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ArQule (NASDAQ:ARQL)

Q4 2012 Earnings Call

March 14, 2013 9:00 am ET

Executives

William B. Boni - Vice President of Investor Relations & Corporate Communications

Paolo Pucci - Chief Executive Officer and Director

Robert J. Weiskopf - Principal Accounting Officer, Vice President of Finance, Corporate Controller and Treasurer

Brian Schwartz - Chief Medical Officer and Senior Vice President of Clinical & Regulatory Affairs

Analysts

Joel D. Sendek - Stifel, Nicolaus & Co., Inc., Research Division

Adnan S. Butt - RBC Capital Markets, LLC, Research Division

Chad J. Messer - Needham & Company, LLC, Research Division

Jonathan Eckard - Citigroup Inc, Research Division

Reni J. Benjamin - Burrill & Company

Jason Zhang - Edison Investment Research Limited

Thomas Yip - MLV & Co LLC, Research Division

Operator

Good day, ladies and gentlemen, and welcome to the ArQule Fourth Quarter Fiscal Year-end 2012 Conference Call. [Operator Instructions] As a reminder, this conference call is recorded. I would now like to turn the conference over to your host, Mr. William Boni. You may begin.

William B. Boni

Thank you, Mimi. Good morning, everyone. Welcome to the ArQule investor conference call reviewing operational and financial results for fiscal year 2012. This is Bill Boni, VP of Investor Relations at ArQule.

This morning, we issued a press release of the reported results for the fiscal quarter and year-ended December 31, 2012. This release is available on our website at www.arqule.com. Leading the call today will be Paolo Pucci, Chief Executive Officer of ArQule. Also present for the company are Peter Lawrence, President and Chief Operating Officer; Dr. Brian Schwartz, Chief Medical Officer; and Rob Weiskopf, Vice President of Finance.

Before we begin, please note that we will be making forward-looking statements as defined in the Private Securities Litigation Act of 1995. Actual results may differ materially from those projected in the forward-looking statements due to numerous risks and uncertainties that exist in ArQule's operations, development efforts and the business environment, including those factors discussed in our press release announcing this call and posted on our website, as well as in our reports on Forms 10-Q and 10-K and subsequent documents filed with the Securities and Exchange Commission.

The forward-looking statements contained in this call represent the judgment of ArQule as of today. ArQule disclaims any intent or obligation to update any forward-looking statement except to the extent required by law. We will provide an opportunity for questions and answers at the end of this call.

I would now like to introduce the CEO of ArQule, Paolo Pucci.

Paolo Pucci

Thank you, Bill, and good morning, everyone. Thank you for joining us this morning. Let me start with the 2012 operational overview and then later in the call, we're going to go into the 2013 financial guidance, as well as an analysis of the objectives that we aim to achieve for our business this year. So for -- to start to talk about our lead development candidates, which is tivantinib.

2012, for us at ArQule, was both a year of clinical progress and also setbacks. These events were related mostly to our lead product, tivantinib, formerly known as ARQ 197, and very much characterized the cycle of new product development of most biotechnology companies, especially in the difficult and challenging area of oncology clinical development.

During the year, we maintained strong financial discipline. The strong financial discipline allow us to maintain our cash burn well in line with expectation and within the norm of the past 3, 4 years. So we were able to close the year of 2012 with $130.6 million of cash and marketable securities on hand. This strong financial position has allow us the opportunity to begin already a new cycle for ArQule. This new cycle was marked by the timely initiation of tivantinib METIV Phase III pivotal trial in second line hepatocellular carcinoma, and to some extent, was also marked late last year with the initiation of the Phase I testing of our FGFR inhibitor named -- code-named ARQ 087. And it is of note also that early this year, in 2013, in connection to the initiation of the METIV trial with the recruitment of the first patient, we received -- we earned and received the $50 million milestone from Daiichi Sankyo in connection to that event. We are fully committed to implement this recalibrated strategy that has just initiated, and we hope that we will be successful at the end of this new cycle.

Part of success is also extracting as much value as possible from the investments in clinical trials that we have already made during the previous cycle. And I'll talk about what the plan relative to that is later on in the call.

Now let me turn most specifically to the tivantinib trials, those that have just initiated, those that have been recently concluded and those that are still ongoing. And I will speak quite a bit about those that are still ongoing so that I offer some clarification to all those investors that have been asking us on the side those clarifications.

So tivantinib, as you know, is a small molecule inhibitor of the c-MET receptor tyrosine kinase. It is a target that is overexpressed in several tumor types and is associated with full prognosis and it is supposed to be involved in resistance to other anticancer therapies. The MET pathway continue to be a target of considerable interest among biotechnology and large pharmaceutical companies, which are developing small molecules, as well as antibody toward this target.

Let's begin the trial dissertation with the latest initiated trial. We have code-named the pivotal Phase III HCC trial, METIV, which is spelled M-E-T-I-V. ArQule is very proud to hold the lead -- the medical lead in implementing the METIV trial. We also led the medical lead for the previous trials in the HCC program. So we have the medical lead and implemented the Phase I and Phase II trial for tivantinib in HCC as a single agent, and we also held the lead of the combination trial of tivantinib with sorafenib/Nexavar, which recruited 80 patients and was presented in the recent test. Through all this work that we have done over the past 4 years in HCC, we have developed a considerable in-house expertise in this area. And we have a very -- we have fielded a very strong team, strengthened by their expertise, to implement the METIV trial. That has been an important element in getting the METIV trial up and running quickly, and we were very happy to begin to enroll the first Phase III patients in the METIV trial very early this year. I should note that from the ASCO presentation of the Phase II HCC trial until initiation of the Phase III trial in second-line HCC, have passed only about 6 months. We are supported in this trial by our very able partner, Daiichi Sankyo, that, with us, participates in the trial governance and it supports us strongly from the regulatory point of view, as well as from the pharmacovigilance point of view.

The primary endpoint of the METIV trial is overall survival. We plan to enroll approximately 300 patients and we plan to randomize these patients 2 to 1, tivantinib versus placebo.

At this point in time, we're planning for 120 clinical sites to be part of this trial. And I should also say that these sites are going to be all in the so-called Western world. So they're not going to include, at this point, sites in the Kyowa Hakko Kirin territories that I remind you are mostly Asian territories defined as Japan, South Korea, Taiwan and Hong Kong. Kyowa Hakko Kirin is assessing its options in HCC, and they will communicating independently what those decisions might be at a later time. The trial in the West, the METIV trial, is conducted under an SPA agreement, and this SPA agreement covers also the companion diagnostic.

