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Medivation, Inc. (NASDAQ:MDVN)

Q2 2008 Earnings Call Transcript

August 11, 2008 4:30 pm ET

Executives

Darryl Messinger – IR, WeissComm Partners

David Hung – President and CEO

Patrick Machado – SVP and CFO

Lynn Seely – Chief Medical Officer

Analysts

Kim Lee – Pacific Growth

Michael Yee – RBC Capital Markets

Andrew Vaino – Roth Capital

Bill Tanner – Leerink Swann

Raymond Myers – Emerging Growth Equities

Nazlene Rocky [ph] – Rodman & Renshaw

Han Li – Stanford Group Company

Operator

Good day everyone and thank you for joining the Medivation second quarter 2008 financial results and business update conference call. Today’s conference is being recorded. Now for opening remarks and introduction, I would now like to turn the conference over to our host, Ms. Darryl Messinger. Please go ahead ma’am.

Darryl Messinger

Thank you and welcome to Medivation’s second quarter 2008 financial results conference call. On the call from Medivation are Dr. David Hung, President and CEO; Patrick Machado, Chief Financial Officer; Dr. Lynn Seely, Chief Medical Officer; and Rohan Palekar, Chief Commercial Officer.

We issued a press release earlier today, a copy of which can be found at our website in the news section. Before we begin, I would like to remind you that various remarks that we make on the call, including those about our product clinical development programs, milestones, future financial plans and prospects, growth opportunities, and competitive positions constitute forward-looking statements for the purposes of the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995.

Any statements contained in this conference call that are not statements of historical facts maybe deemed to be forward-looking statements. Forward-looking statements involve risks and uncertainties that could cause Medivation’s actual results to differ significantly from those projected including without limitation risks related to progress, timing, and results of Medivation's clinical trials, difficulties or delays in obtaining regulatory approval, enrollment of patients in Medivation's clinical trials, partnering of Medivation's product candidates, manufacturing of Medivation's product candidates, competition with Medivation's product candidates should they receive marketing approval, the adequacy of Medivation's financial resources, unanticipated expenditures or liabilities, intellectual property matters, and other risks detailed in Medivation's filings with the Securities and Exchange Commission, including its quarterly report on Form 10-Q filed today with the SEC. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this call. Medivation disclaims any obligation or undertaking to update or revise any forward-looking statements contained in this conference call.

With that I will turn the call over to Dr. David Hung, President and CEO of Medivation.

David Hung

Thank you to all joining us on the call today. We’re pleased to share with you our recent clinical and corporate progress and significant accomplishments.

During the second quarter we made significant progress with our product candidates, Dimebon and MDV3100.

I will focus on the recent milestones outlined in our press release issued today. Pat will then provide an overview of our second quarter 2008 financials and I will conclude with a summary of important upcoming milestones for the company.

For those of who maybe new the Medivation, Dimebon is our lead investigational drug candidate for neurodegenerative diseases. Dimebon is an orally available small molecule that targets neurodegenerative diseases differently than currently available therapies. An important of Alzheimer's disease patient brains is the loss of brain cells and brain cell connections. Mitochondria generate energy for cells and play important roles in brain cell function and survival. Mitochondrial dysfunction has been linked in the published literature to both Alzheimer's and Huntington's diseases. We believe that Dimebon has a novel mitochondrial mechanism of action that makes it a promising potential treatment for diseases such as Alzheimer's and Huntington's and potentially other neurodegenerative diseases as well.

In a podium presentation at the ICAD 2008 meeting in Chicago at the end of July we presented new preclinical data on Dimebon’s mechanism of action that showed that Dimebon improves mitochondrial function in the setting of cellular stress with very high potency. For example, Dimebon treatment improved mitochondrial function and increased the number of surviving cells after treatment with a cell toxin known as ionomycin in a dose dependent fashion.

