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GenVec, Inc. (NASDAQ:GNVC)

Q3 2012 Earnings Call

November 9, 2012 10:00 a.m. ET

Executives

Douglas Swirsky - Senior Vice President & Chief Financial Officer

Cynthia Collins - President & Chief Executive Officer

Analysts

Joseph Pantginis - Roth Capital Partners

Harold Scattergood - Boenning & Scattergood

Mitchell Martin - Mitchell Advisory

Julie Bickel - Boenning & Scattergood

Operator

Good morning, ladies and gentlemen. Welcome to GenVec’s 2012 Third Quarter Earnings Conference Call. My name is Bonny and I will be your conference facilitator today. At this time, all participants are in a listen-only mode. After GenVec’s management concludes their remarks, there will be a question-and-answer period. (Operator Instructions)

We would like to remind conference participants that this call is being recorded today, Friday, November 09, 2012. If you do not wish to continue your participation, you may disconnect at any time. I will now turn the call over to Mr. Douglas Swirsky, GenVec’s Senior Vice President and Chief Financial Officer.

Douglas Swirsky

Thank you for participating in this call. Joining me this morning is Ms. Cindy Collins, GenVec’s President and CEO.

During this call, we will make forward-looking statements within the meaning of the Private Securities Litigation Reform Act involving risks and uncertainties and our actual results may differ materially from our expectations. For a complete statement of these risks, please review statements made in our SEC filings and this morning’s press release.

Today, you will hear Cindy review GenVec’s strategy and discuss the progress we are making. I will then provide you with an overview of GenVec’s third quarter financial results. After these remarks, Cindy and I will be happy to take your questions.

We are optimistic about the opportunities at GenVec. We have developed a focused and novel drug product portfolio based on our core proprietary technology. We believe that our programs in hearing and balance collaboration with Novartis in particular, provides shareholders with a substantial opportunity. Cindy will now discuss GenVec’s business strategy and provide you with some updates on GenVec programs. Cindy?

Cynthia Collins

Thank you, Doug. GenVec has a promising product portfolio, validating partnerships and a sound strategy. On today's call I will provide an update on our hearing restoration program as well as discuss new developments this quarter in our RSV, malaria, and HSV programs.

I believe a key element of GenVec’s future success will be at strategy to develop products through collaborations. This strategy reduces the risk associated with drug development and allows us to pursue new opportunities while keeping our cash burn rate low. We have established partnerships with leading organization like Novartis and Sanofi who are experts in taking drugs through development and into commercialization, and can and will bear the heavy financial lifting that is required to do so.

Collaborations and partnerships like these brings the skills and capabilities that increase the probability of success while reducing our need to access outside capital. Our team is actively seeking other partnerships for our pipeline of novel vaccines.

To summarize, our key growth strategies are advancing the current programs through collaborations and adding new opportunities to the pipeline that leverage our proprietary technology and skills. Let's talk about our lead program which is partnered with Novartis.

Hearing loss is a multi-billion dollar market that could represent hundreds of millions of dollars per year in royalties to GenVec, which is a considerable amount on a per share basis. This is in addition to the funded development and milestone payments. There are over 30 million people in the United States with some kind of hearing problem and the market is dominated by devices that do not address the root of the problem.

Our hearing loss and balance disorder program which is being developed in collaboration with Novartis, address the root cause of hearing loss through the regeneration of critical cells in the inner ear. Our unique approach, offers the promise of restoring lost function and allowing people to once again hear well and enjoy a much improved quality of life. The focus of this collaboration is the advancement of our lead candidate into clinical testing, which will trigger additional milestone payments. We are still not able to provide guidance as to when an investigational new drug application will be submitted by Novartis, although this may occur as early as next year.

Once in the clinic, we should be able to get information quickly as to the potential of the program as there is the possibility that the initial clinical studies in this program could provide an early indication of not only safety but also a first indication of efficacy. This full funded, highly innovative program is a great example of our partnering strategy. Our versatile platform technology that we use to target and express the ATOH protein and cells in the inner ear, can also be used to deliver an antigen intended to provoke an immune response. Thus, we have leveraged our core technology to create a pipeline of vaccine opportunities.

Our RSV, HSV and malaria vaccine candidates utilize GenVec’s novel, proprietary non-human primate, adenovector delivery system that is capable of generating strong immune responses while avoiding vector specific immunity. A key program I want to highlight is RSV. We continue to make good progress in our development of a vaccine against respiratory syncytial virus.

