Joshua Drumm - IR, Tiberend Strategic Advisors, Inc. Khoso Baluch - CEO

Raghuram Selvaraju - Rodman & Renshaw Edward White - FBR & Company

Greetings and welcome to CorMedix Third Quarter 2016 Results Conference Call. At this time, all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to our host, Mr. Josh Drumm from Tiberend Strategic Advisors. Please go ahead, Mr. Drumm.

Thank you, [Jessica] [ph]. Good afternoon and welcome to the CorMedix Third Quarter 2016 Investor Conference Call. Before turning the call over to management, I would like to make the following remarks concerning forward-looking statements. During the call, we may make what are known as forward-looking statements within the meaning set forth in the Private Securities Litigation Reform Act of 1995. These statements are subject to certain risks and uncertainties and include, but are not limited to, any of the following. Any statements other than statements of historical fact regarding management's expectations, beliefs, goals and plans about the Company's prospects, including its clinical development program for Neutrolin in the United States and other product candidates, future financial position, future revenues and projected costs, and market acceptance of Neutrolin and other product candidates. More specifically, forward-looking statements include any statements about our clinical development plans and the timing, costs and results thereof, projections as to the Company's future spending and cash position, expectations as to the timing and nature of anticipated regulatory actions, possible product licensing or other business development transactions, any commercial plans and expectations, market projections for our product candidates, and expectations as to manufacturing and product component costs. Our actual results may differ materially from these projections or estimates due to a variety of important factors including, but not limited to, uncertainties related to clinical development, regulatory approvals, and commercialization. The risks are described in greater detail in CorMedix's filings with the SEC, copies of which are available free of charge at the SEC's Web-site at www.sec.gov, or upon request from CorMedix. CorMedix may not actually achieve the goals or plans described in these forward-looking statements, and investors should not place undue reliance on these statements. Please note that CorMedix does not intend to update these forward-looking statements, except as required by law. At this time, it is now my pleasure to turn the call over to Mr. Khoso Baluch, Chief Executive Officer of CorMedix. Khoso, please go ahead.

