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Prothena Corporation plc (NASDAQ:PRTA)

Q4 2013 Earnings Conference Call

March 6, 2014 4:30 pm ET

Executives

Dale Schenk - Chief Executive Officer

Tran Nguyen - Chief Financial Officer

Gene Kinney - Chief Scientific Officer and Head of Research and Development

Martin Koller - Chief Medical Officer

Tara Nickerson - Chief Business Officer

Analysts

Jeremiah Shepard - Credit Suisse

Charmaine Chan - RBC Capital Markets

Steve Byrne - Bank of America

Christopher Marai - Wedbush Securities

Robert Hazlett - ROTH Capital Partners

Operator

Good day, ladies and gentlemen, and welcome to the Prothena Fourth Quarter 2013 Financial Results Conference Call. At this time, all participants are in a listen only mode. Later, we will conduct a question-and-answer session with instructions following at that time. (Operator Instructions) As a reminder, this conference is being recorded. Now, I'll turn this conference over to Tran Nguyen. Please begin.

Tran Nguyen

Thank you, [Tyrone] (ph). Good afternoon everyone. I'm Tran Nguyen, Chief Financial Officer of Prothena. Welcome to our fourth quarter and full year 2013 financial results conference call. As a reminder, this call is being recorded and webcast. It will be available for the next seven days via the dial-in provided in our news release and on the Investor Relations section of our website at prothena.com. Our year-end release was issued this afternoon after market closed. Please take an opportunity to read the full details of the release which can be found also at prothena.com.

Before we begin, I would like to remind you all that we will make forward-looking statements regarding Prothena's financial, clinical, regulatory and commercialization efforts and expectations, which are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements contained in this call that are not statements of historical facts should be deemed to be forward-looking statements. These statements involve risks and uncertainties, including but not limited to, the risk and uncertainties detailed in our filings with the Securities and Exchange Commission.

Accordingly, you should not place undue reliance on these statements. Please refer to our recent filings with the SEC including our annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K for a full review of the risks and uncertainties associated with our business. Forward-looking statements are based on information that is available to us today and Prothena undertakes no obligation to update or revise any forward-looking statements made on this conference call.

On today's call, Dr. Dale Schenk, President and Chief Executive Officer of Prothena, will discuss the Company's 2013 highlights and strategic accomplishments, Dr. Gene Kinney, our Chief Scientific Officer and Head of R&D, will review our pipeline development, and I will provide financial results for the fourth quarter and full year of 2013 and comment on the Company's financial outlook for 2014, then Dale will provide you with our upcoming milestones, and our full leadership team will be available during the Q&A portion of the call.

Now, I will turn the call over to Dr. Dale Schenk, President and Chief Executive Officer of Prothena. Dale?

Dale Schenk

Thank you, Tran, and a warm welcome to all of you joining us this afternoon. It has been a dynamic year for Prothena where we achieved significant corporate and operational milestones in all areas of our business. 2013 was our first full year as an independent public entity and we successfully transitioned into a clinical stage biotechnology company with three exciting lead programs.

Before I review our accomplishments, recall that we target proteins in novel ways to resolve unmet clinical needs of patients. The three lead programs focus on diseases caused by misfolded proteins or cellular dysfunction. Specifically, our first two program target misfolded proteins implicated in several potential indications including AL and AA amyloidosis through NEOD001, and Parkinson's disease and other related synucleinopathies through PRX002, and our third program PRX003 targets cellular dysfunction as a result of inflammatory diseases and cancers.

At this time, I'd like to review our 2013 and recent highlights. First, PRX002. In December, we entered into a comprehensive worldwide collaboration with Roche to maximize the clinical and commercial potential of PRX002, our monoclonal antibody that targets alpha-synuclein for the treatment of Parkinson's disease and potentially other related synucleinopathies. This partnership builds on and validates the importance of Prothena's strong scientific foundation. By combining Roche's CNS expertise with our own, this collaboration will greatly enhance the overall development efforts of PRX002 and provide the best opportunity to successfully bring PRX002 to patients worldwide.

