Receptos, Inc.'s CEO Discusses Q3 2013 Results - Earnings Call Transcript

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Receptos, Inc. (RCPT) Q3 2013 Earnings Conference Call October 30, 2013 8:00 AM ET


Faheem Hasnain – CEO

Graham Cooper – CFO

Sheila Gujrathi – Chief Medical Officer


Ravi Mehrotra - Credit Suisse

Marko Kozul - Leerink Swann

Jim Birchenough –BMO Capital Markets


Good day ladies and gentlemen. And welcome to Receptos Third Quarter 2013 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. (Operator Instructions) As a reminder, today’s conference may be recorded.

I would now turn the call over to Faheem Hasnain. President and Chief Executive Officer, you may begin.

Faheem Hasnain

Good afternoon and thanks for joining us for Receptos third quarter 2013 earnings call. With me today are Graham Cooper, our Chief Financial Officer and Sheila Gujrathi, our Chief Medical Officer. Today’s call is also being webcast live on our website and will be available for replay until November 12th.

Before we begin I'll ask Graham to handle the forward-looking statement disclaimer and Graham will walk you through our financial results followed by an update on our clinical development program that Sheila and I will cover. After that we’ll be happy to take any questions you may have. Graham?

Graham Cooper

Thanks Faheem. Please note that except for statements of historical facts, the statements in this conference call are forward-looking statements under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that can cause actual results to differ materially from those in such forward-looking statements. Please see the forward-looking statement disclaimer and the company’s earnings press release issued after the close of market today, as well as the risk factors in the company’s SEC filings including our Form 10-Q for the third quarter that will be filed shortly.

Undue reliance should not be placed on forward-looking statements which speak only as of the date they are made and the facts and assumptions underlying these forward-looking statements may change, except as required by a law Receptos disclaims any obligation to update these forward-looking statements to reflect future information, events or circumstances.

I will now turn to the financial results for the third quarter. For the three months ended September 30th, 2013, Receptos reported a net loss of $15.6 million or $0.88 per share as compared to a net loss of $6.0 million or $4.44 per share for the third quarter of 2012. total revenues for the third quarter of 2013 were $1.1 million, compared to $1.8 million for the third quarter of 2012.

Total operating expenses for the third quarter of 2013 were $16.6 million compared to $7. million for the third quarter of 2012.

R&D expenses were $13.5 million for the third quarter of ’13, compared to $6.8 million for the third quarter of 2012. The increase in R&D expenses is primarily related to commencement of the Phase II portion of our Phase II/3 trial of RPC1063 in Relapsing Multiple Sclerosis, commencement of the Phase II trial of RPC1063 in ulcerative colitis and preparation for the Phase III portion of our Phase II/3 trial of RPC1063 in MS.

G&A expenditures were $3.1 million for the third quarter of 2013, compared to $1 million for the third quarter of ‘12. This increase in G&A is related primarily to an increase in personnel costs, additional stock comp expenses and additional expenditure on outside services.

As of 2000 – as of September 30th, 2013, Receptos had $80.8 million in cash and equivalents, debt with a principal balance of $4.9 million and approximately $18.3 million of common stock outstanding, we also have $25 million inventory debt that remains available to us under our credit arrangement with mid-cap financial.

We believe that between the cash and the balance sheet and the availability of ventured, of the ventured debt line, we have and continue to have sufficient resources to provide cash runway until the mid 2015.

With that I will hand the call back over to Faheem.

Faheem Hasnain

Thanks, Graham. There are three major topics that I want to cover on the call today. I’ll start with an update on RPC1063 in Relapsing Multiple Sclerosis where we have some great progress to share.

I’ll also cover the opportunity for RPC163 and also to colitis which we believe is substantial and probably under-appreciated by the market thus far. And, finally, I’ll give you an update on our pipeline programs, including our monoclonal antibody for eosinophilic esophagitishagitis, as well as our oral GLT1 program for Type 2 diabetes.

I’ll then ask Sheila to provide some detail on our clinical progress across these programs.

So, starting with RPC1063 in Relapsing MS, I’m pleased to announce today that we have completed enrolment in our global Phase II trial. This is a critical milestone for our company as it allows us to maintain our timeline to Phase II data in mid-2014.

I want to thank our clinical development team for the tremendous effort made to get this trial enrolled in dozens of sites around the world.

