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Vical Incorporated (NASDAQ:VICL)

Analyst and Investor Day Transcript

November 9, 2010 5:00 pm ET

Executives

Vijay Samant – President and CFO

Sanjiv Agarwala – Chief, Medical Oncology & Hematology and Director of Melanoma and Immunotherapy Program

Alain Rolland – EVP, Product Development

Mark Pescovitz – Professor of Surgery and Microbiology & Immunology

Rick Kenney – VP, Clinical Development

Vijay Samant

Welcome to Vical’s Unidentified Analyst Day. We have our Senior Members from Vical’s staffs here along with some distinguished speakers, so – and both members from the buy side and the sell side community.

First of fall, I want to thank all of you for coming for this Analyst Day. I want to walk you briefly to the agenda, but before I do that, I need to remind you of the Safe Harbor statements, you know, the presentation that both the outside speakers, as well as the inside speakers will be making – it may contain statements which are forward-looking statement. Please refer to our filed SEC document to fully understand the risk associated than investing in Vical or any of the biotech company for that matter.

Brief overview of the agenda. I’ll give you a brief overview. The last time we did this quite a few people came that we directly went into the programmatic review and not giving a Vical overviews. So I’ll take about five minutes going to our broad programs that Vical has undertaken, beyond the two programs that we are focusing on.

Dr. Sanjiv Agarwala, Sanjiv raise your hand please. He’s a distinguish melanoma expert. And he also is from Mumbai, which I just found out today. And he’s going to be giving us a little update on the state of melanoma, what’s going on. And obviously you'll have opportunity to ask him questions, as it relates to some of the competitive activities that are going on in the feet of melanoma.

Followed that Alain Rolland our Executive VP of Development. Alain, is going to give a specific presentation on Allovectin-7, which will contrast some of the things that Sanjiv is going to be presenting, but will give you a real idea of what our program is and how the clinical trial is being conducted.

Mark Pescovitz, is a leading transplant expert, solid organ transplant expert. And some of you may be familiar with him because he has been on some of our conference calls on the back stand, he’ll be talking about CMV, the State of Art of CMV and how important viral node in terms of predicting CB [ph] disease among other things.

And Rick Kenney our VP of Clinical will be talking about our TransVax program, specifically how the clinical trial that we conducted recently, to summarize the data in what our plans for the future are. And then we’ll end the presentation with certain Q&As, okay, so which I would be moderating.

So briefly quickly looking at Vical at a glance, it’s a late stage buyback company. 0We have multiple programs, cancer being the lead program, programs in infection disease, PAD. And established platform to be able to retain commercial rights to most of our program, we have several validating partnership, big pharma, small pharma.

We are one of the few companies which has a State of the Art manufacturing facility and a strong balance sheet. The key program of Allovectin-7, big commercial opportunity, market greater than $500 million, CMV is the only company working in that field. Temusi, you will see the top line data on November 16, but that did not mean the primarily end-point and then emerging to this platform.

Allovectin-7 is a first in class the systemic immunotherapy. We have dose about 800 patients to date. It has applications in variety of solid tumor. It’s well tolerated. Given an outpatient setting, it has unique mechanism of action. It’s synergistic with current program that are under development.

And we have significant capacity to commercially launch this product, as I told you we are the only company we has to my knowledge of biological. The 13, San Diego, it is an often drug status. It has a fast track designation and it has – we have retained all the U.S. and EU rights for this program.

TransVax to my knowledge, we are the only company working in the field of 90% to 40% of transplant with the safety vaccine, this is the therapeutic vaccine to prevent CMV reactivation, we have demonstrated group of concept in the phase II study that Rick is going to cover in details, all the clinical data which is presented at recently at AGAC.

Again, we have sufficient capacity to commercially launch this product, we have often drug designation this is application of a both solid organ transplant and hematopoietic cell transplant. And it gets the rise both for U.S. and EU and you got to hear more about the clinical trial designs for both the programs, then Alain and Rick presents their respective presentation.

Our key collaborations on AnGes is a second largest biotech company in Japan, they funded our melanoma program for Allovectin-7, pay us about $23 million for which we give them rise in Asia. And the goal really is use to Allovectin-7 in head and neck cancer in that part of the world. We have retained U.S. and European rights. I mentioned Collategene, which is the program for PAD, similar to the program that Sanofi is doing for PAD and they expect to start the trial sometime in 2011.

Sanofi-Aventis obviously, will be very disappointed with the failure of that study; more of the data will be presented at the America Heart Association next week. And then Merck which has been a big partner for us has stated about $30 million for the last seven year has hTERT cancer vaccine which is a telomerase gene license from John [ph].

How do you define validation of this technology? A lot of people ask, the two important validation that have occurred of for – in the animal health space, one is Merial lead of license incept which is the melanoma vaccine for dog. And this is really the first therapeutic vaccine approved before Dendreon’s Provench [ph] got approved either in human kind or fat kind.

And it’s a – despite at $1000 per treatment, it was launched in Jan of 2010 is being short supply, but we expect this particular opportunity further validating the application of Vical’s technology.

Novartis is a vaccine for stem and approved $3 million efficient clinical trial and all the salmon, and if you had salmon, you had salmon tonight for dinner. Unfortunately, we’re not going to have salmon tonight. Salmon coming from Canada is vaccinated with more extreme vaccine. And then we have several programs if you have collaborated with IHN.

For peace simplex we presented some very exciting data, HIV Ebola, WNV, SARS in the intercept time will not be touching those programs today, you can do to our websites, but those programs have got in funding to the total $240 [ph] to $50 million for the last several years.

Financially, we raised about $32 million in September 2010, we have sufficient cash now to last through 2012 and we have milestone – potential milestone in royalty payments which have potential to fund further R&D. Since, summary the upcoming milestone that the full data of that fail through C-trail will be presented at the American Heart Association.

The Swine Flu data which has come out sometime in the first quarter of 2011, by the way that study was funded by the U.S. maybe the database log for Allovectin-7 Phase III for melanoma is sometime in the second half of 2011, I’m hedging the exact timing because we need to have the appropriate man create and make sure the patients have progressed.

TransVax Phase III HCT trial and the SOT trial, our goal is to start those in the second half of 2011. And AnGes our partner which is going to do a PAD study in critical (inaudible) in sometime in 2011.

So if you’re looking for investing in Vical what are the important value drivers, it’s a proven technology platform there are two animal health products that would be approved right now. We have a phase III program, which is the more advance immunotherapy asset is available for licensing.

A phase II study in TransVax, the first time somebody have shown in such an immune compromise spacious, that we can mould in and response and Rick is going to cover some of that data very shortly. A phase I dynamic influence of vaccine program, why is that program important, this could be an opportunity, forgetting money for department with decent for further validations of the technology and potential starts oiling from very specific users.

The phase I CyMVectin program, this is really a big opportunity. We’re collecting for vaccine for female of child-bearing age, this is the last big target for our female of child-bearing age. Female will see me negative, who get CMV infection defrayment is a leading cause of birth defects due to an infection raising to U.S. cytologist.

Just – the way (inaudible) use to be in the 50s and 60s, we owned a lot of intellectual property around both TransVax and CMV, we had an IND approved and hopefully we’ll get funding from a partner to start the study in the near future, to approve animal health program and fiscal responsibility. If you look in the last seven, eight years, we have managed our cash very effectively both in terms of programmatic usage, as well as bringing revenues from other sources.

So with that, I’ll stop and pass the turnover to Dr. Agarwala. Sanjiv.

Sanjiv Agarwala

Thank you, Vijay. It’s a pleasure to be here. And I just want to, that you all know that I am Medical Oncologist that specializes in melanoma a very unique disease that I’ll try show you tonight.

I’ll give you one note that I am an Investigator on Vical phase III trial, which is being completed of course and I have done Ad-hoc consulting for Vical in the past and have received research support and honor form Vical I did not own any stock in this company.

So let’s talk about melanoma and this is really an overview of the disease, I don’t have any specific data obviously with Allovectin-7 to show you. But what I want to do is put in perspective in terms of this disease what are the un-net needs, how important is it and where things are going into seal, this is being very exciting time for melanoma actually with a lot of new things going on.

So 2010 these numbers go up every year, the U.S. incidence is now about 68,000 cases with almost 9,000 death and as I’ll show you, unfortunately the death rates for melanoma, approximates pretty much the number of stage four patient.

The lifetime risk of developing melanoma is 155, which means if you know 55 people one of them will get melanoma, so this is a disease that although not as common as long and breath cancer so on, is very important and indeed by the way is the fastest growing cancer in both man and women today.

These are some slides looking at some data that is some old and some relatively new. You see that the incident in melanoma is rising quite dramatically. And some of this is because we are looking for it more, obviously the more you look for something the more you find it.

However, the debt rate has risen as well and it’s not just an artificial incidence because of increase awareness. This is now what we are projecting in 2015 that there will be one in 50 lifetime risk in the United State of melanoma in Caucasians and I got a feeling that that’s going to be exceeded, actually the way things are going. So we’re seeing much more this disease and we use to.

Now, I do a lot of teaching for fellows and residents and so on. And of course, you have the stage cancers and I think just to make it as simple as possible as I do for them. I tell everyone that there are four stages of all cancer.

So stage one and two is when it’s localized to the organ of Oregon, so melanoma it’s on the skin and not anywhere else, because that’s where it usually starts, it is a stage one or two. If it goes to the closest lymph nodes, the lymph plants that makes to stage three and anything beyond that is stage four. And this applies to most cancers.

Now this looks a little complicated because what I’ve shown here is stage one and two in melanoma and then the key system we use a TNM system of staging for cancer to make it very precise. And T stands for Tumor size, N the word N, the letter N stand for nodes and M, of course for metastasis disease. So what is really shown here is that, you go from T1 to T4 and the stage goes up as the thickness of the melanoma goes up.

I do want to point out that this is a cancer that we measure in millimeters there is no other cancer that we measure in millimeter. And to put in a perspective the four millimeter melanoma, which is not very large at all, the survival for that patient who has that melanoma can be as bad as only 50% that person is a 50% chance of making it for 10 years and there is no other cancer that does that for four millimeter of tumor.

So very unique disease and therefore, what you have here is increasing stage and then, there’s something call isolation which is on the skin surface when the melanoma is isolated is worst and that’s why you have the AMB subset. So take one point, T1 to T4 goes from thin to thick, thick is four millimeters only and the stage gets worst as it grow along.

Now looking at Nodal disease, this looks complicated too, but we know that when it goes to lymph nodes, the lymph plant and say for example, the melanoma is on the arm where it’s going to go is most likely the lymph nodes under the arm or the axilla, it can be involved, but it can be involved in various ways, it could be microscopically involved, which means that when I examine my patient I don’t feel anything.

but I can find that microscopic node by new technique that we use called lymph node mapping and it can be very, very tiny but obviously if you detected that early it’s better, so that you have your, what we call N1 disease which is microscopic and AHS meaning that is very small and microscopic, macro means that I can palpate that lymph node, I can feel it and as you can imagine if I can feel it. There’s a lot of melanoma.