Preventing RSV infection is a significant unmet medical need that we are addressing with our proprietary non-human primate vector technology. RSV infection is a significant cause of respiratory illness in children, the elderly and high risk adults, resulting in more than 100,000 hospitalizations annually in the United States alone. RSV infection does not provide durable immunity and therefore re-infection can occur throughout life. No vaccine against RSV is currently available and the market is only partially addressed through a passive monoclonal antibody, Synagis, a product of MedImmune that generates sales in excess of $1 billion a year.

Synagis is important as a guide or benchmark for efficacy as it provides us with information regarding the required levels of neutralizing antibodies which a protective vaccine would likely need. GenVec’s RSV vaccine, GV2311, has been designed to overcome key efficacy and safety hurdles plaguing other vaccine approaches. Or vaccine was designed to produce strong and durable protection against RSV without inducing vaccine enhanced diseases. Preclinical data shows GV2311 generates an effective RSV immune response while avoiding the problems of vector specific immunity that have hampered other vectored vaccines.

We are particularly excited about data we recently presented at the 8th Annual International Respiratory Syncytial Virus Symposium in September. Preclinical studies and accepted animal models show that our vaccine candidate has the desired efficacy and safety attributes required for a successful RSV vaccine. Specifically, results from these studies demonstrated that GenVec’s universal RSV vaccine candidate is highly immunogenic and produces durable and broad protection from a single inter-muscular administration. High levels of neutralizing antibody were generated with [tighters] comparable to live RSV infection. Protection was observed in the upper and lower respiratory track and this protection was durable lasting a minimum of six months in industry accepted preclinical modals of RSV.

Importantly, no disease potentiation was observed which has been a limitation of other vaccine approaches. GenVec’s RSV vaccine candidate utilizes our proprietary non-human primate adenovirus that is capable of generating a broad immune response while avoiding the problems of vector specific immunity that have hampered other vector vaccines. During the third quarter we met with the FDA to discuss the manufacturing and clinical development plan for our RSV vaccine. We were encouraged by the positive feedback we received from the agency, including the acceptance of our Phase I clinical plan beginning in healthy adults and culminating in seronegative children. We are continuing to explore opportunities to move this exciting program forward.

So to summarize the key attributes of our RSV program. It is protective of both the upper and lower respiratory tracks. It is durable, providing at least six months of protection. The response is rapid with protection seen within two weeks. It is safe, and we believe it will be effective in infants even in the presence of anti-RSV maternal antibodies. To our knowledge, there are only two companies with RSV vaccines in the clinic. Both of these companies utilize a different technological approach than GenVec.

Another program I would like to highlight on this call is malaria. Last month we announced a new $3.5 million agreement with the Naval Medical Research Center or NMRC, to support malaria vaccine development. Under the terms of the agreement, GenVec is responsible for producing clinical supplies of its malaria vaccine and NMRC plans to use this clinical material to assess the safety and efficacy of our next-generation vectored vaccines. Importantly, GenVec retains the right to commercialize this novel technology.

Our new contract with the navy is a firm fixed price agreement. GenVec will receive approximately $600,000 in the fourth quarter of 2012, $1.9 million in 2013, $1 million in 2014, and the balance in 2015. The agreement contains an option of up to an additional $200,000 or work that can be requested by the NMRC.

In April 2010, encouraging clinical data were presented from a Phase I malaria vaccine trial conducted by NMRC and Walter Reed Army Institute of Research, using an earlier generation of GenVec’s adenovector technology coupled with DNA plasmid (inaudible). This DNA adenovector malaria vaccine administered to malaria naïve adults was safe and well tolerated with minimal local or systemic reactions and no serious vaccine related adverse reactions. Sterile protection, a complete absence of parasites in the blood, was seen in four out of 15 volunteers that had been inoculated with the vaccine and subsequently challenged with the malaria parasite.

Work under our new agreement will build on the encouraging clinical results previously demonstrated in malaria with our vaccines, and we appreciate the U.S. military’s continued support of malaria vaccine development. Malaria is a severe threat to the health of military personal and travelers visiting endemic areas. Malaria is found in more than a 100 countries and there are 350 million to 500 million clinical episodes per year.

Lastly in the third quarter, we convened a panel of experts to review our HSV therapeutic vaccine program. We are very pleased with the feedback and have a pre-IND meeting scheduled with the FDA this quarter. We will provide our shareholders with an update on this meeting as appropriate.

