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Executives

Tim Enns - Senior Vice President of Corporate Communications and Business Development

James Manuso - President and Chief Executive Officer

Michael Molkentin - Chief Financial Officer

Greg Berk - Chief Medical Officer

David Bearss - Chief Scientist

Michael McCullar - Vice President of Drug Discovery Operations

Analysts

Derek Jellinek - Susquehanna Financial Group

Ram Selvaraju - Rodman & Renshaw

Math Osborne - Lazard

Elemer Piros - Rodman & Renshaw

SuperGen, Inc (SUPG) Q1 2008 Earnings Call April 28, 2008 4:30 PM ET

Operator

Good day ladies and gentlemen and welcome to the First Quarter SuperGen Earnings Conference Call. My name is Nikeda and I will be your coordinator for today. At this time, all participants are in a listen-only mode. (Operator Instructions). As a reminder this conference is being recorded for replay purposes.

I would now like to turn the presentation over to your host for today's call, Tim Enns, Senior Vice President of Corporate Communications and Business Development. Please proceed sir.

Tim Enns - Senior Vice President of Corporate Communications and Business Development

Thank you operator. Good afternoon and thank you for joining us today to discuss SuperGen's 2008 first quarter financial results. With me today are Dr. James Manuso, President and Chief Executive Officer; Michael Molkentin, Chief Financial Officer; Dr. Greg Berk, Chief Medical Officer; Dr. David Bearss, Chief Scientist, and Dr. Michael McCullar, Vice President of Drug Discovery Operations.

In a few moments James Manuso and Michael Molkentin will deliver remarks on the 2008 first quarter financial results and provide a summary of our business outlook. After our prepared comments, we'll open the line for questions. A copy of the press release is available on the Investor Relations section of our website at www.supergen.com. In addition, this call is being webcast and may be accessed via the Investor Relations section of our website. The webcast replay will be available for 90 days.

During the call we anticipate making projections and forward-looking statements that are based on management's expectations. Actual results may differ materially from these forecasts due to various factors. There are significant risks and uncertainties in biotechnology research and development. There can be no guarantee that our products or product candidates will progress at clinical trials as we expect or that we will ultimately obtain approvals for the indications that we seek. Moreover, if the products or product are approval in the future we cannot guarantee that they will be commercially successful. The company's results may also be affected by such factors as competitive developments, launches of new products, the timing of anticipated regulatory approvals, other regulatory action or patent disputes and litigation.

For additional information and discussion concerning the risk factors that effect tj Company's business please refer to the Company's filings with the Securities and Exchange Commission included reports of our most recently filed Form 10-K and Form 10-Q. The company undertakes no duty to update forward-looking statements. For those of you interested in learning more about SuperGen on an upcoming investor event, tomorrow we will host the webcast of our Third Annual Analyst Day event in New York City. Looking further event we will be presenting at the Banc of America Healthcare Conference at May 13 in Las Vegas, the Rodman Renshaw Healthcare Conference on May 19 and the Friedman, Billings, Ramsey Investor Conference on May 29 in Europe, these events will be webcast with all the brief overview under the investor relation section of our webcast. I will now turn the call over to Dr. James Manuso, who will provide highlights of our 2008 first quarter.

James Manuso - President and Chief Executive Officer

Thank you very much Tim. Good afternoon and thank you for joining us today for SuperGen's 2008 first quarter financial results conference call. The first quarter of 2008 was a very productive quarter for SuperGen. We have advanced further the development of our portfolio of noble anti-cancer drugs and there were significant increases in Dacogen royalty revenues. Specifically first quarter Dacogen royalty revenues were $8.1 million, a 114% increase from the 2007 first quarter. The company reported a net loss for the 2008 first quarter of $1.1 million compare to a net loss of $3.3. million in the first quarter of 2007. We ended the quarter with approximately $90.8 million in current and non current unrestricted cash, cash equivalents and marketable securities and no depth.

With respect to our financial posture we continue to manage our money conservatively well optimizing its deployment. We have been debt free since the end of 2004 and unlike many companies in our sector we have not founded necessary to raise money for more than four years.

