Executives
Jim Goff - Senior Director, IR
Dan Welch - President and CEO
John Hodgman - SVP and CFO
Bill Bradford - SVP, Clinical Science and Biometrics
Analysts
Richard Smith - JPMorgan
Meg Malloy - Goldman Sachs
Terence Flynn - Lazard Capital
Brian Abrahams - Oppenheimer & Company
Adam Cutler - Canaccord Adams
Howard Liang - Leerink Swann
Stacey Hirata - UBS
Jason Kolbert - SIG
Eun Yang - Jefferies
Tom Schrader - Rodman & Renshaw
George Farmer - Wachovia Capital
Stephen Willey - Thomas Weisel Partners
InterMune Inc. (ITMN) Q1 2008 Earnings Call May 1, 2008 4:30 PM ET
Operator
At this time I would like to welcome everyone to InterMune's first quarter 2008 conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks there will be a question-and-answer session. (Operator Instructions).
I would now like to turn the conference over to Jim Goff, Senior Director, Investor Relations. Sir, you may begin your conference.
Jim Goff
Thank you operator. Good afternoon and welcome to the InterMune Earnings Call. This afternoon, we issued a press release that provides details of the company's financial results for the first quarter ended March 31, 2008, as well as our 2008 guidance. The press release is available on our website at www.InterMune.com.
During the course of this conference call, we will state our beliefs and make projections and other forward-looking statements regarding future events and the future financial performance of InterMune. We wish to caution you that such statements are predictions and expectations, and actual events or results may differ materially
We refer you to the company's publicly filed SEC disclosure documents for a detailed description of the risk factors affecting our business, especially our Form 10-K, filed with the SEC on March 14, 2008, and our prospectus supplement filed with the SEC on September 21st, 2007. These documents identify important factors that could cause our actual results to differ materially from our projections and other forward-looking statements. These risk factors include regulatory, revenue, intellectual property, clinical development and other risks relating to our business.
Throughout the call we will refer to our commercial product, InterMune gamma-1b, using its trade name, Actimmune, even when describing investigational uses. We refer you to our website for complete prescribing information for Actimmune.
On the call today are Dan Welch, InterMune's President and Chief Executive Officer; and John Hodgman, our Chief Financial Officer. Dr. Bill Bradford, our Senior Vice President, Clinical Science and Biometrics, will join us for questions and answers.
During today's call we will review our progress in the first quarter of 2008 including our progress advancing our two clinical development programs. We will share our financial results for the three-month period ending March 31st, 2008, and discuss our 2008 financial guidance. We will then open the call to your questions.
I will now turn the call over to Dan Welch.
Dan Welch
Thank you, Jim, and thank you, everyone, for joining us today. The first several months of 2008 have proven to be a very exciting period for InterMune. Results from four cohorts of the important Phase 1b multiple ascending dose, or MAD study, of InterMune-191 reported in early April suggest a very competitive product profile for 191.
We also reported substantial overall progress on 191 program and look forward to our next important clinical development step in this quarter, the initiation of our 14-day triple combination study of InterMune-191 with Pegasys and ribavirin.
The balance of this year and early 2009 will be a pivotal period during which we expect to complete our MAD study of 191, gain our first clinical experience with the compound in triple combination therapy with Pegasys and ribavirin and report results from the Phase III CAPACITY program for pirfenidone.
Recently we were pleased to report continued progress with our Phase III CAPACITY program for pirfenidone for the treatment of idiopathic pulmonary fibrosis, or IPF, and we also noted the progress of Shionogi & Company, Japan, which has rights to pirfenidone in that country.
As many of you are aware, Shionogi filed for registration of pirfenidone in Japan in March of 2007. At its R&D day on March 18th, 2008 Shionogi reported that it had responded to questions from an initial meeting with Japan's Pharmaceutical and Medical Devices Agency. Good clinical practice inspections have been completed at both the clinical sites and at the Company.
For quite some time many of you have asked us about Shionogi's plans to present their Phase III data. Shionogi will present data from its Phase III study in an oral presentation at the meeting of the American Thoracic Society on May 20th. An abstract of the Shionogi data is available at the ATS website, www.thoracic.org, in Section C-95, publication page A-768. Shionogi expects the pirfenidone NDA approval in Japan and the launch in their fiscal year 2008, which is between April 2008 and March 2009.
We expect to report our top-line results from our Phase III CAPACITY program for pirfenidone and IPF in approximately eight months or, more precisely, in January of 2009. Study conduct and patient retention in CAPACITY remain excellent with a very low level of patient dropouts to date.