The total worldwide upfront milestone payments for PRX002 may amount up to $600 million. Of the $600 million in total, we recently received in early 2014 a $30 million upfront payment and we expect to receive an additional $50 million near-term clinical milestone payment this year. We believe this collaboration allows Prothena to maintain a significant economic and operational participation should PRX002 reach the market.

Parkinson's disease is the second most common neurodegenerative disorder after Alzheimer's. There are an estimated 7 million to 10 million patients with Parkinson's disease worldwide. Current treatments are limited in their effectiveness because they only manage early motor symptoms of the disease and eventually become less effective. Also, no treatment exists today that alters the course of the disease. Hence, Prothena and Roche aim to develop PRX002 as a potential disease modifying treatment for Parkinson's disease and other related synucleinopathies.

In addition to the Roche collaboration, we have made substantial progress with NEOD worldwide. NEOD001 is a monoclonal antibody targeting AL and AA amyloidosis for the potential treatment of systemic amyloidosis. In 2013, we were granted orphan designation by the European Medicines Agency for NEOD001 for the treatment of AL amyloidosis, which adds to previous orphan drug resignation that we received for NEOD001 in 2012 from the FDA. In April 2013, we moved this program into the clinic for the potential treatment of AL amyloidosis, and we expect interim data from this trial to be presented at the appropriate upcoming medical meetings this year.

Today, there are no approved treatments for AL amyloidosis and no therapies that directly target potentially toxic forms of the AL protein. Current treatment for patients with AL amyloidosis includes organ transplant and other therapies including off-label use of chemotherapy that aim to reduce or eliminate the cells that produce AL protein. There are approximately 15,000 patients in the United States and Europe suffering from AL amyloidosis. We are excited to be on the forefront of developing new therapies for these patients and look forward to advancing this program through clinical investments.

Turning to our corporate progress, we continue to build on our solid financial foundation by further strengthening our balance sheet and creating a corporate infrastructure for future success. In October 2013, we successfully completed a public offering netting proceeds of $84.5 million. We also have diversified our shareholder base through two successful secondary offerings of shares owned by Janssen Pharmaceutical and Perrigo in October 2013 and recently in February 2014 respectively.

In addition to our financial stability, the efficient advancement of our lead programs is also made possible by the depth and breadth of the experience of our Board numbers and executive management team. In 2013, we enhanced our Board with the appointments of Dr. Christopher Henney and Dr. Dennis Selkoe, who joined existing directors, Dr. Lars Ekman, Richard Collier, Shane Cooke and myself.

We added industry veterans to our executive team with the appointments of Dr. Marty Koller as Chief Medical Officer and Tran Nguyen as Chief Financial Officer, and in recognition of her exceptional contributions to Prothena and need for strong business execution going forward, it is my pleasure to announce the recent promotion of Dr. Tara Nickerson to the position of Chief Business Officer. These executives lead teams of motivated and talented individuals who work together to execute our strategic objectives, to advance our programs, to achieve our business goals in a fiscally responsible manner.

At this time, I'd like to turn the call over to Gene Kinney for a discussion of our lead programs. Gene?

Gene Kinney

Thank you, Dale. Truly it's been remarkable to see the accomplishments and progress of the team to-date. As Dale mentioned, in April 2013 we initiated the multi-center Phase 1 multi ascending dose study of NEOD001. This Phase 1 clinical trial is evaluating the safety, tolerability, pharmacokinetics and immunogenicity of NEOD001 in patients with AL amyloidosis. The study is designed to define a maximally tolerated dose and/or a recommended dose or doses for a Phase 2/3 study. The current study is also evaluating exploratory biomarkers of cardiac, renal and hepatic function. As previously communicated, enrollment is continuing at a consistent rate, so we expect to communicate interim data from this ongoing study at the appropriate upcoming medical meetings this year.

