Coronado Biosciences' CEO Discusses Q1 2013 Results - Earnings Call Transcript

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Coronado Biosciences, Inc. (CNDO) Q1 2013 Earnings Call May 8, 2013 8:30 AM ET

Executives

Harlan Weisman – Chief Executive Officer

Lucy Lu – Executive Vice President & Chief Financial Officer

Noah Beerman – Executive Vice President & Chief Operating Officer

Karin Hehenberger – Executive Vice President & Chief Medical Officer

Dale Ritter – Senior Vice President, Finance & Chief Accounting Officer

Analysts

Matthew – Piper Jaffray

Salveen Richter – Canaccord Genuity

[Fasin Ahmed] – Bank of America

Megan Dow – MLV & Co.

Christopher Marai – Wedbush Securities

Jay Silverman – BioInvest

Operator

Good day, ladies and gentlemen, and welcome to the Coronado Biosciences Q1 2013 Results Conference Call. (Operator instructions.) As a reminder, today’s conference is being recorded. I would now like to introduce your host for today’s conference call Dr. Lucy Lu, Chief Financial Officer. You may begin.

Lucy Lu

Great, thank you. Good morning, everybody. This is Lucy Lu, CFO for Coronado Biosciences. Thank you and welcome to our Q1 2013 financial results conference call.

Before we begin I’d like just to remind everyone that various remarks that we make on this call will contain forward-looking statements including those regarding the timing of clinical trial initiations, their enrollment and results; potential future clinical trials; the therapeutic and commercial potential of our product candidates and their regulatory pathways; intellectual properties’ position; our manufacturing, supply, and other collaborative agreements; the sufficiency of our cash resources.

Forward-looking statements involve risks and uncertainties that could cause our actual results to differ significantly from those projected. Additional information concerning these risks and uncertainties is contained in the “Risk Factors” section of our Annual Report on Form 10(k) for the year ended December 31, 2012, and in the company’s other filings with the SEC.

With that I’d like to turn the call over to Dr. Harlan Weisman, Chairman and CEO of Coronado Biosciences who will begin the presentation, after which I will provide you with a summary of the financial results for the company. Harlan?

Harlan Weisman

Thank you, Lucy, and thank you all for joining us this morning for Coronado Bioscience’s earnings call to discuss Q1 2013. With me on the call today, in addition to Dr. Lucy Lu is Noah Beerman, our Chief Operating Officer; Dr. Karin Hehenberger, our Chief Medical Officer; and Dale Ritter, our Chief Accounting Officer.

During Q1 2013 Coronado remained focused on driving our clinical programs forward. On April 9th we held an analyst and investor event in New York City with leading clinicians in the field of inflammatory bowel disease, autism, psoriasis, and Type I Diabetes who reviewed TSO’s potential to treat diseases marked by immune disregulation.

On today’s call I’d like to highlight some of the key takeaways from the analyst and investor event and provide a quick update on our clinical trials underway for TSO and CNDO-109. Dr. Lucy Lu will then review our Q1 2013 financials and the recent sale of common stock through our at-the-market sales facilities. Following our prepared remarks we’ll be happy to address any questions you have.

As many of you know, the interest from the medical community to study TSO in a number of autoimmune diseases beyond the company’s sponsored trials in Crohn’s Disease has been really impressive. We’ve received and continue to receive requests and proposals for clinical trials from leading clinicians and researchers around the world. We take these requests very seriously and review each of them in detail.

In many cases, the requests come with funding already identified from leading research organizations, significantly extending the number of new indications we can explore outside of inflammatory bowel disease – indications that were presented by leading experts at our recent Analyst’s Day, including psoriasis, autism, Type I Diabetes as well as multiple sclerosis. After obtaining the results of these studies we’ll consider pursuing larger, company-sponsored trials that could support regulatory approval.

To date, five investigator-sponsored trials are underway and additional studies are planned to start in the second half of 2013 across seven different indications. In order to provide additional clarity on some of the indications being studied, we held an investor event on April 9th with a panel of TSO investigators who discussed the rationale for TSO in their field of expertise.

