GenVec's CEO Discusses Q4 2013 Results - Earnings Call Transcript

Mar.28.14 | About: GenVec, Inc. (GNVC)

GenVec, Inc. (NASDAQ:GNVC)

Q4 2013 Earnings Conference Call

March 28, 2014 10:00 a.m. ET


Douglas Swirsky - President and CEO

Douglas Brough - Chief Scientific Officer

James Lambert - Senior Director of Accounting & Finance


Joe Pantginis - Roth Capital Partners

Reni Benjamin - H.C. Wainwright

Harold Scattergood - Boenning & Scattergood


Good morning ladies and gentlemen, welcome to GenVec’s 2013 Fourth Quarter and Year-End Earnings Conference Call. My name is Danielle and I will be your conference facilitator today. (Operator Instructions). We would like to remind the conference participants that this call is being recorded today Friday, March 28, 2014. If you do not wish to continue your participation you may disconnect at any time.

I would now like to turn the call over to Mr. Douglas Swirsky, GenVec’s President and Chief Executive Officer. Please go ahead sir.

Douglas Swirsky

Thank you for participating in this call. Joining me this morning is Dr. Douglas Brough, GenVec’s Chief Scientific Officer and Mr. James Lambert, GenVec’s Senior Director of Accounting & Finance.

During this call we will make forward-looking statements within the meaning of the Private Securities Litigation Reform Act involving risks and uncertainties and our actual results may differ materially from our expectations.

For a complete statement of these risks, please review statements made in our SEC filings and this morning’s press release. Today, we will review GenVec’s strategy and discuss the progress we are making. Doug Brough will provide you a brief scientific overview, including the science behind our exciting hearing loss program which is partnering with Novartis. Jim Lambert will then provide you an overview of GenVec’s fourth quarter financial results. After these remarks, we will be happy to take your questions.

Let’s get started. When I took over as CEO of GenVec six months ago, we embarked on our revised operating strategy focused on maximizing the value of the company's technology and assets, including our collaboration with Novartis to develop novel treatments for hearing loss and balance disorders.

Since then we’ve accomplished much to bring that vision into focus. We're thrilled that our hearing program is poised to enter the clinic through a trial being conducted by our partner Novartis. We are also pleased with the progress we are making to form new collaborations to exploit our technology for the benefit of our shareholders. At the same time we have significantly reduced our operating structure and strengthened our balance sheet.

We continue to believe that a key element of GenVec’s future success will be our strategy to develop products through collaborations. This strategy should reduce the risks associated with drug development and allow us to pursue multiple new opportunities while keeping our cash burn rate low. We've already established partnerships with leading pharmaceutical companies, including Novartis and Sanofi. Both have substantial expertise and resources to take drugs using our technology through development and into commercialization.

The skills and capabilities our partners bring to the table increase the probability of success versus a go-it-alone strategy, while reducing our need to access additional capital. We are actively seeking other partnerships to further develop our proprietary technology and our preclinical vaccine candidates against RSV and HSV.

Our lead program CGF166 is partnered with Novartis and addresses a potential multibillion-dollar market. There are over 30 million people in the U.S. with speech frequency hearing loss and the market is dominated by devices that do not address the root cause of the problem.

90% of hearing loss is sensorineural with most of these cases caused by the loss of sensory cells in the inner ear. Our program addresses the root cause of hearing loss through the regeneration of these critical cells in the inner ear. Our unique approach offers the promise of restoring lost hearing function and delivering an improved quality of life.

The current focus of this collaboration is Novartis's advancement of the program into clinical testing which will trigger an additional milestone payment to GenVec. As we previously announced, the IND was filed in January and was deemed effective last month triggering a $2 million milestone payment to GenVec.

Dr. Brough will take you through the clinical program but I do want to emphasize that this initial clinical trial will assess both safety and efficacy. This fully funded, highly innovative program is a blueprint for how we hope to monetize our technology going forward and in the process deliver enhanced value to shareholders.

Our versatile platform technology which we use to target and express the atonal protein in cells in the inner ear has broad potential for other therapeutic applications, and can, for example, also be used to deliver an antigen intended to provoke an immune response.

GenVec’s novel proprietary non-human adenovector delivery system is capable of generating strong immune responses to a variety of antigens of interest while avoiding vector specific immunity that has hampered other vectored vaccines.

We seek to leverage our core technology through additional collaborations to generate upfront licensing and milestone payments to GenVec and create a pipeline of product opportunities developed and funded by our collaborators that may lead to additional milestone and royalty payments to GenVec.

