GSK plc (GSK.L) Q1 2008 Earnings Call Transcript

Thomas Watkins - President and CEO Tim Barabe - SVP and CFO David Stump - EVP of Research and Development Jim Davis - EVP and General Counsel

Chris Raymond - Robert Baird & Company Geoffrey Porges - Bernstein Karim Defillipe - Citi Mark Schoenebaum - Bear Stearns Ted Tenthoff - Piper Jaffray Terence Flynn - Lazard Capital Markets Annabel Samimy - UBS George Farmer - Wachovia Capital Markets Jason Kolbert - SIG Dave Veal - Morgan Stanley Meg Malloy - Golden Sachs Ian Somaiya - Thomas Weisel

Welcome to the Human Genome Sciences first quarter 2008 financial results conference call. Today's call is being recorded. Now at this time, it is my pleasure to turn the conference over to Thomas Watkins, President and Chief Executive Officer of Human Genome Sciences. Please go ahead.

Thank you, operator, and good afternoon, everyone. Thank you all for joining us. Those of you who have not seen the press release that we issued just a short time ago will find it posted on our website at www.hgsi.com. Before we begin, I would like to point out that we will be making forward-looking statements based on our current intent, belief and expectations. They are subject to certain risks and uncertainties and I encourage everyone to look at our SEC filings for additional detail. In today's call, I plan to provide an overview of recent accomplishments. Next, Tim Barabe, Senior Vice President and Chief Financial Officer will briefly touch on a few key aspects of our first quarter 2008 financial results. Finally, for the Q&A session, we'll be joined by several other members of our senior management team. The first quarter of 2008 was another period of substantial progress for HGS toward the commercialization of our late-stage products. It was also a quarter in which HGS moved forward, strategically and opportunistically to strengthen our pipeline. So what you have is a company with three strong Phase 3 products and an emerging pipeline that creates opportunities for future growth. Let us talk about our Phase 3 products first, beginning with LymphoStat-B. Just two weeks ago, we completed the enrollment of BLISS-52, one of our two pivotal Phase 3 trails of LymphoStat-B in patients with active systemic lupus, and we expect to complete the enrollment of BLISS-76, the other Phase 3 trail of LymphoStat-B before the end of this summer. These are the largest randomized trials ever conducted in lupus. With enrollment now completed in the BLISS-52 trial, we and GlaxoSmithKline are on track to have our first Phase 3 data for LymphoStat-B available by mid 2009 -- with all Phase 3 data in fall 2009. Assuming success in Phase 3, we believe that LymphoStat-B could represent a breakthrough that would change the landscape of treatment for lupus. Moving to Albuferon. I am pleased to report that we completed the treatment phase of our ACHIEVE 2/3 study in April. As you know, ACHIEVE 2/3 is one of our two pivotal Phase 3 trials of Albuferon in combination with ribavirin in treatment-naive patients with chronic hepatitis C. We expect to complete the treatment phase of ACHIEVE 1, our other Albuferon Phase 3 trial in July 2008. We continue on track to have ACHIEVE 2/3 data available before the end of 2008 and we expect to have all Phase 3 data by spring 2009. We and Novartis planned to file global marketing applications by fall 2009. Phase 2 results for the 900-microgram dose of Albuferon dosed every two weeks demonstrated efficacy and safety comparable to Pegasys with half the injections, improvements in quality of life and significantly fewer missed days of work on treatment. If these results are confirmed in Phase 3, we and Novartis believe that Albuferon could become the market leading interferon for the treatment of hepatitis C. Our third product in late-stage development is ABthrax, which we believe will make an important contribution to our Nation's Biodefense Program. ABthrax is also progressing well. Results in multiple studies in relevant animal models have provided the scientific evidence required to establish the efficacy of ABthrax in the treatment of inhalation anthrax. In two clinical trails in healthy human adults, ABthrax was generally safe and well-tolerated. We have reached agreement with the FDA on the regulatory pathway to support authorization of delivery of ABthrax to the strategic National Stockpile. We are currently manufacturing ABthrax on schedule to begin delivery by fall of 2008. And we are on track to receive $165 million in revenue from this contract with between $100 million and $120 million of that expected to come in late 2008. Quite behind these late-stage products, our mid-stage pipeline also continues to move forward. Our mid-stage products are lead by our TRAIL receptor antibodies for the treatment of cancer and include important products under development by GlaxoSmithKline to which we have substantial financial rights. GSK announced on April 23rd that it intends to advance darapladib to Phase 3 trails as a potential treatment for atherosclerosis. GSK will still -- will soon begin