Molecular Insight Pharmaceuticals, Inc. Q2 2008 Earnings Call Transcript

Molecular Insight Pharmaceuticals, Inc. (MIPI)

Q2 2008 Earnings Call Transcript

August 13, 2008 10:00 am ET

Executives

David Barlow – Chairman and CEO

Pricilla Harlan – VP, Cooperate Communications

Don Wallroth – CFO

John Babich – President and Chief Scientific Officer

Edward Coleman – Vice Chairman of the Department of Radiology and Director of the Division of Nuclear Medicine, Duke University School of Medicine

John McCray – COO

Analysts

Marco Crosio – Jefferies

Ken Trbovich – RBC Capital Markets

Aaron Reames – Wachovia Capital Markets

Debjit Chattopadhyay – Boenning & Scattergood

Operator

Good morning and welcome to the Molecular Insight Pharmaceuticals second quarter 2008 financial results conference call. My name is Karin, and I will be the operator on today’s call. I would now turn the call over to David Barlow, Chairman and CEO of Molecular Insight.

David Barlow

Thank you, Karin, and good morning to all. I appreciate you all joining us today for our second quarter 2008 conference call. I am David Barlow, Chairman and CEO of Molecular Insight. With me today are John Babich our President and Chief Scientific Officer; Don Wallroth our Chief Financial Officer; John McCray our Chief Operating Officer; Norman LaFrance our Senior Vice President of Clinical Development and Chief Medical Officer; Joshua Hamermesh our Vice President of Commercial and Business Development; and Pricilla Harlan our Vice President of Cooperate Communications.

We are also honored to be joined today by Dr. Edward Coleman, Vice Chairman of the Department of Radiology and Director of the Division of Nuclear Medicine at Duke University School of Medicine. Dr. Coleman is the lead investigator on our recently initiated Trofex trial for the diagnosis and monitoring of prostate cancer, as well as on our Azedra trial for the treatment of adults with pheochromocytoma.

Before we begin it is important to let you know that we will be making forward looking statements on today’s call. Priscilla is going to go over a brief safe harbor statement and then we will proceed with the rest of the call.

Priscilla Harlan

Thanks David, hello everyone those who are on the webcast please turn to slide number two, forward-looking statement. This is just to remind you that statements made on the call that are not strictly historical in nature constitute forward-looking statements. Such statements include, but are not limited to, statements about the development of Azedra, Onalta, Zemiva and our other product candidates. Such forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause the actual results of Molecular Insight to be materially different from historical results or from any results expressed or implied by such forward-looking statements.

These factors include, but are not limited to, risks and uncertainties related to the progress, timing, cost, and results of clinical trials and product development programs; difficulties or delays in obtaining regulatory approval for product candidates; competition from other pharmaceutical or biotechnology companies; and the additional risks discussed in filings with the Securities and Exchange Commission. All forward-looking statements are qualified in their entirety by this cautionary statement, and Molecular Insight undertakes no obligation to revise or update this information to reflect events or circumstances after the date hereof.

For those on the webcast, please turn to Slide 3 for our product pipeline. I’ll now turn the call back to Dave.

David Barlow

Thanks Pricilla, at this point Don Wallroth will briefly summarize our financial results for the second quarter and six months. John Babich will then review some exciting recent Research and Development highlights that will set way nicely into a discussion that Dr. Coleman will lead on the critical need for more accurate and non-invasive method for diagnosing and monitoring prostate cancer, and how our molecule imaging candidate Trofex has the potential to address this unmet clinical need.

I will then review our keen clinical milestones through the first half of 2009 and lastly we will open up a call to you for a question and answer period. First Don Wallroth our CFO will highlight our financial results for the second quarter and six months just passed.

Don Wallroth

Good morning everyone, and thanks David. As we reported in today’s press release Molecular Insight’s second quarter 2008 net loss was $21 million, or 84 cents per share on a basic and diluted basis compare to a net loss of $11.5 million or 47 cents per share on a basic diluted basic in the second quarter of 2007.