Throughout the event, a few common themes were addressed by all of the physicians, which I’d like to highlight. First, for the indications reviewed there’s a large medical need. In the case of Type I Diabetes and autism there are few options to choose from. For inflammatory bowel disease and psoriasis there are a number of approved immunosuppressive therapies available but they don’t work for all patients, they can lose their effectiveness over time, and they’ve been associated with serious, sometimes fatal adverse events.

To that point, the second theme relates to safety. For the indications being studied there is a need for safer agents to treat patients. To date, TSO has demonstrated a good safety profile. This has been one of the driving factors that has led physicians and researchers to get involved with the product.

The third theme relates to the hygiene hypothesis. The hygiene hypothesis proposes that autoimmune diseases are increasing in prevalence in developed countries because well-intended efforts to improve hygiene have adversely disturbed the regulation of immune responses, resulting in inappropriate immune attacks on the body’s own tissues. Specifically, our bodies can be thought of as ecosystems that can be damaged by a reduction in the number and variety of organisms including bacteria and parasites that populate the intestinal tract, disrupting the mutually beneficial relationship between the host and these organisms.

This environmental disturbance has resulted in the loss of the immune regulatory processes that normally prevent inappropriate inflammatory responses and the consequence is the rise of autoimmune diseases and immunologic disorders. We believe that TSO restores the immune regulation that was lost when the (inaudible) were eliminated from the human intestinal environment. To the best of my knowledge, TSO is one of the few products being evaluated under an FDA-regulated process that addresses the disturbance of the intestinal ecosystem, which is a common thread among immune disregulated diseases.

It is this concept coupled with TSO’s unique mechanism of action that leads us to believe that it has the potential to show a treatment effect across a number of autoimmune diseases. In addition to these common themes, the panelists also provided details on the clinical trials underway, evaluating TSO in inflammatory bowel disease, Type 1 Diabetes, autism, and psoriasis. If you were unable to attend the event I encourage you to listen to the archived webcast which can be found on the “News and Media” section of our website.

Moving to an update on our clinical trials, as you’ll recall there are currently two company-sponsored Phase II clinical trials underway evaluating TSO for the treatment of Crohn’s Disease: TRUST-I being conducted in the US by Coronado, and TRUST-II being conducted in Europe by our development partner Dr. Falk Pharma.

The TRUST-I trial continues to enroll patients across the US. Enrollment is progressing as planned and we remain on target to announce top line results from this trial in the second half of 2013. TRUST-II also continues to enroll patients and is on track to also report results in the second half of this year. Additional investigator-sponsored trials in ulcerative colitis, autism, psoriasis, and multiple sclerosis are all underway. We potentially will have data in autism and psoriasis around the end of this year.

For CNDO-109 a Phase I/II trial in acute myeloid leukemia has initiated. This study is a dose escalation trial of allogeneic natural killer or (NASDAQ:NK) cells activated by CNDO-109 in patients in first complete remission from AML who are deemed high risk for relapse.

In addition we announced yesterday that Dr. Thomas Shaible has joined the company as Project Leader for Inflammatory Bowel Disease or IBD. We’re excited that Dr. Shaible will lead Coronado’s R&D efforts in advancing TSO in IBD. I’ve known Thom for over 20 years and believe that his expertise in IBD and other autoimmune diseases will be greatly beneficial to Coronado as we progress TSO forward.

Dr. Shaible led the teams that developed and gained approval for the use of Remicade for treating Crohn’s Disease in 1998 and rheumatoid arthritis in 1999 for which he received the Johnson Medal, the highest award for research innovation at Johnson & Johnson. In addition, Dr. Shaibel’s group designed and conducted SONIC trial in Crohn’s Disease, a major clinical trial published in The New England Journal of Medicine, demonstrating the superiority of Remicade versus a conventional immunomodulator – azathioprine – in reducing signs and symptoms of disease.

I’ll now turn the call over to Dr. Lucy Lu who will review our financials for Q1 2013. Lucy?

