GSK plc (GSK.L) Q2 2008 Earnings Call Transcript

H. Thomas Watkins - President and CEO Tim Barabe - SVP and CFO Barry Labinger - EVP and CCO David Stump - EVP of Research Development Jim Davis - EVP, General Counsel and Secretary

Ted Tenthoff - Piper Jaffray Terence Flynn - Lazard Capital Liisa Bayko - JMP Securities Chris Raymond - Robert Baird Joseph Schwartz - Leerink Swann

Good day and welcome to the Human Genome Sciences conference call. Today's call is being recorded. At this time, I would like to turn the call over to H. Thomas Watkins, President and Chief Executive Officer of Human Genome Sciences. Please go ahead, sir. H. Thomas Watkins: Thank you, operator. Good afternoon, everyone. Thank you all for joining us today. Any of you who have not seen the press release that we issued earlier this afternoon 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 which are 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 further detail. In today's call, I will provide a brief overview of recent HGS accomplishments, as well as comment on a few milestones that are just ahead. Then Tim Barabe, Senior Vice President and Chief Financial Officer will briefly highlight a few aspects of our second quarter 2008 financial results. Then, we will follow with a Q&A session and for that we will be joined by other members of our Senior Management Team. During the second quarter of 2008, HGS continued to make excellent progress in our Phase III trails and towards the commercialization of our late-stage products. We also continued to advance our oncology portfolio during the quarter, and we remained committed both for achieving commercial success with our first products, and for receiving long-term sustainable growth beyond the launch of our first products. Let me begin with ABthrax, for the treatment of inhalation anthrax. We expect ABthrax to generate our first product sales later this year. ABthrax continues to move forward on track for delivery to the Strategic National Stockpile, beginning this fall. In May of this year, we submitted the final ABthrax data package to the FDA, as well as to the Biomedical Advanced Research and Development Authority, also known as BARDA within the Department of HHS and we expect to receive $165 million in revenue from our contract with between $100 million and $120 million of that to come in late 2008. At this point, we are awaiting the completion of FDA's review of the ABthrax data package, which is required before authorization can be obtained for us to begin product shipments. Now let me turn to Albuferon. Today we announced that we have completed the treatment phase in both of our Phase III trials, of Albuferon in combination with ribavirin in treatment of naïve patient's with chronic hepatitis C. In April of this year, we completed treatment in our ACHIEVE 2/3 trial in patients with the genotype two or genotype 3 virus and as expected, we have now completed treatment in our ACHIEVE 1 trial in patients with the genotype 1 virus. We are now in the follow-up and data collection phase of both Albuferon Phase III trials, and we look forward to having our first Phase III data in December of this year, and to having all Phase III data by spring 2009. We and Novartis are on track with our plans to file global marketing applications by fall 2009. Assuming success in Phase III, we believe a launch of Albuferon could occur in 2010. In our Phase II B trial, the 900 micro gram dose of Albuferon administered every weeks, exhibited 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 III, we believe that Albuferon could become the market leading interferon for the treatment of Hepatitis C. Turning now to LymphoStat-B. We also reached an important milestone in the development of this potential break through for the treatment of lupus. In today's release, we announced that we had completed the enrollment of new patients into screening in BLISS-76, which is the second of our two Phase III trials of LymphoStat in active SLE. This means that we will complete randomization in initial dosing in BLISS-76 by the end of August. You may recall that our other Phase III trial, which is BLISS-52, completed randomization in April of this year. So, we continue on track to have our first Phase III data by mid-2009, and to have all Phase III data needed for regulatory filings in the fall of 2009. We are on track with our plan to file a BLA in the United States in the first half of 2010. Assuming success in Phase III, we believe a launch of LymphoStat-B could occur in the second half of 2010. In June of this year, at the 2008 EULAR Congress, we presented three year results of our long-term Phase II continuation trial of LymphoStat-B in patients with active SLE. These data confirm and extend the findings presented at previous scientific meetings at earlier time points, including a significant reduction in SLE disease activity, as measured by the response rate chosen as the primary efficacy end point for our Phase III trials. If the Phase II results are confirmed in Phase III, we believe that LymphoStat-B could represent a breakthrough that could change the landscape of treatments for lupus. As you've heard us say before, both Albuferon and LymphoStat-B have important therapeutic potential and blockbuster commercial potential. Now let's turn to our oncology products. As you know, we view our oncology portfolio as a key driver of future growth and we have invested strategically to expand and advance this portfolio around our leading expertise in the apoptosis pathway. In December 2007, we acquired the new opportunity to develop and commercialize HGS1029 and other small-molecule inhibitors of IAP proteins. In April 2008, we reacquired rights to our TRAIL receptor antibodies from GlaxoSmithKline. 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. In today's call, I will focus, in particular on HGS-ETR1, our antibody to TRAIL receptor 1. HGS-ETR1 is the most advanced of any products in development that targets the TRAIL pathway. Now we have begun to implement our plan to generate proof-of-concept data for HGS-ETR1. This proof of concept phase currently consists of three randomized trials, to evaluate the potential of HGS-ETR1 in combination with chemotherapy in the treatment of specific cancers. With multiple myeloma, we expect to have initial data available in the third quarter of 2008 from our randomized Phase II trial of HGS-ETR1 in combination with Velcade. With non-small cell lung cancer, enrollment is progressing rapidly in our randomized Phase II trial of HGS-ETR1 in combination with paclitaxel and carboplatin as first line of therapy. We expect to complete randomization and initial dosing in this study very soon and we expect to have initial data available in 2009. With hepatocellular cancer, we have initiated dosing in the safety lead-in for randomized Phase II trial of HGS-ETR1 in combination with Nexavar. So, all three of the studies in our proof-of-concept series are now ongoing. We believe, taken together, that this series of randomized trials will demonstrate the potential of HGS-ETR1 in the treatment of cancer. We are also moving forward with the development of our IAP inhibitors and have initiated dosing in a Phase I trial of our lead IAP inhibitor, HGS1029, in advanced solid tumors. Our mid-stage products are lead by our TRAIL receptor antibodies, but also include important products under development by GlaxoSmithKline to which we have substantial financial rights. The two most advanced of these products are darapladib, for atherosclerosis, which was discovered by GSK, based on HGS technology and Syncria for type 2 diabetes, which was created by HGS using our proprietary albumin-fusion technology. During the second quarter of this year, GSK announced its intent to advance darapladib to Phase III trials to evaluate its potential to decrease cardiovascular risk. We look forward to darapladib's future progress in Phase III development and the commercial potential that it offers. Now let's turn to Tim Barabe for comments on our financial results. Tim?