Total revenue for the second quarter of 2008 which to date represents grant revenue from the NIH was approximately $90,000 compared to $20,000 during the same period last year. R&D expense which represents 61% of total operating expenses was $10.1 million in the quarter as compared to $7.7 million for the same period last year.

Key components of the 31% spending increase were additions to research and development stuff as well as continuing to spend Zemiva, Azedra and Trofex for contract manufacturing cost reduced for drug usage, and lastly cost associated with clinical trials.

G&A expenses were $6.4 million for the second quarter of 2008 compared to $4.4 million in the second quarter of the prior year. This 43% increase is primarily due to increases in compensation and benefits as a result of an additional staff and legal and consulting expenses in support of public company reporting requirements, including compliance with provisions of Sarbanes-Oxley.

Other expense net was $4.7 million for the three months ended June 30, 2008 as compared to $0.6 million for the same period in 2007. The increase in interest expense for the second quarter of 2008 compared to the second quarter of 2007 was due to the $5.7 million payment in kind interest accrued on the $150 million senior secured debt.

For the sixth month ended June 30, 2008 the company recorded a net loss of $40.8 million or $1.63 per share on a basic and diluted basis. This compares with a net loss of $25 million for the same six months in 2007. Included in the net loss for the six month end of June 30, 2008 is revenue of approximately $200,000 which to date represents grant revenue from the National Institute of Health and compares with approximately $300,000 for the same source during the same period last year.

Operating expenses for the six months of this year increased by 27% to $31.7 million up from $24.9 million for the same period last year. R & D expenses which accounted for 64% of the company’s operating expenses for the six month ended of June 30, 2008, increased 16% to $20.1 million from $17.4 million in the same period last year. This increase was primarily due to the ramping of this Amino program which increased cost associated with all aspects of clinical trial as well as expenses for the Azdra programs.

This increase, year over year was offset by a onetime licensing fee for Onalta and acquisition fee for Solazed. The 53% increase in G & A expense to $11.5 million for the six months, ended 2008 was compared to $7.5 million for the same period in 2007 is attributable to additional staff, legal fees related to patent assets and expenses in support of public company reports requirements including compliance with provisions for Sarbanes-Oxley.

This increase in other expense, net for the six month end of June 30, 2008 is principally attributed to $8.9 million payment in kind on a $150 million senior secured debt, as previously noted. At June 30, 2008 our cash, cash equivalent and short term and long term investments totaled $131.2 million. The company expect to achieve its previously guided cash burn of $57 million for the year. I will now turn the call over to John Babich.

John Babich

Thanks Don, I would now like to review some of our recent research and development highlights. For those in the webcast please turn to Slide 4 recent R&D highlights. We completed enrolment of our plan Pivotal Phase 2, clinical trial for Zemiva for the detection of cardiac ischemia in the emergency department setting. This program remains on track and we expect we report date from the trial by year end. Also in the quarter we completed Azedra’s Phase 1 dose ranging clinical trial and adult Phase of a pheochromocytoma.

Azedra are targeted radiotherapy candidate for the treatment neuroendocrine tumors. We presented preliminary clinical date from the Phase 1 study at annual meeting of the American Society of Clinical Oncology (ASCO), this past June. The preliminary trial results indicated that Azedra is safe and well tolerated, thus supporting movement to plan Pivotal Phase 2 trial. We also announce the determination of the maximal tolerated dose for Azedra in this study in the Society of Nuclear Medicine meeting which is held in June, our top dose would be 8.0 mCi/kg.

As we highlighted on our last call, Molecular Insight also initiated Phase 2 clinical trial for Azedra for the treatment of children with high-risk neuroblastoma in early May. The primary objective of this trial was to determine the maximum tolerated dose of Azedra and its pediatric patient population. Secondary objectives are to determine tumor and dose response and toxicity, to estimate normal organ dose symmetry and describe the affects of Azedra on the overall quality of life of these patients. The trial is being coordinated by new approaches to Neuroblastoma therapy Consortium also referred to as NANT.