All the patients will be measured for MET status in the METIV trial. And more importantly, this measurement is going to be a measurement executed with metas [ph], so at the time of delivery of the therapeutics. There is an emerging body of evidence relative to timing of administering a test for MET status, type of test that is administered and the definition of the MET status, as it might or might not relate to time of delivery of therapy. And it's not entirely clear that MET status measured sometime before the delivery of the therapy would still represent the MET status that the patient might have at time of delivery of the therapy. So we have seek with the METIV trial to cut through this Gordian knot of analysis and time at the same moment, both the testing of the patient and the delivery of the therapeutics.

Now this is a very exciting trial for us. It's a very exciting trial for us, but it's also exciting for patients and physicians. For patients, it's exciting because there is no systemic therapy that has yet shown to be effective for patients with advanced HCC following, obviously, first-line therapy with sorafenib that has been proven terribly effective in that setting. Therefore, there is an urgent medical need to be met here. It's exciting and therefore, it's exciting for the patients and the physicians. It's also very exciting for the physicians and we have seen that there is tremendous excitement among the investigators that had joined the trial because this trial is unique. It's unique in its design because it is the only currently enrolling Phase III trial that targets a molecularly defined patient population. And so this is for us a very compelling opportunity to play a role in tumor type where there is a bigger met need and also do it in a very different way than most other companies have done it so far, unfortunately failing.

So we base on our -- what we based our belief in the METIV trial on? We base it on data. We base it on the data from the Phase II second line HCC trial. That trial recruited 107 patients, it was also randomized 2 to 1. One could argue as some have argued, you had very good results from the Phase II HCC trial. It was a randomized trial, but it was few patients. It was few patients indeed, 107, but it's also one of the largest trial of its kind that was conducted so far in second-line HCC. So if you had that perspective, the patients were few but the probability mattered, nonetheless.

Furthermore, once you compared the number of patients we recruited to the -- in the Phase II with the number of patients we're planning to recruit in Phase III, it's 107 versus 300. And there, as well, we find some comfort in the numbers. But let's see what the trial was about. This trial demonstrated that in the treatment arm of tivantinib monotherapy, so without the confounding factor of a combination companion as we have had possibly in other trial, the trial met for the intent-to-treat population's overall endpoint and demonstrated a more pronounced and consistent benefit in overall survival, time to progression, progression-free survival among the MET-high patient population. Here again, we largely measure MET status of these patients for the first time, systematically, at time of delivering of the therapy. So we knew that -- what the MET status of the patient was at the time that we deliver the therapy, not at some point in time in the past of the patient's life.

A few numbers. Median TTP in this MET subsegment was 2.9 months for the tivantinib arm versus 1.5 months in the placebo arm. Median PFS was 2.4 months in the tivantinib arm versus 1.5 months in the placebo arm. And median OS in the tivantinib arm was 7.2 months versus 3.8 months in the placebo arm. This overall survival trend would represent almost a doubling in favor of the treatment arm versus placebo. This same study show the first body of evidence that patients on placebo with high level of MET did worse than patient on placebo with lower level of MET. That seems to indicate that MET status is an independent negative prognostic factor. This is also something that we are going to try to validate with our Phase III trial. So you can see that the Phase III trial is built on a very strong body of evidence where the drug got tested as a single agent, so without confounding factors that could emerge from a combination and the cross talk there is among the different targets. And then you understand better why the investigators are so excited to be part of this trial.

The excitement was further enhanced by the fact that the complete findings of the Phase II trial were recently published in the Lancet Oncology. And we believe that the releasing of this prestigious publication further help the process of beginning recruitment for METIV trial timely. So this is for us the future, a future we strongly believe in, in many ways and for many good reasons, we believe.

Let's talk about now the non-small cell lung cancer program. There, where we have suffered a number of setbacks in the recent past. Let me begin to discuss the MARQUEE trial. The MARQUEE trial was conducted in partnership with the Daiichi Sankyo in the West. With Daiichi Sankyo this time in the medical lead of the trial. The trial MARQUEE is a double-blind, randomized, placebo-controlled trial. It was intended to be a TP without trial and tested tivantinib in combination with erlotinib versus erlotinib alone in previously treated patients with locally advanced metastatic non-squamous, non-small cell lung cancer. So here, the recruitment criteria was not inspired by the definition of molecularly-based population but rather by a histologically-based population. So we made some assumptions that there'll be some correlation between the histologically-based population of non-squamous, non-small cell and the MET status of that patient population. MARQUEE, as some of you recall, was halted last fall for 2012 for futility, and that occurred on the preplanning interim analysis, and we'd received a recommendation of the independent data monitoring committee. At that time, top line interim data available to us showed, as we communicated already, a statistically significant improvement in progression-free survival in the intent-to-treat population. But unfortunately, this benefit did not appear to be carrying over to the endpoint of the trial, which was overall survival. No unexpected safety findings were identified by the DMC at the time of the interim analysis. And the trial carried on for a few more months to its natural conclusion in December of 2012.

We currently aim to present the database analysis for MARQUEE at a peer-to-peer review forum in the second half of the year, and we are awaiting for the full database for this trial. Based on the data that the database will make available to us, we will seek to perform an extensive and exhaustive number of subanalysis for this trial. We believe that the result of these analysis, once augmented by additional data from other non-small cell lung trial currently still ongoing, will help us address any potential future development for tivantinib in non-small cell lung cancer, including potential development in define -- bio-market defined or histology-defined subgroups within this non-small cell tumor type. So as I said, the MARQUEE trial has reached its natural end in December 2012 and now all we left to do is collected the data and analyze it.

For the ATTENTION trial, it's a different story. The ATTENTION trial was conducted -- is conducted still by Kyowa Hakko Kirin in Asia. This is the second trial in non-small cell lung cancer that was being conducted for tivantinib. And it continues to move toward its natural conclusion, although I should say, with a reduced number of patients enrolled versus the original plan. The trial is being conducted in Japan, South Korea and Taiwan. And as I said, is under the sponsorship, sole sponsorship, of Kyowa Hakko Kirin. This trial originally was intended to recruit approximately 450 patients. But additional recruitment was terminally suspended once approximately 300 patients have been already recruited. That happened because of an observing balance in cases of interstitial lung disease. Of interest, I should remind, that interstitial lung disease is a toxicity that we have all been aware of, and now, upon Kyowa Hakko Kirin has been monitoring for. Because as a recent epidemiological study named POLARSTAR executed in Japan teaches us, it is ILD. It's an adverse drug reaction of concern specifically for Japanese patients who received erlotinib as a single agent as well.