As part of our progress update in late April, we announced that InterMune will conduct a rollover study available to patients who have completed one of the Phase III CAPACITY trials of pirfenidone and IPF. That rollover study is designed to gather long-term safety information related to treatment with pirfenidone and may be helpful in extending the label for pirfenidone beyond the 72 weeks of treatment of the CAPACITY study.
Now turning to our hepatology program, we were excited and very pleased to report new data and substantial program progress in early April, when we reported topline results from our MAD study evaluating 191 as monotherapy in patients with chronic hepatitis C virus and infection.
We reported data from the first four cohorts of that study, as follows. Treatment with 191 resulted in rapid and significant reductions in HCV RNA levels. Patients administered 200 milligrams of 191 every 12 hours achieved a median 3.1 log reduction in HCV RNA at study date 14, and patients treated with 200 milligram every eight hours achieved a median 3.8 log reduction in HCV RNA at study day 14.
In terms of reduction in HCV RNA after 14 days of monotherapy treatment, the results achieved by InterMune 191 are equivalent to or superior to those of any HCV compound in clinical development. InterMune 191 was safe and well-tolerated, no serious adverse events were reported and no subject discontinued the study due to an adverse event. Adverse events were generally mild and [transient] in nature.
In the ongoing MAD study, a fifth and final cohort of patients consisting of treatment-experienced patients, dosed at 300 milligram every 12 hours, was enrolled in April. The results are not yet in.
We also reported substantial development, preclinical and formulation progress in the overall 191 program. Specifically, the Clinical Trial Authorizations, or CTA applications, were filed in Europe in March, to begin a 14-day triple combination study with Pegasys and Ribavirin. This study is expected to start in the second quarter of 2008.
We also reported that 13-week chronic toxicology studies in both monkeys and in rats have been successfully completed, which support the longer duration dosing planned in Phase II. Toxicology studies of longer duration will be completed in time for clinical studies of longer duration than 13 weeks.
Roche has completed development of the tablet formulation of InterMune-191 that will be used in our Phase II program. And finally, by way of program update, Roche has also began work on a modified release formulation of 191 with the goal of delivering either a very robust twice-a-day dosing schedule for 191 or potentially a once-daily dosing schedule, if that is deemed attractive for commercialization.
Now, I will discuss the remaining 2008 milestones for 191 program. We expect to initiate the 14-day triple combo study of 191 in combination with Pegasys and Ribavirin in this current quarter. Additional information regarding the study design and the time line will be shared at that time of study initiation. We also plan to submit several in vitro preclinical and clinical abstracts for possible presentation at AASLD, scheduled for October 31st through November 4th in San Francisco. The clinical abstracts will describe data on InterMune-191, including more detailed data from the MAD study.
I will now turn the call over to our Chief Financial Officer, John Hodgman. John will review our first quarter 2008 financial results and also discuss our 2008 financial guidance. John?
John Hodgman
Thank you, Dan, and good afternoon, everyone. I will focus first on our quarterly financial results.
InterMune reported a net loss for the first quarter of 2008 of $26.3 million or $0.68 per share, compared to a net loss of $20.8 million or $0.61 per share in the first quarter of 2007.
We reported total revenue in the first quarter of 2008 of $9.3 million compared to a total revenue of $20.3 million in the first quarter of 2007. Total revenue in the first quarter of 2008 primarily consisted of Actimmune revenue of $8.5 million compared with $19.5 million in the same quarter of 2007, a decrease of approximately 56% reflecting lower off-label physician prescriptions of Actimmune for the treatment of idiopathic pulmonary fibrosis, which we do not promote.
Research and development expenses in the first quarter of 2008 were $27.2 million, compared with $29.4 million in the first quarter of 2007, a decrease of approximately 7%.
General and administrative expenses were $7.5 million in the first quarter of 2008 compared with $9.5 million in the same period a year earlier, a decrease of about 21%.
As of March 31st, 2008, InterMune had cash, cash equivalents and available-for-sale securities of approximately $211 million, compared with $235.3 million at December 31st, 2007.
Now, our 2008 financial guidance, which is unchanged from our prior guidance at February 7, 2008. For the year ending December 31st, 2008, R&D expense is anticipated to be in the range of approximately $100 million to $110 million net of development costs reimbursement under the Roche collaboration. G&A expense is expected to be in the range of approximately $25 million to $30 million.
That concludes the report of financial results and our 2008 guidance. We are now ready to answer questions. Operator, please open the line for questions.
Question-and-Answer Session
Operator
(Operator Instructions) Your first question is from Richard Smith, JPMorgan.
Richard Smith - JPMorgan
With respect to the data at ATS, can you just give us a sense of what we should be focusing on in the presentation?