discussions with regulatory agencies regarding the structure of the Phase 3 program. Darapladib was discovered by GSK based on HGS technology. It is a small-molecule inhibitor of Lp-PLA2, an enzyme associated with the formation atherosclerotic plaques and identified in clinical trails as an independent risk factor to Coronary Heart Disease and ischemic stroke. If Phase 3 trails are successful, the commercial potential of darapladib will be very large. HGS will receive a 10% royalty on worldwide sales if darapladib is commercialized. We also have a 20% co-promote option in North America and Europe under which we would contribute 20% of the commercialization effort in exchange for 20% of darapladib profits. So, we are excited, and we look forward with great anticipation to darapladib's future progress in Phase 3 development. Syncria is also progressing well. Syncria was created by HGS using our proprietary albumin-fusion technology. There is a long acting form of GLP-1, a peptide hormone that acts to help maintain normal blood-sugar levels and to control appetite. We believe that it also possible that GSK will reach a decision this year regarding advancing Syncria for Phase 3 trials for the treatment of type 2 diabetes. HGS is entitled to milestones and other payments, some of which have already been received that could amount to as much as $183 million in addition to single-digit royalties on worldwide sales if Syncria is commercialized. Clearly, the GSK decision to move forward with Syncria would be important for HGS. We have also moved forward strategically and opportunistically to expand, advance and enhance the value of our oncology portfolio. At the end of last year, we completed a strategic transaction with Aegera Therapeutics, which added the new opportunity to develop and commercialize IAP inhibitors for the treatment of cancer. Both the TRAIL receptor antibodies and the IAP inhibitors are highly-targeted agents that selectively cause cancer cells to die through apoptosis or programmed cell death, and both have shown significant promise against an array of cancers. We expect soon to initiate Phase I trials of HGS1029, our lead IAP inhibitor. In mid-April of this year, we reacquired rights to our TRAIL receptor antibodies from GSK in return for a reduction in royalties due to HGS if Syncria is commercialized. The fees and milestone payments due to HGS under the original Syncria agreement remain unchanged. We will still receive significant royalties on worldwide sales, and we continue to be excited about Syncria's commercial potential. The exchange of rights allows us to convert some of the value from at-risk royalty revenue some years from now into the opportunity to explore a new strategic alliance structure that could result in near-term milestone payments and cost sharing and then ultimately could help us more aggressively develop our pipeline. HGS has pioneered the development of highly-targeted antibody therapies based on the TRAIL receptor apoptotic pathway. HGS-ETR1, our antibody to TRAIL receptor 1, is the most advanced of any product in development that targets the TRAIL pathway. Last month, we announced that we plan to initiate our third randomized chemotherapy therapy combination trial of HGS-ETR1 by mid 2008, this one in patients with hepatocellular cancer, which accounts for between 80% and 90% of all liver cancers. In February 2008, we completed enrollment in our randomized trial of HGS-ETR1 in combination with Velcade in multiple myeloma, and we expect to have data available from the multiple myeloma study in the third quarter of 2008. The randomized chemotherapy combination trial of HGS-ETR1 that we initiated in December 2007 in non-small lung cancer continues to enroll, and we expect to have data available in 2009. We view our oncology portfolio as the cornerstone of our mid-stage pipeline and as a key driver for future growth beyond the products that we plan to launch between now and 2010. We believe that the steps we have taken over the past several months have significantly increased the value of our oncology portfolio and has substantially broaden the strategic opportunity they represent. Now, let's turn to Tim Barabe for our financial results. Tim.

Thanks, Tom, and good afternoon. You have the numbers for the first quarter of 2008 in the press release, but I would like to point out a few highlights. First, revenues continue to increase and rose to $12 million for the first quarter of 2008 or $9 million in the first quarter of 2007. Second, net cash burn for the first quarter amounted to $36 million, net of $47 million we received from Teva Pharmaceuticals Industries in partial payment for CoGenesys stock previously owned by HGS. This number also reflected increased clinical development costs related to our Phase 3 programs. Third, with more than $590 million at the end of March 2008, our cash position remains strong, and our 2008 net cash burn is on track or between $135 million and $155 million as previously guided. With that, I would like to turn it back over to Tom Watkins for the Q&A session.