Taking a step back, systemic amyloidosis are a complex group of diseases caused by tissue deposition of misfolded proteins that result in progressive organ damage. The most common type, AL amyloidosis or primary systemic amyloidosis, involves a hematologic disorder caused by plasma cells that produce misfolded AL protein resulting in deposits of abnormal AL protein, or amyloid, in the tissues and organs of the individuals with AL amyloidosis. We believe that NEOD001 which binds to the misfolded AL protein will neutralize circulating AL protein aggregates preventing further built-up and may clear the deposits in tissues and organs. We look forward to the presentation of the interim data from our ongoing Phase 1 trial, and if supported by the interim data, we expect to initiate a Phase 2/3 trial later this year.

Now, I'll move to PRX002, a monoclonal antibody targeting alpha-synuclein, which is the primary focus of our worldwide collaboration with Roche. Together with Roche, we aim to develop PRX002 as a disease modifying treatment for Parkinson's disease and potentially other related synucleinopathies. Alpha-synuclein is found extensively in neurons and is a major component in the characterization of many neurodegenerative diseases. This includes Parkinson's disease, dementia with Lewy bodies, and multiple system atrophy. Collectively, these disorders are called synucleinopathies.

PRX002 has been tested in various cellular and animal models of synuclein-related disease. Passive immunization with antibody 9E4, the murine version of PRX002, and multiple transgenic mouse models of Parkinson’s disease, reduce the appearance of synuclein pathology, protected synaptic connections and improved performance by the mice in behavioral testing. Based on preclinical studies that show PRX002 may be effective in slowing or reducing neurodegeneration associated with synuclein misfolding and/or cell-to-cell transmission, together with Roche we expect we initiate a Phase 1 clinical trial of PRX002 for Parkinson's disease this year.

Our third lead program, PRX003, is a monoclonal antibody targeting MCAM, or melanoma cell adhesion molecule, for the potential treatment of inflammatory diseases and cancers. MCAM allows certain cells travelling in the blood stream to leave the circulation and enter tissue, starting or sustaining a pathological response. MCAM is expressed on certain cells within the immune system including Th17 cells that are known to play an integral role in inflammatory diseases. Metastatic tumor cells also express MCAM. Functioning like VELCRO hook-and-loop fasteners, MCAM allows these cells to stick to the blood vessel wall so that they can migrate into surrounding tissues to start the disease process.

Scientists at Prothena have discovered novel antibodies that block MCAM's VELCRO like function and may stop the disease from spreading into tissue. Hence, an antibody against MCAM may be useful for treating a number of inflammatory diseases and cancers. Over the course of the last several years, we have generated monoclonal antibodies that selectively block MCAM-mediated cell adhesion and have been effective in delaying autoimmune responses. We expect our lead candidate, PRX003, to complete IND enabling toxicology study this year. So in summary, our three lead programs target the underlying cause of disease and have the potential to significantly improve the treatment approach for a number of indications that involve protein misfolding or cellular dysfunction.

So with that, I'd like to turn the call over to Tran for a discussion of our financial results. Tran?

Tran Nguyen

Thanks Gene. I'd like to take a moment to remind everyone that prior to December 21, 2012, the Prothena business consisted of a substantial portion of Elan Corporation Limited, formerly Elan Corporation plc, now owned by Perrigo Company plc, former drug discovery business platform, which historically operated as part of Elan and not as a separate stand-alone entity. The carve-out financial results for periods prior to December 21, 2012 presented in our earnings release do not necessarily represent the financial position or results of operations of Prothena had it been operated as a separate independent entity. For more information, please refer to our SEC filings.

I will now move on to our financial results. Firstly, I'm pleased to report that our 2013 cash burn of $33 million is lower than our previously communicated 2013 cash burn guidance range of $34 million to $40 million. Of course, these figures do not include the $84.5 million in net proceeds raised through our October 2013 public offering.

We reported a net loss of $11.1 million for the fourth quarter of 2013 and $41 million for the full year of 2013. This compares to a net loss of $12.2 million for the fourth quarter of 2012 and $41.4 million for the full year of 2012. Net loss per share for the fourth quarter and full year of 2013 was $0.52 per share and $2.20 per share respectively, compared to $0.82 per share and $2.84 per share for the respective prior periods. Net loss for the fourth quarter and full year of 2013 included share-based compensation expense of $1.1 million and $3.1 million respectively, compared to $0.6 million and $7.5 million for the respective prior periods.

