Cell Therapeutics Management Discusses Q1 2013 Results - Earnings Call Transcript

May. 2.13 | About: CTI BioPharma (CTIC)

Cell Therapeutics (NASDAQ:CTIC)

Q1 2013 Earnings Call

May 02, 2013 4:30 pm ET

Executives

Monique M. Greer - Senior Vice President of Corporate Communications and Investor Relations

James A. Bianco - Principal Founder, Chief Executive Officer, President and Executive Director

Corey Masten-Legge

Steven E. Benner - Chief Medical Officer and Executive Vice President

Analysts

Reni J. Benjamin - Burrill & Company, Research Division

Robert Cummins Hazlett - Roth Capital Partners, LLC, Research Division

Operator

Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Cell Therapeutics Q1 2013 Financial Results Conference Call. [Operator Instructions] This conference is being recorded today, May 2, 2013. I would now like to turn the conference over to Monique Greer, Senior Vice President of Investor Relations. Please go ahead.

Monique M. Greer

Good afternoon, everyone, and thank you for joining us today for our first quarter 2013 financial results conference call. Following formal remarks by management, the conference call will be open for questions.

With me today are Jim Bianco, President and Chief Executive Officer; and Steven Benner, Chief Medical Officer; Matt Plunkett, Executive Vice President of Corporate Development; and Lou Bianco, Executive Vice President of Finance, will be available during Q&A.

A press release was issued after market close today, a copy of which can be found on the homepage, in the Investor section of our website at celltherapeutics.com.

The agenda for the call is as follows: Jim will begin with a brief overview of the first quarter results; Steve will follow with an update on our development pipeline; and then Jim will close and open up the call for questions.

Before we begin, please note that during the course of the call, we will be making forward-looking statements based on current expectations. 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 our quarterly report on Form 10-Q for the quarter ended March 31, 2013, and in the company's other periodic reports and filings with the Securities and Exchange Commission.

I will now turn the call over to Jim.

James A. Bianco

Thank you, Monique, and good afternoon, everyone. The first quarter of 2013 was a busy period for the company, as we continue to focus on 3 straightforward value drivers for CTI.

Firstly, increased use and adoption of Pixuvri in countries in the European Union, where we have market access, pending the completion of the reimbursement process. Relapsed or refractory aggressive B-cell non-Hodgkin's lymphoma has been largely an ignored disease with no standard of care. Pixuvri is the first approved therapy in the European Union for the treatment of patients with this disease. We're in the early phase of our commercial experience and continue to make important progress with regards to reimbursement in the major market countries, which I'll cover in more detail in a few minutes.

Secondly, we want to build value for development of our late-stage product pipeline, with emphasis on Pacritinib. As you may recall, Pacritinib is our oral, once-daily, JAK2/FLT3 inhibitor that is currently in the Phase III development. Steve will update you on this important program later in the call.

Thirdly, we want to aim to secure additional operating capital through strategic partnerships while managing our expenses. As you know, one of our goals for this year is to secure a partnership for Pacritinib. We anticipate that such a partnership could provide us with non-dilutive capital and external validation for the program. We believe we have a unique asset in Pacritinib and we're encouraged by the strong interest so far. I'm pleased to report that we are currently engaged in diligence under confidentiality with a number of global biopharmaceutical companies.

In addition, in March, we secured a $15 million credit facility from Hercules Technology Growth Capital, of which, $10 million was funded at closing.

At the end of the day, our intent is to evaluate those partnerships and transactions that we believe are in the best interest of our company, our customers and our shareholders.

Now I'll briefly review our financials for the quarter the ended March 31, 2013. Net product sales for the first quarter of 2013 were $1.1 million, and was solely attributable to net product sales of Pixuvri, primarily in Germany. We sell Pixuvri to healthcare providers and through a limited number of wholesale distributors in the EU.

In total, operating cost and expenses or OpEx for the first quarter of 2013 were $19.6 million, including noncash stock-based compensation of $2.4 million. Total OpEx was essentially flat, with Q4 2012 OpEx of $18.9 million.

We reported a net loss of $19.4 million or $0.18 per share, and that compared to a net loss of $17.4 million or $0.43 per share for the same period in 2012.

We are reaffirming our net expense guidance for this year. Net loss from operations is expected to be approximately $60 million to $65 million, excluding any noncash stock-based compensation expense.

