Coronado Biosciences CEO Hosts Analyst Day (Transcript)

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Coronado Biosciences (CNDO) Analyst Day April 9, 2013 8:30 AM ET


Harlan Weisman - Chairman and CEO

David Elliott

Joshua Korzenik

Mark Lebwohl


Boris Peaker - Oppenheimer

Ian Somaiya - Piper Jaffray

Joe Pantginis - Roth Capital Partners

Salveen Richter - Canaccord

Chris Marai - Wedbush Securities

Harlan Weisman

[Abrupt Start]

… will get things going.

Good morning to the audience that’s here with us this morning in New York and also to the people who are participating via the webcast. I am Harlan Weisman, I am Chairman and CEO of Coronado Biosciences and we are really glad to have all of you participate either in the audience or by the webcast with what I think will be a really stellar meeting and interaction with a group of thought-leaders in a variety of fields in which we believe and are accumulating evidence that our product here so will add great value.

I have a somewhat different disclaimer today and that is that what you are going to hear are the views of the people presenting, Coronado has not given them instructions, has not altered editorially any of the contacts, you are clearly seeing these experts in their fields unplugged and without our influence. And perhaps during the question and answers if something comes up related to Coronado there is a possibility that there would be forward-looking statements.

So, here is the agenda and you can see the list of our speakers’ and your bios are available, I guess, hopefully you got them when you came in, if not, we’ll make sure that you can get them. So I am now going to give a detailed biographical sketch of these individuals, but as you look at their bios you will agree with me that these really are the top people in their fields.

The morning will begin with the presentation by David Elliott, who is one of the members of the original research team that developed the idea of the hygiene hypothesis that relates to Crohn’s disease and the idea that TSO, Trichuris Ova or the Pig Whipworm Egg and after it hatched the Pig Whipworm larva, it could be a useful therapeutic in autoimmune conditions. So, he is one of the inventors of this idea and he will be able to give you a broad understanding of how they arrived at this, as well as some of the specifics of the exciting research they are doing in understanding mechanisms as well as giving you a window on some of the data that they have obtained as well as current research they are doing. That’s going to be followed by another talk by Dr. Kursnik, Joshua Kursnik from Harvard Medical School and the Brigham Young Women's Hospital in Boston. Again Josh was an expert in Crohn’s disease, familiar with the hygiene hypothesis and TSO and he again was going to give you a more detailed explanation of why he believes TSO will be an important product in this area.

And then the next speaker will be Eric Hollander who is at Albert Einstein Medical School and Montefiore hospital and has been studying TSO in autism and is now conducting an initial first in human from a sponsored perspective in autism. I got to tell you that autism as a disease that had an auto immune component or an immune mediated component was news to me when I first heard about it. And then as I read further the work that has been going on, it is a very compelling case for autism, autoimmunity, and the role TSO.

Mark Lebwohl, who is Professor and Chairman of Dermatology at Mount Sinai School of Medicine will speak about psoriasis, he's one of the thought leaders in psoriasis. He has one other distinction which I'm not sure is positive or not, and that is he was my resident at Mount Sinai hospital when I was an intern and had a lot to do in shaping me about what medicine was really about as opposed to what I thought it was about coming out of medical school. Not only is he a brilliant researcher, investigator but also a great clinician.

And then we will end with another important autoimmune disease and that's type 1 diabetes that will be presented by Desmond Schatz whose Professor and Associate Chairman of Pediatrics and the Director of the Diabetes Center of Excellence at the University of Florida at Gainesville.

And then finally we have left room for questions and answers and that will give the audience the chance to ask any questions you want, talk to many of you in the audience and you've asked us questions. But now is the chance to ask directly from the experts in the field so we're very excited about that. Please write down your thoughts and your questions as the morning goes on so that we can have a wide array discussion and perhaps debate at some point. Because this is being webcast, I’d like to ask those of you who are here live to turn off the ringers on your phone just so that doesn’t interfere with the webcast. And with that I’d like to introduce David Elliott who is going to give you an update on the Hygiene Hypothesis, David?

David Elliott

Thank you. Do I bring it up? No? Okay, good. So, what I am going to speak to you about is Helminths, Mucosal Immunity and the Clinical Use of TSO. The outline is going to be a little discussion about the epidemic of immune-mediated diseases, epidemiology of IBD and Helminths and how we came to the hypothesis, the effect of Helminths in animal models and then our findings in clinical studies and effect of Helminths in immunologic diseases.

There has been a dramatic increase in immune-mediated diseases that now are quite about 10% of the population in developed countries and numerates about 80 different well-characterized illnesses. If you add in coronary artery disease, autism and other illnesses that have an inflammatory component, that number is even larger. Most of these diseases became common in the 20th century and were rare before that and remained rare in other countries in developing countries but as these countries developed, the diseases became more prevalent and this is a very famous graph by Bach that just shows the dramatic increase in incidences of immune-mediated diseases in the western hemisphere over time.

What we are going to be focusing on from my talk is inflammatory bowel diseases, the picture of a normal colon and a colon involved with Crohn’s colitis where you have deep ulceration caused by deregulated inflammation targeted towards luminal content. And that inflammation causes tissue damage. So one of the questions then this is what regulates inflammation, they have done studies on patients with inflammatory bowel disease compared to normal siblings and genome wide dissociation studies to try to locate what genes might be contributing to Crohn’s disease and ulcerative colitis and now there is more than 160 genes that provide some degree of risk.

Many of these genes now have been sorted into families or pathways that regulate inflammation so you will see there the TH17 pathway or variations in that pathway or to your risk for inflammatory bowel disease and other pathways also. Many of these genes or variations and pathways also affect other autoimmune diseases; so for example, I have outlined there, ones that are involved with type 1 diabetes in addition.

But what the genes don't tell you about is why the increased incidence and prevalence of these diseases overtime. It takes a long time for your genes to change; takes centuries. And so, if it happened in one generation that is not a genetic change, that’s an environmental change. This is what happened in Crohn’s disease overtime in different areas and you can see that the incidents dramatically increased. That's continuing in other parts of the world, as they develop.

So here is this graph from western Hungary showing the increase and also replacing Crohn's disease after the fall of Soviet Union when that country became more westernized. So, just that the genes create a predisposition for autoimmunity, but it was the change in the environment that precipitates it, or allows it, or permits it.

Okay, so, we thought that there the rapid increase in IBD prevalence adjusted that environmental risk increase; environmental change increases the risk and then the question is what was the change. And what we are looking for then is the change that occurred in the last half of the last century and when the change that occurred at that time was the eradication of Helminths.

Prior to that, they were fairly common and John D. Rockefeller initiated a procedure or focus to get rid of Hookworm because he felt that Hookworm caused lassitude among his workers and if you got rid of Hookworms, you will be able to work his people harder. So he went out to try to get rid of it and this is what actually turned into the Rockefeller foundation and a lot of the hygienic laboratories and focuses globally.

And as you can see here in southeast, back in the 1910 - 1914, in Florida one analysis of children showed Hookworm carriage of about 62%. But by the 1950's, that had dropped down to 19%. And now Hookworm is no longer an endemic in the United States. This is an example of a flyer that was distributed in Illinois in the 1936 to 1941 extolling the virtues of having your own outhouse. So, to say that we’ve had dramatic change in hygienic environment is understated. What that did though is it really got rid of Helminths. So our hypothesis was at the loss of intestinal Helminths was an environmental change that contributed to IBD and if you flip that on its head then, Helminths exposure alters the immune system to prevent excessive intestinal inflammation. And we investigated that animal models and we and others found that that indeed correct. If you look at several different models of colitis, in this case with the TNBS and IL10-dificient colitis giving mice Helminths will either prevent the onset of the inflammation or if the inflammation are already established, will reverse it.

The one that we use in the lab is Heligmosomoides polygyrus it’s a nematode of mice it lives, it has the completely enteric lifestyle, is acquired by ingesting small L3 larvae and they reside in the duodenum and then we can look at what’s happening in the colon and terminal Ilium distant from where the worm is just see what the immunologic circuits are. And the basic protocol that is we take a mouse, we infect it with some larvae, wait a couple of weeks and then see what’s happening immunologically.

And what we’re going to be looking for is what’s happening in the immune regulatory circuits. So the t-cell season (inaudible) cell, it will - can develop into a type 1 Th1 cell (inaudible) Th17 making IL17 or Th2 making IL4, that whole inflammatory complex is regulated to some degree by the key regulatory cells which kind of offset that and there is a lot of counter balance here. So, we’re going to be investigating these circuits. When we do that, we see that we give the mouse worms and look at (inaudible) lymphocytes present in the intestine. We have an induction of IL4, an induction of IL13 and induction of IL10 and a dramatic turn off of pro-inflammatory IFN γ and IL17.

That suppression is due to active regulation, so here is that suppression again. If you look at mRNA from freshly isolated (inaudible) cells it’s also knocked out and if we take cells from this group and cells from this group and mix them together, we see that we still get suppressions. So, cells from the Helminths infected mouse can suppress the inflammatory cells from the non-infected mouse suggesting that there is active regulation occurring. If we are investigating what might be causing that active regulation, if we block IL10 or IL4 we can release it. So the (inaudible) circuits that are being established by the Helminths are influencing the pro-inflammatory circuits and suppressing them.

That’s good for the normal mouse what’s happening in colitis. Well we have another model that’s very powerful. We can take screen cells from a mouse, remove the regulatory cells and put it into a mouse that lacks an immune system; then we stimulate the mouse with Piroxicam to kind of injure the intestine a little bit, take the Piroxicam away, that mouse will then become colitic. We can then infect it with Helminths and see what the Helminths do with established information. This is the more clinical model, a treatment model with Helminths.

When we do that we can see that, giving a mouse with colitis, a Helminthes resolves the colitis. This is the clinical score, histologic score. When we do that we again alter the cytokine environment. So we have drop in IL17, a drop in IFN γ in augmentation of IL4, an augmentation of IL10, and basically its complete suppression of IL12 p40 and IL23; the circuits that drive the Th1 and Th17 pathways.

We also have induction of regulatory cells in an environment where no regulatory cells were transferred, so we’re converting cells over to become regulatory cells as measured by CTLA-4 and Foxp3. So we then went and dig a little deeper into the mechanisms. When we do that, one of the things we wanted to look at was IL4, I showed you a second ago that blocking IL4, kind of reversed the suppression. So we wanted to see what would happen if we affected that circuit. IL4 and IL13 signal through their receptors, both activates STAT6 and so STAT6 is the up transcription factor influenced by L4.

We can then do that same transfer model I talked to you about a second ago. You think cells from STAT6 knockout mice which would not be able to respond to IL4 or IL13 and see how these animals react to Helminthes colonization. If we do that we see mice that were transferred while T-cells have nice resolution of their inflammation whereas mice that had transferred in STAT6 deficient T-cells do not have resolution of the inflammation, showing that the STAT6 circuit actually is important in the mechanism of this Helminthes.

When we look at what’s happening with the cytokines, we see we have a diminution in IL17 in the wild-type transfer but not in the Stat6KO transfer same with IFN γ. The IL10 is augmented in a wild-type transfer but is actually decreased in the Stat6 transfer and again we get a very significant reductions in IL12p40 in a wild-type transfer but not in a Stat6KO transfer.