Thank you, Tim. So in summary, we have continued to make substantial progress here in the first quarter of 2008 for the commercialization of our late-stage products and for building a company able to achieve sustainable growth beyond the launch of our first attractive price. Operator, we're now ready for questions, if you would please review the procedures.

Very good. (Operator Instructions). Our first question will come from Chris Raymond with Robert Baird & Company. Chris Raymond - Robert Baird & Company: Thank you. Maybe in terms of a clinical question, I am not sure if Dave is there on the line, but you know lot of has been made over the recent Rituxin failure and SLE and I guess a lot of folks have been questioning generally the role of these are targeting as an appropriate pathway. I wondered if you guys could comment maybe on hypothesis little bit and also maybe outline for us or remind us, what you think differentiates LymphoStat-B lupus program from Rituxin, maybe in terms clinical design, thanks?

Yes, Chris, I am here. I thought someone might be interested in that question. Let me start, firstly, with a word of caution. We should be very careful directly comparing what we are doing here, which is a large accurately powered Phase 3 program, where we are applying the learnings from our own exploratory Phase 2 program too. But someone else is just getting started within their own exploratory Phase 2 program. That being said let me highlight what some of those learnings have been for us. Now, I think it really starts to me with a primary endpoint has been selected. As you all recall, we looked at a lot of different lupus disease activity instruments in Phase 2 and really concluded that for LymphoStat a SELENA SLEDAI responder's endpoint was optimal. In fact, we looked at BILAG as a responder's instrument and it did not work very well for us. In fact, when used the explorer primary endpoint, we would not expect a positive results of LymphoStat. It simply did not work for us. BILAG, however, is a useful tool. We do believe that it has merit -- we have included it in our responder's endpoint as it was designed. My understanding of it is, it was initially built for a practicing clinician to look at a patient they are seeing in the clinic and compare their status to basically a month ago or two months ago, and ask has there been progression since then. In fact, we have incorporated BILAG as progressor's kick out in our combined response endpoint. We did the same thing with physician's global assessment. But I personally believe that choice of primary endpoint is absolutely critical in the kind of the lupus trials. Second key point that we learned a lot about in Phase 2 is your optimal target population. We went into Phase 2 thinking we do a lot about the target population, but turned out we needed to learn from Phase 2 and particularly with respect to the role of active bottle antibody secretion, so called serologically active patients when you are using a specific B-Cell target agent like LymphoStat. Do not know the details from explorers to the demographics blend of placebo plus. It would be quite important to know that before reaching clear interpretation of this read on us. There are some other important features. We need to remember that Rituxan and LymphoStat are not substantially the same. There is some overlap across B-Cells and their precursors with respect to distribution of CD20 in BLISS receptors. But it is not a 100% and very importantly, you do not find CD20 receptors on more mature antibody, presumably a lot of antibody secreting B-Cells where you do find BLISS receptors. In fact if you treat a patient with Rituxan, the physiologic response is to actually increase circulating BLISS levels. So one could actually paradoxically have a recovery event of CD20 suppress B-Cells. So it takes place in BLISS rich environment. What that could do I think is speculate, but certainly to conclude they are exactly the same form pharmacologically and biologically it is just not correct. So, in the end, we are applying everything we could have learned from Phase 2. I am very happy with the way we are going about this. We have got adequately powered for minimally interesting clinical benefit studies. One is enrolled, the other one we are going to finish by the end of summer. What I can promise you is we will deliver definitive data one way or another in the middle of next year. Chris Raymond - Robert Baird & Company: It reminds me, is there a interim look that can happen this year at all?

We have interim safety analysis ongoing by an independent data monitoring committee. There is no early interim look for efficacy. It just simply was not feasible given the 52-week primary endpoint in those studies. You would not have enough efficacy events accumulated by the time enrollment was nearly complete to accomplish that. So on safety only, we will have to wait till next year. Chris Raymond - Robert Baird & Company: Thanks.