The effect of Dimebon on improving mitochondrial dysfunction has been confirmed in an independent laboratory at the Karolinska Institutet in Sweden. We also presented data that showed Dimebon promoted neurite outgrowth, an important step in the formation of new brain cell connection.

We and our collaborators are encouraged by our preclinical and clinical findings thus far. One of the more important events of the quarter was the publication of our Dimebon 12-month pivotal trial data in Alzheimer's disease in The Lancet. In this study, patient’s treated with Dimebon experienced statistically significant improvements compared to placebo in all of the key aspects of the disease after both six months and a full year of treatment. Those key aspects are memory and thinking, activities of daily living, behavior, and overall function.

Dimebon’s benefit over placebo continued to increase throughout the 12 month treatment period and at the end of 12 months Dimebon treatment preserved patient function at their starting level on each measure of the disease. All patients who completed 12 months of dosing were eligible to enroll in open label extension for another six months. All participants in the open label extension received Dimebon including patients who had previously received placebo during the prior 12 months of the trial.

At ICAD, Dr. Jeff Cummings presented new data from the 6 months open label extension, demonstating that after 18 months of treatment in the Dimebon preserved function in patients at or near their original levels upon entering the trial across all key apsects of Alzheimer's disease. These results are noteworthy as untreated Alzheimer's progressively deteroriate over time in these areas. Dimebon remained well tolerated throughout the 18 months treatment period.

Also at ICAD, Dr. Rachelle Doody presented new 12 month data from a subgroup analysis by disease severity of the first pivotal trial showing that Dimebon benefitted both mild and moderate patients. The benefit in the subpopulation was particularly robust with a 9.7 point drug placebo difference on the ADAS-cog with a P value of less than 0.0001 after 12 months of treatment.

We intend to advance development of Dimebon as quickly as possible, so we can bring it to market as a new treatment option for the many people who suffer from Alzheimer's disease, 18 million people worldwide and growing with the aging of the population. To that end in June we initiated our second pivotal Phase III trial of Dimebon for mild-to-moderate Alzheimer's disease. The primary endpoints, duration of treatment, and patient inclusion and exclusion criteria in this trial are substantially identical to our first pivotal study. The primary differences are that the second pivotal Phase III trial will be global and we will test two doses of Dimebon, the same dose of Dimebon studied in our first pivotal trial at a lower dose.

Since we enrolled the first patient last quarter, I am pleased to report that we are making excellent progress getting clinical sites up and enrolling patients. We currently have 30 US sites up and running and anticipate 60 to 80 sites worldwide. We continue to expect to complete the study in time to submit an NDA to the FDA in 2010.

During the second quarter, we also completed a thorough QTc cardiac safety study of Dimebon as required by the FDA for all new drugs undergoing regulatory approval. In this study, Dimebon was well tolerated and did not produce any cardiac safety issues. We are exited about the progress we have made in the clinical development of Dimebon for Alzheimer's disease. We are working diligently to bring Dimebon to market so patients can access to a drug that might improve how they and their caregivers live with this terrible debilitating illness.

Our growing body of data continued to show that Dimebon produces broad, clinically meaningful benefits in Alzheimer's disease patients after long-term dosing and appears to operate through a novel mitochondrial mechanism of action.

Now, turning to Huntington's disease.

In early July, we announced top-line results from our Phase 2 trial of Dimebon and Huntington's disease, which we conducted in collaboration with the Huntington's study group. Results showed that Dimebon significantly improved cognitive function in patients with mild-to-moderate Huntington's disease. Cognitive function was significantly improved over placebo with a P value equal to 0.03 as measured by the mini-mental state examination or MMSE. This is a validated measurement tool widely used by clinicians to assess patients with neurodegenerative diseases. Cognitive impairment in a very important therapeutic unmet need in Huntington's disease and to our knowledge Dimebon is the first investigational drug to show a significant benefit in any measure of cognitive function in patients with mild-to-moderate Huntington's disease in a well controlled study.

