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Executives

Dr. Harvey Berger – Chairman and Chief Executive Officer

Ed Fitzgerald – Executive Vice President and Chief Financial Officer

Dr. Tim Clackson – President of Research & Development and Chief Scientific Officer

Maria Cantor – Vice President, Corporate Communications and Investor Relations

Analysts

Ryan Martins - Barclays Capital

Eun Yang – Jefferies

Eric Cheung – Oppenheimer

Jonathan Eckard - Leerink Swann

Joel Sendek – Lazard Capital Markets

Ling Wang – Brean Murray

ARIAD Pharmaceuticals, Inc. (ARIA) Q3 2010 Earnings Call November 9, 2010 8:30 AM ET

Operator

Thank you for holding for ARIAD Pharmaceutical’s Q3 2010 Investor Conference Call. (Operator instructions.) Please be advised that this call is being taped at the company’s request, and will be archived on the company’s website for three weeks from today. At this time I would like to introduce Ms. Maria Cantor, ARIAD’s Vice President of Corporate Communications and Investor Relations. Please go ahead.

Maria Cantor

Good morning, and welcome to ARIAD’s investor call. This morning we will report on financial results and corporate developments for the Q3 of 2010. Joining me for this call are Dr. Harvey Berger, our Chairman and Chief Executive Officer; Mr. Ed Fitzgerald, our Executive Vice President and Chief Financial Officer; and Dr. Tim Clackson, our President of Research & Development and Chief Scientific Officer.

Before we get started I would like to state that during this conference call we will be making forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to factors, risks, and uncertainties such as those detailed in our Form 10K for the year ended December 31st, 2009, and other SEC filings that may cause actual results to differ materially from the results expressed or implied by such statements. Now I would like to turn the call over to Dr. Berger for this morning’s opening remarks.

Dr. Harvey Berger

Thank you, Maria, and good morning everyone. This is a very promising time at ARIAD. As we report our Q3 2010 financials to you this morning, the company has never before had the level of excitement or reason for optimism that we do today. We have three internally discovered and molecularly targeted oncology product candidates in our pipeline, two of which are in late stage clinical development and a third which we expect to advance in the clinic in mid-2011. And our newly strengthened financial position provides us with the ability to carry these product candidates through well-defined points of value creation.

Ponatinib, previously known as AP24534, is our investigational pan-BCR-ABL inhibitor, currently in a global clinical trial in patients with resistant or intolerant chronic myeloid leukemia. We expect that the time to full patient enrollment and patient follow-up in the pace trial, and to potential regulatory filings for marketing approval, will be prompt and predictable given the strength of the clinical data to date.

AP26113, our investigational anaplastic lymphoma kinase inhibitor is advancing through IND enabling studies. We expect to file the IND for AP26113 in the middle of next year and to be in the clinic very soon thereafter. “113” as we call it has shown in preclinical studies to have much higher potency than Pfizer’s ALK inhibitor Cryzotanid (sp) and to inhibit mutated forms of ALK that are now being observed in patients becoming resistant to Cryzotanid.

This is a scenario that mirrors very closely our preclinical experience with Ponatinib, and the currently available BCR-ABL inhibitors for whom resistance has emerged as an impediment to successful treatment in some patients.

Finally, Ridaforolimus, our investigational mTOR inhibitor has recently shown strong clinical potential for patients with advanced endometrial cancer, and at the same time is at the cusp of having final results reported from the global phase III Succeed trial in patients with metastatic soft tissue and bone sarcomas.

As I mentioned earlier, we have three product candidates in our oncology pipeline, each highly promising, two in late stage development, and a solid balance sheet to support them. I’m going to start first by asking Ed Fitzgerald to provide our financial overview and then Tim Clackson to provide an update on R&D.

Ed Fitzgerald

Thank you, Harvey. Good morning, everyone. Let me start by highlighting a point that Harvey alluded to in his opening remarks. Our recently completed capital raise, which netted us approximately $57.4 million, significantly strengthens our balance sheet and provides us with a cash runway into the second half of 2012. With the significant progress we continue to make in our research and development programs we are very pleased to have the resources necessary to support them.

