Camilla Zuckero - Marketing Communications Manager Neil Warma - President and CEO Don Healey - Chief Scientific Officer Donna Rill - Chief Development Officer

Robert LeBoyer - Aegis Capital Keith Markey - Griffin Securities Pooya Hemami - Edison Investment Research Keay Nakae - Chardan Capital Markets Jason Kolbert - Maxim Group

Welcome to the Opexa Therapeutics Year-End 2015 Financial Results Conference Call. [Operator Instructions]. I would now like to turn the conference over to your host Camilla Zuckero, Marketing Communications Manager. Thank you, Ms. Zuckero. You may begin.

Thank you, Tim. Good afternoon, everyone, and welcome to the Opexa Therapeutics year-end conference call. During today's call, members of our Senior Management team will review Opexa's financial performance and business highlights for the year-ended December 31, 2015. Before turning the call over to senior management, I would like to remind everyone that this call includes forward-looking statements including financial projections and expectations of progress in our clinical development programs that are subject to risks and uncertainties that could cause actual results to differ materially from those projected including the risks set forth in Opexa's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission as well as the specific risks and uncertainties noted in our 2015 year-end financial results news release. With us today, are Neil Warma, President and CEO, Don Healey, Opexa's Chief Scientific Officer, Donna Rill, Opexa's Chief Development Officer and other members of Opexa's management team. I would now like to turn the call over to our CEO, Neil.