As we previously discussed, we’re planning to conduct an interim analysis to this trial later this quarter. If the interim data looks supportive, meaning, that if the differentiation profile that we’ve outlined looks to be confirmed – then, we will swiftly move forward with the first to fit two Phase III trials.

Positive interim data would obviously derift [ph] the program from a shareholders’ standpoint, in addition, initiation of Phase III may be an point of value inflection and could allow us to shorten the overall development timeline substantially by eliminating the white space that typically exists between the completion of Phase II and the start of Phase III.

This would put us in position to be the next S1P1 modulator into the market behind GILENYA. Now, let me remind you that we have two Phase III trials planned, a trial with a two-year primary endpoint and a trial with a one-year primary endpoint. By starting the longer trial early, we can avoid having it be rate limiting to the overall development plan.

Now, speaking of GILENYA, as you know the market for oral therapies continue to take shape. GILENYA did $518 million in the third quarter, up 11% quarter on quarter from $468 million in Q2 and on track for about 2 billion in global sales this year. Tecfidera did $286 million in third quarter, handily beating expectations and on track to achieve blockbuster status.

Clearly, the trends towards orals is in full effect and the market share numbers for the ABCR [ph] class have reflected the switch. I think it’s also important to point out that there continues to be a need for next generation oral therapies. Unfortunately, there’s no cure for patients afflicted with MS. Patients start on a drug and generally continue until they relapse prompting a switch.

If we’re successful getting RPC1063 approved, we expect it when we arrive on the market, there will be a substantial group of patients in need of the new oral therapy with an enhanced profile versus the other approved drugs.

This thesis has been validated in market research that we’ve conducted with both physicians and payers. At switching gears, we’re also very enthusiastic about the opportunity represented by RPC1063and also to colitis, an inflammatory valve disease more generally.

Current therapies can be used to treat inflammation in the intestine, however, the long term use of these types of anti-inflammatory agents which includes injectables and infused biologics, is associated with limited durable efficacy and significant side effects.

As a result, there remains a significant unmet need for effective and well tolerated new oral therapies, particularly in the maintenance setting. This represents the substantial market opportunity and let me just remind you that the ulcerative colitis market in terms of the number of patients is actually substantially larger than the MS market, with approximately 1.1 million patients in the U.S. and approximately 700,000 patients in the other major markets.

Based on the mechanism of action of RPC1063 and the precedent of other agents that inhibit lymphocide trafficking that have shown efficacy in these indications in the past, we believe that we have the potential to be a first in class and a best in class for the treatment of ulcerative colitis. And, as you would anticipate, if we show efficacy in ulcerative colitis, it would be natural for us to pursue the program into Crohn’s disease as well. The Crohn’s market represent another million or so patients worldwide.

Now, finally, I’ll touch on our pipeline and with regard to our anti-IL-13antibody, we believe that it has the potential to have an impact in eosinophilic esophagitishagitis. An emerging indication with significant unmet need that has only been recently diagnosed in the last 10 to 15 years.

Now, while it’s still in orphan indication, it has been growing in prevalence as awareness and diagnosis has increased. Patients with eosinophilic esophagitishagitis or EoE as we call it, can have a range of symptoms including food impaction, difficulty swallowing and a result in weight loss or failure to thrive.

Now, while there are no approved therapies, the majority of patients are treated with swallowed steroids, which are associated with a number of side effects and a limited duration of efficacy.

This program is Phase II ready. And, we expect that our next step would be to initiate a randomized trial in an EoE patient population and Sheila will comment more about that.

While the oral small molecule GLP-1 receptor Allosteric Modulator Program is still early, we are excited about the novel, mechanistic approach and the sizable opportunity that this innovative program represents. Our orally administered lead compounds have shown single agent efficacy in a diabetic disease model, as well as, activity that it’s synergistic with metformin, in combination studies. Receptos expects to conduct I and D enabling studies in 2014. So, that’s the sum, now sketch of our current development programs. I’d like to now ask Sheila to give you an update on some of the specifics in terms of our ongoing trials.

Sheila Gujrathi

Thanks Faheem. I’ll just provide an update on our Phase II - III assumpti-one [ph] receptor modulator program and relapsing multiple sclerosis, as well as, the Phase II ulcerative colitis program. I’ll then cover our anti-IL-13 antibody program and eosinophilic esophagitishagitis.