Now a review of our financial results as of September 30th, 2010, as detailed in our press release this morning. For the quarter ended September 30th, 2010, we reported a net loss of $20.4 million, or $0.18 per share, compared to a net loss of $20.8 million, or $0.21 per share, for the same period in 2009. For the nine month period ended September 30, 2009 we reported net income of $115.6 million or $1.05 per share compared to a net loss of $62 million or $0.70 per share for the same period in 2009. Net income for the nine month period ended September 30, 2010, reflects primarily the positive impact of our restructured agreement with Merck entered into in May of this year for the development, manufacture, and commercialization of Ridaforolimus in oncology. This agreement resulted in the recognition of $175 million in revenue in the Q2 of 2010.

For the quarter ended September 30, 2010, we reported operating expenses of $16.8 million, as compared to $17.9 million for the same period in 2009. And for the nine month period ended September 30, 2010, we reported operating expenses of $54.1 million as compared to $60.4 million for the same period in 2009. The decreases in operating expenses for these periods reflect primarily the assumption by Merck as of January 1, 2010, of 100% of the costs related to Ridaforolimus per the restructured agreement, offset in large part by increases in costs related to the development of Ponatinib for which we initiated the PACE Pivotal trial in the Q3 of this year.

For the nine month period ended September 30, 2010, we reported cash provided by operating activities of $18.8 million, as compared to cash used in operating activities of $36 million for the same period in 2009. The increase in cash provided by operating activities is primarily due to the receipt from Merck in 2010 of the $50 million up front payment and $12.8 million in reimbursement of our share of Ridaforolimus costs upon execution of the restructured agreement, offset in part by the receipt in 2009 of $22.5 million in milestone payments from Merck related to the start of two phase II clinical trials pursuant to the 2007 collaboration agreement with Merck.

We ended the Q3 of 2010 with cash and cash equivalents of $59.3 million compared to $40.4 million at December 31, 2009. With the additional funding of $57.4 million from our recently completed offering, we now expect to end this year with approximately $102 million in cash and cash equivalents on our balance sheet, and anticipate that this cash position will be sufficient to fund our programs into the second half of 2012. This revised financial guidance does not take into account the positive impact of any regulatory or sales milestone payments we may receive from Merck related to Ridaforolimus, which could come to fruition in 2011; or any payments related to a potential collaboration agreement on Ponatinib.

Let me make a few points regarding the impact of our $57.4 million public offering. Importantly, this additional funding is expected to enable us to complete patient enrollment in the pivotal phase II PACE trial of Ponatinib; to obtain at least six months of follow-up response data; to complete analysis of the trial; and to prepare filings for marketing authorization of Ponatinib. Depending on the outcome of the PACE trial we anticipate filing a new drug application for Ponatinib in the second half of 2012.

In addition, we anticipate that this funding will allow us to retain the substantial potential commercial value of Ponatinib in multiple lines of treatment for chronic myeloid leukemia and other cancers by focusing our partnering strategy on a regional collaboration in select markets outside of the US. As we stated in connection with our public offering, we do not intend to pursue a global partnership for Ponatinib, which supports our plan of becoming a fully integrated oncology company.

Let me now turn the call over to Tim.

Dr. Tim Clackson

Thanks, Ed. We made substantial progress across research & development during the Q3, most notably with the initiation of our pivotal phase II trail of Ponatinib in patients with chronic myeloid leukemia (CML) that is resistant or intolerant to dasatinib or nilotinib or that have the BRC-ABL T315-I mutation. The Pace trial is designed to provide definitive and robust clinical data to be used for regulatory approval of Ponatinib in patients with resistant olfactory CML and Philadelphia positive acute lymphoblastic leukemia or ALL in the United States and Europe and in other key major markets.

Patient enrollment has been underway now since the middle of September in the US and we will be expanding the trial into Canada this month and into Europe, Australia, and Asia by early 2011. Due to the serious unmet medical need in this CML and Philadelphia positive patient population, along with the broad enthusiasm of clinical investigators for Ponatinib, we expect full enrollment in the Pace trial by approximately this time next year. With the availability of six month follow-up data for response, overall trial analysis and filing for potential marketing or authorization will occur promptly thereafter, depending on the overall results of the trial.

