Cell Genesys, Inc. Q2 2008 Earnings Call Transcript

Cell Genesys, Inc. (CEGE)

Q2 2008 Earnings Call Transcript

August 1, 2008 4:30 pm ET

Executives

Susan Ferris – IR

Stephen Sherwin – Chairman & CEO

Sharon Tetlow – SVP & CFO

Analysts

Joseph Pantginis – Canaccord Adams

Mark Monane – Needham

Pamela Bassett – Cantor Fitzgerald

Ren Benjamin – Rodman & Renshaw

Presentation

Operator

Ladies and gentlemen, and welcome to the Cell Genesys second quarter 2008 conference call. (Operator instructions) As a reminder, today's conference is being recorded.

And with that being said, I'd now like to introduce your opening speaker for today, Susan Ferris of Investor Relations. Please go ahead.

Susan Ferris

Thank you. Good afternoon, and welcome to today's call. I'm Susan Ferris, and with me today are Dr. Steve Sherwin, Chairman and Chief Executive Officer, and Sharon Tetlow, Senior Vice President and Chief Financial Officer.

Before we begin, I'd like to remind you that during today's call, we may make forward-looking statements about the Company's future expectations and plans, including milestones and financial projections for 2008. Such statements are subject to risks and uncertainties that could cause results to differ materially from those projected. We encourage you to consult our SEC filings regarding the risk factors that may affect Cell Genesys.

I'll now turn the call over to Dr. Sherwin.

Stephen Sherwin

Good afternoon, everybody, and thank you for joining our second quarter 2008 call, particularly on a Friday afternoon in August. We appreciate it. As usual, Sharon and I will begin the call with about 15 minutes of comments, and then we'll be happy to answer your questions.

During the comments, we'll review today's report of our second quarter financial results, as well as some recent developments in the business; and I'd also like to use the occasion of this call, as we typically do with the second quarter call, to review with you our year-to-date progress and remind you of our key milestones for the rest of this year and into 2009.

So now let me turn things over to Sharon and ask her to recap today's financial report for the second quarter.

Sharon Tetlow

Terrific. Thank you, Steve. As reported today, we ended this quarter with approximately $166 million in cash. During the quarter, we had two significant inflows of cash. We received in April the $50 million signing payment from Takeda Pharmaceutical in conjunction with our worldwide collaboration with Takeda for the development and commercialization of GVAX for prostate cancer. And in May, we executed on a $30 million financing with a single institutional investor.

In addition to the closing cash balance of $166 million, we have invoiced and have booked a receivable from our partner Takeda for development support of an additional $11 million, which we expect to receive in good funds from them this month. Actual spending – before taking into account the payments to us from Takeda – for the quarter was $29 million and for the six months, first six months of this year was $62 million, right on schedule, as expected.

And for the full year, taking into account the Takeda cash receipts, we expect the net cash spending to be between $35 million and $40 million. With the financing of $30 million, which I just mentioned, we have already covered much of that.

Back to you, Steve.

Stephen Sherwin

Okay, well thank you, Sharon. What I want to say at the outset is that I think that the first half of this year has been a very, very positive period of time for the company, particularly with respect to the progress in our ongoing Phase III development program for our lead product, GVAX immunotherapy for prostate cancer, as well as of course with the signing of our new collaboration with Takeda Pharmaceuticals for the further development and commercialization of the product.

So now, let me highlight some of that progress for you. As you're all well aware, over the last four years, the Company has been conducting two large multi-national Phase III trials for GVAX prostate, the VITAL-1 and VITAL-2 studies, both of which are being conducted in patients with advanced prostate cancer who have metastatic hormone refractory disease. The VITAL-1 study, as you're also probably aware, compares GVAX prostate to Taxotere chemotherapy in asymptomatic patients. It has the primary end point of improvement in survival, and it completed enrollment with 626 patients last year.

I can confirm today that we continue to believe that we will have sufficient events to trigger the final analysis of this study in the second half of 2009. So of course, between now and then, we're doing all the things that one typically needs to do to ensure that the data is in good order for this analysis, and we're on track with all of those efforts.

The VITAL-2 study is complimentary. This study, to remind you, compares GVAX prostate plus Taxotere to Taxotere alone. It also has the primary end point of improvement in survival. This study started little over a year after VITAL-1, so it's continuing to enroll patients. We're now open at about 110 sites in North America and Europe, and all of the European sites are in EU member nations.