Strategically, our goal is to continue to benefit from worldwide Dacogen revenues and to monetize select assets. while at the same time augmenting the value of drugs and our portfolio by advancing their development in a cost effective manner. As a result of our uniquely productive discovery research process known as CLIMB and the capability for the rapid advancement of drugs into the clinic we intend to benefit financially from multiple business development initiatives going forward. In Dacogen related developments, as we indicated in our last financial result conference call Eisai management express confidence that the European organizations for research and treatment of cancer the EORTC Phase III myelodysplastic syndrome, survival trial results will be positive. Eisai's diligence on Dacogen before its acquisition of MGI Pharma prompted the company to state that the majority of the patients in the EORTC trial have receive a sufficient number of cycles of treatment thereby heightening in the potential we retrial to demonstrate in overall survival benefit. We are encouraged by our partner's perspectives and we look forward to the announcement of results for the Phase III survival trial in the coming months.

Outside of North America the sublicense of Dacogen Janssen-Cilag a Johnson and Johnson Company. Janssen-Cilag continues to actively file Dacogen and select jurisdictions where FDA approved drugs may be registered. Dacogen is now approved and marketed in Russia and other countries and we have recently become to recognize revenues from Janssen-Cilag sales and marketing efforts outside of North America.

Janssen-Cilag has got it to a marketing authorization application or MAA submission to the European medicines agency the EMEA in 2008. After the EORTC trial results become available. Before time recall over to Michael Molkentin who will discuss our financial results in detail I would like to provide a brief update on the continuing development of our lead product candidates. These updates highlight the accomplishment of our goal of becoming a discovery base development company. We are now capable of discovering and developing normal drugs rather than aquiline compound that requires substantial ongoing payments to external parties.

During the 2007 fourth quarter we announced dosing of the first patient in the multi- armed Phase 1b clinical trial of MP-470. Our all tyrosine kinase inhibitor and Rad51 suppressor. To remind you Rad51 is a protein that repairs double standard DNA breakage in cancer cells following chemo and radiation therapies. If Rad51 can be significantly down regulated as MP-470 appears to accomplish the efficacies of select chemo and radiation therapies can be enhanced.

Our Phase 1b trial of MP-470 is assessing safety and tolerability of the drug in combination with five standard of care anticancer regiments. An additional Phase 1b clinical trial expected to commence during the second half of 2008 will examine MP-470 in combination with radiation and Temodar in glioblastoma multiforme a LIFO brain cancer.

In addition as we advanced further the clinical development of MP-470 we expect to initiate a Phase II trial of this drug in the fourth quarter of this year. The punctual indications for MP-470 include non-small cell lung cancer, small cell lung cancer, gastro intestinal stroma tumors and glioblastoma multiforme. We continue to advanced three of their preclinical candidates towards the clinic. S110, SGI-1776 and MP529. Let me describe briefly our plans for each of these normal drugs all of them discovered by our scientist and all of them wholly-owned by our company.

Over the years as a result of our development and the FDA approval of Dacogen we have augmented further our expertise in the field of epigenetics. We have continued to advance the development of S110, our second generation prodrug of Decitabine.

Based on expensive preclinical and animal model research conducted over the last three years data suggest that S110 my be a less toxic equally efficacious formulation of decitabine where there is longer half life than existing formulations of decitabine. S110 could ultimately find applications in Myelodysplastic or MDS, Acute Myeloleukemia or AML and solid tumors. Our plan is to began a Phase I clinical trail of this drug later this year or early next year.

To remind you S110 is the subject that the writer first offer to our partner SI. SI we elect to sell or out licensed the drug we are bound to offer to SI a well negotiation. That being said, we precede S110 as a low risk, lower cost, high potential asset within our growing portfolio and we intend to maximize its value in the clinic before offering it for sale or out licensers. It is our believe that the clinical and the regulatory development of S110 can be for shortened considerably given the FDA familiarity with existing formulation of Decitabine. An investigation of new drug or IND submission is plan for SGI-1776 our PIM kinase inhibitor during the second half of 2008. This drug has exhibited significant potential in lymphomas acute myeloleukemia and prostate cancer during the preclinical stage of its development. It is possible that SGI-1776 will become the worlds first PIM kinase inhibitor to enter clinical trails. Our industries larger companies have been extremely interested in the advent of SGI-1776. The formulation of MP-529, our selective Aurora A Kinase inhibitor that may have potential in pancreatic colorectal breast and prostate cancer is currently being optimized. Following formulation optimization we'll consider initiating a Phase I clinical trial. Finally, we continue to advance the development of our JAK2 inhibitor, based on its in-vitro inhibition of cancer cell proliferation.