Thanks, Camilla and thanks everyone for joining for the earning's call today. We appreciate your support and interest. At Opexa, we’re excited to be at the forefront of developing personalized therapies for autoimmune diseases. Our proprietary platform technology which has been developed by leading immunologists for the Baylor College of Medicine we believe has the ability to address unmet medical diseases across multiple disease areas. Through the administration of personalized tailored therapies we are aiming to restore the function of the body's immune system in those patients with autoimmune diseases. As many of you know our first disease target is multiple sclerosis, we have conducted several clinical trials in MS over the years and have invested well over $100 million into our proprietary piece of platform in order to develop safe and effective treatment for individuals with multiple sclerosis. 2016 will be a highly significant year for Opexa as we aim to complete and report on our landmark Phase 2b clinical study in secondary progressive MS patients. The execution of the 190 patients ability, clinical trial went well in 2015 in the first quarter of this year. We’re excited the final dose was administered in the last patient this past February so a few weeks ago. And over 97% of all the patient visits have now been completed. So we're very excited as we complete the remaining activities of Abili-T trial and we expect to report top line results of this trial early in the fourth quarter of this year. So just several months away. Coupled with winding down of the clinical activities associated with the Abili-T trial we recently announced a restructuring initiative within the company this was really driven by reduced operational demands associated with the Phase 2b trial and importantly it should enable us to extend our cash runway into Q1 2017. And as we've talked about several times in the past we believe our platform technology has brought applications to other out immune disease areas. We identified the rare disease Neuromyelitis Optica or NMO as our second indication and have been conducting preclinical studies with our second development candidate OPX-212. In 2015 we were pleased to have completed our bioactivity study, bioactivity preclinical mouse study where we demonstrated a statistically significant and dosed dependent reduction in our targeted end points and that targeted end point was the reduction or depletion of AQP-4 reactive T cells. So that was a good result for us couple months ago back in 2015 we reported on that mouse study. And we at Opexa are pioneering the developments of really a novel personalized therapy in NMO and as such we from time to time encounter unexpected hurdles as we progress. For example with respect to the manufacture of OPX-212 it's taking us a little longer than anticipated to manufacture the peptized use for the production process due in own part to the hydrophobic of the peptides. So we have been working with externally validated manufacturing companies to overcome this issue and at this stage we believe it's prudent to hold back on providing kind of additional or specific guidance with respect to pacing and timing of the milestones for OPX-212 in NMO and we will report on our progress when and if we reach these important milestones. So just take a minute now, I want to speak to financial figures, report on the financial health of the company, we recognize revenues of $2.6 million for the year ended December 31, 2015 related to the recognized portion of the $5 million upfront payment received from Merck Serono in conjunction with the Option and License agreement executed in 2013 and the additional $3 million payment also received from Merck Serono in connection with the March 2015 amendments. So the 2015 revenue figure of 2.6 million is approximately double the 1.3 million revenue figure reported for year ended December 31, 2014. The net loss reported for the year ended December 31, 2015 of approximately $12 million or $2.05 per share compared with a net loss of approximately $15.1 million or $4.33 per share for the year ended 2014. The decrease in net loss for 2015 is primary related to the increase in revenue due to the March 2015 amendment to our option and license agreement with Merck to which I just referred and a decrease in research and development expenses are partially offset by an increase in G&A expenses. The cash balance as of year-ended 2015 was approximately $12.6 million. In addition there is no debt on our balance sheet. The operating cash burn rate in 2015 was approximately $1.1 million per month. So fairly consistent over the year, based on our current activities and projected burn we believe we have sufficient liquidity to support the remaining clinical activities of the Phase 2b ability study Tcelna [ph] patients with secondary progressive MS, the preclinical activities for OPX-212 and NMO and for general operations of the company into the first quarter of 2017. So really in conclusion before you jump onto the Q&A it's obviously a very exciting and important year for the company as we mentioned we expect to report on the Phase 2b trial and secondary progressive MS later this year specifically early in the fourth quarter. The top line results will focus on the key endpoints namely whole brain atrophy, and disease progression. It started in secondary progressive MS represents approximately 30% to 40% of the entire MS population which indicates a significant unmet medical need. This also translates into a substantial market, possibly in the range of $7 billion. So the Abili-T is successful and Tcelna is ultimately the treatment of choice for secondary progressive MS patients, we believe our immunotherapy could capture a sizable portion of the potential multi-billion dollar market opportunity and importantly it could mark a significant contribution for patients with the progressive form of multiple sclerosis. Additionally we have secured a potential partnership with one of the top MS companies in the world that being Merck Serono and this is through an option and license agreement and this is secured back in 2013. Should the Abili-T data read positively we believe that Merck would exercise their option and advance Tcelna through clinical development in MS and if they did exercise this option Merck would gain worldwide rights to all MS indications for Tcelna excluding Japan. With this they would fund all the remaining development and commercialization of Tcelna in MS and Opexa could benefit through the receipt of milestone payments totaling $220, an additional royalty payment from 8% to 15% of net sales. So the revenue generation potential of this option and license agreement we have with Merck Serono could be very exciting if Tcelna continues to prove itself successful through the rest of clinical development and commercialization. So having given that overview I would like to open up the mikes to questions from the listening audience if I may. Tim?

[Operator Instructions]. Our first question comes from the line of Robert LeBoyer of Aegis Capital. Please proceed with your question.

And the question I had has to do with NMO indication and if there is any prediction as to how long it's going to take to solve these problems and get the trial moving forward?

As we said we’re pioneers in this technology, I think a lot of people are excited about the platform as it relates to autoimmune disease in general certainly with MS and also with NMO, we don't think there's another company out there that is targeting these diseases with a specific personalized Tcelna therapy for MS and certainly for NMO and that’s been a lot of the excitement coming from the patient community and the KOL's as well and as I just briefly mentioned as we the pioneers going down this untrodden path sort of speak there are certain challenges that come up along the way, certainly manufacturing was one that kind of cropped up the peptides AQP-4 protein. You know certainly challenging in manufacturing in formulating these, these are hydrophobic in nature not to get into too much of the science, Don here can talk to that if you wish. As far as trying to understand, guess the challenges and hurdles we’re facing I think at this stage Robert, we’re best to not put a specific time line, you know a specific line in the sand and give any direct guidance as to when we think we're going to be filing INDs and moving to the clinic. I know we've given guidance in the past but as I said it's still very much a development program, a preclinical development program for us. We're still very dedicated and enthusiastic about the NMO program. But right now I think as we kind of march through some of these hurdles and knock them over it's best for us just not to give specific guidance until we have their understanding. So we're going to report as we progress when certain milestones are reached we figure to be best to report to the market at that point rather than try to predict any outcome at this stage.

