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Dyax Corp. (NASDAQ:DYAX)

Q1 2014 Earnings Conference Call

April 30, 2013 05:00 PM ET

Executives

Jennifer Robinson - Associate Director, Investor Relations and Corporate Communications

Gustav Christiansen - President and CEO

Todd Bazemore - EVP and CCO

Burt Adelman - EVP, Research and Development and CMO

George Migausky - CFO

Analyst

Michael Yee - RBC Capital

Nicholas Bishop - Cowen and Company

Joseph Schwartz - Leerink Partners

Christopher Marai - Wedbush Securities

Christopher Marai - Wedbush Securities

Akiva Felt - Oppenheimer

Operator

Good afternoon, and welcome ladies and gentlemen to the Dyax Corp’s First Quarter 2014 Financial Results Call. At this time I will like to inform you that this conference call is being recorded and that all participants are in a listen only mode. At the request of the company we will open up the call for a brief question-and-answer period at the end of this presentation.

Before turning the call over to Gustav Christiansen, President and Chief Executive Officer of Dyax, the company would now read the forward-looking statements.

Jennifer Robinson

This afternoon Dyax issued a press release concerning its first quarter 2014 financial results. Dyax would like to remind everyone that statements made today reflect current expectations, estimates and projections about its products, programs, collaborations, strategies and financial performance and are forward-looking statements. These statements, including those relating to Dyax’s commercial product KALBITOR and its clinical stage product candidate DX-2930 are subject to risks and uncertainties that could cause actual events and results to differ materially. Important information concerning these risks and uncertainties is contained in Dyax’s press release today and described or referred to in its most recent Form 10-K and other periodic reports filed with the SEC and are also available on the Company’s website at www.dyax.com.

I will now turn the call over to Gustav Christiansen, President and CEO of Dyax. Gustav?

Gustav Christiansen

Thank you Jen. Good evening everyone and welcome to our first quarter 2014 financial results conference call. On the call today we’ll discuss KALBITOR, DX-2930 the LFRP and our first quarter financial highlights. Because of the diversity of our core businesses, we believe Dyax is well positioned and well balanced for future growth. Our business are defined by the LFRP, which provide a compelling value with significant upside potentials. DX-2930 a potentially best in class prophylactic treatment that is directed against a clinically validated target and a growing KALBITOR business contributing positive cash flow.

Supporting all of this is a strong balance sheet which provides Dyax's flexibility to pursue our clinical and commercial goals.

Next I would like to highlight some very exciting news. The first part approval from our LFRP was announced last week by Eli Lilly. CYRAMZA scientific name ramucirumab was approved by the FDA as a single agent treatment for patients with advanced gastric cancer. Lilly announced that expects to make CYRAMZA available in the coming weeks. The total potential of this program is significant for Dyax.

In addition to its approval in gastric cancer CYRAMZA is currently in several Phase 3 trials for other indications. And two of these trials have already had positive data readouts. This suggests meaningful commercial potential for the product with Dyax eligible to receive a net royalty of 2.5% on the first 10 years of commercial sales.

Now moving to our HAE business; Dyax is focused on exploring the plasma kallikrein pathway and developing products for the treatment of HAE. KALBITOR our market product to treat acute HAE attacks achieved net sales of $12.5 million for the first quarter 2014. We continue to add new patients and the treatment rate remains similar to what we saw in Q4 2013.

Further this month we also announced that the FDA approved and expanded KALBITOR, that includes treatment of acute attacks of HAE in patients 12 years age and older. This makes KALBITOR the first and only subcu therapy available for pediatric patients within this age group.

Next is DX-2930; during the first quarter we reported results from the first inhuman clinical study of DX-2930. The Phase 1a study met all objectives and supports the advancement of DX-2930 into further clinical trials. We expect to begin dosing HAE patients in the Phase 1b, multiple ascending dose study midyear and are anticipating data from this trial in early 2015.