We also are investigating circuits of IL6. So, Helminthes suppressed Th17 and promote Treg development. The Treg cells and Th17 cells are continually being pushed in one direction or the other by IL6 and TGFβ. IL6 and TGFβ drives Th17 development whereas TGFβ alone drives Treg development. So, IL6 serves as a switch and so we want to see what would happen to IL6 in this system. And IL6 signals through its receptor and activates STAT3 which is critical for Th17 activity and the GWAS studies I showed in the very beginning have shown that IBD risk is influenced by a STAT3 variance so our question then was does Helminthes infection alter IL6-signaling?

And what we find was this that again when you infect a mouse with H. bakeri or H. polygyrus you get diminution in IL17 production and you can get an augmentation of TGFβ, we knew that before but when you look at IL6 you also get an induction of IL6 which creates a paradox because then you should be inducing more Th17 cells, not suppressing them. So we want to see what was going on there.

If we take the mesenteric lymph node cells and then if you take it from a controlled mouse and stimulate them in vitro with excess (inaudible) IL6, you get an induction of IL17 unlike you would expect but if you do that with cells from a mouse that’s infected with Helminthes, the additional IL6 does not stimulate additional IL17 so the cells are now refractory to the IL6 and part of that is a due to a downturn in the IL6 receptor display on those lymphocytes.

IL6, as I mentioned, acts through its receptor to stimulate pSTAT3 or STAT3 which is a transcription factor that helps drive IL17 development or Th17 development and we wanted to see what happened then to the pSTAT3 compartment or pSTAT3 expression and when we look at that we what we see is that (inaudible) have very little fossil pSTAT3. So this IL6 signaling circuit actually is turned off in these animals even though there's IL6 around.

So the conclusions from the mice work done is that infection with Helminthes promotes gut mucosal (inaudible) IL4, IL13 and IL10 production while inhibiting ILNγ and IL17. Infection with polygyrus bakeri inhibits colitis in multiple model systems. T-cells STAT6 circuitry is required for reversal of colitis and suppression of the Th1, Th17 responses and it also is active in suppressing T-cell IL6 signaling which is necessary for maintenance and development of the Th17 compartment.

We also did initial work moving from bench to bedside when we started getting the data back that Helminths really did suppress colitis in mice, the next step was to the take this to the bedside and ask the question well how much colonization attenuate established intestinal disease in patients.

The first question we had was which Helminthes? So we sat around for literally months trying to decide which was the best worm to pick. And the ones that are currently being developed or at least being investigated is Necator americanus, you may know hookworms and organs in that we choose Trichuris or porcine whipworm and we centered on whipworm because of some of its parasitologic attributes and then we switched over to the porcine whipworm for other attributes.

The Trichuris suis is closely related to T. trichiura so closely related that you can only see the difference looking genetically. It can cause a self-limited colonization in people. It has no known pathogenic potential for people. So for example pig farmers have been exposed to Trichuris suis for millennia but there's never been a recorded case of significant disease from Trichuris in a pig farmer or the kids of a pig farmer.

It is confined to the intestine unlike some Helminths that are around the body that stays put. It does not multiply in the host. There’s no direct spread to close contact. This is important to us. So the Helminthes egg, the Trichuris suis egg requires incubation in the soil for a couple of months to embryonate and become infective, so a person cannot transmit the colonization to someone else on close contact. You have to work very hard to do that.

Pathogen-free eggs are easily obtained because we can obtain that from specific pathogen-free pig that has been raised in very sterile, very pure environment and the eggs are very stable that can live in the wilds in the soil they can survive for a decade or two.

So with that we thought we had agents that would be amendable to clinical study and we have studied Trichuris suis and active Crohn’s disease in an open label study. In this study we had 29 patients who had active Crohn’s disease, 25 completed the 24 weeks, four with through but all were analyzed, one was through for pregnancy, three for disease activity and what we found was that at 12 weeks and at 24 weeks and they were giving every three weeks, we had a very significant remission rate and a response rate measured by a drop of CDAI of 100 points. This was much higher than what you would expect for placebo response.

So that was very reassuring. We also did a double blind placebo controlled single centered study in ulcerative colitis. This was a double blind study where we enrolled 54 patients and they had a disease activity score greater or equal to four and that’s measured by stool frequency, bleeding, sigmoidoscopy score and overall degree of illness each graded on zero to three for a maximum of 12. The study we designed was actually a crossover study so people who are active at the 12 weeks or transferred over to the other limb. They were giving Trichuris every two weeks. it was a mixed in charcoal and a sport drink so you wouldn’t be able to see that there was any eggs, if you hold them up to the light, the eggs are microscopic but if you hold the water up to the light you can see that glint off of it, so you put charcoal in there so that wouldn’t happen. Most medications were allowed. We had two protocol violations, one placebo controlled patient had a COPD exacerbation and received steroids when patient had increase in disease activity and was given steroids. And we determined the response by a drop of four in UCDI index and measured on a significant two-tailed Fisher’s exact test. And when we did that, looking at both intention to treat and per protocol in the Phase 1 initial part of the study we found good response rate to T. suis on both those determinations. And as I mentioned the UCDI is measured in by four components; stool frequency, blood in the stool; the appearance of the mucosa and then overall assessments; and in all of those components, we had a response rate. On the Phase 2, we had crossover, so the people who were given placebo were still active were transferred over to T Suis and the people who had T Suis and who are still active, were transferred over to placebo and when we did that we saw again a continuance over response in the patients' that got T Suis.

Combining those two data points, we were able to come up with a time to response and appears that the time to response is somewhere between six and eight weeks after the initial dose. So, in addition now more recently Coronado has done a dose ranging study for Crohn’s disease. This was a multicenter, double blind placebo control trial looking at 500 to 7,500 in six centers.

They had confirmed Crohn’s disease, on stable medications, they received a single dose and then were followed for 30 days and looking at adverse events and no dose dependent trend was noted for any adverse effect event at clinical laboratory or vital sign measured. So, it appears that from those studies that TSO is well tolerated.

I want to mention the effects of Helminths in other immunity diseases. Initially I showed you a graph by Bach that showed that many of these diseases came up in the last half of the last century and about now 24 million Americans have immune mediate disease. And in comparison about 9 million have cancer and about 22 million have heart disease. So this is a very substantial number of people and significant morbidity.

Information request on autoimmune disorders outnumber all other health topics that are brought are sent in to the National Women’s Health Information Center and the problems is increasing dramatically. If you look at Helminths in models of human disease, we find that they are very effective in reducing clinical scores in multiple sclerosis, Type 1 diabetes using the NOD mouse and (inaudible) mice and different models of rheumatoid arthritis and actually also in reactive airway disease.

And I will stop there and take any questions, except from two minutes although.

Joshua Korzenik

Thanks very much. That was a great introduction to the overall concept and my responsibility will be to give you a broader context for Crohn’s disease, talking less about TSO as much as where we stand with Crohn’s disease both in terms of pathophysiology and in terms of therapies.

It’s a very different audience to what I’m usually used to talking about, so I hope I sort of approximate it what your level of knowledge and interest might be. So, but please ask questions if I’ve either underestimated or overestimated where your knowledge base is.

What I am going to talk about is just a brief overview of the pathophysiology; a little bit about genetics over lapping a little bit with what David said is a slightly different slant. A little bit about environment and a little bit about immunology in a broader overview and talk a little bit about the current standard of care, what’s the problems with our current therapies, what are the questions we’re asking with our current therapies and what the unmet medical need and how TSO may fit into the treatment paradigm and then little bit about patients reception to TSO in terms of the way we’ve discuss it and what we talk about.

Now, when we think about what would be the ideal therapy for inflammatory valve disease, really for almost any disease but particularly for inflammatory valve disease. We need something that reduces disease activity, induces remissions and not just a response but something that’s really getting people into a full, what we would call healthy. And then after inducing remissions it really maintains remissions. So in terms of any FDA trial those are the two end points that we’re looking for, its first reducing activity and keeping somebody dead in remission for longer period of time and usually at least six months or starting in preferably longer.

We also want to make sure that this interferes with natural history, so that we break the cycle of reputed hospitalizations, reputed surgery and what the end point we’re looking at increasingly is mucosal healing. So, meaning the lining of the intestine is healed up, it’s not just that someone feels better as they might with steroids, with prednisone but that they are really healed, so that’s a good marker not surprisingly for an improved outcome over the longer haul.

So, we really want to find end points. Particularly in Crohn’s disease where patients will have an operation, have recurrent disease, have recurrent surgeries and we need something that’s going to break that cycle and change things. We’re concerning certainly about economic perspectives. We need something that’s relatively inexpensive given the incredibly soaring costs of what we are dealing with and this has something like anti-TNF, not just in Crohn’s but will account for about $16 billion a year, worldwide next year. So for patients concerns, we need something that’s going to be covered by insurance. So that it’s not so difficult to get them these new medications. And patients’ concerns are not just efficacy, but certainly our concern as well, but something that’s safe and something also that’s taken relatively and frequently.

So it’s needless to say we don’t have an ideal therapy at some inflammatory bowel disease. Some of them go over a little bit while. Now Crohn’s disease was probably first discovered not by Crohn but by (inaudible) about a 100 years ago, not by, in the British Medical Journal he said I can only regret the etiology of the condition remains in obscurity, but I trusted (inaudible) of the difficulty.

Going on about a 100 years later, and we really haven’t cleared up the difficulty. We have made considerable advance. For those of you have seen talks before in Crohn’s or ulcerative colitis you have seen this type of slide. I think it’s slightly misleading because it gives the sense of equivalence between these various factors and then the idea is that really for any immune mediated disease, that there are genetic factors, that there is an immune response, that there are particularly inflammatory bowel disease, now this area of the Micro biome, the intestinal flora which is probably a critical component, and then environmental triggers. And those people who are unfortunate to have enough of these factors that are off will then collide and have inflammatory bowel disease.

The genetic factors are, as David pointed out, have been increasingly detailed. There are about 163 genes so far. This is the picture I took at Twinsburg Ohio. The guys in the middle row went to high school with the women and the guys in the back where their women is on the right (inaudible). And it really was a remarkable conference. There are not people with inflammatory bowel disease. I was out there actually collecting stool. But that may be something that we can talk about some other time. My wife did not come along for the trip.

In any event, as David was pointing out these various genes have been, it’s a little bit confusing when you have 163 genes. And it really means, in a circumstance, that we don’t have a full explanation. The contribution of these genes may account for as much, or let’s say as little as 20% to 25%. In my sense that’s probably an overestimate of the influence of genes into this. Now some of the genes, what’s been very interesting is identifying pathways that maybe critical in the development of inflammatory bowel disease such as a defect in innate immunity so the primitive initial responses were found to be really defective sort of deficient and so it’s curious of why you would expect in that disease where there is an accept of immune response that some of the genes are actually associated with the deficient response and that has been an important insight into the disease and has shifted our understanding of the disease, even though therapies haven’t really caught up. But there is a variety of things whether it’s epithelial barrier, a variety of other things that are deficient, we can talk more about those.

But to give you a sense of how the relative importance is for these diseases that the genetic contribution is relatively mild. so if we look at the first one identified NOD2 it’s perhaps associated with Crohn’s disease and 13% of Crohn’s disease population, about 1.6 million or so Americans who have either Crohn’s or ulcerative colitis, this is more associated with Crohn’s perhaps 13% or maybe about 104,000, the healthy population at least in this particular referenced population is estimated to be 3% to 7% and this represents in this group, over 6% so you see out of 18.5 million, 104,000 actually got Crohn’s, for the another one IL23 receptor again about the same amount or 15 million Americans and the healthy population on autophagy the one that is more strongly associated in the certain sense with Crohn 34% in the healthy population it’s 25% or 77 million.