Dimebon also caused some benefits in the behavioral component of the unified Huntington's disease rating scale; a composite scale measuring several components of Huntington's disease but these results did not reach statistical significance.

Dimebon was well tolerated. In a study that is unusual in clinical trial of any drug, fewer patients in the Dimebon group than in the placebo group experienced adverse events. This is similar to the results of our first pivotal trial in Alzheimer's disease in which they were significantly fewer serious adverse events in Dimebon treated patients than in placebo treated patients after one year of treatment. We intend to seek FDA approval to begin a phase III Huntington's disease study in 2009.

I would now like to the turn to MDV3100, our novel androgen receptor antagonist, currently in a Phase I and II clinical trial for the treatment of castration-resistant prostate cancer also known as hormone-refractory prostate cancer. As background, the Phase I and II trial has enrolled more than 110 patients with castration-resistant prostate cancer who have failed current standard hormone therapies and/or chemotherapy. The trial endpoints are safety and pharmacokinetics, serum PSA levels, effects on clinical and imageable disease, and circulating tumor cell counts. At the ASCO annual meeting in June, Dr. Howard Scher, principal investigator of the study, presented new study data on patient’s dose with the lowest doses in the expanded cohorts, 60, 150, and 240 mg per day of MDV3100.

Results show that after 3 months of treatment MDV3100 demonstrated encouraging antitumor activity as measured by declining serum levels of PSA and circulating tumor cells as well as radiographic disease stabilization. Analysis of the data showed a dose dependent effect of MDV3100 on PSA levels, CTC counts, and clinical outcomes with a 90% or greater decline in PSA levels seen in nearly a third of patients in the 240 mg dose and cohort, our third lowest dose.

We are encouraged by the results observed at these lower doses and are continuing to test higher doses to assess the dose response. Since the presentation of the data at ASCO, we have initiated dosing in the 360 mg expansion cohort and this past quarter we obtained IRB approval to add two higher dose groups, 480 mg and 600 mg to the ongoing Phase I and II study increasing the total number of dose groups from 5 to 7.

MDV3100 remains well tolerated and a maximum tolerated dose has not yet been reached. We remain on track for completing this study later this year after which we intend to seek FDA approval to enter Phase III in 2009.

In summary, we are pleased with our recent progress. We remain focused on rapidly developing our novel product candidates, as we believe they have the potential to treat serious diseases with critical unmet medical needs.

I will now turn the call over Pat who will review the financial results for the quarter.

Patrick Machado

Thanks David and good afternoon everyone. Today, we released our financial results for the second quarter ended June 30, 2008. I will review some of the highlights and refer you to the press release issued earlier today for the full details.

We reported a net loss for the quarter ended June 30, 2008, of $18.5 million or $0.64 per share, compared to a net loss of $7.2 million or $0.26 per share for the same period in 2007. For the six months ended June 30, 2008, the net loss was $34.1 million or $1.18 per share compared to a net loss of $12.8 million or $0.46 per share for the same period in 2007.

Total operating expenses for 3 months ended June 30, 2008, were $18.7 million compared to $7.7 million for the same period in 2007. Our operating expenses increased primarily due to significantly expanded clinical development of both Dimebon and MDV3100.

For the six months ended June 30, 2008, total operating expense were $34.6 million compared to total operating expenses of $13.9 million for the same period in 2007. These figures include non-cash stock-based compensation expense of $4.2 million in the six months ended June 30, 2008, compared to $2.6 million for the same period in 2007.

Cash and cash equivalents at June 30, 2008, totalled $33.4 million compared to $43.3 million at December 31, 2007, and $32.9 million at March 31, 2008. During the second quarter of 2008 we raised approximately $15 million in net proceeds from the sale of shares to existing institutional investors. At June 30, 2008, the remaining capacity under our committed equity line of credit without Azimuth Opportunity Ltd. remains unchanged at $78.8 million. We have the option to draw on that remaining capacity at our discretion during the term of the facility, which expires on April 1, 2009.

