Dyax's (DYAX) CEO Gustav Christiansen on Q2 2014 Results - Earnings Call Transcript

Jul.29.14 | About: Dyax Corp. (DYAX)

Dyax Corp. (NASDAQ:DYAX)

Q2 2014 Earnings Conference Call

July 29, 2014 17:00 ET

Executives

Jennifer Robinson - Director Investor Relations, Corporate Communications

Gustav Christiansen - President, CEO

Todd Bazemore - EVP, CCO

Burt Adelman - CMO, EVP, Research and Development,

George Migausky - CFO, EVP

Analysts

Judy Liu - RBC Capital Markets

Biren Amin - Jefferies

Akiva Felt - Oppenheimer

Serge Belanger - Needham & Company

Jeff Solomon - Cowen & Company

Paul Matteis - Leerink Partners

Operator

Good afternoon, and welcome ladies and gentlemen to the Dyax Corp's Second 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 this 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 second 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 Web site 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 second quarter 2014 financial results conference call. On today's call, we will review the company's quarterly results and provide an update on our key value drivers including the KALBITOR business, DX-2930 and the Licensing and Funded Research Portfolio or as we call it LFRP.

We continue to execute against our goals and are seeing results in each of our focused areas. Let me start with the KALBITOR business.

Revenues in the second quarter increased to $16.6 million driven by a higher treatment rate and a low gross to net conversion rate. Sales were robust in the second quarter. However, we still view KALBITOR has a modestly growing product.

KALBITOR is an acute treatment and as we have guided in the past, KALBITOR sales will likely be variable quarter-to-quarter. That said, we continue to manage it very closely to maximize cash flow contribution and to help fund our research and development activities in particular DX-2930.

With regard to DX-2930, as we announced we started dosing HAE patients in the Phase 1b multiple ascending dose study in May. The study is on track and we anticipate data in early 2015. Lastly, the LFRP continues to bear fruit led by the recently commercialized product CYRAMZA from our licensee Eli Lilly. CYRAMZA is the first product approval from our LFRP and Dyax is eligible to receive a net royalty of 2.5% on the first 10 years of commercial sales.

In addition to this important milestone, we anticipate additional data and regulatory events from our licensees as the year progresses. These will be detailed later in the call.

I would now like to turn the call over to the members of our executive management team, who will review our business in more detail. First Todd Bazemore, EVP and Chief Commercial Officer, will discuss the highlights from the KALBITOR sales and marketing efforts in the U.S. Second, Dr. Burt Adelman, EVP of R&D and Chief Medical Officer will then discuss our research and development activities. Then George Migausky, Chief Financial Officer, who will review the progress of the LFRP as well as second quarter financial highlights and financial guidance. Following these updates, I will provide summary remarks and then we will open the line for Q&A.

At this time, I will turn the call over to Todd Bazemore, who will review the KALBITOR U.S. business.

Todd Bazemore

Thank you, Gustav. Good afternoon everyone. Today I will provide a brief update on our progress with the KALBITOR business. I'm pleased with KALBITOR's performance in Q2 and achieve net revenues of $16.6 million an increase of approximately 33% over Q1. We continue to modestly grow new patient starts and have focused more on patient retention and persistency.

There were several upside drivers to performance during the quarter, notably higher KALBITOR treatment rates were realized across all actively treating patients and were particularly high within a subset of frequent KALBITOR treaters. We also realized gross to net favorability from a number of factors most particularly a change in the payer mix for KALBITOR units utilized with a higher percentage of our overall business coming from non-Medicaid units in the quarter.

The commercial organization will remain focused on executing our plan to grow the KALBITOR base business. This includes growth in new patient start and a greater attention to patient retention and persistency.

In parallel, we continue to evolve our commercial model to fully leverage our unique offering of KALBITOR along with individualized patient support services. The underlying goal of these efforts is to help the right HAE patients receive and stay on KALBITOR therapy, so they can successfully manage this disorder over the long-term.

Although, our primary focus is growing the KALBITOR business, we are also in the early stages of building a strategy for DX-2930 both for the U.S. and global markets. We look forward to developing this strategy in tandem with our R&D and regulatory team as they execute important clinical and development goals.

Now, I will turn the call over to Burt. Burt?

Burt Adelman

Thank you, Todd. Good evening everyone and again, thanks for joining us today. Let me begin with a brief update of DX-2930, Dyax's fully human monoclonal antibody inhibitor of plasma kallikrein. As you all know, DX-2930 is currently in development for the prevention of HAE attacks. I'm pleased to tell you that two important papers are recently published describing our work with DX-2930. Publication of these papers in important peer review journals confirms the significance of DX-2930 in the scientific community.