Our next question comes from the line of Keith Markey of Griffin Securities. Please proceed with your question.

I'm just wondering what are your plans for Japan?

I think as many of listening audience knows Japan has really done remarkable things through their regulatory authorities in speeding access to market for cell therapy regenerative medicine compounds. It really been very progressive over the past couple of years and essentially cell therapies can get fast track to market with relatively small Phase 1/2 study, get access to market and do supportive studies on the back of that. So it's really exciting what's happening in Japan. One of the reasons that we were interested in keeping the MS rights to Japan was because of that reason. Obviously as I mentioned in the beginning we've negotiated the option and license agreement with Merck Serono for worldwide rights to MS excluding Japan because of the interest in cell therapies and the rapidity which you can get these things to market. We were interested in maintaining MS for Japan, we obviously have worldwide rights to NMO and all other diseases off this platform. So we've done a lot of background work at this stage Keith kind of understanding the regulations. We've had a number of conversations with groups in Japan as well about how to get our products through the regulatory pathway in Japan. We've also been having discussions with Japanese pharma companies and non-Japanese pharma companies, I think a lot of pharma companies recognize that a lot of could be an amazing a quick path to market in Japan with cell therapies, so companies have approached us to talk about our technology and as I said we've got a lot of understanding with a lot of a due diligence on our part kind of understanding the regulatory authorities. So all that to say that Japan remains a very interesting territory for us. So it's a matter of us kind of balancing time and cost and capital, obviously the focus of this company is getting the ability study done and completed and reporting on the top line results early in the fourth quarter as I said we're excited about all the progress we've made there and we’re last few patients to go through final visits and such. So the focus of the company very much on completing the Abili-T study but as I said as we have rights MS, we have worldwide rights to every other compound of our platform in Japan, that's an area that's really exciting. A couple of companies have gone through Japan with their products. We've seen the relatively quick process that they've received, we've seen reimbursement numbers again very positive in $150,000 range for reimbursement for the first two products with this Japanese regulatory pathway. So a lot of it bodes well for cell therapies, we can get in there quickly and in Opexa we have done a lot of pharm work and we would like to move as quickly as capital and time allows us. It's very interesting territory for us.

And since you brought it up I was just wondering also whether or not you thought that there was any sort of expedited path to approval outside of the -- well in the U.S. or in Europe. Perhaps based upon the Phase 2 trial that you've guided assuming that you end up with a fairly significant signal there.

Yes, it's a very good question Keith. We have had a lot of discussions internally about the regulatory pathway for MS with positive results. We've had a lot of discussions with our partner with Merck Serono, again generally speaking how our Phase 3 program would look, just keep in mind if the results are positive, they exercise their option, you know they really lead the way with the clinical development and pay for all that as well for Phase 3. So obviously they're very interested in the Phase 3 program. And we like to think I collectively we think if the results are in positive from the Phase 2 study in a few months there certainly could be expedited path to market in the U.S. possibly in Europe as well. Well certainly you know as you know we have fast tracked designation already for Tcelna and secondary progressive MS beyond that I can most certainly see us applying for and ideally receiving breakthrough designation, accelerated approval as well. Again it's uncertain, if the data is really out of this world could this be the registration to try out with breakthrough designation that gets us straight on the market. I don't know that subject to discuss with the FDA that's probably tough. But I think at the end of the day with positive results, with a breakthrough tag. I think we would be looking at one pivotal Phase 3 study I don't think we would have to do two pivotal Phase 3 studies as is customary with other MS drugs especially in relapsing remitting. I think given this therapy, given the track record especially on the safety profile I do think there is a very good chance that we will get kind of that breakthrough designation and kind of rapid access to market through a single pivotal Phase 3 study which would be terrific for us. Again this is all subject to FDA discussion but I think our heads are certainly thinking like that and I think Merck Serono is probably looking at that type of expedited pathway as well. So it could be pretty exciting for us. And again with us as I said have to have Merck pick up all the costs for the rest of the program to make it really cash neutral for Opexa it would be terrific and then on top of that the revenue coming back from those milestone payments would be superb and then we can direct at any program we wish once the milestones come in we don't have to dedicate that to MS at all. So with positive results in a few months it could be really significant for Opexa you know the second half of this year and into 2017 it's an exciting time.