Turning to our balance sheet. We ended the first quarter with cash and cash equivalents of $44.3 million compared to $50.4 million at the end of 2012, and we currently have 112.6 million common shares outstanding.

With that, I'll move on to our commercial progress during the quarter.

As we mentioned during our fourth quarter call, we began to establish a European commercial operation on a country-by-country basis in order to be ready for Pixuvri commercial launch starting in January of this year. We now have a sales presence in 8 countries in the EU, including the Nordic countries, the Netherlands, Austria, Germany and the U.K. These countries are referred to as free-market access countries, where a drug is reimbursed at our market price for 12 months from hospital funds or country sick fund until final pricing negotiations are completed.

In general, even though reimbursement discussions should have no bearing on the reimbursement of Pixuvri or a physician's ability to prescribe this new treatment, many of those who might purchase the product rarely await the official outcome of the reimbursement process before they really begin to utilize the drug in their practice.

This is what we found to be the case in certain countries. Germany has certainly been the exception, representing the vast majority of Pixuvri Q1 net product sales and is consistent with other oncology product launches in the EU.

In March, we received preliminary benefit assessment from Germany's Institute for Quality and Efficiency in Health Care, or so-called IQWiG, which concluded that no additional benefit could be determined for Pixuvri because there is no standard of care, with limited comparative data within the guidelines that IQWiG has to follow. Now the Federal Joint Committee, known as the G-BA, is the ultimate decision-maker in German healthcare. And it consults with IQWiG to assess patient-related benefit. And G-BA is really focused on evidence-based medicine and patient outcomes in terms of morbidity, mortality and quality of life.

In Germany, when an agent is the first drug-approved in an indication, IQWiG is really restricted from determining benefit. So it's common to see preliminary assessments from IQWiG among first-to-market agents in a given indication that do not reflect ultimately the opinion of G-BA. G-BA is expected to decide on the innovation score and the additional benefit versus the self-assigned comparative therapies late in the second quarter of 2013.

In April, we received an appraisal consultation document, or ACD, from U.K.'s National Institute for Health and Care Excellence or NICE. The draft guidance did not recommend funding of Pixuvri by the U.K.'s National Health Service due to insufficient evidence that shows Pixuvri is more cost-effective than current NHS treatments and does not represent good value for the money for the health service. And NICE requested a public comment period by May 1 on the preliminary recommendation. This document, as you may know, is not their final guidance and the recommendation may change prior to the final appraisal determination or FAD. We have strong support amongst the U.K. lymphoma experts and the data in the labeled population of patients with aggressive B-cell NHL who failed 2 or 3 prior lines of therapy, demonstrates that Pixuvri is a cost-effective therapy for this end-of-life population, and we look forward to our next meeting with NICE, which we know will take place in mid-May.

We believe Pixuvri offers patients suffering from relapsed aggressive NHL a safe and effective therapy where there currently is no approved alternative, and we'll continue to work with the German and U.K. regulatory bodies to ensure a successful outcome, as we navigate the reimbursement process in each country.

Although it is early in the launch, in general, we're pleased with the interest and receptivity of Pixuvri by healthcare providers and certainly, by the key lymphoma opinion leaders. We're currently focused on educating physicians on the unmet medical need, building brand awareness of Pixuvri as the third and fourth-line treatment option amongst physicians in countries where Pixuvri is currently available.

Remember, in the randomized controlled pivotal study known as EXTEND Phase III trial, our labeled population consists of a subgroup of 34 blind patients with B-cell NHL. In that group, the overall response rate was 48% of patients at the end of treatment, compared to 12.2% in the comparator group. Importantly, 28% achieved a complete remission or an unconfirmed complete remission, compared to only 4.1% in the comparator arm. There was a 50% reduction in the risk of death or disease progression, and the median overall survival for those that receive Pixuvri was 13.9 months, compared to 7.8 months with physicians' choice chemotherapy. Pixuvri had predictable and manageable toxicities when administered at the proposed dosage schedule.

Broader intensive treatment results from the EXTEND study, as you may recall, were published in Lancet Oncology in last May.