You are welcome.

Our next question will come from Geoffrey Porges with Bernstein. Geoffrey Porges - Bernstein: Thanks very much for taking the questions. Tim, a couple for you. Could you just layout for us any additional payments you expect for Genesis? And then, also, could you just give us some comment on your cash holding, whether you have any debt obligations or any instruments in there? But you've had to write-off at all or whether you anticipate you might have to adjust the value there at all, that would be helpful. And then if you just talk a little bit about the genotype 2, 3, 4 completions of dosing and what we could infer from that about safety. Thanks.

Okay. I will take the first couple, and then we will pass the third one on to David. So, in terms of CoGenesys, there was a 10% holdback that will be received in the first quarter of 2009. So, we received $47 million. We expect another roughly $5 million in the first quarter of 2009. In terms of our cash and cash equivalents, actually our industrial policy is a rather conservative investment policy. We do not hold any auction-rated securities. We do not believe that any of our securities are at risk for impairment and feel pretty good at the composition of that balance right now. With that, I will turn the third question over to David. Geoffrey Porges - Bernstein: Thanks.

Yeah, Geoff, this is David. ACHIEVE 2/3, as we mentioned I believe a couple of weeks ago, has finished active dosing. If we are now in the follow-up to SVR Phase, we expect to have that successfully completed and have results available late this year. So, ACHIEVE 2/3 will be the first glimpse we have into the safety and efficacy profile that might be achievable with Albuferon.

Our next question will come from Yaron Werber with Citi. Karim Defillipe - Citi: Hi. This Karim Defillipe dialing for Yaron. Thanks for taking my question. I may have question for Dave. Could you share with us how the BLISS-52 and 76 trials are powered? I know you have the SPA for it. And what kind of percentage of patients that need to reach the P in order for that SPA to be reached? Also, if you could remind us when and do you expect to hear an announcement about every four week dosing of Albuferon. Thank you.

The counting of the BLISS studies is at or above 90% with adjustments for the two active LymphoStat doses being tested versus placebo. So, we are powered or the treatment effect we observed in serologically-active patients with our combined response endpoint as applied to our Phase 2 study population.

With respect to the every four week study program, we are still talking with Novartis and clinical expert field about that study. I believe there is a study that we are going to be able to pull together that will be relevant and interesting to you all. I do not think we are going to have to wait till final ACHIEVE results or intend to do so. The actual details, I think we have got to wait until we have final agreement with all stakeholders before we talk about them with any specificity. But I am optimistic we are going to get to something interesting in the not-so-distant future. Karim Defillipe - Citi: Great. Thank you very much.

Our next question will then come from Mark Schoenebaum with Bear Stearns. Mark Schoenebaum - Bear Stearns: Hello. Hi, guys. A couple of questions. Do you guys know if there is going to be Syncria data at the ADA meeting this year? I know about Glaxo, but I just thought I would ask 80AV is going to be sure I know that Glaxo but I just thought I would ask in case you happen to know. And then TRAIL program, David, can you kind of remind us with that ongoing randomized Phase 2 Velcade add-on trail, what would you consider to be a successful trial? Is that something you can you can move straight into Phase 3 on the heels of?

I will take the second question first. The ETR1 myeloma study is powered as Phase 2 study. It is exploratory with key endpoints of interest being myeloma anti-tumor response as well as time to progression. There are aspects of that, which, I believe, if drug effect is significantly robust, could enable into Phase 2 discussion and move to Phase 3. It would depend on how consistent drug effects are across these multiple endpoints. But, yes, the answer is it could be. But again, it's an exploratory Phase 2 trial, and we will be looking at a lot of different parameters of drug activity when we actually get data in the third quarter. With respect to Syncria at ADA, maybe I would ask Barry to make a comment on that.

Yes, Mark, this is Berry. Mark Schoenebaum - Bear Stearns: Hi, Barry.

I believe GSK has said that they will not have data presented at ADA on their Phase 2b study with Syncria. The timing just did not work out for the abstract deadline. So, we hope that it will be released at some other conference later in the year. Mark Schoenebaum - Bear Stearns: Okay, fair enough. Thank you very much.

Thank you.