Thank you, Josh. Good afternoon, everyone, and thanks for joining us today. I'm very pleased to introduce myself formally as the Chief Executive Officer of CorMedix, a position to which I was appointed in October. I come to CorMedix with several decades of operational and commercial experience with prominent biotechnology and biopharmaceutical companies, including Eli Lilly and UCB Pharma, and I'm very excited about the opportunity to lead an organization that is focused on developing and bringing to market an important new anti-infective product in the U.S. My number one priority is to complete the ongoing clinical development program and to secure FDA approval. I will provide an update on the status of our development program for Neutrolin later on during this call. In the room with me this afternoon is Jim Altland, our Interim CFO, and on the call are, Dr. [Steve Hayward] [ph], our Medical Director; Jack Armstrong, our Executive Vice President of Technical Operations; and our CSO, Tony Pfaffle. They will be available during the Q&A portion of our conference call. Let me begin by giving you an overview of Neutrolin. As many of you know, CorMedix is focused on developing and commercializing Neutrolin, a product to prevent catheter related blood stream infections in patients who have an implanted central venous catheter or CVC, also known as central line. Depending upon the medical condition being treated, these patients are subject to frequent direct access to the blood stream via the catheter over a period of time ranging from days to several months. This presents repeated opportunities for infections to develop. Aside from being potentially life-threatening, catheter related blood stream infections often result in a significant longer hospital stay and can cause permanent health complication in patients who are already very frail due to end-stage renal disease. Hospital programs enforcing sterile techniques have been shown to be effective at reducing overall infection rate, but infections still occur. One of the reasons for this persistence is the growing threat of antibiotic resistance, which continue to confound efforts to minimize catheter infections and it's a significant public health concern. In the face of antibiotic resistance and a vulnerable patient population, we expect Neutrolin to emerge as an anti-infective with a broad spectrum mechanism of action that will be proven effective against most types of bacteria and fungal infections, including MRSA that can cause catheter related blood stream infections without any evidence of resistance. Importantly, these blood stream infections also cost the U.S. healthcare system several billion dollars every single year. In addition to the adverse impact on patient health and the burden on the system from the higher cost of care, hospitals are affected as they no longer are fully reimbursed for care given to patients who are readmitted with an infection within 30 days of discharge. For these various public health and far more economic reasons, it is absolutely imperative for hospital and dialysis center globally to dramatically reduce with the hope of entirely eliminating catheter related blood stream infections. Our lead product candidate, Neutrolin, aligns perfectly with this important goal, which is why we are working hard to enroll patients and complete the clinical trials and why we believe it can be a successful product in the U.S. if approved by the FDA. Neutrolin contains a powerful anti-infective molecule called taurolidine, which is designed to prevent microbians from colonizing the inside of the catheter and causing blood stream infections. Our current formulation of Neutrolin also contains heparin, a common anticoagulant agent which prevents the formation of blood clots or thrombosis that blocks the catheter flow, another major complication associated with central venous catheters. By simultaneously reducing infection and thrombosis, Neutrolin can protect both patient and hospital from dangerous and costly complications. In fact, we have shown evidence in previous clinical trials as well as a post-market observational study in Europe that Neutrolin is effective at preventing a significant number of blood stream infections. We hope to replicate these positive results in the ongoing Phase 3 clinical study. Now let me enter into where we are with the enrollment. LOCK-IT-100, the first of the two Phase 3 studies required to file for Neutrolin approval in the United States, is currently enrolling patients with CVCs who are receiving hemodialysis for end-stage renal disease, and completing this study expeditiously as possible is our highest priority at this time. Since the last quarterly update, CorMedix has continued to enroll patients and engage additional clinical sites for this trial. The Company also recently completed a comprehensive assessment of LOCK-IT-100, involving some of our principal investigators and other clinical staff for multiple clinical sites, as well as a number of our key opinion leaders, regulatory counsel and biostatisticians. Based upon the outcome of this assessment and in consideration of the patient enrollment rates, we are revising our estimate as to the likely date of trial enrollment completion. We now expect to complete patient enrollment for LOCK-IT-100 in the fourth quarter of 2017. The reason for this delay are two-fold. In some cases, fewer patients have been enrolled than were projected initially by the sites. Specifically, certain sites have taken longer than anticipated to come online and ultimately have fallen short of the enrollment benchmarks upon which are based our enrollment estimates. Additionally, we found a significant number of hemodialysis patients, who are prime candidates for our study, are being blocked from enrolling during the screening process, either because of antibiotic use, hospital admission or [indiscernible] factors under the approved protocol. While we had anticipated that this would happen in this very frail, end-stage renal disease population, it now appears to be happening with much higher frequency than was projected. While these patients remain eligible for future enrollment and rescreening once the condition resolves, this phenomena has caused delays in getting sufficient number of patients enrolled and randomized into the study. Going forward, our clinical and regulatory teams have developed a multipronged strategy to enhance our trial processes and accelerate patient enrollment. Let me cover with you what we are doing. First, we are implementing various initiatives to increase enrollment rate at our existing clinical trial sites. Second, we are aggressively activating additional dialysis practices focusing on those with enthusiastic investigators and high number of hemodialysis catheter patients. To date, these types of sites have exceeded enrollment target and appear to be particularly motivated to have their patients participate in our study. We are also terminating underperforming sites. Third, we are working with our sites to promote