This is a group of 14 Universities and Children’s Hospitals in the United States and Canada, with a strong research and treatment program already instituted for the treatment of Neuroblastoma. The trial will involve approximately 24 children across NANT’s fourteen member pediatric oncology research centers and currently the first core of the patients has been enrolled and dosed and we are following them up as we speak.

The company also presented data from several additional studies at this year’s Society of Nuclear Medicine meeting and which was held in New Orleans this past June. The data presented covered much of our pipeline and included two preclinical studies on Onalta our targeted radiotherapeutic candidate for the treatment of carcinoid and pancreatic neuroendocrine tumors.

The data demonstrated the potentials indium -111 Onalta, as an imaging tool to predict Onalta’s absorption in the body’s tissues and to aid in determining appropriate patient dosaging.

We also presented preclinical data support in the pharmacology and mechanism of action of Solazed, our targeted radiotherapeutic for the detection and treatment of metastatic melanoma. We performed a series of studies to identify a lead radiotherapeutic candidate from the library of compounds that we in-license from a Bayer Schering pharma last year, and we selected MIP 1145 to progress in the clinical development based on the significant melanin and specific tumor uptake and retention both in vitro studies and in vivo studies. Also there was some very strong anti-tumor activity and our radiochemical stability was such that we could scale this up into a product formulation.

At the same time, at the same conference we made two Azedra presentations; one on our preliminary data from the Phase I pheochromocytoma trial which I mentioned earlier, and a poster on the delivery system for administering Azedra in the hospital setting. Also we present the preclinical data supporting our Trofex, prostate cancer diagnosis and monitoring program which included the synthesis, production and preclinical profile of our two lead clinical candidates MIP-1072 and MIP-1095.

Lastly during the quarter we initiated a phase 1 dosimetry clinical trial for Trofex in patients with metastatic prostate cancer. Trofex is a small molecule inhibitor of prostate specific membrane antigen or PSMA, a protein that is highly expressed on prostate cancer cells and serves as an excellent target for detecting this disease. During the trial we will investigate our two small molecule candidates that were discovered and developed by Molecular Insight these are MIP-1072 and 1095, and we’ll determine which candidate to progress into further clinical trials from the results of this trial.

It is now my privilege to introduce Dr. Edward Coleman, lead investigator on our Trofex Phase 1 Clinical Trial. He is here today to talk about metastatic prostate cancer and our related molecular imaging clinical program for Trofex. As we mentioned earlier Ed is the Vice Chairman of the Department of Radiology and a Director of the Division Nuclear Medicine in Duke University School of Medicine.

He is Board certified in nuclear medicine, as well as internal medicine. His research has been published in more than 400 scientific papers and several leading journals. He has published several text books related to Nuclear Medicine as well. Dr. Coleman is on the editorial board of several top medical journals, including the Journal of Nuclear Medicine, Radiology and Academic Radiology. Those on the webcast please turn to the slide 5, Trofex clinical highlights. I will now pass the call over to Dr. Coleman.

Edward Coleman

Thank you John, it’s a pleasure to be able to present here today. I will briefly review some data on prostate cancer statistics, the present imaging technology used in prostate cancer and the initial results with Trofex. There are more than 200,000 new cases of prostate cancer each year in the United States, even though it is the second leading cause of cancer related deaths in man. The prevalence of prostate cancer is quite large because of the high incident in the prolong survival in many patients.

In cancer, we consider various aspects of the evaluation of the patient and treatment of the cancer. With prostate cancer, there’s diagnoses which is usually by biopsy and that is frequently not diagnostic and may not show cancer even though its present, and many man have to have re-biopsy to make an accurate diagnoses. The staging of the cancer hasn’t spread at the time of diagnoses. That is done by combination of imaging and surgery, but certainly there’s limitations to that.