I'm happy to confirm today that the enrollment for VITAL-2 is also very much on track, and again, we continue to believe that we will complete enrollment of this trial with approximately 600 patients in the first half of next year, by which time we also expect to have sufficient events to trigger the pre-planned interim analysis in the VITAL-2 study.

It's also important to point out that in the background of conducting these two large multinational Phase III trials, is the ongoing performance of the company's manufacturing capabilities. Obviously, that is what is necessary to supply product for the participants in the trial. It involves thousands of shipments of product across North America and Europe.

All the manufacturing, to remind you, is being carried out in the company's commercial scale facility in Hayward, and by all of the performance metrics that are meaningful, things are going very well there. So we're a company, again, that has been producing its Phase III product from the very beginning of Phase III in the commercial launch facility.

The other thing to comment on in terms of general recent progress relates to our new collaboration with Takeda Pharmaceutical, and what I want to say about that is, I couldn't be happier about how the relationship is developing between ourselves and Takeda. This is true of multiple points of contact involving a variety of development and pre-commercial activities.

So aside from the obvious financial benefit to Cell Genesys, what we had hoped for was strategic benefit in working with a company committed to global oncology, which Takeda clearly is, with experience that's credible in the prostate cancer area, which they clearly have, and with a commitment to the prioritization of this product. By all of those measures, we couldn't be happier, and I wanted to make sure you heard that message loud and clear today.

Now, besides the effort in Phase III development and building the new relationship with Takeda, the other recent news that I wanted to summarize for you in my comments relates to the further analysis of our Phase II experiences with the product. And in this regard, I specifically want to highlight several recent reports that we had at this year's AACR and ASCO meetings.

And the bottom line for me individually – and I think for the rest of the management team is that as we continue to get mature data from these Phase II trials in our target population, as well as relevant supported data from Phase II trials in other stages of prostate cancer, the story is one that is building with respect to encouraging findings over time. There have been no disappointments and no set backs in our view, and the consistency, as I'll comment shortly of the findings across this Phase II database, give us all the more encouragement with respect to the prospects for our Phase III trial.

Just to go over some of this more specifically, most recently, we had announced the publication of the Phase II – the second of the Phase II trials that we conducted in metastatic hormone refractory disease. This was published in the July issue of Cancer.

If you look at the two studies that the company has carried out in metastatic hormone refractory prostate cancer – again, this is the target population for the Phase III trial. You can see consistent findings with respect to median survival, particularly for the patients who receive doses comparable to the one we're evaluating in Phase III.

The specific numbers, to remind you, were median survival for those patients of 34.9 months and 35.0 months, and these compare favorably to the published results for Taxotere – in the asymptomatic metastatic hormone refractory prostate cancer group, Taxotere results in 21 months to 22 months of median survival.

Now, in addition to these clinical findings, we've also recently reported at the AACR meeting of April of this year the initial findings in the analysis of the immune response in patients with this stage of prostate cancer that are receiving GVAX prostate. And what we've reported at that occasion and have otherwise confirmed in other presentations is that these patients produce a broad immune response, as measured by antibody formation that varies from patient to patient.

So as predicted, it is patient-specific; and we're now in the position to analyze some of these individual antibody responses to see which antigens on the multi-antigens GVAX prostate product are producing antibody responses that may correlate with clinical outcome. And indeed, without going into the details today, we are finding antibodies that are associated in a statistically significant manner with better outcome in terms of survival. Other antibodies are not indicating the specificity of the observation, and we're quite encouraged by this and obviously, now feel we're developing the molecular probes to do similar analyses in the future with a much larger sample size that we'll have available to us from the Phase III program.

Now, in addition to these two studies in advanced prostate cancer, I want to remind you that the company has also carried out two studies in early stage prostate cancer, specifically, men who have hormone sensitive disease – this means that they have biochemical recurrence of prostate cancer after surgery or radiation therapy as measured by a rising PSA.

Also, at the recent AACR meeting, we reported for the first time the results of the second of these two trials, and what we saw in this study was favorable changes in PSA based both on the prolongation of PSA doubling time and improvements in PSA velocity, which was consistent with the results in the first study in this population.

We've also done immune response analyses for the patients in these two studies in earlier stage prostate cancer, and again, we're beginning to identify specific immune responses that correlate with better outcome, in this case, as measured by PSA.