So, Faheem noted the headline is that we have completed enrolment of the Phase II portion of the Phase II- III radiance trial in MS. The screening and randomization process built momentum and accelerated toward the end of the trial and as a result, we ended up over enrolling the trial. We take this as a sign that patients and their physicians are very interested in the opportunity that RPC 1063 represents in the treatment of relapsing MS. And other, remains a significant unmet need for MS patients.

Having completed enrolment, with a six month primary endpoint, we are on track to report top line results for the relapsing MS trial in mid-2014 as we have previously guided. As Faheem mentioned, we also plan to conduct an interim analysis of this trial later this quarter. We shall inform any decision to move into Phase III. Now, this interim analysis will focus mainly on the safety features of RPC 1063 in comparison to placebo. Including its cardiovascular profile, hepatic effects, any impact in other major organ system profile.

We are using a dose titration regimen in this trial, joining at 0.25 milligram up to 0.5 milligram and then up to 1 milligram for the patients in the higher dose group. The purpose of the titration regimen is to attenuate the first dose heart rate effects and this approach has been effective in our TPT study as well as in our phase line normal healthy volunteer study.

We are collecting a robust data set in our program in order to be able to support of case for RPC 1063 having a more benign cardiovascular profile. Depending on our data, we may be able to potential limit or eliminate the cardic monitoring requirements associated with GILENYA.

Now, assuming the results of this interim review period be consistent with our prior trans with RPC 1063, the first the few planned Phase III trials will start. The first trial is designed as a head-to-head superiority study with two doses of RPC 1063 versus Avonex. We did the same two doses, 0.5 milligram and 1 milligram, that we are studying in the Phase II trial.

And, the primary endpoint for this trial will be reduction and after two years of treatment. The second trial which is designed as a one year study – so as not to be rate limiting – will start after we obtain the top line results of the current Phase II trial. We can again expect it in mid-2014.

Because this trial will be shorter in duration than the first, we expect that we will be able to complete both trials at about the same time in order to optimize our overall development timeline.

So, that covers the clinical update on the relapsing MS program. But, before turning to the UC program, I want to briefly review with you the key elements of a poster that we presented at the Extarim [ph] Conference in the Copenhagen a few weeks ago.

The subject presentation reviewed the data from our Phase I Therapy T study. As you will recall, the study involved 124 subjects with 62 subjects randomized to receive RPC 1063, and then, intended therapeutic dose of 1 milligram per day and a therapeutic dose of 2 milligrams per day. And, 62 subjects randomized to receive placebo. The dose titration regimen used in the study is the same as that used in our clinical trials of RPC 1063, which enabled us to gain additional experience using this approach early in our development program.

The primary objective of the study was to assess whether exposure to therapeutic or super therapeutic doses of RPC 1063 in healthy subject increased the QTC interval compared to placebo. The primary objective of the study was met and we ruled out a relevant effect at both therapeutic and the super therapeutic doses. In addition the study was validated by reproducing the known effect of a controlled treatment that is moxifloxacin on the QT interval as part of the study.

The dose titration regiment employed during the study appear to attenuate heart rate effects, as the first dose, as well as, during the titration process. What we saw in general was no mean decrease in heart rate from the patient’s morning baseline, but rather a blunting of the increase that typically occurs as normal circadian rhythm.

The difference in the mean lowest heart rate over 24 hours between 1063 and placebo arms, was about 3 beats per minute in the first day of therapy and never exceeded 5 beats per minute as we increased the dose during the titration regimen. These small heart rate changes appear to be benign in nature and nothing in the outlier data gave us cause for concern. RPC 1063 was well tolerated and no notable safety issues were identified. The poster that we presented is available in the investor relations section of our website.

So, now trace the UC program, we are also conducting a safety trail of RPC 1063 called TOUCHSTONE and patients with ulcerative colitis. This trial is designed to enroll 180 patients randomized with the same two doses of RPC 1063 – that is 0.5 milligram and 1 milligram or placebo.

The primary objective of test run is to compare the efficacy of RPC 1063 for the induction of clinical remission in patients with moderately to severely active ulcerative colitis. This trail to continues to enroll at pace, and we continue to expect that we will obtain and report the results of this trail in mid-2014. The SCA has indicated that if the results of the study are statistically and clinically persuasive, TOUCHSTONE quick count as one of our Phase III trials.