A large of number of men undergo detection of recurrence, these men have biochemical failures that is they have had treatment of the prostate cancer. The prostate specific antigen (PSA) has gone to zero or near zero and then starts to increase. This tumor marker demonstrate that there is cancer in the body but by that tumor mark in the blood we don’t know where it is recur. It frequently recurs in the prostate bed after surgery or radiation therapy, but it may occur in lump nodes or in bone or other parts of the body, so that’s a large unmet need at this time.

Then there is the need to monitor treatment in patient who do have recurrent cancer or restaging after a course of therapy, so there is potential imaging that’s used at all of these stages of evaluation. There are presently several techniques that are being used to help determine the stage or situation with the patient. CT scans are used its probably the number one procedure that’s used now in prostate cancer ,but its neither sensitive or specific, it really does not help at all in the diagnoses of prostate cancer, in the prostate gland it may detect lymph nodes spread or spread the bones.

Magnetic residence imaging, or magnetic residence spectroscopy are used at a limited numbers of sights in the United States, but has not gained wide-spread acceptance. In some sides it is used to diagnose cancer in the prostate gland, but very limited numbers of sides are using it for that purpose.

Radionuclide bone scans are used to determine if it spread to bone, bone is one of the primary methods by which this cancer spread. The bone scan is quite sensitive for detecting the metastatic disease, but it’s not very good for following the therapy once metastatic disease to bone has been identified. A radio labeled molecular antibody prostate, serum prostate specific membrane antigen called prostate has been used to study patients with prostate cancer. It has limited sensitivity and specificity and again has not gained wide-spread usage in the United States.

There are certainly limitations with the use of this radiopharmaceutical. Positron Emission Tomography has not been very successful in evaluation of patients with prostate cancer. Prostate cancer has low metabolize, so FDG patch is not very helpful. There are a group of patients that are hormonally resistant that have recurrent disease where it perhaps may have some benefits.

Most recently we have participated in an initial clinical trial of Trofex to look at those symmetry and its uptake in prostate cancer patients. We have now done two patients who have documented the causticity and these patients have been injected with both of the agents that have been identified by Molecular Insight as potentially useful.

In both of these patients, we have detected all sides of known disease. In one patient we detected a side of unknown disease. This was a lymph node in the retroperitenium that was less that 1 cm in size.

As we look at these images we have high uptake within the lesions, both in bone and soft tissue. In one patient the patient had metastatic disease at the time of diagnosis and so his prostate is still intact and we see uptake in the prostate gland where there is known prostate cancer.

The urologist and medical oncologist taking care of these patients have been extremely impressed with the quality of images that we are obtaining. Our technologist who are scanning these patients and who also scan the patients with Prostascan are amaze that the quality of the images that we are obtaining. So, we have been very please with the data that we have gotten so far both agents seem to be working extremely well, there is slight differences in the distribution outside of the prostate cancer, but they have shown the prostate cancer and metastatic disease extremely well.

David Barlow

Thanks very much Dr. Coleman for that really thorough presentation which I’m sure we’ll stimulate a lot of interesting questions. So as we’ve discussed on this call, Molecular Insight had a very productive second quarter and we have look forward to continuing the development of our robust portfolio of targeted radiotherapedics for cancer and molecular imaging radio pharmaceuticals.

I will now review our upcoming clinical milestones and for those on the webcast please turn to Slide six, entitled Clinical Milestones through the first half of 2009. Through the first half of 2009 we plan to report top line results from Zemiva’s plan Pivotal Phase 2 registration trial for the detection of cardiocoschemia in the emergency department setting. We also plan to initiate Azedra’s Plan Phase 2 pivotal trial and complete Trofex’s dosimetry trial for the detection and monitoring of metastatic prostate cancer.