And then just a second question on 191. When do you anticipate starting that longer-term tox study? And maybe just talk about the safety profile of the drug a little bit more, following the MAD and SAD trials.
Dan Welch
Okay Richard. Thanks for the question. So first, for the ATS presentation of Shionogi concerning their Phase III results. Their abstract is online, but it's not -- there is not a lot more information there that they have already disclosed at R&D day about a year ago. Obviously, they will be presenting their results, which show that this is the first multi-center placebo-controlled Phase III study in IPF that has hit its primary end point.
And, they will also be presenting on the progression-free survival endpoint, the secondary endpoint, which was also positive. And, they will be providing information, we believe, around the safety profile and perhaps some of their other secondary endpoints. But we have not yet, at this time, seen their presentation. So we will be, in some respects -- we will obviously get it before the presentation day, but we don't have it at this time. But that's our supposition as to what they will be presenting.
On the 191 talks, we generally don't give a whole lot of color around when we are going to start studies. What we have said in the past is that we will stay ahead of what is required to do the next phase of development. So, for example, we announced about a month ago that we had successfully completed the 13-week rat and monkey tox, so that we could dose the Phase II studies.
Likewise, we will make sure that we get the longer-duration studies done in time to do studies of longer duration. So, I don't want to make any announcements about when we will start, but we will be ready for when we need it.
Richard Smith - JPMorgan
As I understand it, Roche is looking at maybe treating for longer than a 12-week period?
Dan Welch
At a certain stage in development, yes. So we would have the toxicology studies ready in time to interrogate longer durations than 12-week.
Richard Smith - JPMorgan
Okay. Thank you.
Dan Welch
You're welcome.
Operator
Your next question is from Terence Flynn with Lazard Capital.
Terence Flynn - Lazard Capital
Hi good afternoon. Thanks for taking the questions.
Richard Smith - JPMorgan
Hi Terence.
Terence Flynn - Lazard Capital
The first one. I was just wondering, first if your agreement with Roche for 191 precludes them from conducting, say, combination trials of a polymerase inhibitor and a protease inhibitor, other than 191?
Dan Welch
Well, Terence, we have filed a redacted version of our contract with Roche in our 2006 10-K filed in April or so of 2007. I will direct you to sections of the contract that are appropriate to exclusivity. But as you will see if you read that, you will find that we have an exclusivity to each other for the mechanism of action that is protease inhibition. And there are consequences, should that exclusivity be broken. And so, I would encourage you to look at the disclosure. And we feel very confident and very comfortable in our position that Roche is committed to 191 and has an exclusivity agreement with pretty important consequences to them, should that agreement be broken.
Terence Flynn - Lazard Capital
Okay, and that's all geographies?
Dan Welch
That's worldwide.
Terence Flynn - Lazard Capital
Okay. And then second question. Just wondering maybe if you can review for us if successful development of a twice-daily schedule of 191 depends upon the data from this fifth and final cohort, or if the data you've seen from the first four cohorts gives you enough confidence that you really have a twice-daily drug here. Thanks.
Dan Welch
You're welcome, thank you, Terence. So on that topic, we're very pleased with what we have seen in terms of the viral kinetics from the doses we have explored. Roche, as we mentioned, has launched a program to develop, to optimize the formulation of 191, and we're happy with what we have seen in monotherapy. But, at the same time, we are doing the triple combination study. That's really where we are going to get a better feel for the dosing and the schedule.
All that said, either through its intrinsic properties unformulated or in triple combination or in optimized formulation, we and our partner Roche are very relaxed and confident that we will be a BID regimen by the time we commercialize.
So, in other words, the profile already is interesting enough to know that, again, in triple combination or intrinsically or in a formulation, we will be there with at least a twice-a-day by commercialization; and perhaps once a day, should we decide that's something commercially attractive. We're not so sure it is.
Terence Flynn - Lazard Capital
Okay, thanks a lot.
Dan Welch
You're welcome.
Operator
Your next question is from Brian Abrahams with Oppenheimer & Company.
Brian Abrahams - Oppenheimer & Company
Hi, thanks for taking my question. A question on 191, on the safety front. I am just wondering, where is the 300-milligram twice-a-day dose or 600-milligram total per day. Where that falls relative to the range of doses that you had explored in the original Phase 1a single ascending dose study. I am just wondering, based on the PK analysis that you've done so far, comparing the single versus multiple doses, how confident are you that you won't necessarily bump up into some of those transient side effects that you saw with the top dose in the Phase 1a?
Dan Welch
I will take a start at the question and then ask Bill Bradford, who is our SVP of Clinical Science here and leading the program, 191.