Recall that the Pace trial is a global, single-arm clinical study of Ponatinib in approximately 320 patients with chronic phase, accelerated phase, or blast phase CML, as well as Philadelphia positive ALL. Patients resistant or intolerant to dasatinib (Sprycel) or nilotinib (Tasigna) will be enrolled into the trial. Patients will be grouped into one of six separate cohorts based on their phase of CML – chronic, accelerated, or blast – and their BCR-ABL mutation status – with our without the T315-I mutation.

The primary endpoint for chronic phase patients in the study is major cytogenetic response rates. The primary endpoint for accelerated or blast phase patients and ALL patients in the study is major hematologic response rates. These endpoints are the same as those utilized in the clinical trials of dasatinib and nilotinib in their second-line regulatory approval. The FDA and EMA concur with their use in the Pace trial.

Secondary endpoints in the trial include major molecular response rate, duration of response, progression of free survival, and overall survival. Patients in the trial are receiving a once-daily oral tablet administration of Ponatinib at a dose of 45 milligrams. This dose was determined in the ongoing phase I clinical trial of Ponatinib in heavily pre-treated resistant and refractory CML patients to be well tolerated and to be the optimal dose for use in further studies. Durable, clinical, and molecular responses have been obtained at this dose level. The trial is proceeding with the guidance of a steering committee comprising nine leading international experts in the CML field.

While the pivotal Pace trial is underway and enrolling patients, the phase I study of Ponatinib in patients with resistance or olfactory CML continues. Additional safety and efficacy data from this ongoing study will be presented in an oral session at the American Society of Hematology, or ASH, annual meeting later next month. In fact the ASH abstracts are now publicly available on the ASH website although I’d like to remind everyone that the data we’ll be presenting at ASH will be updated compared to the abstract. These updated data will include more extensive phytogenetic and molecular response data on Ponatinib as well as duration of response to therapy. Data from this study presented earlier this year showed the Ponatinib in a heavily pre-treated patient population, where the majority of patients received at least three prior (inaudible) kinase inhibitors, compared favorable to dasatinib or nilotinib in each of their respective second line phase I studies. We look forward to additional data presentation at ASH and to talking further about this highly promising opportunity.

With Ponatinib advancing through the clinic, our investigational ALK inhibitor, AP26113 or “113” is moving quickly towards the clinic. We are on track to file an IND for “113” in mid-2011 and to begin a biomarker-based targeted clinical trial in tumors including non small-cell lung cancer, shortly thereafter. “113” is a potential best in class ALK inhibitor that has been shown in preclinical studies to have significantly higher potency that the investigational ALK inhibitor being developed by Pfizer, Cryzotanid, and to inhibit mutated forms of ALK that are now being absorbed in patients becoming resistant to Cryzotanid. As Harvey spoke briefly to earlier, this is a scenario that mirrors our preclinical experience with Ponatinib and the current BCR-ABL inhibitors for whom resistance as emerged as an impediment to successful treatment in CML. We are very much looking forward to advancing “113” into clinical development next year.

One final note before I turn the call back over to Harvey. Important interim data from a randomized, open-label phase II study of oral Ridaforolimus in patients with advanced endometrial cancer were presented at a major medical meeting last month. These positive interim data were presented at the International Gynecologic Cancer Society meeting in Prague and showed a near doubling of the primary endpoints of progression-free survival by single agent Ridaforolimus compared to the current standard of care – oral progestin or chemotherapy – in this difficult to treat patient population. Based on this statistically significant improvement in PFS, Merck has stopped enrollment in this clinical trial while continuing to follow surviving patients.

It should be pointed out that the design of this trial shares several aspects of the phase III Succeed trial of oral Ridaforolimus in patients with metastatic, soft tissue and bone sarcomas – that is, both trials evaluate singe agent Ridaforolimus in a randomized setting against a PSS endpoint, and both trials utilize the same oral dose and schedule of Ridaforolimus. The interim results from the phase II study of Ridaforolimus in endometrial cancer therefore reinforces our confidence in a potential positive outcome to the Succeed trial.