We also intend to initiate Onalta’s Phase 1, dosimetry trial in the US for the treatment of neuroendocrine tumors. As you may recall, Onalta’s complementary to Azedra is we are developing it primarily for the treatment of a subset of neuroendocrine tumors called carcinoid. Onalta is supported by Three Phase 1 and Three Phase 2 clinical trials conducted by (inaudible) in more than 300 patients before we in license the compound from them last year.

We also intent during this time frame to prepare clinical development plan for Onalta in Europe. We are currently in discussions with European regulatory authorities regarding an appropriate development program for the commercial approval and wide-spread availability of Onalta.

As we mentioned on our last conference call there is an established base of Onalta use throughout Europe, where the compound continues to be widely used under physician sponsored protocols at several dozen European centers, primarily in patients with carcinoid. We estimate that patients receive approximately 3,700 Onalta treatments each year in Europe and this continues to grow.

Finally during the time frame we have plan to initiate Solazed’s Phase 1 dosimetry trial in Malignant Melanoma with the lead compound MIP-1145. We believe that the next several months will continue to be an exciting and productive period for Molecular Insight, we anticipate making significant progress towards our mission to bring innovative, targeted molecular radiopharmaceuticals to patients in need.

This now concludes our prepared remarks. I’d like to open up the floor to questions, Karen.

Question-and-Answer Session

Operator

Thank you Mr. Barlow. At this time we will take calls from the audience. (Operator instructions) Your first question comes from the line of Marco Crosio [ph] with Jefferies. Please proceed.

Marco Crosio – Jefferies

Hi good morning guys its Marco Crosio in for Adam Walsh. How is everybody?

David Barlow

Hi, how are you doing Marko.

Marco Crosio, Jefferies & Company

Great, so we are expecting Phase 2’s amoebae results by the year end. Should we be looking for press release just with top line results or how do you expect to report that to us.

John Babich

Sure, this is John Babich Marco. Our expectations that we would have top line results in a press release, and that we will be looking to present the overall results or detailed results either at ACC or SNM in the early half of 2009

.

Marco Crosio, Jefferies & Company

Great and do you have any further thoughts on a Phase 3 pivotal trial design at this point or does that depend on what you see and report out for the Phase 2?

John Babich

Well certainly it’s going to be continued upon the results from this trial and also discussions with the agency.

Marco Crosio, Jefferies & Company

Finally a housekeeping question for Azedra, I didn’t quite catch, what was the MTD.

John Babich

8.0 mCi/kg in the adult population.

Marco Crosio, Jefferies & Company

Thanks for answering my questions.

John Babich

Pleasure.

Operator

And your next question comes from the line of Ken Trbovich with RBC Capital Markets. Please proceed.

Ken Trbovich – RBC Capital Markets

Thanks for taking the question. I guess the first one is really is for Dr. Coleman. You mentioned the distribution of the Trofex compounds perhaps outside of the tumor target. Can you give us a sense as to whether or not there are particular locations that make the diagnostic ability perhaps less beneficial with one of the candidates as opposed to the other for example in the bladder or other areas of the body that might obscure the prostate?

Edward Coleman

The distribution is a little bit different between the two agents. One of them has a little more liver activity, the other one of them has a little more Reno excursion than the other, but none of these are of the degree that I think that is going to cause any problems in interpreting the data. We are doing these patients with SPECT imaging, so we can differentiate the prostate gland from the bladder quite clearly.

There is some activity in the bladder particularly later on, but that has not compounded our interpretation of the uptake in the prostate cancer in the one patient that we have done that has non-prostate cancer. So the answer to your question is there’s no large areas of uptake in areas that should compound the interpretation of the scans.

Ken Trbovich – RBC Capital Markets

Okay and then question for the company as it relates the Trofex. I know obviously we are still in the early days on the diagnostics side, but do you envision longer terms changing out the isotope and perhaps changing this from a diagnostic to a tumor targeting therapeutic?