Thanks, Tom, and good afternoon. By now, you have seen the numbers for the second quarter of 2008 in the press release. I would like to draw your attention to a few key highlights. First, revenues continue to increase, and rose to $12 million for the second quarter of 2008 from $9 million in the second quarter of 2007. Second, R&D expenses rose to $68 million for the second quarter of 2008, from $49 million for the same period in 2007, due primarily to increased costs for LymphoStat-B Phase III trials and increased ABthrax manufacturing costs as we prepared to fulfill the terms of our contract. You will note that for the six months period, R&D expenses were also up substantially to $140 million in 2008 from $97 million in 2007. The increase for the six months was due primarily to increased costs related to LymphoStat-B Phase III trials, in addition to increased R&D costs related to the progress of our oncology portfolio, specifically both HGS-ETR1, and HGS1029, plus once again, ABthrax manufacturing costs, which are expensed as incurred. Third, net cash burn for the first six months of 2008, amounted to $113 million, and our full-year 2008, net cash burn continues on track of between $135 and $155 million as previously guided. Incidentally, with respect to net cash burn metric, we have decided to provide the detail on an ongoing basis on the HGS website. You can just click the live link where net cash burn is provided in the press release on our website, and you will be taken to a table and explanation. Finally, our cash position remains strong with approximately $539 million at the end of June 2008. With that, I would like to turn the call back over to Tom Watkins for our Q&A session. Tom? H. Thomas Watkins: Thank you, Tim. So in summary, we have continued to make excellent progress in our Phase III trials here in the second quarter and toward the commercialization of our late-stage products. We also continue to advance our oncology portfolio and we remain committed both to achieving commercial success with our first products and to achieving long-term sustainable growth beyond the launch of our first products. So operator, we are now ready for questions. Would you please review the procedures with us please?