Our next question will come from Ted Tenthoff with Piper Jaffray. Ted Tenthoff - Piper Jaffray: Right, thank you very much. Maybe just following up on Mark's question, obviously you guys went through a lot of trouble to get the TRAIL antibodies back. And now that they are in house, can you just kind of give us an update on sort of what the future plan trials are for both the TRAIL-R1 and TRAIL-R2 antibodies kind of for the next 12 to 18 months timeframe? Just what kind of studies do you guys want to do with respect to developing those assets?

Yes. This is Dave, Ted. I think the studies we clearly talked about besides the myeloma study are ongoing non-small cell lung study that's another one or two doses of ETR1 combined with active chemotherapy in the setting of front-line non-small cell lung cancer. It's another 105 patients study. We should be enrolling it through this year. Likely I would imagine the data should be available sometime next year. The third study which we first mentioned last month is a variance study. We have had a lot of conversation particularly with our hepatology experts whom we know well about hepatocellular carcinoma and certainly murking biology that places TRAIL receptor 1 in a potentially essential role in mediation of apoptosis in HGC. So we are preparing to start another randomized Phase 2 trial we'd be combining with sorafenib in this study. We will do a safety, I mean, initially to make sure we have got an avertable risk benefit window in that setting. But we are actually quite exited about the biological rational here and the chance to do some more work with our clinical experts with whom we have had the pleasure to work over recent years. Beyond that we really have not talked specifically about other studies that we would be doing. There is a good rational for a number of, say as, if you focus on things like placing the receptor in tumor tissue looking at, cellutory pharmacologic interactions, looking at interesting commercial opportunity and we are looking at all those. Obviously, the more minds and capital we could bring to the discussion, the more we could do and I would love it if we can get to that point. Ted Tenthoff - Piper Jaffray: Okay. Thank you very much!

Our next question will come from Terence Flynn with Lazard Capital Markets. Terence Flynn - Lazard Capital Markets: Hi. Thanks for taking the question. I had a question on the LymphoStat-B program and the BLISS trials. I know that you got into a data in the middle of next year from BLISS-52, but I know the endpoint of both trials BLISS-52 and 76 is at 52-week time point. So are you going to release data from those trials separately at least headline data, so we get headline data from BLISS-52 first and then headline data from BLISS-76 later in the year or is that going to be a release of both trials at the same time? Thanks.

That we released at the time we have initial 52-week primary endpoint analysis available. So BLISS-52 would report middle of next year, BLISS-76 primary endpoint data would be later next year. If you will recall, we do have an extended double-blind placebo control phase over another six months in BLISS-76. That would be follow as BLISS like secondary endpoint but we would disclose with analysis of available 52-week data. Terence Flynn - Lazard Capital Markets: Okay. Thanks a lot.

You're welcome.

Our next question is from Annabel Samimy with UBS. Annabel Samimy - UBS: Hi. Thanks for taking my question. Quickly on the LymphoStat program, I am not sure if you really enter this, but when you talk about how the BLISS program is progressing, that there is a 9% confidence in it, but what improvement, implicitly, that you need to see without any drop in the biological and the physician's global assessment?

The power is built on the combined response endpoint we are powered 90% at -- it run -- 12% to 14% would be the kind of typical power based on what we observed in our Phase 2 trial. Any power is not necessarily the threshold where a statistical significance is achieved. You could see statistical significance at a smaller treatment level in that, but you would not have the 9% certainly you are seeing it if it's real. So, powering is an order, it depends a lot on what you would expect your control group event rates to be. So, we have to be little bit careful about penciling that into absolute benefit. But along those general guidelines I think gives you an idea of what we will be for looking for. What certainly think see if we achieve it, it will be clinically meaningful based on our discussions with top leaders and regulatory source. Annabel Samimy - UBS: Okay. Great. And then on the each ETR1 trail, what you need see where is Velcade to be able to move forward?

Well, maybe I can clarify that. Velcade has a controlled response rate. Annabel Samimy - UBS: What you need you to see over Velacade to just be moving forward?

Well, I think on an exploratory basis if you're response rate 20% absolute over Velacade, you probably be better enthused if its 10% you probably be looking at other endpoints to assure that you've got a drug effect that if we did a much larger study, has a decent chance of translating into a meaningful clinical effects. So I think its kind of bench where Velacade is, the approval of Velacade response rates are in the 25% to 30% range. That was at the time of launch. We will have to see where it actually ends up in current practice. So that is an important variable that will only really be able to integrate once we actually have final there. Annabel Samimy - UBS: Okay. Thank you.