Our next question comes from the line of Pooya Hemami with Edison Investment Research. Please proceed with your question.

And I just have a few questions here mainly on the OPX-212, can you provide us some of the technical details in terms of what is that the issues with the manufacturing I mean. My understanding was that the platform is based on screening certain peptides which I’ve already been identified by Opexa and also since there was a preclinical studies done in the past. What are the hurdles being brought here as opposed to what was occurring given that there were already some preclinical test done with the same peptides involved.

As far as the preclinical studies I mean really you recalled when we visited with the FDA and inquired about necessary preclinical studies before we got into the clinical studies their request was for preclinical animal model to demonstrate bioactivity and at that stage there really was no NMO model available, no one had really gone down this path with a [indiscernible] cell therapy to demonstrate and effect in animals. But Don Healey our Chief Scientific Officer who devised an experiment whereby we theoretically could show a biological activity in an animal model. We presented this to the FDA and they said yes that would be a valid experiments and in theory if you demonstrate biological activity that should be good for preclinical study for NMO, DMO indication and this is different than MS, in MS we went straight first in [indiscernible] back then FDA didn't require us to do preclinical studies, here they're requiring the preclinical study. So we designed those studies and really it was a terrific result we reported on these I mentioned those in the script a few minutes ago. We reported those preclinical results back in November and our goal was to show the reduction of those pathogenic T-cells in an animal model and this was based on what we had shown in the MS model but we had shown that in human Phase 1 study back in the day. So our design for the animal model is based on the human study we did in MS where we wanted to show reduction of those pathogenic or AQP-4 reactive T-cells. So we ran that study in mice and we demonstrated a dose dependent, we looked at three doses, so a dose dependent reduction in AQP-4 reactive T-cells and this was statistically significant. So that preclinical animal study went very well again a complicated one that we had to design ourself based on no other precedent but again we got a terrific team here who came up with the model and the therapy proved itself in that animal model. Looking at, so that we really wasn't some kind of checked out box if you will and that will support the IND when we get there. As far as the manufacturing, it's not only our manufacturing process that we struggled with a number of months ago. This is really in the manufacture of those individual peptide that we use to detect the pathogenic T-cells and maybe Don you can see to Pooya's question about specifically you know what is the hydrophobic nature of some of these peptides and mine was a little bit complicated for us to try to manufacture these.

Sure. Just to finish off the conversation on the activity study, there was only a single peptide that was actually used in that model system. Obviously [indiscernible] have the advantage of being homogeneous in terms of [indiscernible]. So single episode was all that's required to map the actual core response in MS. Life is more difficult for humans obviously NMO is associated with an [indiscernible] but nevertheless at this time the knowledge of which episode immunity in individual patients is not known. So consequently we fall back our overlapping peptide library that encompasses the full length of the sequence. AQP-4 is an interesting protein, it's a trans membrane protein and in fact it actually causes the membrane a six different locations in the protein sequence. Obviously the elements of the minor sequences that are embedded in the lipid bilayer are hydrophobic in nature and as a consequence trying to manufacture those peptide sequences bear in mind they're not going to be soluble in water or weak acid has been a major challenge for manufacturers both in production of the peptides and probably more especially in the purification of those peptides and so traditional automated synthesis programs were not very successful and the companies we work had to develop a manual manufacturing of purification methods with optimized, coupling reagents and purification methods and columns. So obviously we need quality materials to be able to manufacture our products and obviously we impose that restriction upon our manufacturers of raw materials, they are fully categorized as reagents and so there is manufacturing processes they implement and indeed robust.