We made progress across all of our programs during the third quarter. However, before we review our third quarter results, I would like to sincerely thank the many loyal, talented and hardworking employees that we parted ways with recently. The reduction in force we announced in September was difficult. However, it was necessary in order to ensure our costs are more closely aligned with our resources and business strategy. The reduction in force is in addition to other ongoing cost cutting initiatives.

I will now turn the call over to Doug, who will review GenVec’s financial performance?

Douglas Swirsky

Thank you, Cindy. For the third quarter of 2012, our net loss was $4 million or $0.31 per share, which compares to a net loss of $1.5 million or $0.11 per share for the third quarter of 2011. Total revenue for the third quarter of 2012 was $2.1 million compared to $4.3 million in the third quarter of 2011. The decrease in revenue reflects a reduced manufacturing effort on the Novartis collaboration as we move closer to clinical trials in that program. Operating expenses were $6.2 million for the quarter compared to $5.8 million for the comparable 2011 period. Operating expenses for the quarter included approximately $660,000 incurred in connection with our recently reduction in force.

GenVec ended the third quarter of 2012 with $18.2 million in cash, cash equivalents and short-term investments. We believe that we have sufficient capital to fund our operations for the next two years and can extend that runway through the achievement of milestones under our collaboration with Novartis. Our runway isn’t longer, given the recent cost cutting initiatives because our current expectations for funded work for 2013 are below we had previously expected. Of course we are working to generate more funded work by aggressively working to partner our RSV and HSV programs as well as seeking other sources of non-dilutive funding.

We are mindful of the need to conserve our capital and the recent reduction in force reduced our ongoing personal obligations by as much as $700,000 per quarter.

Before we move on to Q&A, please note that we will not be commenting or answering questions regarding ongoing litigation other than to say that we believe that litigation that has been filed against the company and certain of its Officers and Directors is without merit and that we are vigorously defend ourselves from these claims.

This concludes our prepared remarks and we welcome your participation in the question-and-answer session. Operator, please proceed.

Question-and-Answer Session

Operator

(Operator Instructions) Our first question comes from Joe Pantginis of Roth Capital.

Joseph Pantginis - Roth Capital Partners

A few questions if you don’t mind. First, in no particular order let me just, maybe with malaria because this was some timely new today. GlaxoSmithKline has some additional data from their Phase III program and positive, and it was published in the New England Journal of Medicine. Obviously, they are much further along in the development pathway. I was just wanted to see if you can add some color maybe about potential differentiating characteristics with your vaccine and why the malaria market could have obviously room for more than one product.

Cynthia Collins

The malaria that we have in development, as I said earlier, is one that we believe has a lot of promise and let me first comment that the original program that was done in 2010 showed a level of sterile protection of about 27%. So four out of the 15 volunteers showed no detectable parasite in the blood. The scientific community believes that a truly successful malaria vaccine needs to be in the order of magnitude of 80% sterile protection and that is what we are targeting in our development program of the next generation vaccine that is in development in collaboration with the navy.

We believe a combination of a couple of factors are gonging to be very important. One is the vector itself. And so we have a next generation adenovector which is non-human primate vector. And secondarily, we believe that identifying new antigens is going to be critical as well. And so the configuration that we first tested with the navy focused on a particular antigen. We have some new antigens that we are testing now that we think in combination will give a greater response.

In reference to GSK’s vaccine that’s in development, I have not yet personally seen the data but my understanding is that they are roughly in the range of a 50% sterile protection. And so that’s certainly much better than anything that is currently available today and I think ultimately up to the regulators to determine whether that is going to be commercially successful.

Joseph Pantginis - Roth Capital Partners

And then regarding RSV, for example, obviously you guys are looking for, as you said, you are actively seeking partnerships. Now that you have the FDA sign off for your Phase I clinical plan, I don’t know if this is a rhetorical question, but is it safe to assume that then you will not maybe look to start that Phase I until you have a collaboration in place.

Cynthia Collins

We are actually looking at both alternatives. Our first and desired task would be to find a partner who could sign on early and be a partner throughout the entire clinical development pathway. But we are very encouraged and enthusiastic about the data that we have seen and we think there is some good differentiators compared to other vaccines that have been in development that we would also look to potentially a scenario of funding it internally.

Joseph Pantginis - Roth Capital Partners

Okay. And then just lastly. You did highlight again at the beginning of the call today again, not only your current opportunities but the potential at looking at new opportunities to leverage your platform technology. Is there some sort of way to handicap or saying which you are spending more time on or what you might potentially be looking at?

