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Peregrine Pharmaceuticals (NASDAQ:PPHM)

Q4 2013 Earnings Call

July 11, 2013 4:30 pm ET

Executives

Jay Carlson

Steven W. King - Chief Executive Officer, President, Director, Chief Executive Officer of Avid Bioservices Inc and President of Avid Bioservices Inc

Joseph S. Shan - Vice President of Clinical & Regulatory Affairs

Robert Garnick - Head of Regulatory Affairs

Paul J. Lytle - Chief Financial Officer, Principal Accounting Officer, Corporate Secretary, Chief Financial Officer of Avid Bioservices Inc and Corporate Secretary of Avid Bioservices Inc

Analysts

Joseph Pantginis - Roth Capital Partners, LLC, Research Division

George B. Zavoico - MLV & Co LLC, Research Division

Roy Buchanan - Piper Jaffray Companies, Research Division

Operator

Good day, ladies and gentlemen, and welcome to the Peregrine Pharmaceuticals, Inc. Fourth Quarter Fiscal Year 2013 Results Conference Call. [Operator Instructions] And as a reminder, today's conference is being recorded for replay purposes.

I would now like to turn the conference over to your host for today, Mr. Jay Carlson. Sir, you may begin.

Jay Carlson

Thanks, Mary. Good afternoon, and thank you for joining us. On today's call, we have Steve King, President and Chief Executive Officer; Paul Lytle, Chief Financial Officer; Joe Shan, Vice President of Clinical and Regulatory Affairs; and Rob Garnick, Head of Regulatory Affairs. Steve will begin by providing a brief overview of the company's progress over the last quarter, including the company-sponsored trials, as well as the investigator-sponsored trials, or ISTs, and how these events set the stage for numerous near-term clinical data milestones. Joe will then review the clinical developments of the quarter, with Rob then discussing our regulatory plans as we advance our bavituximab and Cotara programs. Paul will then finish with a summary of our financial results for the fourth quarter and fiscal year 2013. After our prepared remarks, we welcome your questions.

Before we begin, we'd like to remind you that during this call, we will be making forward-looking statements that are subject to risks and uncertainties that may cause actual results to differ. These forward-looking statements reflect our current views about future events and financial performance and are identified by the use of terms and phrases such as believe, expects, plan, anticipate, on target and similar expressions identifying forward-looking statements.

These risks include, but are not limited to, the risk factors detailed from time to time in our filings with the Securities and Exchange Commission, including, but not limited to, the Annual Report on Form 10-K for our fiscal year 2013 ended April 30, 2013, which was just filed earlier today. Investors should not rely on forward-looking statements because they are subject to a variety of risks, uncertainties and other factors that could cause actual results to differ materially from our expectations. And we expressly do not undertake any duty to update forward-looking statements, whether as a result of new information, future events or otherwise.

I will now turn the call over to Steve.

Steven W. King

Thanks, Jay, and thank you to everyone who is participating in today's quarterly call. We've had a number of important events take place since our last quarterly call in March. These events started with important revelations further defining bavituximab's immunotherapy mechanism of action. They extended to compelling final data from our Phase II second-line non-small cell lung cancer study that was the cornerstone for successful end-of-Phase II discussions with the FDA that resulted in an approval of our Phase III clinical trial design. The better understanding of the mechanism of action has given us a completely new insight into recent clinical results, and even further strengthened our excitement about the Phase III trial design, combining bavituximab with docetaxel based on its immune adjuvant characteristics.

Joe will cover the Phase II clinical data in more detail, as well as our plans for advancing the program to Phase III later during the call. Rob will highlight the regulatory aspects of developments over the past few months, and Paul will give us an update on the great year at our contract manufacturing business, Avid Bioservices, and on efforts to strengthen the cash position as we look to advance the bavituximab program to Phase III while continuing partnering discussions.