So does this issue with the OPX-212 because if I understand correctly you know right now the company is giving a fairly open guidance in terms of if and when it will return so. There is a possibility that this hurdle may not be overcome if I understand the wording that you’re seeing, is that correct?

Yes we’re just careful with wording, Pooya, again it's biotechs, you can never be 100% certain. Again we're still committed, we're still working hard to move the program forward. So as I said it's you know it's a nature of biotech, we have to be careful with the language we use but as I said we're committed to moving the NMO program forward most certainly.

Okay. And your guidance includes continued R&D and continued development of the OPX-212 meaning you’re funding guidance into Q1 '17?

That’s correct. Yes.

And the issues involved with the OPX-212 does that be a potential issue with maybe either autoimmune targets or other indications for the [indiscernible] platform, is that something that we can see in either potential developments?

Not necessarily, we didn't really see that in the MS program at all, we kind of sail through that and that was fine and there's three proteins there and you know more peptide to manufacture so that was not an issue. It's the hydrophobic nature of some of these and just a handful of the peptides with NMOs, so it's tough to tough to predict. I think one of the advantages is and Don correct me if I'm wrong, one of the advantage is as we worked hard for some of these external guys and we solve a lot of riddles along the way. So if we do encounter this in other programs moving forward we've got a lot of history and knowledge and experience from the NMO piece under wraps already. So it's tough to predict but as I said a lot of intelligence has gone into this so if it does come up again we should have some answers for it.

And one final question about this is that the [indiscernible] financing that was dedicated to the NMO program how was that going to be affected by these delays?

I think as most people know we secured kind of a $5 million financing from a private investor last year and this individual is really excited by the approach that Opexa was taking with the NMO program, again very novel targeting that you know selective targeting of that pathogenic T- cell and they were very intrigued with the model, haven't really seen this before so we're supportive and stepped up and gave us that $5 million tranche financing. You know the first tranche we received with the execution of the agreement and the remainder of the tranche come as we progress with preclinical milestones and clinical milestones. We have filed this as well, we've recently gone back to the existing investor and amended the agreement to allow us flexibility around some of those timelines moving forward. So yes the investor still very supportive and very interested in what we're doing. Gave us flexibility around those four remaining end point to milestones that we had as part of that agreement. So that's in file with SEC, it's out there and if you want to a look but again we did -- well we did get extension of those milestones for an additional six months beyond what they were originally. So we're pleased with that and that's accidentally should bode well for the company.

Our next question comes from the line of Keay Nakae of Chardan. Please proceed with your question.

Just a question regarding the expenses in Q1, you’re expecting related to the restructuring, any further refinement of what those might look like?

Sorry, say that again, any further refinement of what Keay?

What the charges related to the restructuring will look like in Q1?

Yes. I mean the charges restructuring we reported in the original press release. I believe they are around -- we had the severance around $350,000, $300,000 was the charge to the company for the severance and equal amount for the retention as well. So again the rationale is just back up a little bit, the rationale for the restructuring. As the activities and we mentioned this earlier as well and it's probably not overly complicated and I think it was quite prudent as a company, response of the company as the trial winding down in a positive way and the number of the activities are completing. We felt it was fiscally kind of responsible of us to tear the burn as the activities wound down so we took a restructuring charge again that was minimal in the range of $300,000 and $345,000 -- $325,000 charge to the company. The important aspect there was extending the runway out into Q1 of next year. So again it made sense winding down the activities to carry the individuals and maintain the burn, didn't really make sense from a financial perspective. So we restructured, laid out a number of folks, extended the runway into Q1 and I believe that restructuring charges is $325,000.