I will now like to turn the call over to members of our executive management team, who will review our business in more detail. First, Dr. Burt Adelman, Executive Vice President of R&D and Chief Medical Officer, will discuss our research and development activities. Then George Migausky, Chief Financial Officer, will review the progress of the LFRP as well as first quarter financial highlights and financial guidance. Following these updates, I will provide summary remarks, then we will open the line for Q&A.

Before moving on I would like to take a brief moment to introduce Todd Bazemore, who recently joined Dyax as Executive Vice President and Chief Commercial Officer. Todd is an accomplished senior healthcare executive, with two decades of commercial experience in both primary care and specialty markets and he has a strong track record of strategic leadership, operational execution and launching and developing brands.

All of this will be valuable as we aim to grow our KALBITOR and as we develop plans to how to optimize the value of DX-2930. Todd.

Todd Bazemore

Thank you, Gustav. I am delighted to join the Dyax leadership team and I am pleased to be here today. My decision to join Dyax was driven by the opportunity to strengthen KALBITOR’s position in the acute HAE market and to launch DX-2930, a potentially best in class product for prophylactic treatment of HAE. I am happy to have the chance to work alongside this thoughtful and dedicated management team as we continue to build out our commercial strategy for KALBITOR and DX-2930 both in U.S. and globally. Both product opportunities have attracted a great deal of attention in the medical and financial communities and look forward to updating the market on our progress and to meeting each of you.

Now, I’ll turn the call over to Burt.

Burt Adelman

Thank you, Todd. Good afternoon everyone. Thanks for joining us today. As I have said in the past, Dyax’s ongoing strength in HAE teaches us that patients and physicians managing this complex disorder together are best served by having the opportunity to choose amongst various treatment options, both acute and preventive. By having choices and being part of the decision process, patients are best able to gain control of their illness and live independent productive lives. We are pleased that the FDA has extended to 12 years the age of patients eligible to be treated with KALBITOR for acute HAE attacks. KALBITOR is now the only subcutaneously administered therapy approved for children from age 12 and above.

We are excited to be able to offer KALBITOR to these young people and firmly believe that they will benefit from the integrated care options Dyax has developed for KALBITOR patients. Current preventive therapies are not consistently effective so that many patients must supplement chronic therapy with additional acute treatments. This efficacy gap highlights the need for better prophylactic options. Beginning with its discovery, our objective for DX-2930 has been to develop a highly effective, convenient and well-tolerated prophylactic HAE treatment.

Recently, we reported the results of the first in human study of DX-2930. A single dose placebo control dose escalation study in normal subjects. In this study, there were four dosing cohorts ranging from 0.1 to 3 milligram per kilogram. Importantly, DX-2930 was administered by subcutaneous injection in this study. Results showed the DX-2930 was well tolerated. There was no evidence of any dose-limiting toxicity. The most common adverse event was headache which occurred in equal rate of 25% in the DX-2930 and placebo groups. Pharmacokinetic data from the study demonstrates the DX-2930 accumulates in plasma in a predictable, linear dose-dependent manner. The plasma half-life is long ranging between 17 and 20 days.

Pharmacodynamic data demonstrates a dose and time-dependent inhibition of plasma kallikrein is proportional to plasma drug concentration. At this point in development, we believe that DX-2930 has already begun to display the key attributes of an effective prophylactic agent for HAE. First, DX-2930 is directed against plasma kallikrein, a validated target in HAE. HAE attack result from aberrant activation of the contact system and plasma kallikrein is the central enzyme in that pathway. A definitive answer will come from proof-of-concept study.

Second, DX-2930 was developed for chronic use. DX-2930 binds the plasma kallikrein with high affinity and specificity. Preclinical testing provides evidence that DX-2930 is well tolerated in high doses over long periods of time. Phase 1 trial results indicate that DX-2930 was well tolerated in normal subjects given single doses, clinical testing will provide definitive long-term safety data.

Third, DX-2930 has a pharmacokinetic and pharmacodynamic profile that should enable maintenance of a continuous therapeutic plasma level. DX-2930 behaves predictably across a range of doses and has a long half-life that will allow infrequent dosing.