Cynthia Collins

At this point it’s probably early in the process to say in a lot of clarity but we are looking at applications where the adenoviral vector technology is best suited. And so those are product concepts like vaccines where local delivery is important. We are getting a strong immune response. It’s going to be critical. But we are looking at both vaccines and therapeutics.

Joseph Pantginis - Roth Capital Partners

Thank you very much. Looks like it’s going to be a real exciting 2013 for you.

Operator

Thank you. Our next question comes from Harold Scattergood of Boenning & Scattergood.

Harold Scattergood - Boenning & Scattergood

My questions revolve around, Doug, your comment concerning your funding between now and through ’14 and ’15. You made the statement in the release that if certain milestones came through than you have funding through the third quarter of 2015. I am assuming that that means that the Novartis expectation has been pushed back a year now in terms of what you are -- where the collaboration is. So that the IND is not going to be in ’14 but ’15, or am I misinterpreting this?

Douglas Swirsky

What we have said in the press release and that was consistent with the Q, is that we believe we have got the financial wherewithal to take us through the third quarter of 2014. And then I further stated that that runway could be extended to the middle of 2015, subject to the achievement of these milestones. Now when those milestones get achieved, it’s sort of irrelevant from determining whether or not you have capital to get through ’14, through the third quarter of ’14 or into the middle of ’15. It’s really -- I wouldn’t take away any cues on what the timing is.

So again, it’s important to note that we believe we have two years of operating capital that’s through the third quarter of 2014, and that runway could be extended if we achieve milestones. But that’s not to say that we don’t expect those milestones to be achieved and that cash to come in at the tail end of that. That being said, as previously announced, we don’t anticipate an IND being filed this year.

Harold Scattergood - Boenning & Scattergood

Okay. So let's focus on that. So you are saying that the IND with respect to hearing and balance is, when you say this year you are talking about 2014 or 2013? I don’t know.

Douglas Swirsky

This year meaning 2012. The current calendar year that we are in.

Harold Scattergood - Boenning & Scattergood

2013?

Douglas Swirsky

2012.

Harold Scattergood - Boenning & Scattergood

2012, excuse me. Okay. So is there any further clarification with respect to what you perceive to be difficulties with respect to hearing and balance given your -- I guess your background now that you have with the RSV IND that you have been able to successfully push through the FDA on your own, versus what Novartis is encountering to hold things up on their side.

Cynthia Collins

Good question. Obviously, the discussions that are being had with the agency regarding the hearing restoration program is directly with Novartis. But the major distinction I would draw there is that again, the hearing restoration program is a first in class drug and so the development pathway is always a little bit less certain than it is in a drug like RSV. And so the fact that others already in the clinic with RSV make our discussion a little bit easier with the agency and there is more clarity around industry accepted preclinical animal models etcetera. So it’s tough to draw a direct comparison there.

Harold Scattergood - Boenning & Scattergood

Okay. I understand that both programs are different. What I am searching for is whether there is an expectation of further delays with respect to hearing and balance, with respect to what Novartis trying to accomplish in getting to the IND process which than triggers some milestone. I can only take away that it doesn’t seem to be promising that something is going to happen in the early to mid part of 2014 as well. I mean...

Douglas Swirsky

Harold, I understand that certainly as time ticks on it gets -- things seemed a little bit less clear. But I think it’s important to note that this program is continuing, and they are not keeping the lights on on this contract in order for us to keep talking about the program. They are making progress. We are working with them. We have every hope and expectation that this is going to get into the clinic and when there is an IND we will be very happy to see that and to talk about it.

But I think the fact is obviously delays in programs aren’t good. They sort of change how you view the program and ultimately the way that we come back here is that it gets in the clinic. We have no reason to believe it won't. We have no reason to -- no ability to estimate for you, whether or not there will be additional delays. But they are still committed to the program and that what gives us comfort that we will be able to move forward.

Harold Scattergood - Boenning & Scattergood

So if I can then shift my attention to the RSV program that seems to creating some pretty good excitement. The game plan is to create a joint venture with somebody, and the sooner the better. It seems as if you are almost ready to either file an IND or you have done so. I am not particularly certain as to where that stands. But should you get the go ahead from the FDA to begin a trial and you don’t have a joint venture partner signed at that point in time. What's the game plan? Are you going to take it on yourself or you are going to pull it off and wait until you have somebody with you?