The Journal of Biological Chemistry as published an article entitled Inhibition of Plasma Kallikrein by a Highly Specific Active Site Blocking Antibody by Jon Kenniston and others. This paper describes the discovery and characterization of DX-2930 and details a number of important pre-clinical study results. It's a great read we recommend it to all of our fans.

The Annals of Allergy Asthma and Immunology has published a Phase 1 study investigating DX-2930 in healthy subjects by Yung Chyung and others. This paper describes the pharmacokinetic and pharmacodynamic findings of our Phase 1a study. Most of you saw the presentation of these data during a previous Dyax conference call. For those of you interested in how we conduct our assays, the paper contains methodologic details.

Regarding the DX-2930 clinical development program, we have completed the long-term toxicology studies in non-human primates at this time, there are no notable findings. These studies along with our Phase 1a and 1b results will be used to support our application for long-term dosing in HAE patients. Our Phase 1b study in HAE patients is progressing nicely, patient accrual is ongoing nothing else to report here until the date of read out planned for early 2015 so stay tuned.

Some of you are aware that we are interested in the possibility of a kinin pathway activation they contribute to the path of biology of inflammatory disorders. Here at Dyax the process of identifying potential target diseases as encompassed a number of strategies. These include a comprehensive review of published findings in human disease and animal models. Detailed conversations with knowledgeable investigators and assaying plasma individuals affected by a number of candidate diseases.

To-date these efforts have generated some lean indications but we do not yet have definitive findings because all tested patients have normal levels of C1 inhibitor, our assays does not been able to detect the striking elevations of two chain high molecular kininogen that we routinely see in HAE patients. We are looking into the possibility of developing more sensitive detection systems. We have some good ideas but no data yet.

Published clinical observations and preclinical studies do identify a number of interesting candidate diseases. This list includes rheumatoid arthritis, inflammatory bowel disease and diabetic macular edema. We are considering various studies that could be done to directly test kinin pathway inhibition by a in vivo models of these diseases. We will keep you informed as we learn more.

With that I will turn the call over to George to provide updates from the LFRP and our financial performance.

George Migausky

Thanks Brut. Before I review the financials let me begin by updating you on the LFRP.

Recently, two of our licensees Lilly and Biogen Idec reported updates on their clinical development programs, so I would like to take a moment to give you an overview. On their recent second quarter earnings Lilly confirmed their launch of CYRAMZA in the U.S. CYRAMZA is indicated as a single agent treatment for patients with advanced or metastatic gastric cancer or gastroesophageal junction adenocarcinoma with disease progression on or after prior chemotherapy.

Dyax stands to receive a net royalty of 2.5% on CYRAMZA sales for 10 years from first commercial sale. We expect to recognize royalty revenue after we receive the definitive royalty report from Lilly at the end of each quarter. In this case, our first royalties would be included in the third quarter 2014 and that translates into reporting royalties one quarter in arrears.

In addition to the commercial launch of CYRAMZA, Lilly stated that they have submitted an FPLA to the FDA for CYRAMZA as combination therapy in patients with second line gastric cancer. Lilly expects FDA action in the first half of 2015. Lilly has also filed data from both the RAINBOW and REGARD studies in Europe where the dossier is currently under review, possible action by year end 2014. We reiterated their intension to submit a regulatory filing in the second half of this year for CYRAMZA in second line non-small cell lung cancer.

And then on the clinical front, top line data for the RAISE trial of CYRAMZA in metastatic colorectal cancer is expected by the end of this year 2014. Necitumumab another candidate from Lilly reported positive top line data in 2013 for SQUARE, which is a study for first line treatment in patients with squamous non-small cell lung cancer. Lilly presented the full data set from this trial at ASCO and recently stated that the FDA has granted fast track status for the BLA.

Lilly reiterated that they anticipate submitting the BLA before the end of this year. And lastly, Biogen Idec stated on their second quarter earnings call that their Phase 2 anti-lingo clinical trial and acute optic neuritis is fully enrolled and they expect to disclose top line results in January 2015.

As a reminder, for the LFRP overall Dyax is eligible to receive a net 2% to 3% royalty on the first ten years of commercial sales from each of the programs. Given that our large markets being targeted in each this amounts to a significant potential royalty over time and provides both near and long-term value potential for Dyax.