So, what this tells us it’s primarily not a genetic disease. Genes maybe importantly associated, it’s important to understand in pathophysiology but this is really an environmental disease. And when we look at the environment, there are a whole host of things that have been associated clearly with the development of inflammatory bowel disease. So the best ones I would say are smoking, smoking curiously is something that protects against the development of ulcerative colitis and it’s curious because if you are smoker and you quit smoking, your risk is higher than if you had never smoked at all. But while you are smoking you are protected against the development of ulcerative colitis and if you do smoke and you get ulcerative colitis you tend to have milder diseases and onset at an older age. Smoking in Crohn’s is the opposite. it’s a risk factor for the development of Crohn’s, it is a risk factor for faster development of inflammatory disease after surgery and quitting smoking can bring, make the disease slightly milder, not a profound effect. Non-steroidal or ibuprofen (inaudible) type medications can provoke flairs and maybe important in causing the disease in a variety of other ways that we can talk about interestingly having an appendectomy for an inflammatory reason meaning there wasn’t just the surgeon in there decided to grab the appendix on the way out, but it is people who had an appendectomy before the age of 21 for appendicitis are profoundly protected against the development of ulcerative colitis not Crohn’s. So it reduces the risk by about 60% of subsequent development of ulcerative colitis, why that is we don't really understand. Breast feeding seems to be protective in ulcerative colitis and Crohn’s and micro biome is an area of intent interest recently. Diet has an influence but the data is really all over the board and there are a whole variety of other things that we don't have a good understanding on at all, and whether it's hygiene, whether it's air pollution and a whole bunch of things in between have various effects on these diseases and there are a major components of the environment which we haven't understood at all.

We know that the development of the micro biome is critical and the mode of delivery, whether it's a C-section so you develop your micro biome you're born obviously without any bacteria, and you acquire it usually as it comes through the birth canal, but if you have a C-section that shifts the nature of your micro biome and that though not consistently found is associated with the development of Crohn’s disease, breast feeding, probably not so much because of any immune effects but really because of founding the micro biome in a certain way is probably how that happens. And people have had other things that alter the micro biome, whether a severe GI infection as a child or antibiotic use are also risk factors for the development of these diseases, so things that affect the micro biome in different ways which we haven't fully understood, critically can cause it and when we look at the micro biome with the tools that we have now we can show that there are broad brush differences between the diseases and we give certain types of bacteria to mass models we can induce colitis or improve colitis and we know that certain bacteria are better or worse pro-biotic haven't really come through yet but there are other things we can talk about that are being looked at .

So there is an important component of the (inaudible), but what really fundamentally is causing is not as if there's a single bug or set of bugs that are clearly those that are causing these diseases, so the model that we're looking at really is that there's an innate immune defect, if there's some damage whether it's to the intestinal barrier whether it's increased permeability or delayed clearance that leads to an acute inflammatory response that if unresolved will lead to more of a chronic inflammatory response, and then you have this cycle which needs to be broken at some point in the circle to be able to bring about health. And so we really go to this model that we borrowed from the rheumatologists starting with the mildest approaches I mean its things like Mesalamine or you may have heard it Pentasa or Asacol or Lialda.

Working our way up to steroids, we do everything we can to avoid steroids and I must tell you why, other not just (inaudible) but any of the anti-TNF. We are now really talking about inverting this pyramid whether we should do it much sooner in the role of things. I am going to just go through some of these therapies very quickly to give you a sense of where we stand.

For ulcerative colitis, these are very effective in perhaps 30% to 70% people we can get them in remission on these but for Crohn’s, it’s really relatively ineffective so when we look at Mesalamine and Crohn’s disease which a lot of people are looking at, or have looked at in the past, the benefit in the meta-analysis is trivial, so even though this drug was looked at for an indication for Crohn’s disease, it never achieved that because it’s just not effective and we need something in this range of a mild drug that is much more effective and this is not yet, the (inaudible) benefit of 20 point change in the Crohn’s disease activity index is really not something that’s clinically meaningful.

Steroids are something we rely on much too much there is a huge effort to get away from this, it’s quick, it can induce remissions and I will go into it in a little more detail. As people have pointed out if steroids came up before the FDA for Crohn’s disease or ulcerative colitis it would not be approved. It had too many side effects it does not have a long-term benefit and it really does not heal the mucosa. And just as an indication if you start someone on steroids as much as a third will have long-term dependency on steroids and you created your own burden of disease by trying to help patients. So we really try to get away from it not so this does not heal. So we turn off into 6 MPs of Azathioprine, add drugs which have a long track record but when we studied them in larger numbers of patients, they are really not as effective as we would have liked even though we still use them quite a bit.

So, even here in an earlier study when patients were all started up on steroids then randomized either Azathioprine or placebo the long term response rates were 42%, the more recent studies with larger numbers of patients don’t look as effective as 42%.

And we now turn then to the anti-TNF as you are aware the ones that we’re using currently in Crohn’s are Infliximab, or Remicaded Adalimumab or Humira and Certolizumab or Cimzia all approved for Crohn’s. so when you look at the trials are already equivalent, particularly when you can look at the difference between the placebo and the active drug and almost all the biologics come in at about 20% improvement over placebo. so even though we turn to these as these new wonder drugs that we have for the treatment of inflammatory bowel disease and this has resulted in Crohn’s disease the result in ulcerative colitis are pretty good for infliximab, not so good for Adalimumab, even though it has FDA approval and we don't have data yet for Certolizumab. These are great drugs, but you can see that there is still an enormous unmet need from these results.

And what's also a major problem with anti-TNF is that there is a loss of response over time as much as 50% over six months. Now, we can often regain response in some and there is an increasing emphasis on measuring drug levels. We just in last week have approved Adalimumab levels and Infliximab levels. They are hugely expensive to test, from Infliximab levels about $2,500 for single test. But it's such an expensive drug that we do use it and we can maximize therapy a little bit by using that.

But there is a huge problem with safety. And they are remarkably safe given what they can do and given their interference in the immune response. We worry about not just things that are black box warnings such as tuberculosis, but others about 5% or less infusion reactions, we worry about infections above all and then a variety of other things that are less common but still occur.

And just to give you an indication and where we are at and trying to, we’re still about 15 years into using a Infliximab and we are still trying to figure out how to use it best and I would say with some embarrassment, as someone in the field that our recommendations waver back and forth in terms of how to use these drugs so that initially we were saying that good as mono therapy and then we said no you really need to go dual therapy with some immunosuppressants, then for other data came out, so we said really mono therapy is better and now we are going back to dual therapy.

This was a study that was critically called Sonic, where patients were randomized to either Azathioprine alone, Infliximab alone or both together. And to our somewhat perhaps naïve surprise, Azathioprine 30% awfully low. This was not a placebo control thing. This was with active comparator. There may be reasons why this was low, that could be explained but still it was 30% compared to 45% and the surprise was together there was a synergy here and so that we got response rates that were higher than what we had anticipated and this is the week 26 coming off of steroids and being in remission.

So it brings up the issue though how great is the unmet need, so if you are developing a new drug, how great is the clinical need out there? And in terms of how to define that exactly, it’s probably about 30-60% of people with inflammatory bowel disease aren't fully responding to what’s out there. I think that there is probably, if you take something like (inaudible) it’s probably about 20% in most studies, don’t tolerate it and need something else and people who are poor candidates for variety of reasons so we can go into it’s probably 5% to 10%.

Now, I’d say that the clinical trials are really a poor guide because most of the candidates for those trials are fairly restricted in terms of we can get into them so there often not ideal candidates. What’s coming down the line? Adalimumab is just for approved for Ulcerative Colitis even though the data was remarkably poor, is a benefit there. Golimumab or Simponi that’s been approved for other immunologic indications will be likely approved soon for Ulcerative Colitis.

Etrolizumab is an (inaudible) molecule antagonist, so these are the white cells that streaming long in the vessels and these molecules grab a whole of the leucocytes to bring them into side of inflammation and these antibodies block that.

Vedolizumab is something that has reasonably good data would be likely approved in 12 months for Crohn’s and Ulcerative Colitis that say that was statistically significant in Ulcerative Colitis. It shows the benefit to data is an overwhelming but it’s a very positive and other ones in that class is coming along. Other ones in term of (inaudible) antagonist are coming along. Use to Secukinumab or Stelara approved for psoriasis is in phase 3 studies and looks reasonably good and we're using it a moderate amount even though we don’t have an indication yet. And then there are other approaches such as Janus kinase 3 inhibitor, Tofacitinib which is probably the most promising thing that’s coming along for Ulcerative Colitis but that still has a long ways to go.

So who would TSO fit into the treatment paradigm here? Well, I think that it really would potentially be an enormous game changer because we typically think of when you have a new drug; this is going to come in, at sort of the end after people have failed everything else. Because of the tremendous safety of this it would likely be something that’s not just thinking about unmet need but it would go very early on in the disease paradigm. So this would be a shift in a huge way of how we would approach the disease assuming we can demonstrate efficacy.

The mechanism may treat some underling fundamental immune defects that occurs, mono therapy would also hope that sufficient so that’s complicating things and adding on risk of side effects that may define infrequent dosing, early use in the disease I mentioned and a pediatric use which is very much needed. We don’t yet know about efficacy but there is certainly inklings of benefits, we don’t know at all if it’s going to change the natural history, we don’t know it’s going to heal the mucosa and whether it’s really going to reduce hospitalization.

In terms of patient acceptance, I think that it’s really not a problem. We are talking now about other things with patients like cecal transplants and other things and patients are happy to do what it takes. I think initially there is some very minor squeamishness but once they understand that it’s not fear factor, taking in a couple of rising worms, they feel comfortable with it and they actually feel relieved. Ultimately that’s something that’s so benign; they could bring about profound benefit.

So we are now in the phase II studies, TRUST-1 and TRUST-2. I won’t go into this in any detail, but we can talk about this in more detail during the question and answer period. I haven’t talked about this, in terms of the patient acceptance, there is a universal interest and really fascination by patient as there is I think by the public generally and I think that resistance to the concept is really superficial. I think this will be data driven and I had quite a few patients who have gotten off-label as well; because I think the interest and desire is quite intense.

So I will turn this over then to my colleague. I will happy to answer questions later. Thank you very much.

Unidentified Company Representative

Okay, well thanks very much. It’s a pleasure to be here. So I am going to be talking a little bit about some of the rationale behind our current trial of (inaudible) with autism inspection disorder. Just acknowledge the funding sources, Federal Foundation and Industries support. So autism is a neurodevelopmental disorder. So everybody who has the onset of the illness has to have the symptoms before age three. So that’s a very early age of onset. Right now to make the diagnosis, you have to have marked impairment in three different domains. Socialization, repetitive behaviors and language based difficulties. In the DSM5, one major change is that the fine grain categories of autism, Asperger’s syndrome and PDD NOS are going to be thrown out, and there is just going to be one category, autism spectrum disorders and the three domains are going to be shrunk down to two basic domains, repetitive behaviors and social communications.

So hereto, there are maybe a 100 different genes that have been implicated as playing some role in autism. It’s fairly heterogeneous disorder but there is no single gene with a major impact. And one idea is that there are certain final common pathways that are associated with the core and associated symptom demands.

So, here for example we have social deficits, repetitive behaviors and speech and communication. There is a lot of associated symptoms that shaped the expression of the illness and contribute to the overall caregiver strength, so lots of impulsivity and aggression. There can be seizures, hyperactivity, and that the symptom domain sometime runs within families but to get the full illness you have to have multiple symptom domains.