more efficient rescreening of the patients who could not be enrolled due to the various factors that arose during the initial screening. Finally, by working more closely and effectively with our clinical research coordinators and the principal clinic investigators, we now have a better appreciation for the challenges they face in enrolling in our trial, and we can also be able to identify ways in which we can better support them. While we have been frustrated by these delays, we are confident that we can execute our plans and complete the study. In addition to completing LOCK-IT-100, we are also in discussions with the FDA to finalize the design of our second and final pivotal steady for Neutrolin, LOCK-IT-200. As we have mentioned previously, the FDA has been very helpful in their guidance for Neutrolin clinical development, allowing us to conduct LOCK-IT-200 in a distinct patient population, mainly oncology patients with a chronic central venous catheter. This is another large patient population that could potentially enhance the product label for Neutrolin beyond hemodialysis, upon approval. We are grateful to the FDA for enabling us to pursue this approval pathway and we are continuing to work with the agency on the final protocol. As was mentioned on the last call, the specific timing of initiating the LOCK-IT-200 will be flashed out at a later date based on the final protocol and funding. I want to end this segment by reminding you that the FDA has recognized Neutrolin potential by granting us Fast Track designation as well as Qualified Infectious Disease Product or QIDP designation under the Federal GAIN Act. Both of these designations provide potential value for Neutrolin in terms of the additional FDA guidance during pivotal development and potential priority review of our NDA as well as additional five years of market exclusivity, should we be granted approval. Beyond Neutrolin, we are excited about the prospects of our taurolidine-based platform, based upon the broad applicability of its antimicrobial and potential therapeutic properties. To that end, we are evaluating the feasibility of new indications and formulations of taurolidine by establishing several early research collaborations. These collaborations are at a very early stage, and so you will appreciate that I cannot go into a great detail at this point. But I can say that they are focused on potential oncology treatments as well as on certain biomedical device applications. As one example, during the third quarter we announced our newest collaboration with an organization known as POETIC, which stands for Pediatric Oncology Experimental Therapeutics Investigators' Consortium. We are excited to be working with several leading National Cancer Institute centers that are part of POETIC, including Memorial Sloan-Kettering, the Cornell Medical Center, and Alberta Children's Hospital, to develop our proprietary formulation of taurolidine as a therapy for rare pediatric tumors, based on taurolidine's apparent ability to inhibit tumor growth and promote cancer cell death and antitumor immune activity. The collaboration is focused initially on identifying orphan indications, including pediatric neuroblastoma and osteosarcoma. Let me now move into the third quarter financials, which was filed yesterday with the SEC on the Company 10-Q. My comments will focus on the recent quarter and financial status. Net loss for Q3 2016 was US$9.1 million, or $0.23 per share. Operating loss last quarter, that is Q2 2016, was $4.9 million or $0.13 per share. The increase in operating loss from the previous quarter reflects the increased activity in the ongoing Phase 3 LOCK-IT-100 trial. Cash on hand as of September 30 is US$26.7 million, versus $28.6 million on hand as of quarter ending June 30, 2016. Cash used in operations this quarter, that is Q3 2016, was $6.5 million, the difference from the operating loss reflecting non-cash expenses and working capital adjustments. The use of cash is primarily focused on conducting our Neutrolin Phase 3 program and related G&A activities. The operating cash burn was partially offset by cash from financing sources. We received approximately $400,000 for the exercise of stock options for 567,500 common shares, and $4.2 million from the sale of 2,541,716 shares of common stock under our existing ATM program. As of September 30, 2016, we have approximately $4.1 million remaining available under the current ATM. We also have an additional $40 million available under our new ATM program once we can access it upon SEC effectiveness of the registration statement and the waiver from Elliott. Once again, our goal is to remain focused on the clinical trial execution of our Phase 3 study and operate the Company as efficiently as possible. Completing our pivotal clinical program to gain FDA approval to market Neutrolin in the U.S. is the most significant catalyst for the Company, but reaching that milestone will require more cash than we have available today. We have long disclosed that our current financial resources are not sufficient to complete LOCK-IT-100, nor to complete the contemplated second pivotal study. As we reported previously, we will need to raise additional capital. As we have done in the past, we plan to raise capital sensibly and on the more favorable terms for our shareholders, managing unnecessary dilution against the need for CorMedix to be sufficiently funded to reach the key value inflection points. In the short term, we will optimize our existing cash while we evaluate our financial options. We believe this strategy has the potential to deliver maximum value for our shareholders upon clinical success for Neutrolin. In conclusion, before moving into the Q&A portion of the call, let me summarize my thoughts about CorMedix and our prospects. We believe there is a clear unmet medical need for a product like Neutrolin, which has the potential to significantly reduce catheter related blood stream infections. We expect to benefit from the increasing awareness and attention focused on preventing these infections. We believe the public health and cost-containment pressures will enhance this opportunity, since Neutrolin is not an antibiotic and does not appear to contribute to antibacterial resistance. These properties should help to drive adoption. As I mentioned before, Neutrolin also has the FDA Fast Track and QIDP designations, which would confirm up to 10.5 years of market exclusivity upon FDA approval, potentially adding significant value to our product. It all comes down to trial execution, and that is why completing enrollment in the current Phase 3 program and reaching our clinical milestones remain our top priority. We are committed and energized to bring this much needed product candidate to the market and to deliver long-term value to our shareholders. I'm very pleased to have the opportunity to lead CorMedix as we work to bring this important product to the market and explore new opportunities for its use. With that, I will turn it over to the operator for questions.