Okay. And with respect to the Phase 2 study with last dosing having occurred, not that the study is autopilot but you know what's going to keep you up at night between now and the results?

It's not on autopilot at all, just sitting here with me and smiling but it's I think a lot of people think I can found those, you’re kind of cruising now. There are some things where you kind of wipe your brow and say that's the final doses is behind us and with dose and all the patients who are taken care of, there are still patient visits you know the final six months follow up from last [indiscernible] patients coming to the office for the final MRI and final visits and so there's a lot of work obviously that goes into dressing addressing any open issues at the sites and closing the sites, locking the database, cleaning the data, getting it in-house, analyzing, reporting it. You know as I said but now you’re thinking about all sorts of things and one thing that does come for me though is the terrific team we have here. You know very capable, very confident in assuring that all the steps get done and get done appropriately. We have superb, this study could run in 35 centers across the U.S. and every single one of those sites have one enrolled patients which is terrific and almost unprecedented and so it's a superb group of sites we’re working with, great PIs, you know you saw the quote from Clyde Markowitz in the press release he's been so supportive of the product, he was in our previous study back when I joined the company a number of years ago and in the secondary progressive MS trial. So you’ve got some terrific PI study coordinators, the patients have been wonderful. So all that you know gives me a very positive feeling. The team here to close down the data, we’re all encouraged, excited and you know we know what we saw in patients from previous studies whether it's a relapsing studies or even a secondary progressive MS patients, we prevented 80% of the previous patients we treated and patients we treated with secondary progressive MS previously 80% of them showed no signs of disease progression. So we're really excited about the data as we get closer and closer, as I said there's always things going on in my mind here and there but as I said is I take a lot of comfort from the superb people we’ve inside Opexa, they are closing out the trial and we have the top MS sites in the U.S. and Canada running the site for us. Doug Arnold doing all the central reading on the MRI at McGill University. He is the top guy in the world for this. So we're supported by a great cast. So I get a few winks every now and then.

Our next question comes from the line of Jason Kolbert of Maxim. Please proceed with your question, Mr. Kolbert.

When Keay was asking you what keeps you up at night. I think I have to answer that around brain atrophy. So can you talk a little bit about the potential for brain atrophy to be used as an approval end point in a pivotal trial and whether it would need to be combined with another measure like EDSS.

Yes. I mean brain atrophy or maybe it's my own that keeps me awake but brain atrophy as an endpoint, yes it doesn't really keep me awake because I said we discussed this a lot, you and I’ve discussed this a lot, we discussed it internally, we discuss it with our scientific advisory board members as well a lot of the rationale for picking whole brain atrophy as the primary endpoint. As I mentioned in the script I mean important in the analysis in the top line analysis certainly will be the primary end point of whole brain atrophy but also coupled with disease progression EDSS we expanded the definition of EDSS we're looking at as well. So disease progression will be critical but whole brain atrophy is very important and very relevant as well and maybe Don you want to speak to patients kind of comment about whole brain atrophy and its relevance in MS like this.

Obviously the understand of atrophy really just translate to the [indiscernible] event and there was actual loss of brain tissue, it had been used in the past the secondary progressive trials to be suggestive of an improvement downstream in progression. More and more is been learnt and applied from MRI techniques against showing more activity in grey matter and what was really perceived to be a normal appearing white matter, there's a lot more inflammatory activity in the degeneration and so more analysis is being done on the measurement of atrophy in relationship to progression. It's certainly been described and probably the strongest relationships are still been associated with [indiscernible] function as opposed to physical disability. So we think that the data from atrophy will translate to -- and be predictive of change in progression rates. Yes it's likely an assault and at least EDSS will probably remain the primary marker for clinical outcomes in the eyes of the FDA, although as you know companies like biogen have been looking at composite end points now essentially breaking down the key components within the EDSS to achieve a higher resolution of [Technical Difficulty] for measuring disability. So those factors are always moving and as we move forward with our clinical studies and hopefully we will want to select the most sensitive tools for clinical benefit which may ultimately be a combination of an MRI end point as some sort of composite read on subsets of disability endpoints.