We continue to seek a partner to advance the development of our vaccine against RSV. RSV infection is a significant cause of respiratory illness in children, the elderly and high-risk adults resulting in more than 100,000 hospitalizations annually in the U.S.

Natural RSV infection does not provide durable immunity and therefore reinfection can occur throughout life. There is currently no approved vaccine against RSV and the market is only partially addressed by Synagis, a monoclonal antibody that is only indicated for high risk infants but still generate sales in excess of $1 billion annually.

GenVec’s RSV vaccine GV2311 has been designed to overcome key efficacy and safety hurdles plaguing other vaccine approaches. Preclinical studies in accepted animal models show that GenVec’s universal RSV vaccine candidate is highly immunogenic and produces durable and broad protection from a single intramuscular administration. In animals – in animal models, high levels of neutralizing antibodies were generated which provided protection against RSV challenges in the upper and lower respiratory tract. This protection was durable lasting for a minimum of six months. Importantly no disease potentiation was observed which is a critical safety criterion for RSV vaccine and one that has been the limitation of other vaccine approaches. We believe our vaccine will be effective in infants even in the presence of anti-RSV maternal antibodies.

As previously disclosed, we met with the FDA to review manufacturing and clinical development plan for the RSV vaccine and we were encouraged by the feedback we received from the agency. To be clear, however, there are no current plans to advance the program into the clinic without a partner.

To further develop our technology for vaccine development, we have a program focused on the identification of novel antigens. For example, using our proprietary screening technology, we identified new antigens that are as protective as the gold standard circumsporozoite protein, or CSP in an industry accepted mouse model of malaria. Recent data suggests that new antigens are needed and that CSP used in vaccines being developed by others may not be sufficient to generate a protective response in an adequate percentage of people.

Malaria is a well-suited initial target application for an antigen discovery technology because there is good evidence that novel antigens with the capacity for inducing protective T-cell responses exist and there is a clear unmet need for new highly protective antigens. The proof of principle established in the malaria model leads us to consider using this technology for the identification of new antigens in other infectious diseases as well as cancer.

In summary, we've made significant progress in our strategic repositioning of the company. We have aligned our expenditures with our capital resources and have refocused the company on near term opportunities. The upcoming initiation of the phase 1/2 proof-of-concept trial by Novartis further validate our technology and provide us with an important milestone payment.

Before Jim reviews our financial results, Dr. Brough will share with you his perspectives on our technology and discuss the science behind the hearing program. Dr. Brough has been with GenVec for over 20 years and has been instrumental to the hearing program since its inception. Doug?

Douglas Brough

Good morning. I want to spend my time this morning to help shareholders have a greater appreciation of our technology and the exciting science behind our hearing loss and balance disorders program.

For over 20 years, GenVec has been an industry leader in gene delivery technology, specifically in the field of adenoviral derived viral vectors. We have developed a suite of proprietary vectors for gene delivery, complementary manufacturing cell lines and product programs to prevent or treat significant unmet medical needs.

According to a recent paper on gene therapy by Fred Ledley from Bentley University, in the past 25 years, over 50 companies have been founded specifically to develop gene therapy and as a group have raised a total of over $4 billion. We wholeheartedly agree with the encouraging conclusions of Dr. Ledley’s paper specifically that the gene therapy industry is now achieving the level of maturity that has been a requisite for product success in other technology sectors including monoclonal antibodies.

We believe that GenVec’s technology is well-positioned in the space. To be clear, not every disease problem amenable to gene delivery technology lends itself to our technology. However when efficient, robust and transient gene expression is desired, adenoviral vectors have meaningful advantages versus other gene delivery methods.

GenVec’s advanced adenoviral vectors have additional dilutions to provide safer vectors for gene transfer with greater packaging capacity. Our proprietary manufacturing cell lines are also a significant asset to the company.

One of these key cell lines is subject for a massive regulatory file at the FDA and over 3000 human clinical subjects have been dosed with vectors manufactured on the cell line. Our next generation adenovectors are derived from non-human sources, including gorillas and they provide efficient expression of genes of interest or antigen, without limiting the effects of pre-existing immunity of the human adenovirus.

Now I would like to say a little about our Novartis collaboration. For the past several years, we have worked with Novartis to complete the preclinical development of our hearing loss product candidate, which Novartis is developing under the designation CGF166. We look forward to the first patient being dosed in the phase 1/2 proof of concept trial in the near future.