Kyowa Hakko Kirin has informed us that, as applicable and where possible, patients that had -- patient of 300 patients -- all those 300 patients had already been enrolled in the ATTENTION trial, a number we reconsented after the permanent suspension of additional recruitment. And so those patients that got reconsented continue to receive treatment if they were still on therapy as per protocol.

We don't have data from this trial, and we're not going to have data until later on this year or early next year. Timing of delivery of the data will depend on timing of events. And at this point in time, we cannot make more than just an educated guess on when Kyowa Hakko Kirin will reach the predetermined number of events to perform an analysis of this trial. And that's what why we think today that we expect -- we hope to receive an analysis from -- results from this trial sometimes late in 2013 or early 2014. As I said before, this data is going to be important because it will help us inform any learning we captured from MARQUEE.

At this point in time, I should also say that there are 2 key differences between the MARQUEE trial and the ATTENTION trial. Those difference are in dose and in patient population. Let's start with patient population.

The patient population of the MARQUEE trial in the West included both types of EGFR mutation, wild-type as well as otherwise, while the ATTENTION trial only includes EGFR who are wild-type. The second difference is dose. The MARQUEE dose was just 1, 360 BID. The tivantinib dose regimen for ATTENTION comprises 2 dosages: 240 and 360 milligram. And that was driven by the fact that the drug exposure given by the 360 milligrams tivantinib in the ATTENTION trial to Asian patients who are poor metabolizer, around about 15% of the total population, could have been too high of an exposure. So from the ATTENTION trial, we are likely also to understand if drug exposure creates some differential between -- and then we're going to see that to compare it some of the data that might emerge from the 2 trials.

The additional 2 trials that will inform our understanding of the potential use of or otherwise of tivantinib in non-small cell lung cancer are Phase II trials. One is a randomized open-label Phase II trial conducted in the U.S. in patients with KRAS mutations who are receiving tivantinib plus erlotinib or chemotherapy. And we expect to enroll approximately 100 patients in 14 clinical sites in the U.S. with the endpoint being PFS and with data being expected this year. The second Phase II trial is an open-label, single-arm study of tivantinib plus erlotinib in Japan in patients with locally advanced or metastatic EGFR mutation-positive non-small cell lung cancer. Recruitment is about 40 patients and the primary endpoint is overall response rate with data available likely next year.

So in conclusion for non-small cell. To determine if there is a fast forward in non-small cell lung cancer for tivantinib. And what that fast forward might be, we will need to take into consideration the entire body of evidence that will emerge from the MARQUEE data, from the ATTENTION data and from the data from this Phase II trial. And we're looking forward to inform investors and the scientific community as this body of data becomes available to us as well. So that concludes the parts relative to non-small cell lung cancer.

For -- let me turn now to colorectal cancer. We announced early this year the results for our Phase II, randomized colorectal cancer with Daiichi Sankyo being in the medical lead to execute this trial. And this trial assess the combination of tivantinib placebo plus irinotecan and cetuximab against the doublet of irinotecan and cetuximab in second- and third-line colorectal cancer. This trial was intended to be a signal generating trial, a rigorous one, but a signal generating trial. And because of the changes in the therapies that occurred while the trial was being conducted, changes that affected treatment of colorectal cancer both in front line and in third line, we decided to reduce the number of patients to be recruited into this trial from 180 to 120 patients. However, the statistical plan did not get adapted to the reduced sample size and the trial, once opened, did not reach statistical significance for the primary endpoint, which was progression-free survival. However, a number of significant trends that favor the triplet treatment of tivantinib plus irinotecan and cetuximab emerged from further analysis of the data. Of particular interest, as we have mentioned in a previous press release, is that TFS results, both in the treatment and in the control arms, were longer than expected compared to previously published historic norms. And I should say that the historic norms here are changing for colorectal cancer.

The same thing can be said for the measurement overall response rate, which was 45% for the treatment arm of the triplet combination. We are targeting ASCO the coming June to present a more detail and complete body of data. The data presentation at ASCO will include analysis of patient subgroups by a market status, regional variability and as mature overall survival as we might have by that time. I remind you that we announced early this year that we had no overall survival data because that data was not mature yet. Subsequent to the presentation at ASCO and armed also with the overall survival data, which at this point we don't have, we will convene with the CSC experts to assess if there is a fast forward in this tumor type and what that fast forward might be.

So this concludes the trials where, with Daiichi Sankyo or ArQule in the medical lead, but as a sponsor, with the 2 companies that sponsored the trial, we had been working on tivantinib. There is a number of trials that we're working with tivantinib in partnership with NIH. Those are the so-called tivantinib CRADA trials. I'll mention some of those that are included in that number. They are: a Phase II single-agent trial in prostate cancer, which is randomized -- I mean, multiple myeloma and in breast cancer related -- or not randomized, they are open label; Phase II combination therapy trials in kidney cancer with or without erlotinib, randomized; head and neck cancer with or without cetuximab, also randomized; and finally, there are a number of Phase I trials testing tivantinib single agent in pediatric indication or tivantinib plus a number of combinations in pediatric indications as well.

So this concludes the tivantinib review. As you can see, we are still working hard on our lead drug. Not only we're working hard, or represents the future of this drug, the METIV trial for which we feel very, very positive. And about -- but also, we are working hard to collect a body of evidence from concluded trial and we're preparing to receive body of evidence for branding trial to better inform our understanding of the drug and our calibration of the strategy for further development for tivantinib. We are encouraged that we are seeing signs of efficacy as a single agent and in a number of combinations as well.

Now let me turn to pipeline and our discovery activities. The most notable development for our pipeline is the initiation of the Phase I trial with ARQ 087, which is an orally bioavailable, potent multi-kinase inhibitor with pan-FGFR activity. This is an internally sourced compound. It focuses on fibroblast growth factors and their receptor controls. They are implicated in a number of processes of several proliferations, survival, migration. And FGFR as a target had been, in the past, lagging a little bit by hand in terms of interest, but there has been a resurgence of interest in this target. And with that, there has been a resurgence of trials and competition. So we're very aware that we are in a competitive environment. We think that we can compete effectively and that's why we are in Phase I.