At this time, I'd like to turn the call over to Michael Molkentin who will provide details of our 2008 first quarter and provide revised annual financial guidance for 2008. Michael?

Michael Molkentin - Chief Financial Officer

Thank you, Jim. As today's press release indicates, SuperGen reported total revenues for the 2008 first quarter of $8.1 million compared with $4.4 million for the same prior year period. The 2008 first quarter revenue consisted of 8.1 million in royalty revenue compared to 3.8 million for the same prior year period.

Royalty revenue is earned pursuing to a 2004 license agreement entered into with MGI Pharma which granted MGI exclusive rights to the development, manufacture, commercialization, and distribution of Dacogen. We recognize royalty revenue on a cash basis when it is received from the licensee.

No net product revenue was reported for the 2008 first quarter compared with 621,000 for the same prior year period. The decrease in net product revenue during the 2008 first quarter is due to the sale of products to Mayne Pharma in the prior year.

Total cost in operating expenses for the 2008 first quarter were $10 million compared with $8.9 million for the same prior year period. The primary reason for the increase in total cost and operating expense for the 2008 first quarter were higher research and development costs related to increased product development activities including ongoing clinical trial cost partially offset by lower cost of product revenue, a reduction in stock-based compensation expense, and lower sales and marketing expenses as well as a gain resulting from the sale of products to Mayne Pharma.

The gain on sale of products for the 2008 first quarter of $1 million represents receipt of an indemnification holdback paid by Mayne to the company after expiration of the contractual holding period earlier in 2008. There was no similar gain in the same prior year period. Included in operating expenses for the 2008 first quarter is a stock-based compensation expense of $747,000 compared with $1.2 million for the same prior year period.

In summary, the company reported a net loss for the 2008 first quarter of $1.1 million or $0.02 per share compared with a net loss of $3.3 million or $0.06 per share for the same prior year period. As previously indicated, the company had approximately $90.8 million in current and non-current unrestricted cash, cash equivalents, and marketable securities as of March 31st 2008.

At this time, I'd like to provide an update on our annual financial guidance for 2008. The updated guidance has changed a little from that provided in our 2007 year-end earnings call.

We continue to expect royalty revenue for 2008 in a range from $32 to $35 million. Royalty revenue is initially based on annual end-user guidance of approximately $157 million for 2008 as provided by Eisai in the quarterly conference call in February of this year. As previously mentioned, the company recognizes royalty revenue on a cash basis when it is received.

The company also expects to record additional milestones that relate to the prior sale of products to Mayne Pharma that are estimated for 2008 in a range of $1.6 to $2.6 million. Currently we're not forecasting any cash flows from business development transactions in the 2008 financial guidance, though we continue to pursue third-party business development opportunities.

Research and development expenses for 2008 have not changed from our previous guidance and are expected to total approximately $34 to $36 million with future growth influenced by increasing costs related to current and anticipated future clinical trial programs, ongoing preclinical product development efforts, and continued investment in the discovery, preclinical, manufacturing, regulatory and clinical development operations of our business.

We expect to record a non-cash charge during 2008 of approximately $5.2 million for acquired in-process, research and development which relates to a milestone payment to the former Montigen shareholders. This payment is contingent on the filing an IND with the FDA of a second drug emanating from the acquisition.

Selling, general and administrative expenses for 2008 have been revised slightly downward from our previous guidance and are now estimated at $13.5 million. Included in total operating expenses are revised non-cash stock-based compensation expenses which are not estimated to be approximately $4 million for 2008.

Based on the revised financial guidance we estimate the loss from operations will now range from $17 to $19 million for 2008. Our company continues to estimate that average shares outstanding for the year will be approximately 58 million common shares. This concludes the review of our financial results for the 2008 first quarter and our revised annual financial guidance for 2008.

I will now turn the call back to Dr. Manuso for closing comments.

James Manuso - President and Chief Executive Officer

Thank you, Michael. Before we open the line to questions you should know that our pipeline was recently highlighted in five poster presentations and one oral presentation at the 2008 American Association for Cancer Research or AACR annual meeting that recently took place in San Diego, California.

At the conference we presented data demonstrating that MP-470 our tyrosine kinase inhibitor and Rad51 suppressor in combination with erlotinib effectively suppressed the HER pathway. This suggests that current administration of both compounds may hold promise as a new treatment for prostate and breast cancers.