Fourth, DX-2930 will be available in a dosage form convenient for patient self-administration. DX-2930 will be formulated so that it can be self-administered by infrequent subcutaneous injection. Our next trial is a Phase 1b blinded multicenter repeat dose, dose escalation study exploring DX-2930 in patients with HAE.

The primary purpose of this study will be to gain safety and PK data in the target patient population. We will also use our biomarker assay to assess the possible impact of DX-2930 on basal plasma kallikrein activity. We plan to start enrolling patients by midyear. As many of you are aware, we have great interest in the spectrum of disorders that may impart be driven by activation of the contact pathway. These diseases are commonly autoimmune and are characterized by swelling, pain, and edema in the targeted tissues. Examples include Crohn’s disease, ulcerative colitis, rheumatoid arthritis and psoriasis.

We are actively investigating these and other disorders and plan to share our thinking with you midyear.

With that I’ll turn the call over to George to provide updates from the LFRP and our financials.

George Migausky

Thank you, Burt. Before I review the financials let me begin by updating you on the LPRP, last week several of our licensees reported updates on their late stage clinical development programs. I would like to take a moment to give you an overview, earlier Gustav mentioned a pivotal event for the LPRP which was the approval of CYRAMZA by the FDA, CYRAMZA, scientific name ramucirumab was approved as a single agent for the treatment of advanced gastric cancer. Though we expect to make CYRAMZA available in the coming weeks and for this product Dyax stands to receive a net royalty of 2.5% for 10 years from first commercial sale. Though we also stated that they expect to submit an application with regulatory authorities this year on the positive results from the Rainbow study, their Phase III trial with CYRAMZA in combination with paclitaxel for the treatment of advanced gastric cancer.

Additionally Lilly communicated their plans to present data from the revol trial at ASCO this year and reiterated their intention to submit the first application of these data to regulatory authorities in 2014. The revol data is Lilly’s global Phase III of CYRAMZA in combination with chemotherapy in patients with second line, non-small cell lung cancer and this trial had positive data readout earlier in 2014. CYRAMZA is currently being evaluated in two ongoing Phase III clinical trials both of which are expected to report top line date later this year. Top line data from the REACH trial in liver cancer is expected midyear and topline data from the RAISE trial in metastatic colorectal cancer is expected later in 2014.

Necitumumab a different Phase III candidate of Lilly’s reported positive topline data last year for ESQUIRE which is a study for first line treatment in patients with squamous non-small cell lung cancer, and Lilly stated they plan to present the detailed data at ASCO and they anticipate submitting a regulatory filing by the end of 2014. In addition to these Phase III programs in the portfolio we anticipate data readouts this year from our licensees Biogen Idec for their (lingo) [ph] trial in acute optic neuritis and from Merrimack for their MM-121 trial in breast cancer.

And just as a reminder Dyax is eligible to receive a 2-3% royalty for the first 10 ten years of commercial sales from all of these programs and given that there are large markets being targeted in each, this amounts to significant potential royalties over time and provides both near and long term value potential for Dyax.

Now moving on to our financials, as reported this afternoon our total revenue for the first quarter of 2014 was $14.1 million compared to $12 million for the same quarter last year. These revenues include KALBITOR net sales which for the first quarter of 2014 were $12.5 million compared to 8.6 million last year. Looking first at the year over year comparison for KALBITOR net sales, patient demand units which are the units of KALBITOR that are sold by our distributors to hospitals or patients. These demand units increased in the first quarter of 2014 by approximately 39% over last year.

However it is worth noting as we mentioned in the past that the treatment rate does vary and last year Q1 2013 was a period in which the treatment rate for KALBITOR was atypically low. It’s also useful to look comparatively at the sequential quarterly sales of KALBITOR. Compared to Q4 2013 net sales as well as patient demand units in Q1 were virtually unchanged. And also compared to Q4, KALBITOR net sales in Q1 did reflect an approximately $800,000 decrease in distributor channel inventory. So the sales in the first quarter of 2014 are net of discounts, rebates and other charges of approximately 11.3% of the gross sales and as noted in the past we anticipate the typical gross to net sales adjustment during 2014 would be in the range of 12-15%.