(Operator Instructions). We will take our first question from Ted Tenthoff with Piper Jaffray. Ted Tenthoff - Piper Jaffray: Great. Thank you very much. If I may on ABthrax, you've been pretty consistent in saying that we will be giving the beginning of that delivery this fall. Can you just give us a little bit more clarity, either on the timing, or how we should expect to see this rollout? In other words will it be pressed released, or will it just be on the [SEDAR], will be it one lump-sum? What additional information can you give us there? H. Thomas Watkins: Let me ask Jim Davis to speak to that question. Thanks. Ted Tenthoff - Piper Jaffray: Thanks, Tom.

Sure. This is Jim. We are, obviously, in the process of working closely with FDA and BARDA to have the data that we submitted to FDA fully reviewed. As we said we expect to begin delivery this fall. My expectations, though I would say, there has been no final decision, is that we would issue a press release upon the actual first delivery of product to National Stockpile. It will not be at one time. It will be overtime, if and whether reasons of security, you do not want all your products on one truck or at one delivery time. So we will be delivering over the course of the latter part of this year, and into next year. Ted Tenthoff - Piper Jaffray: Okay. Thank you.

Our next question comes from your Yaron Werber with Citi.

Hi, this is actually [Coreen Dephilipe] calling in for Yaron. I have a question, if you give us an update on your partnering plans for the ETR1 antibody, have you been in talks with anyone, or you intend to wait for the Phase 3 data in the third quarter? Thank you. H. Thomas Watkins: I am going to ask Barry Labinger to comment on that. Barry?

Yes. As we said when we announced the reacquisition of our rights to TRAIL receptor antibodies from GSK, we have begun to explore potential new partnerships that are more ideally structured to support the program. So we have started that process to reach out into the oncology community. And I think it is fair to say that we have had our expectations confirmed that the TRAIL induced apoptosis pathway is a hot area. There is a lot of interest, a lot of awareness of the pathway, and therefore, significant amount of scientific interest in talking to us about this program. We had also said that we will only do a deal if we find the right deal in terms of the right partner or the right structure, and frankly, it's too soon in the process to know where this is all going to end up. Right now, I would say that there are fruitful discussions going on as people do their scientific assessments and you will hear more when we get further down the road.

Our next question comes from Terence Flynn with Lazard Capital. Terence Flynn - Lazard Capital: Hi, thanks for taking the question. I actually had two. I was just wondering if you could remind us of how the cost of goods will be recognized for ABthrax, if that is being recognized currently in the R&D line. And then the second question, just wondering if you could give us any more details of planned Phase II SLE trial of the subcute formulation of LymphoStat-B? Thanks a lot. H. Thomas Watkins: Terence, let me ask Tim Barabe to comment on the first and Dr. David Stump to answer your question second question.

Terence, this is Tim. All of our costs related to the ABthrax program are being expenses incurred, currently. So you would see the manufacturing costs in the R&D line. Once we do get permission to ship the product, we will then be able to inventory the product. But until then essentially the cost of goods sold will be zero for any product that we are currently inventorying until a shipment approval is received.