How we are in Phase I? We are in Phase I on the bank of a very strong preclinical package. We have a crystallography study that shows the binding of FGFR 087 in a noncompetitive AGP fashion. We have a number of individual studies that show those dependent inhibition of growth and a decrease in the biomarker in tumor driven by FGFR2, specifically. And our strategy for the Phase I study includes validating the FGFR family members as predicted by our market, as well as obviously evaluating 087 toxicity, and potentially clinical activity. We are in the early days. We are entering soon the recruitment of cohort 3, and we will update on this trial as we go. This trial puts the FGFR inhibitor 087 in the same basket as where we have ARQ 621, an Eg5 inhibitor; and ARQ 736, a BRAF inhibitor. And I reiterate what we said several times in the past, we aim to collect Phase I data for all of these 3 candidates to then hopefully make the decision to bring one of these candidates as a proprietary candidate but on a partner basis, to Phase II.

Finally, for the review of our 2012 business activities. In 2012-- late in 2012, we completed our 4-year long, research collaboration with Daiichi Sankyo. That collaboration from now on will relate exclusively to the license agreement for 092, an AKT inhibitor for which, on behalf of Daiichi Sankyo, we are conducting Phase I testing. This license agreement provides Daiichi Sankyo with exclusive worldwide rights to ARQ 092. And after further development of this drug, ArQule will be entitled to milestone payments, royalties and an option to co-commercialize under certain terms in the United States. So that concludes the review for 2012.

Let me now turn to the objectives we set for our company for this year 2013. First and foremost, timely progress in patient enrollment for the Phase III METIV trial. And we have said in public before, and I would like to reiterate here, is that we hope to give more certainty about timing of completion for the recruitment of this trial by the time we understand better, based on the data that we will accumulate, what the real screen failure rate is for these patients. We have the hurdle of testing for these patients. We're working on the assumption that round about 50% of the patients that will be tested will test MET high. But we want to be cautious and accumulate data on the first 100-some patients before we give a final and definitive timeline to complete recruitment for this trial.

The second objective is to present the final data from the randomized Phase II combination trial in colorectal cancer testing tivantinib plus irinotecan and cetuximab. And we have said here today that we aim to present the data for ASCO. We also aim to present later in this year, hopefully in the fall, the data set and data analysis for the MARQUEE trial. And as we also say during the call, we hope that either late this year or early in '13, depending on the flow of events, Kyowa Hakko Kirin and therefore, ourselves, will be able to update on any results that might emerge from the ATTENTION trial.

We're also aiming, as a additional objectives, to complete the enrollment in the KRAS trial and possibility present data if there is a good clinical venue available for that, and we continue to support -- we will continue to support the NCI trials, which are quite a few and are going to begin to deliver signals over the next year or 2. Elsewhere, we will focus in completing the Phase I trial for 087. Obviously, completion might occur this year or next depending on how many cohorts we need to obtain the data within necessary to take a decision to proceed to Phase II or otherwise.

And on the discovery front, where we have some resources freed up now from the Daiichi Corporation that employed a large part of our resources for the last 4 years, we're going back to our library, which we have continued to develop over time. And we are launching a big effort -- a fresh effort to screen it against a number of targets that we have been doing some work over the last 4 years.

As far as our finances, as I said, we concluded with $136 -- $130,600,000 in cash last year. That's the top range of our guidance. And we maintain today that based on the budget that has been recently approved for this year by the ArQule directors and they're projecting their budget out within reason, we can say that our working capital requirements are met well into 2015. And here again, as our business model develops, we will update.

Now this concludes my part of today's dissertation -- presentation. I hope to have given you all enough elements to look optimistically at the future of ArQule, and also to have given you enough elements to have a rich Q&A session at the end. Let me now turn to Rob Weiskopf for the financial part of the our call. Rob, please.

Robert J. Weiskopf

Thank you, Paolo. The company reported a net loss of $10,872,000 or $0.18 per share in the year-ended December 31, 2012, compared with a net loss of $10,762,000 or $0.20 per share for the prior year-end. For the quarter ended December 31, 2012, the company reported a net loss of $5,296,000 or $0.09 per share compared with net income of $3,758,000 or $0.07 per share for the quarter ended December 31, 2011. At December 31, 2012, the company had a total of approximately $130,000 -- $130,599,000 in cash and marketable securities. For the year-ended December 31, 2012, revenues were $36,414,000 compared with revenues of $47,310,000 for the prior year-end. For the quarter ended December 31, 2012, revenues were $5,143,000 compared with revenues of $16,504,000 for the comparable quarter in 2011.

Research and development revenue in 2012 included revenue from the Daiichi Sankyo agreements related to tivantinib development, AKIP research collaboration and ARQ 092 licensing, as well as the Kyowa Hakko Kirin tivantinib license agreement. The $10.9 million revenue decrease in 2012 was principally due to several factors: a $10 million decrease in revenue recognized in the company's Daiichi Sankyo ARQ 092 upfront-licensing payment received in 2011, a $4.4 million decrease in revenue recognized in the tivantinib license agreement with Kyowa Hakko Kirin, $10.2 million decrease in revenue recognized on a milestone received from the Daiichi Sankyo tivantinib program in 2011, a $2.2 million revenue decrease from the Daiichi Sankyo AKIP agreement; and a $2.6 million decrease in revenue recognized resulting from extension of the development period of the Daiichi Sankyo tivantinib agreement. These revenue decreases were partially offset by a $2.8 million increase from the company's Daiichi Sankyo ARQ 092 agreement and lower contra revenue of $15.7 million associated with the Daiichi Sankyo tivantinib program.

As a reminder, under the terms of our tivantinib collaboration with Daiichi Sankyo, our share of Phase III cost is payable solely from milestones and royalties. Our cumulative share of Daiichi Sankyo Phase III costs from inception through December 31, 2012, totaled $63.8 million. During that period, we received milestones of $25 million. Our cumulative share of Phase III costs has therefore exceeded the amount of milestones received through December 31, 2012, by $38.8 million, an amount which will be netted against future milestones and royalties when earned and which is not reported as contra revenue.

On January 31, 2013, we announced that the first patient had been enrolled in the pivotal Phase III METIV trial of tivantinib, entitling us to a $15 million milestone. We'll not receive any net cash proceeds from those milestone as it will be netted against our cumulative share of Phase III collaboration costs in excess of milestone received.