And that make it worst, since – basically what it shown here is that ego from 3A, 3B, 3C depending upon how many lymph nodes were involved and how much involvement is there. Okay. So if I see a patient with lots of lymph nodes involved that’s much worst and somebody who I think there are no lymph nodes involved, but I do a special surgical technique and find that microscopic lymph node and of course, our goal is to find it as early as possible, because that’s our best chance to cure. So that’s your stage three disease.

And then stage four. It’s kind of wide, if you think about it, right, because if it’s beyond the lymph nodes it could be anywhere, including the brain which is very bad as you can imagine. And it could in melanoma very commonly can spread to other skins sites, so this is not a new melanoma, but it goes from here to this side of the skin that becomes stage four.

And as you’ll see in the other Vical study that was done, those were patient that were targeted for this type of approach. Its can metastatize the subcutaneous tissue that is underneath the skin and lymph nodes but they are not the closest lymph nodes but far away and a lot of people get confused by this. If you have a melanoma on the right arm and my left lymph nodes are involved get backs to stage four, not stage three.

We also know that, we have the reason to subset this out is that, A) having these area is better than B, having it into lung and C is the worst which is having it anywhere else, which includes the liver, the bone et cetera but also keep in mind, if you read about this, there’s something called LDH and that’s importantly we talk about the trial having a high LDH no matter where the melanoma had gone to, if it’s that bad mark for melanoma.

We know that now it’s very important. And we are to stratify patient based upon these and decide upon creeping options and clinical trial options of these patient. So we take one point that all stage poor disease is not the same, obviously there are categories within that subset as well.

So what do we do, I’m a medical oncologist and my best friend is my pathogen because he is the one that is really going to diagnose the patient for me and hopefully cure that patient and I don’t need to do anything more. Unfortunately that’s not always the case, in fact it’s not often the case many melanoma patients don’t’ get cured by bioscopy.

The first thing you have to do is, if you suspect the skin cancer, skin cancer are common, melanoma is one of the skin cancer is much less common but it’s very tough to diagnose it and I am very grateful that as a medical oncologist I don’t have to make this diagnosis.

It should be simple right, because you don’t – you do not need a bronchoscopy or colonoscopy to diagnose melanoma. You should be able to look at it on the skin and pick it up. It’s not as easy as that. So you can suspect something and it won’t go there and miss the time, but the only way we can prove diagnosis is with the bioscopy.

So if you get a skin lesion you don’t like, what you’re going to do. You’re going to make an appointment with your doctor and he’s going to look at it, if he doesn’t like he will bioscopy it. He will take it out as much as he can and sent it to the lab for analysis, if it is a melanoma and it needs certain criteria we do that lymph node mapping technique that I talked about which is – when I don’t have lymph nodes that I can feel, I am going to try to find it, anyway if it’s there – if it’s there microscope would do lymph node mapping and then if you made the diagnosis you take off little margin of skin around that to be safe that a wide excision and then if the lymph node is positive, you take the rest of the lymph nodes out.

So this is our surgical approach and my surgeons that we work with will do this very nicely and then after that’s all done, we have the right stage and then I get involved in terms of what else we can do next.

And where I get involved with these patient that are hopefully cured but sometime not is perhaps give them what we call adjuvant therapy. You have heard about this, this is another cancer treatment given post surgery to try to prevent relapse and therefore make the patient live longer.

So we know that when you take cancers out no matter what they are, they often come back, just because it could be microscopic cell that’s gotten away, we can’t find them. So we sometimes get chemotherapy and so on in melanoma, the only drug that has worked and will tell you that it’s not worked as well as we would like because it has this problem. But this is an approved agent, IFN-alpha [ph] use a lot of this.

It’s immune therapy, I do want to point out this because one of the unique things about melanoma is that immune system is very important and indeed the only adjuvant drug in melanoma that’s approved or works is an immune agent, not a chemotherapy. Chemotherapy in fact in the adjuvant setting in melanoma is useless, everything else has not been effective. We won’t go there in terms of details, but we tried everything including radiation and so on it doesn’t really work.

So let’s now talk about metastatic melanoma which is of course the main interest, right, because that’s where we have a major (inaudible) and just to summarize here the four approaches that we take as clinician and researchers for treatment in melanoma, we can try chemotherapy, we can try immunotherapy, biotherapy is the other name for that. We can put altogether and have chemoimmunotherapy, so we try everything because it’s kind of desperation to get something that works and of course, experimental treatments, clinical trial which is certainly a very important approach for this disease.

Let’s start with number one, chemotherapy. So this may be a little hard to read but bottom line is that there are some chemotherapy drugs that have been applied in melanoma, you might have heard of dacarbazine or DTIC. It was approved by the FDA about 30 plus years ago and if you look at how often it works, we use this terminology CRPR which mean complete response, all tumor gone, partial response, tumor shrunk by seven percentage.

That combination has been reported to be about 20% and keep that number in mind as I show you in the next slide but everything else that has been used, none of this are FDA approved drugs melanoma by the way apart from DTIC but we tried them anyway the numbers are small and had not really been any better than DTIC.

The problem is that DTIC which is the only FDA approved chemotherapy drug from melanoma after 30 plus years and I have been doing this now for 17 years, there’s not being a new drug approved for chemotherapy melanoma. The response rates that mean the percentage of patients that have a meaningful shrinkage of their tumor is not 20% as you thought. It in fact is lower than that, it is single digit number, 6.8% in one study,7.5 in the other because the date I showed in the previous slide was older, now we have much more straight criteria, CT scan and so on, this does not work very well, that’s important.

And the important things is also it doesn’t last very long even if the 20% or less in this studies that’s a 10% doesn’t last very long and in fact the medium time to progression which is, we called this, when does the patient progress on their CAT scan, we tend to scan our patient every two months and the medium time that means some more like the average time, that the patient progressing is less than two months, which means that when I give somebody DTIC and it shrinks, the tumor shrinks, chances are the next time I scan them it’s progressing and that’s obviously the problem.

Survival this is median number in our fact rate. So this is – these are the facts about our only chemotherapy approved drug by the FDA. It is still the standard drug, response rate is really less than 10%, one and 10 not very good. Importantly, no long term remissions. We don’t have durable responses from this. And you know to be very fair this drug has never been tested in our clinical trial versus doing nothing, or doing best supportive care.

Of course, that trial is impossible to do, no patient going to be willing to go against that and many of us in the field take that DTIC is in fact that’s supportive care, it doesn’t do all that. And as I mentioned no new drugs approved and you know there is (inaudible) also to remember it’s very important that, the reason is there will be no drug approving chemotherapy is that, we have not yet beaten DTIC in the randomized study. Okay that’s very sober in fact that we have not yet beaten the struggle any randomized trial than anywhere in the world yet.

So in oncology, when we have one drug that might work and other that might work as well, we often add them together. We get combination chemotherapy and one of the combination chemotherapy is it goes by the name of the Dartmouth regiment, because it came out Dartmouth.

Just to summarize, I feel four drug added together, they all have activity. I think, I can go in a detail afterwards if you like but bottom-line is this combination we thought was going to be better, so to prove it, you do a randomize trial four drugs versus one. You could imagine how difficult that trial was to do in terms of just getting patients to agree to it, because everyone has tendency to think more is better, indeed more is not better. This is an example of a Keppler-Meier survivor curve where the two arms of the trial completely overlap and both go down close to zero essentially one important fact of chemotherapy melanoma is that, no matter how many drugs you put together, we have no better benefit then DTIC alone.

So DTIC is still standing tall as the drug to beat in metastatic melanoma in terms of chemotherapy. You might have heard temozolomide and I mentioned temozolomide because it happens to be actually in terms of chemotherapy even more widely used from melanoma then DTIC even though is not FDA approved. The reason it’s widely used is because it’s very similar to dacarbazine or DTIC.

It has some penetration to the brain which is an important place for melanoma to travel and its appeal it makes easy to give. So essentially there are couple of trials now showing you one here, that is looking at whether temozolomide which has all these potential advantages is it any better than DTIC. This is a large European trial that I actually participated in this as well as my center.

We can see a very large sample size and the bottom line is that indeed the two drugs are basically equivalent. So the question is you know, temozolomide and DTIC are about the same and therefore are having the same information in terms of response rates. And as I showed you earlier not that great, we would love to have something that was better than DTIC or .dacarbazine.

So to summarize chemotherapy, the standard drug is still their dacarbazine from the FDA approved drug. Temolozomide is no matter how you do it, which ever schedule you test, it’s about the same as DTIC, combination chemotherapy is not better than single agent chemotherapy and of course when you add drugs together, if you have no benefit you certainly have more toxicity. So we don’t recommend doing that, outside of any kind of clinical trial. So our standard treatment for melanoma right now, is we’re going to use chemotherapy using one drug, even though it sounds, less aggressive, it is indeed the right things to do.

IL2 the other approved drug for metastatic known by the FDA is not a chemotherapy drug, it’s an immune therapy drug or biotherapy drug caused (inaudible), it came of the NCI of the National Cancer Institute, some taxable IL2 to summarize a complicated and long field. This is a high-dose treatment, to put in a perspective, it needs to be done mostly in the ICU, okay. This is not a treatment that is doable by anybody.

You cannot read a book and give someone IL2. You have to be specially trained to do it. My center does it, there are only about 15 centers in the country that offer IL2 to patients and it’s a very expensive and toxic treatment, but the reason we do it is that there are some patients, a small number, about 5% to 6% for whatever reason, we don’t know how to select those patient ahead of time. They will respond to this drug and will remain responded for a durable amount of time.

So what separates IL2 from chemotherapy, even though it’s very toxic and expensive and ICU and all that, is the durability of response and that’s the key things because finding something that works that’s less toxic and durable will be very, very important. And as I said earlier, it is something that is, only given to selective patient that has all these different side effects that you can imagine, low blood pressure, renal failure, swelling and so on, difficulty breathing.

These are not things that most patients want to go through and indeed only 10% of people that we see or even candidates to get this and it works on 10% of them. So this is a one in 100 drug, really if you think about effectively.

So let’s try to fill it all together. Let’s take IL2, let’s take chemotherapy and put them altogether and see if it that works any better. So there was this very large clinical trial that was done through the cooperate group ECOG mechanism that’s a group that all of us collaborate on and do studies together, and what this is really showing you is that there were three chemotherapy drugs and CBD is three drugs, Cisplatin, Vinblastine and dacarbazine or DTIC, so three chemotherapy drugs. IL2, not the high dose IL2 but a lower dose because we really cannot add high IL2 to anything and interferon as well.

All five drugs, to cut a long story short, when we did the trials of the five drugs just in phase two, they look like it might be better, but you have to prove it, do a randomized study, the comparison was chemotherapy alone versus adding the biotherapy on the other arm and yet another negative clinical trial with very similar capital micros overlapping.

And really if I just go back for a second here, combination chemotherapy is no better than single agent chemotherapy. So really if you had five drugs together including lower dose of IL2 and interferon, it is truly no better than single agent chemotherapy. So back to DTIC, as your kind of like goal standard, chemotherapy drug for melanoma.