We anticipate the total operating expenses in 2008 will be in the range of $65 million to $75 million, excluding stock-based compensation expense. The increase from prior guidance of $55 million to $65 million is due primarily increased manufacturing and clinical development costs to support the expansion of the company’s ongoing and upcoming clinical trials. This forecast includes the work necessary to keep us on track to achieve our publicly disclosed development milestones.

With that I will turn the call back over to David.

David Hung

Thanks, Pat. We anticipate steady milestone achievement and news flow over the next year. We expect to one, conduct multiple clinical trials of Dimebon in Alzheimer's disease for marketing and reimbursement purposes and to provide a safety database of approximately 1500 patients as part of our marketing application; two, present the results of our Phase II study of Dimebon in Huntington's diseases at an upcoming scientific meeting; three, initiate a global Phase III clinical study in Huntington's diseases in 2009 if the results of our meeting with the FDA are successful; and four, complete our Phase I and II study in castration-resistant prostate cancer later this year after which we intent to seek FDA approval to enter Phase III in 2009.

At Medivation, we are dedicated to developing product candidates as rapidly, efficiently, and cost effectively as possible as the patients are in desperate need of novel effective treatment options.

On behalf of the management team, I thank you for your interest and look forward to communicating with you on our progress in advancing the clinical development of Dimebon and MDV3100.

With that we would be happy to answer you questions. Operator please poll for questions.

Question-and-Answer Session

Operator

(Operator instructions) And our first question will come from Kim Lee with Pacific Growth.

Kim Lee – Pacific Growth

Good afternoon. Two questions for you. First have you had your end of phase II meeting with the FDA yet with regards with Huntington's disease?

Lynn Seely

We have not had that meeting yet.

Kim Lee – Pacific Growth

Okay. And when do you plan to have that meeting?

Lynn Seely

I cannot assure you that it is soon as we results from that meeting we will share it with you, but I cannot tell you at this point exactly when the meeting is going to be.

Kim Lee – Pacific Growth

Okay. Second question is how many additional studies do you intend to run at your safety database [ph]?

Lynn Seely

We are really in the process of making final decisions about that. There are lots of options for this drug as you might imagine it has a lot of potential and so we are considering a host of options from – evaluated in the presence of other standard of care medications to diseases of increasing severity or more moderate-to-severe disease et cetera. So, we do not have the final plans but when we do we will be bringing those forward to you.

Kim Lee – Pacific Growth

On the QTc study that you just completed how many patients were in that and is [inaudible] so patients won’t be included in the safety database as well?

Lynn Seely

All patients who have been treated with the drug will be included there were 150 patients in that study, 50 of them were treated with Dimebon.

Kim Lee – Pacific Growth

Okay, thanks a lot.

Operator

Thank you. Our next question will come from Michael Yee with RBC Capital Markets.

Michael Yee – RBC Capital Markets

Hi, guys. A couple of questions in regards to MDV3100 you said you are going up a couple of more cohorts. Are we going to see final data by year-end is that going to be press released and presented, and then would you continue to go higher if you didn’t see an MTD?

Lynn Seely

So, we are we have not yet achieved an MTD, so we are continuing to dose escalate. I think, obviously we are very intent on moving that program forward. So, I don’t think you will see us continue to dose escalate. And we are intending to complete the study by the end of the year.

Michael Yee – RBC Capital Markets

Okay, and then in regards the Huntington's, have you actually requested the end of Phase II meeting?

Lynn Seely

You know, we do not get into very specific details. I think at this point what we are able to commit to is that we will give you the results of those discussions when they are finalized and I think that as you know we have just very recently [inaudible] these data and it does take some time to go through the whole FDA process of requesting and providing them with all the information, giving them time to review it, and then actually holding the meeting. So, it is a little bit early in the process.

Michael Yee – RBC Capital Markets

One financial question and an IP question. On the financial side, did you actually take any thing down off Azimuth since June 30?