Now let me turn the call back over to Harvey.

Dr. Harvey Berger

Thank you very much, Tim. Before we open the call to questions I’d like to provide a short update on the Succeed trial. Merck has recently communicated to us that the full number of PFS events in the study has been reached. The final data collection is now underway and being performed by our colleagues at Merck. As such, we expect top line final PFS results from the Succeed trial to be announced in the Q1 of 2011, and that we will communicate these findings along with our partner, Merck. We remain as optimistic as ever that there’s a strong likelihood of a positive clinical outcome and we look forward to early next year when a report of the top line results is anticipated.

Operator, please open the call to analyst questions.

Question-and-Answer Session

Operator

Thank you. (Operator Instructions.) Your first question comes from the line of Ryan Martins with Barclays Capital. Please proceed.

Ryan Martins - Barclays Capital

Hi, good morning and thanks for taking the questions. Firstly, just on Ridaforolimus, the $65 million in milestones from Merck, is that all related to the NDA filing or is it a portion of that?

Dr. Harvey Berger

Thanks, Ryan. The $65 million that is associated with the sarcoma and the sarcoma indication in the Succeed trial is actually several milestones. The $65 million is made up of $25 million for acceptance of the NDA in the US, $25 million for FDA approval of Ridaforolimus in sarcomas, $10 million for European EU approval of Ridaforolimus, and $5 million for Japanese Regulatory Authority approval of Ridaforolimus. So it’s four separate milestones, but all driven largely by the Succeed trial results. In Japan there’s an additional bridging study, a smaller Japanese trial running which obviously impacts as well on the approval in Japan.

Ryan Martins - Barclays Capital

Thanks for clarifying that, Harvey, and just also on the filing, is that expected on positive data pretty soon after Q1? Is that expected in the first half of 2011?

Dr. Harvey Berger

Obviously with a positive outcome to the Succeed trial Merck will file as quickly as possible. I don’t think we’ve quite fine tuned that to exactly when that’s going to happen, but certainly once we have the results and if they are positive we’ll be able to provide some additional guidance with more specificity as to exactly when Merck will do the filing. But again, it’s really in Merck’s hands to finalize the documents for regulatory filing. We are doing a common technical document around the world, major portions of the NDA are already drafted and are completed. Obviously the clinical section is highly dependent upon the outcome of the Succeed trial, but without doubt the goal would be to file as quickly as possible after the Succeed trial results are in hand.

Ryan Martins - Barclays Capital

Thanks. And maybe just on Ponatinib. On your regional partnership strategy, is that something where you’re thinking about carving out for example Japan and maybe Europe? Maybe if you can give some more color on that.

Dr. Harvey Berger

Well, I mean I think in general terms what you describe of course is what we’re referring to but the specifics will really depend on how the ongoing discussions evolve. But it could be Japan and Asia, it could be parts of Europe, it could be a different approach in Asian than in Europe. I mean there are a lot of possibilities there and I don’t really want to go into any more details about what we’re actively pursuing at this point. But your general framework of course if correct.

Ryan Martins - Barclays Capital

Okay, thanks. And maybe one final one before I jump in the queue. In terms of “113” I know obviously you’ve shown data in lung but I’m curious, what other tumor types do you see potential for “113” in ?

Dr. Harvey Berger

I’ll let Tim answer that.

Dr. Tim Clackson

Hi, Ryan. So ALK is certainly over-expressed and activated in other tumor types, including anaplastic large cell lymphoma, which is the lymphoma from which it got its name; about 50% of such cases, a rarer form of sarcoma known as IMT and various other lymphoma-like diseases which are becoming known as alcomas in the field. So there are a number of specific tumor types or subsets that are potential targets for a potent ALK inhibitor such as “113.”

Ryan Martins - Barclays Capital

Okay, thank you.

Operator

Your next question comes from the line of Eun Yang with Jefferies. Please proceed.

Eun Yang - Jefferies

Thanks very much. So you mentioned that there is a strong likelihood of a positive outcome in the Succeed trial. I’m just wondering where you get such confidence. Is it based on what you hear from Merck in the Succeed trial or is it based on the endometrial cancer positive data?