John Babich

Well Ken this is John Babich. Thanks for your question; it all has to do with normal tissue accumulation. We are obviously seeing some very high tumor accumulation and we need the results from this study to understand what the radiation dose would be if we did go to a therapeutic. I think what we are seeing right now though suggest that we should put some effort into to considering a program, whether it’s one of these two compounds or one of the other ones that is still on the shelf.

Ken Trbovich – RBC Capital Markets

Okay and then finally on Zemiva, I guess the question becomes for us, once the top line results come in, in terms of the interpretation is there some measure of interpretation that’s required following the analysis of the top line results regarding your decision to move forward with the confirms Solazed . Is there a particular threshold above or below which you have got, harder facts to go or no go decisions?

John Babich

I think we have to take the older data is into totality. I don’t think we can answer that right now, I think there is a situation where obviously we are going to have to look at it and assess it and feel that the product is can do or we expected to do or not and I’m not sure we can answer that, specifically at this time.

David Barlow

Ken this is Dave, Just one follow up on that. We were very encouraged by the results that we presented last September and as you recall that was based on study to which we have made further refinements in the protocol, which are being implemented now and has just completed Phase 2, so I think those parameters presented based on the study would provide good guidance relative to our decision-making to go forward.

Ken Trbovich – RBC Capital Markets

Okay, and then as it relates to the high recitations that were the sort of slow to enroll Kohort. Can you remind us again whether there are included in the total analysis and that to what extent, the analyzes of those patients determines at all, the efficiency of the product when you sort looking towards commercialization?

David Barlow

So if you recall, Ken the issue for that trial was the high risk patients that we wanted to put into the study where the difficult ones to divert into radiology for the imaging study. I think you also recall that the target market where the intermediate to lower risk patients to equivocal population for which we had no problem in fact we over enrolled that group because they were so easy to enroll. Right now the combination of all those patients will drive the results of the trial, so they are not, I’m not sure I understand your question completely.

Ken Trbovich – RBC Capital Markets

Well they are not separately analyzed, in other words you couldn’t have an outcome where you are looking at segmentation and having a failure in one a positive and in another…

David Barlow

No, of course there are all kinds of sub-analysis we can do, but the objective really is to look at that a collective group and not as up front and then any sub-analysis would be a secondary evaluation, secondary end point.

Ken Trbovich – RBC Capital Markets

Okay, all right thank you.

Operator

Your next question comes from the line of Aaron Reames with Wachovia Capital Markets. Please proceed.

Aaron Reames – Wachovia Capital Markets

Hi, thanks for taking my questions. I had just a couple of questions for Dr. Coleman. The first one just regarding the expression patterns of PSMA, it seems like from the literature that in metastatic disease you have a high up regulation and that you still have some expression of PSMA in normal prostate, so just given the limited data you have and just kind of looking out into the future, do you envision this product as best being physician to your track and follow patients to pickup metastasis and disease progression or is it something that would be used in initial diagnosis of the patient, and then I have got a follow up question after that.

Edward Coleman

Yes, very good question and we don’t have the answer to that as yet. The question still needs to be determined as how much uptake is there in normal prostate gland. So we will have to do a study looking at patients who have their prostate in the intact to see what is the normal update, so right now we would say the leading use would be in defining the reoccurrence of cancer outside the prostate gland but based on some studies there are ongoing it does seem that there is much more uptake in prostate cancer then in normal prostate gland. So we think that we are likely to be able to detect active prostate cancer in the prostate gland.

John Babich

Aaron this is John Babich. I just wanted to follow up with that question again, a good question. I think what we have to understand in that is what’s the gradient difference between a normal prostate BPH and full blown prostate cancer and that’s the study that would be much more down further down the road. The lower hanging prude here from a regulatory prospective and sort of getting this to market as fast as we can, now the clinical development really would be going after biochemical relapse in that population that have prostatectomy and now have recurring elevated PSA where its really important for the management to have patient to understand whether or not its local recurrence in the pelvis or whether or not the patient has just a metastatic spread, so while we see there is a whole spectrum here that we can go after and pursue. I think the most rapid approach from a regulatory prospective would be to go after that biochemical relabs population first.