Cynthia Collins

So as I mentioned previously, our first path forward, the most desired path forward would be to do that in collaboration with a partner. And that really provides for a more seamless clinical development pathway where we have that partner on board from the beginning. And just to reiterate, we have had a pre-IND meeting with the FDA. We have not yet submitted an IND. So our goal would be to have that partnership in place first.

However, having said that, the data that we are seeing is promising enough that we will evaluate and consider potentially funding it ourselves. But if all things were equal we would prefer to have a partner.

Harold Scattergood - Boenning & Scattergood

How far away are you, Cindy, then from submitting for the IND? Can you talk about that? Are you ready go for that or not?

Cynthia Collins

We would expect to be in a position to submit an IND in 2013.

Harold Scattergood - Boenning & Scattergood

And if at that time you still don’t have a partner you are going to go ahead and begin the process on your own?

Cynthia Collins

I don’t want to yet commit to that. As I said, we will evaluate that as a possibility. I think we need to evaluate that in context with all of our programs and where we are with each of those in the development phase.

Douglas Swirsky

And certainly whatever resources we have available will need to be factored into that equation. So I think the takeaway here is very clear, that the preferences for the program forward would be the assistance of a partner. However, we are not ruling out filling an IND and beginning the process ourselves but that’s not the preference.

Operator

(Operator Instructions) Our next question comes from Mitchell Martin of Mitchell Advisory.

Mitchell Martin - Mitchell Advisory

It seems like the company is still running as if it had $35 million in the bank and maybe had 5 to 7 years worth of cash burn before it had to raise money and had a market cap of a few hundred million, and if it did needed to raise capital it can do so. I mean the fact is, is that with the postponing of Novartis partnership and things delayed, that there is very little catalyst for boosting the stock price till we might face a liquidity event where you are going to have to raise capital. And I think you would agree that the worse thing from a shareholders perspective is to raise capital at present prices. I mean currently the company is valued at basically the cash on hand, about $18 million. You are running operating expenses of $2 million a quarter. So in late 2013 or 2014, if we are still not in clinical trials with Novartis, shareholders are going to be facing a huge liquidity event. I mean a huge dilution. And that’s directly counter to the interest of your shareholder.

So I am wondering what you guys plans are for -- and Doug, you made reference to this, anti-dilutive capital raising measures. And I think this is how the stock price has dropped basically 40% since Cindy has taken over the company. And I think a lot of this has to do with the concern amongst shareholders regarding the company not reducing its operating expenses sufficiently given where we are and the delays in the program. Can you guys please address that?

Douglas Swirsky

Sure. So we haven’t raised any capital since 2010 and I don’t -- I want to be clear that if that option is not off the table I recognize that it would be very diluted at these prices. However, the ultimate goal here is to generate value for shareholders and sometimes that would require additional capital to do that. So I think that’s the endgame here. It’s not how big a piece of the pie that you have, it’s how big the pie is and who can we generate value. And again sometime we need to raise money to do that.

So we are not taking that option of the table. It’s a question of how we build value for shareholders. Is it to sit and wait and collect if the Novartis program forward? That certainly is one strategy that you take and we looked at that strategy early on after the failure of TNFerade and the PACT trial. For us right now the goal is to try to generate value with the encouraging preclinical data we are seeing and these other programs. We are trying to move them forward with non-dilutive sources of funding. I think a good example of that is the new contract with malaria. We are going to see our new proprietary non-human primate vectors get tested in the clinic and it’s not going to cost us anything. In fact we are making money and it’s a firm fixed price agreement.

So I think we are being creative in how we are going to move programs forward but I don’t want to be on record as ruling out financing. I don’t think the prudent way to look at it. The best way to move programs forward whether it’s with a partner, without, and if we have to raise money we are hoping we will have achieved some things too, reduce some of the pain in terms of dilution.

Mitchell Martin - Mitchell Advisory

Do you see your operating expenses as running about $2 million a quarter, what do you project your operating expenses to be?

Douglas Swirsky

Right now we are at about $2.2 million burn per quarter.

Mitchell Martin - Mitchell Advisory

You don’t see that changing?

Douglas Swirsky

We are absolutely going through a process of looking at every line on the expenditure to see how they can be reduced in order to conserve capital. The first step in that was to take a significant number of people out of the organization. That’s resulted in a savings that depending on certain assumptions would be up to savings of $700,000 per quarter. We think that’s significant. Everyone here is working more efficiently and effectively with less resources. And then to that we are also looking line by line at our expenditures to determine what other cost can be saved here.