So let’s just summarize what we have available to us outside the clinical trial and what we would have approach as clinicians outside of the clinical trial. We would say that single agent chemotherapy is still the standard, but unfortunately, DTIC does not have the high response rate and more importantly, even though the people that respond, don’t respond for very long time, almost always they are progressing very quickly we need something else.

High dose IL2 is a little bit different. It has durable responses, but as I said earlier, if the drug that is quite toxic and therefore it requires a very healthy patient that is able and willing to go through this that it’s only 10% of the people that we see. And if only one in 10 of those respond, you’re not looking at a big drug that is going to be taking over and doing a lot of things for a lot of people, something that is very selective.

Adding the two type of treatments together and at some format like I showed you and there are other trials as well does not improve response rates, does not improve survival. All of these have some issues with toxicity and safety, and there was no question that this is a disease that in terms of career choices for us as oncologist are very good carrier choice, because there’s a lot of work to do. There is a major unmet need for new treatments in metastatic melanoma.

So what are those new treatments that have been looked at, now this is a very simple collaboration of the cell, you know, when I was studying oncology, we were taught that the reason cancer flows, cancer survive is because cells are growing quickly. They’re rapidly dividing. They are growing fast and they are cumulating, we now know that in fact that’s not true, cancer cells actually grow slower than normal cells. They just don’t die. Cancer is a disease of lack of death not a disease of too much growth.

And if our process [ph] which is death in cancer cells occurs normally in normal cells all the time and you have this path ways in place that makes the cancers cell to become a cancer cell by refusing to die, so you know when I teach my fellow I tell them that the way it work is, if you are a cell and you go into the cell cycle, which happens several times a day in some cells, you stop and you examine yourself and see, am I normal and if I’m normal I would say alive and if I’m not normal, I should really commit suicide and go away.

That’s what a cell is supposed to do. When it does not do that, it becomes a cancer cell. It’s obviously a complicated mechanism in place that make it not do that. One of them is a pathway called B-raf and I’m sure you’ve heard of this pathway. And B-raf is a mutation, an activating mutation but the bottom line is what it does is that B-raf is mutated in melanoma.

It makes the cell not die. It cuts off its apoptotic pathways and it’s mutated in about 40% or 50% or so melanomas, not every melanoma has that mutation. So wouldn’t it be nice if we could find a drug that targeted B-raf and therefore allows the cell to take up dose and therefore the cure the disease and clear [ph] the disease.

So the first drug in that area was called Sorafenib. Sorafenib was in the market for kidney cancer and some other diseases as well. And this was a clinical trial and I won’t give you the details why but it was a chemotherapy combination with Sorafenib, placebo on one side, Sorafenib on the other, chemotherapy on both sides.

This is a front-line trial that we did to ECOG. It’s not yet been published but it was presented in an abstract form, lot of study and what it showed was that the reason of course, Sorafenib was added to this was because Sorafenib has activity against B-raf turned up. We know now not so good activity and indeed you have overlapping survival curves once again.

So adding Sorafenib into frontline setting for metastatic melanoma with that chemotherapy did actually nothing. So there was also a trial looking at second-line therapy. This is a trial that we presented at ASCO in 2007 and very similar design, in fact, this study was actually reported before the other one, second line trial, same design, Sorafenib on side, placebo on the other, chemotherapy combination and a second-line setting, exact thinking [ph], no benefit of Sorafenib

So one of few things, either B-raf is no good in melanoma or Sorafenib is not a good B-raf drug. And we think it’s a matter because we have better data now from drugs that are more selective and highly effective in inhibiting B-raf, example being PLX4032, one of the drugs out there that has been, now this is, I just showed you the presented data, there is more updated data as well.

So if you have B-raf mutation and you use a B-raf selective drug, you can get some nice responses. This is still being worked out, randomize studies are going on. I’m sure you are following this but it’s looking promising and we’re finally understanding that there might be some biology here in melanoma that we can exploit.

So that’s a B-raf story in nutshell. What about anti-CTLA4 antibody therapy? Switching back to immunotherapy now, so the anti-CTLA4 pathway, the way I can look at it is that the CTLA4 mechanism and I won’t go in detail, is like a brake on the immune system. So we all have immune systems and the immune system is set up in a way that it works normally and they are check points in the immune system.

CTLA4 is a brake. If you – anti-CTLA4 antibody takeaway is a brake. So the immune system gets hyperactive which is a good thing for creating melanoma but not so good for some side effects that can take place obviously. Ipilimumab is one of the anti-CTLA4 antibodies. This study was presented at ASCO and published recently as well as you can see here.

This made it to the final session of ASCO so it is very exciting. It was a trial comparing Ipilimumab by a cell plus placebo to Ipi plus gp100 vaccine for the vaccine alone. That was a trial designed a randomize study, do want to point out here with second-line therapy, not frontline therapy.

This has sample size of 600 plus patients and a three arm study and what really was seen was that the vaccine arm alone was inferior to both the other arms that really the comparison was designed and the statistics will be between Ipi plus placebo versus the gp100 and there was a significant difference.

So for the first time, we had a randomized study in metastatic melanoma with a survival advantage. We never had that before whether it is second-line therapy and the median survival is approved for about six to 10 months. So it certainly not a cure for everybody but I think definitely a nice interacting advance that is validated with the concept with immune therapy melanoma is important. And there is no doubt that immune therapy melanoma is a key part of our therapeutic approach of the disease.

Anything we do have side effects unfortunately. I do want to point out here that Ipilimumab does have side effects. The important thing is that if you look at what this drug does is make sure immune system hyperactive, we try to make you allergic to your melanoma but sometimes it makes you allergic to parts of yourself as well, which is why you get diarrhea and so on in terms of some other side effects. Okay. So there are some issues with this but obviously with better training and management, we will be able to control this and this is a powerful weapon.

The question is how do you harness this to make it effective for yourself without doing harm to the patient and we have some more things to learn about that. So you know, having said that immune therapy is important, chemotherapy, obviously, I convinced you is not great. B-raf, we’ll see what happens is looking good but we will see. So let’s just spend the last couple of minutes on immune therapy.

There is a couple of things that are very important about this approach. Immune therapy is not chemotherapy. These are not chemical. You are not giving someone a poison to kill the disease and obviously, has side effects with the patient as well.

You are giving them a treatment that is trying to change their whole immune system. You are trying to making their normal immune cells more reactive and that takes time, if not something that you give a drug today, it is going to happen tomorrow. It can take weeks to months for that to happen. In fact, that’s a biggest problem with this approach is that you need sometime and we are impatient as physician and as patient and we are trained to do scans every two months and if we don’t have that response to two months, if that is not working, let’s move on.

That’s not the case with some immune therapy. Just to wait a little bit longer, if you can, sometimes you can so the response might be delayed but the interesting thing is when they are delayed sometimes they are very durable so you should not miss this if you can. That’s important about our immune therapy. You often have mixed patterns of response.

Most patients have more than one side of metastases. So I got two liver mets and one lungs mets, two mets underneath the skin and I’m giving some one immune therapy, you could have a response in one place and growth somewhere else and sometime all that comes together as being a response so we will do clinical trial however. You might know this, they are very strict.

If you have a new lesion, no matter if you have five and all five are shrinking but number six shows up, that’s progression. You go off that treatment. For clinical and trial purposes, that is a failure and you have to move on. Is that the right thing to do? Who knows? Right. With immune therapy, you have to figure this out.

So survival and durability response are much more important endpoints. So when we design clinical trials for immune therapy, we have to be careful. We cannot design that with the same patterns we have used for chemotherapy. We have to design them with a little different approach, allowing the patient to work to have that response perhaps seen.

And that’s what we’re trying to show here is that chemo happens quickly, goes away quickly. Immune therapy happens slowly, sometimes later but it lasts longer and that’s the key that we are going to be designing immune therapy studies looking at durability. Just like IO2 for example, it’s important.

So I hope I had some tendency [ph] that melanoma is unique. It is. Why is it unique? It is resistant to most forms of therapy. You know, there is not a cancer out there that has had such little success with chemo.

Think about chemotherapy in breast and lung cancer, it works much better. Probably, it’s because we call melanoma by one name but its several diseases in one. And we’re learning that from the biology of heterogenous and we’re creating it all the same way. You can do that.

You have to design studies and treatments for patients that has specific biology and finding the right person to enrich your population, if you will. It’s a difficult trial design. That’s exactly why all those negative survival occurs, I’ve showed you, it’s because the designing studies for those disease, especially with immune therapy are difficult and it’s very important when you have a disease that is technically incurable that quality of life is important.

So there is no point in giving some high dose IL2 drugs because at the end of the day, the patient is going to die at exactly the same time. What service have I done to that patient? You got to find a treatment that allows them to continue life on in a more humane way and that’s very, very important.

Melanoma is immuno responsive. No question, two of the three drugs have approved melanoma in a high dose IL2, the other is DTIC our immune therapy drug, no other cancer has that. We know that if you look at melanoma tumors, there is insufficient lymphocytes.

Lymphocytes are trying to get in there. Something about this disease, it’s attracting them or something about this disease is making those lymphocytes angry and they want to get in, they’re going to attack it so how do we use that effectively. We know from many observations that Vitiligo has improved outcome.

So when you have a patient with melanoma and I’m treating them and they are having the discoloration of that skin, they are very worried and I’m telling them that’s a good thing because your skin is being attacked by the same lymphocytes that are hopefully attacking your tumor. And of course, we do need additional approach to it as well. So thank you. I’ll stop here.

Alain Rolland

Just like to thank Dr. Agarwala for his excellent presentation on metastatic melanoma. I’m Alain, one of the Executive VP, Product Development, at Vical and I’m going to show you how we have developed novel immunotherapeutic for melanoma. Allovectin is Vical’s new product in the phase III of the trial. It is the first in class immunotherapeutic, currently validated in metastatic melanoma patients.

Allovectin is plasmid bicistronic [ph] immunotherapeutic but expresses two genes which together form an MHC Class I complex. It is formulated with a proprietary lipid base system that actually placed the delivery of DNA into the strongest [ph] tumor cell. It is convenient to the patient of the single bio, stored refrigerated and we are using a conventional needle and syringe administration into a lesion.

The initial development of Allovectin that I will review today is focused on metastatic melanoma but as immunotherapeutic, it could have essential applications in other accessible solid and immuno reactive tumors as well.

Allovectin is injected into a single lesion to produce both a local but also a systemic effect through six weekly injection cycles. The point is used in a physician’s office as we heard from Vijay in an outpatient setting and it does not require any pre-medication or post-medications (inaudible) hydration.

One of Allovectin’s hallmark has been the remarkable safety profile to date, observing multiple trials with multiple dosing as well. Allovectin has a unique set of mechanisms of action. Really does it teaches the immune system to recognize and destroy the tumor cells. First, the HLA-B7 flags the tumor cell aspirin [ph]; you know we’re very similar to the transplant mismatch.