[Operator Instructions] The first question comes from Ram Selvaraju with Rodman & Renshaw. Please go ahead.

Thank you very much for taking my questions, and Khoso, obviously congratulations once again on your appointment as CEO of the Company. I wanted to ask specifically about not only the timing of release of data from LOCK-IT-100, but also if there have been any updates to your filing strategy for Neutrolin given the potential timing relationship between the first Phase 3 trial and the second Phase 3 trial, if you could perhaps give us some additional color on that, if there have been any changes in particular?

In terms of the LOCK-IT-200, we continue to have discussions with the FDA about the protocol. And once the protocol is finalized, we'll be able to discuss the timing and cost associated with that program. And so, it would be hard at this present moment to share more from a timing perspective because, A, we need to get the protocol approved by the FDA, and second, we do need to ensure we've got the financing.

Okay. And for LOCK-IT-100, would you potentially pursue a separate filing path specifically for the indication covered by the LOCK-IT-100 patient population, is that something that you are entertaining at this time?

If I follow your question correctly, would I just be filing with the first study, is that your question?

Yes.

At the moment, with the FDA we are required to provide two Phase 3 studies. They have been generous to give us it in two different patient populations, but clearly that is our understanding and will be the focus of where we are driving our clinical and strategic plan.

Okay. And just very quickly, with respect to the collaboration with POETIC, can you give us a sense of how that works from a financial perspective, what CorMedix's financial obligations are under that collaboration vis-a-vis any clinical programs that you may undertake in conjunction with POETIC?

Ram, at the moment it's very early to give details about that program. Clearly my first focus has been to focus on the LOCK-100, which clearly that is the major value driver for the Company. And after I have got that clearly buttoned down, the goal is to turn my attention to look at some of the early work we are doing in terms of our pipeline. So it's too early right now to give more specifics about that, but rest assured, as we go forward I would be sharing more insight into our pipeline once I've had a chance to review those in detail.

Okay. And then just one last if I may, the interim analysis of LOCK-IT-100, when do you expect that to occur?

So, just to be very clear, we use the term 'interim', but this is actually a safety analysis which studies go through, and usually this happens, and what has been articulated in the past, when we get half the patients recruited or half the events that take place. We are not being very specific now about the timing of this, A, because there is a lot of variability in the study [indiscernible] not make a lot of sense to be very definite about which quarter that will happen. But rest assured, once we do get to that point and the safety board does look at the safety data, and our expectation would be that they would see nothing to concern them, we will obviously then share it with the market. But I don't want to be very specific right now as to when that point will materialize.

Okay. Thank you.

The next question comes from Ed White with FBR & Company. Please go ahead.

So when you were doing the comprehensive review of the sites for LOCK-IT-100, how many sites were open at that time, how many sites have now been dropped, and how many sites are you currently adding? So what's your goal once you're fully up and running again?