And, as Faheem mentioned, if we are successful in Phase II of ulcerative colitis, the probability of success of RPC 1063 working on Crohn’s disease significantly increases. It would be only natural for us to consider broadening the program into Crohn’s disease. So, that covers the update on the trials of RPC 1063 and relapsing MS and ulcerative colitis, let me now turn to RPC 4046, our anti-IL-13 antibody for the treatment of eosinophilic esophagitishagitis.

As Faheem mentioned, there is a indication where treatment options are limited. There is strong scientific rationale from a pre-clinical and clinical basis to support a directed anti-IL-13 therapy in EoE, including eosinophilic esophagitishigil over expression of IL-13 fedacain [ph]. The ability of IL-13 to induce expression of e attacks in 3 and Perri Austin[ph] – which is the most of how we express proteins in EoE as well as the ability of IL 13 to commote both inflammation and fibrosis in the eosinophilic esophagitishagus.

I want to also remind you that there appears to be validation of this mechanism in other allergic meted disease areas. Especially IL 13 antagonist have demonstrated efficacy in allergic pre-clinical models and recently have shown clinical activity in asthma as well as ease in the eosinophilic esophagitishagitis patient.

In terms of our clinical development plan, we intend to connect the Phase II EoE trial as a randomized double blind per cubic control study in patients with active EoE. We plan to enroll approximately 90 patients to set subcutaneous doses of RPC 4046 compared to placebo. And, the primary objective of the Phase II trial will be to determine whether treatment with armachio [ph] is efficacious as determined by histologic improvement of ease of count at week 12.

We also plan to explore potential participant diagnostic by a micros of for efficacy in this study.

Prior to initiating the trial, we gaze upon ING with a GI division of the FDA. We intend to have a pre-ING meeting later this quarter as we filed the ING in the first half of 2014. Because Phase I trials have already been conducted for the small scale, we will be able to mistrate into the Phase II trial.

So, that covers the update on our clinical preference, I will now turn the call back to Faheem.

Faheem Hasnain

Thank you, Sheila.

So, just to summarize on the RPC 1063, we’re actually knitting well, having now completed enrolment in the relapsing MS trial and on track to disclose top line results in mid-2014. We’re planning to conduct an interim review of the RMS data trial later this quarter which will trigger initiation of Phase III if the data confirms the differentiation profile.

We believe that based on our trajectory, we have the potential to be the next S1P1 modulator into the market. A market that is growing in overall size, and where oral therapies appear well positioned to continue to take share from injectable therapies.

We have a large, perhaps even larger opportunity in UC, and inflammatory valve disease in general where our current Phase II trials are also on track to read out mid-2014. While investors tend to be focused on the MS opportunity, I do believe that success in this proof and concept trail could create an upside for the program that is yet to be appreciated given the size of the patient population and the unmet need.

And, let me remind you that with regard to RPC 1063 in all indications, we own 100 percent of the worldwide right to this asset and we have strong IP running until 2029 without adding any time for data exclusivity. And, finally, we’re making progress in building a pipeline with other product candidates addressing other therapeutic indications including eosinophilic esophagitishagitis and Type 2 Diabetes – both of which could represent substantial opportunities whether we pursue them alone or in partnership.

And, of course, doing all of this with an extremely talented passionate and committed group of professionals here at Receptos. With that, we’d be happy to answer your questions.

Question-and-Answer Session


(Operator Instructions).

Our first question comes from Ravi Mehrotra of Credit Suisse, your line is open.

Ravi Mehrota –Credit Suisse

Hi guys, congratulations on the on time enrollment. [INDISCERNIBLE] solicit that change in dynamics within the MS market, perhaps you could give us your view and the feedback you get from physicians on this feat of this change or relations. Would you view it as more revolutionary rather than devolutionary. And, in that context, perhaps you could take us through what you previously said about the asset with regards with partnering, whether that’s change in given and then the dynamics at the MS market. And, let me talk about the elephant in the room – what Faheem said about ultimate exits here with regards to partnering versus strategic options in the past. Thank you.

Faheem Hasnain

Thanks, thanks Ravi. So, the first part of your question related to market dynamics and our view not at – we continue to believe that we are going to see a fairly rapid – I don’t know if you call it, revolution or evolution. But, certainly a rapid movement towards orals – you know, there’s been projections that suggest that 50 percent of this market will be in oral by 2016. I think that projection may be light. I think we’re seeing, we’re seeing clear market uptake with both Tecfidera and GELINYA. And, to a much lesser extent, Apaggio [ph]that really speaks to the need for oral therapies and I would argue probably speaks to the need for higher efficacy oral therapies in the marketplace.