Dr. Harvey Berger

Entirely based on the endometrial cancer trial and the similarities between that trial in terms of dose, schedule, design and endpoint, to the Succeed trial. Merck knows absolutely nothing more than we know today. When the data analysis is completed we will know what they know but it’s not based on any feedback from Merck or investigators. It’s merely trying to make a comparison between data in hand in endometrial cancer, and data that we anticipate – namely the SUCCEED trial. And I think the reason we focused on that is the endometrial trial is the first result that we have on Ridaforolimus of a statistically significant difference in PFS measured independently, analyzed by an independent panel of radiologists in a randomized trial against in this case an active control, which is a higher standard or a different standard than in the SUCCEED trial. So there’s some parallels there that I think some investors haven’t really focused on, so that’s really why we’re trying to show the similarities. Endometrial cancer and sarcoma are different diseases, so one doesn’t guarantee an outcome in the other. And so it’s just really laying out the parallels between the two trials.

The one really interesting difference, though, is that the endometrial trial is at the moment based on a little over 100 patients; the sarcoma trial is randomized over 650 patients. So you have a lot more data to work with in terms of really understanding the effect in sarcomas. So we’ll see how it plays out but yet there was a highly significant difference, nearly a doubling of PFS in the endometrial trial. We’ll look at a comparison and we’ll look at the SUCCEED data when we have it early next year.

Eun Yang - Jefferies

Thanks. And then the endometrial cancer, so Merck has stopped its phase II study based on the positive interim data. Can you comment on what Merck’s next step will be? I mean will they go with a registration or trial in the near future as a single agent, or would they do some combination studies before moving into pivotal studies?

Dr. Harvey Berger

I think we really can’t comment on that right now. I mean that analysis, exactly how to go forward in endometrial cancer, is ongoing at Merck, as you would expect based on the positive outcome of the trial. Certainly the results suggest single agent Ridaforolimus is a potentially effective agent in endometrial cancer. And it seems to me that the questions are not single versus combination, but what’s your control group? Do you only include second line? Do you include first line? I mean there’s some obvious questions that have got to get addressed, and I’m sure that that’s the analysis that’s ongoing as Merck works through reaching decisions about what’s next in endometrial cancer. It speaks volumes I think to their interest and broad interest in Ridaforolimus – you’ve got combination trials in breast cancer, the randomized phase II trial, we have single agent trials running, there are more combination trials with other molecularly targeted agents that are in the planning and about to start. So there’s a broad spectrum of approaches that are very exciting to Merck and to us, and we anticipate that that will drive the next registration trials.

Eun Yang - Jefferies

Thank you.

Dr. Harvey Berger

Thanks.

Operator

Your next question comes from the line of Bret Holley with Oppenheimer. Please proceed.

Eric Cheung - Oppenheimer

Hi, this is Eric Cheung in for Bret. I just had one question. For the PACE study, can you give us an idea of what the mix of second line and third line patients could be like and how this mix could effect physician usage in CML?

Dr. Harvey Berger

That’s an absolutely great question, in part because it really get sat the heart of the evolution of the CML treatment paradigm. I mean I think most of the patients in the trial inevitably are going to be patients who have failed both imatinib and one or other of the second line treatments, just because dasatinib and nilotinib are just now getting approved or recently or now are getting approved for use in the front line setting. Although they’ve been used in the front line setting by experts in the fields for a number of years, the shift to front line use is one that we’re near the beginning of that transition as opposed to well into it. But it’s clear that the trial will include both patients who have failed after frontline use, first line use as well as second line use; but the majority of the patients just given where we are in the field will be after second line use.

Eric Cheung - Oppenheimer

Okay, great. Thank you.

Operator

Your next question comes from the line of Jonathan Eckard with Leerink Swann. Please proceed.

Jonathan Eckard - Leerink Swann

Hello. Thank you for taking my question. I guess kind of a follow-up to the ponatinib is I think you guided, I think I heard in the call by the time of filing you expect approximately six months of follow-up. I was wondering how important are some of the secondary endpoints in the PACE trial to the filing, and what would be the ideal – is six months enough follow-up from some of those key endpoints to construct a filing for the drug?