You're welcome.

Our next question is from George Farmer of Wachovia Capital Markets. George Farmer - Wachovia Capital Markets: Hi. Thanks for taking my question. David, on your SPA, do you need both BLISS-52 and 76 to hit in order to win approval of LymphoStat-B? And secondly from the explore trial, we know that Rituxin is not a major B-Cell compartment, is there anything that we can learn, you can without seeing the data but realizing that not only primary, but a number of secondary endpoints miss as well. Is there anything we can learn about the role B-Cells from LymphoStat? Is that your understanding from the role B-Cells in your view?

The answer to your question is yes. The SPA requires both studies. R-positive at pre-specified levels of statistical significance and SPA also included agreement on the primary endpoint, which we are using. With respect to what might be in the explore trial and you are right we have not seen it. I am really curious to know what might be in there. I am particularly curious to know whether some of their exploratory endpoints, I believe (inaudible) collects SELENA SLEDAI as an exploratory endpoint, thought not a pre-specified secondary endpoint. There is a difference in what they said so far, I do not know extents to exploratory if they had SELENA SLEDAI data would be, I think really important for them to test its application, even with rebuild version of our endpoints to see what they come up with. The other thing I think is really important to distinguish between the two drugs or if not at this (inaudible) to look at the biomarker profile kenetics, with LymphoStat we are able to steadily overtime in a quite nicely same manner, convert circulating auto-antibodies particularly anti-double stranded DNA to lower or if not negative levels. We have been following our Phase 2 patients now for up to three years and we are seeing nice sustained reductions in those auto-antibody levels, in addition to some conversion of new auto-antibodies overtime. I also will be interested to see whether they can biologically increase the depressed complement levels as another biomarker. We have demonstrated that we have significantly better affect with that. I think it really comes back to where CD20 receptor and BLyS receptors are distributed. If you believe the more mature B-Lymphocytes are the ones making auto-antibodies, the biology would suggest they are particularly depended on BlyS for their survival. Obviously, the effect of CD 20 is more indirect. You are trying to deplete a precursor department waiting for natural turnover of those mature B cells. So, I think there has got to be a wealth of data in that study given its design. It is randomized. It is placebo-controlled. Knowing my ex-colleagues, they are pouring over it now, and I am quite anxious to see what they come up with in due course. The other thing I think they need to do is do some subgroup analysis. That is really to get out the interaction of target population with their broad effects. So, you've got a real three-way equation playing out here: End point, target population, drug affect. You just have to spend some time sorting through that to really know where you stand. George Farmer - Wachovia Capital Markets: Okay. Thanks very much.

Our next question is from Jason Kolbert with SIG. Jason Kolbert - SIG: Hi, guys. Just wanted to switch back over to the ACHIEVE trial. Given the fact that you've finished dosing and you are now waiting for SVR rates, is that suggestive that you are out of the woods in terms of side effects associated with the 900 microgram dose?

I think that is a reasonable inference if we are talking about ACHIEVE 2/3 and genotype 2, 3 dosing. I hope to be able to reach the same conclusion in July when we are at the end of dosing on ACHIEVE 1. But for G 2, 3 I believe that is correct. Jason Kolbert - SIG: And one other thing I wanted to take up on and I do not want to [handle] those questions in terms of endpoints and powering assumptions on BLyS, what assumptions do you have in terms of the controlled group and can you just remind us on what meds they are on?

Yes, I dot think we have talked in real great detail about the assumptions we will use in powering our controlled group. I think I am not inclined to do that at this point. Those were assumptions that we build out of our own Phase 2 data which have been very useful to us in designing the trial. I think I will just leave it there. Your second question, I am sorry. Jason Kolbert - SIG: No, I think you answered it. Thank you very much.

Yeah.

Our next question is from Sapna Srivastava with Morgan Stanley. Dave Veal - Morgan Stanley: Hi. It is Dave calling in for Sapna. The first is do you have any update on exactly what was the preliminary issue seen with the 1,200-microgram Albuferon dose? Also, do you have any details on the trial design for the darapladib Phase 3 and will that need to be an outcome study or are there going to be some surrogate markers that are going to be the primary endpoints there?