In addition, we highlighted Phase I clinical trial data indicating that MP-470 is bioavailable and safe in humans. Further, clinical results have demonstrated that this compound can be safely administered to humans in doses of up to 900 mg per day.

Additionally it was found that MP-470 modulated Rad51 expression in a dose-dependent manner. Data on S110, our second generation prodrug of Decitabine showed that S-110 induced significant anti-tumor activity in prostate and cisplatin-resistant ovarian carcinoma xenograft models.

Additionally, S110 restores sensitivity to cisplatin in the ovarian cancer model. Equally important, S110 reduced toxicity and was observed to increase the half-life of decitabine, the active chemical mode in Dacogen and the competitor drug.

Lastly, in an oral presentation, Dr. Steven Warner, SuperGen’s Manager of Discovery Biology detailed how SuperGen’s scientists used our proprietary client technology to build the model that allowed for the creation of small molecule PIM kinase inhibitors.

SGI-1776 was identified and synthesized as the lead drug. It is a potent and selective inhibitor of the PIM kinases. As such SGI-1776 was found to induce cancer cells apoptosis cell cycle arrest, thereby causing a reduction in phospho-BAD levels and enhancement of mTOR inhibition in vitro. Most notably, SGI-1776 induced significant tumor regression in acute myeloid leukemia or AML xenograft models.

We are encouraged by these promising data and we seek to determine if SGI-1776 may prove to be a treatment for AML and the other malignancies that over express the PIM kinase enzymes.

In closing, let me compliment the SuperGen team as they were responsible for the work that led to these AACR presentations and all of the other work that is currently underway.

We look forward to reporting to you throughout 2008, the continued progress through development hurdles of our novel compounds. Complete copies of the AACR abstracts, posters, and presentation are available on our website SuperGen.com located in the pipeline/products in development section of the website.

Finally, as Tim Enns mentioned that outset of this conference call please take the opportunity to listen to our analyst day presentation by accessing our website. The presentation will be webcast live tomorrow beginning at 9:30 a.m. Eastern Standard Time.

In addition the webcast will be available on our website for the next 90 days. With that this concludes our prepared commentary. Thank you for listening in. At this time Drs. Greg Berk, Michael Molkentin, Micheal McCullar, Tim Enns and I are happy to answer your questions as is Dr. Dave Bearss. Operator please take questions at this time. Thank you.

Question-and-Answer Session

Operator

(Operators Instructors)

James Manuso

Thank you.

Operator

Your first question comes from the line of Derek Jellinek. Please proceed.

Derek Jellinek

Great thanks guys good evening.

James Manuso

Hello Derek, how are all. Thank you.

Derek Jellinek

I'm well thanks. Jim just quickly you made a comment on business development initiative and Mike went here and said there's nothing located in your guidance contained to look at business development effort. But maybe you can outline for us meaning -- given your pipeline it’s quite interesting at 470 and 1776 and 529. Where do you see the commercialization of those molecules going as far as out licensing those compounds, thanks?

James Manuso

Okay, thank you. I appreciate that we do not like to give prognostic guidance far in advance of anything that might be concluded in the way of a business development initiative. Rather our position is to be more conservative and to the extent that we do undertake a deal we would obliviously announce that along with the financial implications for the company. It is clearly our intention to engage in business development initiatives especially across 470, 1776 and 529 and there has been a great deal of interest as you might well suspect based on the increasing data that is available for each of these compounds. And relative to discussions that are underway at any point in time I can certainly assure you that there are multifarious, they are with a number of international pharmas and yet we don't want to make any announcement prior to a signed deal. So it is strategically very much in our interest and our intentions to proceed with deals on one of more or these because as you know Derek, we can't do everything. And yet I've also indicated and specifically stated in this brief presentation that we -- given our low risk potential for S110 we do intend to take that a little further up the line. We see that as a potential for shortened clinical and regulatory cycle in that regard. Does that answer your question?

Derek Jellinek

No it doesn't takes any clarity on that, maybe if I can add one more. On the PIM Kinase Inhibitor 1776 I mean, we saw a good data at ACR I mean, a cell based 8 acids as well as in renograph models. I was wondering if you can comment on the combined ability or synergy of that molecule with other drugs? Thanks.

James Manuso

Okay I'll pass this one to Dave Bearss. Dave?