Dr. Harvey Berger

Well, certainly for the filings, what we need is six months of patient follow-up and meaningful results on the primary endpoints. That’s what we believe to be the basis for the trial, the basis for potential approval, both in the US as well as in the EU. Secondary endpoints obviously add value. Of the secondary endpoints, within six months of follow-up I think we will have data on major molecular responses. If you look even at our website or presentation, one of the patients that’s highlighted has had a major molecular response within three months. There are other patients who are like that, certainly three to six months. And so you know, we will have a minimum of six months of follow-up data on the last patient into the trial. Bear in mind that it’ll be a distribution that has at the short end six months, at the long end 18 months, potentially for a patient who is enrolled in September. So we’ll have a mix of duration of follow-up that covers a pretty broad spectrum, but the focus is really on the two primary endpoints – the one for the chronic phase which is based on cytogenetic response, and for the other groups hematologic response. So the secondary endpoints we think are supportive but not required for approval.

Obviously survival data takes years and years and nobody, none of the drugs in the field have used survival data as the basis for approval or labels. Even imatinib to the best of my knowledge doesn’t have survival data that are part of its label – it’s obviously their studies are now looking at long-term response to imatinib because that drug’s been around the longest. But I don’t believe for nilotinib or dasatinib in the second line there’s any meaningful survival data – it takes years. And the regulatory agencies really are focused on measurable, quantitative objective determinants of patient benefit that have been out of many trials now shown to be predictive of a long-term clinical benefit, including survival benefits. So really focus on the cytogenetic and hematologic primary endpoints and molecular response in some of the patients with supportive data, and you’ll see more about that split of endpoints and data of that sort at our ASH presentation coming up where we’ll present for the first time from the phase I trial some important data on major molecular responses.

Jonathan Eckard - Leerink Swann

That’s very helpful, thank you. And then in the phase I trial in the 60 milligram dose, which is higher than the dose being used in PACE, there were some pancreatitis events. Did these events, were they rectified fairly quickly? Did they go away with the stopping of treatment? Or could you just describe a little bit about some of those events, what happened after the patients stopped treatment?

Dr. Harvey Berger

So what generally happened was patients had their dose of Ponatinib lowered, so either lowering of the dose or very transient, brief couple-of-day discontinuation of treatment. And all those patients got better. So it was a very transient, easy to treat pancreatitis, predominantly chemical pancreatitis – no patient needed surgical intervention, no patient developed a surgical belly. These are patients who basically had predominantly elevations in amalase and lipase and to some degree the clinical syndrome of pancreatitis. It resolved pretty easily, again, either by very short-term discontinuation and then re-initiation of treatment perhaps at a lower dose, or just lowering the dose and continuing to treat.

It’s also worth pointing out that there’s at least one patient who didn’t even tell their physician they had the pancreatitis, came in substantially after the pancreatitis and said “Gee, I had what appeared to be pancreatitis last week,” and stayed on 60 milligrams. And there are patients today in that trial that are on 60 milligrams a day who tolerate it perfectly well. So it’s a mixture, there’s no one answer to your question other than to say it appears to be pretty benign and predominantly driven by chemical pancreatitis that is readily treatable within the context of both the trial and long-term usage of Ponatinib.

Jonathan Eckard - Leerink Swann

That’s very useful. Thank you very much.

Operator

(Operator instructions.) Your next question comes from the line of Joel Sendek with Lazard Capital Markets. Please proceed.

Joel Sendek – Lazard Capital Markets

Hi, thanks. I just wanted to follow up on the oral presentation at ASH. In the abstract they mentioned 48 patients as valuable. I guess you said you were going to have an update on the cytogenetic and molecular response data. Are you going to have all 67 patients, are they going to report on all 67 patients at the ASH conference?

Dr. Tim Clackson

Josh, this is Tim. That’ll depend on, not all endpoints I think will be evaluable for all patients at that time, but there’ll be a substantial update from a fairly recent data cut that obviously occurred well after the submission of the abstract that will aim to give us as updated a story as possible regarding both major cytogenetic response in the overall population and different cuts of the patient population. And as Harvey mentioned earlier we’re going to have a particular focus on molecular response data because those responses have now had time to be evaluated and mature. So whether we’ll have every single patient reporting on all endpoints we’ll have to see, but that final presentation is being worked on right now.