This is Dave again. I do not have any more information to offer on the issues with the 1,200-microgram dose. The communication from the Data Monitoring Committee was expected in severe preliminary events that were increasing there on, and we are still blinded to the data and the DMC is not. That's what we know. I do not want to be speculating about darapladib. My own personal opinion, I have some experience in the cardiovascular world is they will have to do an outcome study. But I guess they will determine that in the course of their interactions through our regulatory authorities around the world in designing Phase 3. But if you look at the winds that have been blowing around cardiovascular trials, it's likely one would think that that is a reasonable assumption. Dave Veal - Morgan Stanley: Seems fair. Okay. Thank you very much.

You're welcome.

(Operator Instructions) We will next go to Meg Malloy with Golden Sachs. Meg Malloy - Golden Sachs: Thanks very much. Two questions. The first one I guess for Tom, and that is it is fair to assume then with respect to ABthrax that there is no more legislative steps or sort of regulatory processes that have to happen? It's just a matter the introducing the material now and then handing it over. Secondly for Dave; if you would not mind sharing your thoughts from the IAP program and what indications we might first expect to see at, I guess, given the apoptotic mechanism. Thanks.

Meg, I am going to have Jim Davis speak to your ABthrax question.

Hi, Meg. It's Jim. For ABthrax, we are in the process of bringing together all the final data reports that would be required for us to make sure of the product delivery or product is stockpiled. We are in the process of submitting those reports to FDA. FDA does have to review those processes. HHS and TDC do have to put some paperwork together. All of this we expect to have completed this summer, which will allow us to begin over delivery in the fall. Meg Malloy - Goldman Sachs: That is great. So, there is never more budgetary or processing based on the --?

There is no more budgetary legislation or authority that we need in order to deliver the product. We have manufactured a large portion of it and are continuing to manufacture the product. Meg Malloy - Goldman Sachs: Thanks very much.

Our next question is from Ian Somaiya with Thomas Weisel. Ian Somaiya - Thomas Weisel: Thanks for taking my question. Just on the ACHIEVE 2/3, has there been any additional looks of the data by the DMC at the end and what would be the criteria for making decision to share that data with us.

We do not comment specifically on when exactly our DMC's look at data from going on trials, and I will say making a material recommendation to us. We give data to them on a regular basis. I think you can assume they are tracking it with us as the study evolves. Ian Somaiya - Thomas Weisel: Are there any thoughts internally to share the RVR data prior to the SVR data becoming available?

No, we have no plan to do that. We will unblind the database when we have final SVR data complete and available for full analysis. Ian Somaiya - Thomas Weisel: Okay. And just on the finance side, just following up on a couple of questions, if I can, of earlier, can you just walk us through the partnership payments that you might receive this year assuming your partnered programs continue to move on schedule?

I do not think we have given any details on that. I think we have pointed you to guidance in terms of our ending cash, $450 million to $470 million, as well as our net cash fund for the year. But we have not gone into details of any milestones or partner payments that we might receive.

This is Dave Stump. And I think we kind of stepped on the second half of next question, if I recall, on where we are going with the IP antagonist program. The biological rationale here is quite interesting, if you can really antagonize the IP gate on intracellular apoptosis. So, Phase 1 really would be pretty straightforward dose escalation, single agent, looking at pharmacology and safety. However, we will be really trying to build a platform where we can begin to combine IP antagonism with both standard chemotherapy, and we are quite excited about combining it with our own apoptosis induction potential with our antibody or TRAIL receptor antibodies.

We do have one question remaining in the queue, and that is a follow-up from Meg Malloy of Golden Sachs. Meg Malloy - Golden Sachs: I think they just answered it.

Very good.

Did I get it right?

(Operator Instructions) I think you must have gotten that right?

Maybe I answered the question.

Yes, indeed. With that, there are no further questions. I would like to then turn the calls to Mr. Watkins for any additional or closing comments.

Thank you, Operator. As we have said, we are very proud of the progress that we have made in this first part of the year. And thank you, everybody, for your participation and interest in HGS. Thank you very much. Have a good day.