The goal of this program is the restoration of hearing function by regenerating sensory cells in the inner ear. We accomplished this by trans differentiating supporting cells in the inner ear to sensory cells. During embryogenesis, supporting cells and sensory cells originate from the same precursor cells. The expression of a single gene and atonal gene is responsible for this precursor cell becoming the sensory cell instead of a supporting cell.

We deliver this gene with our proprietary adenovector. Multiple preclinical animal models demonstrate that delivering atonal gene to cells in the inner ear with our vector leads to the trans-differentiation of supporting cells and the sensory cells. We have further demonstrated that these new sensory cells are able to attract neuronal connections leading to functional recovery in both hearing and balance loss.

We've also demonstrated the morphological recovery of sensory cells in human tissue explant models. As we approach the initiation of the first clinical trial on the hearing program, many of you have asked us, what has taken so long given that Novartis licensed the technology from us in 2010.

During the last four years, Novartis has invested significant time and money to complete extensive preclinical development of CGF166 to help lower project risk. The work included confirming the encouraging animal data that led to the collaboration and in addition, there has been significant toxicology studies that have been completed with input of the FDA.

CGF166 is built on the same F5 vector backbone that GenVec and its various collaborators have administered to over 3000 subjects. CGF166 incorporates a tissue specific promoter to limit the expression of the atonal gene to a small number of cell types, including the supporting cells that are the target for therapy.

As you know, we are awaiting initiation of the first human clinical trial with CGF166 in patients with severe but stable acquired bilateral hearing loss. The protocol for the phase 1/2 trial would be conducted in 3 parts. In the first part, 3 patients will be enrolled sequentially with a safety assessment performed after each patient. It’s very important to note that even the first patient will receive a dose that we believe may be efficacious based on the preclinical animal models.

After a whole dataset review of the first 3 patients, the trial will move to the volume escalation phase. The concentration of the vector being used has been optimized for quality and manufacturing consideration. The dosage will be escalated by increasing the fluid volume delivered.

The second part of the study will identify the maximum tolerated volume that will be used in the third portion of the trial. A review of safety data will take place after the first patient and at the end of each cohort. Volume will be escalated for each subsequent cohort until the maximum volume is reached, which could be up to 90 microliters.

The third part of the study will enrol 20 patients with an option to resize as the data warrants. We expect the total number of patients to be between 26 and 45 patients. There are no established efficacy criteria for a drug to improve hearing, because no such drug yet exists. The primary efficacy criteria in this trial was established by Novartis and uses the same change in sensitivity used to determine if a drug is ototoxic. And we are looking for a 20 decibel improvement in pure tone audiometry at one frequency or a 10 decibel improvement at two frequencies. The trial is powered though to detect 2.5 decibel improvement in hearing.

There are also secondary and exploratory hearing endpoints as well as balance function and quality of life assessments.

In summary, GenVec’s core technology has broad applications in human health and we believe that forming additional partnerships such as our collaboration with Novartis is a strong and efficient path towards further developing our technology and generating returns to our stakeholders.

I will now turn the call over to Jim who will review GenVec’s financial performance.

James Lambert

Thank you, Doug. For the fourth quarter of 2013, our net loss was $0.9 million or $0.07 per share, which compares to a net loss of $3.2 million or $0.24 a share for the fourth quarter of 2012.

Total revenue for the fourth quarter of 2013 was $145,000 compared to $1.5 million in the fourth quarter of 2012. This decrease in revenue reflects a reduced work scope under our collaborative agreements and grants, the significant layoffs announced last June and the decommissioning of our previous facility.

Operating expenses were approximately $1.3 million for the fourth quarter of 2013 compared to $4.7 million for the comparable 2012 period. Our net loss for 2013 was $10 million or $0.77 per share which compares to a net loss of $14.1 million or $1.09 per share for 2012.

In 2013, total revenue was $3.7 million compared to $9.4 million in the prior year. GenVec ended 2013 with $6.1 million in cash, cash equivalents and short-term investments. As of March 24, that amount was $15.5 million which includes approximately $8.4 million in net proceeds from the registered direct offering of common stock to institutions that we announced last month. That also includes approximately $2.5 million in proceeds net of commissions from selling stock under our at-the-market or ATM program through Roth Capital. It does not include the $2 million milestone payment from Novartis that we earned when the IND became effective in the hearing program last month.

We anticipate our cash burn will be between $5 million and $7 million for 2014. We believe our existing resources combined with anticipated near-term milestones are sufficient to fund the company's operations into the foreseeable future and we've therefore suspended our ATM facility with Roth Capital.