So, there has been a lot of work recently identifying genetic pathways and in particular copy number variations, it’s a small deletion, duplications, and chromosomal material that are associated with more homogenous syndromal forms of illness, so Rett syndrome or Fragile X or these 16P or 15Q cases and there are social networking sites so that individuals who have specific syndromal forms of the illness get to know each other. We also know that there are important epigenetic factors, so early exposure to the environment has a key role in terms of shaping gene expression and the progression of the illness.

The repetitive behavior is now one of the two core symptom domains in the illness and we’ve seen that there are sub-factors within the repetitive behavior domain. People can have intrusive disturbing thoughts that cause anxiety. They can do certain kinds of habits or rituals to neutralize the anxiety, so checking or washing for example or counting. There are a lot of these lower order self-stimulatory kinds of behavior, so hand flapping or rocking or head banging and then hoarding things as well.

So, currently there is no known approved treatment for the core symptoms of autism. There are two medicines that have gotten FDA approval, risperidone and aripiprazole atypical antipsychotics specifically for a small subgroup of individuals of autism who have severe irritability of disruptive behaviors, who have a lot of self-injury or lot of aggression.

Many patients are on different medicines so some patients are taking selective serotonin, reuptake inhibitors like low-dose Prozac to deal a little bit with the anxiety and the flexibility issues. Some patients are taking anticonvulsant type medicines to deal with the irritability or the seizures. Some individuals are taking stimulant medicines to deal with seizures of attention deficit hyperactivity disorder. And, there are a number of sort of new pathways that are being developed by industry or an academic side, so people have looked at peptides like oxytocin or vasopressin that maybe involved in social cognition or peer bonding.

Some companies have developmental programs looking at drugs that work on glutamate system and the GABA system so inhibitory and excitatory pathways. There has been some interest in developing medicines that work on these cell psycho-pathways that are also found in cancer. When these cell psycho-pathways are activated, synapses become strengthened, then drives sprout and you can get longer in neuron so bigger brands and one common feature of autism at certain stages in developments that you see larger (inaudible) bigger brains that around age 12 to 18 months.

And, so there are some drugs in development that influence this PI3K-AKT-mTOR pathway and some of these drugs like rapamycin that work on the mTOR path are also being developed. So, we have been interested in looking at sort of the role of inflammation as a key feature in many individuals with autism and trying to intervene in terms of inflammatory pathways to change the core symptoms and the progression of the illness.

Now you’ve heard a little bit about the role of the micro biome, so we’re not necessarily just our own cells we really are super organisms and there are more cells inside our body that are not us than are us and autism is a good example of a gene by environment interaction.

We have a series of studies where we’re looking at fever response in autism and one idea on autism is about third of patients who get a fever, have some clinical improvement where they have a little bit better eye gaze where they seem to have a little more social communication, they seem more connected with other individuals.

One study that we’re involved in is comparing individuals at different temperatures 102 degrees versus 98 degrees with the idea that there can be thermo labile enzymes in the brain that maybe activated and play role in terms of taking methyl groups of regions in chromosomes and maybe associated with gene expression. One model of autism also involves the role of maternal stress and there are some epidemiology studies that suggest that mothers who are pregnant exposed to hurricanes at around 24 weeks of pregnancy seemed to be at increased risk of having offspring with autism spectrum disorder and that high maternal stress maybe associated with pumping out a lot of cortisol and that the locus coeruleus noradrenergic system maybe exquisitely sensitive to this maternal stress at critical stages in brain development and you may get a developmental hypo function of the noradrenergic system.

If studies looking at norepinephrine reuptake inhibitor Milnacipran that’s currently marketed for fibromyalgia and then we’ve been interested in examining this immune inflammatory response and in particular we have a new treatment trial in young adults who are high functioning individuals of autism with Trichuris suis ova illness.

To hear this febrile response, the idea that some individual seem to have some clinical improvement with fever less irritability, a social withdrawal with hyperactivity, less stereotype behaviors, and more appropriate speech.

Now if you look within the first degree family members of individuals of autism, you see a really significantly increased risk for a broad range of other autoimmune problems in the first degree family members. So higher rates of diabetes, ulcerative colitis, and Crohn's disease, psoriasis, ITP, Lupus, myasthenia gravis, rheumatic fever or any autoimmune disease as a whole. So, significantly increased odd ratios. And if you look at antibodies, it binds a different proteins or receptors in the brain in individuals with autism either on postmortem tissue for example you can see high binding and a range of different receptors or proteins.

So, one idea is that either in the mother or in the infant you can get this activation of the immune inflammatory response increase in proinflammatory cytokines of interest some of these proinflammatory cytokines trigger this cell psycho-pathway, the PI3K or phosphatidylinositol 3-kinase pathway, so this is a primary target or receptor for lithium and it turns out that the number of other compounds that we work with in psychiatry, oxytocin, serotonin receptors, for example, play an important role in regulating this PI3K AKT - mTOR cell cycle pathway to have genes like P10 that inhibit this pathway in certain forms of cancer P10 is inactive and that’s the case in some individuals with autism spectrum disorders.

We have some biomarkers for example that we could look at in patients with autism and that may be of some help in terms of following the progression of the illness and that may be early efficacy biomarkers for change in the inflammatory pathway with treatment.

We know that things that enhance inflammatory stimuli can trigger CNS or psychiatric symptoms so the use of interferon for example or this idea of maternal immune activation. So flu for example or other things that can trigger an inflammatory response in the mother can be associated with the speech forward mechanism of enhancing inflammation in the placenta and then in the fetus and with developing nervous system.

So, here is the idea of that, sort of activation of the peripheral immune system can certainly influence central activation of things like microglia and so pumping out pro-inflammatory cytokines can cause monocytes to migrate through the blood brain barrier and increase sort of essential CNS inflammation.

In illnesses like Rett Syndrome, one interesting treatment these days is irradiating the peripheral immune system, sort of infusing healthy T-cells that can get grafted into the brain that may result in behavioral improvement in Rett Syndrome.

So, one idea is that environmental stress for many different pathways can trigger chronic inflammation. That chronic inflammation can affect a range of different disorders including neuropsychiatric disorders or development mental disorders.

So, in autism, there is a hygiene hypothesis that was developed in Iowa has been, thought of that sort of a paradigm shift, in terms of the way that we think about these illnesses, in measuring the spinal fluid or in looking at post mortem brain tissue, individuals with autism have died prematurely is evidence for activation of microglia or astroglia and higher rates of these pro inflammatory cytokines.

So we have a pilot study now in 10 subjects who are young adults who have high functioning autism. They all have normal or high IQ and good verbal skills. They are capable of giving informed consent and we can have conversations with them and get a range of different outcome measures. So the study is in young adults age 18 to 35, it's a double blind, randomized crossover trial, so individuals either get 12 weeks of TSO and then are crossed over to 12 weeks of placebo or vice versa and to minimize any potential carry over effect there's a four week wash out period between the two active phases. In particular what's been noted in anecdotal case reports of children and adults who have been treated openly with TSO is that there is an improvement and particularly in these disruptive behaviors and those disruptive behaviors really stem from repetitive behaviors.

So one idea in autism is that there is need for predictability and when things happen in the environment that are outside of what's expected, that can trigger some level of discomfort and that discomfort is often translated into some type of protest or temper tantrums resulting in high care giver strain within the families. And we think that one target in particular is the rigidity or compulsivity that results in these disruptive behaviors or temper tantrums but we're also going to be looking at things like global functioning and social cognition, and then various laboratory immune measures as well.

In looking at repetitive behaviors there are good outcome measures that the FDA has utilized for approvals in a number of different treatment trials in childhood and adult obsessive compulsive disorder, that are also used in the autism field. There are good measures associated with irritability that have been followed by the FDA for treatment trials of irritability of disruptive behaviors and there are some trials looking at social cognition as well.

I think I'm going to stop at that point and just say that this has been sort of a shift in the way that people think about autism spectrum disorder and this is a sort of a novel therapeutic approach.

Mark Lebwohl

Okay. I am Mark Lebwohl and I am going to speak to you about psoriasis and specifically concentrate on unmet medical needs. So this is a very abridged list of treatments that we have for psoriasis and despite the enormous size of this list and all of these drugs that are currently in development for psoriasis. A survey published only a few weeks ago of 2,000 patients reports widespread dissatisfaction with our treatments and a high level of discontinuation of the treatments that are out there. And there is actually a lot written about the frankly enormous proportion of patients who start on TNF blockers Humira, Enbrel, Remicade because of loss of efficacy or adverse reactions from those drugs.

Methotrexate has side effects, I will mention some of them later, liver toxicity and bone marrow toxicity that are dangerous but if you speak to patients on Methotrexate, an enormous proportion of them just feel lousy when they effect. Many of them will time their Methotrexate doses for weekends so that they don’t have to feel sick at work. Ultraviolet B I highlighted in red there the cost, Ultraviolet B is given three times a week for months. The average co-pay is now about $50 that the insurance does not cover. So it’s $150 a week for many of the patients who get it. But, completely apart from the cost think about the time sticking yourself up and going to phototherapy unit in the middle of the work three times a week. And there are not many places that have hours outside of nine to five, we do, but very few places do.

The new TNF-alpha blockers that I mentioned and Stelara which blocks out 12/23, there is a level of non-responders with just primary failures, they simply don’t respond right from the start. But then if you go and look a year later or two years or three years later substantial proportion of patients have discontinued because the therapeutic benefits that they got at first, stops happening overtime. So, there is still a large market, large need for new treatments.

Now, these are the last guidelines from the American Academy of Dermatology for the treatment of psoriasis came out in 2009. The psoriasis foundation guideline just came out a little while thereafter are not that different and both of them essentially are written in order to help dermatologists justify these biologics because almost from the start, you will not find a single dermatologist who has prescribed a biologic who hasn't got a denial. And it is an enormous proportion of time that we get denials.

So, the guidelines say that if psoriasis is too extensive for topical therapy or refractory of topical therapy and phototherapy. If patients have a minimum body surface of 10% or if even if it's not 10% but they have severe psoriasis on their palms and soles or severe psoriasis in the scalp. There is a justification for prescribing biologics. Now when we write that letter, provide a lot of backup information, we can often get to biologic prescribed. We can get it to pay for by the insurance company and the average price tag here we’re talking about is between $25,000 and $50,000 annually. But, what the insurance companies have realized is, first dermatologists hate writing letters. We spend all of our day seeing patients, we don't get reimbursed for writing letters and so it is actually a rare dermatologist who would go through this and only a small proportion of my colleagues are actually prescribing biologics because it takes up too much of their time.

In fact a survey that we did a number of years back was that the average amount of time to get a single biologic approved was an hour of time and that's uncompensated time. So, many of us don't do that. We have a full-time employee who just does biologic approvals for our practice which consists of seven or eight medical dermatologists. One person full-time assigned to just getting prior approvals for biologics.

Now, so what is the outcome of that? And this is a survey done a few years ago. Biologics were already on the market and look at the proportion of patients with severe psoriasis who are still on topical therapy. Imagine time-to-treat more than 10% of your body surface area with a messy ointment twice a day. And so the majority are on topical therapy because of that.

Now, I put this slide into overwhelm the compulsive no takers in the audience. This was a billed slide but because it’s in PDF you won’t get the bill but I’ll just point out, years ago we thought that it was Acitretin (ph), the top sell in the epidermis that was responsible for Psoriasis and we used topical steroids, we thought that methotrexate worked by slowing down the multiplication of those cells. We were completely wrong. It turned that it was the lymphocyte that was responsible and you’ve heard this morning a lot about interfere in γ and Th1 being suppressed by T. suis ova.