Joel Sendek – Lazard Capital Markets

Okay, but it’s pretty likely you’re going to have more than the 48 that were in the abstract.

Dr. Tim Clackson

That would be likely.

Dr. Harvey Berger

Yeah, most of the patients will be included in what you- What you’ll see at the ASH meeting is essentially most of the patients in the trial for whom, in that group we’ve got the appropriate follow-up.

Joel Sendek – Lazard Capital Markets

Got it, okay. Thanks a lot.

Dr. Harvery Berger

Thanks, Joel.

Operator

Your next question comes from the line of Ling Wang with Brean Murray. Please proceed.

Ling Wang (sp) – Brean Murray

Hi, good morning. Thank you for taking my questions. I was wondering for the Succeed trial, can you discuss the alpha spend with the first and second interim analysis and how would that impact the statistical hurdle for the final analysis?

Dr. Harvey Berger

Ling, thanks very much for that question. You know, we have not disclosed nor has Merck the alpha spend on either the first or the second interim analysis. Again, the first interim analysis was at a third of the event, the second interim analysis at two thirds of the PSF events, and the final analysis will be the predefined full number of PFS events. What I can say is that the design of the trial is nothing out of the ordinary. There’s noting in it that is either an especially difficult or especially easy hurdle to meet. Obviously having two interim analyses, one early, one late, impacts to some degree on the final P-value that one has to achieve with Kaplan Meier curves in looking at the PFS event rate in the two arms, but I can’t speak more to it than that other than to say it’s pretty standard and nothing out of the ordinary.

Ling Wang (sp) – Brean Murray

I see. And also the final analysis, the timeline, it seems to be pushed somewhat from your original estimate. What does that (inaudible) perhaps about your original assumptions about the patient population?

Dr. Harvey Berger

For the last year we’ve suggested that the final PFS analysis would be about at the end of the year. That really hasn’t changed, I think we’ve just- Given that the control over that analysis and the collection of the final datasets and the turn of the final data has shifted from ARIAD to Merck. That to us suggested that it would make sense to build a little extra time into the process, and Merck is very focused and dedicated to getting this done as quickly as possible but I’m sure you’ll appreciate they have probably more processes and more standardization of how large trials are analyzed and their disclosure than we would, not in terms of the quality of the data or the quality of the analysis but things just take a little bit longer. And so whether the results were to come out as we had projected over the past month towards the end of this year or the beginning of next, I don’t think that difference is meaningful certainly relative to two years ago. We’ve refined when we think, both when we thought full enrolment would take place, which was right on track, although slower at the beginning but hit the total number in about two years; and the follow-up now is roughly where we thought it was.

So we don’t read much of anything into the exact timing. If it were a year difference, sure – that would have a big impact. But given the complexity of collecting data from countries around the world, although it’s electronic, double checking the quality of the data for the final analysis and bearing in mind that with the final analysis Merck will unblind the data. So you don’t have any more chances to go back and clean things up after the fact. During the interim analyses you take the data as you collect them, be sure the data are properly entered and double checked, but it’s still blinded with the respect of the companies. The final analysis, the data will be unblended, and so I think it’s good to be especially prudent to ensure that the data are fine tuned, followed up properly, completely checked and entered into the database correctly, optimally, and then analyzed as we have done with the same programs that have been used for the interim analyses.

Ling Wang (sp) – Brean Murray

Great, thank you.

Dr. Harver Berger

Thanks so much.

Operator

Ladies and gentlemen, this concludes the question-and-answer session. I would like to turn the call over to Dr. Berger for closing remarks.

Dr. Harvey Berger

I would like to thank all the participants for joining our call this morning, many really excellent questions and we appreciate your interest. We have a very productive Q4 underway and look forward to reporting on our continuing progress with our promising products early next year. Thank you very much.

Operator

Ladies and gentlemen, thank you for your participation in today’s conference. This concludes our presentation. You may now disconnect. Have a good day.

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