and we were happy to see a significant number of clinicians would obviously clearly prescribe in any palliative setting as the agent of choice, but interested to know even from a curative perspective, the high degree of interest in using this agent, as well. So these are all elements that will continue to input into our launch planning as we build out the marketing strategies, tactical interventions, et cetera, in anticipation of our launch.

Kia Calfer – Citi

Perfect, thank you, very much.

Jim Caruso

Thank you.

Operator

Thank you. (Operator instructions). Our next question comes from the line Jason Kantor with RBC Capital Markets. Please go ahead.

Michael Yee – RBC Capital Markets

Hey, guys, it's Michael Yee with Jason. A couple of questions for you guys. Just to be clear, what expenses are included in the guidance, and what is not? I mean does that include the sales force or how much of the sales force and how big are you thinking there?

David Clark

This is David. I think as Paul said, includes certain – a phase-in of certain key hiring for the sales force. As our press release said, though, it's not inclusive of all costs associated with potential future launch, so it doesn't – it does incorporate key investments for commercial planning. It also incorporates the precommercial scale-up of manufacturing so we have drug ready for launch but we're not going to give specific guidance on headcount at this point.

Michael Yee – RBC Capital Markets

Okay. In regards to the European side of things, can you better update us in terms of where you stand there in regards to discussions with the EMEA on the ability to file with current data, the ability to discuss with them the duration of response data, and do you think that's a rate-limiting step to a partnership?

Pablo Cagnoni

This is Pablo. Let me first comment on the plan with the EMEA, then I'll let Paul comment on the partnership issue. We've had preliminary discusses with the EMEA. Our goal right now is to finish up the NDA and submit it to the FDA. We want to get that in as soon as possible. After that, we will request additional meetings with the EMEA so we can share with them the final data from PROPEL and take it from there. I think we continue to believe that we will – we'll submit an EMEA based on the PROPEL data. Obviously, the discussion with the EMEA will guide us in what direction we should move regarding exceptional circumstances, conditional approval, or full approval, but first we need to sit down with them and review the final data from PROPEL in detail.

Paul Berns

That's right, Pablo, thank you. Michael, just to add some additionally commentary, I would say that on a parallel path, those are much of the same conversations, as you can imagine, from outside parties that have clearly expressed interest in wanting to meet with us to share their capabilities from a drug development, as well as commercialization perspective on the ex-US partnering side of the equation, if you will. To that end, I would say that, all in all, there's been a great level of interest in our view and we are having very productive conversations with multiple parties.

Pralatrexate is a late-stage near-term commercial opportunity in the US and equally represents great potential on a worldwide basis as well and, frankly, we are having very constructive discussions with organizations. I think they look at the strength of the PROPEL data, they look at the potential regulatory pathways, both frankly in ex-US, Europe and Japan, just to look at two regions outside of the United States as an example, and there's great interest for organizations based on the strength of this data and its potential path as Pablo spoke to a moment ago, for Europe, as we look at that as just an example of where we can go and the multitude of potential patient populations that, in fact, should be evaluated with pralatrexate and even beyond PTCL.

So, we are in – we're in a good – we think we're in a good position to have thoughtful discussions with interested parties and look to understand and quantify that interest in the best interest of our shareholders.

Michael Yee – RBC Capital Markets

Outside of financials, given your preliminary discussions and your discussion with partners, is it reasonable to have a base case that you're good to go with this data?

Paul Berns

I think – here I'll let – is it from a regulatory perspective? I think Pablo spoke to it clearly. We're following the regulatory plan that he's laid out where we're processing it appropriately after we make the FDA submission. We've had pre-meetings with the EMEA already and we believe we have a good course charted out with the outside regulatory advisors that we use for both Europe and Japan for that matter.

Michael Yee – RBC Capital Markets

Okay. And just quickly on the lung cancer study, the Tarceva label was updated to allow up to 300mgs for smokers, do you know if your protocol allows for dose escalation on the Tarceva arm?

Pablo Cagnoni

It does not. As you know, this is a worldwide study. The one label that has been updated is the US label. The study's being conducted in a number of sites around the world.

Michael Yee – RBC Capital Markets

Okay. All right, thanks guys.

Paul Berns

Thank you.

Operator

Thank you. We show no further questions. Please continue.

Paul Berns

Okay. Thank you, operator. And to conclude this afternoon's call, I would like to summarize our three key corporate operating principals. First, our focus on excellence and innovation in the development and execution of our clinical programs; second, to proactively evaluate opportunities to grow our business through potential product acquisition, partnerships and other strategic initiatives; and third, lead with ethics and integrity to insure quality business decisions that create value for our patients, employees and shareholders.

As always, we appreciate your participation and look forward to keeping you apprised of our progress in the months ahead. Have a good day.

Operator

Thank you. Ladies and gentlemen, this concludes your conference call for today. Thank you for using ACT conferencing. You may now disconnect.

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