So based on Pixuvri's efficacy and safety profile and the clear unmet need, as you know, the European Commission granted us conditional marketing authorization for Pixuvri. Independent third-party market research among 250 lymphoma physicians in the EU 5 major market countries demonstrate that treating physicians favorably assess the Pixuvri product profile established in the EXTEND trial noting it will allow them to offer salvage therapy as compared to palliation of patient symptoms. And through our medical education programs and field activity with our medical science liaisons and sales force, we're able to highlight the unmet medical need that Pixuvri can fulfill, while sharing the results of the EXTEND study with healthcare providers. Our initial launch experience suggests that the market for Pixuvri is highly promotionally sensitive, and our medical sales organization thus continues to engage and build relationships with key hematology lymphoma opinion leaders through one-on-one meetings, scientific advisory boards, medical symposia and investigator-sponsored studies and publications.

So at this time, I'd like to turn the call over to Steve, who can update you on our development programs.

Corey Masten-Legge

Thank you, Jim. Based on Pixuvri's safety and efficacy profile and the clear unmet need in aggressive B-cell non-Hodgkin's lymphoma, the European Commission granted conditional marketing approval for Pixuvri. As we previously described, in connection with the approval and an agreement with the European Commission, we're conducting a post-marketing commitment trial, known as the PIX-R or PIX306 study. This trial is intended to support the conversion of our EU conditional approval to a full approval.

Now I'd like to turn to our development program evaluating Pacritinib. For those of you who may not be familiar with this product candidate, Pacritinib is an oral, once-daily, JAK2/FLT3 inhibitor that inhibits 2 important activating mutations, JAK2 and FLT3. The JAK pathway is important in many biological processes, including the regulation of immune function and the formation and development of blood cells. JAK2 is implicated in a spectrum of blood cancers, such as myeloproliferative neoplasms or MPNs and leukemia. FLT3 is a commonly mutated gene found in patients with acute myeloid leukemia or AML.

JAK2 inhibitors have been shown to be effective in treating myelofibrosis and have an established regulatory approval pathway which lowers the risk of development. MPNs are a group of diseases in which specific types of blood cells are overproduced in the body and disrupt their normal functioning. It's a chronic, malignant bone marrow disorder that triggers an inflammatory response resulting in fibrosis within the bone marrow and limiting its ability to produce blood cells.

Splenomegaly and organomegaly are consequences of the disease process. The spleen size can grow up to 10 times the normal size, causing great discomfort. And at this stage, the disease is termed myelofibrosis. In myelofibrosis, myeloid suppression, particularly thrombocytopenia, a relative decrease in platelets in the blood, is both a consequence of the disease and has emerged as a limiting treatment-related side effect of JAK1/JAK2 inhibitors.

Where a normal platelet count in adults ranges from 150,000 to 450,000 platelets per microliter of blood, thrombocytopenia refers to platelet counts lower than 150,000.

As the myelofibrosis progresses, the platelet production decreases and thrombocytopenia develops, identifying a higher risk population than patients with myelofibrosis who have a normal platelet count.

Of the estimated 30,000 people living with myelofibrosis in the United States, based on a peer-reviewed publication, between 25% to 30% of the patients are thrombocytopenic with platelet counts below 150,000. Although we believe Pacritinib will benefit all patients with myelofibrosis, we believe the benefit will be clearly demonstrated in those patients with low platelet counts. Accordingly, we believe Pacritinib may offer an advantage over other JAK inhibitors through the effective treatment of symptoms, while having less treatment-emergent, drug-related, thrombocytopenia and anemia.

Pacritinib has been studied in 2 Phase II trials, with a total of 65 myelofibrosis patients. In these trials, 30% to 74% improvement in each of the 7 components of the myelofibrosis symptom assessment score was observed relative to baseline. Among the valuable patients, approximately 1/3 achieved a 35% or greater reduction in spleen volume, measured by MRI. We believe these are effects that are independent of baseline platelet count. Pacritinib is different from other JAK2 inhibitors because it appears to be associated with less myeloid suppression and does not appear to induce clinically relevant degrees of treatment-emergent thrombocytopenia. Importantly, in the 2 Phase II trials of Pacritinib, comparable rates of reduction in splenomegaly were observed among patients with platelet counts of less than 50,000; 50,000 to 100,000; and greater than 100,000 of baseline. The most common adverse events were diarrhea and nausea, which we now know we can manage with proactive use of anti-diarrheal and anti-nausea medications. With early intervention at the first sign of GI symptoms, these side effects are readily manageable and resolved with time.

We believe Pacritinib addresses an unmet need, particularly for patients living with myelofibrosis who face treatment-emergent thrombocytopenia and anemia, a serious consequence of certain therapies and of the disease. We believe that Pacritinib may offer patients an effective therapy with a safety profile that could allow for longer-term management of their disease.