So the summary that I would leave you with of these four different Phase II trials – two in early and two in late stage disease is that there's a very compelling story of consistency across these independent multi-center trial.

First, with respect to the survival observations in the two trials in late disease, and then with respect to the PSA measurements for the two trials in early disease, and across all four studies with respect to the analyses of the immune response. It's a story, as I said, that just adds to our conviction about the prospects for the Phase III trials that we're conducting.

Two other quick updates from the quarter to remind you of is that we also updated at this year's ASCO meeting, the ongoing study of GVAX prostate plus ipilimumab. This is the CTLA-4 antibody that Bristol Myers and Medarex have been jointly developing. Previously, we'd reported the results of the first 12 patients in the study in an escalation phase. The report at ASCO was the next 16 patients in an expansion phase, and what we confirmed there was both PSA and bone scan stability in these patients indicating activity for the combination with a generally acceptable safety profile consistent with the previous reports for ipilimumab.

Where we are with this program, as we indicated at the time of ASCO, is reviewing these findings with Bristol Myers and Medarex, and also with our new partner Takeda in order to determine next steps. I don't have any further update for you at this particular moment.

Finally, we also had a report on the CG0070 study. This is the lead oncolytic virus therapy program, a product which is being developed in collaboration with Novartis for, at this point, recurrent bladder cancer. At the recent AUA meeting, the American Urologic Association meeting in May, we reported for the first time the multiple dose Phase I data, which showed that 10 patients of 16 patients had complete responses at follow-up cystoscopy, indicating clinical benefit – and again, with a generally tolerable safety profile. So here, as you would expect, it's necessary to review these findings with Novartis and determine where we go from here. So those are the recent highlights from the Phase III program and the Phase II reports at recent meetings.

Let me turn now to recap the company's milestones. For the rest of this year, you should anticipate further news flow from the earlier stage trials, the Phase II trials of GVAX prostate, as well as some of our pipeline products, and as we get to specific presentations, we'll let you know. But of course, 2009 is the year in which the Phase III program for GVAX prostate will have the visibility that we've all been waiting for – to remind you, in the first half of the year, we expect to complete enrollment for VITAL-2 and have enough events to trigger the interim for that trial; and in the second half, expect to have enough events to trigger the final analysis for VITAL-1. And as I said earlier, we're on track for all of these important goals.

Now, as we as a company look forward to 2009, we do so with increasing conviction about our prospects for success. And of course, no one in my position can ever promise a positive outcome in a Phase III trial. You all know that, but I do want you to hear the conviction in my voice, and I know I speak for the management team.

We think we've targeted the right cancer. It's a slow growing malignancy. We have a chance for an immune therapy to have effect. Previous studies of some immunotherapy products have overlooked this important point. And we absolutely believe we have designed and have been executing the right clinical trials – two large multinational trials with the pre-specified primary end point of improvement in survival. Survival, we continue to believe, is the most relevant measure of effect for immunotherapy products. So it's been a long journey. It will be a five-year journey by the time we get to next year; but as we like to say around the company, the light at the end of the tunnel grows larger every day.

So it's been a good half of 2008, and we look forward to the challenges in front of Cell Genesys with a lot of enthusiasm. We feel good about our progress in the Phase III program and we feel, as I said, that we're off to a very good start with our partner Takeda for this product. The mood at the company is positive, even in a tough environment for small biotech companies.

Our financial resources, I think, speak for themselves and we look forward, Sharon and I, to giving you progress reports at some conferences coming up, which Susan will review with you now, and then after that we will be pleased to answer your questions. So Susan, if you could just recap for the audience some of the comments.

Susan Ferris

This month, we'll be presenting at the Canaccord Adams 28th Annual Global Growth conference being held in Boston, August 12-14. And then in September, we'll be presenting at the UBS Global Life Sciences Conference in New York, September 22-25. These presentations will be made available via webcast on the Investor section of the Cell Genesys corporate web site, www.cellgenesys.com.

And now Operator, we would like to open up the call for questions.

Question-and-Answer Session

Operator

(Operator instructions). Our first question then today is from the line of Joe Pantginis with Canaccord Adams. Please go ahead.

Joseph Pantginis – Canaccord Adams

Hi, guys, good afternoon.

Stephen Sherwin

Hi.