So in the SAD -- so let us recap a little bit. In the single-ascending dose, we had excellent safety and we interrogated doses many folds higher than those individually given in the MAD study. We did say at SAD that only at the very highest dose interrogated, which, again, was many folds higher than a single-dose given. In the MAD, we saw mild G.I. in-transients, only at the very highest dose. Short of that, we really saw nothing of any consequence.
And, the doses we are looking at, even in a total daily dose, were under that level that we saw, again, the mild in-transient G.I. effects. But I can ask Bill Bradford to again kind of profile the SAD and MAD and the safety signals or observations we have made so far.
Bill Bradford
I think you well summarized it. We are well below the dose, we are well below the exposures that were observed in the SAD study in healthy volunteers. And obviously, as we commented, the safety has been excellent in the MAD study at these dose levels. The observations of loose stools, for example, have not been an issue.
Dan Welch
The other thing I would add to Bill's comments is that the 300 twice a day in total daily dosage terms is the same as the fourth cohort, which was 200 three times a day. And we got viral kinetic responses in the threes, in the very high threes, and we are very comfortable as a monotherapy with those levels moving into triple combo. So, we don't think, really, it's likely that we will be going significantly higher in triple combination, if at all. But that remains to be seen.
Brian Abrahams - Oppenheimer & Company
Great, that's very helpful. And then, just as a follow-up, I was wondering if you could -- you guys have talked a lot about potentially combining 191 with a polymerase inhibitor. And I was - I guess I was wondering from a chemistry point of view what you think might be some of the challenges you guys might face in combining 191 with some of the polymerase inhibitors that are in a similar stage of development and where you are so far in terms of whether or not you've thought about conducting feasibility studies or how far you along you might be with those? Thanks.
Dan Welch
So, I assume you're talking about co-formulation into one dosage form. So this stage, we and our partner Roche are talking about combinations of 191 and polymerase inhibitors, but not necessarily in a combined, formulated pill. That would be the next step, certainly, down the line. One constraint -- one of the many good things about 191 is its small dosage. So we are only giving a total daily dose of, in the highest sense, 600 milligrams. So as a single pill, that's a small mass, which is a great characteristic when you are thinking about co-formulating with other mechanisms.
On the other side of it, the polymerase inhibitors of Roche, both of them, and they are the most advanced polymerase inhibitors out there, they both have a fairly large mass in total daily dose. So that's one of the constraints we will have to work with. But that's a little bit down the line from them.
Brian Abrahams - Oppenheimer & Company
Thanks, that's very helpful.
Dan Welch
You're welcome.
Operator
Your next question is from Meg Malloy with Goldman Sachs. Meg you line is open.
Meg Malloy - Goldman Sachs
Hi, can you hear me?
Dan Welch
Hi Meg.
Meg Malloy - Goldman Sachs
Sorry about that.
Dan Welch
All right.
Meg Malloy - Goldman Sachs
Thanks. just a couple of quick questions. First is on the timing of the triple combination studies. I know they're supposed to start in the second quarter. Do you have, sort of a -- assuming the results are consistent with what you have observed so far, do you have a time line in terms of when you would like to finish those and start 12-week triple-combination studies, now that the tox is behind you?
And then secondly, as a housekeeping question for John, if you could just break out the ESO expense line by line for the quarter, that would be great.
Dan Welch
So, for timing of the triple combo, we generally don't talk about the timing of a study that we have not yet begun, Meg, so we will stay to that policy. Our plan would be to move as rapidly as possible, obviously, from that triple-combo 14-day into the next definitive study, which would be a large Phase II study. But we have not commented on the timing of that yet.
Meg Malloy - Goldman Sachs
If I could just ask as a follow-up. Will we get top-line data from the first 14-day, sort of, in a similar fashion to what we have seen with the already-reported data?
Dan Welch
So, are you asking if we would press release top-line data on the triple combination?
Meg Malloy - Goldman Sachs
Yes, 14-day.
Dan Welch
We haven't decided that yet, as to the communications strategy and the timing. But it's something that's certainly among the alternatives we are thinking about.
Meg Malloy - Goldman Sachs
Okay.
Dan Welch
And then I will ask John to answer your question.
John Hodgman
Yeah, hi Meg. Regarding stock-based compensation for the quarter, it totaled $1.8 million, $0.7 million in R&D and $1.1 million in G&A.
Dan Welch
Thanks a lot.
John Hodgman
You bet.
Operator
Your next question is from Adam Cutler with Canaccord Adams.
Adam Cutler - Canaccord Adams
Him thanks for taking the question. I am wondering if you could just tell us a little bit from your 13-week preclinical tox studies what some of the signals were that we are seeing there, the types of things that you may be are watching out for in clinical studies.