So, I think this trend is going to continue and I think it’s continue at a pace that’s faster than perhaps many people would expect. Sheila if you’ve got anything else to add on that front?

Sheila Gujrathi

I think that we’re seeing that given the tolerability profiles that obvious – obvious the convenience of the month to date will join in – start the day oral pills with Tecfidera and – and just the recognition of the efficacy profile that these agents continue. And I think, also discussing, you know, the focus on earlier aggressive treatment in MS that we heard – loud and clear accurems[ph], which I think is a real focus for treating neurologys [ph]. I think this – this makes sense and moving to the oral therapy that are safe and efficacious and make a lot of sense as well.

Faheem Hasnain

Ravi the second part of your question related to partnering, we’ve been pretty clear I think and pretty consistent all along is that – it is our view that we will establish a partnership around RPC 1063. We’ll establish a partnership based on end of Phase II inflection. And, our rationale for saying that is largely related to the need to have good commercial strength alongside of it – and, of course, it would be our intent to also participate in that commercialization – depends if commercial strength to be able to compete with the likes of Novartis and Tevon Genitic [ph] and others.

But, having said that, we have a substantive opportunity at the point in time that we disclose the Phase II data and MS assuming that it’s positive – we think we’ve got a substantive opportunity that we think is going to be a much greater value inflection than where we sit today.

And, you know, that doesn’t even take into account the UC opportunity which we think is largely under-appreciated as I mentioned. And so, we’re very optimistic about – not only our programs – but also very optimistic about what kind of market reception we will receive once we turn out those data cards in the event that those data points are positive.

And so, with that, we fundamentally believe that a partnership at the Phase II inflection that reflects Phase II evaluation makes a whole lot more sense than doing anything today.

Ravi Mehrotra – Credit Suisse

Understood, thank you.


Our next question comes from Jim Birchenough of BMO Capital Markets, your line is open.

Jim Birchenough –BMO Capital Markets

Hold on a minute, Nick and Jeremy is on a plane this afternoon. Thanks for taking my question. It’s sort of three-part question and some are falling on from Ravi’s question but – you know, the first thing I notice at acronyms was the 1063’s not really into the lexicon yet of – so many, there are Europeans who are giving how I treat MS talks and giving the winnowing [ph] of the field over the last 12 to 18 months of – and now, the very positive therapeutic data, I’m wondering if that’s changing.

And then, we heard this early, aggressive treatment loud and clear. You haven’t really discussed – you didn’t discuss the trial design of your second Phase III – and I doubt it’s a CIS trial. But, how important is that – a CIS trial.

And then, thirdly, your choice of Avonex – everyone’s piling into the oral about – and yet, if you do choose Avonex as your comparatory in this trial, does that, do you think that affects your ability to enroll that trial rapidly? And, I’ll pop back in the queue, thanks.

Sheila Gujrathi

And, thank you for your questions. Yes, so, the first question you asked was around the 1063 of - our 1063 is coming into the awareness of many neurologists at this time. And, I do think, you know, we had then, somewhat of a surprise. And that, we – because of our accelerated program, we are embarking upon a real important milestone for this program, we could be entering Phase III by the end of this year or early next year.

And, I think, given that and given where we stand with our cardiac differentiation – which I think has been very well received when we go through and discuss some of our benefits that we’re already seeing with 1063. Especially in terms of avoiding any QT prolongation effects, which has not been observed with – which has been observed with other in its class. I do think that we are coming more into the awareness of the community of neurologists.

Obviously, we’re in many global sites around the world, enrolling the phase of it – having involved the Phase II trial and going to be starting the Phase III study if everything looks positive. So, I do think that’s going to be shifting and you will see a lot more of 1063 in future meetings and more around the awareness. Especially in the differentiation profiles, specifically.

And I do agree with you on your second question about the movement into earlier treatments of lines of MS. And that, we do see the profile for RPC 1063 really lends itself to a very favorable benefit for that earlier treatment – reaching population.