Lucy Lu

Thank you, Harlan. We released our financial results for Q1 2013 in a press release this morning. Our net loss in Q1 ended March 31, 2013, was $8.9 million compared to the net loss of $6.6 million in Q1 2012. R&D expenses were $6.0 million in Q1 2013 versus $4.6 million in Q1 2012. The increases are primarily due to increased expenses associated with our increased TSO development activity related to our ongoing Phase II TRUST-I study in Crohn’s Disease.

G&A expenses were $2.5 million in Q1 2013 versus $2.0 million in Q1 2012. The increase is primarily due to increased infrastructure and personnel costs. At March 31, 2013, Coronado had $44.1 million of cash. In 2013 through May 7th we have sold approximately 3.4 million shares of common stock under our at-the-market sales facilities, or ATM, for net proceeds of approximately $29.9 million.

Included in that was 1.8 million shares that we sold since March 31st for net proceeds of $18.1 million. The ATM provides us the opportunity to sell registered shares into the open market from time to time under our S-3 shelf registration. We believe that we’re in a healthy cash position with respect to cash resources. Our current cash can fund our operations for at least the next 12 months.

I will now turn the call back to Dr. Weisman for closing remarks and the Q&A session.

Harlan Weisman

Thanks, Lucy. Looking ahead to the remainder of 2013, the anticipated results from TRUST-I and TRUST-II and possibly the results from two of the investigator-sponsored studies in psoriasis and autism – these will provide us with a large amount of data on TSO. We look forward to sharing these data with the financial, medical, and scientific communities. And with that I’d now like to open the call up for questions. Operator?

Question-and-Answer Session

Operator

(Operator instructions.) Our first question comes from Ian Somaiya with Piper Jaffray.

Matthew – Piper Jaffray

Hi, good morning, it’s Matthew on for Ian. Just a couple of quick ones if I may. It sounds like enrollment and timelines are progressing as expected for the Phase II TSO trials. I was just wondering if you might be able to give us any color or sense around the order in the second half that things might read out? Are you expecting TRUST to come first followed by the investigator trials? TRUST-I then TRUST-II, TRUST-II then TRUST-I? And then I have just two other quick follow-ups, thanks.

Harlan Weisman

Okay, Matthew, thanks for the question. We’re monitoring the enrollment in both trials but until the trials are completed it’s probably wise for me not to speculate on when each one would be anticipated to complete, or whether one would finish before the other. I’d rather have the knowledge based on facts rather than speculation, but they’re both running at a rate in which we feel comfortable with saying that we will have results in the second half.

Matthew – Piper Jaffray

Okay. So we haven’t heard recently too much about the HINT trial and I was just wondering if you can give us an update on that and how you were thinking about sort of the definition of “good data” if you will for that one.

Harlan Weisman

So the HINT trial is completed in its enrollment but it isn’t completed in the treatment and follow-up phases of the trial. So that’s something that we don’t anticipate would occur this year but is a 2014 event. The trial is based on a small pilot trial that yielded very encouraging results in multiple sclerosis and clearly we’d want to see this replicated in the larger sample size and the larger trial.

Matthew – Piper Jaffray

Okay. And then just one sort of on the financial side. It seems like obviously there’s a big pick up in spending this quarter, certainly on the R&D side; and I believe on the last quarter there was some sort of preliminary guidance that we should be thinking about a spend rate of about $8 million to $9 million per quarter. And I was just wondering if that was something we should continue to assume going forward or if things have changed a little bit. That’s my last one, thank you.

Harlan Weisman

We’re still comfortable with the guidance that we gave previously.

Matthew – Piper Jaffray

Great, thank you very much.

Operator

Our next question comes from Salveen Richter with Canaccord.

Salveen Richter – Canaccord Genuity

I have just one question around the TRUST-I study; maybe you can just put into context for us the background [ARBs] that patients are on and how we should think particularly about steroid use here and how that might affect the trial. And then just a follow-on on the investigator-sponsored studies: I think autism and psoriasis are supposed to read out at the end of the year, and maybe you can just frame for us what you want to see before taking this forward internally. Thanks.