And that was the next thing we thought, it was the lymphocyte and certainly those Th1 cells and interfering γ played a role but then along came TNF-α blockers which it turns out TNF-α is increased by Th1 cells and blocking TNF-α it turned out was beneficial for Psoriasis and we thought, well that’s it, that’s the answer.

And then as you look further down, and I do have a pointer here; as you look further down, it turns out that Th1 cell and TNF-α and γ all end up in a common pathway that leads to IL23 and IL12, which are blocked by Stelara and then we thought well there is the answer, IL23 blocks these cells, IL12 blocks - if you block IL12, we block the Th1 response and we thought Stelara is going to be the final answer, blocks all the pathways.

Well it became very clear, very quickly that it was just this pathway that was most important, more important than Th1 pathway and just blocking these ends up clearing Psoriasis and now we have a host of new drugs which I think I’m showing in the next slide.

So this is Stelara, which blocks IL12 and IL23, TNF-α which is blocked by Humira, Remicade and Enbrel are these three steps but it turns out that there is anti IL23 from Merck and Novartis, Lily and Amgen have drugs that block IL17 and it turns out that blocking that by itself is extremely effective. So we do have mechanisms, you may have heard this morning that T. suis ova blocks Th1, interfering γ and Th17 which is this IL17 pathway. In a mechanism that appears to be pretty harmless.

The treatments that are in currently used besides biologics have number of drawbacks and these are the treatments that were almost forced into by insurance companies before we’re allowed to prescribe biologics.

Phototherapy with UVB requires three visits a week for many months and the high co-pays that I mentioned. PUVA again three visits a week for months, and clearly is associated with the development of skin cancers and now melanoma; so that treatment has actually been cut down dramatically as a result. Acitretin which is Soriatane as mono therapy is not very effective and so it’s almost always used with phototherapy, and it causes birth defects.

Methotrexate not only causes birth defects but there is a death rate associated with methotrexate. It remains one of the more common treatments that we use because it’s cheap, and because it’s oral. But the death rate comes primarily from bone marrow toxicity and there is, with chronic use, hepatotoxicity. The guidelines in dermatology, unlike rheumatology still call for routine liver biopsies in patients who have other risk factors like obesity, which is probably the average psoriasis patient.

And lastly cyclosporine is hardly used because if you keep patients on cyclosporine, and it’s a dramatically effective drug, but if you keep patients on cyclosporine for more than two years, a 100% kidney damage. So our guidelines call for limiting cyclosporine use to one year.

Now in contrast the biologic therapies are not hepatotoxic. They don’t affect the liver, don’t affect the kidney or hardly affect the liver, don’t affect the kidney, do not cause bone marrow toxicity, they don’t cause birth defects. But the plants to make them cost almost a $1 billion. And so their main side effect is poverty. They are extremely expensive and that’s why insurance companies create major hurdles to our prescribing them.

So, I took this photo years ago and I called the bride biologic pharmaceutical companies leading the groom who is a dermatologist prescribing therapies for psoriasis to the biological alter and are they successful? They are somewhat successful. Because of the cost the market share hasn’t grown but it’s not just because of the cost. The line you see here in light blue is prescriptions of biologics.

So it took about only two years for biologic therapies to exceed methotrexate which was the most common prescribed therapy for psoriasis, in dollar terms back then and at this point possibly in absolute numbers, biologic therapies exceed methotrexate. But the size of the market has not grown that much. And part of the reason is cost but part of reason is that does anyone know what this picture is? The picture of the VIPs who are invited to witness the first nuclear blast in New Mexico and the high proportion of them went on to die of a variety of malignancies.

So the question is when we immune suppress patients and we’ve got a lot of history with transplant patients, immunosuppressing them, what happens, we get infections, we get malignancies, and so are we going to see more of those? Well, with infection, there is no question, there are a whole host of opportunistic infections reported in patients treated with biologic support (inaudible) toxoplasmosis, Listeria, molluscum, cryptococcal infection, aspergillosis most of these are infections you never even hear about but they happen in these patients.

We used to hear about them in AIDS patients before the development of antiretroviral therapies. Now putting that in perspective however I had group excellent medical students look at every report of an opportunistic infection in a patient on biologic therapies and they went through the list and the largest number were with infliximab which is the most effective of the team of alpha blockers. Why it’s more effective? It’s the most immunosuppressive.

Next came Etanercept which had been around a lot longer than Adalimumab, which was third but if you looked at the cases, three quarters of them were on either corticosteroids or methotrexate. So you can’t just blame it on the biologic therapy. Most of them occurred in patients on either 6-MP methotrexate, steroids or cyclosporine along with the biologics.

Are they associated with an increase in malignancy? Well, certainly we know that the other treatments that we used like cyclosporine and this is transplant patients. There is an enormous increase in the frequency of malignancy. In fact probably 15 folds at least and methotrexate as well, this is a report of a patient who developed non-Hodgkin’s lymphoma on methotrexate. The only treatment that was instituted with withdrawal of the methotrexate and the lymphoma disappeared.

So certainly other treatments we used are associated with the development of malignancy specifically lymphoma and squamous cell carcinoma of the skin which is what we see in transplant patients. So this is a report that raised an alarm, first alarm for biologist therapies was 26 cases reported to the FDA, 18 on Etanercept, 8 on infliximab. The majority are exactly the ones we seen immunosuppressed patients, non-Hodgkin’s lymphoma.

And what was probably most frightening is when they stopped the Etanercept in one patient and the Infliximab in one patient, lymphoma has disappeared. And that really tells you that the drug had something to do with this.

Now that alarm became much louder when this paper was published in JAMA and what Bongaarts and his colleagues reported is that you would expect to get one additional malignancy with six to 12 months of treatment for every 154 patients treated with the TNF blocker. One additional serious infection was treated 12 months of treatment for every 59 patients, feed with the TNF blocker and when that was published there were a lot of letters to the editor criticizing the study and the methodology. What they have done was looked at placebo controlled trials that then are extended into long term follow up.

If you have a placebo control trial that runs for let’s say six months; and these are all done for rheumatoid arthritis, and the patients on active drug get better very quickly so they stay in for the six months. But the patients on placebo drop out after few weeks because they know they are not getting the real thing and so those were counted as if they were equal periods of time. Well, you are going to diagnose a malignancy in six months, a lot more easily than you will in a patient who has been on a trial for four weeks or two weeks because they are just followed by you longer.

So, there were serious methodologies but I believe if there is some truth to the study, and this is a table that I took from the study and I’m going to highlight one part of the table. Look at how many skin cancers and lymphomas are here. You see the lymphomas in red. Lymphomas are pretty uncommon tumor, but look at how common it is in this group of patients. That’s exactly the kind of cancers that we see in immunosuppressed patients. So clearly Bongaarts and his colleagues were onto something.

The other reports that are somewhat alarming to us are congestive heart failure in patients on TNF-α blockers and I am not sure if that’s real but certainly it’s in the package insert. My colleague think it’s real and certainly with high dose Infliximab it appears to be real. This is a publication which raised an alarm about heart attacks and strokes in patients on Stelara. This is major adverse cardiovascular events during placebo control trials. This is Stelara and Briakinumab which is added drug that block the same step and there were 10 heart attacks or strokes or arrhythmias out of a little over 3,000 patients, zero in the placebo group.

When they looked at the TNF blocker studies, there is only one out of almost 4000 patients and only one in the placebo group. So the numbers are alarming, it was not statistically significant, I think that there are criticisms you can do of this analysis and I'm not sure if it's real but certainly my colleagues are a little concerned about it.

Lupus and other autoimmune diseases being caused by TNF blockers is of concern and certainly all of the TNF blockers cause positive ANAs in a high proportion of patients. ANA is a blood test that is a marker for lupus. On the other hand there are patients who've actually been treated for their lupus with TNF-α blockers. It’s again an unclear picture, but I can tell you that most rheumatologists and many of my colleagues are very reluctant to use TNF blockers in patients who either have a connective tissue disease or at risk for a connective tissue disease.

So the drawbacks of biologics, the biggest drawback is that they're administered by injection. So that's again an extra block of time with the patient who's very reluctant to start with to give themselves an injection on a regular basis. Heart failure is questionable, connective tissue disease questionable, but the concerns are there. They do exacerbate, TNF blockers exacerbate multiple sclerosis and again there's a questionable association with major adverse cardiovascular events with Stelara.

Now should T. suis ova work for psoriasis? Now you've already heard very compelling data that it's effective at controlling Th17 and Th1 dominated diseases. There's anecdotal evidence in human beings after self-treatment with helminthes and (inaudible) in a study I'll show you next have shown a reduction to the psoriasis mouse model, flaky skin mouse model, and when they give that mouse model, T. suis ova or rather helminthes therapy the psoriasis clears and that's the publication there.

So the trial that we are doing is an open label study, and open label studies in psoriasis for bad psoriasis are pretty compelling. This is a first trial in psoriasis, the placebo response in severe psoriasis is on the order of 5% or 10%. In fact at a good study site it's 5%. So we should be able to get a reliable answer here. It’s a multicenter study Mount Sinai and two other sites, we'll be starting out with 20 patients and we're going to give them either T. suis ova 2,500 or 7,500 ova, daily for four months. The primary endpoint just changes in the PASI score. Just want to see what this does.

The secondary endpoints will then be PASI 50, 75 and 90 which are for those of you not familiar with. The PASI score is a Psoriasis Area and Severity Index, it’s a marker Psoriasis Severity. So, when you look at quality of life studies, the biggest change occurs with the first 50% that’s PASI 50. The endpoint used by the FDA had been PASI 75 which is just three quarters improvement in psoriasis and patients are really happy when they get that level of improvement. And off late we are looking at PASI 90 scores, one of my friends called that’s the score where patients want to run around naked to show you they don’t have psoriasis.

So, we are currently enrolling at Mount Sinai. We expect to start any day now. If this shows a promise in PASI score improvement then we will have some idea about dosage and move forward with a company sponsored Phase 2 trial.

And that is a photograph taken in 1978 of Microsoft. So hopefully in 35 years we will meet that care and Coronado Biosciences personnel will be in the photo. Thank you very much.

Desmond Schatz

Good morning and I too want to thank Coronado for allowing me to perhaps just spark your enthusiasm and really transfer some of my passion for Type 1 diabetes and to really tell you about what I would think is an opportunity to impact a disease that we are certainly seeing more of, everybody is certainly aware of Type 2 diabetes, the burgeoning epidemic of Type 2 diabetes but there is also an increase in Type 1, which I’m going to sort of show you.

So the goals of my talk today are several-fold. One is to talk about the increasing burden of diabetes and certainly Dr. Elliott has introduced you to that concept, to talk about the limitations of current therapeutic strategies and to tell you that insulin is not a cure. To talk about current and future research strategies to interdict Type 1 diabetes and then to really hopefully convince you that TSO from a lot of the information you have heard today mechanistically, therapeutically, from a safety perspective is what I would call a great grasp therapy, and generally regarded as safe therapy, which is really for us in TYPE 1 diabetes, really a Holy Grail, as we consider our next generation of studies and this was certainly discussed in the last talk as well.

So, what is the burden of TYPE 1 diabetes and the burden of diabetes and generally, if we sort of think about, these are very recent data that have just been published, really last month and looks in the burden of diabetes in the United States in 2012 and that there are 22, just over 22 million Americans that have diagnosed diabetes and there are 6.3 million undiagnosed and roughly one in 300 or probably more than that if we think of what's called a lauded of group of adults, about 5%-10% of adults with TYPE 2 actually have TYPE 1 diabetes.