Now moving on to our financials, as we reported this afternoon, our total revenue for the second quarter of 2014 was $19.6 million compared to $11.3 million for the second quarter of 2013. These revenues include KALBITOR net sales which were $16.6 million in the second quarter of 2014 compared to $8.6 million in the last year.

Of note, sales in Q2 represent substantially all patient demand with no distributor channel fluctuations. The increase in net sales over last year's Q2 was due to several factors. First, sales represented by patient demand units grew in 2014 by approximately $4.2 million or 39%. And this growth reflects a higher level of KALBITOR utilization which does continue to vary significantly among patients particularly those patients who experience and treat frequent HAE attacks.

While there no distributor channel fluctuation this quarter, the distributor channel adjustments which occurred in 2013 last year reduced the comparable 2013 net sales by approximately $1.2 million. And then finally, KALBITOR price increases and lower gross to net adjustments increased the 2014 net sales by approximately $2 million compared to last year.

So sales in the second quarter of 2014, our net of discounts rebates and other charges of approximately 9% of the gross sales, the comparatively low percentage for KALBITOR. As noted by Todd earlier in the call, this decreased in the gross to net was from a number of factors, most particularly variability in our patient payer mix.

And looking forward, we anticipate the gross to net sales adjustments during 2014 to be in a range of 11% to 14%.

Operating costs were $20 million during the second quarter of 2014 including approximately $1 million for cost of product sales and within operating costs research and development expenses for Q2 were $8.5 million as compared to $6.5 million last year. The primary reason for this increase is costs associated with DX-2930 development and higher LFRP related pass-through fees.

Selling, general and administrative costs which include commercial cost for KALBITOR with $10.6 million in the second quarter of 2014 as compared to $10.2 million for the same period last year.

For the quarter ended June 30, 2014, Dyax reported a net loss of $3.1 million or $0.02 per share as compared to a net loss of $8.4 million or $0.08 per share for the comparable quarter in 2013. The per share amounts are based on approximately 136 million outstanding shares.

While the reported net loss for Q2 was $3.1 million, our operating cash burn in the second quarter was break even. So at June 30, 2014, our cash resources that's cash, cash equivalents and investments totaled $187.7 million that's exclusive of restricted cash. As previously stated, we plan to continue to manage operations with a controlled level of cash burn.

With respect to 2014 financial guidance for the company, we are revising our guidance. Top line total revenue guidance has been increased and is projected to be in the range of $61 million to $66 million and this includes an approximately 15% increase in KALBITOR sales guidance which is now $51 million to $56 million.

So let me provide some context for our view around the KALBITOR guidance. We are certainly pleased with KALBITOR's performance this quarter and year-to-date, but we remain conscious of the fact that HAE is a disease with significant variability and KALBITOR is an unscheduled acute treatment. That makes it difficult to predict and patients will have future attacks that require treatment with KALBITOR. And the utilization of KALBITOR is at a rate which continues to vary significantly among patients particularly individual patients who experience and treat frequent HAE attacks.

And as a reminder also the top line revenue guidance does not include any royalties that were eligible to receive from sales of CYRAMZA. We are also making an adjustment to our guidance for 2014 operating costs and these costs represent cost of product sales, research and development expenses as well as SG&A costs. And they are expected to be in the range of $80 million to $82 million.

So with that I will turn the call back over to Gustav.

Gustav Christiansen

Thank you, George. We achieved a number of important milestones in the second quarter. And we are excited about the positive direction of the company. Thanks to the diversity of our businesses. We believe Dyax is well-positioned for future growth. We remain focused on the three main value drivers. Our KALBITOR business good revenues that contribute to positive cash flow and support our development activities. DX-2930 a potentially best in class and risk reduced total active HAE treatment that is currently in a Phase 1b clinical trial.

And the LFRP, this provides another revenue stream with upside potential. In these key areas we have a number of catalysts over the next 12 months. Data from the DX-2930 Phase 1b trial in early 2015 initiation of the Phase 2 trial for 2930 later in 2015. Anticipated royalty revenue growth from CYRAMZA and a number of data and regulatory milestones from Phase 3 and Phase 2 candidates in the LFRP. We look forward to updating you on our progress in future calls.

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

Question-and-Answer Session

Operator

Thank you. (Operator Instructions) Our first question comes from Michael Yee of RBC Capital Markets. Your line is open.

Judy Liu - RBC Capital Markets

Good afternoon, this is actually Judy Liu for Michael Yee on the line. Thanks very much for taking the questions. I had two questions, one is could you enlighten us up to the progress on required data needed to start multi-dose Phase 2 studies as well as the design of the study.