We recently initiated the first of 2 planned Phase III trials in patients with myelofibrosis. PERSIST-1 is a multicenter randomized controlled trial comparing the efficacy and safety of Pacritinib with that of best available therapy, excluding JAK inhibitors, in patients with myelofibrosis. The primary endpoint will be the percentage of patients achieving a 35% or greater reduction in spleen volume measured by MRI at 24 weeks of treatment. A total of 270 eligible patients are planned to be enrolled at approximately 90 clinical sites in Europe, Australia, Russia and the United States.

We continue to open additional sites in these countries. I can tell you that the sites are enthusiastic about the trial and are identifying patients as we speak.

We anticipate fully enrolling the trial within 12 to 14 months from its initiation in January 2013.

The second Phase III clinical trial, PERSIST-2, is currently being planned to evaluate Pacritinib compared to best available therapy, including JAK inhibitors, in patients with myelofibrosis whose platelet counts are less than 100,000.

This trial is expected to initiate in the second half of 2013, and we expect will have the same primary endpoint as PERSIST-1. Interest in this study among U.S. investigators continues to be very encouraging.

In addition to myelofibrosis, we have encouraging clinical data in lymphoma and preclinical data in FLT3-resistant AML. From an intellectual property perspective, Pacritinib has composition of nano protection through 2026, and orphan drug designation in both the U.S. and Europe for myelofibrosis.

Finally, although our primary focus is on blood cancers, we continue to work with our other pipeline candidates targeting hematologic and solid tumors, including tosedostat; OPAXIO, which is paclitaxel poliglumex; and brostallicin, through a cooperative group and investigator-sponsored trials. We plan to report on results from several investigator-sponsored trials, as well as Pixuvri and Pacritinib at upcoming scientific meetings.

I will now turn the call back over to Jim.

James A. Bianco

Thanks, Steve. As we look forward, we continue to execute on our 2013 operating plan. We have an important opportunity to serve patients and their caregivers and to ensure rapid and widespread access to new, less toxic therapies that we believe will make a difference. We're off to a productive start in 2013, and look forward to what is shaping up to be a busy and productive year for the company.

So with that, I would like to open the call for questions. I'll have the operator put us into question mode.

Question-and-Answer Session

Operator

[Operator Instructions] And our first question is from the line of Reni Benjamin with Burrill & Company.

Reni J. Benjamin - Burrill & Company, Research Division

Just a couple of quick ones. One regarding the PIX306 study, you mentioned that it was ongoing, but could you give us any sort of a status update or update as to when you think enrollment or data might be available?

James A. Bianco

Steve, you want to take that?

Steven E. Benner

Sure. The study is ongoing and initially, we had started with only centers in the United States. We're now in the process of expanding to Europe as well. We've needed to engage a new CRO. So that's given us a little bit of a delay. But we anticipate, in the second half of this year, we'll have European sites. With the interest we're seeing with Pixantrone in Europe, we expect that to have a significant boost on accrual. So we're still targeting the same initial timeline, as was initially presented.

Reni J. Benjamin - Burrill & Company, Research Division

And just -- once you go to Europe, since it's approved in Europe, do you expect that it could potentially interfere with sales? Or how do you control for that?

Steven E. Benner

My expectation would be that, that would not be the case. Here, it's important for clinicians to gain experience and have access to treat their patients with this drug. Participation on a critical trial certainly enhances that. So we think this would actually be a benefit for the program overall in Europe.

James A. Bianco

Yes, and our commercial team reflects that same sentiment.

Reni J. Benjamin - Burrill & Company, Research Division

Okay. And just, I guess, related to that, you mentioned that the $1.1 million is coming from Germany. Is that all private payers paying out of their own pocket? Or is there some other system that's established? And could that occur with any of the other countries that are still trying to determine price?

James A. Bianco

The answer is yes it can. It is mostly-- payers in Germany. It gets listed like on a formulary in -- so hospitals, essentially. We mentioned this on one of the prior calls, about 178 of 200 that we went to requested to payers to have this listed as a pharmaceutical available to them, and then it gets reimbursed on our "at market" price for 12 months while we're in the process of negotiations with the various health technical agencies. In the Netherlands, you have to be -- now starting in 2013, you have to be on an add-on list. That process is in progress in terms of getting that going, that would help, obviously, central funding through the sick funds for the Netherlands. Similar with the Nordics, the U.K. now centralized their cancer drug fund. That is the primary mechanism for getting reimbursement during the period of price negotiations with NICE, or during the review period with NICE. So you tend to see, of the free market access countries, Germany and Austria being certainly the easiest, the most robust, that would be followed by the Netherlands, the Nordics, and then probably last in that queue would be the U.K., while you're finishing the various discussions that you're having with regards to reimbursement.