Dave Bearss

Yeah. So we -- as you might expect we've actually looked at quite a few potential combinations with respect to the potential clinical indications that we're moving ahead with. I think we're excited about the potential combination ability with 1776 with chemotherapeutic agents as well as some targeted agents and there's a lot of literature out there suggesting that PIM Kinase an inhibition would combine well with things like mTOR inhibition. And that's very exciting and very interesting area that we are following up on right now. So there is a lot of potential for combining 1776 with chemotherapeutic drugs as well as targeted agents and we've shown preliminary in cell based models that it combines well with those types of agents.

Derek Jellinek

Great thanks again for taking the questions.

James Manuso

Thank you.

Unidentified Company Representative

Next question please.

Operator

The next question comes from the line of Ram Selvaraju of Rodman & Renshaw. Please proceed.

Ram Selvaraju

Yes, thank you for taking my question. I was just wondering whether it would be possible for you to add some color on approximately when we might see the URTC Phase III data, and if you could give some more clarity on the comment you made earlier in the call regarding A size confidence that the number of cycles of Dacogen administered is high enough to provide a sizable survival benefit. Approximately how many cycles on a average might we be talking about there?

James Manuso

Okay, first with respect to the timing on the EORTC data, we have no updates to give since our last public announcement and Eisai and J&J have represented that it would be in the course of the second quarter or the summer. And to extent that we do have an update on that we'll be giving that as rapidly as we can.

And relative to Eisai's confidence on the data, recall that they had been in discussions with MGI for approximately two years before they finally acquired the company.

And during that period of time, they combed through the existing and ongoing data that was being collected vis-à-vis Dacogen, and it was also based on two important elements here. Remember that the median number of cycles of treatment for the Phase III patients in our original Phase III trial that we undertook for Dacogen was 2. And remember that for the intermediate-2 and high-risk patients, if they were called out separately, there appeared to be a benefit in terms of time to AML or death.

Now the original approach with respect to the trial on the protocol for the EORTC trial is from four cycles of treatment up to eight cycles of treatment. So, what I am saying is that at a minimum, by protocol it was twice as many cycles of treatment for the very sub-groups that appeared to benefit most from the treatment with Dacogen. So, relative to the minimum number of four as twice as many as what we add in our Phase II. Greg Berk may have some comments with respect to this. Greg?

Greg Berk

Yeah, now, I mean, Ran, it's a great question about the number of cycles. We obviously don’t know what that is - it’s going to turn out to be and obviously the more cycles would clearly translate to a higher likelihood of success from a survival standpoint. We believe that, based on the timing of the trial and the European's experience with the drug, these are the same sides that accrued well and participate in the large Phase II experience in Europe that they sufficiently know how to use the drug and best know how to use it. So, hopefully that'll turn out to be a significant number of cycles.

James Manuso

What we can also say is that during the Phase III trial in the EU, it was better understood based on data of MD Anderson that more cycles was better and that patients are following the initiation of treatment could tolerate more cycles. So, interpret those realities plus SI statement following its acquisition of MGI that they were quite sanguine about the potential for positive survival benefit coming out of that trial.

Ran Selvaraju

If I could just ask for a quick clarification? This trial is 80% powered to show an increase in survival from 11 months to 16 months, is that correct?

James Manuso

Correct.

Ram Selvaraju

Okay, just one other question if I may; with respect to the Phase II studies that are envisaged for MP-470, what would you consider at this time to be the most likely target indications for such studies?

James Manuso

Good one; Greg?

Greg Berk

Yeah, Ran I am going to actually discuss that in much more detail tomorrow morning at the analysts meeting which will be webcast. So I do invite everybody to listen to that discussion either those who'll be attending live as well as those who listening on the webcast. And I'll present obviously the biological rationale for what makes most sense to combine 470 with as you know it’s an agent which down regulates Rad51 which is actually a key resistance mechanism in therapies which induces double-stranded DNA therefore combining with platinum makes a lot of sense. You know, we have been interested in small cell lung cancers since days, early days of looking at this drug, because of its synergy with platinum's we have expensive date with small cell lung cancer and we live in sure a little bit of clinical data tomorrow at the meeting. So small cell is at the top of our list. GBM is at the top of our list, because there has been a lot of preclinical work done. In GBM models we had good synergy with Temozolomide and radiation which are the main stay of therapy right now, and hence the rationale for launching the 1b trail which as Jim mentioned will be lunched within the next few months. So those two are right up there, but we’re quite interested I have to say in the combination with (Inaudible) which we actually presented preclinical data at EORTC, that’s one of the arms in our Phase 1b as you would expect the drug is easily combined with Tarceva and it makes a lot of sense, and there is good rationale to combine with Tarceva and the setting of second and third line non small so lung cancers well, but I go over all of these potential indications in Phase II clients in much more details tomorrow morning.