So in our 10-Q, you will see that we have talked that our plan would be to get about 70 sites enrolled. We do not want to go any further and provide any more detail insight any deeper than that right now. I think the focus needs to be on the enrollment completion, which I have obviously shared the time that it would be by the end of 2017, Q4 of 2017. And the strategies we have now deployed to make sure we can bring those sites onboard and enroll the patients, that is where we are focused on.

Okay. And can you make any comment as to how many patients have been enrolled so far?

We do not want to provide that level of insight right now into our trial.

Okay. And then just looking at R&D expense, R&D expense was up dramatically in the third quarter from the second quarter, and it seems that obviously the enrollment isn't where you had thought it was going to be. Can you give us any kind of insight as to what R&D spend is going to look like going forward?

What I can share with you is that in the past we have given a ballpark of what the LOCK-100 study will cost us, and the range we have shared about the study is somewhere between $26 million and $30 million. We still expect the study to come in within that bracket of what we shared before. So, as you will see quarter by quarter, we should be seeing our clinical spend go up in order to get the enrollment we need to achieve the closure of the study.

Okay. Thank you very much.

The next question comes from [Robert Constantino with Deka] [ph]. Please go ahead.

Congratulations on the appointment. We're glad to have you onboard. I have a question on Europe and the Middle East. It seems like it's almost an afterthought. We have approval of a product that's better than the existing product. Someone who signed a non-compete agreement to not ever market a product similar to ours is doing so at will and is doing so at a lower price, undercutting our price. You have a commercial background, I am glad to see that, and an international background. What are your plans to get up the sales in the Middle East and Europe? And we had $44,000 of sales in the quarter. It's a total embarrassment. The sales for the nine months is $102,000, down from $187,000 last year. This is a differentiated product. You are allowing somebody, who has a non-compete agreement that they would not do this, to sell. We are still waiting for a promised distribution sale to the Middle East. That has never happened. And we don't seem to have any strategy to go after these criminals that are illegally selling an inferior version of our product against the non-compete agreement. And Europe is hardly even mentioned on this call. We have an approved product over there. Can you please tell us your plans to improve the commercial sales in Europe and the Middle East over the next year?

Thank you very much for your question and the point you outlined. Clearly there's a couple of things for me to address here. Number one, you know we have ongoing litigation in Europe to address some of the points that you brought out as it relates to the competitor in the marketplace and what they are doing there. That will run its course and we will wait to see the outcome of the court's decision. As it relates for us promoting our product, a differentiated product in Europe and the Middle East, I concur with you, we do have a differentiated product and we can do significant difference in Europe and the Middle East. However, having said that and knowing those markets, it's going to take resources. Right now, the greatest inflection point for CorMedix is for us to be able to complete the first and the second Phase 3 studies here in the United States in the most efficient manner we can. Any resources I deploy to Europe or the Middle East will just make it worse for us to even have further dilution and further fund-raising, which we cannot afford at this moment. So, everything has its place and time, and Europe and the Middle East will have its time and place in an appropriate organization structure to do it. For the moment, my focus is the LOCK-100 study, the enrollment completion and to bring it to market as soon as we can.