Terence, this is Dave. Let me just comment on the plan for the Phase II LymphoStat subcute program. This is a very straight-forward program. We will be administering the dose subcutaneously over a period of several months, looking at pharmacology biomarkers, and immune intensity general safety tolerability. Our both of the study would be to generate data that would enable a Phase III program to demonstrate comparable clinical benefit down the road. We have a final protocol. We are in the process of getting regulatory activations and hope to be starting our Phase II trial in the next few months.

Our next question comes from Annabel Samimy with UBS.

Hi, this is Stacy calling in for Annabel. I have a couple of questions, starting with the IAP inhibitor. When do you expect data for the Phase I study that you initiated in May? And my second question is, at what point would you consider initiating a combination trial of the IAP inhibitor and TRAIL? What type of safety and efficacy milestones might we need to see from these trials?

Its Dave, again. First question on the timing of Phase I, it is a little hard to predict, given the nature of Phase I trials. We make decisions about next cohorts of patients to be exposed, based on experience that we accumulate as we go forward. Obviously, if we were to hit a safety signal with the finds maximally tolerated dose sooner, then that would lead us to next trials sooner. And we just don't know for sure when that will happen. With respect to the combo trial, we will certainly finish the single-agent Phase I trial. Then I see a real fork in the road. There is pre-growing preclinical database, it would suggest the IAP antagonist could be combined with standard chemotherapy. I have also shown you data with an antagonist in combination with TRAIL receptor antibodies. We might well choose to do those in parallel, depending on what we see in terms of the safety. Is its overlapping or not with any of the agents we would combine with? Where we might sequence them? But we have an eye towards getting through those, what I would call Phase IB combination studies, as quickly as we can. Obviously getting to randomized Phase II proof-of-concept studies for test for activity as the program goal for the near term.

We have a question from [Bryan Scorning] with SIG.

Hi guys. Just a couple of really quick questions here. First, can you give us, now that you have finished the treatment Phase in the Albuferon trials without any more adverse events, pulmonary adverse events, do you have any thoughts as the pursuit of once a day dose on Albuferon and when we might expect to see any sort of clinical work to begin on that? My second question is just could you remind us of the trial designed for the ETR1 and Velcade combination trial? Thanks.

Yes, this is Dave again. I assume you meant once-a-month for Albuferon. We are not testing it once-a-day dose there. But I think, yes, I am very happy we are through the treatment phase on both Phase III trials and we are very aggressively moving into data collection and planning for data analysis, before the end of the year. We have been in talks with our partner Novartis about a month and every four week dosing program, and we have gone deep into protocol design and development and would hope that we can get a program going sometime in the very near future, testing that regimen. Our pharmacology does suggest that it is certainly a schedule for the drug worthy of exploration. You asked about design of the myeloma study. This is a study that briefly is a randomized active control trial, so we are studying the combination of ETR1 at one or two doses, in combination with Velcade and we are randomizing to the control armed with Velcade alone. The study ran with sequential dose testing, the 10 milligram cohort was tested before the 20 milligram cohort was tested. So that means we have controls, both concurrent to each dose and pooled. So that will be something that will be explained to you when we actually start talking about the analysis of the data. We have obviously completed enrollment. We have completed our planned dosing of four cycles before our first analysis for response rate by the Blade criteria is our primary end point. However, we do have number of very important secondary end points that we will be looking very closely at progression free survival time to response, duration of response. We will also be looking at individual components of the Blade criteria for multiple myelomas, it's determination of serum in urine and proteins, bone lesions, marrow cells, marrow plasma cells. It is likely that at the time of our first analysis for response rate, we will still have patients with ongoing responses who have not yet progressed, so the data probably may not be mature for the time-to-response analysis. So we will be looking for response rates that generate signals for us. If you look at exploratory Phase II testing, if you start with formal, two-sided P value less than 0.05 testing, we would detect a 25% difference in response rate, if we see it. If you go to a more exploratory feed value, which would be a one-sided of level. 0.1, would be in the 15% response rate territory. So we are probably looking for that 15% to 25% incremental response rate delta. And then, we will have to interpret our time-to-progression data, based on the majority of the data we actually have in hand when we do that analysis. So it is going to be a rich data set. We are going to look at it in a lot of different ways, and I look forward to talking with you about that when we actually have it in hand. It is still in this quarter.