And then on the tablet formulation being finalized, can you just give us a sense of what differences you may expect from that formulation, if any?
Dan Welch
Sure. Hi Adam. So on the preclinical -- we generally don't comment about what we have seen in preclinical studies. We have characterized the 13-week rat and monkey as having been successfully completed, so that we can move forward. We have seen nothing in those studies that would preclude the aggressive continued development of 191 exactly as we contemplate.
What we have said in terms of tolerability in man is, only at multiples higher than those seen in the MAD. In the SAD study, we saw some mild G.I. transient effects. So in terms of what we are watching for, if you will, or what we have seen in the human exposures is what I have described. I think that's about what we will say on that.
Adam Cutler - Canaccord Adams
Okay and then on the…
Dan Welch
On the tablet, it's hard to say. Generally, when you go from a gel cap to a tablet, you could expect a difference in the absorption. But we don't have a great deal of data on that yet, which will be -- we plan to use the tablet in the Phase II study, and so we have a little time to explore that. But don't have anything to comment on that yet.
Adam Cutler - Canaccord Adams
Okay. And then just then just turning to pirfenidone, just a couple of quick questions. Can you just remind us about generally what the performance has been in terms of patient dropout rates, etcetera, in your study on a blinded basis? And then, can you remind us if there are any differences that are worth noting on the entry criteria in your studies versus the Shionogi studies?
Dan Welch
I will ask Bill to answer those questions to the extent we can, in light of our constraints with Shionogi.
Bill Bradford
Yes, with respect to the study conduct piece and retention, dropouts, etcetera, we have not disclosed an exact number on that, other than to say that things are going extremely, extremely well on that front. We're very pleased with the ongoing conduct of the study.
And with respect to the comparability of the eligibility criteria, Shionogi has not disclosed much information at all on that, which really precludes us being able to comment on that.
Dan Welch
What we have said in the past, Adam, is that the entry criteria are not significantly different than those that we have for CAPACITY. They are different but, in our mind, not significantly different.
Adam Cutler - Canaccord Adams
Do you expect that we may get a little bit more clarity on the Shionogi side of things at ATS?
Dan Welch
I would expect that they would describe their entry criteria.
Adam Cutler - Canaccord Adams
Okay, great. Thanks a lot.
Dan Welch
You're welcome.
Operator
Your next question is from Howard Liang with Leerink Swann.
Howard Liang - Leerink Swann
Thanks. Just to follow up on Adam's question about the animal tox study, that 13-week study. Did I hear you say that the dose used was many times of the human dose? I guess if that's the case, were you referring to the raw dose after the conversion, or are you correcting for the exposure? Because, I think the monkey exposure is relatively low in plasma and rats higher.
And, I think you said there is food effect in humans, which would give you higher exposure. I guess, what was the comment that you made about the level of dose you used in the tox study?
Dan Welch
I am sorry if I wasn't clear, Howard. I was trying to say that, in humans, at a dose many fold -- in the SAD study, at a dose many fold higher than the individual doses in the MAD study, what we saw was mild and transient G.I. effects, for example, some loose stools, in a few patients, but only at the very highest level in the SAD study.
I didn't comment about the dosing in the preclinical studies, but of course you do them at many fold higher than you expect to expose man to. So there is a very, very healthy range of multiples over that, as you know.
Howard Liang - Leerink Swann
After correcting for the level of exposure…
Bill Bradford
Right, both on the dose and the exposure.
Howard Liang - Leerink Swann
Okay, great. Can you talk about -- I think you have probably collected PK data, culture data as well, in your MAD study. Can you talk about whether there is an increased exposure in patients in comparison to health…
Dan Welch
What we have disclosed to today with respect to the MAD, obviously, is the TK and comments on the safety, both of which we feel have been excellent. We have not commented on the pharmacokinetics yet. Obviously, they are of interest and particularly important as it relates to TK, the so-called PK/PD relationship. Those analysis are really ongoing. We have just fairly recently completed those first four cohorts.
But the plan is to roll this out, ideally, in a scientific venue moving forward because we know it's interesting and important data.
Howard Liang - Leerink Swann
Given what we saw at -- you saw on boceprevir, how do you think about where you are in the type of potency you need and comparatively with either boceprevir or telaprevir?
Dan Welch
So in terms of the of the viral kinetic performance?
Howard Liang - Leerink Swann
Yeah. I guess my perspective is that the boceprevir data looked quite interesting, or to me, quite good. Just wondering whether you think that makes it more likely that perhaps you don't need as much of a raw antiviral potency to achieve good SAR.