This concludes our prepared remarks and we welcome your participation in the question-and-answer session. Operator, please proceed.

Question-and-Answer Session


(Operator Instructions) And our first question comes from Joe Pantginis from Roth Capital Partners.

Joe Pantginis - Roth Capital Partners

Hey guys, good morning. Thanks for taking the question. A few questions, if you don't mind. Doug, thanks for the fine details on the technology, et cetera. Maybe I just wanted to dive a little bit into the actual study that you just described. And I know this is a Novartis study, so it might be a little hard to share their views on this at this point, but can you talk about the time to potential efficacy? If I remember, in the animal models I believe you can see hairy cell expression or sensory cell expression within a couple weeks. So, what is the kind of timeframe you might see Novartis looking at these patients for efficacy?

Douglas Brough

Let me bring up the points from the animal models which I think is key here to talk through. Usually it’s taken in these animal models a month to two months to begin to start to see some recovery of function. And remember that it’s a long process of kick starting these cells to trans differentiate and then get the neural connection and then to be able to send those signals back.

Douglas Swirsky

So just to jump in here, I think that, for the protocol safety assessments at one, two, and four weeks and monthly thereafter and then efficacy assessments starting after the first month and monthly thereafter.

Joe Pantginis - Roth Capital Partners

Okay, and so on that, do you have any views on the potential disclosure of news? Are they going to look at -- look to present data after each cohort or wait until the study is complete? I don't know if you can even chime in on that, since it's their study.

Douglas Swirsky

Obviously we can’t provide any guidance to -- as to when Novartis might provide information coming out of the study. We will work very hard to ensure that to the extent disclosure can be made, that it gets made.

Joe Pantginis - Roth Capital Partners

And then with regard to milestones, I know you have another milestone coming in for the actual Phase I initiation. Can you give a sense of how big that is? And then, also what other near-term milestones you might be expecting?

Douglas Swirsky

So the milestone for the initiation of the clinical trial is a $3 million milestone payment to GenVec upon the first patient treated. So that’s the milestone we anticipate from Novartis this year. We are working to conclude other collaborations which would come with additional upfront payments and opportunities for milestone payments and royalties down the road but we don’t have any guidance to provide in terms of other monies we’re expecting from those relationships beyond just some funded work through the various collaborations.

Joe Pantginis - Roth Capital Partners

And then maybe just the last one, you discussed the differentiation of your vectors with the adenovectors you have. You mentioned that they came from nonhuman animals, such as gorillas. And you said that obviously this doesn't bring prior immunity to these viruses, so I'm just curious that as you start to use these vectors in humans, does immunity become an issue at some point? Are you concerned about it, and if not, why?

Douglas Brough

A lot of the immunity that will be generated by the viral vector and will be dependent on how it’s delivered. And so while you can’t see an immune response that would be generated after multiple administrations, we don’t expect this to be a limitation for these new vectors.

Joe Pantginis - Roth Capital Partners

So you would be able to obviously dose enough to be able to -- like for a vaccine standpoint, dose enough times in order to generate the immunity to not worry about the host immune response to the vector?

Douglas Brough



Thank you. And your next question comes from Reni Benjamin from H.C. Wainwright.

Reni Benjamin - H.C. Wainwright

Hi good morning guys, and thanks for taking the questions. Maybe the first one in regards to CGF166, can you give us some thoughts as to how long you think the effects could last? I know we have preclinical models, but how does that translate into humans and what are your current thoughts regarding that?

Douglas Brough

Well, from a regeneration point of view, once the cells are there and they would still be sensitive to all of the things that kill those cells but I would expect them to last for a very long time and all the preclinical data suggests that as well.

Reni Benjamin - H.C. Wainwright

And when we talk about the improvements in hearing, clearly you're breaking new ground here and looking at both 20-decibel and 10-decibel hearing, depending on one frequency or two. Is there any sort of further analysis that is being done in regards to -- it's not how clear the hearing is, but how understandable, let's say, the new hearing is. So for example, are they just hearing muffled tones or is there an actual translation of the tones or speech into something recognizable?

Douglas Brough

Number of other secondary endpoints and we will be looking at some of these [indiscernible].

Reni Benjamin - H.C. Wainwright

Okay, so we will get a complete picture there. And I guess one question regarding the antigen discovery platform. Can you talk a little bit more about it? What is unique about it, and is this something that this year we could find a partner interested in having you look for novel antigens for them?