Within our operating costs, research and development expenses for the first quarter of 2014 were $6.9 million as compared to 8.7 million last year and the primary reasons for the decrease are lower LFRP pass-through license fees as well as significantly lower development costs in 2014 related to the single injection formulation of KALBITOR. The selling, general and administrative costs which includes the commercial costs for KALBITOR were 9.5 million in the first quarter of 2014 as compared to 11.1 million last year. And these costs were higher last year in 2013, primarily due to non-cash charges associated with certain stock option modifications.

For the quarter ended March 31, 2014, Dyax reported a net loss of $5.7 million or $0.05 per share, as compared to a net loss of $11.2 million or $0.11 per share for the comparable quarter in 2013. While the reported net loss for Q1 2014 was 5.7 million, our operating cash burn in the first quarter was approximately $4 million.

We plan to continue to manage operations with a controlled level of cash burn. With respect to our cash resources, as of March 31st Dyax had cash, cash equivalent and investments totaling $187.2 million exclusive of restricted cash and this balance, this cash balance reflects approximately $80 million in net proceeds from the financing that was completed in March.

So, shifting to our 2014 financial guidance. We are reiterating that we expect top-line total revenue to be in a range of $53 to $59 million, which includes KALBITOR sales guidance of $44 to $49 million. The top-line revenue does not include any royalties which maybe earned from sales of CYRAMZA. For our KALBITOR sales we have seen significant variability in the rate at which HAE patients use KALBITOR to treat their acute attacks. And it’s important to note that our 2014 annual guidance uses the average treatment rate, realized during 2013 which reflects the potential for quarterly variability.

In addition to reiterating our revenue guidance, we also reaffirm guidance for 2014 operating costs. These operating cost represent cost of product sales, R&D expenses and SG&A costs and are expected to be in the range of $72 to $75 million. With that I will now turn the call back over to Gustav.

Gustav Christiansen

Thank you, George. We continue to execute on our goals and have a number of catalysts ahead of us this year. First, the dosing of HAE patients in our phase Ib clinical trial of DX-2930 by midyear and a number of data and regulatory milestones for phase III and phase II candidates in the LFRP. Further, data understanding of the role of plasma kallikrein system in inflammatory disorders and its impact on our development strategies in mid-2014. And last, growing KALBITOR sales and cash flow.

Again, thanks to the diversity and progress of these core businesses, we believe Dyax is well positioned and well balanced for future growth. As always we look forward to updating you on our progress in future calls.

And with that I'll turn the call over to questions. Operator?

Question-and-Answer Session

Operator

(Operator Instructions) Our first question comes from Michael Yee, RBC Capital. Your line is open.

Michael Yee - RBC Capital

Congratulations on the process. Two quick questions, one was in your phase Ib that you're going to be starting, [indiscernible] data for early '15. What will we know about the average number of rents that these patients have? Is there any way to, although it's not placebo controlled, look at any efficacy measures in patients and how long they'll be getting the drugs or can see any sort of signs of efficacy? And question number two, maybe it's for Todd, I know you just joined on. Is there anything that we should be thinking about as a competitor may have data soon, how your -- what your work has shown in terms of a subcu versus (overall) [ph] or maybe an oral; how we should be thinking about that? Thanks.

Burt Adelman

So this is Burt. Thanks for the question; I’ll answer the clinical part first. So remember that the phase Ib study is relatively small study, we’re giving people two doses separated by I believe 14 days. So they should actually you know, our phase I study showed that at the higher doses we got fairly significant exposure for 10 days or so, so these people -- it should get fairly significant exposure for a month or more. But we’re not enriching the population for folks with lots of attacks. We’re really interested in getting the study done and getting some TK and TD data in HAE patients. Nonetheless they have to have active disease and we will of course count attacks and calculate attack rate, so there is the possibility that we could learn some efficacy data, but I think it’s -- I’ve got to be clear with you guys that that’s not the intention of this study. The intention of this study is to get additional safety and PK data across this range of doses following two exposures in the HAE patient population and then we’ll move very quickly to a Phase 2 proof of concept study, and now I’ll hand it over to Todd.