There are about 1.6 million cases per year and I think many of you are aware of the high morbidity and mortality. In 2012, there were about nearly 250,000 deaths and more than 600 a day. There is a shortened life span due to an accelerated risk of atherosclerosis might cause an (inaudible) stroke. Almost three quarters of them have high blood pressure.

And then there are over 40,000 new cases of end stage renal disease, 12,000 to 24,000 new cases of blindness per year and over 80,000 amputations per year. And if that wasn't good enough if we simply look at the cause of diabetes; in 2012 I was about $225 billion in medical costs and depending on how you look at it it’s between one and five and one in eight healthcare dollars goes into diabetes and its complications. And what's interesting to me that as I looked at the total cost of medications that was spent in the United States of $286 billion, 27%, that is $77 billion were used in the treatment are all patients with diabetes. So clearly we need to do something about that.

Now again, Dr. Elliott showed some data from really a very good friend of mine called Jon France (ph) (inaudible). Jon France (ph) is a physician, immunologist, a diabetologist in Paris and he showed the rising incidents of diabetes as well as Crohn's disease, as well as multiple sclerosis and a decrease in infectious diseases which has really formed the basis of the hygiene hypothesis.

Now, I want to show you some data I gathered some data from Finland but the data mirrors that in the United States. The reason I’m showing you the finished data is that the Fin’s have better registries than we do. Now on the y axis is the incidents per 100,000 and on the X axis are the years and as you can see, from 1954 to 2000 there has been exponential increase in type 1 diabetes where in the early 50s there were 10 to 12 for 100,000 per year and really now 2010 data it’s between 50 and 60 per 100,000 per year.

But folks, this is not going away and in fact as you can clearly see that the predicted trend by the year 2050 will be 80 per 100,000 per year which clearly indicates that there is something in the environment because genes certainly are, probably neither necessary, nor sufficient to develop the disease. But clearly there is something that’s accounting for this increase in incidents of type 1 diabetes.

So, my challenge really to all of you and really to all of us as physicians and scientists is that this current status quo in 2013 is really unacceptable and why? Because there is an epidemic worldwide. We have an increasing burden to the individual and society and for those of you who have ever seen kids with diabetes or any family members with diabetes, kids have to take a multiple injections every day or wear a pump, they have to check their blood glucose many, many times a day, they’ve to watch what they eat, they have to exercise.

This clearly impact on blood sugar. Invariably their parents are unsatisfied when they come to the doctor, the doctors always says, you can do a little bit better. So, clearly it’s a huge burden on every kid, on every family and as well as the cost to society.

Despite our wonderful advances in technologies, there really hasn’t been a reduction in acute complications and in fact we may even been seeing more. We may be seeing more hypoglycemia because of the intensity of our current therapeutic efforts which is really our standard of care. And the potential benefits of improved glycemic control are really reaching only a minority of patients. Well, it’s expensive and most people just don’t have the resources in order to handle such a difficult disease.

And what I will also tell you and I’m going to show you some even current successful immune interventions of questionable translation, meaning that we see a scientist bio statistical effect but when we actually look at this in terms of translation of a population, we ask the question, while it may be bio statistically significant but really is it clinically applicable?

So as we think about where we are going, we have to try and understand where we have come in the last 20 years in terms of diabetes. Well, we do know that through the DCCT the Diabetes Control and Complications Trial, that tight control can reduce complications. And therefore that has heralded in an area of intensive management and that is the standard. And as I told you this is a very difficult standard to achieve. Through a lot of work, a lot of work actually in our laboratories, at the University of Florida and others, we now know that Type1 diabetes is predictable autoimmune disease using a combination of genes immunological metabolic markers, and the reason that’s so important is that if we understand the natural history of pre-diabetes that sets stage for prevention.

And also the greater understanding of Beta Cell Biology, those are the cells that make influence, allows us to consider replacement of beta cell function and that sets the stage for a cure of the disease. So this is where we have come and we are clearly are ready to embark into the next level.

By knowing where we have come, this tells us really we have a very clear picture in terms of what are our opportunities for prevention and cure. And I just want to run through the slide, because if you understand this slide it will tell you the many opportunities that we have in terms of intervening in this disease. As I told you already, there is a genetic risk. The highest genetic risk is in twins. Identical twins with 70% to 80% over a lifetime will develop the disease. But not all certainly will.

And if you have a high risk HLA genotype, we can screen the day that a kid is born and we can assign a risk in a relative as high as one in five or as high as one in 20 in a general population in terms of a genetic risk. If you follow these patients and we are certainly doing this in one of our funded studies, over time there is this appearance of islet autoantibodies which signals in essence a suicide of the pancreas. And that’s been, will herald in a pre-diabetic period mocked by glucose abnormalities, in the onset of the disease, established disease and then complication.

And we have to focus on not only finding a cure but also to try and prevent this disease and I will say right up-front, that without prevention which is absolutely cure, there can never be a cure and the reason for that is that autoimmunity, which is Type 1 diabetes, the suicide of the pancreas is a much more difficult issue than is alloimmunity, which is really the treatment of rejection post-transplantation.

So what are our major challenges? We have got to develop new methods for achieving tight control without hypoglycemia and that’s an artificial pancreas but again I will tell you that insulin is not a cure. We’ve got to develop better methods for replacing beta-cell function, which is transplantation and regeneration which is the biological cure and we’ve really got to understand this disease process, this interactions of genes, the environment of the immune system which will allow for more effective preventative therapies and could it be that T. suis could it be that something that we’re going to for example interfere with the immune system, can shift that balance from a more malignant to a more benign enhancing immune response.

Now I’d show you the slide. It’s a that we presented before which shows you how many people are actually achieving the target hemoglobin A1c goals in the United States and what you can really see is that under the age of 20 roughly a third and over the age of 20 above 25%.

So even with modern technology just very few people are in fact reaching target. Why? Because they are tremendous barrier to success, it’s too tough a routine, you need tremendous motivation support from family and healthcare teams, the cost I’ve already shown you. There is fear of hypoglycemia, diabetic ketoacidosis, weight gain, the need for frequent blood glucose monitoring and again insulin is not a cure and the artificial pancreas is still a dream.

So what is our ultimate goal? Our ultimate goal is a biological cure. Number one, we have to stop the suicide of pancreases and protect the beta-cell mass and then if necessary we need to replace that in people who don’t have enough function. So what our approaches to curing type 1 diabetes and this is really the way we sort of looked at this, on the one hand traditionally you can think about immunomodulation and immunosuppression. When you’ve obviously lost all your cells you got to think about transplantation or stem cells or else we can maybe think about in vivo or in vitro transdifferentiation of cells in order to make insulin.

Well, if we think about this, what are our opportunities and this is a very important slide that I wanted just highlight your attention. This is the natural history of disease we have genes, you have damage to the islet cells, you have pre-diabetes and then diabetes.

Now early on in the disease, you got to lot of more islet cell mass remaining and we also believe that you have a less aggressive immune response and so therefore if we are all getting to start early, therapy is more likely to be effective, albeit that prediction is less accurate. Later on in the disease, where there is less beta-cell function, and beta cell mass, prediction is more likely to be accurate but therapy less likely to be effective because you’ve lost beta cells function and your immune response is a lot of more aggressive.

So, one of the questions is why do you even want to do an intervention study in a new onset patient with type 1. Well here again our data from the DCCT in which we know that if you preserve the C-peptide that’s the insulin response, we can prevent both short term and long term complications. If we can’t prevent them at least we can reduce them and here are data published from the DCCT which shows that hypoglycemia, quality of life, as well as complications such as retinopathy, small vessel disease can be reduced by preserving C-peptide and an early intervention.

Now, again this is a PDF and shows some of the potential targets of immune modulations that have been conducted really over the past, let’s say 10 to 20 years. And again this is if you will, the pancreatic islets, this is the interaction of the immune system with the islets. You’ve got a defect in what we call immunoregulation. We have got enhanced T-cell killing and here are a multitude of agents that have been used, many of which have already been discussed earlier in the course of this morning’s discussions.

These are the studies that have been published in new onsets humans and all my data that I am showing you except for one slide is in human and you can see from anti-T cell therapies, to anti B cell therapies, to agents that interfere with the presentation of antigen to the T cells to cord blood, as well as many other immunomodulatory agents have been undertaken.

And really none of them have really been very successful in the long term. In the short term what I can show you is that if this is a control patient, soon after diagnosis there is an extra block of beta cell function.

In studies, for example, the AntiCD20 study, there is an increase for the first three to six months and then there is a decrease over time and this has been shown with the successful studies such as Anti CTLA-4, heat-shock protein and AntiCD3.

So, where does that allow Trichuris suis and whether this fit in? Here is a slide from Anne Cooke and her colleagues from the UK and published even several years ago in which they gave a Helminths and they looked at the incidents of type 1 diabetes in one of the models. As has been talked about earlier there are models such as (inaudible), the streptozotocin induced model as well as (inaudible) in the mice, and here is a control, and as you can see this is the natural history of the mice. After 20 weeks about 80% of the female mice develop diabetes and for those that were actually infected with schistosoma mansoni, another parasite, you could clearly see a very-very decreased incidence of the disease suggesting that the administration of a parasite may in fact impede the natural history and prevent the disease.

So again, where are we now as we sort of put all together and from I began this talk? Our current treatment is quite good, but insulin, even developing an artificial pancreas is not a biological cure. For every one of us who is a clinician and a scientist we believe in the added (inaudible) safety. We are reevaluating study designs, we're thinking about new shorter studies in new onset patients.

Why do we want to use a drug? We got to define clinical significance. Even if we can't find a major p-value, what happens if I told you we could make it so much easier for that kid, they could lessons, they wouldn't have to check less often so we're showing that it's superior or ease over a current therapy?

This is clearly a very translatable therapy. This may, we do need to understand better the mechanisms leading to the disease and I think that over time we're going to have a cocktail approach. We certainly are thinking outside the box and really think that Trichuris suis is one of those agents that we really need to use.

So as I conclude, our future prevention of type 1 diabetes will be as if we need to identify the trigger, we need to start early. There could be T. suis that’s used. These studies are already in the design phase. We're looking at using T. suis both as a preventative agent and also further on down the road, although I do believe that if we do use it down the road in order to affect a complete cure we'll need to use another immunotherapeutic agent as well as a regenerative agent. And with that I conclude and will hand it back to Harlan.

Question-and-Answer Session

Harlan Weisman

And this point Desmond, maybe I could invite you to sit next to me and invite the previous speakers to come up, and we're going to open up the session, transition this session to questions and answers from the audience here. The people on the webcast will be able to listen to that. Because it is being webcast, if you want to, you don't have to, you can identify yourself, there was a first question over there? Yes please.

Boris Peaker - Oppenheimer

Good morning, my name is Boris Peaker, I'm an analyst from Oppenheimer. I guess I'll start with the first, present to Dr. Elliott that may apply for a few others. You have mentioned a lot of data from mice and it’s always obviously helpful to get the mouse data and we have heard mouse in diabetes and we heard some in a few other indications. I’m just curious what we could learn from the pig, because the way the TSO is made you have pigs that are raised in a clean environment that to some extent stimulates what happened to humans. Their intestines are probably much more similar to humans than the mice are but we haven’t heard any data on the pigs themselves. What do we know about that?