Our next question from Liisa Bayko with JMP Securities. Liisa Bayko - JMP Securities: Hi. Just a couple of quick follow-up questions. First, just can you clarify, are planning a monthly dosing trial with Novartis for Albuferon?

Yes. That is correct, Liisa. Liisa Bayko - JMP Securities: Okay. And then cost for ABthrax, I just wanted to revisit that. What are the margins on ABthrax? H. Thomas Watkins: Liisa, we are having great difficulty hearing you. Could you repeat that ABthrax question please? Liisa Bayko - JMP Securities: Yes. What are the margins on ABthrax? H. Thomas Watkins: Jim Davis?

We have not disclosed the margins. I can say that we consider this to be a pharmaceutical product. And we expect to get pharmaceutical-like returns on what we are doing, obviously recognizing that having a single customer out certainly reduces some of your costs. Liisa Bayko - JMP Securities: Okay.

This is Tim Barabe. Let me just follow up a little bit on that. We have been expensing the costs associated with ABthrax as we incur them. So that the testing that we have done to-date, the manufacturing that we have done to-date, have already been expensed. So you are likely to see, even though we are not going to get in to specifically what the margins are on a dose of ABthrax, a lot of the costs are in fact behind us. So it will be a very high-margin product when we recognize the revenue, once we are allowed to ship the product. Does that help you out? Liisa Bayko - JMP Securities: It does. And then, once, assuming like an average time or a mean time of when you expect to ship and then given how much you still would have to ship, what percentage would have already been expensed in R&D versus what is remaining? Is it like 75/25, or is 10/90? What is the right way to think about it? H. Thomas Watkins: Well, Liisa, this is Tom. We have said previously $100 million to $120 million of revenue this year out of a $165 million contract with obviously the remainder expected next year. We've manufactured or will have manufactured by the time we expect to begin shipment a considerable amount of the product. I don't think it is possible for us to give you exact percentages. But a considerable amount of the product will have been manufactured, and as Tim mentioned, presumably everything we manufacture will be expensed as we make it.

And most of the tests are behind us as well. So those have already been expensed. Liisa Bayko - JMP Securities: And then just lastly, maybe, can you give us some ways to think about how you are going to launch Albuferon. How and when might you start looking at using Albuferon for some of the newer anti-virals agents that you are currently developing? H. Thomas Watkins: Couldn't quite hear that question

You trailed off at the end. Liisa Bayko - JMP Securities: I was just wondering how we might think about the timing and structure of when you might look at Albuferon in the context of some of the newer anti-virals that are currently in development for Hepatitis C.

Liisa, this is Dave. I will take a stab at the scientific basis for that. Maybe Barry will want to comment on how it will fit in to our commercialization strategy. We are in active discussions already with a number of entities that make new novel drug anti-virals. So there is a great deal of interest at the scientific level in combination studies with Albuferon. And I think, in part because of the kinetic profile that tends to show less exaggeration of semen at the end of the two-week dosing cycle. The first studies will have to be clinical pharmacology studies, if you will, where we test in combination over a short-term, measure the pharmacology of each compound, make sure the tolerability is acceptable, and bridge from that to credible Phase II trials actually looking for incremental safety in early signs of SVR. We think we can get at these in the not too distant future. So, certainly I think with the ACHIEVE studies reporting, that data should allow us to offer a good sound basis for testing. Barry, do you want to comment on the commercial strategy?

Yes, Liisa, I will just reiterate that, we recognize the issue that the marketplace is evolving and we do expect that Albuferon will be the leading interferon in the emerging treatment regimens that come out. As Dave said, studies can be done prior to approval of these drugs and we expect to get them done. So our goal is to have data and the literature in time of our launch that's little more than two years away. So we still have time to get that work done and get it published.