And the second question is based on any dialog you may have had with the FDA so far which result do you expect are going to be needed to make Phase 2 a pivotal study? Thank you.

Burt Adelman

Hi. This is Burt. So I will try to answer some of those questions. I'm not going to answer all of them. So I'm not really at the point to discuss the design of our Phase 2 study, but I will tell you that we believe we have completed all pre-clinical studies necessary to ask the FDA for any dosing exposure period or any rational dose that we could consider using that we learn from our Phase 1b study. And so we are just waiting to finish accrual and data analysis for this Phase 1b study and then I think we will – we would anticipate having all the information that we need to sit down with the FDA and have a pretty meaningful discussion about what else would have to be done to complete the clinical development of 2930 in for prophylaxis in HAE. And obviously, it is an orphan indication and we would imagine that the size of the trail and the number of trials would be something that that we can discuss with the agency and we will have lots of supportive information by then.

Operator

Thank you. Our next question comes from Biren Amin of Jefferies. Your line is open.

Biren Amin - Jefferies

Yes. Thanks for taking my question. I guess a couple of questions on 2930. Can you provide us which cohort in the Phase 1b if completed so far? Any guess Burt on the pre-clin data, any observations from the six month study that wrapped up I guess a few weeks ago?

Burt Adelman

So as I said in my presentation there are really no notable pretty clean study nothing much to say about it and we think it should give us – it will be – it will give us a necessary support for whatever extended dosing we need to do. So there will be no other studies necessary to support long-term dosing.

All I'm going to say about the Phase 1b study because I imagine you can recognize that this pretty competitive space. We are moving along on plan and we continue to believe that we will be able to share the results of the Phase 1b study with you all early in 2015. So things are moving along no problems.

Biren Amin - Jefferies

Okay. And maybe if I could I have a follow-up on KALBITOR, for the quarter was there any impact or benefit from the label expansion that occurred earlier in the year in the pediatric population. What was the mix of patients this quarter from the pediatric indication?

Todd Bazemore

We did launch the pediatric indication in the quarter as you noted. We did see an overall modest growth in the number of new patients on KALBITOR and some of those patients that did come on therapy were in fact pediatric patients in the 12 to 16 range, which is the new proved age indication for KALBITOR. We are not going to provide any specifics on natural number of new patients in total or what percent where pediatric or adult patients. But we do have both pediatric and adult new patient starts in the quarter.

Biren Amin - Jefferies

Great, thanks.

Todd Bazemore

Sure.

Operator

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

Akiva Felt - Oppenheimer

Thanks for taking the question. I know that you are still leaving room in guidance for a down quarter potentially. Just wondering given where a month into 3Q is that enough time to get a sense about whether the current quarter – could be the down quarter or you still being some of the contributing factors for the strong 2Q that still in play?

Gustav Christiansen

Burt?

Burt Adelman

Thanks. I mean our guidance is really based on our best assessment of where the business is going. We really do pass of it June 30th and not try and use July as a proxy for either the quarter or the rest of the year. But, taking all of it into account that's where we believe the guidance is reasonable, which does allow as you pointed out for the variability that we have seen in the past where treatment rates move around and you put a down quarter that complements some of the up quarters like we just had.

Akiva Felt - Oppenheimer

Thank you.

Operator

Thank you. Our next question comes from Serge Belanger of Needham & Company. Your line is open.

Serge Belanger - Needham & Company

Hi, good evening. And congrats on the great KALBITOR numbers.

Gustav Christiansen

Thanks Serge.

Serge Belanger - Needham & Company

I guess, I will start off with that. I think for the last couple of quarters for the first half of 2014 you reported patient demand unit growth of around 40% for this quarter in the last one. Just trying to get an idea of why you don't think that's sustainable going forward. And you also mentioned that one of the growth aspects or KALBITOR this quarter was new patient starts. Just trying to get an idea of how much of an impact new patients had?

Gustav Christiansen

So, you are on new patient start, I think we shared at the call at the end of first quarter that we are not going to directly provide guidance on the number of new patients due to the competitive nature of the market. And the number of competitors competing for a few number of HAE patients out there. I would tell you if we continue to modestly grow new patient starts, we just did so in Q1 and did so again here in Q2.