Ram Selvaraju

Okay I don’t want to secure any of you. Thank you very much for answering my questioning

James Manuso

Thank you Ran. Next question please?

Operator

Your next question comes from the line of Math Osborne of Lazard. .Please proceed.

Matthew Osborne

Hi guys thanks for taking the question.

James Manuso

Yeah

Matthew Osborne

You know just a few on Dacogen. How should we expect release of the data, would it be a joint press release between you SI and J&J or some derivative there?

James Manuso

Well, there are number of variations on the theme. First let me say that SI has not elected to update MGI guidance, and let me also say that the EORTC is in control of the data process and those are some of the realities that have to be appreciated here. So there are effectively for parties with very keen interest in the outcome of that trial. What we can say however is that they are proceeding rapidly. They -- over the period of the last two years at which point J & J really stepped up its support of the EORTC trial with respect to data capture and management and oversight that it is being handle very appropriately and very conservative way with regard to the good assurances that the data will be very straightforward and comprehensible in QA properly and everything else, and that’s exactly what all of us would want.

That being said, we do certainly hope that we will work out an arrangement with SI and J&J to reflect at the minimum that the trial results have been tallied that we know what the are i. e positive or negative and that J&J would be proceeding or not with its filing of the MAA. Now as to whether or not the EORTC then would elect to announce those top line results earlier rather than latter, its really up to them. Some have mused that they might be presented at the EHA others still at ash and we just don’t have a clear answer, I wish we could give you on, but we don’t. Greg, do you have any comments on that?

James Manuso

We just don’t know Math.

Matthew Osborne

May be they’re listening now, we can hear our enthusiasm over the data.

James Manuso

Okay

Matthew Osborne

If that I can follow up there is been some speculation that perhaps this trial the way the enrollment criteria is designated that you could enroll higher risk patients, do you see that is as a potential or do you see the enrollment criteria as similar criteria similar to the five days of study.

James Manuso

Where the enrollment criteria clearly are they are less than 5% of the lower risk intermediate one patients and that I think is being is been 5 consistently since it was brought up. It is intended for the intermediate-2 and high-risk patients and we don't have the demographics of the patient's such that we can say that there would be a clear overlap between them and the patient's in the Vidaza trial. Greg, do you have any comments?

Greg Berk

Hi, I think based on obviously the criteria were a little different between the two trials, but if you look at what we know from the Vidaza enrollment, it seemed like they had a significant number of high-risk patients. So, I think that the similarity is going to be pretty close. What I don't fully appreciate Matt is whether or not there will significant differences in the performance statuses of these patients because I have a sense that the Vidaza patients were a pretty fit group of patients even though they had high-risk MDS. I could be wrong, but I haven't heard real good explanations for why perhaps the best supportive care group actually had a pretty good survival in and up itself.

James Manuso

All right and just one last comment with respect to this Matt, the criteria for enrollment mere into a high risk; however, the strict definition is greater than 10% blast counts. Okay, so in that regard, you would certainly include patient's that would be advanced with respect to the high-risk end of the spectrum and yet they would have to fulfill the criterion of the greater than 10% blast count.

Matthew Osborne

Okay, great. Last question, Greg, you actually touched upon this, what's your expectation for the control arm given that the Vidaza study seemed to show a fairly high meeting survival of 15 months where historically patients on control or best supportive care meeting survival maybe around 11 to 13 months. What's your expectation coming out of the EORTC results?

Greg Berk

I just think supportive care has gotten better in the last couple of years. So, to some extent it could be partially explained on that. But I once again have to say that from taking care of a lot of patients with MDS, you could look at 10 patients Matt that have high-risk MDS and if you have five of those patients that have a good performance status and five that have a poor performance status, you could predict who is not going to tolerate the chemotherapy whether you use Vidaza or Dacogen and that's why really the importance of this is critical as to what kind of patients go on these trials, because as you know the ability to tolerate and run in to problems with myelosuppression and sepsis all of that is critically important especially because those are the kind of things that decide if patients are going to continue therapy of not. So, the bottom-line is I think that we'll probably see the survival on the EORTC go up to some extent from what has historically been seen in the 11-month frame because I think supportive care has gotten better. But I don't know ultimately what the performance status of all those patients are that win. That'll be to me the primary determinant of it.