Because, as we know, this class of therapy and its – a lot of state of had come from the journey of long term studies – it has shown very good efficacy, especially in terms of brain volume preservation and some of that data was really Fed act terms early this year. And we have every reason to believe that we would see very similar good results on the reduction of brain atrophy as well as the anti-inflammatory processes that are going on. But, combine that with our, hopefully, improved tolerability and safety profile that would make a very nice profile to be used in earlier lines of treatment.

Currently, the second trial is going to be enrolling a broad range of MS patients, including patients who could be CIS patients coming in after their first syndrome or their first relapse. But, it is a good question for us. We would like to do a CIS focus study along in our development task – it’s something that we will be considering, again, as we continue to show that we have a safe and tolerable profile that would support that. So, review and the support of a safety development program.

So, in the last question around Avonex – yes, we have chosen Avonex for this first study and there were really a number of reasons to do that – still Avonex is widely used. And so, you know, I think that that will change over time. We do have a robust program in terms of designing a superiority study against Avonex. And, importantly, this drug is available and is – patients have access to this therapy. And, it is approved in all the countries that we’re currently doing development in and that was a real key factor for us in determining the first IP comparator.

Having said that, we could change the IP comparator for the second pivotal studies in other supportive cities that we will be conducting as part of the registrational program. I think there’s a lot of opportunity there to look at other IP comparators that are relevant in the treatment of MS patients today.

Faheem Hasnain

And, I think I’ll just add to that, given the speed and rapidity which we are able to enroll our first – our Phase II study, which was, of course, a placebo control study where our patients had to deal with the possibility of getting either active or really nothing, and the fact that we were able to enroll that study so fast – I think it gives us some optimism, better rate of enrolment in Phase III. When you actually throw in an active comparator even if it has Avonex.

Jim Birchenough –BMO Capital Markets

Thank you.


(Operator Instructions). Our next question comes from Marko Kozul of Lerrink Swann, your line is open.

Marko Kozul – Leerink Swann

Hi, good evening, looking forward to your continued progress. Mainly, just to continue the – this seem as a lot of question. Could you maybe talk a little about what might drive a change in active comparators for the second Phase III, why you might choose to change to Compatron [ph] or to Tecnidar [ph] and then I have a follow-up.

Sheila Gujrathi

Yeah, I think we’re – from our perspective, you know, assuming that, for example other orals continue to get regulatory approval – and all the required countries and patients have access to this medications, you know, we would be pretty excited to do an oral head-to-head study. I think that would be something that it would be novel and well received by the community of treating neurologists as well as patients.

I think one of the constraints we have is – let me do these head-to-head trials – is that we do have to have them blinded. So, they do have to have a double dummy component. In patients, do have to get placebo injections if they are getting injections – so, that is really, influence our decision to choose therapies that are less frequently administered given the duration of these trials than one that would be, for example, a daily injection – which is, provides more difficult involvement of barriers if you will.

But, based on the key factors that will be influencing us, just to understand the evolving market dynamics over time, and understanding, you know, where the treatments of patterns are evolving to and what are the most relevant comparators. And, I think that will help dictate what choice of comparators we have in the second study as well as beyond the second study in other supportive trials.

Marko Kozul – Leerink Swann

Sheila, thanks for that. And the other question I had relates to the upcoming fourth quarter interim analysis for the Phase II in that study. Can you remind us, you know, beyond the – looking at the cardiovascular parameters, hepatic effect – what else are you looking at in terms of safety in that interim. And then, in terms of logistics, should we expect that your next press release around this will be announcement of what you’d seen in the interim or would it be frustrations in the Phase III study once it starts? Thanks.

Sheila Gujrathi


Faheem Hasnain

Yes, go ahead Sheila.

Sheila Gujrathi

Yes, so, the interim analysis will, as you said, will primarily because focus in on safety, reviewing all the different, differentiation profiles that we – the elements of differentiation profile that we reviewed with you. But, in addition to that, we will be looking at the efficacy side of the equation. The most important aspect there for us – given this will be a more limited data sentiment. It’s not the full data said in terms of primary endpoint – we’ll be looking at the measurement associated with the safe count. So, we will have some robust data looking at count reduction as a value that something that we will be spending some time looking at to ensure that we are – do have the appropriate doses.

In addition, we will have some efficacy data – coming out – looking at MRI reason count. So, that will be limited in nature, since it is under power to really expect that endpoint. But, we will take look at that some are trending in the right direction. And, again, we have a data monitoring committee that will also be reviewing all this information to make sure it’s appropriate for us to go into Phase III.