R&D expenses totaled $5.6 million for the fourth quarter of 2013 and $26.1 million for the full year of 2013, compared to $9.8 million for the fourth quarter of 2012 and $34.1 million for the full year of 2012. R&D expenses for the full year of 2013 decreased primarily due to the reduced share-based compensation, personnel expenses and lower external costs associated with the external ELND005 program related to research services, discovery and NEOD001 programs, partially offset by increases in external expenses attributable to our PRX002 and PRX003 programs. R&D expenses for the fourth quarter and full year of 2013 included share-based compensation expense of $0.4 million and $1 million respectively, compared to $0.4 million and $6.1 million for the respective prior year periods.

G&A expenses totaled $5.3 million for the fourth quarter of 2013 and $15.1 million for the full year of 2013, compared to $3 million for the fourth quarter of 2012 and $9.9 million for the full year of 2012. The increase in G&A expenses was primarily due to an increase in personnel costs, share-based compensation expense and professional services fees.

As part of the October 2013 public offering, Janssen Pharmaceutical sold its full position of approximately 2.6 million ordinary shares, and in February of this year, Elan sold its full position of approximately 3.2 million ordinary shares of Prothena. We are pleased to have helped diversify our shareholder base with these two successful offerings.

As of December 31, 2013, Prothena had $176.7 million in cash and cash equivalents, which includes approximately $84.5 million of net proceeds from our 2013 public offering. We have no debt and approximately 21.9 million ordinary shares outstanding.

Now turning to our 2014 financial guidance, the Company expects a cash burn of $7 million to $12 million for 2014, ending the year with approximately $167 million in cash. The 2014 cash burn is primarily driven by an estimated net loss of $13 million to $18 million, which includes approximately $6 million of share-based compensation expense.

Additionally, the estimated 2014 net loss is primarily due to clinical development costs related to NEOD001 and PRX002, manufacturing and IND enabling study costs related to PRX003, and costs related to further advancement of its discovery programs, which we expect to be offset by up to the upfront milestone payments of $30 million which we received in early 2014 and the anticipated near term clinical milestone payment of $15 million which we expect to receive in 2014 from the PRX002 collaboration with Roche, which may be accounted for as a combination of revenue and expense offset in our income statement. We are currently in the process of evaluating the accounting treatment for this transaction as it pertains to future reporting periods.

With that, I'll turn the call back over to Dale to summarize our upcoming milestones for 2014. Dale?

Dale Schenk

Thank you, Tran. Building on a year of foundational growth, we see our momentum continuing into 2014 and beyond. In summary, this year we plan to present interim data from our ongoing Phase 1 study of NEOD001, initiate a Phase 2/3 clinical study of NEOD001, in conjunction with Roche initiate a Phase 1 clinical study of PRX002, receive a $15 million near-term clinical milestone from Roche under the PRX002 collaboration which is in addition to the $30 million upfront we recently received from Roche in February this year, announce the initial educations for PRX003, and finally complete IND enabling studies for PRX003 with plans to initiate Phase 1 trials in 2015.

We are confident that our novel approach to treating diseases will ultimately result in new therapeutic alternatives for patients suffering from these devastating conditions. With an exceptional team in place motivated to help patients and driven to meet our corporate objectives, we look forward to reporting our progress in the months ahead.

At this time, we are ready to open the call for questions. Can we do that, operator?

Question-and-Answer Session

Operator

(Operator Instructions) First question is from Jason Kantor of Credit Suisse. Your line is open.

Jeremiah Shepard - Credit Suisse

This is Jeremiah for Jason Kantor. First question is, in terms of upcoming meetings where you might present data for NEOD001, how do you plan on announcing which meetings that might be, would you wait for the publication of the abstracts or do you potentially announce it upon the acceptance of the abstract?