Joseph Pantginis – Canaccord Adams

Steve, a couple of – two-pronged question about your immunological data. You obviously came out with some very good data, which you discussed. You had two antibodies that showed very good correlation with survival and two antibodies that didn't show correlations supporting the multi-antigen approach. When do you think we might get an update with regard to identifying further antigens? And then the second question is regarding these immune type data, are you currently looking at Phase III patients' blood samples on a blinded basis, or how would you apply that to Phase III and potential commercialization? Thanks a lot.

Stephen Sherwin

Let me take those questions in turn. The analyses of the Phase II studies that I referred to are indeed ongoing. Additional data is being generated and we're quite pleased with how this story is unfolding, and it is possible that you will hear more about this even before the end of the year.

With respect to your second question, of course the analyses of the Phase III specimens have to be done in a strictly blinded manner, and of course, given the size of these studies and the number of time points, that will occur in parallel with the completion of the studies and what we hope to be doing in the future with respect to a preparation for BLA. And the reason for that is that first benefit from these data has to do with an important component of the BLA, which of course, are studies relating to the products proposed mechanism of action, and it's our view that these data, these immune response data, speak very strongly to our understanding of how this product works. After all, the hypothesis is to stimulate the immune system with GVAX prostate in such a way as to result in clinical benefit to the patient. So if we can show that there are subset of antibody responses that correlate with better outcome in the Phase III trials, we'll have a strong argument in our favor there.

You also alluded that – just the final comment to, are these biomarkers? And in the first sense, we would hope that they would be biomarkers that the clinicians in the future could use in treatment decision-making for GVAX prostate patients. If we can provide a panel of antibodies that indicate a better outcome is in store for the patient, then perhaps these could be used as correlative diagnostic tests during treatment. So that is a longer term goal, absolutely, and I think it's particularly relevant in immunotherapy products where there maybe subsets of patients, which we're not smart enough to identify now, but perhaps in the future, that could be particularly benefited by this treatment.

Joseph Pantginis – Canaccord Adams

Great. Thanks a lot.

Stephen Sherwin

Most welcome.

Operator

And our next question then comes from the line of Mark Monane with Needham. Please go ahead.

Mark Monane – Needham

Hi, good afternoon, and greetings from New York City.

Sharon Tetlow

Hi, Mark.

Mark Monane – Needham

Let's first talk about antibodies, because you've nicely gone over that with us. Did you see antibodies to the PC3 and the LNCaP antigens, and the question is should we be expected to see this because my familiarity with the vaccine was closely related to the T-cell side. Maybe the antibody side comes as a secondary phenomenon after you get some sort of apoptosis of cells and releases of antigens. Can you discuss that for us, please?

Stephen Sherwin

Sure. Well, with respect to your first question, do we see immune responses against both cell lines? The answer is absolutely yes, and that speaks to why we have gone to the extra trouble of having two cell lines, which as you're probably remembering, are manufactured and vialed separately, and injected separately, so why do that? And these data certainly support the importance of having both cell lines. And it makes sense to us because they're very different in terms – very much complimentary in terms of their origin and in terms of certain antigens that one has versus the other. So it broadens the multi-antigen nature of the GVAX prostate product. Now your second question which we're sometimes asked is why are you focusing on antibodies? Aren't T-cell responses more important for tumor elimination?.

Mark Monane – Needham

Yes.

Stephen Sherwin

And let me say two things about that. First, the mechanism of how you get to an antibody response in a setting like this, which I think get to your question; and second the advantages of using the high throughput assays that we can conduct with antibody measurements as opposed to T-cell. So on the first point, remember that GVAX products when they're injected into the skin, which is the routine site of administration, first act upon the local dendritic cells in the skin, and those are of course antigen presenting cells. As the GVAX product cells die, tumor antigens are ingested and then presented by the dendritic cells to T-cells that are trapped in the area, so you get T-cell activation through that mechanism. These T-cells then traffic to local lymph nodes and go from there throughout the body and hopefully, kill the patients' tumor; and you may then get additional cycles of the antigen presentation and T-cell activation. But that's where the T-cell activation is occurring in this chain of events. And then of course, some of the T-cells secondarily activate B-cells and you get antibody formation, so there is no doubt based on multiple pre-clinical and clinical studies that GVAX activates both T-cells and B-cells. You get the full range of a broad immune response, which we think is one of the strengths of the product. We're not trying to over emphasize one or the other limb of the immune system. This is not only something that we have studied on an antigen-specific basis for B-cells, but in various studies along the way, T-cell repertoires showing activated T-cells against certain components of GVAX products have also been identified, described, characterized and published in the scientific literature, so there's a lot of data that's out there to back up everything I've just said.