Fiscal 2012 research and development expenses were $33,966,000 compared with $45,011,000 for fiscal 2011. Fourth quarter 2012 research and development expenses were $7,246,000 compared with $9,674,000 for the fourth quarter of 2011. Research and development expenses decreased in fiscal 2012 and in the fourth quarter 2012 primarily due to the decrease in outsourced clinical and product development costs related to Phase I and II programs for tivantinib and other product candidates.

General and administrative expenses for fiscal 2012 were $13,852,000 compared to $13,373,000 for fiscal 2011. Fourth quarter 2012 general and administrative costs were $3,352,000 compared with $3,151,000 for the fourth quarter of 2011.

Turning now to financial guidance for 2013. ArQule expects net use of cash to range between $40 million to $45 million. Revenues are expected to range between $12 million and $15 million. Net loss is expected to range between $28 million and $31 million, and net loss per share to range between negative $0.45 and $0.50 for the year. ArQule expects to end 2013 with between $85 million to $90 million in cash and marketable securities.

With that, I would like to hand the call back to Paolo.

Paolo Pucci

Rob, thank you very much. And now we can please, operator, open the floor for question. As a reminder, I'm joined here by Peter Lawrence, President and Chief Operating Officer; and Brian Schwartz, Chief Medical Officer. And we'll all be happy to take questions. Thank you.

Question-and-Answer Session

Operator

[Operator Instructions] Our first question comes from Joel Sendek of Stifel.

Joel D. Sendek - Stifel, Nicolaus & Co., Inc., Research Division

I had a couple of questions. I'm just wondering if you can confirm that the METIV trial will have an interim look. And if it does, what's your best estimate as to when we might see that?

Paolo Pucci

Yes, Joel, I can confirm that the METIV trial will have an interim look once 60% of the planned events are achieved. And it's going to be a look that doesn't include the efficacy of futility, but it was very much called for by 1 of the 2 regulatory agency. The timing is hard to predict at this point in time, Joel, because as I said, we don't know what the flow of events is going to be and much less we know what the flow of -- what the screen failure rate is going to be. So let's -- you give me the opportunity to say what we have been saying for some time in public, we expect that it takes up to 2.5 years to recruit the trial. And then that will put the trial fully recruited sometimes in 2015, so that will put an interim analysis potentially sometimes in 2014. But I really don't want to give a more specific date now until we understand better what the screen failure rate is. Is it the 50% or so that we are predicting? Is it much less? We see quite a bit of enthusiasm by the investigators that are open, there are a few, but they're really screening it. However, we don't have enough patients to say. Maybe Brian wants to add some more comments about the interim -- the nature of the interim.

Brian Schwartz

Joel, our anticipation is at the interim, we will clear off the completion of accrual. But the timing, as Paolo said, is -- we'll have much better clarity on that towards the end of the year.

Joel D. Sendek - Stifel, Nicolaus & Co., Inc., Research Division

So just a couple of clarifications, I don't know if I heard you right. You said it will or will not include efficacy?

Brian Schwartz

So it basically, in terms of efficacy, it will not have a futility look. So it will be purely a efficacy-based look, and no futility analysis will be run. It will be ongoing safety looks, which are at the discretion of the DMC, but no formal futility look at the interim.

Joel D. Sendek - Stifel, Nicolaus & Co., Inc., Research Division

Okay. And then I guess, Paolo, you said 2.5 years to recruit. But, Brian, I think, didn't -- did you say that -- and then Paolo, did you say you would have the interim before that 2.5 years or would it be after?

Paolo Pucci

It will depend on the -- Joel, it will depend on the rate of events. So there are 2 pieces of info for that, right now we can't predict. One is the screen failure rate, okay? And our best assumption so far is 50%. And the second is the rate of which we're going to see events. And we have said something about the statistics of this trial. And that those are the best assumptions we have made. We have made an assumption in terms of time for placebo, which is around about 5 months and we have made an assumption for treatment which is around about 7.5 months. So it's very early days of the trial. The reason why we stay conservative are these. And the other reason is that this is a very novel trial, so it needs focus on execution, particularly early in the trial. The focus ought to be on quality of patients recruited and quality of execution of the trial rather than a mad dash to recruit as fast as possible. So those questions are going to be very much on our mind and it's in our interest definitely to try to make the -- any prediction less conservative because, obviously, the clock is ticking and we don't have infinite capital. And obviously, we watch our capital base as we go about implementing this METIV trial, which is the value-generating opportunity that we can speak of right now until other things emerge from our business. But this is not the time that we can make a better projection. But you can rest assure, we're going to try to beat the conservative timelines. There you can rest assured. But we're going to try to do it sensibly.

Joel D. Sendek - Stifel, Nicolaus & Co., Inc., Research Division

Okay. So with just to be -- just so I understand you correctly, it would seem to me that the interim look would be 2015 or later, it would seem to me.

Paolo Pucci

No, I don't think so. So the trial could be from the recruited in a conservative hypothesis sometimes in 2015, okay? And depending on what the curve of recruitment is, we could handicap when an interim analysis might occur.

Joel D. Sendek - Stifel, Nicolaus & Co., Inc., Research Division

And that's why -- okay, so that's where you get the potentially 2014?

Paolo Pucci

Yes. But then it depends on the recruitment curve. And to be more specific, Joel, I think one -- the one thing that Brian and I are looking for, and that will give us more color to update you all around these very, very important questions is that the rate at which the sites are initiated. So we look every day at the site initiation curve, and that's the key measure that we look at until early this fall. And then, we look secondarily at how the screening is going in -- at these sites. So we hope to have the bulk of the sites initiated by fall.

Operator

Our next question comes from Adnan Butt from RBC Capital Markets.

Adnan S. Butt - RBC Capital Markets, LLC, Research Division

I have 2. The first question, first question is how do you define progression in the METIV trial?

Brian Schwartz

So the METIV trial has a slight twist, Adnan, and similar to what the sorafenib trial did. So progression will be defined using standard research criteria, however, if the patient's performance status is good and the investigative feel that there may be some form of benefit from the drug, we're not taking patients off the therapy straightaway. So we scan them again 4 weeks later and then we'll remove them from the trial. So very much like the short trial and some of the other HCC trials. The concept is to try and keep patients on therapy even past the formal radiological progression provided clinically there's no deterioration.