David Elliott

So, this is Dave Elliott. There have been some work in pigs with Helminths. Most of the work in animal stock is to get rid of Helminths because they are worried about productivity in producing weight in the pigs and getting them generated and things. There is data that pigs raised in containment in very clean environments, well for a pig, are more pruned to colitis than pigs reared in a more natural environment, free range environment.

As no one has really looked to see whether Helminths reduce colitis in pigs raised in containment. That’s not been evaluated. There have been some studies where they infect are very young pigs, just weaning with Helminths and with a (inaudible) Helminthic infection in pigs that worsens that infection because of suppression of the Th17 circuitry. So, it’s obvious that Helminths are doing the same thing in the pigs that they do in people or in mice I should say. So, there is that data.

Boris Peaker - Oppenheimer

Do we know specifically from the pigs that are used to make TSO in this case because it seems like that in itself would be a useful data point because these are clean pigs and you are using the exact TSO that you are packaging into patients?

David Elliott

No, we have not. That is a good question and it’s something that we probably could assay looking at the comparison between colonized versus non-colonized pigs. They have looked at T. suis in pigs in other and Joe Urban would be the person to really look at, where they do show the same circuits are active in pigs.

Harlan Weisman

There is also data in laboratory cleaned animals, in this case; monkeys where there is a spontaneous colitis in the pathogen free monkeys and treatment with Helminths does effectively treat that colitis from which the monkeys usually die and they were not responsive to other therapy. Next question, yes go ahead please.

Unidentified Analyst.

Phil (inaudible) Capital. My question is for Dr. Lebwohl. Dr. Lebwohl you paint a dismal picture, a bleak picture of the treatment of psoriasis with biologics. I was wondering if you could comment on some of the newer oral medications that are in development.

Mark Lebwohl.

Yes, I certainly didn't intend to paint a bleak picture. I think that the market that is available for treatment is much smaller than the market that has being treated for the reasons that I showed. The two oral agents that are closest to improve psoriasis apremilast and tofacitinib, so the apremilast which hopefully will be available soon, in their 30 milligram twice a day dose in their Phase 3 trial had I think about a 33% PASI 75 which is the endpoint that the FDA uses; which is comparable and maybe a little bit lower than what we see with methotrexate and it appears to be safer. And I think that there is a market for the apremilast simply because of the side effects of methotrexate and the desire to have an oral agent as opposed to an injectable agent.

Having said that, a large determiner of what we prescribe, because I mentioned we don’t like writing letters is what the insurance company allows us to prescribe. So it depends at where it’s tiered. If this comes in inexpensive, or not very expensive, it maybe tiered before biologics and that would end up in a lot of prescriptions. If is very expensive my suspicion is that it would be tiered at the same level as biologics and that's a lot of work. Tofacitinib in their phase 2 trial, the phase 3 data is not out; is underway. In their phase 2 trail, the highest is 15 milligrams, they say is very impressive. It is equivalent to some of our best biologics. I think 70% of the patients achieved PASI 75. But there were side effects and that in the other rheumatoid arthritis trials that were done and the FDA did not approve that dose for rheumatoid arthritis since available in 5 milligrams twice a day and 10 milligrams once a from rheumatoid arthritis.

In the phase II trial they didn’t look at 10 milligrams, they did look at 5 milligrams and that was response, it was about a 40% and achieved PASI 75, same as the apremilast phase II trial. So, in the phase III trial they are looking at 10 milligrams twice a day and we’ll see what that is.

Unidentified Analyst

My question is mostly for Dr. Elliott but anybody can answer as well. You spoke a lot about the (inaudible) of higher seamless and (inaudible) which is a natural infection in the mouse. So a few questions from me now of about is anybody accessed that IL6, IL4 levels within your patients before and after treatment or by any studies to speak about it. And whether or not the fact that TSO is not a natural infection and natural organism, whether or not you think that would have any clinical effect?

David Elliott

So, we didn’t do immunologic studies in the patients we were doing because it was a proof of concept study. We simply didn’t have money to do intense immunologic investigation. Those studies are now going on. There is going to be a mucous trial which is looking at the immune response to people with Trichuris suis ova and ulcerative colitis. There have been some studies on immunology and studies with multiple sclerosis and with studies in allergy that showed augmentation of the Th2 circuits. Nobody's really looked specifically at what’s happening with IL6 or STAT6 circuitry.

The next question was what do I think about the difference between Trichuris trichiura which is the human whipworm and Trichuris suis which is the pig whipworm. We picked Trichuris suis because it was previously known to be an able to colonize human beings. A person named Bear (ph) did that back in England in 1976 and so since it was able to colonize humans, we assumed it would be able to create a niche and be able to alter immunity in humans much like it could in pigs.

It does not seem to be long lived in humans unlike Trichruis trichiura which can last for a couple of years in people. Trichuris suis is transient. That is also a good thing. So, we thought that was an advantage. We expect that repeated doses Trichuris suis would have a similar effect as the client dosing of Trichuris trichiura and it would also allow us to arrive at an organism that we can get without our concern for co-infections as you would have with the true Helminthes or primate parasite. So, we are trying to thread that edge between a, using an organism that is able to colonize humans but that we can arrive at in a production status that relatively clean.

Ian Somaiya - Piper Jaffray

Thank you. Ian Somaiya with Piper Jaffray. First question is to you Dr. Elliot. In your presentation you shared with us the 24-week data in Crohn’s patients, 12 to 24. In the publication there was a mention of patients being on therapy for much longer period of time. Can you just share with us the experience in your patients that were on therapy for many years?

David Elliott

So we had patients that were on therapy for extended periods of time and they really like the therapy and when we withdrew it they are unhappy. The rate of relapse vary; so some people would relapse after about three months, other people relapse a year or a little more than a year later, which is not unusual in Crohn’s disease, which has a spontaneous remission relapse rate. The patients tolerated very well. They actually liked the therapy a lot because they didn’t perceive any side effects from it.

The studies in allergy and in multiple sclerosis suggest that around six weeks or so, the same time that we were seeing a response, maybe a little earlier that some people will have transient loose stools, this doesn’t impact the studies, to the patients themselves or the enrollees, consider it significant, and then that results suggesting that there is an immune event that’s occurring, that’s altering mucosal or intestinal motility. We didn’t see that in our studies, probably because the individuals had significant irregularities in the mucosal or their intestinal motility to begin with and it simply improved rather than going to the transient dip.

Ian Somaiya - Piper Jaffray

One of the other things that was mentioned was just a loss of benefit of biologics over time. I was wondering if you could sort of comment on that whether any of your patients saw a moderation of benefit or loss of benefit?

David Elliott

We did not see a loss in benefit over time, but the longest we have treated people was a couple of years. There are people on open label treatment or our compassionate used treatment that have been on it for years and years and maybe Harlan can talk about those.

Harlan Weisman

Well, there those studies are not -our experiences are not actually core and auto sponsored. Those are people going directly to the manufacturer in Germany and we really don’t have any scrutinize ability to comment on it because we haven’t seen the data reviewed that.

David Elliott

Right, I haven’t either but my understanding is the people who are doing that are staying on it. So that’s all I can really comment on.

Ian Somaiya - Piper Jaffray

Maybe this last question for me and maybe just for all of you. In your experience, what is sort of conferred non-response or lack or response to the therapy? I don’t know if you have any theories or have you been able to correlate it with any biomarkers or antibody formation to the TSO?

David Elliott

So actually we haven’t investigated the non-responders yet. I think that would be a very interesting area for investigation but that hasn’t been, not to my knowledge.

Joe Pantginis - Roth Capital

Okay great thank you. Joe Pantginis from Roth Capital. I guess maybe a question on the autism indication, Dr. Harlan. Obviously you and your colleagues at Einstein are believers. So I was curious, I guess two parts to my question, where the role of the immune component in autism and then more specifically the role of TSO and acceptance of the hygiene hypothesis in the mechanism of action falls within your discussions with colleagues outside of Einstein at conferences et cetera?

Harlan Weisman

Okay, we all say that first it’s a big unmet need in autism because that is very early age of onset and now the estimates are about 1 in 50. So it’s relatively common. I think that there is a no drug yet that’s been approved to treat the core symptoms of autism yet. The best of these atypicals that are associated with significant risk in that small subgroup who have very severe aggression or self-injury.

So again there is a big unmet need and the agents that are available have substantial side effects and I think there has been a lot of interest from a number of different ways in looking at inflammatory mechanism that’s been final common pathway in individuals with autism spectrum disorder, not only in autism but other closely related syndromal forms that also present with repetitive behaviors and disruptive behaviors like Rett syndrome for example.

So we’re the first site in the U.S. to do clinical trials now with TSO that there are patients who have been treated with TSO out in the community getting it on their own and there are lot of anecdotal case reports of clinical benefit that it’s pretty well tolerated. There’s a new study that is just about to get started in Jerusalem in children as well.

But I do think that there is a lot of interest in terms of inflammatory mechanisms as a final common pathway. I think some of the major genetic studies and studies of copy number variations have highlighted the role of inflammatory pathways as a sort of final common mechanism.

Salveen Richter -Canaccord

Salveen Richter from Canaccord, Just a question for Dr. Korzenik. You mentioned that a 20 point improvement in CDAI from baseline was not meaningful. Just wondering what your view with meaningful here and also when you look at a drug arm versus placebo arm?

Joshua Korzenik

The CDAI, the Crohn’s Disease Activity Index is made up of really eight different factors and a patient fill that at a diary for a week, looking at three different factors; one is number of bowel movements each day and then that is multiplied by three, abdominal pain each day on the score of zero to three and that is multiplied by five and then overall wellbeing on a score of zero to four that’s multiplied by seven.

So if somebody has two stools a day, every day that’s 14 times three will be 42, and so that would be 42. Now overall for active disease, the other things that go into extra-intestinal manifestations, weight in a limited way and hematocrit and several other things. The total score below 150 is considered remissions, over 220 is considered active disease and sort of between 150 to 220 is sort of no man’s land.

No one is happy with the CDAI. Everyone recognizes that it is very poor as an indicator of inflammatory disease so that people with the irritable bowel, so when there is no inflammatory disease can have a CDAI active but it’s not because of the inflammatory disease. So you take a study like sonic study comparing Infliximab and Azathioprine on combination therapy, 30% of the patients underwent, everyone underwent colonoscopy. 30% of the patients who were scoped to have active disease had no inflammatory disease.

So typically it was considered in the older area even just 10 years ago that a 70 point decrease would be clinically significant. We have gotten away from that and now it’s at least 100 or really we prefer remission and in order to get into studies, we are increasingly looking at either inflammatory markers like c-reactive protein or even stool marker called fecal Calprotectin. A decrease of 20 points would mean that on two or three days, their overall wellbeing went from a four where it's terrible to three which is just not feeling great.

So no one would say that that means anything in terms of anyone's function. The placebo response that we expect in a Crohn's trial, typically is, between 15% to 20% of the people will be in remission and that's usually what we've seen, most of the biologics fall into that, really it's really about close to 20% are in remission, meaning below 150 and feeling well,

So the FDA's very interested in looking at other end points, There's been a number of conferences one already, another one coming up in October I think looking at trying to develop an alternative to the CDAI.

Salveen Richter - Canaccord

And then just a follow up on that, with TSO, do you have any data pre clinically or in humans around the inflammatory biomarkers?

Joshua Korzenik

We don't. Well actually I'm not sure if in your original open label trial, the inflammatory markers are in the ulcerative colitis trials, I don't in terms of it, the trial is looking at inflammatory markers as well as fecal Calprotectin which I think is a very specific measure of GI specific inflammation.