Gene Kinney

So, I think what we've been pretty consistently saying is that we will let everyone know through a press release when an abstract has been accepted. That would certainly give details about the meeting that we'll be presenting at, which scientific conference, as well as details on date. There wouldn't be much information on what's actually in the abstract of course until the abstract publishes in the public domain, at which point we'd update that press release publicly and provide the information on the abstract. Probably obvious but a point of note, that between the period of time when the abstract was submitted and then when we actually do the presentation, the information at the presentation will obviously be updated at that time.

Jeremiah Shepard - Credit Suisse

And regarding the Phase 2/3 study, what are the gating factors for starting that study and could you potentially file with the data from this study?

Dale Schenk

I'll just say one thing, and then maybe Gene and Marty can comment. Gating factors as to whether to do it or not, we have already said from our Phase 1, it's a safety, tolerability study, we want to understand that it's safe and reasonably well tolerated, we hopefully want to figure out a dose to use, and then finally from perhaps exploratory end points and other data we'd like to know which organ or organs to focus on. And once we have that information, we've already said, we would then design a Phase 2 or Phase 2/3 to further evaluate it. I don't know if Gene or Marty want to…

Martin Koller

In addition to that, we would also of course meet with regulators to review the design of the study and the outcome measures to be utilized.

Jeremiah Shepard - Credit Suisse

One last question, when you might consider pursuing a frontline study or a study in combination with other agents for amyloidosis?

Gene Kinney

I'm sorry, the question was, when would you consider that, is that…?

Jeremiah Shepard - Credit Suisse

Yes, when might you consider that?

Gene Kinney

I think it's a very good question. I mean there are certainly some benefits that could be seen in combining this approach. In as much as at least in theory, it should be complementary to the chemotherapeutic approaches. There are a number of operational logistics that you need to think through and difficulties. So I can't give you any commitment on timing at this point. I will tell you it's something that we are always discussing and we are always thinking about, and obviously in the clinical development path and in the clinical development program, we are thinking quite a bit about the right time to start to think about the combination approaches as opposed to a more sequential approach, but I can't give you much more color on it than that today.

Dale Schenk

And I would just add, from the biology perspective, we view scientifically what NEOD001 is designed to do is complementary to the existing approaches that are currently being used. We are trying to improve clearance of [amyloid protein] (ph) whereas those approaches are turning off the production.

Operator

The next question is from Michael Yee of RBC Capital Markets. Your line is open.

Charmaine Chan - RBC Capital Markets

This is Charmaine on behalf of Michael. My question pertains to the potential sort of Phase 1 expansion cohort at the [MTT] (ph). I understand that your ongoing dosing, you're still right at raising the dose because you're not seeing a lot of safety effects, so I'm just trying to understand would that still be something that you're interested in starting, what kind of data would you be getting if you were to start the expansions and you seem to have definitive – quite definitive timeline in starting the Phase 2/3, and I have a follow-up.

Gene Kinney

Let me start the question, Charmaine, and maybe Marty can also jump in. So it's a good question, thank you for that. I think in terms of the expansion versus dose escalation, we haven't really said where we are in terms of enrollment in the ongoing Phase 1 trial. I think you'll get a lot of information about that when we do come out and talk about the data, you'll get a much better sense of at least where we were at the time of the abstract submission and then subsequently at the meeting. You will be able to hear a little bit more about where we are with respect to either dose escalation or expansion.

The expansion cohort is something that we can use in a number of different ways. It really depends on the type of information. We feel like that will be beneficial to us as we start a Phase 2/3 study. I think the nice thing about the expansion cohort is that that cohort can continue and even run in parallel with the potential Phase 2 or Phase 2/3 study such that we can continue to get both safety information as well as any other kind of logistical information we might need from that study. Martin, do you want to add?

Martin Koller

And it adds to additional biomarker [and other counter-measures] (ph) and the design of the Phase 2/3 study as well.

Charmaine Chan - RBC Capital Markets

That's helpful. And my follow-up is on the biology side where in animal studies and with the doses that you're using right now, dosing once a month, how many cycles do you think it is needed to get to a level where clearance has reached a steady-state equilibrium, where you believe that like if that level of biological activity pertains or sustains itself, that you would see clinical activity?