Before turning the call over to my colleagues, I will briefly discuss the importance of the elegant data presented at AACR that firmly established the immunotherapy mechanism of action of bavituximab. This data has given us a completely new viewpoint on the bavituximab program, and valuable insight as we review the clinical program and make plans for the next set of studies.

Data from a series of preclinical studies exploring the mechanism of action for phosphatidylserine or PS-targeting antibodies, such as bavituximab, were presented at the Annual Meeting of the American Association for Cancer Research. Results of these studies demonstrated that PS-targeting antibodies mediate immune stimulatory changes in tumors by acting on an upstream immune checkpoint, resulting in the transformation of inhibitory immune cells known as MDSCs into tumor-fighting immune cells known as M1 macrophages, while simultaneously starting changes that lead to the formation of tumor-fighting cytotoxic T-cells. Based on these findings, we have reviewed the entire clinical program and are working with our clinical investigators to collect samples that may provide immune correlative data from 3 ongoing clinical trials in breast, rectal and liver cancers.

This mechanism of action insight has also opened the door to completely new combinations not previously explored. Bavituximab acts on an upstream immune checkpoint, and thus, makes a potentially ideal combination with downstream-acting immune checkpoint inhibitors such as anti PD-1 antibodies and CTLA-4 targeted approaches, just to name 2. Preclinical studies are well underway to explore these combinations, and we look forward to generating and reporting data later this year that could support moving these concepts into the clinic.

This has also led us to put clinical results to date into a clear perspective by allowing us to understand which combinations and dosing regimens are the most attractive, and perhaps more importantly, strengthening the rationale behind the planned Phase III trial combining bavituximab with docetaxel. These recent developments have also generated new partnering opportunities, as well as increasing interest on our ongoing partnership discussions for the bavituximab program. And will continue -- which will continue while we execute in advancing the program on multiple fronts.

I will now turn the call over to Joe Shan for an update on the clinical program. Joe?

Joseph S. Shan

Thanks, Steve. Certainly, the clinical highlights of the previous quarter were the encouraging results from the bavituximab Phase II trial in our lead indication of second-line non-small cell lung cancer. These data led to an agreement with FDA on the pivotal Phase III trial design, which Rob will discuss later on the call. The final data from the randomized double-blind placebo-controlled Phase IIb trial presented at ASCO demonstrated a median overall survival of 11.7 months in the 3-milligrams per kilogram bavituximab plus docetaxel arm compared to 7.3 months in the combined control arm, with a persistent separation in the Kaplan-Meier survival curves.

Subgroup analysis of overall survival by key patient characteristics, including age, gender, ECOG status, ethnicity and prior treatment, favored the bavituximab 3-milligram per kilogram containing arm, and there were no significant differences in adverse events between the trial arms. Importantly, the recent understanding of bavituximab immune action mechanisms Steve described earlier further reinforces the rationale of combination treatment with docetaxel, as not only does docetaxel upregulate PS, it has also been shown to exert immunostimulatory effects.

The pivotal Phase III trial design that we proposed and the FDA agreed to is a randomized double-blind placebo-controlled trial evaluating bavituximab plus docetaxel versus docetaxel plus placebo in approximately 600 patients at clinical sites worldwide. They will enroll patients with advanced non-squamous, non-small cell lung cancer who have progressed after standard front-line treatment. Patients will be randomized into 1 of 2 treatment arms. One treatment arm will receive up to 6 21-day cycles of docetaxel at 75 milligrams per meter squared in combination with 3 milligrams per kilogram of bavituximab weekly until progression of toxicity. The other treatment arm will also receive up to 6 21-day cycles of docetaxel at the same dose, but in combination with placebo weekly until progression or toxicity. The primary endpoint of the trial will be overall survival.

This Phase III trial design in the bavituximab immunotherapy mechanism were extremely well-received at our clinical advisory board meeting at ASCO, which comprised a group of leading oncologists who specialize in the treatment of lung cancer. The group was excited by bavi's unique upstream immune mechanism of action, and believes we have a very special drug with future potential synergies with downstream immunotherapies in clinical development. These experts also provided insightful feedback on the Phase III trial to help facilitate timely patient enrollment and differentiate it from potentially competing trials.