And so, it will be a nice data set to really help – if you should delist the program and allow us to move forward into Phase III with some of – more enthusiasm.

Fahreen Hasnain

So, with that said, so – basically, what you’ll be hearing from us is, is really a decision to move forward into phase three or not and from there the read through that you should take in that decision is that – the profile, the safety profile that we’ve defined and the pharmaco dynamic markers that we’ve – that we believe is highly co-related to efficacy – are intact and in the range – is that we have spoken to probably all of you about in the past.

So, that will give us the confidence to move forward to Phase III – and then, of course, you’ll see the Phase – the full Phase II data set a number of months later – mid-2014.

Marko Kozul

Terrific, thanks for getting the questions.

Faheem Hasnain



We have a follow-up question with Jim Birchenough. Your line is open.

Unidentified Speaker

Hi, and it’s Phil Mek [ph], Jim’s still on the plane. I’m wondering, would the TPT data, do you submit it, and or discussed that to – with FDA – to get their opinion on your searching that – the various thresholds, indicate the QT effect were not met.

And then, you know, there was some data from one your competitors about remileanation – and, I’m wondering if you’ve got Robert [ph] working away in the labs looking at remileanation effect. And then, finally, there’s a phone going trial with and I’m wondering if you had any feedback on how that trial is going and what patterns, some of the observations are. Thank you.

Sheila Gujrathi

Sure, yes, thank you (Nick). So, yes we have obviously been working to submit our data on the TPT study to the FDA. But, I think in terms of ruling out a relevant TQ effect, I mean that is fairly well defined in terms of looking at Thera QT [ph] study methodology. There’s clear criteria and our regulatory threshold that – that’s outlined for us that would, that constitutes whether you have a negative or a positive Thera QT [ph] study. So, from that regard, I think that we have met that criteria in ruling out a relevant QTC effect in our upper bound of our threshold is well below the ten most second regulatory special that they’ve outlined.

But, we will, obviously be continuing to gain guidance from them and feedback on our TQT study data itself. And, also, we as you know, had a positive control in the study looking at Mossy Fossington [ph] that was a key secondary endpoint where we were able to produce that intended QTC prolongation. So, it is a robust study with what we call ASI sensitivity, in that the study was pointed enough to detect the QTC effect and yet, we’ve ruled out a QTC with our therapy. That that is a kind of a clinical concern. So, but we will, of course, be getting more feedback from that from the FDA.

The second question on remileanation, there is some interesting after looking at GILENYA, and so, I think we are in the process of developing some additional study that we’re going to be conducting with 1063. And, a lot of that will be in collaboration with some of our key opinion leaders who are working with us closely, especially in the translational area. So, we do plan to initiate some of the studies and continue looking at SMP1, receptor modulation in the CNS and understanding the effect on the remileantion and micro grill [ph] activation in particular as well effect in other neuronal cells. So, that is something that we are very focused on. Again, especially with the evolving story on brain atrophy.

So, more to come on that. And then, in terms of the GILENYA – half those trial – we haven’t heard a lot about that in terms of feedback or the context of the study – so, we can’t really comment on that. I think, you know, our thinking on the study was that – you know – if it does work many of the attributes that we outlined that we’re going to be differentiating – again, for GILENYA – probably won’t be that does dependent. Such as the QT prolongation effect 15 that pretty consistently across all the database study.

So, again, this will become and we will continue to monitor and see what the data shows. But, it hasn’t really changed our differentiation thesis or our key on positioning.

Faheem Hasnain

Yes, that study Nick[ph] – we know, basically – we understand at this point in time – is a very large study, I think 2500 patient looking at GILENYA lowdesk .25 – GILENYA added, marketed as .5 and then versus Capacsen[ph]. But, haven’t heard anything – I mean, it really just got started I think at the beginning of this year. So, it would probably be a while before we get a read out.

Unidentified Speaker

OK. Thank you.


I’m showing no further questions. I would like to turn the call over to Faheem Hasnain for any further remarks.

Faheem Hasnain

OK, well thank you all for joining on this call, we really appreciate your support and look forward to continuing to keep you updated as our development programs have progressed. So, thanks again, everybody. And, great afternoon to everybody.


Ladies and gentlemen, thank you for participating in today’s conference. This does conclude the program and you may all disconnect. Everyone, have a great day.

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