This is an immune reaction against these tumor cells. Then Beta-2 microglobulin also restores the effective presentation of the tumor associated antigens from the patient, making these tumor cells more visible to the immune system and finally, the lipid DNA complex that we are using induces danger signal that serves or boosts immune system against these tumor cells.

So in another words, those different actions result in the local and a systemic recognition of the tumor cells by these educated immune cell. Allovectin mechanisms of actions is complementary and plus it would be synergistic to other anticancer therapies. We are very excited as we heard about the recent success of Provench [ph] for instance and Ipilimumab but combination was released as Dr. Agarwala pointed out, we like to remain the standard of care in oncology. So in the example shown on this slide, the T-cell activation generated by the anti-CTL4A antibodies such as Ipilimumab could work in concert with Allovectin-7 by boosting the tumor cell destructions by these T-cells that have been activated.

The safety and the efficacy of Allovectin at high dose, the 2mg dose where if elevated in the phase II clinical trial, a very large phase II with a 127 patients, most of the greatest trial that we have done at Vical, we’re continuing with a much lower dose 10 mg dose which is about 20 times lower than the dose that we are using or we have used in phase II. The efficacy was evaluated in 127 stage three and stage four metastatic melanoma patients and several response endpoints were measured by strict RECIST criterion.

Overall, survival also assessed in this phase II profile. Allovectin was very well tolerated as you can see on this slide, when compared to other treatment such as DTIC and Ipilimumab, the 11.8% response rate achieved with Allovectin-7 compared very favorably with these historical data with chemotherapy, for instance, such as DTIC or immunotherapies such as Ipilimumab, all the responders to Allovectin added durable response to at least six months as presented by Dr. Agarwala and have shown in the slide, chemotherapy results in a very short-lived response.

For such kind of chemo naïve patients but we are finding in phase III, the double response rate was about 17%, so that’s highly remarkable. Importantly, in these last phase II clinical trials, the median survival was 18.8 months which is remarkable when you compare to historical data in metastatic melanoma population where the survival range is strictly from six to 11 months.

In fact, this Kaplan-Meier graphs represents the very promising median survival of 18.8 months obtained with Allovectin-7. Even though a 63% of outpatient receive one cycle or less with Allovectin due to pervasive disease based on strict RECIST criteria at least half of the patient showed a substantial survival benefit compared to historical controls. The respondents in particular are prolonged survival ranging from 18 months to more than seven years and the median survivor as you can see on this graph was not even reached for the responders.

We further compared Allovectin phase II survival data to recently published analysis of 42 phase II clinical trials in about 2000 metastatic melanoma patient. In this application, as shown on this graph, the mean one-year survival was 25%. No statistical difference was observed with any of these treatments since on this one-year survival points of these blue dots basically fall within the 95% confidence internal.

In contrast, if you look at the Allovectin-7 one-year survival of 65%, this is well above the run showing a statistic of significant improvement in comparison to this historical data. Even the two-year survival of Allovectin which is 23% is still better than the one-year survival for all of this published data.

So what did we learn from this phase II results in order to maximize this phase III design for the first line education. First, we selected the healthiest metastatic melanoma patient. We have normalized (inaudible) normal LDH, nor brain, no visceral mets, no liver mets and we also selected chemonaïve patient with more intact immune system and this to keep the patient on study as long as possible in order to maximize the chance of benefit from the immune therapy Allovectin-7.

We injected a single lesion with a full dose 2 mg to optimize the antichemo effect. We also modified the RECIST criteria to help patient – to keep the patient on study for at least two cycle. Two cycle was the median time to respond in the phase II study. We also allowed resection of a stable lesion after 32 weeks to verify the lesion is median lesion or whether it is only scar tissue. And then we use as we heard from Dr. Agarwala the primary endpoint that we stated as durability of response observed for immune therapies.

For the phase III pivotal trial design was accepted by the FDA under special protocol assessment and FDA. It is intended to show superiority of Allovectin. This is third-line chemotherapy, DTIC or temozolomide, the choice powered 90% at least to show benefit not only in response rate but also in survival benefit. The trial of enroll, 390 patients by February of this year due to a large number of subject (inaudible) both in the U.S. and Europe and AnGes (inaudible) Japan has truly funded the clinical cost of the phase III clinical trial.

We expect as Vijay mentioned, to a lot of database in the second half of 2011 and surely there are, so we will announce (inaudible).

So in summary, Allovectin is a first in class immunotherapeutic with a unique mechanism of action but is complementary to other anti-cancer therapies. Allovectin is used in an outpatient setting and has very safe profile. We have focused initially on metastatic melanoma but Allovectin has potential indication in all their solid tumors.

We have obtained very promising results in this phase II clinical trial and pivotal phase III trial as completed the enrolment early this year. We have a pay notes to Orphan Drug designation and Fast Track designation in the U.S. And we’re now getting ready for commercialization of our reconciling. So I’d like to thank you. I think we are in transition now to drawbacks.

Mark Pescovitz

Okay. So we’re going to change gears entirely here. Go from cancer to infectious disease and talk about virus which is particularly problematic in transplantations of stem cell and solid organ called cytomegalovirus. But before I again, I should make a note that I’m a paid consultant of Vical. I have also received consulting reports and grants reports from Roche, Genentech and honorary from me to those. I do not have stock in Vical or for that matter in Roche and Genentech.

So cytomegalovirus is a major problem in both solid organs and stem cell. There is about 60,000 allogeneic which means transplant from one individuals to another and autologous which means a transplant from the person back into himself. There is about 60,000 of those hematopoietic stem cell transplants or HCT done in United States and Europe each year.

Similarly, there is about 60,000 allogeneic solid organ transplant so they are performed in both Europe and U.S. Cytomegalovirus has been and continuous to be perhaps most common opportunistic infection after transplantation, appearing in anywhere from 50% to 70% of patients, depending upon the specific combinations.

I’ll show some of the data to support that and whether or not to use and what type of prophylaxis or preemptors strategy used. The incidence of clinical apparency on the disease is slightly less, anywhere from 20% to 60% but if we do not treat CMV than either the solid organ or the HCT population at least to a very high morbidity and mortality.

When I talk about CMV, it’s a fairly simple life cycle shown here. In the center, there is a cartoon of the virus itself that’s a double stranded DNA virus which is surrounded by a capsid. When a patient first – a person first comes in contact with CMV, the CMV enters the host where the viral envelope binds to the cell, the viral DNA enters the nucleus of the cell, viral DNA replication occurs, virus particle are assembled and in this area here, an immune reaction starts to occur.

And depending upon, how strong the immune reaction is one of two possible scenario is going to occur. Either the immune system is weak and this virus just keeps going around in a circle generating more viral particles and expanding exponentially, creating CMV disease. The patient gets sick or alternatively, an actually at the same time, the virus can enter what’s called the latent stage where the virus is in the body but not replicating and not causing disease.

Now, when we make a diagnosis of CMV, (inaudible) clinical disease, we know the patient is sick but you also want to show evidence of the virus. And the original way of doing this was by culture such as the shell vial culture is very insensitive. It takes a long time and it’s pretty much relegated to the historical literature.

Alternatively, you can measure CMV antigenemia and this is an assay where you take white blood cells from your particular patient, you spin it down onto a microscope slide and you stain using amino fluorescence for example against the polypeptide 65 or pp65 and you look to see whether or not there are any fluorescent cells indicating that there is a virally infected cell circulating in the blood. This is semi quantitative and is still used in a lot of centers.

Now, we’re advancing more towards DNA methodology, you can use either qualitative preliminary chain reaction or PCR or a quantitative PCR to identify whether the virus is there and how much of the virus is there. So they are both very sensitive and if you actually quantify it, you can break them up into different risk groups, depending upon how many viral particles there are.

And lastly, there are newer ways such as detection of mRNA for those who are not yet approved or being used widely. Now, the most important the predictor of who is going to develop CMV post transplant is what’s called serologic risk and serology means antibodies. So if a patient has antibodies before the transplant either a stem cell transplant or metastatic cell transplant or solid organ transplant and what the donor status is, puts the patient in a certain risk status.

So these are data now from an HCT study and shown along the x-axis here is the days after transplantation and along the y-axis going up to here about 20% is the incidence to CMV disease. What you can see is if your donor of the bone marrow is negative and recipient is negative, there is no CMV in the system and obviously the risk of CMV is quite low. If the donor is positive and recipient is negative, there is now a little bit of incidence of CMV. But the worst is when the recipient is positive.

Remember that virus is latent. You’ve eliminated the immune system but the virus is still sitting in the body. So when the immune system gets weakened, that virus is now able to replicate. Now, remember this image because in solid organ it’s flipped. Okay, now once again, the lowest risk is still the donor negative, recipient negative but the highest risk now is where the donor is positive and recipient is negative.

In HCT, it was where the donor was positive or negative but the recipient was positive, that was the highest risk. Here, if the recipient is negative, that’s the highest risk because now these recipients are here have never had a chance to mount an immune reaction. So developing a primary infection to CMV in the phase of a very weakened immune system.

If a donor is positive and the recipient is positive whether donor is negative and the recipient is positive, that was the highest risk with HCT when in fact, it’s an intermediate risk with solid organ transplant. So although virus is a same virus and the treatment is similar, you have to think in terms of different groups, in terms of risk factors.

Now, when did CMD occur? Well, it occurs fairly early. Once again, this is time after stem cell transplant or HCT here. This is in days and this is out in months here and you can see that in – Viremia is occurring fairly early at about 40 days. And that’s pretty standard. But if you don’t use any sort of prophylaxis, you’ll start to see Viremia developing at about 40 days or so. It used to be called the 40-day fever because that’s why it was happening, you get a fever of about 40 days.

Furthermore, you will notice at the incident of Viremia is relatively high in this population, about 50%. Now, on the other hand, if you don’t do anything and you progress the disease, the disease is going to happen a little bit later here at month and the incident to disease is much lower than the incidents of Viremia. Now, why is that, that’s happening because we typically don’t want lot of these patients go to disease so we start interrupting. When they have Viremia, we start treating and that lowers the incidents of disease.

Now, in the stem cell or hematopoietic population, if you have T-cells still around, if you have an intact system, so a non-myeloablative, you can see as the time the CMV disease is actually delayed. Here it is later than if you deplete the immune system. So in a myeloablative, we wipe out the immune system completely, CMV disease is happening very early in a non-myeloablative approach, disease happens later.

Now, in organ transplantation, the same sort of pattern appears. These are data from an early trial and liver transplants where the patients did not receive. This is placebo group. They did not receive any anti CMV prophylaxis along the x-axis against the time for its transplant and you can see that once again the time to CMV is at about 40 days.

So again, solid organs, similar to hematocellular transplant patient, if you don’t prophylax, CMV is going to happen in about 40 days or so.

Now, why bother worrying about CMV, well there is a lot of reasons too and it causes a lot of different types of disease processes. First of all, we can develop what is called CMV syndrome and CMV syndrome is the fever that people get. Typically, a spiking fever goes up, comes back down. In my response, it was administering aspirin but the patients feel quite miserable. Lot of malaise, well they are febrile.