Harlan Weisman

Sure. Salveen, thanks for the questions. The issuer background therapy in TRUST-I, the patients are allowed to be on what would be considered standard therapy in patients which includes 5-ASA and the antimetabolite products, 6-mercaptopurine or azathioprine which itself is a related product, and steroids. The steroids being used are on the low end of steroids. They’re still a fairly high dose – it’s up to about 15mg methylpenicillin which for any of us would be a significant dose of steroids, but it’s still on the low side. It’s not the kind of large-dose steroids that were used in the pre- anti-TNF era.

My thought is that these are unlikely to affect the trial one way or the other, except that it does point to patients that have fairly active Crohn’s Disease because they are having elevation in their Crohn’s Disease activity index and evidence of inflammation on colonoscopy despite the use of this background therapy. So I think mainly it’s a marker of the present of active disease that isn’t being well controlled, but in terms of affecting the outcomes I don’t think it’s going to either adversely affect or positively affect the trial other than the fact that obviously an active product such as TSO is going to exert its benefit in patients with high activity of disease – which these patients have.

And then remind me of the second question.

Salveen Richter – Canaccord Genuity

Sure, with the autism and psoriasis investigator-sponsored trials reading out just maybe you can frame what you’re looking for to take these studies forward internally.

Harlan Weisman

Sure. So let me talk about psoriasis first. It is what I would call a signal detection study. We are taking patients with severe psoriasis who would not be expected to have spontaneous remission; and in fact, the rate of remission in these patients would probably be in the 10% range to at most 15%. So we’re studying 20 patients serially with TSO and if we saw response rates in which even as low as 5 but as many as 10, 11, 12, or greater number of patients responding we would view that as a very positive signal that would allow us to consider moving forward with a company-sponsored study.

And with autism, the initial study is a study being conducted at Montefiore Hospital in New York. It’s a study which is being very well conducted but is in younger adult patients with autism. And again, it’s on a signal detection but we are doing another study in Israel in pediatric-aged patients and it would really be the combination of those two. Certainly if we saw something in the adult patients that would be very thrilling and I think that would encourage us to move forward in autism.

But if we saw something that wasn’t as impressive in the adults I’d still be very interested to know what was happening in the children because I think everything we know about autism and about these autoimmune disorders, but autism in particular, is the idea that if you can intervene earlier it’s probably better. So that’s basically how we’re looking at these. They’re signal detection trials.

Salveen Richter – Canaccord Genuity

Thanks, Harlan.

Operator

Our next question comes from [Fasin Ahmed] with Bank of America.

[Fasin Ahmed] – Bank of America

Hi guys, thanks for taking my questions. This is for Harlan as well. Can you talk a little bit about what specific investigator-initiated studies are underway for metabolic syndrome or Type I Diabetes? Do you have any internal sort of concept data? And can you talk a little bit about the potential for there being some clear biomarkers that are predictive of developing Type I Diabetes and could TSOs study the impact on these biomarkers?

Harlan Weisman

Thanks for the questions. Let me begin by just dividing what we’re thinking about in Type I Diabetes into two slightly different indications that we’re exploring and in active discussions with investigative groups on. It’s probably premature for me to announce the specifics about trials at this point because I don’t think that we’ve actually, with the investigators, come to a point in which we’ve identified the trials and the investigative groups who are conducting it. But one is in prevention in high-risk pre-Diabetes and the other is in early-onset Diabetes, and those are patients who have the onset of Diabetes in the first six months to a year.

They’re related, and the reason they’re related is in both situations there are still insulin-producing cells that are alive in the pancreas but greatly injured to the extent that insulin production is markedly reduced. In the case of pre-Diabetes there’s still sufficient insulin to not quite cross the clinical threshold of what would be called Diabetes but there are measurable glucose abnormalities. In the case of early-onset Diabetes they’re on the other side of that line where they’ve crossed the line to be called Diabetic, where the insulin production has been reduced sufficiently to where the patients now require insulin for metabolic control. But they still, at least many of them, would be expected to have viable insulin-producing cells in the pancreas.