But the number of patients we have treated, we have a number of patients who will go and buy it online. I have a patient who'd done very well on it, and as we can show you his ERP was 80 which is quite elevated and it goes down very nicely. But in terms of a broader series of patients I'm not aware of any.

Chris Marai - Wedbush Securities

Hi, Chris Marai from Wedbush Securities. I was wondering if you could perhaps elaborate on how it is that TSO, which is resident in the gut could potentially have a systemic effect in a lot of these autoimmune disorders that you talked about today.

Joshua Korzenik

Sure, so there's a tight correlation between systemic immunity and mucosal immunity. Indeed most of your systemic immunity generates mucosally. So almost all of your contact with foreign antigens etcetera are mucosal, rather than through other mechanisms.

So when you think about kids explore their environment by eating stuff, and it's actually quite difficult to be immunized or to be exposed dermally. You actually have to cross the dermal barrier and it happens with bee stings, it happens when you cut yourself but otherwise you don't get exposed that way naturally.

Your natural mechanism of exposure is mucosal and so most of the viruses that you contact are also being sensed mucosally even though they may be sensed by other mechanisms. And the immune cells that migrate through the intestine can also circulate other ways. We find that enteric only Helminths can alter systemic immunity and that was the last slide I showed, had some of that data in.

David Elliott

So just to reinforce that and it’s not just that I am a Gastroenterologist so I would see the GI tract instead of central organ in the body and the rest of the world revolves around it but that it’s the largest immune organ in the body that we have mechanisms of tolerance that we develop.

What things are we going to develop immune reactions to, is really centric to the GI tract. So that there are various studies of giving, of trying to sort of promote tolerance to try to down regulate this immune response more generally. So it may be, is one of the central areas to orchestrate a broader immune response systemically.

Chris Marai - Wedbush Securities

Any of the other, outside the (inaudible) comments of feeding the immune system’s GI tract?

David Elliott

We fundamentally, we think of tolerance in three ways; one we call a low dose tolerance the other the high dose tolerance and the other is what we call broadly energy. And we can certainly show this in mice. I mean there is no question we could show you in mice. It’s not as easy frankly to do this in humans because we often don’t know whether the systemic response in the blood actually reflects what’s happening in a target organ.

So, for example in Type 1 diabetes we can see responses in gut, we can see responses in draining lymph node and in the pancreas but it’s been very hard in human to define an immunoregulatory or immune effect maker. So, those are exactly the things that we are actually looking at now is looking at biomarkers and looking at markers about both innate and adaptive immunity.

Mark Lebwohl

There is an animal model of autism we call this maternal immune activation. So you can take female mice at stages in pregnancy and then expose them to poly IC or polysaccharide and induce a maternal immune response and that’s been shown to sort a feet forward and activate this immune response and of course that and in the offspring, the offspring has this interesting behavioral deficits, they have a lot of preservative behavior, social avoidance and irritability. And then you can give the mother’s antibody against IL6 and prevent that behavioral response that you see in the offspring.

Unidentified Analyst.

Tim Grey (ph) (inaudible) Capital. A lot of this sounds great, almost too good to be true and then from me as an investor it took me a little while to come over to the dark side. Can maybe one or all of you talk about your evolution as clinicians, as scientists how you first heard about this, was approached about the idea and how you came to be more of a believer I guess than a skeptical, we were skeptic initially, I would imagine that all of us were at that point at one point?

David Elliott

So, we have no shortage of trials in psoriasis, I showed you that long list of studies and I think the market has grown because of all the studies that are ongoing now. So, those patients are all in clinical trials and we are doing many of them at Mount Sinai I was actually reluctant to take a trial with an unproven drug but the impact on the cytokines certainly caught my eye and then the reports that it was beneficial in Crohn’s disease, really maybe want to do the study because many of the treatments that we used for psoriasis worked for Crohn’s and vice versa.

Mark Lebwohl

So, David, my experience has been that, I think that our understanding of these diseases, inflammatory bowel diseases, is really lacking some fundamental understanding of what goes on. So, right now it’s seen as complex T cell driven disease. We’re moving towards innate immunity. But we are really seeing it sort of devoid off the central element which is environment. Now, what that factor is, I don't know but I don't think it’s as complex ultimately as we are making out to be that there is something about some simplicity that needs to be there as far as a factor that’s provoking these diseases. And I think this maybe a factor. I think also the data is from in humans is impressive but very preliminary at this point.

The data, we are giving you just a sort of a glimpse of the extent of data, but the data in animals, there is a huge literature of a profound immune effect of a variety of parasites. So, whether that's going to be sufficient to control Crohn's disease, I don’t know but it’s not as we have in many that there is some preclinical work and there is some clinical work. There is really an overwhelming amount of data that points to an important immune effect which I think will probably translate into a clinical benefit.

Harlan Weisman

I guess my first exposure is to a patient of mine who had very severe autism with very severe rigidity and perceptive behaviors who would explode frequently, so the family took them out of the house into restaurant or on the subway there would be major explosions. Her father was an investment analyst who did a lot of research on his own and he had Myasthenia gravis and then that family was just loaded with all of these immune inflammatory illnesses and this was a child who really didn’t respond all the standard treatments, the atypical anti psychotics or the anti-convulsions in terms of trying to control his explosive behavior, he had a really pretty amazing response to TSO, that rigidity and the explosive behavior sort of went away, he tolerated the treatment really well.

Joshua Korzenik

I think until we have a cure and prevention we’re all skeptical of the next age of any agent. But I think that really everything sort of here makes sense, sense of the epidemic of diabetes, the tremendous role of the environment, the potential efficacy of this drug in mouse models, preliminary human data in other autoimmune diseases. The fact that it’s safe, the fact that it has potential to be used in a broad population says that it’s worth a try.

We got to see whether this agent can be a sort of, what I would call an out of the box therapy. It’s not in that classical typical thing and why not try another autoimmune or other immune regulatory or immunosuppressive agent. So, I think that there is a lot of upside to saying this is definitely the next generation of agent or agents that we can use to try and make an impact on a rising incidence of so many autoimmune diseases.

Unidentified Analyst

Hi, Megan Dow (ph) again, so you talked a little about that disease activity indices for IBB, I was curious if we could hear from the rest of you on the other indications and what exactly you’re looking for in these trials to give you the confidence to take TSO further in these indications, particularly psoriasis and autism and as you’re designing the type 1 diabetes trial.

David Elliott

The psoriasis trial is two dose study. So if we see dose related response that would give us promise, we don’t know what the optimal dose is and we don’t know that it works but if we see a trend in PASI scores, again the placebo response in psoriasis is trivial, really small. So, that and stable psoriasis. So, that if we see an improvement at either dose and especially if we see a dose related response, then that would tell us to go to the next level.

Harlan Weisman

And a primary outcome measures, in our study are things like repetitive behaviors, which you could measure with, there is a Y-BOCS scale that’s been used in all of the trials for OCD, and an irritability measure that’s been used in the treatment trials with the atypical to look at irritability. We are looking at sort of cytokine profiling at baseline and endpoint for each of the different phases and then some other things like C-reactive protein as well.

Unidentified Analyst

Quickly just one to both of those, that’s a 10 patient trial in a 20 patient trial?

David Elliott

20 in psoriasis.

Unidentified Analyst

So do you feel confident in those numbers?

David Elliott

Oh sure, again I would expect to placebo response, maximal placebo response of 2 out of the 20.

Harlan Weisman

Our study is 10 patients but it is a crossover, so each patient gets both arms. So in a sense it’s like 20 trials but in 10 patients of a washed out and I think it’s first we want to look at safety measures and then see if we are getting some efficacy measures. I mentioned as in other trials that’s kind of be getting started in Jerusalem that would be a little bit larger.

David Elliott

We have not finalized the final trial designs yet for Type 1 diabetes. But really there are two major areas that are being considered. One is in new onset patients and that would be, in my mind, a small study, looking at tolerability and safety as well as the efficacy and the efficacy can be defined by C-peptide, by ease of administration, by insulin dose, by frequency of hypoglycemia. So that is a small study that I think needs to be done and should be done; and how much more obviously there is so much money you have got to do a study.

I think that in an ideal fashion, as is being pointed out by numerous people, we do want to look for changes in both innate and adaptive immunity. So that is the one, let’s say that’s the ideal study to sort of look at. Another study that certainly is being talked about, and has actually been approved within the trial med organization is a prevention study where patients who have a single islet autoantibody which places them at risk, because as I said we know we can predict the disease, are looking for zero conversion to two or more antibodies or to the development of the disease. That would be a longer bigger study, but that is being considered right now.

Ian Somaiya - Piper Jaffray

Follow-up question, Ian Somaiya again at Piper and question on combination therapy with TSO. Are there any natural challenges in combining TSO with the existing therapies and if we think about TSO as a replacement for what you’re using for today, what would that be?

David Elliott

Take the second question. Easily methotrexate makes you feel crummy that’s got long list of non-life threatening side effects and its main attribute is that it’s cheap. Patients really hate being, it’s been actually very easy to switch patients off of methotrexate to even injectable therapies and I think we need an alternative oral therapy that really works.

The only other two we have I mentioned, cyclosporine which damages kidneys. So many dermatologist don’t use it. Also there’s million drug interactions and Soriatane which simply doesn’t work that well. So methotrexate works but it makes you feel lousy and has a real death rate associated with it. So both dermatologists and patients would rather have an alternative that would be the main substitute.

Mark Lebwohl

I think also when we look at inflammatory bowel disease and we think about mono-therapy or dual-therapy, one of the things that seems attractive in concept about TSO is that it works through probably a number of mechanisms and that when we look at some of the things that we used that have very specific mechanism, it maybe that they’re not as effective. Second is when we take someone who even is having great response to an anti-TNF and they comment and they say, yes, I’m feeling great when I can stop it.

So then you say well, we’re not sure and we go through our discussion of things. They say, you mean I have to be on this for rest of my life and so the people for the most are eager to move onto something else and so if the data comes through that it’s strongly effective, I don’t see this necessarily some it could be combination therapy. I think the attractiveness in part is that of mono-therapy and this would be replacing this cocktail of drug that we’re increasingly using.

Ian Somaiya - Piper Jaffray

You don’t feel there is a need to maybe dial down the dose of some of the biologics as you speak to concerns related to potential infection or signals that we’ve seen in terms of malignancies and may be talked about from that perspective?

Mark Lebwohl

So you mean just people who are on aside from TSO. So actually the trend nail for anti-TNF inflammatory bowel disease and I know this is going on in another field is measuring levels and so it may be that we can actually boost response rates by going up and so some of the low response rates, say in ulcerative colitis may be that people actually lose a lot of protein and lose antibody quickly in their stool, so that when the given people say a good dose of infliximab and then measure levels a week later, in some patients who are non-responders there is no drug there.

And so it may be that we can optimize therapy much more by monitoring levels in a whole new complex set of things that are coming out at least to this point from Infliximab and Adalimumab. So that may be a trend in terms of optimizing.

So it may be that for a remission you can use a lower use but I think for the most part we are going to be looking at the people who are non-responders or poor responders or loosing response and it may be partly due to antibody but more importantly it may be to lower circulating levels and we are going to be pushing doses more than withdrawing doses.

Harlan Weisman

We are near the end of hour and the session and I don’t see any others questions. So I want to thank our panelists and give them a hand and also thank the audience both who have joined us here in New York as well as those who are attending via the webcast and thanks very much for coming. Bye-bye.

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