Back in progress, we’ve got tissue invasive CMV disease where the virus actually gets into organs and effects them and can cause a gastroenteritis in the stomach, intestine and colon, which can cause symptoms such as heartburn which doesn’t respond to an H2 blocker. In worst case scenario, that can actually lead to a perforation of the stomach or an intestine which can lead the need for an emergent operation.

It can lead to nephritis or an inflammation of the kidney which can look a lot like rejection, it can lead to hepatitis which can cause liver enzymes to be elevated. It can cause pneumonitis such as shown here and if you don’t give any prophylaxis, pneumonitis can lead to the patient requiring ventilator support and can actual result in the death of the patient.

And lastly, CMV retinitis, more common in the HIV population but still can occur in organ transplant and HCT. There is also a host of what we call the secondary complications or CMV and this is where you can really identify the virus but there is a strong association between the presence of the virus or the presence of the virus infection in the past and this particular secondary complication.

Don’t have the data to show but cardiac complications have been strongly associated with CMV. In organ transplantation, both acute and chronic rejection which is shown here, the scarring that builds up super infection and I’ll show data for that in just a second where you have CMV. The CMV weakens the immune system and then these other bacteria or fungal infections occur on top of that, super infection and that can then lead to lot of morbidity and mortality. And lastly, in cardiac transplantation, there is this atherosclerosis or chronic rejection of heart transplant which has been strongly associated with CMV.

Now what about superinfections? So, these are data from a few years ago, looking at the risk of dying following ACT transplant based on whether the donor was CMV positive or the donor with CMV negative, you can see it’s a major causes of death or septicemia, aspergillus, infectious molds, bacterial infection, and is worse if the donor was CMV positive. So, donor CMV positive as on top of the risk of CMV as opposed to the donor being negative and these three virus are significant.

So, it’s not the CMV that’s necessary killing the patient, that’s the rate that CMV here is the same, it is the superinfections leading to the death which is significant.

Now similarly, in a liver transplantation here we look once again at the Ed Gain [ph] study and the placebo population of patients. There were 29 cases of CMV disease. Seven of those patients ended up dying for about a 28% incidence of death. If you did not have CMV disease, only 9 of those patients died or the incidence of death was 7%.

So if you don’t give any prophylaxis in a liver transplant population the patients develop CMV disease. You have fourfold increased rate of dying, and most of those deaths are due to acute infectious complications, not specifically the virus but bacterial and fungal infections.

Now what about other things that I worry about in my transplant population? Well that would be graft rejection. So this is kidney graft survival over a five-year time period here, and for same graft survival. You can see those patients who had a history of CMV disease in the white line has significantly worse graft survival over five years then those patients who did not have CMV disease. This is very impressive effect, much greater than some of our immunosuppressive drugs that we are seeing.

Now, because of the problems with CMV, a series of options or therapies for seizures have been developed that try to prevent CMV from occurring in our transplant population. So what are these?

One of them is to try to limit the viral exposure to your recipient. So if possible, use a CMV negative donor. So, you have CMV negative organ recipient and you can get a CMV negative kidney, the incidence of CMV is extremely low. The same with ACT. If your donor is negative and your recipient is negative, there is a flat line – there was no CMV.

So, if possible, we try to use CMV negative donors, but that’s not always possible. In fact it’s frequently not possible with solo organ there is a such a shortage in organs that if you wait for this combination the patient may never get a transplant. In the ACT population where matching of HLA is so important you may not be able to transplantation if you want to “match your CMV and match for the our antigens.”

Certainly you want to use a possible CMV negative blood product because CMV can’t be transplanted or transmitted with a CMV positive blood transfusion or platelet transfusion. And lastly, you can filter the leucocyte that is the blood, leave the red cells, get rid of the white cells because the white cells are the carrier for the CMV virus.

Now, alternative to that if you can’t limit the exposure is to try to treat these virus either in a prophylaxis approach before they develop infection or after the virus is replicated. For that we will be using antiviral therapy. So the first two are sort of related approaches, and that’s called the prophylaxis approach.

The universal prophylaxis means that every single transplantation gets antiviral prophylaxis. Now, most people don’t do that because the risk is not there for all patients and these drugs are very expensive. So most of us wouldn’t use if we did a prophylaxis would usually call selective approach.

We look at the particular patient, we look at the donor and we say that this is a patient in a combination of a very high risk of CMV, let’s give antiviral prophylaxis. On the other hand maybe the donor is negative, the recipient is negative, we would say low risk for CMV we don’t want to waste the money and the exposure to the drug. So, that would be a selective approach.

The alternative approach is the preemptive therapy and the way preemptive therapy works is you don’t give any antiviral prophylaxis and no antiviral therapy, and you monitor the patient for the development of viremia.

Typically that’s done by preliminary of chain reactions, but it could be done by CMV antigenemia. If the patient starts to show evidence of viral replication, you see the virus in the blood, that indicates that’s the patient who is now at very high risk of progressing the CMV disease. We know that CMV disease is bad, so what you do would do that is once you see viremia, hopefully before the patient has developed symptomatic disease you would then give some sort of antiviral therapy to nip it in the bud, if you would.

Another reason to use a preemptive therapy is that these agents here are quite often particularly in the ACT population they do impair recovery of the bone marrow. So, if you could avoid antitoxic agents during the recovery of the bone marrow that would be beneficial on that sort of preemptive approach more often using ACT. An alternative approach is to do nothing, monitor the patients, when the patient gets sick with CMV disease then you give some sort of active treatment.

Now what are the drugs that are available for use? Well, these are the ones that are currently available. So slide on nebula virus immunoglobulin – CMV immunoglobulin or IVIG is approved for prophylaxis of kidney, lung, liver, pancreas and heart transplant. What differentiates CMV-IG from typical IVIG preparation is that the donors for this immunoglobulin have been screened to have high tittered anti-CMV antibodies. Otherwise it’s the same IVIG that would be used for other indications.

Though acyclovir and its related drug acyclovir are effective, I will show some data on that for CMV prophylaxis, but are not indicated in the US for that. Again, acyclovir, both intravenous and oral formulation are approved for the treatment of CMV retinitis and prophylaxis of CMV disease and heart and bone marrow and though again acyclovir is relatively new comer on block which has been around now for about ten years is approved for treatment of CMV retinitis and prophylaxis for heart and kidney transplant but actually in the united states it’s not approved for prophylaxis of liver transplants.

Now if you would like to go with the preemptive approach, which means you are not trying to give any antiviral therapy and so you see viremia then you are going to have to become comfortable with the fact that CMV viremia does predict CMV disease and higher the viral load, the higher the risk that the patient will go on to develop CMV disease. So, a preemptive strategy is effective – the idea is to try to nip it in the bud if you would, and so you monitor viremia.

The success of that approach depends upon you being able to consistently monitor the patient for viral load. So as you do the transplant, have a cellular (inaudible) organ and then you have to monitor the patient by trying blood samples on a regular basis, acting and for getting the results back and acting upon those.

It’s one thing if the patient is in the hospital, it’s another thing if the patient has gone home. There is no standardized accepted value at which threshold ones begin therapy, but you can use either Valacyclovir or Valogan or IV acyclovir prophylaxis, but there is no effect on CMV disease.

Now what about some of the efficacy results? So this is what we see, for instance, with Valacyclovir. These are data from – for the period in New England Journal a few years back, ten years ago or so. Days after transplantation following kidney transplant, a percentage of patients who have CMV.

In the placebo treated group here shown in yellow, once again, CMV disease occurring about 40 days post transplant in a kidney population, if you use Valacyclovir, very few cases of CMV disease of all the patients getting prophylaxis.

When you stop the prophylaxis you see this better CMV occurring. I will talk about that in a little bit. That’s called late onset CMV, late onset because it is not happening here. But these two lines are parallel. So you do effectively prevent CMV by Valacyclovir prophylaxis, but not completely.

Here’s a data from Valogam acyclovir. This is the Carlos pie data from in transplantation or AJT several years ago as well. Once again, time after transplant the incidence of CMV disease, the prophylaxis period of 100 days, no cases of CMV disease while the prophylaxis is being given. When the prophylaxis stops, here is this late onset CMV anywhere from 10% to 15% to 20% incidence of late onset CMV.

Now if you can prevent CMV, it does have positive effects. So these are data from a heart transplant study in patients who have received CMV prophylaxis or not in the immediate post transplant period, now addressing the question of this post transplant cardiovascular disease. And in the heart transplant setting this post transplant cardiovascular disease or hardening of the arteries, if you would, lead to death of the patient.

So this is a very good surrogate for a patient who is going to die. As you can see that those patients who did not receive CMV prophylaxis had significantly worse vis-à-vis cardiovascular coronary artery disease in those who had CMV prophylaxis. So, by providing CMV prophylaxis early post transplant the patients do better, they live longer. The same thing is seen in kidney transplants.

So, this is three years after kidney transplant and this is now a kidney survival. Those patients who did not have CMV prophylaxis has significantly worse graft survival then those patients who did have CMV prophylaxis. So, CMV is a bad disease in either ACT or in solo organ transplant and leading to more survival.

Now, we mentioned as superinfections These are interesting data that’s (inaudible) effective CMV on super infections. This is a med analysis by Hart General looking now at the incidence of the relative risk of various infections. So if you didn’t receive any anti-CMV therapy they peg this rate at one – arbitrary value of one. If you give anti-CMV prophylaxis with Ganciclovir, acyclovir or the like, you can see there is a 73% reduction in the incidence of herpes simplex and varicella zoster.

So that shouldn’t be a surprise because these viruses are related to CMV and they are inhibited by Ganciclovir and acyclovir as well as CMV. But if you look here, bacterial infections and protozoa infection are basically nemesis’ are also significantly reduced by 35% and by 70%. Acyclovir, Ganciclovir have no activity on bacteria and no activity on TCP. But, by eliminating or preventing CMV, they therefore having this beneficial effect on these other secondary infections.

Now we talk about (inaudible) organs a comparison of prophylaxis versus preemptive, both of them are effective at prevention of CMV organ disease. You can see there is a significant reduction in CMV organ disease whether you use prophylaxis or pre-emptive acute rejection is also reduced by both approaches. But, bacterial infections and death are only reduced by the prophylaxis approach because by allowing viral replication at least in solo organ you are still allowing that secondary effects that weaken a immune system.

I mentioned late CMV, and that is a problem in transplant setting both for ACT and for solo organ. So what causes this late CMV? Well, first of all in CMV mismatch transplant, so particularly in solo organ if the donor is positive the recipient is negative, there was no chance for building up an immune reaction, those patients are more likely to develop late CMV disease after you stop prophylaxis.

In a ACT population if you have this chronic (inaudible) as host disease where the immune system is constantly weakened by the graft of attacking host those people develop late CMV disease. If you have leucopenia or lymphocytopenia from immunosuppressive drugs, potent immune suppression, those are factors that lead to late CMV.