Dan Welch
That's a great question, and it's one we been thinking a lot about. If you look at the polymerase inhibitors, granted it's a different class, but in monotherapy of one or two logged drops in a comparable monotherapy study, when in triple combination they are in the five's and six's is in terms of viral kinetic or number of log drops. So, if polymerases are somehow transferable to proteases, they may or may not be, and certainly they are different in many respects, but that might be one lesson. Your lesson of the boceprevir might be another one.
Nonetheless, in our MAD study, we have reported VK, or viral log drops, as good or better than other protease inhibitors; in this case, boceprevir. In the case of telaprevir, a 3.8 or 3.9 isn't really materially different than a 4.0 or a 4.4. It's really, the difference is really immaterial when you look at percent reduction in the virus. It's hundredths of a percent difference. So we feel like we are right in a great zone with telaprevir in terms of viral kinetic performance with a total daily dosage of about one quarter. So in terms of potency, it's a very, very potent compound.
So based on the monotherapy data of whether it's TID or BID, a VK of -- in the threes -- in fact, one of the sell-side analysts held a conference with Dr. Stefan Zeuzem, who said, if you're in the 4 log drop plus or minus a half a log in monotherapy, you've got a great drug. I am paraphrasing Dr. Zeuzem, but that's essentially his message. So, to wrap up my long answer, we think we are in great position with our monotherapy data. We are very excited to move into triple combo, and we expect good results.
Howard Liang - Leerink Swann
If I could slip in one more question about the data that you presented at AASLD. Are you -- will you present the SAD or single-dose PK study in healthy volunteers? And also, for the last cohort of the MAD, the fifth cohort, could we possibly see the data before AASLD in some form? And then lastly, will you consider presenting the 13-week toxicology data?
Dan Welch
Okay., So, I will take them in order. The SAD, the single-ascending dose, we do plan to submit a number of abstracts for consideration by the AASLD, if they get accepted. Some communication on the SAD, probably in a PK format or a context, some mention of the SAD is one of the abstracts that we are considering.
In terms of cohort number five, would we release top-line or some kind of communication before AASLD? Haven't decided on that. We have to be careful, so as not to compromise our ability to get the MAD study accepted. That's always the trade-off, as you know, sharing data versus compromising it for its acceptance.
As to the 13-week tox, that's unlikely we would be presenting that. It's pretty straightforward stuff. It's 13 weeks at many fold the dose and exposure in man, in both rat and monkeys, and it was successfully completed. So, I don't think you'll be seeing that. It's just not terribly interesting, at least, or relevant for that type of forum.
Howard Liang - Leerink Swann
Okay, thank you very much.
Dan Welch
You're welcome.
Operator
Your next question is from Annabel Samimy with UBS.
Stacey Hirata- UBS
Hi, this is Stacey calling in for Annabelle. Thanks for taking my question. Regarding the fifth cohort for the MAD here, are you going to be using that data to help inform your dosing regimens for the 14-day triple combination study?
Dan Welch
Probably not, but I should have the expert give that answer. Bill?
Bill Bradford
I think, as always, clinical experience is clinical experience and we will have more safety data, more VK data, ingrained, in a different patient population. And in particular, the safety, I think, is valuable. So, to that degree, it will potentially influence our thinking.
Stacey Hirata- UBS
So, if we were to see a 300 two-time arm the 14-day trial, could we assume that the efficacy shall be better, or you just won't have that in time?
Dan Welch
I don't think you can make any assumptions like that, looking at our strategy in the combo study, obviously understanding safety is important, but also the exposure/response relationship. We really want to come out of the study with a good handle on Phase II dosing. So we will be interrogating multiple doses.
Bill Bradford
The other thing to keep in mind is that the 300 BID dose is in the treatment-experienced or non-responder group, and that's something that we have to consider how similar or different that group is compared to the naive patients, which is the subject of our 14-day triple combination study.
Stacey Hirata- UBS
Okay, thanks. One last question. You said that you are using the tablet formulation Phase II. Are you also going to use a tablet formulation in the 14-day triple-combo study?
Dan Welch
No. It would be the gel cap that we used in the monotherapy.
Stacey Hirata- UBS
Okay. thank you.
Dan Welch
You're welcome.
Operator
Your next question is from Jason Kolbert with SIG.
Jason Kolbert - SIG
Hi Dan, thank you. I just want to shift gears with you back to pirfenidone a little bit and kind of take up one of the other questions that I know was already asked, and we don't have the data to answer it. It has to do with the patient populations in the US versus Japan because we do know that Shionogi with running at about 90% male. So is the US trial more mixed?
Dan Welch
We have not commented on the baseline characteristics, but I think you can look at some of the data we have previously presented from other studies, and there does tend to be a male predominance in these studies in both North America and Western Europe.