Todd Bazemore

Michael I would just say it’s too early to have a response to your question, I mean obviously that’s one of the many things we’ll be looking into as we assess the commercial opportunity to 2930, but too early rather to comment at this point about PO versus subcu administration.

Operator

Thank you. Our next question comes from the line of Nicholas Bishop of Cowen and Co. your line is open.

Nicholas Bishop - Cowen and Company

Just a couple on KALBITOR actually; first, on the first quarter sales as I recall in Q1 there was some sense of last year, some sense of seasonality in the frequency of patients treating their attacks which didn’t seem to be observed this time. Just wondering if there is any kind of --is there a pattern that allows you to predict any way how often patients are going treat or is it kind of a surprise every quarter?

Burt Adelman

No I actually don’t remember we talk about (fatality), what we talked about is a variability in disease. They can have good months and bad months quarters. So it’s the variability so when we made the guidance for 2014 we specifically said we are leaving room for one quarter that we saw in ’13, there’ll be a down quarter in terms of number of average treatments. So we have not seen that in ’11 or ’12 necessarily. So we don’t know, it is a variable disease patient by patient and is not always that variability among patients outweigh each other. Q1 last year, it happened [indiscernible] the same way for a large number and therefore impacted the quarter.

Nicholas Bishop - Cowen and Company

And can you say how many new patients you added for therapy in Q1?

Burt Adelman

We have stopped saying how many patients we actually added because probably variability among attraction, so on and treatment is a bigger influence on the number and we were the last one left among competing companies giving those numbers, so we decided that we would end doing the new patient adds and let the sales and the -- and let the sales and demand units represent it. So we talked not only about sales but also talked about demand units.

Nicholas Bishop - Cowen and Company

Okay, on a separate topic then, also on KALBITOR actually, the expense of the FDA label to the younger patients, how would you think about in kind of the size of that segment relative to the one that you’re in before? And is that taking into consideration in the annual guidance?

Burt Adelman

It’s a relatively small number of patients but we in an often indication where you get to patients one by one and being the only subcu in this AIDS group where some patients do start having attack and will seek treatments. It’s important to get these patients on to KALBITOR, we also believe it’s a segment of patients where the expansion number of services we provide including the home nurse could be an important element for parents and for the child to feel they are being treated and they manage their disease the right way.

Operator

Thank you. Our next question comes from [inaudible] of Jeffries. Your line is open.

Unidentified Analyst

I guess first off on KALBITOR, is there going to be any impact on the expanded indication and on sales and whether your yearly guidance incorporates the new label. And I guess on the 2930 just wondering if maybe get the status on the formulation work that’s ongoing with that compound, thanks.

Burt Adelman

We have not changed the guidance for the year, what we said in the guidance is that we have left room for a down quarter and if it happens we will be within the guidance. So we will leave that opportunity open because the variability [indiscernible] but we obviously liked the quarter, it was a strong beginning of the year.

Unidentified Company Representative

So we have in the Phase 1 and in the Phase 1b trial, we’ll be using a 100 milligram per mil liquid formulation that is stored in a refrigerator. We have on stability, additional formulations, additional strengths. I am not sure yet that we’ll actually need them but we do have them on stability. The antibodies like most antibodies is pretty robust and easy to formulate, there is nothing particularly unusual about the buffers system that we’re using, it’s all standard recipients. Obviously we’re happy with the progress that we made to date and depending upon what we learn from ongoing dosing studies will help us determine whether we would even need or be interested in further developing the higher concentration formulations that we currently have on stability.

Operator

Thank you. Our next question comes from the line of Joseph Schwartz of Leerink Partners. Your line is open.

Joseph Schwartz - Leerink Partners

Great. Thank you very much. I was wondering, if you could talk a little bit about what the animal data tells you about the repeat dose PK-PD for 2930 and how it might differ in patients versus healthy volunteers?