But the most important factor is the lack of a specific immune response because the antiviral agents that we use are viral static, they are not viral cyto. So once you stop those antiviral therapies, the immune system unless it’s strong enough to take care of the virus, the virus will replicate. So, you really need to work on improving the immune system.

And lastly drug resistance can lead to late onset CMV, but that’s pretty uncommon in our classified population. Now here are some data that was recently used to give Valganciclovir a new label for extended prophylaxis, and remember the original was 100 days of prophylaxis that’s shown here. These are the days after the study was started and the incidence of CMV.

So, during the initial period time, when the patients receive in a 100 days of prophylaxis, no cases of CMV, you stop CMV prophylaxis, late onset CMV appears. Now you can increase the duration of prophylaxis now from 100 days to 200 days, again no CMV essentially during this period of time, but once you stop the CMV prophylaxis, CMV starts to appear.

So this is late, late CMV. So even though you can extend the prophylaxis, you are not completely eliminating the virus because, remember it’s the immune system that ultimately controls the virus. So, what’s the problem with our current anti-CMV medications? Why should Vical or any other company be looking for additional approaches?

Well of the current medications, the absorption is generally poor with Valacyclovir – talking about taking several grams of drug a day you need a lot of pills in order to do this. You can have breakthrough CMV ever after extended prophylaxis. There is a concern for viral resistance through anti-CMV therapy. There are poor for treatment at least in some of the cases. The drugs are very expensive and they do have a fair amount of toxicity associated with them.

So, how can you prevent CMV? Well, along prophylaxis we showed – perfect, you can do monitoring. So once you stop the prophylaxis you can monitor the patient’s development of viremia. If you see viremia you can give even more antiviral therapy. Immunologic monitoring, such as the ability of the immune system to respond to the virus has been suggested as a possible way of monitoring them.

Adoptive immune transfers such as additional intravenous hemaloglobulin or specific CMV T-lymphocytes have been talked about. But, on the cutting edge here, the thing we are looking at, we have been looking at it for a while is can we induce the immune system by a vaccine because if we can boost the immune system then that would eventually carry us through, once the antiviral therapy is stopped.

So, in conclusion then, CMV disease shortens survival after transplant both for HCT and solid organ. Prophylaxis or preemptive antiviral therapy can prevent some of these notorious complications, preemptive therapy is still the standard of care in HCT particularly because of the concern for leucopenia and solid organ is sort of a pops up longer antiviral therapy may be advantageous in the solid organ transplantation, but we do need new approaches particularly focusing on leveraging the immune system. And with that, Rich.

Rich Kenney

Thank you, Dr. Pescowitz. That was a great review of CMV and the transplants setting, we said this little bit here. As you have seen antiviral therapy has dramatically improved outcomes in ACT but there is still a significant unmet need for better control of CMV. TransVax is a therapeutic vaccine is designed for transplantation from re-activation of CMV during the first year after the procedure when the most profoundly immuno-suppressed.

Today, I am going to very briefly cover just to tide things up, the rationale for a vaccine approach, the results of our recently completed Phase II study and our plans for continued development. ACT has matured substantially in the past 20 years and is used in most types of leukemia and lymphoma after chemotherapy failure or in patients during their first remission.

You and I have pretty healthy immune system that keeps CMV in check. If we are infected, a very large proportion of the immune cells in our blood, maybe up to 5% are actually directed against CMV, we have a very active immune response all the time against CMV.

Transplantations, after they give the chemotherapy very rapidly – the chemotherapy kills the tumor cells will become profoundly immunosuppressed within a few days of that. CMV positive recipients therefore are at risk for recurrence for three reasons. First the dark cells are functioning inactive just after transplant. It takes time for them to differentiate perform and active immune response. Secondly, the patients can get continued immunosuppressive therapy in the month after the transplant (inaudible) prior to the CMV.

Finally, even though CMV infection can usually be controlled with antiviral drugs reactivation have indirect effects, the transplant which is going to be risked from multiple recurrences. Thus the vaccine needs to be effective both early in the first three months after transplant as well as late so their immune surveillance can catch up to prevent the CMV disease.

The four basic assumptions that we’ve used in developing this vaccine did well, that was in the literature. We know the reactivation is a significant problem soon after transplant in about 60% of the patients. Most patients are treated for CMV preemptively, that is reports check regularly for CMV and then there are only three if the test becomes positive.

Treatments dramatically reduce the incidence of disease but it still occurs in about 5% and presents the unmet need. DNA vaccine is safe in this setting and can provide both T and B-cells stimulation. Improved immunity should reduce the number of reactivation episodes, so lately onset and reduce the duration of Viremia.

And finally this has clinical implications since the decreased exposure of viremia as Dr. Pescowitz said, should lower the risk of toxicity from antiviral therapy and helps to control the CMV disease.

The Vical product is composed of two plasmas that encodes CMV antigens, GV as a surface protein that induces antibodies that can neutralize the virus. pp65 as a segment protein is important for cellular immunity, and important and protection from occurrence. The prophylaxomer as an excipient, it enhances antigen production without causing inflammation.

Overall, the TransVAX formulation is very easily used in outpatient setting. We have had actually made great progress in the studies in phase I and II in addressing safety and immunogenicity and we met key end points for just good path as clinical targets for phase III.

Very briefly, the transplant concept is very straightforward. The recipient’s bone marrow is conditioned for several days before the transplant with a strong chemotherapy that serves to ablaze the tumor cells. Cells are then taken from a match related or unrelated donor, purified and then transferred to the recipient intravenously. We give the first vaccination before the material ablation to put the plasmas in the appropriate states to start the protein production.

As a transplanted donor cells mature, repeated vaccination in the months after the transplant provides continued simulation that can boost the immune response.

The phase II trials that we did was designed to define the best end points for phase III. We enrolled 80 adult subjects with leukemia or lymphoma, but that was scheduled for transplant and were previously infected with CMV.

So the risks were randomized 1:1 for vaccines versus placebo, before transplant and we use the one, three and six months, after transplant in the phase II study to provide optimal immune simulation. Then end points in the phase II study includes a safety and immunogenicity as well as several critical efficacies end points that should antiviral therapy and viral load.

This is the immune response that transacts vaccine elucidated very good T-cell immune response is for pp65 throughout the year after vaccination. Each dose is indicated by the arrows bottom, vaccine groups in green and the placebo groups in red. Immunogenicity was very strong, very early in the transplant period which is good even while the immune – the subjects were very immunosuppressed and they remain strong after the last dose up to a year.

The difference between the groups was highly significant. This indicates that the DNA vaccination was active despite immune suppression and that long-term cellular immunity was being induced both early after transplants and in the late phase.

This table summarize that the efficacy endpoints from the trial that were measured during the follow-up period, as you can see in the percent change column on the right, it crosses all the endpoints, the vaccine consistently cause a change in the right direction.

That is the vaccine group had fewer events in the placebo group, most significant planning during the top three rows, the occurrence of CMV reactivation, the time of the reactivation and the presence of multiple events.

These are the most important ways to look at the viral load. I’ll show a couple of these findings graphically in the following slides. This is the Kaplan-Meier curve it shows the percentage of subjects in each group who are protected from viremia over the year follow-up. You can see immediately that the vaccine is doing something very good in this population; only 32% of the vaccines develop viremia in the year after transplant, so they didn’t even hit 50% line, if we can make this work.

Whereas half the placebo group developed viremia within the first 100 days, 62% of the placebo group eventually develop viremia which is red line with historical rate of about 60%. The significance was very statistically significant, the statistical difference was 0.03 which suggest this is the right type of market to take into Phase III.

This is the last data slide and it’s a prevalence graph, it’s actually very simple count of a number subjects who develop viremia each month in the vaccine and placebo group, the lines here was smooth to help show the trend. Vaccine group in blue is clearly having fewer viremic episodes compared to the placebo group in red and we get the P value of 0.036.

The approach to an end point in Phase III needs to be readily measured and to take up the problem that multiply episodes into account since those are the subjects that are at the highest risk of clinical CMV disease. This Andersen-Gill statistic combined the of the event multiple episodes and inter-event correlations, and this provides and excellence statistical approach allows us to calculate the hazard ratios that we need to determine the group size in Phase III.

So to summarize in Phase II we’ve shown the TransVax improves the cellular and the hemaro immune [ph] response TransVax significantly outperform placebo on viral load end points including the occurrence of viremia reoccurrence of multiple events and the time the CMV viremia. Antiviral treatment was approved in Phase II but the study was not powered to show statistical difference, this could continue to serve as the secondary end point along with other end point like hospital utilization and survival.

DNA vaccination is safe and appropriate for the very sick immune suppressed [ph] transplant population. Success in these subjects makes us atomistic so we can impact CMV disease in new born by vaccinating potential others before pregnancy with CyMVectin vaccine.

So finally we are using these insights prepare the strategy for Phase III by combining the lessons learned. We met with clinical experts earlier this year to develop robust end point for Phase III, to link the time to infection reduces the risk that are associated with antiviral therapy, limiting the number of episodes, reduces the risk for CMV disease, so these are the end points that we came up with.

We had a statistical consultation with Tom Fleming and he is the one actually who lets us do this Andersen-Gill model which allows to combine all these concepts into a single end point for Phase III. We are currently initiating discussions with regulatory authorities in both U.S. and the EU, it should be finalize in the middle of next year.

We are making preparations now that are needed to start the pivotal study in late 2011, and in addition, we may conduct the parallel study in SOT, in the solid organ transplant to expand the safety database and run the potential market for this novel therapeutic vaccine.

So at this point, I want to turn the mic over to Vijay to share the Q&A session.

Question-and-Answer Session:

Vijay Samant

Thank you, Rick. As you know this Q&A session is webcast. So if you have questions please ask the questions in the mic which should be passed on to you, so we are now open for Q&A. Question from the audience.

Unidentified Analyst

Thank you, Vijay. I just want to make sure I heard the Phase III discussion about TransVax properly; did you say that the primary end point time to infection would that be CMV viremia or would that be clinical CMV disease. Can you comment on that?

Vijay Samant

CMV viremia would be the end point, not CMV disease.

Unidentified Analyst

And you have discussions with authorities whether…

Vijay Samant

We are in the process of having discussions both in Europe and U.S. right now. So, we locked up the end point the CMV viral load or one other multi facets – the answer is no. So I think, based on the expert consultation that we had both from the hematopoietic cell transplant group, statistically but I think we feel pretty confident that we should be able to get a viral load endpoint approved.

That’s critical because, as you know these incidents of CMV disease is so low in this patient population, because of the use of Ganciclovir and valganciclovir. It’s impractical to conduct the study.

Unidentified Analyst

Okay.

Vijay Samant

The CMV disease is the endpoint.

Unidentified Analyst

Okay. And, how larger trials do you think you might need to do to show an impact on CMV viremia?

Vijay Samant

Rick, you want to take that?

Rick Kenney

Sure. I think that – given, how the ratios that we’ve been able to calculate with this – the trial should be about 250 subjects. If we had CMV disease, we need over 3000. So this is one of the reasons we think is impractical.