Based on these encouraging data, the reaching of agreement on the pivotal Phase III trial design and discussions with our medical advisors, our primary focus in the near term is to initiate the bavituximab Phase III trial in second-line non-small cell lung cancer by the end of this calendar year. Meanwhile, we continue to learn about bavi's effects on tumor immunity, both preclinically and clinically. The current investigator-sponsored trials in lung, breast, liver and rectal cancers include imaging, laboratory or tissue correlative studies, which should inform future clinical development of bavituximab as a novel upstream immunotherapy.

We look forward to providing an update on these efforts in the coming months. With that, I'll turn it over to Rob.

Robert Garnick

Thanks, Joe. From a regulatory standpoint, I'm very pleased with the progress made during this quarter as we achieved 2 major goals in our most advanced program. First, the positive data that emerged from our second-line non-small cell lung cancer trial provided additional safety, as well as clinically meaningful efficacy data needed to advance the program. Second, the reaching of an agreement with the FDA on our proposed clinical trial design was the result of a very successful and highly collaborative effort with the agency, which allowed us to proceed.

Since our last quarterly conference call, we have had very positive interactions with FDA concerning our production processes and capability to manufacture Phase III material, and ultimately, bavituximab for the market, as a prelude to the end-of-Phase II meeting, which was, by design, focused on our Phase III clinical plans. We believe this Phase III trial, along with the large amount of supporting data to date, could be sufficient to support a future biologics license application submission. The next steps from a regulatory perspective are to initiate discussions with x U.S. regulatory agencies, such as the EMA, in order to facilitate the start of the global Phase III by year's end.

With that, I'd like to turn it over to Paul.

Paul J. Lytle

Thanks, Rob. Shifting gears now, I'd like to spend the next few moments covering a few financial highlights and our related financial goals. As I mentioned on the last call, it's important to note that we operate a hybrid business model that includes a revenue-generating contract manufacturing business and an advancing drug development business.

Let me first focus on our revenue-generating business, Avid Bioservices. There are 3 important topics to discuss with respect to Avid, including fiscal year '13 revenue growth, future revenue potential and Avid's strategic importance in preparing bavituximab for late stage clinical development and potential commercialization. Starting with revenue growth, during the recent quarter, Avid generated $4.2 million in contract manufacturing revenue and $21.3 million during fiscal year '13. This represents revenue growth of 44% over the prior fiscal year and is in line with our increased revenue guidance we provided in March of this year.

Second, Avid's revenue potential is closely tied to its current committed backlog for future services. We began fiscal year '14 with over $27 million in manufacturing commitments that currently cover services to be provided in fiscal '14 and into fiscal '15. Based on this, we expect contract manufacturing revenue for fiscal '14 to be between $18 million and $22 million based on our current commitments. And third, it's important to emphasize Avid's continued contributions towards preparing our novel immunotherapy bavituximab for Phase III clinical development and for potential commercialization. There is a tremendous amount of ongoing effort in preparing a novel monoclonal antibody for commercial manufacturing.

Now, let me turn to our net loss. Strong revenue growth, combined with an expected decrease in R&D spending, has significantly reduced our net loss, decreasing 29% in fiscal year '13 compared to fiscal year '12. And this reduction in our net loss has translated into a 35% reduction in our cash burn rate during the recent fiscal year to $24.8 million, representing our reported net loss less noncash expenses.

Let me now talk about our financing goals. As a backdrop, let me emphasize that we are closely managing our business, our cash position and our various sources of capital as we prioritize and advance our later-stage clinical pipeline. Investing in our clinical program is the most important and significant potential value driver for Peregrine. Over the recent period, we have strengthened our cash position and reported over $42 million in cash and cash equivalents as of June 30, 2013. We now have the needed capital to fund our operations for at least the next 12 months based on our current financial projections, giving us the needed flexibility to initiate the upcoming Phase III trial in second-line lung cancer, while strengthening our position as we evaluate other potential opportunities.