Okay, thank you. I have one other request, and this is for you and for your Board of Directors, and I'm a CPA, a former CFO of a New York Stock Exchange company. I cannot believe that your executives have not been restricted from selling stock. Going back to last year, during partnership negotiations, when we were told there were 20 people looking to partner with you, your CMO, your ex-CFO, interim CFO and Board of Director, were allowed to sell this stock in the $6s and $7s while they were on detailed weekly calls and knew more about the partnership negotiations that were obviously not going well, and they were allowed to sell stock not under a 10b5-1 plan. This year, with clearly this trial not registering as many new patients as we thought, as we were told, your CMO has repeatedly sold stock and has filed again to sell stock. I am asking your Board to do a better job restricting stock sales when there is insider knowledge of partnership negotiations or how a trial is going. It was completely inappropriate for these people to be allowed to sell stock in the $6 and above area when they knew the partnership negotiations were not going well last year, and it was completely inappropriate for the Board of Directors to allow the CMO, who is running this trial, to sell stock not under a 10b5 plan but day to day making audible calls after he's out there knowing that this registration is going slower than expected and we were told it was going fine. So, I am just asking, and I'm not blaming you, I'm blaming your Board of Directors and I hope they are listening to this call, I am asking that no executive be allowed to sell while this process is going on that is not under a 10b5-1 plan approved by your General Counsel or attorneys. If they want to sell stock over time, that's fine. But if they're going to dump stock and continue to hurt this stock, while you are doing an ATM, while you are trying to raise money, when they have knowledge of what's going on and we don't, especially after this delay in registrations of new patients, the CMO selling stock is completely inappropriate. So my question is that you ask, if they are not listening now, all of your Board members to restrict all executives from selling stock without a 10b5-1 plan. A 10b5-1 plan can be registered with your attorney and then he could sell stock whether or not he has inside information or not over time. But the plan has to be registered and done over time. And there are – I talked to over 100 investors, we are all very, very upset about the Board of Directors allowing this to happen.

Thank you very much for your statement, I guess I should say, and what you are talking about the 10b5 plan. Clearly we have that in place right now and our Counsel is looking very carefully at all our insider trading that is taking place. So, I think as we go forward, you should be seeing if there is any sale, and I don't want to get into individuals who are doing it, but it will be done with a 10b5 plan.

Excellent. And my last request is to please do not give any restricted stock or options to any of the executives that were part of the failed partnership attempt last year and this delay in this registrational trial that resulted in the delay of the results for another six months, because that would be sending the wrong message to shareholders. We are ready to support you. You have a great background. I am so happy you are here. But please do not reward the current executives that allowed this delay to happen.

Okay. Thank you very much for your comments. I hear you. I cannot commit to that. Clearly, we'll look very carefully with our Counsel and get advice on that. But thank you, I've made note of it.

Okay. I have one other question. I have realized that we have only limited resources and the Phase 3 is obviously the most important thing, but I request some change, even if it's the hiring of a new one person in charge of European sales. This is where we have a product available for sale. To not throw some resources out at that – if we saw sales going up, me and about 10 other people could probably do the financing you need without letting the [indiscernible] drive this into the ground into a secondary, but we need to see something, some attempt to get these European and Middle East sales up. Thank you.

Thank you very much. I hear you loud and clear.

Okay, thank you.

The next question comes from [Thomas Jackson] [ph], who is a private investor. Please go ahead.

I'd also like to say I'm very excited to see that you have taken the reins. Along the previous callers, one of their main points is helping with the fund-raising, and one of the problems in the past has been transparency. If investors see that things are happening, that it's clear, then they'll be willing to fund this. If not, this is going to get ugly, like today's share price reaction. So to not give any comment or any color on enrollment is potentially a big problem. Past reassurances that enrollment was on target proved obviously incorrect. So, besides not rewarding those people, I would also hope that you would take a note that we need more transparency in this area, whether it's enrollment numbers, whether it's what the trend is, number of clinics, we need to see data. It can't just be trust anymore. Thank you.

I understand and I hear you. Again, the key focus for us in the organization is the enrollment of patients, and that is where we put efforts. And as I've indicated on our previous question that came, is when we do hit that midpoint, which is what they've been asking, which is the safety, and once that point has been reached, we will make it public. So you will be able to see when it happens.

Right, but we thought that midpoint was going to be happening this quarter. Now we don't even – now there is not even a projection of when you think that may happen. So we are losing transparency, we're going from no transparency to even less.