Now, why have we been focusing on these B-cell assays in the analysis of the specifics of the immune response? And the answer is that it's simply easier to do high throughput assays – by which I mean lots of assays from lots of patient specimens against lots of antigens. It's much easier to do that with the B-cell response, and what we wanted to do here, we know we start with a multi-antigen product, as you all understand, and we did not want to go and look for certain pre-defined antigens that maybe have been in the literature.

We wanted to just ask an open-ended question using Cerex and ProteoMix methodology as to exactly what these patients were responding to, and we've seen several hundred different antigen responses by measuring the antibodies, and then we can go back and again, ecumenically, associate certain of the responses with clinical outcome, as I described. That is only possible with B-cell assays. Even the most devoted T-cell immunologist would find that to be a daunting task to go back and look at multiple time points from what will amount to over a thousand specimens in our Phase III trials against potentially a panel of antigens. So hopefully that practical aspect is helpful.

Mark Monane – Needham

Very thorough response. And then in follow-up, in medicine and in life, we tend to look where we can find things. And so clearly, you've demonstrated an antibody response in the blood, but the question is, do we know what's happening in the tumor macro environment? There's been some recent interest in Tregs. Is it possible that the active immunotherapy may be limited by the local environment, even though the serum may show a brisk response?

Stephen Sherwin

Well, the answer is of course, first in pre-clinical studies we absolutely have looked not just in the injection site, not just in the draining lymph node, but also in the tumor site. And there's no question about the activation of the immune system in these sites by multiple assay methodology. Now when you turn to humans, to state the obvious, you have some limitations in terms of how much invasive biopsying procedure you're going to subject the patients to, particularly with a tumor like prostate cancer, where tumor sites are much less accessible being, for example, in bone or deeper lymph nodes in the pelvis and retroperitoneal, so it's not so easy to do those experiments, but we have in – particularly in melanoma – in the past looked at evidence of activation in these multiple sites and found it. We've also been able to assess the vaccination site for evidence of specific immune cells that are being activated. It's not the tumor site, but it is within the patient being treated and confirms all of the above as well. But there are going to be some practical limitations to addressing that question experimentally in certain types of cancer.

Mark Monane – Needham

Fair enough. And we would be remiss if we didn't ask Sharon a question.

Unidentified Analyst

Hi, Sharon, thanks for taking my question. Do you have any information on how the Takeda reimbursements will be booked through your balance sheet – your income statement – and you'll get the money and then you'll amortize it? For example, do you get – do you charge it in one quarter and it takes a few quarters to get back, and is the same true with your milestone? It will be amortized over a year or two.

Sharon Tetlow

So the up front payment of $50 million, which we have received – it is not – it is irrevocable, it's ours forever – will be recognized over a period of time and we recognize $4.5 million of it in this quarter, and so it sits on the balance sheet as both current and non-current portions of deferred revenue, and then we recognize it through the P&L over time. The development support payments we recognize when we invoice, but of course, we receive payment shortly after we send the invoice, and invoicing is quarterly. And the milestones, which are generally development – probably related to regulatory achievements – will be recognized – probably most of the milestone payments will be recognized at the time – at the moment in time when we earn them, and probably not recognized over time. Is that helpful?

Unidentified Analyst

Yes, thank you very much for taking my question.

Mark Monane – Needham

And thanks for the added information.

Sharon Tetlow

You're very welcome.

Operator

(Operator instructions) Our next question then is from the line of Pamela Bassett with Cantor Fitzgerald. Please go ahead.

Pamela Bassett – Cantor Fitzgerald

Hi, thanks for taking my call. I wonder, Steve, if you could talk about potential commercialization plans for the biomarkers as a diagnostic, and what development path you might take for these diagnostics along with a possible timeline, even if it's long term?

Stephen Sherwin

Sure. Well, how are you, Pamela?

Pamela Bassett – Cantor Fitzgerald

Hi, I'm fine, thanks. How are you?