Unidentified Company Representative

So the animal studies show us that if you give the dose repeatedly, it accumulates and you get higher levels and you can basically behave very predictively. So I’m not quite sure what specifically you’re looking for there. Obviously, we’ll get multi-dose PK data from the HAE study, this 1b study. Because these patients do have probably some basal amount of plasma kallikrein being generated at all times, there is the possibility that there will be an impact on the achieved dose, but we’ll learn that as we do these studies. I think antibodies are pretty predictable, pretty straightforward. I don’t think that we’re going to discover anything particularly unusual we move into the target population. That hits your point?

Joseph Schwartz - Leerink Partners

Yes, that’s helpful but I’m wondering to like, if you think you might need different levels of drugs for different types of patients who maybe have different levels of disease or expression of disease and different organism, things like that?

Unidentified Company Representative

Good question. So let`s stay focused on HAE. There recently was a paper published by (Cicardi) [ph] indicating that looking at the same biomarker that we use, looking at two-chain high molecular weight kininogen that is evidenced of plasma kallikrein activity, and in that study there was some evidence that people who have more frequent attacks tend to have a higher two-chain than patients who have less frequent attacks suggesting that if dosing levels were really critical, you might have to make sure in the high frequency patients that you got an adequately elevated level. I don’t see that as a problem with 2930 because we’ve got very predictable linear dose-related pharmacokinetic with just the matter of identifying those patients and making sure that they’re adequately dosed. In terms of other diseases that might ultimately be of interest to us I think we’ll not know the answer to that until we learn what the right dosing strategy is for HAE.

Joseph Schwartz - Leerink Partners

But I imagine you’re going to be stratifying in order to be able to observe these kinds of relationships and maybe correlate them with your biomarkers?

Unidentified Company Representative

All correct. I mean, I hope that in a proof-of-concept study, we don’t necessarily have to stratify. We might use minimization. You need to have -- if you’re really talking specifically about true stratification that really makes a trial complicated, it eats up P-value. But I do think it's important when you accrue patients to make sure across the groups of patients that you try to evenly distribute patients who may have high attack rates and low attack rates. You certainly wouldn’t want to end up with an obvious mal-distribution between placebo and active treatment groups. So those are good points and we obsess over that all the time.

Operator

Thank you. Our next question comes from Christopher Marai of Wedbush Securities. Your line is open.

Christopher Marai - Wedbush Securities

Hi, guys. Thanks for taking my question. First, really, on 2930, obviously there’s going to be some data from a competitor drug for the prophylactic treatment of HAE. I'm wondering; what would you be looking for in that competitor data that would give you confidence that long-term inhibition of plasma kallikrein could be prophylactic in the treatment of patients with HAE? And then, do you expect that this data could be meaningful at all for you guys in terms of 2930 or could it be potentially misleading? Thanks.

Burt Adelman

Lots of interesting complex questions, can you stay online until around 9 tonight? So obviously we’re talking about the BioCryst oral study. It’s a 28-day crossover study. They’re using only a single dose. We know that they have -- they themselves have said that they have a molecule that presents some very challenging pharmacokinetic data with respect to bioavailability and therefore the ability to maintain consistent plasma levels. So we would hope to see some degree of efficacy in the treated patient population and perhaps to see pharmacokinetic data that related to the degree of efficacy.

And I think that’s about all I can really say, we’re all waiting, we’re interested. Obviously, their program is directed against the same target that 2930 is directed again. I just don’t want anybody to underestimate how important pharmacology and pharmacokinetic properties of the drug ultimately are in assessing activity and improving efficacy.

Christopher Marai - Wedbush Securities

Great, that’s helpful. And then one last question on CYRAMZA maybe with respect to when you guys expect to be receiving that royalties from that. When would you start recognizing that [indiscernible] event?

George Migausky

This is George, so according to Lilly they’ll make the drug available in the coming weeks. So the coming weeks of course is Q2. We would expect that since we won’t get the royalty reports and the like until after that, it will be one quarter in arrears in terms of when we report the sales or in this case the royalties for us. So that would Q3 for us.