The relationship between both of them is very active autoimmune processes going on, active immune-mediated inflammation that is killing the cells and injuring the cells but not all the cells are dead. And the idea in both situations is that TSO would be able to stop the autoimmune attack and allow for recovery of the injured but not yet dead insulin producing cells in the pancreas.

Now, you asked me about biomarkers: in the case of pre-Diabetes we can identify that by abnormalities in glucose metabolism but again, not crossing that threshold of a significantly elevated glucose – an elevated but not to the point of being called Diabetes, so that’s one marker. Another one is the response to what’s called an oral glucose tolerance test. But in terms of predictors, there is a subset of these patients that have autoantibodies that are detectable that are predictive of outcome, and if you have one of these markers it’s a risk factor; but then when you develop two of these markers your risk goes up and if you have three you’re likely going into real Diabetes at that point.

And so we can measure in some of these pre-Diabetics these predictive biomarkers and look at conversion rates and with TSO the reduction in those conversion rates. In Diabetes in which insulin is still being produced there is a compound, there’s a molecule called c-peptide which is part of the breakdown product between pro-insulin conversion to insulin. And when that happens c-peptide is broken off, and that is an accepted biomarker – a validated biomarker accepted by the FDA as a marker of insulin production. Again if TSO is having a salutary effect we would expect c-peptide levels to remain constant or even rise whereas in patients who have the ongoing destruction of their pancreas, pancreatic cells we would expect a continuing decline in c-peptide.

So it’s those kinds of surrogate markers that could be used, and we know these markers – whether you’re looking at antibodies, these specific antibody biomarkers, or you’re looking at c-peptide – are highly predictive of clinical outcome. And that’s in addition to the common biomarker that is always used, and that’s fasting blood glucose and glucose tolerance tests.

[Fasin Ahmed] – Bank of America

Okay. And as far as your seven different indications that are set to start in the second half of the year are any of them an indication that you’ve not already mentioned?

Harlan Weisman

No, what we are continually getting, as I mentioned in my presentation, are requests to consider other ones. But they are the ones that we’ve talked about previously including rheumatoid arthritis and psoriatic arthritis, which I think are two of the ones that I have not mentioned; but multiple sclerosis and psoriasis, autism, Type I Diabetes, ulcerative colitis in addition to the Crohn’s Disease that we’re sponsoring.

[Fasin Ahmed] – Bank of America

Okay great, thanks.

Operator

Our next question comes from Megan Dow with MLV & Company.

Megan Dow – MLV & Co.

Good morning, everyone. Harlan, thanks for all the great details this morning, it’s been very helpful. A quick follow-up on the seven indications. A lot of those markets are actually very large and running trials would be a very large undertaking. Strategically how is the company thinking about moving forward when getting data from so many different indications? Are you going to wait until you have data from several of these investigator-led trials before making a strategic business [decision] to move forward or are you already earmarking how to move forward? Can you just talk about the business strategies?

Harlan Weisman

Yes, good morning, Megan, and thanks for the question. This is in the area of very active work on the part of the executive team in concert with our Board of Directors, and we are doing a tremendous amount of strategic analysis and planning around this. We’re looking at a number of factors – they’re probably pretty obvious but one is the signal detection: what is the likelihood that TSO is going to work? What’s our evidence that we have to date and how easy is it for us to get more evidence that TSO is likely to have a beneficial effect? So that’s number one.

Number two is the regulatory strategy – in other words, what will be required to get regulatory approval both in terms of costs and time? Third is the commercial opportunity. As you indicated, these are all potentially billion to multi-billion dollar markets so that’s not a great distinction among them. It’s hard to choose one over another and say it’s a bigger market – they’re all very large markets.

But we are in terms of the commercial arena looking at the competitive landscape, the opportunity in terms of entry: is this going to be a grab for market share in a crowded market in which we believe that we will be successful based on differentiation in both efficacy and safety, as well as ease of use because of oral dosing? Or is it a place where we believe we can grow market growth in addition to market share? And in some, such as autism and Type I Diabetes there’s an opportunity to create a market.