Stephen Sherwin

Good, thank you. This is a speculative answer, just to be fair, since I wouldn't want to say today that we have definitively identified the kinds of biomarkers that could be useful clinically; but we're pretty excited about those prospects. Now, how would you go about commercializing them? I think you can think about some of the tools that have been developed in recent years for other cancer therapy and imagine that we would take a similar approach. So looking at HER-2 new positivity and making judgments about the use of herceptin, looking at the KRAS Wild-Type versus mutation findings in patients with colorectal cancer and making judgments about cetuximab or panitumumab, those are the kinds of things that – not to say they're the same kinds of assays – but the kinds of timelines and adaptation timelines commercially that we would be thinking about as we go forward here. One thing that I think is an advantage for us in commercialization is that we're talking about antibody assays, which obviously are much more routine in clinical laboratories than some of the assays for the markers I just mentioned. So the methodologies are simpler and I think more likely adaptable in your average clinical laboratory. So I didn't give you anything specific because it's kind of early to be doing that, but that's the thinking at this point.

Pamela Bassett – Cantor Fitzgerald

And so this is something that Cell Genesys could develop on its own and either choose to do a technology transfer to a number of leading cleo [ph] labs in the country that could run these tests and become diagnostic centers for the tests as opposed to say, Cell Genesys actually creating its own cleo lab and pursuing a diagnostic.

Stephen Sherwin

I think you should assume that we would try to approach this collaboratively, both in terms of whatever further development work and commercialization, and it could be through the cleo pathway or, because this could be something as straightforward as a panel of antibody assays, that perhaps even a diagnostic company experienced in this assay area, which is obviously well beyond the expertise of a company like ours, so I think that absolutely would be a path that we would pursue collaboratively.

Pamela Bassett – Cantor Fitzgerald

And my impression is that you guys are pretty far along, that by the time you do filings – by the time you file a BLA, there's the possibility that there could be a companion diagnostic panel of some sort.

Stephen Sherwin

I mean, all I can really say today is the goal is to pursue this in as timely a way as possible, so that the gap between the introduction of this product and the availability of any assay that's useful in terms of treatment management would be small, so that's – and we have a good head start on it with the Phase II studies, and we're, as I said earlier, obviously going to be including information in this area and hope for BLA filing, so I think we're doing what we need to do to be as efficient as possible in the commercial stage and (inaudible) stage.

Pamela Bassett – Cantor Fitzgerald

Okay, great. Thank you. And I do have a question for Sharon about – Sharon, if you could recap the cash spending again for the year?

Sharon Tetlow

We're reconfirming the guidance that we gave at our last call that the spending, taking into account and including the cash receipts from Takeda, will be between $35 million and $40 million this year. I'll also mention that we did do a small financing that I mentioned earlier in the call which raised $30 million, and that covers a good chunk of that $35 million to $40 million.

Pamela Bassett – Cantor Fitzgerald

Okay, great. Thank you very much.

Sharon Tetlow

You bet.

Stephen Sherwin

You're welcome.

Operator

And thank you. Our next question then comes from the line of Ren Benjamin with Rodman. Please go ahead.

Sharon Tetlow

Hi, Ren.

Ren Benjamin – Rodman & Renshaw

Hi, good afternoon and thanks for taking the questions.

Stephen Sherwin

Hi, Ren.

Sharon Tetlow

You bet.

Ren Benjamin – Rodman & Renshaw

Hi. A couple of questions. There have been, I guess, a couple of failures in the cancer vaccine space, and a lot of discussions surrounding the use of adjuvants in the control arm and in particular, GMCSF. And so I wanted to get your thoughts on what you think about that and the data that we've seen so far about using GMCSF by itself and wanted to also confirm with you that GMCSF is not used in the control arms in either VITAL-1 and VITAL-2?

Stephen Sherwin

Sure. With respect to the last thing you asked about, let me quickly confirm that the control arm is the standard regimen for Taxotere chemotherapy, that's Taxotere plus Prednisone, so it's the label use of the product as you would expect in comparing any new treatment to the standard of care. That's how we design the studies. That's true for both VITAL-1 and VITAL-2 so there's no issue whatsoever in that respect.