David Hung

No, we did not Mike.

Michael Yee – RBC Capital Markets

Okay, and then on the IP situation, can you remind me where you guys stand on IP and then also in some of your disclosures regarding missed deadlines, how long was that deadline actually missed by and which patents were involved there?

David Hung

To answer to first question mike we have issued patents in the US and Europe that protect Dimebon and the family of analogous molecules for the treatment of any neurodegenerative diseases. On your second question, the missed deadline pertains only to the US and that was something that occurred prior to the time that we acquired the technology in 2003. That was something that we thoroughly diligenced [ph] with our IP council before we acquired the technology and became quite comfortable with it and since that time in the course of various public offerings and investments that has been made in our company, the whole stream of lawyers have been through it on behalf of investor groups and everyone has reached the same conclusion that we have.

Michael Yee – RBC Capital Markets

How long was it actually missed by?

David Hung

The actual deadline was missed by about 10 months.

Michael Yee – RBC Capital Markets

Okay, thank you.

Operator

Thank you. Moving on, we will take our next question from Andrew Vaino with Roth Capital.

Andrew Vaino – Roth Capital

Thanks for taking my call. Any possibility you could give us a rough guess. I know you mentioned there were 30 sites up and running in the Phase III study, can you comment on number of patients enrolled for example, between 50 or 100 say?

Lynn Seely

We are not going to be commenting on actual patient numbers, but needless to say the recent publicity has not hurt the trial enrollment and we were fortunate that we got our sites up very quickly. So, we were able to take advantage of that.

Andrew Vaino – Roth Capital

Okay, that sounds good. Any rough guess as to how big the Phase III Huntington's disease study would be?

Lynn Seely

So, you know – until we have conversations with the agency it is a little bit hard for me to project accurately. I think it is best to wait until we have had those conversations.

Andrew Vaino – Roth Capital

Is there any possibility that you guys will be announcing a partnership with a large company in the next couple of months say?

David Hung

Well, we publicly disclosed that we are seeking a partner for Dimebon but that is about as far as it will be prudent for us to comment on at this time.

Andrew Vaino – Roth Capital

Okay, great. Thank you very much.

Operator

Moving on our next question will come from Bill Tanner with Leerink Swann.

Bill Tanner – Leerink Swann

Thanks for taking my questions, Lynn. Just on the QTc study, at what point of time would I guess actually details of those results will be provided or you can provide?

Lynn Seely

You know, I think I am happy to discuss them now to some degree. I think the bottom line is it was a very standard QTc study and was reviewed and approved by the agency before we conducted it and there were no cardiac safety issues or quite frankly any safety issues have been identified in the study. There was a placebo group and a positive [inaudible] control as a standard.

Bill Tanner – Leerink Swann

And have those – and have you reviewed those data with the agency yet?

Lynn Seely

We have not at this time.

Bill Tanner – Leerink Swann

Okay. And then I guess just on the 3100, at what point in time, I guess, it sounds like a detour at the end of this year when we might actually see some CTC data?

Lynn Seely

When will we be presenting the data from MDV3100?

Bill Tanner – Leerink Swann

Right.

Lynn Seely

So, I think that we are as you know, collecting data all the time and regularly in the study and I think it is to our advantage to get that out to you as quickly as possible. I think at this point in time we can’t say exactly in what venue it will be presented but as soon as we know that we will be letting you know.

Bill Tanner – Leerink Swann

And then maybe just final one, I know that David you had mentioned I think on a previous call or couple of calls before perhaps about specific a study looking at Dimebon in combination with Aricept, can you provide any more update on that as to where it is and the size and any kind of data readouts, I guess understanding this is more a sort of a safety study, is that correct?

Lynn Seely

Yes, this is a safety study that is going on. It is – say they will be enrolling around little more than 20 patients and that trial is ongoing. It is going well, it is enrolling well and we expect that to be completed on track in the end of this year.