Douglas Swirsky

So before I hand it over to Dr. Brough, I just make it clear, this is the work that we have been doing under our grants and it has produced some interesting things in the malaria program but it's not something that we’re spending a lot of our own resources on. So we are trying to find the best way to move that forward. One potential avenue is through a partnership as you suggest and I will let Doug speak a little bit about the technology.

Douglas Brough

The technology that we have been looking at here actually screens for antigens from malaria that are up regulated during protection based off of the delivering to an animal the pathogen. And one of the keys here has been to look for the T cells or antigens that elicit a T cell response and that’s what we have been screening for. And we have been able to identify a handful of new antigens from malaria that we think will – or that could provide additional protection in addition to CSP to reach this sort of holy grail of 80% or above effective malaria vaccine. And that has been a challenge as the existing RTS,S vaccine is moving forward is protecting about 50% which is great as we start thinking about that but if we’re really going to be able to protect against malaria, we need to get that up in some way and we think these additional T cell antigens will be able to do that.

Reni Benjamin - H.C. Wainwright

Just regarding the RSV vaccine and that program, obviously you are looking for partners. Can you give us any sort of color as to how those discussions may be going? Is it a corporate goal to secure a partner this year or is it still up in the air?

Douglas Swirsky

So a fair question. Our corporate goals do include getting some collaborations done. In fact, there is space… if you look at our corporate goals which obviously we haven’t disclosed but, we can tell you that there's a couple in there for new collaborations. So we are not providing any guidance. And to be clear, so we were coming from a full stop at the end of the summer last year when I took over as CEO, we really kicked off those conversations again in earnest with parties that we knew would take a long time. So we are talking to large companies that do a lot of diligence and take their time but can lead to successful collaboration around the underlying technology with vaccine applications and potentially including other vaccines that we've done preclinical work on for RSV and HSV. So it’s a goal for us and working hard. I've always said that we’d like to get something done in my first year as CEO. I guess we are closing in on my seven-month anniversary here. So we’ve got a little time left on that clock but we are working hard to find other folks to move the technology forward so that we can drive additional value from them without committing our own resources to them.

Reni Benjamin - H.C. Wainwright

Fair enough. Just one final question. As we look out, let's say, 12 to 24 months, how should we be thinking about GenVec? The way -- I look at it as a gene therapy company, and if that's the case, it would seem that you would be looking for new targets to potentially start addressing or new indications to potentially start addressing. Is that happening, or is Novartis really going to spearhead the entire gene therapy program forward and GenVec concentrate more on the immunotherapy program?

Douglas Swirsky

So our relationship with Novartis is for hearing and balance disorders and that that's what it’s limited to currently. And our view here on additional program opportunities is we are trying to navigate a very fine line, we do not want to materially change the company's run rate by taking on big projects at our own expense. We believe the technology is valuable, we’re encouraged by the partnering discussions that are ongoing and we think the best way to build the set of opportunities for us is through collaborations, where we get to leverage our technology, we can receive upfront payments and milestones and build the company that way. We are looking at select ways for small dollars to move the technology forward. You mentioned the antigen discovery work. Are there some things we could do on our own dime to see some things outside of malaria, that would be interesting. That's an example of an area that we could. We haven’t made any commitment in that area. But there are things we could do very selectively but I am trying to walk again a very fine line between not just sitting on the Novartis program but also not ramping up spending too much and endangering sort of… what we have created here.

So first, I want to do no harm, I want to make sure we can fully benefit from the Novartis program, that we are being a good collaborator for them and program’s moving forward but at the same time we want to be opportunistic on how we can move our technology forward and prepare ultimately for additional collaborations going forward.


(Operator Instructions) And our next question comes from Steve Hill from Hill Partnership [ph].

Unidentified Analyst

Quick question for you on the guidance on the burn rate between $5 million and $7 million, is that indicative of what we can expect kind of go forward outside of just 2014? Or I'm just trying to figure out with the initiation of the Phase I with Novartis if that's a little higher specifically, is what I'm trying to understand.

Douglas Swirsky

Right, so it’s going to depend a little bit on number of factors going forward, and I project out our cash expenditures for ‘15 and ‘16 which obviously is for internal use only at this point. But let me give you some thoughts on our thinking. I look at this, I’d say where are those dollars going to ago and they need to be married with success on partnering side. So we’re continuing to invest for instance in the intellectual property around some aspects of our technology and those expenditures will be there, or they won’t based on the fact that people are stepping in to support those programs.