Looking ahead, we will continue to closely manage our operations in line with our cash position, while balancing our various sources of capital. We have invested in these programs using a balanced financial approach by closely matching our capital needs with our various sources of capital. We look forward to keeping you updated on our progress, and we will now open the call up for your questions. Mary?

Question-and-Answer Session

Operator

[Operator Instructions] And our first question comes from Joe Pantginis from Roth Capital.

Joseph Pantginis - Roth Capital Partners, LLC, Research Division

A little bit of a -- well, one macro question and one specific to your programs. First, obviously, you've generated a lot of your new mechanistic data for the immunotherapy aspect of bavi. Maybe can you give a little forward-looking statements with regard to potential plans regarding combinations with some of the checkpoint inhibitors you mentioned? And then I have a follow-up.

Steven W. King

Yes, sure. So I think obviously, with the information we now have on the mechanism of action, it really gives us a whole new insight into how we should be using the drug and what kind of combinations we should be looking at. And I think you've hit the nail on the head that one of the big focal points is, number one, a new indication such as melanoma, for instance, or renal cell cancer, which are known to be more immunotherapy, I guess, sensitive. And then the second is, of course, what should you combine with the drug. And obviously, at ASCO this year, a lot of excitement about the combination potential of agents that act on the immune system, and again, a lot of the excitement being around the combination of PD-1 with ipi. And so I think we're looking at that very heavily. We're well into preclinical programs that would help to answer the questions around how to best combine an early checkpoint inhibitor like bavituximab with some of the later checkpoint inhibitors, and it just makes perfect sense. So one of our goals is to hopefully be able to complete and actually even potentially start a clinical trial combining our drug with other immunotherapies by the end of the year.

Joseph Pantginis - Roth Capital Partners, LLC, Research Division

Okay, great. And just staying on the immunotherapy scene, this is more of a macro commenting question that I'd like to tie into your lung cancer program. Obviously, whether it's cancer vaccines or other immunotherapy approaches such as yours or the PD-1 inhibitor or what have you, there's still a lot of questions that still need to be answered and questions that we're just starting to answer and just scratching the surface on. And one of those things have to do with chemotherapy combinations, sequencing, concurrent, all the different things that could potentially negatively impact the potential efficacy of a drug as we've been learning about different combinations. So with that said, regarding your first line lung program, I guess the question would be, any thoughts, hindsight about why the study might not have impacted survival and did it surprise you? And I guess the crux of the question is, when you look at the immunotherapy space, the general concept is now that the earlier stage patients should perform better with immunotherapy approaches. So I guess, the question would be, why didn't it here? And then, did the chemotherapies have any potential impact on that?