Operator

Thank you. Our next question comes from Akiva Felt of Oppenheimer. Your line is open.

Akiva Felt - Oppenheimer

I want to get back to guidance for a minute, given the stronger than expected Q1, it seems like there is a little bit more than room for just one kind of off quarter, so we think about Q1 being unusually high for some reason or am I over thinking this? And kind of follow up to that is the early ramu of approval, I know that the LFRP isn’t considered into the guidance numbers, but does that impact your flexibility, you're thinking on updating guidance at this point?

Burt Adelman

So to your second point first, you are right we don’t the ramu or the CYRAMZA royalties in the guidance and it’s really too early to try and put it in. We’re not marketing this drug Lilly is and we don’t have any additional information that can -- really gives us a basis on which to estimate it other than all the signs certainly point to it being a drug that will be addressing a needy patient population. So to that end we’re not -- certainly at this point could never update guidance.

And as I noted previously it’s going to be Q3 before we even really see the first of any royalties from this. So that’s the CYRAMZA piece. So for KALBITOR and you know as was touched on, it gets to the variability of the disease. And we saw the variability play out last year with treatment rates during the quarter that were low, treatment rates during another quarter that were high and we fully expect to see some of that variability in 2014. And so while Q1 had a pretty solid treatment rate, the variability is a real possibility and so again it's too early to be updating guidance given the variability and the acute nature of the disease, treating the disease acutely.

Akiva Felt - Oppenheimer

Have you seen any of those variability start to manifest in April so far?

Burt Adelman

No.

Akiva Felt - Oppenheimer

That’s helpful. I just wanted to ask one last question on the LFRP program and the upcoming (lingo) [ph] catalyst readout in optic neuritis. And I think this is going to be a pretty high visible event. And just wondering your thoughts on how this data sort of sets the stage for thinking about the multiple sclerosis trial?

Burt Adelman

So I don’t do that anymore, it’s not fair to them to ask me. I think that let’s take it one step along the way. Let’s see what -- they have got multiple efficacy readouts, let’s see which one they hit on an how strong they are and then we can start to think about how they’ll be able to use that outcome in an MS trial to get a meaningful outcome whether its mobility, cognitive function, I just think it’s little early. Let`s take it one step at a time.

Operator

Thank you. Our next question comes from Sara [inaudible] of Bank of America Merrill Lynch. Your line is open.

Unidentified Analyst

Hi this is Sam for [indiscernible] thanks for taking the questions. What type of a reduction in break through attack frequencies you think doctors will consider meaningful for 2930 or for bio [indiscernible] kallikrein inhibitor?

Burt Adelman

This is Burt, that’s a good question. We think prophylaxis means essentially -- almost it means prophylaxis. It means in most cases most patients shouldn’t be having attacks. I have a hard time seeing a package insert for a product that says preventive and the efficacy is about 50% reduction. So of course we’re aiming really, really high. And I would think that -- we think that the target plasma kallikrein is just the right place to inhibit the majority of the attacks, we don’t have attacks of HAE because we have C1 in adequate concentration to block plasma kallikrein, our hope is that 2930 essentially behaves like C1.

Unidentified analyst

Okay and then have you submitted the toxic data to the FDA yet?

Burt Adelman

So obviously to get permission to do phase 1A and 1B the agency has seen and reviewed a part of the tox package, so they’ve seen all the 28 day tox. We’ve not yet completely finished reviewing all the data for the six month tox, so that has not been submitted yet, that should go in before the beginning of the summer.

Operator

Thank and I’m not showing any further questions at this time, I’d like to turn it back over to Gustav Christiansen for closing remarks.

Gustav Christiansen

Well I want to thank all of you for dialing in tonight, listening to the first quarter call and I want to wish you all a good evening and we look forward to updating you on future quarters, thank you very much.

Operator

Ladies and gentlemen thank you for participating in today’s conference. This does conclude the program, you may all disconnect. Everyone have a great day.

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