Yes, I understand. You know, all clinical studies have variability in timing, including the enrollment process. And just to give you a gauge, sites we are bringing onboard, some of them takes four months to bring onboard and they have gone out as much as eight months to bring onboard. And so that is the variability that we are playing with to try to project where we believe the numbers will be. And so, we want to take that into account and make sure that when we make statements, we actually are able to deliver on those statements. Hence, the revision in terms of when we expect the enrollment to be completed. But at the same time, I have mentioned even to you just now, is that as soon as we've got to the midpoint on patient enrollment, we will make that public.

I appreciate that. I would just hope that maybe for the next call you can consider whether instead of worrying about trying to make a projection that may prove to be false, and I appreciate the dilemma that you are under, actual data which is number of people currently enrolled, right, that's just a fact that you could provide and we can judge for ourselves quarter to quarter what we think about that number. So you're not misleading us, you're not directing us, you're just giving us data. And right now, there is no data.

Okay. I hear you. I cannot commit to that. But I'll take note of what you said.

Appreciate it. Thank you very much.

Next question comes from [Jeffrey Joy with CorMedix] [ph]. Please go ahead.

I appreciate the fact that you're the new CEO. And I just wanted to like reiterate what Rob had said. We need some guidance here. And three months ago I believe that you had said you were on target for reaching a lot of milestones by the end of this year. However, clearly that's not going to happen and I'm really disappointed with that. So, how can you remedy the situation going forward with clear and concise information to investors in your Company?

Thank you for your question. Again, just going over, clinical studies have enormous variability, particularly when you are taking sites and bringing new sites on and getting patients. And a couple of things that I outlined why we have seen a slower uptake in enrollment of patients are driven by some of the factors out of our control. And yet having now spent time doing this deep dive with the principal investigators and study site coordinators, we are able to improve what we are seeing in terms of the enrollment. And so, that's going to be the focus that we have got. And that's why I try to ensure that what we give you is clear, which at the moment either way we try to look at it, with all the different variables, we know we can get by the end of Q4 2017 complete our enrollment of patients. And hence, that's why I can be quite transparent about that. When I look at the other parameters that have been asked, there is variability in that, and I don't want to share when I see that variability in terms of midpoints, in terms of where we are with numbers. So I hope you will also understand that from my perspective.

May I ask another question please? The deep dive apparently should have been done when you first had this study analyzed, and so I'm at a loss as to why we are at this position now.

So if you bear in mind that the study started in December 2015, and as I indicated to you, for a variety of different procedures, IRB approval, budget, negotiations, setting contracts with sites you can have, any number of months, between four to eight months before you actually get sites onboard and you begin to see patients coming through and getting enrolled, and you need to have a certain number of months to see that enrollment before you begin to look at it and compare to your own projections, whether or not this is on target or behind. And we wanted to ensure that we have enough months under our belt, then begin to look, sit down and compare versus our assumptions what were the differences and what can we improve on. Hence the reason it was done at this point. By the way, I was fortunate to have arrived at this point to actually be able to see also this deep dive.

So one more question. So your assumptions are now different than they were three months ago?

We have a better understanding of the different assumptions that led to what was indicated earlier to what we are seeing right now, which sites have a better enrollment and which sites have maybe not an enrollment that we would expect. And number two, like I've indicated in the talk that I just covered, is that we also note sites that are not performing and we've picked up some common characteristics about these sites that are not performing, and we are shutting them down.

Okay. Thank you very much.

Ladies and gentlemen, we have reached the end of the question-and-answer session, and I would like to turn the call back over to Khoso Baluch for any closing remarks.

Okay. Thank you very much. Thanks everyone for joining this call. I know it's late in the evening for several. I look forward to talking to you again during the next quarter, and clearly based on the discussions we've had and some of the points you've raised, you will continue to see the direction we are going. Once again, our focus is to conserve cash and to focus on getting LOCK-100 completed, and enrolled and completed and submitted, but also getting LOCK-200 up and running once we have the protocol approved and also get the funding for it. So thank you very much.

This concludes today's conference. You may disconnect your lines. Thank you for participating and have a pleasant day.