Adnan S. Butt - RBC Capital Markets, LLC, Research Division

Okay, that's helpful. And in terms of what KHK needs to do before deciding? Is it any clinical data? Is it a financial decision? What's your thinking in terms of what they might end up doing?

Paolo Pucci

So obviously, the program in the West moved a little bit ahead of the program in Asia. So what Kyowa -- KHK is primarily doing is accumulating that data with a Phase I trial that they need for purpose of regulatory approval eventually of Phase III trial. That then I think is the primary focus of the KHK activities. Obviously, basal cell carcinoma is a very important trial -- is a very important tumor type from the so-called commercial point of view and epidemiological point of view in Asia, and there is quite a bit of interest from Kyowa Hakko Kirin in proceeding. But any announcement will have to come from them. We are very fruitfully working with them, and there is a very active exchange of data and ideas.

Operator

Our next question comes from Chad Messer of Needham & Company.

Chad J. Messer - Needham & Company, LLC, Research Division

And do appreciate the thorough update.

Paolo Pucci

We're started a new cycle. We thought we'd give you a more thorough update of everything.

Chad J. Messer - Needham & Company, LLC, Research Division

Yes. So I understand why you're -- the reasons for the holding back and being conservative about guidance for the HCC trial. But I was wondering if in the meantime while you collect data about screen failures, so if you could help us out a little bit, maybe review your experience with recruitment in Phase II. And how long did it take you to recruit those patients and how many sites were involved? And other than the actual testing from MET, is there anything about your experience in that trial that you think would be different in the pivotal?

Paolo Pucci

Let me give you a few word of differentiation, and then I'll let Brian talk about the experience in Phase II. So when we test the tivantinib in Phase II other single agent, there was the interest that you would expect the one takes effect like that, which was very innovative at that time. So we did not benefit in the recruitment of the Phase II trial by the data that we produced with the Phase II trial. And so there was excitement by some of the more commitment -- committed investigators, some of which are leading, by the way, the Phase III trial. But then, it took some effort to get everybody else onboard. So that's -- there was some excitement then, there is a lot of excitement now. There was some data then, the Phase I data, there is randomized Phase II data now. In addition to that, at that point in time, there were a number of Phase II trials running, which -- and were actively recruiting, which were draining patients very actively from the key sites including those where we were. That is not the case now. There is a lot less competition now that there was back then. So I would not say that the experience in recruiting the Phase II trial is indicative of the experience of recruiting the Phase III. Actually, I would say if you think that the experience in recruiting the Phase II trial as indicative, you would be in this conservative projection that we're giving you now. If you line up all the reason why we should be more optimistic now in projecting out recruitment versus then, then, you'll say, okay, this is a -- this is actually a conservative point of view, Chad. The other thing -- 2 things that are different now is we were searching for those back then and we needed to work very closely with the sites to manage neutrophilia early on with the 360 dose, and that is now out of the way. So this trial has embedded in it the right dose. I think, probably what the Phase II trial told us is when you have the right dose and the right exposure and when the MET status is measured at the time of delivery of therapy, then things line up. So I want to be specific that we are considering 2.5 years to fully recruit at conservative assumptions. I hope I have given you the reason why we consider it conservative, and we will certainly update along the way. So the experience that we had, which is still relevant for this trial so far was around screen failure rate. We saw about 50% of the patients testing at MET high in the 107 patients of the Phase II, and we're taking that assumption. Now obviously, if the screen failure rate grows than we stay conservative. If it decreases, then, we'll update accordingly. And now there are some emerging theories about MET status variation after Nexavar treatment that money become relevant. And maybe I'll let Brian give you a couple of words about what those theories might be, and we should say that those are interesting scientific hypotheses at this point, but they are very young hypothesis.

Brian Schwartz

So maybe just to jump on that and just give you -- give everyone a little bit of color. There's really 3 important factors with tissue. And in this trial we require tissue prior to randomization. So one is the timing of the tissue and what we are finding is that the closer the tissue specimen to the treatment, the higher the prevalence of MET high as we are terming it. In other words, patients who progress on sorafenib and then get a biopsy, there seems to be a higher proportion of patients who are MET positive in patients who have their tissue taken, for example, at the time of surgery. The second part is the timing of the analysis. We've learned a lot from non-small cell lung cancer and other tumor types, and this is -- and in this trial, it's not really a factor because we do the analysis very quickly within 2 weeks of receiving the tissue. And it's very important to try and get the tissue to the lab as quickly as possible, which could also potentially increase the MET positive yield. And the third is the quality of the tissue. The more HCC cells you have in the slide, the better chance you have of getting an accurate assessment of MET. So we've taken a lot of learnings. Our hope is that the screen failure rates in terms of MET positive and MET negative will increase. But we could be wrong, we really just don't know.

Chad J. Messer - Needham & Company, LLC, Research Division

Okay, great. I do appreciate that discussion of all these factors that are involved that you're kind of dealing with here. Just a quick follow-up on the financials. The $15 million milestone, right, so you don't get the cash that's going to be counted against expenses. Does that mean it's showing up on revenue line or is it reducing the R&D line?

Robert J. Weiskopf

So it reduces the -- at the end of the year, we had $33.8 million that we owed related to the Phase III development, so that will just reduce the $33.8 million by $15 million, so that would bring it down to $18.8 million.

Paolo Pucci

So let me say a couple of words about milestones as well. Obviously, with MARQUEE being -- having been stopped at interim analysis, those that were deemed to be first 2 more milestones for MARQUEE, both first 2 more milestones actually for the second line HCC. And the fact that the commercial opportunity for non-small cell was somewhat larger than the commercial opportunity for second-line HCC does not influence the amount of the milestones that will be connected to the process of putting the HCC second -line through as the potential first registration. So the regulatory milestones, the clinical development milestones and down the road the commercial milestones and royalties will not be affected by commercial size of the opportunity. They are in depth, they are related to first tumor, second tumor and so on.

Operator

Our next question comes from Jonathan Eckard of Citi.

Jonathan Eckard - Citigroup Inc, Research Division

With regards to your comment about having the sites open, you hope to have most of them open by the fall. If we look at clinical trials back of -- the site -- the link for the Phase III liver trial hasn't been updated for a while, but it only has 3 sites open. How should we be looking for updates on how the sites? Will you be providing these or should we be looking at that site property?