We have people here, we have cut our burn significantly as you know from previous years and we've gone -- I think two years ago we had 80 something people and then a year ago 40 something people. When I took over as CEO we had nine people and now we've moved into -- we’ve moved up to 11 people. Those two people are currently being funded, and we need to make sure that we can continue to cover some of our payroll through those types of – through grants and additional collaborative revenue. So I would think that this is the high-end, I know it’s a pretty wide goalpost of $5 million to $7 million but there's some things that we can’t fully predict here this early in the year. And when I talk about burn, Jim is pointing his finger at me, he wants me to make sure that I – make sure that everybody understands that the burn guidance of $5 million to $7 million is for what we’re spending not including the impact of the monies we’re getting in from Novartis this year and not including anything financing activity. So it's not that we are going to burn between 10 and 12 and that's a net of 5 million from Novartis that we’re anticipating this year between the $2 million we’ve invoiced and $4 million of the IND as well as the $3 million we would expect from the first patient treated, that's not a number net of that, that's just sort of exclusive of financing activity, exclusive of the milestone revenue from Novartis but it does include funded work under some grants, under some residual contractual work with the government and of course Novartis.

Unidentified Analyst

Terrific. That's helpful, and I appreciate the detail on the other programs that Brough provided earlier. So thanks, guys, and keep up the good work.


Thank you and your next question comes from Julie Bickel from Boenning & Scattergood.

Harold Scattergood - Boenning & Scattergood

Actually, it's Harold Scattergood, not Julie. I'm sitting here with her. This is a question really, I guess, directed to Doug Brough, if I could, and to ask, what do you think a patient will experience in terms of the effect that they -- the positive effect from the treatment? Do they just -- can you elaborate on that, Doug, please?

Douglas Brough

That’s an interesting question, Harold. Well from thinking about, I would expect that if they are going to experience an efficacy signal is that they would go from not being able to hear at all a sound in that particular frequency range to actually being able to detect something. And that’s been a very positive event for folks that have, for example, that have had genetic hearing loss and have received an implant, to be able to go from that complete deaf situation to actually being able to hear something.

Douglas Swirsky

I think one thing I would also chime in on is that in addition to looking at pure tone audiometry there's a number of secondary and exploratory endpoints that are going to look and help answer the question that you’re raising for instance the Hearing Handicap Inventory for Adults which I think correlates well with pure tone audiometry is more of a subjective measurement. And so I think what you're getting at is okay, somebody can hear particular frequency but how does that actually impact their ability to interact with society as a whole and I think these exploratory and secondary endpoints, Harold, are going to give us a lot of information to help answer your question.

Harold Scattergood - Boenning & Scattergood

So these -- so the patient population that is going to be treated initially are people that at one time had full hearing and speech and lost it for some reason?

Douglas Brough

Correct, Harold.

Harold Scattergood - Boenning & Scattergood

Okay. So if they begin to hear sound again, it doesn't necessarily mean that they're going to be able to interpret things, it's just a minor sound? I'm trying to get an idea as to whether a patient who is going to -- has some sort of recovery here is suddenly going to be able to hear and understand and resume a normal life or not?

Douglas Swirsky

Right, no, I see where you’re going with this question. And so again the trial is going to help us understand some of these things. But to give you an example from the animal models, on the hearing side, you are right. All we can know is that, that based on the animals we know that hearing at specific frequencies is improved through the administration of the vector containing the atonal gene and trans differentiation of the supporting cells. But what you're getting at is, well does that really mean that the animal can actually interpret that they are hearing? But I can say on the balance side, we know that the balance function is being restored because of the functional tests that they are doing with the animals is specifically whether or not how long it takes for purposeful swimming or other balance assessments for instance, where you're actually looking at a functional recovery that is not as subjective as to, I am hearing a sound and can I interpret the sound? But these exploratory and secondary endpoints again in the trial are designed to help answer your questions.


Thank you, ladies and gentlemen, that concludes the question and answer session with GenVec management. I would now like to turn the call back over to Mr. Swirsky for any closing remarks.

Douglas Swirsky

Thank you for your interest in GenVec and for joining us today’s call. I hope that you will agree that we've made significant progress in the past six months. While all eyes are on the initiation of the clinical trial for CGF166 we are actively working to leverage our core technology to build a great company and deliver long overdue returns to shareholders. We look forward to keeping you updated on our progress. Thank you.


Thank you for participating in today’s conference. This does conclude today’s presentation. You may now disconnect. Good day.

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