Bill Tanner – Leerink Swann

And just a contemplation in terms of actually looking at it from an efficacy respective, I mean this is on time presumably post approval or [inaudible] with a partner perhaps?

Lynn Seely

A larger study looking at efficacy?

Bill Tanner – Leerink Swann

Right.

Lynn Seely

Yes, I think that is something that we are obviously strongly considering and it is something that we will probably be discussing in the future when we finalize those plans.

Bill Tanner – Leerink Swann

Okay, thanks a lot.

Operator

Thank you. Our next question will come from Raymond Myers with Emerging Growth Equities

Raymond Myers – Emerging Growth Equities

Thank you. Regarding the MDV3100, as we progress through the remainder of this year, a considerable number of patients will be hitting their one year anniversaries taking MDV3100. In fact, several patients have already hit one year anniversaries. If you don’t reach meeting in time to progression by that point would – how does the trial specifically end. What triggers an end of the trial so as to we don’t have it continuing indefinitely which – with happily healthy patients?

Lynn Seely

It is a great question Ray and in fact obviously we are not going to continue dosage escalation forever and that being said we are going to be continuing patients as long as they are alive on study drugs. So, there is no question about when the trial will be completed as a good one. We are lucky that patients are continuing for a good long time. That being said what we are really interested in here is do we have enough data to warrant moving forward into a Phase III trial and so when we enough data that convinces us we are ready to present those data to the agency and move forward. We will do so, and we are targeting to complete that portion of the trial by the end of the year.

Raymond Myers – Emerging Growth Equities

Great, and can we assume that the next highest dose escalation, I believe the 360 mg was favorable and then that is why you expanded the dosing.

Lynn Seely

I think that you can infer from those data that there weren’t safety problems and that is why we are moving forward.

Raymond Myers – Emerging Growth Equities

Okay, that is good. I have a question for David. At the ICAD conference and with all the news surrounding data that was presented at the ICAD conference, it became apparent that there is a very large valuation gap between what our investors appear to be, the value they appear to be describing to Dimebon versus at least one another compound. Without commenting on about using them [ph] I am specifically asking about the valuation gap about – what appears to be a gap in perception of either the market value or the likelihood of approval of Dimebon versus this other drug which is also been in Phase III studies. Given that there has been about what we estimate about a 10 times difference in valuation between these two compounds, can you help us to understand why that might be or help to dispel this myth?

David Hung

I am not sure I can comment on it live [ph]. I think there is a discrepancy in value between the two companies. I can comment that our data are robust. They have been published in a well respected top tier journal. We are the farthest along in development with the drug from registration of a new Alzheimer's compound .Our clinical trials are going well and we believe that we have a very promising development candidate in our hands and we are delighted by that and the physicians that have affiliated themselves with this trial we think are at the very top in the field. So, we are very comfortable with where we are as an Alzheimer's company.

Raymond Myers – Emerging Growth Equities

What can you say about the results in the Huntington's disease trial that was done in the United States with Dimebon? What does – what parallels does that have to efficacy in Alzheimer's in a Phase III study?

David Hung

I think it is another interesting facet of this program. Of the all the agents in development right now for Alzheimer's, there are no other agents in development that have been showing effects in another neurodegenerative illness like Huntington's disease. So, we believe the Huntington's data is very promising for us. We are delighted that the safety profile of Dimebon in Huntington's patients appeared to also show that the drug was very well tolerated and we believe that is consistent with our Alzheimer's data, and given our mechanism of action as I said earlier, there is evidence that mitochondrial dysfunction plays a significant role in both Alzheimer's and Huntington's diseases as well as other neurodegenerative illness that we haven’t even about talked about today. So, we believe that the fact that we are seeing a signals in Huntington's patients are also further – even more auspicious for this drug as targeting a new mechanism of action and we think that it also bodes well from both a safety and efficacy profile for our Alzheimer's study.

Raymond Myers – Emerging Growth Equities

Great. Thank you.