David Barlow

And Aaron this is Dave. There are roughly 500,000 men each year who are in that particular segment.

Aaron Reames

Okay and in my follow up question, did the patients that were referred into this study, did they have androgen independent prostate cancer and they both of them were referred by a medical oncologist, so I guess that initial group had a lowing hanging fruit, would that predominantly be patients that are managed by the medical oncologist, or what would be the strategy to penetrate into the urology market? Do you see a referral to I guess scanning senders from the urologist on an ongoing basis? May be you can provide some just color and clarity around that as well.

David Barlow

Yes, I think we are going to see patients referred from both the medical oncologist and urologist. If you look at the prostisate which is now used, a high percentage of those come from the urologist. The other group that’s refers a lot of those patients are the radiation therapist. Because they are being referred to patients for therapy after surgery or after previous implant therapy and the PSA is increasing, what are they going to radiate. So I think with the market for this will be from the medical oncologist that are seen the urologic malignancies, the urologist as well as radiation oncologist.

Aaron Reames – Wachovia Capital Markets

Okay and then the last question I had, what are the limitations with prostisate, they cause to not be use as broadly as what individuals had potentially expected to be used and I guess these are molecules that you have in house, how did they overcome those limitations?

David Barlow

Well I’ll say something and then Dr. Babich will probably want to make comments too, but prostisate is an antibody and this is a very large molecule and it takes a long time for it fuse into the tumor, so that’s one limitation. Second limitation is that the antibody reacts to an intercellular component of the PSMA was the small molecule reacts with an extra-cellular component, our third advantage is the advantages of I-123 as an imaging radio nuclide over indium -111 both from the imaging properties and the radiation dosimetry properties. So there is several significant reasons that this small molecule Trofex has over the protestant, John do you know.

John Babich

Yes, well it’s a great start, If we are looking at these from a targeting prospective, basically really defined I think limitations of process in terms of having a large molecule going after a solid tumor and the target being intracellular. That’s not a good combination of issues there in terms of getting good targeting. Immunoglobins also circulate for a very long period of time and the protocols were usually days long and I don’t know , I thin it’s a four day protocol that you use it. Somebody would have to come in on Monday to be injected, probably comeback Thursday or Friday for a follow up scanning and even at that point it’s still a significant amount of persistence in the blood tool and other structures.

What we are seeing right now with Trofex and we have done four patients, Ed’s don’t two and Dr. Goldsmith at New York hospital has done two as well. What we are seeing is within 30 minutes we can actually see the tumor starting to visualized and certainly by four or six hour it’s extremely clear and is persistent over 24 hours and beyond that. So, we can actually look at this as a fairly rapid way of imaging, not inconsistent, let say bone skin setup where someone comes in the morning will be injected and then after lunch would come back for their scan and if there is any questions they could always come back after a following time after that.

So we see this is as having very high target to background. These molecules cleared extremely quickly, but it is also accumulating on the tumor extremely quickly. It’s picking up bone legions as well which I believe prostisate does not pick up and so we are seeing that not only the application that we can pick up soft tissue which prostisate has indicated for, but then we’ve actually had very good correlation with bone scans as well. So we are picking up disease in the bone we are picking up disease in soft tissues prostisate cannot do that. We are doing this in a single day prostisate cannot be that and our expectation is that this will have greater performance.

Aaron Reames – Wachovia Capital Markets

Okay and just the last follow up question, I promise. So in terms did you just, to clarify in terms of PSMA the sub-regulated in the plasma membrane, did you say the process doesn’t bind well to that, but the small molecule does?