Unidentified Analyst

Okay. Thank you.

Rick Kenney

Thank you.

Unidentified Analyst

You mentioned looking at a solid organ trial as well. And, if you say – if you presume that would be done in liver transplant patients, given the lack of wellside labor there and if Doctor Pescovitz could also, maybe just comment on how economy treats liver transplantations.

Vijay Samant

Yeah. If you give Dr. Pescovitz the liberty to do a study, he will do multiple study. We just have to make sure that we are careful into the managing our resources, so with that Dr. Pescovitz, you want to kind of comment on patient what kinds of patient’s studying this study would be the best to be conducted in…

Mark Pescovitz

So, I will your second question first. Most of us in the U.S. don’t worry about the lack of – an indication for livers for valganciclovir and do use valganciclovir for CMV Prophylaxis since we are using a prophylaxis approach. Some would use a preemptive approach, but my and personally for prophylaxis and liver, we use valganciclovir, just like we do for other organ transplant

As far as, who this would be indicated, there is sort of – you have to imagine almost two broad categories for studies. One would be in a high-risk donor positive recipient negative, population, where it might be used in combination with anti-CMVs therapy such as valganciclovir, to try to reduce that laid down set CMV, they are just seeing once you stop therapy. In the positive to positive or negative to positive population, I could see working in a – either preemptive or prophylaxis approach, using viremia as an endpoint for that, you could perhaps use CMV disease as an endpoint for the late onset.

Unidentified Analyst

And just given the opportunity to look at CMV disease in the solid organ setting, would that won’t be an exploratory endpoint and two, how big would that trial need to be, from a powering perspective, if indeed you were to look at CMV disease in the solid organ segment?

Rick Kenney

CMV disease would need to be a secondary, an exploratory endpoint, I think, again, because the incidences gotten so low with the Ganciclovir, valganciclovir treatment. The size is a good question. In Phase II, basically you are trying to answer different clinical questions with your trial designs and right now, we got a trial that’s designed for about a 120 people.

So, we think can answer a few good questions about the dosing strategies. The Phase III trial, it’s hard to predict, because we actually don’t know anything about the response. It’s a very different immunosuppression setting and so we probably have to dose before transplant. It’s kind of a reverse procedure just like the incidence as disease is reverse depending on their recipient positive or negative. So it will take some creative work to come up with the right trial design.

Unidentified Analyst

And just the melanoma question if I can? Just like to make sure everyone has to walk up to the podium. Dr. Agarwal, I know that there has been some talk about immuno competency in the world of LDH. Obviously, different companies have kind of taken a different approach, kind of what Genentech and I guess Medarex kind of on core opposites. What’s your stance on the role of LDH and how important is that to have a normalized LDH and its patient population?

Vijay Samant

That’s a good question. The data you are referring to from Genentech, there was a randomized study that was a negative trial for the primary endpoint and it seems to imply from that – retrospective of view that there was a possibility that their drug was more effective than the LDH population as we know.

The second trial was done and by full disclosure that was part of that trial and that was negative. It did not show that for that antiBcl-230. That’s not immune therapy to remind you. There was no indicator that there was a benefit for a low LDH population.

To me LDH is a marker of bad disease. I’m not sure that there is a way to predict that there is an immune specific response that is related to know LDH level. I don’t think we have any data to prove that if the case.

LDH, being normal implies a good patient population that has, therefore time to live longer to allow any treatment to work and by that way, perhaps immune therapy would be more effective in a normal LDH population, simply because when we have high LDH patients in progress so quickly, there is no time to get in there and do anything effective.

Unidentified Analyst

So if you are running in trial then you would have had, had to stratify those patients on the basis of LDH normalization.

Vijay Samant

I would have, yes. Just to remind you that we do our LDH assets centrally. Okay. We also take out the lap-to-lap variations that occurs in individual hospitals, okay.

Unidentified Analyst

There’s just another question quick question for Dr. Agarwal, just want you to say a bit. A lot of times we see that it’s the trials that they are anonymous, not necessarily the drug. And so when you look at – let’s say this trial, can you pass out any particular positives or any particular negatives and looking at this trial.

One of the key things in immunotherapy, we will like to think about as maybe after the tumor has been receipted or has been treated to use immune therapy as an adjuvant and that’s not what’s happening, here you are doing head-to-head. Can you give us just some thoughts on the trial design?

Sanjiv Agarwala

It’s a very tough problem. As you pointed out and I think in terms of this particular trial, I believe that the patient population chosen was perfectly appropriate, this kind of a drug, with both, not only its mechanism of action but its good administration. You need to have, of course clinically accessible disease for injection. You need to give a time to be able to work.

So from that standpoint, unfortunately, I wish I could tell you that we have great biomarkers and – which don’t exists for anything, whether it’s AB or whatever. That will predict – which is your patient population to treat because, obviously, if you don’t enrich your patient population appropriately, you’ll run the risk of a negative trial which has happened time and time again.

The exception of that is the BOS [ph], because you have the marker there. So with immune therapies like the Allovectin-7, I think you have to really be rational and practical in your patients selection model for these trials, is more based upon practicality and just what we know about basics. The best biomarker for melanoma is LDH. And the best marker for melanoma survival is performance status and having low volume disease.

And all these things were picked in this trial. Outside of that it really is not any good way at the present time to predict non specific immune therapy. This is after all a non specific therapy. It’s not targeting – it’s a big target that we are identifying ahead of time whether it’s IL2 with (inaudible) concept, we don’t have that yet.

Unidentified Analyst

And from a competence perspective, HER involves in a lot of clinical trials and you are currently ongoing. What do you see that’s coming, obviously, Allovectin-7 is quite advanced, the low NCC data, you will see that in second half of next year. But LCC coming down the pipeline that you think is very interesting.

Vijay Samant

Well, it kind of summarized and I think to me, in terms of what we have at least known in late stage development is certainly Ipilimumab as you all know there is an another study with Ipilimumab and that is being conducted in frontline, waiting for those results, the different design and then with B-raf, there is no question that there was activity there. I think the big question for us is clinicians and investigators for those drugs, its durability and so on.

So it’s hard to speculate, but I think that the approach is that are being taken appropriately, so are looking at immune therapy which is obviously important, trying to find the target which is the U.S. approach. And then perhaps better chemotherapeutics. There are trials going on right now with other chemotherapy drugs out there. So chemotherapy isn’t dead or gone. But getting the right one, I think is the way we had to really approach it.

Unidentified Analyst

Just switching gears to TransVax, maybe for Dr. Pescovitz. What’s the relevance of the – greater than 500 copies from Roche? Is that something that we need to pay attention to or is it something that’s more arbitrarily chosen?

Mark Pescovitz

That’s pretty much the sensitivity level of the load (inaudible). When you’re looking at a viral load, two factors really come in as what is the number and how fast is it increasing? So this is a very slow increase than it’s probably not as significant, is something that rapidly increases. The problem of that is rapidly increasing as you could help disease before you have, before you instituted anti-viral therapy.

But the 500 copies is just a sensitivity of the (inaudible). There are – I think Collategene is working on another CMV PCR that – I don’t know what the status of that is, but we do some more standardization across some cost labs and…

Unidentified Analyst

And just when you – when you as a commission look at endpoints, is viremia, a logical valid endpoint for you or you are most interested in secondary infections of dealing with more clinically level than endpoints.

Rick Kenney

Well, the secondary endpoints – they’re lot of factors that drives secondary endpoints. Cardiac disease, you’ll have CMV which will affect smoking, diabetes, Hyperleptinemia. For the rejection rates, you are going to have whatever the immunosuppression is and in the background immune reactivity.

If you’re looking for something that’s supposed to be attacking the virus, you really want to look at the effect on virus. And you will hope that by taking care of the primary, in fact taking care of the virus will eventually take care of this as well as the secondary endpoint. There have been no study that has empowered, looking at an antiviral effect on the secondary endpoint. All of this has been in the association or correlation.

Unidentified Analyst

Couple of questions. First of all, Dr. Agarwala and maybe you could a little bit about one aspect that you mentioned in your presentation regarding the sequence of administration of chemotherapy versus immunotherapy and how the timing of that might impact its effectiveness in melanoma?

And in particular, with the context of Allovectin-7 and how you think that could be applied and whether you think that might be some kind of preferred modality or sequence within which you could administer chemotherapy and immunotherapy together in the same patient, but not necessarily at the same time.

Sanjiv Agarwala

The meditator we have with that approach is, I showed you the biochemotherapy combination trial and then I showed you only one study, which was given all concurrently. And we called that concurrent biochemotherapy, but in the end, there has been a lot of the work that was done there and they did do the sequence hang approach that you talked about.

And what appeared to be from those trails was that, if you combine chemotherapy and immunotherapy, it works best if you give the chemotherapy first and then immunotherapy second. And it was not randomized data. (inaudible) was that by getting chemotherapy first, you do two things.

You shrink the tumor and therefore maybe get the immunotherapy a better chance, but not only that you disrupt the antigens and exposed them on the surface and allow that to work.

Honestly though, the translational part of that has not borne that out. And in the randomized study that hasn’t still, the tested time. I think in terms of Allovectin, we always believe that if you have an immune therapy, you want an intact immune system.

And by giving chemotherapy you do disrupt that – normal immune systems. So, conceptually, speaking there’s indirect evidence for this in the lab that if you do chemotherapy first, you perhaps may not have as good as an immune therapy effect.

That’s not being proven clinically in anyway. The other thing is, certainly, when you have immune therapies and you’ve seen and it appears on as approved agent, you want to move as early as you can in the cycle. And ultimately anything effective in immune setting in stage four disease, should and will move to adjuvant therapy, earlier stage.

So I would not really want to consider doing chemotherapy first and A7 second. If I were to design like in a clinical approached over a trial, I would like it to be – the first thing I do because I get my best shot.

However, I don’t think there’s a reason you could not combine the two. I think it will be interesting thing to do. I think it would be appropriate to do, maybe a small trial with some biological endpoints in that, where I would think about this. I would give chemotherapy an A7 and try to see if I really was producing antigen disruption that was allowing the (inaudible) to work better, but right now as far as the vehicle at this point.

It hasn’t borne out in the clinical trial so far, that giving chemo first and immune therapy second is better, quite the contrary actually.

Unidentified Analyst

And then the next question I had for Dr. Pescovitz. Just, with respect to where the CMV marketplace is right now. We have seen some genetocization [ph] of anti-CMV, anti-viral drug. Has been there a noticeable impact on what you mentioned several times in your presentation, the cost of giving these drugs in a prophylactic manner?

Mark Pescovitz

Well, at least in the U.S. here is no generic version of valganciclovir. There are generics of Ganciclovir, but have not really caught on, because valganciclovir is so much more convenient to use across the space, basically been the same. So, really, the markets still in the U.S. is valganciclovir and the decisions the people are making are, do we use prophylaxis, starting of the time of transplant or preemptive.

If you use a preemptive approach, you have to factor in the coast to doing the polymerase chain reaction and the people power to monitor and react accordingly. And then the therapy and those come out about the same. And then the other decision in CMV prophylaxis is how along three versus six months.