Operator

Thank you. Nazlene Rocky [ph] from Rodman & Renshaw. We will have our next question.

Nazlene Rocky – Rodman & Renshaw

Hi, how are you and thanks for taking my call, most of my other questions have been answered, but I just have one last. What you expect your burn to be for the next 12 months?

David Hung

We have not projected out that far. At this point the guidance that we have given is operating expense through the end of the year which is the $65 to $75 million excluding the stock based comp.

Nazlene Rocky – Rodman & Renshaw

Okay, thank you.

Operator

Thank you. Our next question will come from Han Li with Stanford Group.

Han Li – Stanford Group Company

Hi, yes. Good afternoon, a couple of questions, one on the Dimebon mechanism of action, at ICAD we see you presented the data showing that Dimebon enhancing mitochondrial function. This is the data from preclinical studies of cell based assays, I was just wondering whether you have any plans for additional studies to further identify the molecular targets of Dimebon?

David Hung

Han, as you might imagine finding and eliciting further what those molecular targets are is of great interest to us. We have initiated that Medivation a pretty comprehensive analog program looking to make second or third generation molecules or Dimebon or follow on molecules of Dimebon that will have either identical or superior safety and efficacy and preferably a once a day dosing if possible and so to that end we have spend a fair amount of time trying to characterize Dimebon pharmacologically. We have made a fingerprint of Dimebon action, which we do by looking at function in a number of assays as well as molecular targets. And based on that fingerprint, we use molecules for similar or better activity. So, we have talked publicly about the functional assays that we have showed at ICAD, but we haven’t go into more detail on the molecular targets because they really start to get pretty specific in identifying a road map to make the next Dimebon. So, we are not really talking specifically about that but you can be rest assured that we are very interested in pinpointing what the molecular targets are and using that to our advantage in making second or third generation compounds.

Han Li – Stanford Group Company

Okay, we should expect to read those findings in the coming months?

David Hung

I mean the submolecular targets?

Han Li – Stanford Group Company

Yes.

David Hung

No, I think that until we have rounded our patent state and made sure that all those components are protected and got through the process to a preferred extent, we probably would not be talking publicly about those submolecular targets. We have done lot of work showing that Dimebon effects on mitochondria are potent and robust and you may see further functional studies of mitochondria showing what the range of effects of Dimebon are on mitochondria and cell function but as far as submolecular targets we are reserving that for ourselves to allow us to make second or third generation compounds.

Han Li – Stanford Group Company

I see. Since you mentioned the second generation compounds, can you tell us where are you in regarding patent following on those second generation?

David Hung

So, we have spent a lot of time over the last couple of years following patterns that covers analogs, or potential followup molecules to Dimebon and – so we have a very extensive pattern effort underway there.

Han Li – Stanford Group Company

So, it is being filed or it is in the product portfolio?

David Hung

They have already been filed. We have had many, many patents already filed, but this is obviously a work in progress and so as we find new things and make new discoveries we follow those things. So this is an ongoing process.

Han Li – Stanford Group Company

Okay, I see. The question on 3100, you mentioned that you have a Phase II data in second half of this year. Are you going to present at a medical conference or what kind of format you want to release that data?

David Hung

I think that at this stage of our company, we want to release our data in the form, which makes the biggest impact. So, we look to present our data at an upcoming conference.

Han Li – Stanford Group Company

Okay, thank you very much.

David Hung

Sure.

Operator

Thank you. That does conclude our question and answer session for today. I would now like the call back over to Dr. David Hung for any further comments or closing remarks.

David Hung

I want to thank you all for participating in this call. We are going to be presenting on September 4 at the BioCentury NewsMakers Conference and we hope to see many of you there and upcoming investor and medical conferences this fall. Enjoy the rest of your summer. Thank you very much.

Operator

Thank you. Ladies and gentlemen that does conclude today’s teleconference. We would like to thank everyone for their participation on today’s call. Have a great day.

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