Jason Kolbert - SIG
And can you talk a little bit about with the commercialization strategy is going to be for pirfenidone?
Dan Welch
Yes, sure. In the United States, we would expect that we would do it ourselves. It's a sales force that is fairly small, around 70 to 80 sales representatives. Again, we would launch the product ourselves. The target market, the prescribers, are pulmonologists. They are very well-defined. For IPF, they tend to be tertiary care, which means major metropolitan areas. So with 70 sales reps, you can cover the lion's share of the prescribers in the patients that you're seeing. It makes for a very efficient marketing infrastructure. Classically, they would be medical science liaisons supporting that.
Outside of the United States and particularly Europe, we are exploring that. We are thinking about that, I should say, this year. And, by the time the CAPACITY data are in our hands in January, we will be ready to make some decisions and choices as to how to commercialize that in Europe. It could be by way of a license, it could be by way of a partnership. And we haven't yet decided that. We want to see the results of CAPACITY before we would do a partnership on pirfenidone in Europe.
Jason Kolbert - SIG
And Dan, just remind me. What does the sales infrastructure look like now at the company, and when would you have to start building it up in advance of pirfenidone?
Dan Welch
At this time, some of the listeners might recall, if you've tracked our company for awhile, we use to have a sales and marketing infrastructure when we were marketing INFERGEN, and we divested that to Valeant at the end of 2006 and we took down our whole commercial infrastructure in January of 2007. and since that time, we have not had a commercial infrastructure at the company.
As to when we would start to ramp up that commercial infrastructure again, we plan to do -- in fact, at this point, we have none. In 2009, once CAPACITY results are in, we would then start a ramping of the infrastructure but not take on sales force until we have the approval of the product by the regulatory authority.
So I wouldn't expect, if you're thinking about SG&A modeling, it would be very much back-ended in terms of expenses in 2009, should the CAPACITY data be positive.
Jason Kolbert - SIG
Terrific, thank you so much.
Dan Welch
You're welcome.
Operator
Your next question is from Eun Yang with Jefferies.
Eun Yang - Jefferies
Thanks very much. Just quickly on R&D, the R&D assumption for guidance for this year, $100 million to $110 million, can you break down how much is on the pirfenidone development and how much is on ITMN-191?
John Hodgman
We don't normally give specific numbers, Eun, but what I would suggest is running a Phase III the size of the two concurrent CAPACITY programs is a significant undertaking, and is a lion's share of that $100 million to $110 million, and the rest is our piece of the one-third development costs for 191, plus all our work in our pipeline of our research area.
Eun Yang - Jefferies
Okay. Thanks very much.
John Hodgman
Welcome.
Operator
Your next question is from Tom Schrader with , Rodman & Renshaw.
Tom Schrader - Rodman & Renshaw
Good afternoon.
Dan Welch
Hello Tom.
Tom Schrader - Rodman & Renshaw
Just wanted to -this Roche once-a-day formulation. Is that very early-stage? Is that in the running to be the product you take forward? How should we think about that? Is that independent of what you are doing with the current formulation?
Dan Welch
Yes. We have two efforts, one of which is complete. The first was to get to a more stable pharmaceutical form than the gelcap, and that was the tablet. So if we -- in fact, Roche led this effort. They have successfully implemented the tablet form of 191. So that part is done.
As to the formulation optimization or drug delivery iterations of 191, that's in early stages exploration/absorption in man, modeling over time, etcetera. So, the idea there is that that would be something that we would develop in the fullness of time. But the program has begun. It's budgeted, and there are many people working on it at Roche, and it's an important project.
We don't know necessarily -- just to clarify, part of the program is to see if it could get to once-a-day; at a minimum, a very, very robust twice-a-day, we feel extremely confident in. And we don't know, frankly, if a once-a-day would be commercially important since Ribavirin, which appears from all studies that are being done, that is going to be part of the regimen for the foreseeable future. And having one antiviral that's once-a-day and one that's twice-a-day, we're not so sure that's an advantage, frankly. Having them both taken twice-a-day could be more interesting.
Tom Schrader - Rodman & Renshaw
You anticipated my next question. Is the COPEGUS pill small enough that you can co-formulate that with 191? And, is there any reason to believe those couldn't be in the same physical pill?
Dan Welch
Well, that's something we would not want to disclose at this time. Co-formulation in antivirals has been shown to be a competitive edge in HIV, for example.
Tom Schrader - Rodman & Renshaw
Yes, it sure has.
Dan Welch
Gilead has been a great example of that. So what we are excited about, among many things of 191, is its small dosage load. One pill is 100 milligrams. So that is a great opportunity for co-formulation, that a compound like telaprevir or boceprevir would have difficulty coming to because it's 2.5 grams or so per day as opposed to a few hundreds of milligrams a day. So, it's a totally different formulation, co-formulation equation in 191 than others.