The drug is still very expensive. It’s going to beyond pattern for some period of time, but even if it comes off of pattern, even if the cost wasn’t the issue. We still have this late CMV. We still have the toxicity, still the immune system that ultimately controls the virus. And that’s where we really need to work on, getting the immune systems up somehow.

It’s has been talked about the years using a (inaudible) or attenuated virus for 30 years and hasn’t really works. So, we are hoping, it’s something like this based on the ATT data, would be promising. Cost, yes, it’s something that’s driving whether or not use prophylaxis versus preemptive, also the dose where they are using 900 milligrams which is the package insert dose of valganciclovir, or mini dose of 450. That’s being driven by the cost, but cost is not an issue, we’d still like to have some like effect.

Unidentified Analyst

And then the other question I had was with respect to the distance?

Mark Pescovitz

Yes.

Unidentified Analyst

Is there a specific mechanism where set of mechanisms, that’s been associated with the emergence of the systems through anti-CMV antiviral drug?

Mark Pescovitz

So, the primary thing that people are looking at for existence, of course is the Ganciclovir which is the UL97, which is the viral kinase, the first phosphate group on, again, Ganciclovir, it will have a mutation there that you don’t get, Ganciclovir phosphor elated.

The typical reasons for viral resistance are low levels of drug that can select out a virus that’s somewhat resistant, which is why – is one of the reasons why I don’t recommend using a lower dose other than the package – other than the dose that are just based on the renal function.

I don’t subscribe in mini dosing, everything is more likely to select out of resistance. Also, if you have Immunosuppression, high-risk donor positive, negative recipient, where you are going to have that virus lying around without having immune control, yeah, that’s another risk factor for resistance as well.

The resistance is sort of a spectrum. It’s not a yes or no, you can have the degrees of resistance, but presumably, you won’t have resistance or an immune response.

Unidentified Analyst

Thank you.

Vijay Samant

You have questions? Okay.

Unidentified Analyst

This is Alfred. Dr. Agarwala, regarding Allovectin-7, in the Phase II I think the range for survival time was 62-66 pulse response. Why do you think the range was so wide?

Sanjiv Agarwala

Bill, I did not participate in that trial so I don’t know the specifics, but I would just tell you in general, why it ranges or why it is – it’s the patient selection that’s really how it works. So, I think when you have a Phase II study, it’s much less robust in terms of data than the Phase III trials for example.

And in a Phase II study, if you select a certain patient – certain patient and when you see them in your clinic, you are able to often project sometimes, not always correctly, how are patients going to do and so on? So whenever we do Phase II study, there is that virus there. Sometimes you pick a patient that does very well, sometimes the patient that doesn’t do very well and therefore that wide virus, there’s a wide variation that is quick common in Phase II studies.

And that’s why, really, for me a Phase II trial is just trying to get data, enough to find out – is interesting, I think the data was presented in terms of the core analysis. That’s a very nice way of doing it because when you look at all the Phase II studies that have being done to the coactive groups, you have a very consistent pattern of how they fit in that box.

And when something is outside of the box, we use that as a reason to say only one thing that this is interesting enough and intriguing enough that we should take it to Phase III. And that’s why I think, you really don’t want to look at Phase II data in terms of that much detail, because there is that variation always.

Unidentified Analyst

And as far as Dr. Kenney, what – how did the data play into your decision as far as patient selection in the Phase III, if any?

Rick Kenney

Actually, I think that the patient population that were used in Phase III is almost identical to the Phase II. It was well spread out structure for the Phase II study. The Phase III study will be larger. We might modify some of the dosing, but other than that we think that it’s a good approach.

Unidentified Analyst

Is the expectation and the survival will be just as high?

Vijay Samant

I think – actually, the Phase III patient population is even, really will benefit Allovectin-7, because – a, we are using chemo-naive patients in the Phase II. They were a lot of incorrect. They were chemo-naive, chemo-refractory patients, virus refractory patients so chemo-naive patients have healthy immune systems, that’s one thing.

The other thing is the response rate is measured by a modified resist criteria. So it’s a durable response six months. We also keep the patients on the study. The medical oncologist wants to keep the patient if a new lesion shows up, if the doctor believes that the patient is benefitting from the therapy that way. Most of the patients can get two cycles of treatment. So a variety of success factors, as Alain presented were incorporated into Phase III study, for us to win on this particular Phase III design.

Unidentified Analyst

And, perhaps, this is certainly asked but this is on Eron. Given the fact that the chemo combinations are no better than dacarbazine, how do you think about pricing Allovectin-7?

Vijay Samant

We generally don’t talk about pricing, but all I pointed to you is the pricing that Provench just recently got approved in terms of reimbursement. My god, but if were anywhere close to that, this will be a very large drug but I think what it does you – there is a very good opportunity for pricing this particular drug, particularly, there is a fact that if our safety profile, continues to bare out the quality of life that we give to our patients is significantly better than some of even the newer drugs that have been discussed today.

Unidentified Analyst

There is a question for Doctor Kenney if I may ask. Regarding the slide you showed on the prevalence, with the smooth curve. I’m not too familiar with this going out, as you mentioned. Is it just a matter of comparing the areas between these two curves or is it more complicated than looking at the position of peaks, as well as the areas potentially, as well some other things?

Rick Kenney

My simplistic mind, things of the area under those two curves and you can see that the area is going to be smaller. It’s actually a very sophisticated type of the statistics. The papers from 1982 – its 10 pages of integrals and differential equations and things.

And a little bit beyond my end. But the important thing is that it’s actually an expansion of Cox regression. It’s – the Keppler-Meir on steroids, it allows you to combine both the time dose and along with the number of occurrences. And so, it is used frequently when there is a setting where you have multiple occurrences like in cardiac disease. You get recurrent heart attacks, same thing in cancer you get recurrence of the episode.

So that’s why the statistician said, let’s go with that and see what happens. In fact it turned out to be a nice statics to use.

Unidentified Analyst

Just a quick follow up, even if the areas happen to be the same but the physicians of peaks were different, would that potentially still be significant by this analysis or not?

Rick Kenney

I think it would. I don’t how far target you’d have to have them. But certainly, the fact that there were two or three (inaudible) is important. But really, it’s the overall smoothness or the overall increase of using placebo versus the vaccine. The study was way too small to really be able to tell where this secondary peaks were.

If you can delay the onset of the primary, that’s a good thing. Because the people’s immune systems is going to be recovering fairly quickly over the course of six months.

Unidentified Analyst

Thank you.

Rick Kenney

Just to remind, we use Tom Fleming here to help us. Tom is a one of the most outstanding critical biostatistician and it’s really incorporating multi-dimensional elements of this particular clinical study design.

So, with Tom Fleming’s name behind it and the fact that this methodology was dug up, it will be very helpful as we discussed this but we are hoping that it will be hopeful.

Unidentified Analyst

Just a question on the graphs in particular, I know the idea of throwing an another boost, was thrown around before on recent calls. I think it was just mentioned a second ago and if you look at that, if you look at those curves of the episodes, they actually cross at one point, I think as they, 18, 90 whenever it was.

So, is the picking that you would add, potentially, another boost prior to maybe that month forward dose and if so, is there any trepidation with respect to potentially changing the dosing regimen going into pivotal phases?

Vijay Samant

I will let Rick answer the question, but just to clarify your question. Did we learn something from our Phase II study, where there may be opportunity to change our dosing mechanism, to improve our clinical trial outcome and in order to do that I will let Rick answer the question. You need to have a lot of pre clinical data, because you can’t just change that, okay, because we have the (inaudible). Fortunately, we have a lot of pre clinical data from variety of dose regimes. Rick, go ahead and answer.

Rick Kenney

In that before we grip, Provench did actually cross a little bit. I do think that the population is too small. The number of cases was too small to see if that’s terribly accurate. So I don’t – I’m not bothered at all. But fact as the Provench crossed right there. Whether we can use that – I’m sorry.

Unidentified Analyst

The pre question was whether, whether that allows you to adjust your dosing?

Rick Kenney

Yes. Yeah. So trying to learn from the Phase II, we did see that most of the problem was still in the first four points and so one of the emphasis we want to place on our proposal, is to actually put another boost in there.

Whether or not FDA will allow that to happen or not, we need to see. We are optimistic. We think that’s where the most of the clinical problem is in the setting and so it’s a reasonable proposal.

Unidentified Analyst

Did you disclose the power of the melanoma trial and what’s the assumption to saliva of the placebo patients and also how many events should (inaudible)?

Vijay Samant

First, thanks for asking the question. I was getting concerned. The (inaudible) found that 90% for the two endpoints, for the primary endpoint and response rate, within assumption of the 10% benefit of the DTIC and temozolomide. We probably disclose that – that’s 10% improvement in response rate. At 24, we took the ownership of primary endpoint and then we have a 90% power on the secondary endpoint which is survival as well.

And that is powered at 90%, with another high level of 0.01 if you reach. We know what the number is but we haven’t disclosed what that number should be, but we have a number to reach to be able to show another high level of 0.01 at 90% in (inaudible)

Unidentified Analyst

What are you assumption?

Rick Kenney

The assumption, I’m sorry. The assumption is 18 months, followed back in ‘7 – remember we had 18.8 months in the phase two study. So we are making an assumption here because we have chemo-naive expectation that 18 months is a reasonable assumption for the median survival, back in ’07.

And then for the comparative DTIC and temozolomide, the assumption is 11 months but we took the most conservative number that has been published to date. Typically, you see a number ranging from six to 11 months for the DTIC or temozolomide in very large trial, six months typically for patients refraining that, nine months of patients we have given that. And for patients with (inaudible) like our study is typically 11 months that we made an assumption of 18 versus ’11. We’ve – a 90%, power in level of 0.01.

No, we won’t do any interim analysis. We don’t want to take a hit on the power of the study and we delivered, we’d be able to get (inaudible) in the second half of next year, with the primary and the secondary endpoint as well.

Vijay Samant

More interim analysis. We are coming to the middle of next year, where we should be able to –

Unidentified Analyst

From the 50%....

Vijay Samant

We’ve had what three – six to eight reviews so far. They’ve been no safety reviews. We have John Kirk [ph] who runs our safety (inaudible). He is a real top-notch melanoma expert. You can ask Dr. Agarwala and watched the safety data very carefully.

We can talk that often. We will give you the data, we have, being in terms of what the (inaudible) Yeah, we will give your 0 and 1.

Unidentified Analyst

(inaudible).

Vijay Samant

Okay. We have one last question. Time for any last question, okay, because we are running out of time. Anybody or anything else?

Now, I want to thank first of all, all the invitees for showing up and being part of this presentation and two of our respected speakers, Dr. Agarwala and Dr. Pescovitz and Alain Rolland, and Rick Kenney on giving programmatic updates.

Thank you, again. We’ll see you at some other forum in the near future. Thank you.

Operator

This concludes the teleconference. Thank you for your participation. You may disconnect your lines at this time.

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