Reni J. Benjamin - Burrill & Company, Research Division

Okay. And just one last question on Pixuvri. By the end of year, you mentioned you had about 8 countries on board about now -- right now. By the end of the year, how many countries do you feel will be -- will have Pixuvri and ready to sell or be selling?

James A. Bianco

Right. So we also have, in addition to those 8 EU countries, we have a distributor in Turkey that is selling product. We formed a relationship with a distributor in Israel. As you know, one of our stated objectives this year was to find a more global channel partner for Eastern Europe, Russia, South America and/or the PacRim. And that's how the drug would be made available to all of those other nationalities. It wouldn't be through a CTI effort. It would be through one of our partner's effort. And as you know, the transfer pricing for an approved product is fairly favorable to the company.

Reni J. Benjamin - Burrill & Company, Research Division

Got it. And just one question with Pacritinib. For PERSIST-1, you mentioned best available care excluding JAKs. Should we then be thinking the majority of the people enrolling in that study will be x U.S.? Or how would they be enrolled here in the U.S.?

Steven E. Benner

You're correct. While we will have a few sites in the U.S., we'll expect that most of the accrual will come from the European Union and Eastern Europe. We also have sites in Australia and New Zealand. What I anticipate is that while we'll be enrolling patients with myelofibrosis, regardless of their baseline platelet count, that we'll get a large number of patients on that trial that present with low platelet counts.

Reni J. Benjamin - Burrill & Company, Research Division

Okay. And I guess, just one final question on Pacritinib. It seems like the management from insight [ph] and when they're talking about Jakafi, you're talking about obviously lower doses of Jakafi being administered to combat those patients or to have the drug administered to those patients who have come in with low hemoglobin or low platelet count. Does that -- how does that -- how do you view that? From a competitive viewpoint, how, if Pacritinib gets onto the market, how do you necessarily start going after those patient -- that patient population?

James A. Bianco

I think, Reni, it's probably best to take it from the discussions that we're having with other third-parties in that perspective. So if you have to lower the dose of a drug because of a side effect related to the product, then obviously, the drug is not going to be as therapeutic as it is in the patient population that they studied in their Phase III trial, which was at full dose. And so we think that a product that doesn't have treatment-emergent myelosuppression would certainly fulfill an unmet need in that thrombocytopenic patient population at a minimum.

Operator

Our next question is from the line of Bert Hazlitt with Roth Capital Partners.

Robert Cummins Hazlett - Roth Capital Partners, LLC, Research Division

I just have a more direct question and maybe you've addressed it, and my apologies if you've addressed it directly. But I think the prior line of questioning was added as well. But just the revenue line for the remainder of the year, given the pushes and pulls with the reimbursement agencies, NICE, and the German agency, how should we think about that? Again, there's a -- I could go either way. I could make the argument that, that should increase somewhat rapidly. But at the same time, you can make the argument that it really won't gain much traction until you hear final decisions from Germany and the U.K. Just a little perspective on that throughout the remainder of the year for Pixuvri?

James A. Bianco

I think you're right on point and that's true for a number of products that have a market of this size, that until you get central reimbursement, that you're not going to see kind of an aggressive uptake in the marketplace. And that's why we have been reluctant to provide any guidance in terms of what revenues would look like this year. We're pleased with what's happening in Germany and Austria. We think, in the next quarter, we'll start to see the Nordics and the Netherlands come online. And then the U.K. shortly after that. Clearly, if we have a favorable ruling from G-BA this quarter, that obviously would have a positive impact on the uptake. And similarly, NICE takes a little bit longer. But any of these bodies that give you a favorable outcome with respect to opening discussions for price negotiations, we think, would be a catalyst for additional selling activity.

So our goal is, again, to have the sales force itself and our marketing expenses be paid for by the revenues that they generate this year at a minimum, if not have a positive net product margin contribution. And that's still our goal. And I think that-- thinks that, that is certainly accomplishable in 2013. Obviously, if we get through all of these discussions with -- and have 2 or more of them provide pricing for us, I mean, G-BA and NICE, IFA and G-BA, et cetera, then the rest of the countries, including the EU, will reference off of the 2 lower approval price. And that's -- that also then makes it available through their funds and through their country funds on an automatic basis. It's not as regimented in terms of having applied for a reimbursement on a country-by-country basis at that point.