Tom Schrader - Rodman & Renshaw
But no comments with COPEGUS yet?
Dan Welch
No comments yet.
Tom Schrader - Rodman & Renshaw
Okay. Thanks a lot.
Dan Welch
You're welcome.
Operator
Your next question is from George Farmer with Wachovia Capital.
George Farmer - Wachovia Capital
Hi, thanks for taking my question. One of your competitors has shown some PK data or has pointed out some PK differences with their PI in both versus monotherapy and in combination with interferon/ribavirin. Can you comment as to whether you see any of those differences preclinically? And, is that in any way going to affect your combo trial going forward?
And secondly, do you need at least a BID convenience formulation going forward, or would you be satisfied with the TID formulations?
Dan Welch
Okay, thank you George. So, preclinical -- we have reported at EASL 2007 in vitro work, a 14-day replicon model, whereby we subjected the model to 14 days of InterMune 191 by itself, and then we had the same model but now we added Pegasys. And what we reported is that you could get the same output, which was the eradication of the virus or the replicon from the model in 14 days. In the presence of Pegasys, you needed one-third of the dose, if you will, of 191. So let us call it very strong synergy. That seems like that may have been seen by one of the other protease inhibitors that you mentioned, this concept of synergy.
So we would not be surprised, and it's a reason why we all along have been very careful about the dose of 191 to kind of walk up to the effective VK doses, VK results that we have seen and we are happy we have done away. Because in triple combo with Peg/Riba we could see great synergy, and therefore a dosing on the lower end of what you saw in the MAD giving great results would not surprise us. So…
George Farmer - Wachovia Capital
But they have seen different trough levels, actually, in monotherapy versus combo studies?
Dan Welch
Yes, that's right.
George Farmer - Wachovia Capital
Have you seen anything like that preclinically?
Bill Bradford
You're getting into the drug/drug interaction [peak]. I don't believe we have disclosed any of that information exactly. But we are well aware of what has been seen elsewhere and certainly have designed our combination trial such that we could accommodate a drug/drug interaction, should one in fact occur.
George Farmer - Wachovia Capital
And then, the TID formulation, is that…
Dan Welch
Yes. I think the way to answer it is that, monotherapy is instructive, but it's not practical. No protease inhibitor or polymerase inhibitor, a direct antiviral, is going to be used in monotherapy. So it's a step along the way. What we have seen in monotherapy is very intriguing as to BID. In triple combination with Peg and Riba, we would expect more of the same and even better.
And that's why I said earlier that we believe that either through its intrinsic properties unformulated or in an optimized formulation or in triple combination with Peg/Riba, we and our partner Roche are very confident that by time of commercialization, we will be BID.
So I don't think TID, with 191, by the time of commercialization, is going to be relevant. I think we will be BID, with a high level of confidence, and maybe once a day, if we believe offering that presentation would be attracted in some settings.
So, I don't think we will be there with a TID. I really don't. We and our partner Roche are very confident that one way or the other, by time of commercialization, we will be a BID pill.
George Farmer - Wachovia Capital
Okay. Thanks.
Dan Welch
You're welcome.
Operator
(Operator Instructions). Your next question is from Stephen Willey with Weisel Partners.
Stephen Willey - Thomas Weisel Partners
Hi, thanks for taking my question. I just had a quick question with respect to lead-in dosing in Phase II. We kind of saw the two other polymerase inhibitors take different approaches with respect to using a four-week lead-in dose with Peg and Ribavirin. Is that something that you plan to look at, looking out at your Phase II trial structure? And, do you have any comments on I guess using one over the other?
Dan Welch
Yes. We and our partner Roche are talking actively, obviously, about the Phase II design. We were at EASL; we saw, certainly, the boceprevir data, which was interesting. And we are delighted to be working with Roche, which is the market leader in pegylated interferon, and they have a host of data from all kinds of studies and a huge database that we have the pleasure to be working with to model and interrogate and anticipate some of these different designs.
So, for competitive reasons, I don't want to, at this stage, disclose what we are talking about with our partner as to the design, whether or not they would be a lead-in. But these are some of the things, obviously, that we are considering.
Stephen Willey - Thomas Weisel Partners
Okay. Thanks.
Dan Welch
You're welcome.
Operator
There are no further questions at this time.
Dan Welch
Very good. Thank you very much. Thank you, all of us, for joining us today. And we look forward to our next regularly scheduled call to discuss second-quarter 2008 financial results. Good afternoon, good bye.
Operator
This concludes today's conference call. You may now disconnect.
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