Matthew Osborne

Greg that's very helpful. Thank you.

Greg Berk

Sure.

James Manuso

Next question please.

Operator

Your next question comes from the line of Elemer Piros of Rodman & Renshaw. Please proceed.

Elemer Piros

Yes, if I may just continue Jim, along the lines where Matt was going, do you know what the actual primary endpoints of the EORTC study was?

James Manuso

The EORTC endpoint is 185 events and it is survival.

Elemer Piros

Survival?

James Manuso

Overall survival, yeah.

Elemer Piros

Overall survival and do you know if you are going to get median survival data or survival rates at one year or beyond?

James Manuso

I do not. Greg, do you have …

Greg Berk

I don't know what eventual of that of the report but probably my expectation Elemer is that we'll report median and probably one year based on when the trials stop recruiting patients. But that depends on when they ultimately report it out but I would think at the minimum we'll give median.

Elemer Piros

Okay, and I have somewhat of a basic question about S110.

Unidentified Company Representative

Yeah.

Elemer Piros

And I know you were going to go into more details tomorrow. But could you just Greg basically explain how S110 and Dacogen and Vidaza decide to be an azacitidine relates to each other? And what is the mechanistic thinking of or explanation why it might be better tolerated and perhaps even more efficacious?

Greg Berk

Okay. Dave Bearss is going to grab that one.

Elemer Piros

Thank you

Dave Bearss

Yeah so, it’s a great question. So S110 is basically a dinucleotide of decitabine. So it contains decitabine plus guanosine nucleotide and they’re linked together with a phosphate linkage. So what we've in seen in-vitro is that this dinucleotide is resistant to both enzymatic degradation by cytosine deaminase and as well as it also stabilizes the decitabine inherent instability in an aqueous environment and water. And that translates into a different pharmacokinetic profile in-vivo. So, when we give – we're basically delivering decitabine through this dinucleotide. We know that it gets taken up and released as the decitabine for the mechanism of the action is the same mechanism of action as decitabine, it’s just we're protecting the release and extending the release of decitabine overtime. So we changed the pharmacokinetic profile and we know that that is resulted in a different toxicological profile as well so. So we think that the mechanism of action is that we've changed the dynamics of how decitabine is released and how much free decitabine is present when delivered through S110. And we've consistently shown that we can deliver more decitabine through S110 in a tolerable way that we can decitabine alone. I think the tolerability of S110 remains well to what we understand now on the clinic that giving more decitabine over a longer period of time has a positive impact on survival of patients. So we think the S110 provides us the opportunity to deliver decitabine in a more tolerable way over an extended period of time.

Elemer Piros

And Dave, so then decitabine is the actual compound that gets incorporated?

Dave Bearss

Correct.

Elemer Piros

And how does it relate to azacitidine if at all?

Dave Bearss

So azacitidine obviously in order to incorporate into DNA and to have a hypometholating effect has to basically be converted into decitabine and then further modifications are needed actually to make it available to incorporate into DNA. So S110 is basically just controlling the release and stabilizing decitabine overtime. In terms of how it relates to azacitidine, I think eventually all three compounds have a very similar mechanism of action.

Elemer Piros

Okay, but we can almost draw a circle or two separate pathways from S110 to the decitabine then incorporation then S110 to azacitidine and into decitabine? That's how it works or these are completely separate path goals?

Dave Bearss

So S110 will not convert into azacitidine. It'll release the free decitabine.

Elemer Piros

Okay. Thank you very much for that.

James Manuso

Thank you. Is there another question please?

Operator

At this time there are no further questions. I'll now turn the call over to Dr. James Manuso, President and CEO for closing remarks.

James Manuso

Okay with that I want to thank everyone for participating and again to invite your listening in to Analyst Day tomorrow. And as I reminded you earlier that will be webcast live beginning at 9:30 a.m., Eastern Standard Time. And the webcast will also be available on our website for the next 90 days. Certainly listening in on that will provide an excellent opportunity for a very in-depth review of many of our compounds and of course we will entertain extensive questions during that time. So thank you so much for your participation and I wish you a fine afternoon.

Operator

Thank you for your participation in todays conference. This concludes the presentation. You may disconnect. Have a great day.

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Source: SuperGen, Inc Q1 2008 Earnings Call Transcript
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