We believe that GMCSF, coming to the first part of your question, does have a certain finite amount of activity in the treatment of a number of different cancers. It was studied when the protein first became available as a recombinant protein in prostate cancer and it may have a low level of activity, but I remind you it's been around for 20 years. It was only approved for hematologic malignancies, certain types, and it's never found a role by itself in the treatment of metastatic hormone refractory prostate cancer, so its level of activity is not adequate to stand alone as a single agent. In a sense, GVAX prostate incorporates GMCSF as an active ingredient. It's in the central part of our product and we use it as an adjuvant, but we believe that its greatest activity as an adjuvant is in the local macro environment of the antigen presentation process, which is why we've gone to the trouble of modifying the prostate cells that comprise the product to release GMCSF, as you're very aware. So it is active, but not by itself to a sufficient degree, at least in prostate cancer. It may be a different situation in certain hematologic malignancies. But it's acting primarily as a non-specific adjuvant that activates dendritic cells, and what you need are the antigens that the GVAX cells themselves supply. So that's our view of that.

Now we have quite a bit of experimental work showing that – and this has been presented and published so we can certainly get that to you, Ren. It shows in pre-clinical models how far you get with the cells alone, how far you get or don't get with GMCSF alone, how far you get or don't get when you add mix the two, and how much better than all of the above the local secretion by GVAX cells is. So that's been addressed very rigorously experimentally to back up all what I said. I guess I know why you're asking that relative to some recent Phase III reports, but I don't think it's at all relevant to the GVAX prostate program.

Ren Benjamin – Rodman & Renshaw

Yes, and I just wanted to confirm that in fact the control arms were the standard of care and nothing confusing or GMCSF was not being added to that.

Stephen Sherwin

Absolutely, absolutely.

Ren Benjamin – Rodman & Renshaw

And one other question. When will the next set of DSMB meetings be? I know that there's not another interim analysis, at least for VITAL-1, but I'm sure there are more safety analyses coming up. Can you give us a timeline as to when those meetings are?

Stephen Sherwin

Sure. I want to stay consistent with our past disclosure practices , so I'm going to give you a general answer to that question. We took the view here – which I know is not the same at some other companies – that there wasn't much benefit to the investment community of giving – sending out press releases every time – what we call it as IDMC, Independent Data Monitoring Committee – every time they met and did a safety review on one of these trials. And so we haven't put out those periodic announcements. Going forward, we intend to maintain that practice, and we did put out an announcement after the VITAL-1 interim – we'll do that after the VITAL-2 interim and of course after the final analysis. However, having said all of that, the IDMCs – we have one IDMC for both studies, which makes sense so they can look across the broader databases of the two trials. They have been meeting routinely since the inception of both studies. They can request any amount of safety data that they like from time-to-time, and all of those regularly occurring safety reviews have all gone fine with the statement back to us to continue the trial. So nothing to report there, all in good order. And that will continue between now and the conclusion of the trials. All this is very, very typical for IDMC activity. We just are not going to issue every so often reports – and I know some other companies have chosen to do that, but we didn't think it was necessary.

Ren Benjamin – Rodman & Renshaw

Great. Thank you very much.

Stephen Sherwin

You're most welcome.

Operator

And thank you. At this time, then, I'd like to turn the conference back over to Dr. Sherwin for any closing remarks.

Stephen Sherwin

Well, let me thank you all again for staying a little late on a Friday afternoon in August. We do appreciate that and your understanding of our schedule. And in closing, what I wanted to say was again, we feel very good about the first half of 2008 in terms of progress with GVAX prostate, the beginning of what we think will be a great relationship with our partner Takeda, and certainly doing everything we need to maintain our balance sheet strength in this tough environment. We look forward to the challenges in front of Cell Genesys going forward with great conviction and enthusiasm, and look forward to keeping you posted on our progress at the conference presentations and in our periodic quarterly calls. So thanks again to everybody, and we'll see you soon. Bye-bye.

Sharon Tetlow

Bye-bye.

Operator

And ladies and gentlemen, today's conference call has been recorded and being made available for replay starting today, August 1st, at 7:00 p.m. Eastern Time zone, and running through Monday, that's August 4th, at 11:59 p.m. You can access our service by dialing 1-800-475-6701 in the U.S., or outside the U.S. at 320-365-3844. Those numbers again, 1-800-475-6701, and 320-365-3844. And either number enter the access code at the voice prompt of 923731. That access code is 923731. And that does conclude our conference for today. Thank you for your participation. You may now disconnect.

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