So these are all factors that we’re weighing and optimizing. I don’t want to say that it’s a straightforward formula. It’s very complex because it is such a tremendous opportunity and we’re blessed with having a variety of options to choose from but we would not plan to go forward in all of them. As you alluded to that would be extremely difficult, not only for a small company like Coronado but even for a large multinational pharmaceutical company.

So we are virtually certain that we’re going forward in Crohn’s Disease. I can’t think of anything that would make us not do that. But we’re looking at other indications in maybe one or two… I couldn’t imagine doing probably anything more than that at least initially to go forward in, and start with a company-sponsored registration program. But it is going to be very data-driven – data-driven by clinical trial results and data-driven based on our strategic analysis.

Megan Dow – MLV & Co.

Excellent, excellent. And very quickly can you give us an update on the manufacturing facilities you’re establishing here in the United States?

Harlan Weisman

Yeah, only to say that things are moving forward. And just like with clinical programs there’s a tremendous amount of planning that has to be done before you begin. We’ve had a process working very closely with our partners, with TSO, to make sure that we develop our plant which [as you know will] result in a licensing of our plant for the United States but also in conjunction, and as we scale up our process, that the European facility that Overmed runs – our European manufacturing partner – that both plants are developing consistent and virtually identical product that could be used anywhere globally.

And that means we need to build both plants according to, or build out those plants – expansion in Germany and construction on ours – in a way that allows us to get licensing by the United States and by the European authorities; and similarly Overmed’s facility in Germany would be licensed both by US and European authorities to allow the two plants to mutually back up each other but also ensure that we have sufficient supply as we start to exploit the commercial opportunities that we were just talking about.

Megan Dow – MLV & Co.

Fantastic, thanks Harlan. Congratulations.

Harlan Weisman

Thank you.

Operator

Our next question comes from Christopher Marai with Wedbush Securities.

Christopher Marai – Wedbush Securities

Hi, good morning guys, thanks for taking my questions. So I was just wondering regarding some of these new indications that you’re investigating, some of them may not require larger trials to show strong efficacy and could also potentially have more rapid growth registration. What’s your plan in terms of building a safety database for TSO that would be sufficient for the FDA to take a look at some of these indications in a faster route to registration scenario?

Harlan Weisman

Thanks, Chris. I think what you said is likely the case, and that is that some of the indications will require more substantial patient numbers and perhaps even durations than other indications. We’re currently examining that. Our plan initially would be to formulate our own ideas around this but certainly when we begin getting the results of our trials, including the TRUST trials but also some of the IIS trials is to actively engage the FDA in these kinds of discussions and request meetings so that we can agree on what the safety database would need to look like as well as the extent of size of a Phase III program.

What I would anticipate is that all of the trials contribute significantly to our safety database and to our safety experience. We are moving forward with Crohn’s – by the end of this year we’ll have over 500 patients with an experience in Crohn’s Disease both in terms of the TRUST trials and previous studies, and that’s going to be a significant amount of safety information alone. In the TRUST-I trial, for example, although it’s a twelve-week endpoint of randomized placebo-controlled therapy, the trial offers an open label experience for another twelve weeks – so that’s 24 weeks, and a substantial number of the patients are looking to participate. So that trial alone will give us some clinical trials six-month experience, and then we would anticipate some Phase III in Crohn’s would give us additional longer-term safety. And if we were to pursue one of the other indications, that safety information from Crohn’s Disease would be highly supportive of what we’re doing in additional indications.

Christopher Marai – Wedbush Securities

Great, thanks. And then just to follow up I was wondering if you could discuss some of your plans for interactions with the FDA following the Phase II trial read out here in the second half, the Crohn’s trial. And when might these FDA interactions occur?

Harlan Weisman

Well, in terms of both the extent of interaction and when they occur, they’re not only up to us but they’re up to the FDA as well, so I don’t want to presume a date when the FDA is going to meet with us. But I would anticipate based on previous experience that we would begin planning for and scheduling for an FDA interaction as soon as is feasible after we get the TRUST results.

And should we have sufficient information in our minds to pursue one of these other indications and file our own IND – all of the investigator-initiated studies that are being conducted in the US are under investigator INDs – if we were to file our own IND that would give us an opportunity to interact with the FDA at the time or before the time of the filing of a company-sponsored investigative development program in one of the other indications.