John Babich

prostisate binds to the internal domain, so if you think about this as a plant growing of the surface of the spear and there is a root, the root inside a spear and have to get out of it, and obviously the thinking is that when prostate cancer cells die and they break open then the antigen is available for prostisate into bind to it. Whereas we can go after small and viable tumor sights because we are binding to the external portion which is on the surface of the cell.

Aaron Reames – Wachovia Capital Markets

Okay, perfect thanks for taking my questions.

John Babich

Always a pleasure.

Operator

(Operator instructions) And your next question comes from the line of Debjit Chattopadhyay from Boenning & Scattergood. Please proceed.

Debjit Chattopadhyay – Boenning & Scattergood

Good morning ladies and gentleman thank you for taking my question. Could you remind us the follow up time for the patients who are in the Zemiva trial?

David Barlow

Well the protocol was that we are doing a 30 day follow up post-discharge.

Debjit Chattopadhyay – Boenning & Scattergood

So potentially we could have the data sometime in the October, November time frame, as opposed to previous expectations of December?

David Barlow

Yes I would expect that we would have the data towards the end of the four quarter.

Debjit Chattopadhyay – Boenning & Scattergood

And in Zemiva PCC trial, could you define what do you mean by the Pivotal Phase 2 trial, I mean would this be enough for our registration finding or do you think you need to another Phase 3 or something on this one?

David Barlow

Are you referring to the pheochromocytoma patient.

Debjit Chattopadhyay – Boenning & Scattergood

Yes.

David Barlow

We are in discussions with the agency about the design of the pivotal trial and currently we don’t have the answer to your question, but it’s an ongoing discussion.

Debjit Chattopadhyay – Boenning & Scattergood

And interims of the Trofex, do you think there is going to be baseline theistic requirement in terms of biochemical recurrences about 20 mammograms right now. Do you think that’s kind of a cutoff you are looking where you can start detecting with by imaging or you could go lower?

David Barlow

I am sure we will be able to go much lower than that, that’s the cutoff that we use for bone scans for having boning metastatic disease, but insert to acting soft tissue disease or saying maybe the recurrent disease in the prostate I confident if will be lower than that, but what it will be I don’t think we know. I know that with our prostisate we are seen patients with levels less than one, we don’t detecting disease in those patients but certainly that’s of concern even at that level, and we will just have to do studies to see at what level of PSA were sanctity, but I am confident it will be much less than 20.

Debjit Chattopadhyay – Boenning & Scattergood

And in terms of taking the Trofex product forward, what kind of a competitive would you be looking at for the next trial if it’s around a nice trial?

John Babich

Debjit, this is John, it’s a good question. I think our initial, well those plans are into completely set in stolen, our initial plan would be to go against process and with plus bone scan we probably have to have on involve with that also, with CT confirmation of bone regions and CT confirmation of the processing that I think now. Process revolving down with SPEK, CT. The question of biopsies is still up in the air.

Debjit Chattopadhyay – Boenning & Scattergood

So thinking this a little forward, if you think of reimbursement issues, if you can do one scan and avoid CT scans and process in terms of bone scans, what kind of reimbursement levels would you clam. I mean would you go for a miscellaneous score or would you go for a completely new code of this?

John McCray

Debjit, this is John McCray and what we prefer to compare to this with current office based reimbursement by CMS which is over $4500. So given that if that’s the current reimbursement and that there is a direct pass through drug cost in the office, we feel very comfortable.

Debjit Chattopadhyay – Boenning & Scattergood

Thank you, thank you for taking my questions thanks.

John McCray

Thank you.

Operator

There are no more questions at this time. I would now turn the call back to Mr. Barlow, Sir?

David Barlow

Thank you, Karen. Once again thank you all for joining us on this call. We appreciate your time and interest in our compelling mission and wish you a great day.

Operator

This concludes the call today thank you.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. U.S.ERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: [e-mail]. Thank you!