Operator

Thank you. Our next question comes from Harold Scattergood of Boenning & Scattergood.

Julie Bickel - Boenning & Scattergood

This is Julie Bickel. I actually have two questions. The first goes back to the RSV pre-IND meeting. And I was curious if you could tell us what types of information the FDA was looking for? What non-clinical, clinical CMC requirements need to be met and is that information that you can provide to them without a partner. Is that’s something you already have the ability to provide to them?

Cynthia Collins

So the information that the FDA typically likes to review in a pre-IND meeting is related to both our manufacturing capability as well as the clinical development plan. And that was really the focus of those discussions. So we discussed with them the manufacturing protocols and the testing and product release criteria and those types of activities. And then more importantly, what that first Phase I clinical development plan might look like. As you know, with RSV, ultimately we need to get into a patient population of infants, and so the FDA has very strong concerns about safety.

So we felt it was a very positive outcome that we have a dose de-escalation study that starts in healthy adults and culminates in seronegative children in that first Phase I study. And so we felt very positive about that.

Julie Bickel - Boenning & Scattergood

So they don’t tell you -- so the questions aren’t specific that they -- I am trying to extrapolate it to the Novartis. I know you can't really speak to that. But I am trying to determine the things that they might look for in a similar technology that has extended this runway with Novartis.

Cynthia Collins

Okay, I understand your question. So again the difference here is there are well established animal models that one uses for the development of a monoclonal antibody or a vaccine. And because there is an already approved monoclonal antibody as I said, it provides some sort of benchmark for efficacy. So it’s a little bit more straightforward. The agency has seen other RSV programs so they can compare the preclinical data of our program with others and have a sense around our technology.

Our vectors have been in more than 3000 human subjects over the years and so they understand the safety profile, they understand the data they are looking at. With the Novartis program, it’s not so straightforward. This is really a first in class drug. There are no previously established animal models so in some cases we are actually working with Novartis to develop those models.

Douglas Swirsky

That being said, I do want to emphasize the fact that we are very excited that the feedback we got from the agency was not one of concern regarding these new vectors. This is brand new GenVec technology. These are novel proprietary non-human primate vectors that have important properties for vaccines and we think they are going to be -- they are highly immunogenic. They don’t have the problems associated with earlier generation of adeno technology. So we are quite excited about the feedback we got. Don’t want to make it sound to routine, it was a good moment for the company and it takes some of the risk out. Plenty of risk to go, some of the risk out of that.

Julie Bickel - Boenning & Scattergood

So do you think part of the Novartis is -- okay, so then they need more animal studies. They need more proof because they have nothing to compare it to?

Cynthia Collins

I don’t know that I would characterize it quite that way. It’s just the animal models are being established as we go. They don’t currently exist. So there is an effort to establish the model in concurrence with moving the product forward. I think Novartis has been an incredibly thorough partner. They really have extraordinary experience developing products of these types and have a great relationship with the agency.

Julie Bickel - Boenning & Scattergood

Okay. And then my second question was, the reason that the cost cut didn’t extend to the cash runway it was 2013 income being less than expected. Can you just define for me why it was less than expected and I think Cindy you referred to other ongoing cost reductions, can you tell us what they might be?

Douglas Swirsky

So to be clear, we did get some runway extension, I think about a quarter. So it was not a complete wash. But in terms of saving the money that we did in taking that number of people out of the organization-wide wasn’t longer towards runway extension is because as we were looking at thing, revenue expectations have gone down. We are not providing any specifics as to why those numbers have. We are just revising our guidance on burn accordingly with these two events that were announced simultaneously. One is the reduction in force, two, we discussed in the press release that revenue expectations were down although we had not been providing guidance up to that point in revenue, we have been providing burn guidance and that’s been revised in connection with the risk.

Cynthia Collins

And in reference to the cost cutting activities that I referenced to, the same as Doug referenced. We are going through our expenses on a line by line basis and looking at opportunities to further reduce spending.

Operator

Ladies and gentleman that concludes the question and answer session with GenVec management. I would now like to turn the call back over to Ms. Collins for closing remarks.

Cynthia Collins

Thank you for your interest in GenVec and for joining us on today's call. We look forward to keeping you updated on our progress. Our next earnings call will be in March and we anticipate presenting at investor conferences in the first quarter.

Operator

Thank you for your participation in today’s conference. This concludes the presentation, you may now disconnect. Good day.

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