And again, I would anticipate us doing that as quickly as we could get it done. I am a firm believer in early and as many interactions as you can with the FDA. I think there’s two things: one of them is I don’t think it’s ever a good idea to surprise the FDA about what you’re doing, and I also don’t think it’s a good idea for us to be surprised by the FDA on what they’re thinking. And the best way of doing that is to open up channels of communication and interaction that allow for that frequent dialog so that you take the mystery out of the regulatory process for the development in any of these indications.

Christopher Marai – Wedbush Securities

Okay great, thanks. And then one more follow-up if I could. You noted the 24-week extension study of TSO in Crohn’s, that a substantial number of patients are looking to participate. How many is substantial out of curiosity, is that a lot?

Harlan Weisman

Well you know what, we’re not really talking about the details of the trial. What I can tell you is that I’m certainly extremely satisfied with the number of patients that are electing to go into the open label. It’s anecdotal but I find it very encouraging that patients want to continue. They’re randomized, they don’t know what they’ve been treating during the randomized period but there is a reason why each of them is continuing – either because they’re satisfied that they’ve been getting something good or they’ve been dissatisfied and want the hope of getting something that could help them.

But that’s speculation on my part. I have no idea what the motivation is actually but I find it very encouraging that a large number are going in. And in terms of the number, the exact number that went into it, we’ll be sure to let everybody know when we complete the trial and release our results.

Christopher Marai – Wedbush Securities

Great. And those patients in the extension study, just remind us – they’re blinded still?

Harlan Weisman

They know they’re getting treatment. When they go into the open label extension, 100% of those who elect to go in are getting TSO. What they don’t know is what they were getting beforehand.

Christopher Marai – Wedbush Securities

Excellent, thanks. That’s helpful. Thanks very much for the questions, that’s all I’ve got.

Harlan Weisman

Thank you, Chris.

Operator

(Operator instructions.) Our next question comes from Jay Silverman with BioInvest.

Jay Silverman – BioInvest

Just a quick question, and maybe it doesn’t have any relevance, but do you know if TSO blocks PDE4? I was just listening to some other companies in psoriasis and I was just wondering if you knew of that occurring at all.

Harlan Weisman

Right. I was just recently asked that question and I was trying to find out an answer that would be appropriate. I am personally not aware of that being a direct mechanism of TSO. On the other hand, we know that TSO affects pathways of immune regulation and that it is possible – probably through an indirect effect – that an impact would be seen. But I am not myself aware of any experimental evidence that that’s the case but I could be wrong on that, Jay. I guess first of all I’d ask any of my colleagues if they’re aware of a definitive answer to your question, and if not we’ll try to find out. We’ll ask some experts and find out but I’m not aware of that. Any one of my colleagues from Coronado have more information than I do for Jay?

Karin Hehenberger

Harlan, this is Karin. No, we do not but that is one of the reasons why we are going forward with our trial where we will be analyzing details such as those.

Harlan Weisman

Right, thank you Karin. And what Karin’s referring to is we have several studies, both preclinical and clinical underway in which we’re measuring a number of biomarkers and factors, cytokines and other molecular entities during the course of TSO therapy – whether it’s in laboratory animals or it’s in humans – and which maybe we’ll be more enlightened about your question than we are today. But Jay, you have my commitment to continue to look for the answer.

Jay Silverman – BioInvest

Great, thanks a lot.

Harlan Weisman

You’re welcome.

Operator

And I’m not showing any further questions at this time. I’d like to turn the conference back over to our hosts for closing remarks.

Harlan Weisman

Well, I again just want to thank everybody who participated on the call today, the people who asked us questions, those of you who listened in. And we look forward to bringing you further updates as the year goes on and certainly all of us are looking forward to being able to talk about the top line results from the Crohn’s clinical trials, TRUST-I and TRUST-II. Thank you very much and good morning, bye-bye.

Operator

Ladies and gentlemen, that concludes today’s presentation. You may now disconnect and have a wonderful day.

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