I think we did obviously speak with the FDA about the reflection of these end points prior to initiating these study and they are supportive of using whole brain atrophy as the primary. I think one of the additional benefits here that it is a quantifiable end point and this is an imaging end point that you look at literally the shrinkage of the brain over time from baseline 24 months. We have and we do know and the literature does suggest that there is a fairly consistent level of brain atrophy that occurs in the life of an MS patients roughly on average 0.5% per patient per year. So having a quantifiable endpoint again being assessed and evaluated by one central reader and that central reader being you know Dr. Arnold's group of Montreal which is the top of the world. I think also provides a little more -- I think it's the clarity having a quantifiable endpoint whereas the EDSS can be sometimes very subjective so it's a combination of the quantifiable through atrophy and the very relevant EDSS scale that we look at both of those I think we will be very relevant moving forward, but a lot of discussion went into this. We've seen a lot of companies looking atrophy as far as key primary or secondary endpoints in a MS trial.

Can we talk a little bit about where you’re with Merck Serono particularly if you have good data. How much planning is Merck Serono executing now in terms of the pivotal study and how much discussions are you having with them in terms of their ability to act and go forward with the pivotal study should you have good data. Help us understand kind of the timeline in terms of the relationship with Merck Serono. A - Neil Warma: Yes we have been really just thrilled with the partnership and the relationship we've established with Merck Serono over the past couple of years. I mean they are superb company to work with, they are very enthusiastic about the program they were since day one, so that certainly is exciting I think you know looking back to their motivation, their enthusiasm around it Phase 3 and what comes next, you know we only need to look at well last year debt kind of almost a year ago now when Merck Serono stepped up and gave us literally gave us an additional $3 million and there is no obligation for them to do so and there was nothing really given them return, it was against the future milestone, it wasn't an equity investment. They provided the $3 million payments in order to really bring the companies together to start planning and plotting for Phase 3 and both sides Opexa and Merck Serono were thinking like we know the data is going to be positive, we certainly hope we expect all are planning for success. So we better get ahead of the curve and start thinking about how the Phase 3 study is going to look, how the manufacturing is going to look, is it U.S., Europe, Asia, how does that all plan out. So really the $3 million is in part last year to get them motivated, us motivated to get us around the table to form a joint steering committee and really do this properly and start looking at you know what happens when the data comes out positively we don’t want to be starting a planning process from there, and we both realized that. So over the past year we have met, we have spoken we have prepared plans about how possible studies can look. Again we haven't really been specific as to how often we met and the nature of those discussions. But we do meet formally and we do have discussions with colleagues throughout Merck Serono from the very top to the ones who is conducting the regulatory and clinical and manufacturing. So it's really widespread throughout Merck Serono, they have maintained and I don't want to speak on their behalf by any means but they've maintained their commitment to MS. They have one of the top selling drugs in the market [indiscernible]. They've demonstrated other programs that they're interested in as far as MS, they came up publicly and said their primary focus is on secondary progressive MS and for clinical stage assets essentially the Opex asset is one of their top priorities in the MS pipeline. So as I’ve said we have had great discussions, great relationship, we’re continuing those discussions now. We’re all coming at it from planning for success so we can hit the ground running. There's a lot of activities to be performed in setting out and preparing for Phase 3 study even when the data comes out, we make the decision, it's interesting if they do make the decision to exercise their options. The first milestone payment for us would be a $25 million payment from Merck Serono, and that should we enter straight into a Phase 3 study which we would anticipate we would. So again a $25 million from Merck Serono upon exercising the option certainly bodes well for Opexa and from that point on as I said we will be racing to a Phase 3 start point, there is still a lot of stuff to be done before we get there. So we're not giving any expectations or guidance on that but suffice it to say that they're very enthusiastic, we're very enthusiastic, we're working together very closely with them to try to plan the whole Phase 3 program and commercial program so we can be ready to hit the ground running when the data comes out.