Gene Kinney

It's an important question and it depends a little bit on what do you think or how do you think about the biology, and as I think you'll probably know, Charmaine, because I know you've done some reading in this space, there is a little bit of work out there suggesting that the more soluble forms of these aggregated proteins may be causing ongoing toxicity at the level of the organ. There is also information suggesting that the insoluble amyloid assist that and really interpolates into the tissue is also causing damage, and it may be that one or both of those are sufficient, if you actually rectify the situation, in fact you see benefit.

Now, you would expect, just based on the kinetics, that those more soluble aggregates should be a little bit more quick to resolve in the course of interacting with an antibody. But that said, how you translate that into actual seeing effects in humans, I think is very hard to say and that's basically what we have to do studies to determine.

The only other point I'd make there, if you go and look at the literature in this space, what you'll see is that a lot of the soluble aggregate work is really been done at the level of cardiomyocytes. So it really speaks to the cardiac. I think there's less information that feels, at least my reading of the literature, as to how big a role they play in other organs. And so, we don't know as much about those soluble aggregates, at the level of kidney for example.

Charmaine Chan - RBC Capital Markets

Understood. That was very helpful. Thank you.

Operator

The next question is from Steve Byrne of Bank of America. Your line is open.

Steve Byrne - Bank of America

Can you use MRIs to determine whether or not there is cardiac involvement of amyloid deposits to distinguish it from say cardiac dysfunction due to hypertension, can you use scanning technology to make that distinction?

Gene Kinney

That's an excellent question. We have looked into MRI as a possible surrogate outcome measure for these clinical trials and it's not yet ready for primetime so to speak. There is still evolving methodology and procuring it. There hasn't been any proved validation of the method at this time.

Steve Byrne - Bank of America

Okay. And then a couple of financials for you, Tran, that roughly $15 million loss for the full year, does that assume that the $45 million from Roche is not amortized, it's received in full in the year?

Tran Nguyen

So, none of the Roche actually financials are in the 2013 numbers, given the transaction actually went effective after the HSR period had expired which we announced in January. So, all of or most of the $45 million that we're speaking of will be accounted for in 2014 financials. We are still working with our auditors and finalizing the exact accounting treatment, but as we stated before, it will be reflected in some kind of a combination of revenue and offsetting expenses in 2014.

Steve Byrne - Bank of America

Okay, I was referring to 2014, so whether or not it's revenue or expense offset, it's not going to be amortized in 2014, is that the case?

Tran Nguyen

Yes, let's just say the milestones themselves, those will actually probably be recognized as revenue, and then it's about the accounting for the upfront of the $30 million. And so, we will address that when we brought that out with [indiscernible] how to exactly account for that. But yes, the net loss number that we provided you, that will be effected, whether it's on a revenue line or whether it's more shown through the OpEx line. The net-net of it is shown through the net loss line.

Steve Byrne - Bank of America

Okay, and out of the milestone payments from Roche that you are eligible for, this $600 million less the $30 million upfront, can you comment on how much of that is pre-approval?

Tran Nguyen

So, we can't at this time. What we have said in our prior conversations in December is that, of that $600 million, we said $45 million was in upfront and near-term clinical milestone, and we said $380 million were due clinical, regulatory and first commercial sale milestones, and we also said $175 million, which is the remaining portion of it, is for the sale of milestone.

Operator

The next question is from Chris Marai from Wedbush Securities. Your line is open.

Christopher Marai - Wedbush Securities

First, regarding the Phase 2/3 trial for NEOD001, I just wonder if you could comment on the type of endpoints you might be looking for and if you might be looking for interim look type design specifically what maybe an OS standpoint and a NT-proBNP type interim look or other looks. And then secondarily on PRX003, MCAM is obviously a very sought-after target for a long time, you guys have seem to crack the code, I'm just wondering when you look at your first in-humans trials, are you designing that with a goal in mind for an oncology typesetting or an inflammatory disease immune setting?