Steven W. King

Okay, sure. Yes. And I think this is really at the crux of our complete review of the clinical program. So just kind of taking a step back. So when we started the bavituximab program into clinic, we were really focused on the effects that we were seeing in preclinical studies, primarily around the effects on vasculature. And we knew there was some immune component, but it was really thought to be more of a vascular acting agent. I think that has completely changed now. We recognize that while there are effects on the vasculature, those are downstream effects that are really mediated through inhibiting this early checkpoint. And it makes a world of difference the way we look at the drug because when we started the program, we were looking at chemotherapy as killing tumor, upregulating the target, and so you get these kind of combinatorial effects. What we now recognize is we have to be a lot more careful when selecting indications, as well as chemotherapy combinations. And I guess, one of the things that I think has us so excited about the docetaxel study is docetaxel is one of the stronger adjuvant type therapies that really enhance, if anything, the immune response. And so when we think about our -- kind of the other 2 results we had this year, the pancreatic cancer data, gemcitabine, again, is a good chemotherapy combination potential with bavituximab, it's known to be immuno-stimulatory, however, just perhaps not in pancreatic cancer, where you have very fast progression and patients who are beginning to die from the disease within sort of 5 months to 6 months. And if you look at immunotherapies and the general theme at ASCO this year was that you really see the separation in survival curves starting at 4 to 5 months. So if you're already almost at your median, then you're really going to have difficulty showing an effect on survival in such a fast-acting disease. In the case of the front-line non-small cell lung cancer data, again, while we didn't see much of an impact on overall survival, I think in retrospect, maybe that wasn't as surprising as it could've been because there have now been published reports showing that a combination of ipilimumab with carboplatin and paclitaxel, that staging was very important. And in fact, they found that when they gave concurrent therapy with chemotherapy and the immune activating drug, that they basically had no effect. And when they staged it and gave chemotherapy first and then started with the immunotherapy treatment, then they saw actually quite good results. So in retrospect, if we had been thinking about this in immunotherapy, we might have designed those studies a little bit differently. But I think it opens up a lot of doors for us now in development, and being able to think about those combinations and what we want to move forward. But clearly, right now, it's all about Phase III, which, if anything, I think has been strengthened by what we now know and looking at some of those immunotherapy combinations, and getting those in the clinic and seeing how that goes.

Joseph Pantginis - Roth Capital Partners, LLC, Research Division

Right. No, that makes perfect sense. And I guess, your ipi example is obviously, very well taken, because again, we're really at the, just scratching the surface on being able to answer these types of questions. So now, with this kind of knowledge and answers that we have with regard to the staging of various therapies, is this something that either based on what you plan to do or also in the hands of a partner, you would now potentially pursue in a frontline setting for lung again?

Steven W. King

Yes. I mean, I definitely think that's one of the things we want to do, is really take a look at what studies we run, what we've learned from those and potentially even go back, like you said. And just with now, all the knowledge at hand, is design the study that's more likely to be successful.

Joseph Pantginis - Roth Capital Partners, LLC, Research Division

Right. And I guess, I mean I have to ask the question since you talked about it again during this call, it's very simplistic, how are your partnering discussions going?

Steven W. King

Yes. Well, I think that one of the great things here is that this has really opened a lot of doors for potential partnerships, for collaborations. There's just so many things that we can now do with the drug that we didn't really have in our hands before. The partner discussions are going well. I mean, I think that it's the same strategy we've been laying out before. Goal will be primarily U.S. partnership to bring in someone with commercialization expertise, but also be able to maintain as much U.S. rights as we can to advance the program. And to still have a big piece of the upside at the end of the clinical process.

Operator

Our next question comes from George Zavoico from MLV & Co.

George B. Zavoico - MLV & Co LLC, Research Division

Congratulations on the progress you've made this quarter, and especially the Avid growth is pretty impressive, which is the first question. Based on your projections, it looks like for 2014, fiscal 2014, that the Avid revenue is going to be pretty flat. I imagine that doesn't take into account, obviously, any new customers that you might bring on. So 2 questions. One, do you have room for new customers in terms of doing production runs? And has the record of Avid been excellent in terms of delivering the production runs on time? Is there any back up there?

Paul J. Lytle

Yes. As we mentioned -- thanks, George, for the question, as we mentioned on the script, we're guiding between $18 million and $22 million. And that is purely based on what has been committed as of the beginning of the fiscal year. So there is a lot of potential for additional upside as we book additional potential customers, as they request additional business. But this is truly just committed business that's currently on the schedule as of today. So I think there is some upside. If you look at our guidance last year, we increased, and I believe, a couple of times last year as we gained additional business and delivered on that business. So I think there is some potential upside. And we do have some additional capacity to grow that number. In addition, I think it's important to note that we also -- Avid did approximately $10 million in equivalent services for Peregrine last year, which does not get reflected into the financial statements, it's eliminated in consolidation. But they're also doing a tremendous amount of work, really preparing bavituximab for a Phase III trial for potential commercialization. And those efforts will also be ongoing through this next fiscal year.