Just Dr. McCarthy asked me to ask you this question, I promised him I would. He was really talking with me about a number of patients that will be required for the Phase 1/2 study for OPX-212, what the endpoints of the study might be and especially given the fact that I believe that's an open label study, is it possible that we could see data on a rolling basis from that trial? Thanks.

Again we will be kind of careful with the guidance here and say we’re obviously kind of not providing specific guidance but we have spoken about the with the NMO program and we have spoken about the trial design a little bit in the past Jason, and I think for us the way we’re thinking now and let's say we have got a little bit ahead of us to get there first, but I think for us an open label study probably does make the most sense that’s where our heads are now. We've talked with a couple of key opinion leaders and two very supportive KOLs are Dr. Ben Greenberg at UT Southwestern, [indiscernible] Dr. Johns Hopkins. So we have had some great advice from them, we obviously are very close discussions with the Guthy-Jackson Foundation and getting patient insight into the trial design as well. Right now kind of as it stands we’re working on an open label design, you know dose escalation probably in two to three doses maybe five or six patients per dose. So not a large study, you know the $5 million funding that we kind of ring fenced so to speak from our investor should cover that Phase 1/2 study. So if you look in the range of 15 to 18 patients in total two or three different doses, open label study and I think one could imagine that as the data becomes available you know it could since it is an open label we could report or discuss that maybe batch it to have that first dose batched and report on that we haven't really decided that level of detail but you know as there likely would not be in control. you know there wouldn’t be the blinding issue, so we might actually report on that as the patients move forward to that study, endpoints that we look at. Again going back to our successful animal study we reported on a few months ago looking at the reduction of those pathogenic T-cells I think that would be one of key end points that we would look at in the study. So reduction of pathogenic or AQP-4 reactive T-cells, again similar to what we demonstrated in animal model we probably look at time to relapse as well from a clinical angle. That's an important kind clinical read. Obviously with NMO the clinical end point is relapsed, it's similar to an MS patient if you will, only it tends to be far more active relapses in NMO patients. So looking at that clinical end point the Phase 1/2 study I think it would be reasonable as well. So time to relapse, but I think really focused on that biomarkers as well the reduction is those AQP-4 T-cells. So we have a lot of discussions and we have kind of -- obviously the advancing of Phase 1 study depends on you know nailing down these issues we’re having now. Getting the IND filed and getting it in front of the FDA again with the protocol and getting that all started but a lot of thought has gone into the clinical design already.

[Operator Instructions]. At this time we have no further questions in the Q&A portion of the conference. I would now like to turn the conference back over to our Chief Executive Officer, Neil Warma for closing remarks.

Thanks very much, Jim and thanks everybody for the excellent questions and listening to the earrings release. We're really, really excited obviously about this year and the next few months how it rolls out and it could be really a pinnacle year for Opexa. We continue to be a leader in the development of personalizing immunotherapies for autoimmune disease. We have these important Phase 2b data expected in the near term. We've been prudent in the restructuring of the company's clinical activities associated with the Abili-T Trial wind down. So we feel we’re positioned with the strong potential partnership to advance the Tcelna close toward the market with successful data from the Phase 2b trial as well as we've discussed. So we're really drove really pleased to be at the forefront in developing these next generation therapies and we really look forward in advising you of our progress over the next several months as we get ready for an exciting year at Opexa. Thank you again for your interest in the company and for joining the call today.

This concludes today's conference. Thank you for your participation. You may disconnect your lines at this time.