And in terms of unit growth quarter-over-quarter, Q1 units were actually flat compared to Q4 for 2013, so there was not quarter-over-quarter unit growth in Q1 of this year and we did some nice robust growth in Q2 of 2014 as compared to Q1 of 2014. But feel that there is a guidance we provided, the increased guidance we provided for the remainder of the year is reasonable considering the variable nature of the disease and really the biggest driver in variability being the rate at which patients have attacks. And then the degree to which they treat those attacks with KALBITOR.

So we feel confident that the guidance provides or allows for the potential for lowering of treatment rates that potentially occur in the second half of the year in one of those quarters. And the $51 million to $56 million in guidance is reasonable considering what we have got now.

George Migausky

And Serge maybe just to add that the strategic importance of KALBITOR is to provide net free cash flow to help fund R&D activities. And if you look at 2013 versus 2014, our results 2013 versus guidance in 2014 you see a very significant and important for us net increase in what would be free cash flow to fund R&D activities. So we feel that we are very much executing on the plan.

Serge Belanger - Needham & Company

Okay. And then on the 2930, it seems like you have completed the long-term tox studies for the next Phase 2 in 2015. Just trying to get an idea if you need to do any formulation work prior to initiating future studies?

Burt Adelman

Hey, Serge. This is Burt. So we have a formulation which we talked to you all about 100 milligrams per mil. It seems fine stable. We continue to work with it. We are interested in a possibility of having a higher concentration formulation, so we are doing some work on that. And ultimately we would like the product to be in a pre-filled syringe. And we haven't yet started to do the significant development work for pre-filled syringe. So that's a separate project. It's not critical for the ongoing clinical development nor really would it be critical for launch. But, it’s certainly something we think for a self-administered product patients would appreciate having. So we will need to do some formulation work there.

Serge Belanger - Needham & Company

Okay. One last one on your ongoing R&D projects, where you are looking at autoimmune inflammatory disorders and the kallikrein pathway. Are you looking for additional applications for the KALBITOR molecule or 2930 or looking at the discovery of new molecules, new antibodies?

Burt Adelman

Good question. So we have a – our answer is sort of from the back to the forward. So we do like I think any reasonable company has got a strategy to develop backup molecules for 2930. Now, obviously, 2930 is looking better and better and the likelihood that we would need back up molecules in this pathway has probably diminished. So as we examine the spectrum of disorders that might be driven by activation prophylaxis activation of Bradykinin. We will consider both the use of 2930 and/or one of the other pathway back up pathway agents that we already have developed.

I doubt very much that you would see additional indication such as these developed for KALBITOR because it's such a short acting molecule would really be hard to imagine how we could effectively treat a chronic disease with a short acting molecule. That's why things like 2930 or other antibodies that are potent inhibitors of kinin generation would be our treatment of choice in these chronic diseases because as you guys are well aware drugs like Humira, Tysabri are given quite infrequently because they have a long half-life and that’s the best way to manage a unpredictable chronic inflammatory disorder.

Serge Belanger - Needham & Company

All right, thank you.

Gustav Christiansen

Thanks Serge.

Operator

Thank you. Our next question comes from Phil Nadeau of Cowen & Company. Your line is open.

Gustav Christiansen

Good evening, Phil.

Jeff Solomon - Cowen & Company

Hi, actually this is Jeff in for Phil. Congratulations on the quarter and thanks for taking the question. So I want to start with KALBITOR, I was wondering how much of the increase in sales is due to your change in strategy that you announced in the first quarter in terms of this high touch strategy? You can comment on that.

Gustav Christiansen

So I would say this is a number of things that we are doing in organization that are geared around making sure that we get – I think we have got some feedback on the line there. (Technical Difficulty)We are still getting a little bit of feedback.

Jeff Solomon - Cowen & Company

I will put on mute until you are finished.

Gustav Christiansen

Sure. So what I would tell you is that we are focused with KALBITOR of helping the right HAE patients, receiving stay on KALBITOR therapy. And the idea is being focused on helping these patients manage – appropriately manage this order over the long-term. So I wouldn't get into specifics about what that means from a number standpoint. But, in general we have a focus on the combination of the offering of KALBITOR as a product and our unique individualized patient support programs and services that we feel provide a substantial benefit for a subset of HAE patients.

Jeff Solomon - Cowen & Company

Okay. Thank you. And for 2930, in the Phase 1b trial right now there is a end point in terms of the x vivo kallikrein assay. And I was wondering what you will be looking at their in terms of a biomarker and what will give you a good confidence to both Phase 2 and development?