Steven W. King

And George, I think to answer your question about the timing of release, I mean, I think one of the -- as we've gotten busier and busier, of course, improving operations has become more and more important. And so we've absolutely been focused on success rates of production runs because as we get the reactors more and more full, there's less and less space to have mishaps in the reactor. The second being that we've really been pushing very heavily on the timing, and as recent, you've seen over, really, over the last couple of years. Again, we're busier, but also, we're releasing lots on time. We're getting those out to the customers. It's become a much more reliable sort of flow of production and release and shipment to the customers. So I think we've been very successful on both those fronts, and the group at Avid has done a great job in responding to the increased business demands.

George B. Zavoico - MLV & Co LLC, Research Division

One more Avid question. Your biggest Avid customer is responsible for what percentage of the revenue?

Paul J. Lytle

If you look at in our 10-K, we actually break out segment reporting by customer. And it's included in the footnotes in the financials. But yes, one of our major customers is a major player in our revenue and growth. And their successes are directly aligned with our successes.

George B. Zavoico - MLV & Co LLC, Research Division

Okay. Okay, so moving on to bavituximab then. The -- you mentioned you are going back to the patients that are already in the trials or ongoing trials. You're going to be doing some additional sampling. Does this require any amendments to the protocols? Is this strictly an investigational approach? What do you need to do to be able to make those -- take those samples?

Joseph S. Shan

George, this is Joe. So some of the protocols are already included. Some of these mean correlates, obviously, as our understanding of the immune effect of bavituximab increases, there are additional things we're looking at, so some of these will have to be amended into the ongoing trials to collect the samples appropriately, to be able to answer some of these other questions. But it's a combination of both.

George B. Zavoico - MLV & Co LLC, Research Division

And then for the Phase III, I imagine it's going to be -- you're not going to have to do amendments, it's going to be written into the initial protocol?

Joseph S. Shan

Right, yes. So yes, we're still finalizing what's practical to do in the Phase III setting versus in the sub study of some sort.

George B. Zavoico - MLV & Co LLC, Research Division

Okay. And I'm trying to remember from some of the survival curves that you showed in the meetings, one of the elements that shows up often in Kaplan-Meier curves is a tailing plateau, suggesting that the immune system has kicked in and has kept the tumor in check. Did you see anything like that? I'm trying to remember, I can't remember offhand.

Joseph S. Shan

Yes. I think both our second-line trials, as well as the pancreatic trials, did have a sort of a tail on the right in the treatment arm. And I think it is consistent in terms of the shape. Obviously, we have to run more studies to prove that. But they are separating around the time you expect, around 4 or 5 months. And I think going back to the pancreatic, this is a much more aggressive disease than second-line non-small cell lung cancer, and so the overall survival there was shorter. So I think that's an indication maybe, it's too far. We talked about earlier that the earlier stage, in theory, the more the immune system can play a role. I think that's something we'll have to kind of evaluate on a case-by-case. Sort of at the 1-year survival rates, I mean, we definitely see a difference.

George B. Zavoico - MLV & Co LLC, Research Division

Yes, I mean it doesn't -- it's really a clue. It doesn't prove anything, it's just nice to see that, I guess. And finally -- the final question is about the imaging program. What are you thinking going forward in terms of being able to monetize that? And are you going to use that imaging agent as part of the Phase III -- upcoming Phase III? Is it still going to be a separate track for development?