Gene Kinney

Let me just start with the endpoint question. It is obviously a very good question. I think Dale highlighted in response to an earlier question that one of the things that we really want to understand coming out of the Phase 1 data is what is the appropriate endpoint to focus on, which would really be directed by what organ involvement we focus on moving into a Phase 2 or Phase 2/3 study. If you look at this population, AL amyloidosis, the primary organs that tend to be involved are either at the level of the kidney or the heart. When you think about renal endpoints, one can certainly think about certain biomarkers at the protein area and what have you, but I think most trials that have been in this space are not so much in AL but in AA [indiscernible] tend to rely more on times dialysis type endpoint or even renal replacement type of endpoint.

At the level of cardiac function, I think there are a number of approaches one could think about. One could certainly think about overall survival in as much as survival tends to be a little bit shorter in cardiac involved patients with AL amyloidosis as opposed to other organ involvement. One could also think about functional endpoints and there are a variety of functional endpoints that have been successfully used in the regulatory space. One of note is the six-minute walk test which has been used by a number of companies in the cardio renal area as well as in some rare diseases.

And then I think you're right, the NT-proBNP is also something that's of interest. There is some data out there suggesting that it does seem to be associated with overall survival in the patient population. Obviously we want to explore the different approaches, both as guided by the Phase 1 data, but then also with robust discussions with regulatory authorities to make sure that we are on the same path to next study as a productive study.

Dale Schenk

Okay. This is Dale. And then, I'll just respond to the question on PRX003 MCAM. As we said, we are actually doing well in our work in terms of studying on which indication or indications to look at with PRX003 as MCAM antibody. We haven't yet communicated that, but I can assure you that we are thinking very, very positively about it, potentially in both, as we said previously, both inflammatory diseases as well as cancer.

Christopher Marai - Wedbush Securities

Okay, great. And with respect to NEOD001, just a follow-up, you had mentioned obviously you're going to have to talk to regulators regarding the future endpoints. Given the progress in your Phase 1 study, I'm wondering at what time point you were thinking that you're going to be discussing these endpoints with regulators, particularly considering the guidance with respect to starting a Phase 2/3?

Gene Kinney

I think, Chris, probably the best I can tell you right now is that assuming that the Phase 1 data permits us to move forward to a Phase 2/3 study, we would discuss the potential clinical trial design, including endpoints, with regulators ahead of the start of that study. And I think what we are saying very publicly is that we'll be starting that study in the letter part of this year.

Operator

The next question is from Bert Hazlett of ROTH Capital. Your line is open.

Robert Hazlett - ROTH Capital Partners

My questions on 001 were just answered, so 003 and the MCAM program, PRX003, the corporate I guess goals or the corporate strategy with that asset, is that more something where you would foresee doing some initial clinical work or some robust IND enabling work and then partnering at least part of that asset maybe geographically to help maybe bolster the development of that program, or is that an asset that you would think you might hold onto for a longer time as an individual company?

Dale Schenk

So, I'll just answer the top level and hand it to Tara. There are a lot of options and there is quite a bit of optionality for PRX003 as we talked about previously, both inflammation and cancer. We're looking at all of those are options, and while I'm not being terribly specific, we do plan to communicate this year what we plan to do. I will say this much though, there is definitely a piece of it that we want to keep it owned for sure. We know the information very well because of our previous experience with Tysabri and cell adhesion and inflammation. So we feel very comfortable in this space despite how challenging it is and we understand it quite well. But we will be communicating that later this year. Tara, you want to add anything else?

Tara Nickerson

Yes, I think that's right and we certainly would like to have some clinical data and feel comfortable that we can achieve that on our own, and depending on what indications that data may point us towards, I think that will determine our partnering and potential partnering strategy at that point.

Operator

There are no further questions at this time. I'd like to turn the conference over to management for any closing remarks.

Dale Schenk

I'd like to thank everyone for their attention and for listening. And in conclusion, we thank you all for joining us today and we appreciate your continued interest in Prothena. Thank you very much.

Operator

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the program. You may now disconnect. Have a wonderful day.

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