Burt Adelman

So as I said in my presentation maybe we are a little aggressive in thinking that the assay that we developed to look at 2-chain would be sensitive enough in patients who have normal levels of C1. However, there is now a literature there was a nice article from a group in Norway for example, that has developed a mass-spec based assay that looks at the proteolytic breakdown products of Bradykinin generation. And they demonstrated pretty clearly with that assay that they can detect – first of all, they can measure levels in normal individuals, they are quite low. And that they can clearly see differences from normal individuals of levels in HAE patients having attacks and not having attacks.

So we think that that those sort of strategies are more sensitive and more looking at the possibility of applying mass-spec like assays that look at either Bradykinin breakdown. We are also looking at a mass-space strategy that will essentially look at 2-chian high-molecular-weight kininogen similar to what our Western blood essay looks at. But, obviously, we would much higher sensitivity because it's a mass-spec based assay. That make sense?

Jeff Solomon - Cowen & Company

Yes. Thank you very much for that. And just a last question, in terms of the KALBITOR single shot, any updates on that? Thank you.

Gustav Christiansen

Sure. As we said, a formulation that we have and we have new forwards. We do not currently see a need in the marketplace as long as KALBITOR is administered by health care professional to spend the money changing to a one vial formulation. So at this time, our plan is simply to continue with the current formulation because it serves our needs well and the patient needs well.

Jeff Solomon - Cowen & Company

Thank you very much. And congrats again.

Gustav Christiansen

Thanks Jeff.

Operator

(Operator Instructions) Our next question comes from Paul Matteis of Leerink Partners. Your line is open.

Paul Matteis - Leerink Partners

Great. Thanks for taking my question. And congrats on a good quarter. I have a few – the first is, in the current 2930 trial and as well as the program broadly in future trials, how are you handling experience with Cinryze, Firazyr or KALBITOR in patients. And if patients have a breakthrough attack during the trial, are you allowing KALBITOR use? Thanks.

Burt Adelman

Yes. Paul, all good questions. So in general, so far the current trial is relatively patients get treated twice. And in that trial for sure we have told patients that if they – anybody who is in acute treater can be enrolled in the trial and we tell them that if they have an attack obviously, we won't know about it. But they should treat themselves with whatever their favorite acute treatment is. So we are not enrolling people in this trial who are on maintenance prophylaxis. However, it's a really good question and we are thinking hard on how we will deal with this going forward either in our initial approval studies or in support of approval studies because as you are probably well aware many patients who are on chronic prophylaxis therapy be it C1 or androgens have -- still have attacks.

So they – if they are still having frequent attacks they may in fact still be eligible to enter into a 2930 trial. So we are certainly thinking hard about that. But, I can't tell you exactly how we are going to work it out in the final clinical trial designs because we don't know ourselves. But, it's a really good question.

Paul Matteis - Leerink Partners

Okay, got it. Thanks. That's helpful. And then one more, do you think that the Phase 1b isn't long enough to get a sense of 2930s effect on attack frequency and I know it's not the primary endpoint but I would imagine to be tempted to look at it especially given we have gotten data from competing products recently and that's obviously was most potent?

Burt Adelman

So I mean obviously, we are going to know attacks in patients. And also because the drugs got a really long half-life and we are giving two doses within one half-life will definitely get a step up in plasma concentration between the first injection and the second. And it takes four or five half-lives to clear the drug from your system. So you get dosed on day one, you get a second dose on day fourteen, the half-life is 20 days. So people could be exposed depending upon what therapeutic dose ultimately is. Patient exposure could go on for 50 or 60 days in this study.

So we are certainly following these patients and we will record events that the problem is the number of patients in the study remember there are three planned cohorts, each cohort has four patients who receive 2930 and two patients who receive placebo. So you get to the end of the study and you have only got six placebo patients and 12 active patients. And we didn't really aggressively enrich – we are not aggressively trying to enrich the patient population for people who have very frequent attacks.

So to some degree it depends on how many attacks the six patients in the placebo have for us to be able to make any even guesstimate of what the activity of the drug is. But, we will collect those data and we will share the results with everyone.

Paul Matteis - Leerink Partners

Got it. Great. Thanks very much. We look forward to it.

Gustav Christiansen

Thank you, Paul.

Operator

Thank you. And I'm showing no further questions at this time. I'd like to turn the call back over to Gustav for closing remarks.

Gustav Christiansen

Thank you. I will thank all of you for dialing in tonight, sharing the second quarter with us. And we wish you a good evening and look forward to updating you on future calls. Thank you.

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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