Steven W. King

Yes, so we're continuing the Phase I program in -- with the imaging product, learning as we go along. And I mean, certainly, no intention to implement that into the Phase III. At this point, I think we have a pretty clean design and it's pretty clear what we need to do. And I think certainly, our goal is to be able to implement that into potentially, some of the other clinical trials as well. And of course, again, with the immunotherapy focus now, I mean it really has changed the way we look at a lot of different things. Because we recognize that while it's great to upregulate PS, we also need to make sure we select agents that not -- don't just upregulate PS, but also don't inhibit this immuno stimulatory effect of bavituximab. So a chance [ph] that we'll look at a little bit, but I think as a standalone, it's still potentially got a great future in just monitoring the effectiveness of therapies. And again, if there's a way to implement it into our earlier stage development programs, learn more about it, we're certainly going to take advantage of that.

George B. Zavoico - MLV & Co LLC, Research Division

And is the imaging program on the partnering table as well right now? Or is it -- you only want to gather more data?

Steven W. King

It's going to depend on the partner. Some are highly interested in it, others don't really have as much of a diagnostic imaging type focal point. So obviously, if we start to show some great correlation with clinical results, then it'll certainly be something which will tick up in interest levels.

Operator

Our next question comes from Charles Duncan from Piper Jaffray.

Roy Buchanan - Piper Jaffray Companies, Research Division

It's Roy in for Charles. The first question, I guess. Can you remind me, the Phase III, is that sequential chemo in bavi or is it concurrent?

Joseph S. Shan

This one's concurrent. There's no data to suggest that induction chemotherapy would make a difference in the combination with immunotherapy.

Roy Buchanan - Piper Jaffray Companies, Research Division

Okay. I guess, is it -- maybe it can consider it kind of sequential considering it's second-line? And are you taking all comers? Is it EGFR-mutant patients, first line, erlotinib-treated?

Joseph S. Shan

Yes, so we're not selecting for -- well, yes, they're on selected patients. [indiscernible]

Roy Buchanan - Piper Jaffray Companies, Research Division

Okay, great. And can you remind me the -- you mentioned the ipilimumab studies. What indication was it -- were they looking after sequential versus concurrent?

Steven W. King

Yes. That was actually in front line non-small cell lung cancer.

Roy Buchanan - Piper Jaffray Companies, Research Division

That was on the front, okay.

Steven W. King

Yes, and so I think just to kind of follow up on that. So I think with carboplatin and paclitaxel, there's been shown to be this kind of correlative with giving the sort of staged administration of the chemotherapy followed by the ipi. Then you see the enhanced activity. Now, I think that may not be true with every combination. I think docetaxel, again, is an adjuvant for, I think, slightly different reasons from the literature. And so I think the key there is it's really a much more effective or much more active adjuvant. And so the timing may not be as critical as it is with other combinations. But again, I think that what we've seen up to now has all been with sequential dosing, we've seen very positive results from the Phase IIb study, positive results from an earlier Phase II study. And so I think it's right at this point, we have no reason to want to start to adjust the treatment regimen for that particular combination.

Roy Buchanan - Piper Jaffray Companies, Research Division

Okay, great. And I wonder if you guys could go into a little bit more detail on the end-of-Phase II talks with the FDA. I know the conclusion was good, I just -- if there were any points of concern that the agency brought up, and if there were any key points that, I guess, won them over, convinced them that bavi is ready for Phase III?

Robert Garnick

No. There was no -- really, it was quite benign. They liked the plan we proposed. They were -- they thought it was well thought through. And there were no really -- there was absolutely no sticky issues whatsoever.

Operator

I show no further questions at this time and would like to turn the conference back to Mr. Steven King for closing remarks.

Steven W. King

I'd like to thank you, all, again for joining us on today's conference call. I hope from today's call, you get a clearer sense of why we're so excited about the prospects of bavituximab given our increased understanding of its mechanism, but also how this is fueling additional opportunities for our pipeline. We believe the strategy we have outlined to simultaneously advance bavituximab into Phase III and leverage potential new applications will offer new treatment options for patients participating in our trials, bringing a higher profile of the company and increase the prospects for our valued shareholders. Thank you, again, and we look forward to updating you on our progress over the coming months.

Operator

Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program, and you may all disconnect at this time.

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