Brian Schwartz

I think Jon, there's a slight delay. Our colleagues at Daiichi regulatory update it, and is normally between a 30- to 45-day delay in terms of when they put it in until it shows up. I think clinical trial though, will give everybody a very good feel for how the sites are going, but they'll be about a month to 2 months delay in terms of where we are. But it will give a get feel for how we are in terms of the site initiation.

Jonathan Eckard - Citigroup Inc, Research Division

Great. And then, there is -- one of the trials under the CRADA is a randomized combination trial in head and neck tumors with the cetuximab. That trial again on the website, which can be -- not accurate, so as the data for overall response rate could be available during the summer. Do you guys get updates on these trials, because that looked like it could actually readout in that timeframe?

Brian Schwartz

It's a little early. There is an assessment, and I'm sure they'll update it again. In terms of flow, we're anticipating by the end of this year a readout in the -- and this is what the information we're currently being given would be in the prostate cancer trial, the multiple myeloma trial, and it already passed the first stage of the breast cancer trial, so the second stage of breast cancer trial. Those are the 3 we're anticipating first. The head and neck, there maybe a look -- there is a look this year some time, but we're not anticipating any real data from that at this point -- this year, most probably next year.

Paolo Pucci

And as far as how we get updated, there are calls every so often with the representatives of the NIH where the status of the trial gets reviewed, also because we need to provide them plan to provide for drug for each of these trials. So we need to know what the status is, so that we can plan.

Jonathan Eckard - Citigroup Inc, Research Division

Great. And if I could just ask one more quick question. Brian, what would be the approximate follow-up period at the ASCO meetings for the colorectal trial?

Brian Schwartz

Well, when we did our cut, it was an October cut, and we're just running the survival analysis now, so it's an extra 6 months. And the last patient was enrolled in February '12, so about a year follow-up from the last -- just over a year follow-up from the last patient.

Operator

Our next question comes from Reni Benjamin of Burrill.

Reni J. Benjamin - Burrill & Company

Just a couple of questions for me. Can you just remind be of the statistical plan regarding the METIV trial, what's the power, what's the difference in overall survival in PFS you're looking for? And is there an adjudicating body here that's reviewing the results?

Brian Schwartz

It's an overall survival trial. We are doing independent radiological reviews as well, but it's an overall survival trial. The target hazard ratio is 0.65, and it's 90% power and with a P-value of 0.05 when we determined the sample size. So those were the statistical assumptions both in -- and as Paolo mentioned earlier, 5 to 7.5 months in terms of overall survival as the treatment versus a placebo arm.

Reni J. Benjamin - Burrill & Company

Got it, okay. And when we talk about the MET expression, can you just remind me how do you define the high versus low expressors and how did you come to that definition?

Brian Schwartz

So basically it all started from the MetMAb data and then we bolt on it moving forward. So it's 50% of the tumor cells staining 2 plus or greater is our cutoff point for MET positive, which is a pretty standard IHC cutoff point that was used by MetMAb and used by us in the Phase II HCC trial. So that's pretty much how we came up with that number in terms of determining MET high for the trial.

Reni J. Benjamin - Burrill & Company

And based on your experience in the Phase II HCC trial and the factors that you just reviewed with us including the timing of the analysis and the quality of the tissue, how confident, I guess, do you feel that all those learnings are being applied in the Phase III trial? Or is there anything that you can do to make it even tighter?

Brian Schwartz

I think in terms of MET positive, we are very confident. Are we at the appropriate lower level? So in other words, is 50% 1 plus just as good as 50% 2 plus? That we are learning in future trials. But in terms of 50% of the cells 2 plus or greater, we feel very confident in that data. Going lower down, we need more patient numbers and we need additional trials to determine that.

Reni J. Benjamin - Burrill & Company

Okay. And just switching gears real quick to the MARQUEE trial, what types of subset data are you guys interested in looking at and how might that analysis impact the ongoing HCC trial if at all?

Paolo Pucci

So if at all, it's probably the best chosen word. If at all. Different tumor types, different settings, one single agent and one combination with the potential crosstalk; and more importantly, one stratified by the histology, one stratified by molecular signal, if at all. We are looking, as we said, at all of the analysis that help us understand the subgroups. We are going to be looking at the histological subgroups, the molecular subgroups, and where possible, obviously, and where we have quality data because, as Brian said, the testing sometimes gives you quality data. The testing of the MET status, and sometimes it gives you data that is less reliable. We also are going to look at the other 3 trials, the ATTENTION and the Phase IIs. And then as that data comes in, we might perform additional analysis at a later date also of the MARQUEE trial. The most important ongoing trial next to METIV is actually the ATTENTION trial. The ATTENTION trial, and as I said, though drug exposure is not something that, in non-small cell we have identified as a secondary endpoint or anything of that nature. It is something that we're going to be looking for once we pull MARQUEE with the rest of the data in non-small cell. But it's likely going to be relevant for non-small cell, much less for HCC, if at all.

Reni J. Benjamin - Burrill & Company

Got it. And just switching gears to ATTENTION. Do we have a sense as to how many patients have re-consented? And then, I guess, what the new statistical plan is for the -- since you have a decreased patient population?

Paolo Pucci

Well, I mean, we are really not at liberty to discuss this level of detail on behalf of Kyowa Hakko Kirin. We have some indication of that, obviously. But it's a Kyowa Hakko Kirin trial, and we are not in a position to disclose those level of details. As far as the statistical plan, Brian, it was intended to be a registration trial, so there's very little room to maneuver around the statistical plan. But was -- they had a certain statistical plan agreed with the PMDA and it was part of a registration package, and that's the plan. Don't be confused, please, by the fact that I discuss for colorectal that we reduced the sample size but we did not really adjust statistical plan to it. The reality is for colorectal that this was intended to be as a Cigna-generating trial, and it was difficult for us to envisage given the changes in front and second and third line therapy to bring that data to Phase III. So we're going to the change the plan if necessary. And obviously, as we perform the analysis, we're going to take that into account. But during the Cigna-generation for colorectal. For ATTENTION, it's a registration trial. It was intended to be a registration trial. Will it ever become one? That we shall see in the future.

Reni J. Benjamin - Burrill & Company

Okay. And just one last question regarding the FGFR inhibitor. Can you just remind us what types of tumors over-express FGFR2 and what should be targets of clinical development going forward?

Brian Schwartz

I think we're trying to explore a biomarket-driven type. But I think if you look at the competitive intelligence and you look at some of our internal data, we will be targeting sort of gastric, ovarian, uterine, endometrial, as part of the initial tumors to go off. But we really looking for more of the biology rather than a specific tumor as our primary focus.