Robert Cummins Hazlett - Roth Capital Partners, LLC, Research Division

Just with regard to NICE, Jim, if you could just go through the -- I believe you mentioned this earlier in the call, but if you could go through what are the specific events that will transpire in terms of from here on out with that process?

James A. Bianco

So I mean, everyone's obviously been watching the Jakavi, not Jakafi, Jakavi, as it's called in Europe, and the Novartis and the NICE deliberations. So as you know, as we said in the call, that we did not get a favorable ruling with respect -- on the draft appraisal consultation document, saying that it wasn't cost-effective for the health system. We now have -- they did provide us some opening to go back with them with some additional analysis and information, as well as this public hearing period, which happens mid-month. After that, they may choose to file what's called a draft final appraisal document or -- and like they did with Novartis. And essentially, what that's doing is allowing the companies, or the manufacturers, time to negotiate with the Department of Health with what is -- what would ultimately be considered to be a cost-effective price of the product in the U.K. And that price that you ultimately negotiate with them is not public. And so it doesn't affect your reference pricing. But as you've seen from NICE on all of the last oncology products that have come through the committee, eventually, they come back once they had a price negotiation that they are comfortable with, i.e., they feel is cost-effective, they then will come out with another appraisal document that says that in the following subset of patients, NICE now recommends to the NHS that they reimburse it because it is cost-effective. And essentially, that's just the process by which companies interface with that panel and their experts in an effort -- by the health system to control its cost. So after the next -- after this ACD meeting in May, you'll likely see a draft final AD, and then ultimately, a final appraisal document, which is the final ruling. And that probably won't happen until the summer, just given the timeline that we're currently on. And that is consistent with every other product that has come up before it. I mean, we've seen some where they're really not cost-effective and they -- it may take 18 or 24 months before NICE -- they finally reach a point where the price is acceptable to the National Health Service.

Robert Cummins Hazlett - Roth Capital Partners, LLC, Research Division

And in terms of your confidence to be able to ultimately work out a price that's amenable to NICE, you certainly don't want to get into a public negotiation of anything like that. But in terms of your confidence in your ability to be able to work something out, can you characterize that at this point?

James A. Bianco

Yes. I think, conservatively, that we will be able to do that. I think, if you look at the public information, in the ACD responses that just came out from NICE or came out a short while ago, they say that the cost-effective ratio, while they didn't accept the GBP 28,000 that we proposed, they also rejected the GBP 60,000 that their panel proposed. So it lies somewhere between that number. And if you're familiar with their process, they have the first threshold, if you don't have end-of-life, has to -- the price has to lie somewhere between GBP 20,000 and GBP 30,000 to be considered cost-effective by the NHS. And so we're not far off from where their threshold is, which suggests that you're not -- you will have a discount, but that's still to be determined.

Operator

At this time, there are no further questions in queue. I'd like to turn the call back over to Dr. Bianco for closing remarks.

James A. Bianco

Sounds good. So in summary, we're really excited about the products for helping patients and building value for our shareholders. We believe we're well-positioned to drive use and adoption of Pixuvri in third and fourth-line aggressive B-cell NHL in the EU. Ultimately, with a positive net product margin contribution, assuming that we're able to secure reimbursement in the major markets in the second half of 2013. We're on track to complete patient accrual in the PERSIST-1 Phase III trial of Pacritinib, early 2014, and initiate the second Phase III trial for Pacritinib in the second half of this year.

Finally, we remain opportunistically focused on business development activities, including securing non-equity-based capital through a partnership for Pacritinib, in addition to establishing channel partners for Pixuvri. We're focused on delivering our commitment to patients through the acquisition, development and commercialization of less toxic, more effective ways to treat and cure cancer. We're excited about the prospects for helping patients and building shareholder value. And as always, we thank you for your support of our mission. And that's -- operator, that's the end of the call.

Operator

Thank you, sir. Ladies and gentlemen, that does conclude our conference for today. If you'd like to listen to a replay of today's conference, please dial (0800) 358-3474 or in the U.S., (303) 590-3030 and enter the access code 4615670. We'd like to thank you for your participation and you may now disconnect.

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