Paolo Pucci

And we are looking also on a number of combinations. We're not going to give a lot more detail now because it's a competitive space, and we think we have some ideas to compete effectively, and if the data smothered us quickly. But we had to protect some of our hypothesis. It's a very competitive space. There is AstraZeneca as a front runner with a Phase II program, and we intend to catch up if we can. But the data needs to inform us. We have 2 U.S. sites fully opened for some time, very effectively recruiting. Those are sites that are experts in that pathway and some of the best informed about FGFR, so we are well set. I think we're well set for this. And we spent a lot of time refining this candidate, because this was pretty much where we put all the spare resources we had from the Daiichi Sankyo discovery collaboration. So we are counting on it.

Operator

[Operator Instructions] Our next question comes from Jason Zhang of Edison Investment Research.

Jason Zhang - Edison Investment Research Limited

So, question on the Phase III HCC trial. I'm not sure whether you have included ratings in Asia into the trial. Could that speed up the trial, if you knew? And the reason -- if you don't have that, what's the reason? Is because of business decision or it's because of anything different in terms of patient? I remember one of the Japanese trial in a non-small cell lung cancer you said have metabolism of the drug may be different and the cause the drug to be used at a different dose. Would that be the reason for not including Asian patient in this trial?

Paolo Pucci

Thank you for the question. There's a number of reasons why we are where we are. The METIV trial does not recruit patients in Asia. The reason is the way that the partnerships are set up, the West -- we are partner with Daiichi and we had already faced today on the Western population. And together with Daiichi Sankyo, we decided to go forward quickly into Phase III. We see an opportunity is not going to be there forever. We want to capture it timely. Kyowa Hakko Kirin was in the process of developing HCC data body of evidence in Asia, but they did not possess the data that allow them to timely enter in this trial. So those were the circumstances that have led to METIV and that might lead to an effort by the Kyowa Hakko Kirin in HCC in Asia. It's also true that the mixing of Western and Asian population has created issues in the past. And it's probably -- it's true. It's demonstrated by some trials which failed, and it's also demonstrated by the Nexavar program, which succeeded and the Nexavar program was a 3-piece program, in that it included a Western trial and Asian trial and a specific -- more specific registration Chinese trial. So all these reasons would go into the circumstances we are in right now with the METIV trial. And will -- Kyowa Hakko Kirin will update, and we will update consequentially about what is going to be done in HCC in Japan, China, South Korea and Taiwan.

Jason Zhang - Edison Investment Research Limited

Okay, very helpful. And I'll also ask, Brian, what is the turnaround spend, the turnaround time for the MET analysis? For example, you've got a patient, you've got a sample, you've got an analysis, when can you get the result to show whether the patient will be eligible for accrual? What is the turnaround, is it 1 month, 2 weeks, in 4 weeks?

Brian Schwartz

No. We're trying to do it all within a week. The longest period is actually just a standard tissue in. Once it gets to the lab, it's between 2 and 5 days before they get the answer.

Paolo Pucci

Yes. Based on our past learnings and the accumulating scientific hypothesis, we are trying to shorten as much as possible the period of time that goes between testing the patients to the moment of giving therapy to that patient. That's the most part of the effort in the METIV trial. And that's why this trial needs to really be conducted very carefully. As we get more confident about the process and procedure, then we will accelerate the process. But at this point in time, we are at the point of testing all these policies and procedures for the trial.

Jason Zhang - Edison Investment Research Limited

Okay. Can you also give us a little more update about 621 and 736? And how much of your R&D spend is on these 2 programs material or not material?

Paolo Pucci

No. Not material. The answer -- the spend on -- the projected spend on Eg5 and -- is not going to be material for our R&D budget for some time. And in the year 2013, the projected spend for the B-RAF inhibitor is also not particularly material. The first of the 2 compounds completed Phase I data some time ago. And we said that we were going to wait to see if the class of drugs will be revived by both the results specifically from the programs that some competitors are running, which are very extensive Phase II programs. And for B-RAF, we have said that we need to conclude the Phase I, look at the competitive landscape and also look at whether or not we had the optimal formulation for that drug. That's the status for all. They will be useful assets. I mean, we are going to look at all 3 data sets hopefully soon, late this year, early next. We hope that we can pick the best one to bring forward as a fully-owned drug if our capital allows us to do that, and that we hope to partner 1 or both of the other 2 that might not go as fully-owned forward.

Operator

Our final question comes from Thomas Yip with MLV & Co.

Thomas Yip - MLV & Co LLC, Research Division

Just 2 very quick ones. If -- we think that the emerging evidence is that MET-high patients will benefit the most from tivantinib. Are the NIH CRADA trials are currently screening for MET-high patients? And if not, would it be measured as one of biomarkers of the trials?

Brian Schwartz

In all the NIH trials, so far, except potentially some of the new ones that are going to start, we are measuring -- we're collecting tissue and measuring MET status, but it's not a prerequisite for entry at this point in time. Some of the newer trials on the books, which we can't really talk about, will only include MET positive. The current ones running include all, and then there is the evaluation of tissue.

Paolo Pucci

The caveat to that is the tissue might be taken well before treatment and therefore might represent the status of the patient at that point in time, but not necessarily the status of the patient at that point in time of treatment. So this is part of the evolving process of developing personalized medicine, not more than that.

Thomas Yip - MLV & Co LLC, Research Division

Okay. Actually that leads into my second question. So is it possible for a patient to be enrolled with -- at the beginning of the trial with MET-high status, will the patient status go to MET low or will the status stay the same?

Brian Schwartz

We're assuming that the status most probably will stay the same. However, our colleagues in Japan are doing an extensive paired biopsy evaluation in some of the other trials. But our assumption is that it stays the same, at least, for a period of time. And obviously, in HCC their assumption is more valid than elsewhere because the length of the PFS and overall survival given in that tumor type is shorter than it would be, for example, in non-small cell lung cancer or other tumor types. So our assumption is probably more valid in those circumstances than in other circumstances. But more will need to be learned through our data and other companies' data, as it comes.

Operator

Thank you. I'll hand the call back to Mr. William Boni for closing remarks.

William B. Boni

Thank you very much, everyone, for listening to the year-end call. We look forward to providing you with updates throughout the year. Take care.

Operator

Thank you. Ladies and gentlemen, this concludes the conference for today. You may all disconnect, and have a wonderful day.

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