Our next question comes from Sapna Srivastava with Morgan Stanley.

Hi, it is Dave calling in for Sapna. Just a sort of a follow-up on the interferon market. Recently, through IMS, we have seen a pretty significant diverging gap between Pegasys and Peg-Intron. Just wondering if you guys have booked into what's driving physician decisions right now in the interferon market, because you have few drugs that are fairly similar in a lot of trials with pre-divergent market share. So it seems like something else is going on. So I was just wondering if you have done any more recent work on understanding the market and physician choice and what drives it, and how that fits in to Albuferon's profile?

Yes, this is Barry. We continue to hear in our marketing research that there is not a perception of strong differentiation between the two pegylated interferon products. Mostly physicians believe that these products work about equally well, and their choice is based on secondary factors like convenience of calculating the dose for some physicians it is helpful with Pegasys because it is a standard dose, whereas other physicians prefer to be more customized to the individual patient, so they like weight-based dosing. More or like standard than weight-based and that is why Pegasys does a little bit better. But generally, there is loyalty based on factors that physicians themselves do not consider especially important. So that is about it. There were some expectation that may be the ideal trial would provide some information that distinguishes one from the other, and I think those data didn't deliver on that, and only reinforced that there is not much difference between the two. So what it means for Albuferon is we also continually hear from physicians that when they see the Albuferon profile, they find it very refreshing that there is something about an interferon product that is actually different and they can base their choice on something that's a tangible benefit for the their patients, which is essentially you give shots half as often and therefore a number of the side effects associated with these drugs will happen half as often, and you see the quality of life benefits, and the fewer missed days of work as documentation of that. So, I think this market has long been looking for real differentiation rather than companies battling it out over things that they consider relatively unimportant and we expect that Albuferon will be able to deliver on that.

Great, thank you.

Our next question comes from Chris Raymond with Robert Baird. Chris Raymond - Robert Baird: Hi, thanks for taking the question. Can you hear me okay?

Yes. Chris Raymond - Robert Baird: Great. I wanted to go back to the ABthrax program. Can you remind us what the shelf life of that product is?

This is Jim. We have said that the shelf life is that of a typical monoclonal antibody, and we have not being more specific than that. Chris Raymond - Robert Baird: Okay. Well, what I am trying to get at here is if one makes assumptions as about what a typical monoclonal antibody shelf life is, if this is being ordered for purposes of stockpiling, how is it that you would not have repeat orders?

I do not disagree with you. I think the government will be looking very seriously at this issue. They have not made any commitment now, but it certainly would seem logical that the government would have a desire to want to replenish their stock on a regular basis with monoclonal antibody therapy. Chris Raymond - Robert Baird: If it is inside of a year, and I know you are not disclosing what it is, what, I think, we and most everybody's model is just a single order. Would it be a stretch for us to assume that you might see repeat orders that happen within the span of a year?

I think in a normal commercial market that would be true but when you are dealing with the US government you do not always know what their agenda or their time line might be. And I am afraid I can't be more specific than that because I do not know for sure. Chris Raymond - Robert Baird: Right. Okay, thanks.

(Operator Instructions). We will next hear from Joseph Schwartz with Leerink Swann. Joseph Schwartz - Leerink Swann: Hi, thank you for taking the question. I was wondering, if you could remind us, how patients in ACHIEVE 1 could be down-titrated from 900 micrograms every two weeks to a dose below that and how sensitive were your powering assumptions to that in your analysis? And then also, have you noticed an increase in the rate of down-titrations from 900 micrograms at all since you announced that patients who were receiving 1200 would go down to 900.

Hi, Joseph. This is Dave. Let me try to see if I can answer this as prudently as possible. There was, at the beginning of the study, a dose titration algorithm. I think we talked with you all about that at the time based on any sign of observed tolerability problems, patients could be down-titrated to a lower-dose Albuferon and the same for Pegasus. This was not Albuferon specific and the goal there was to optimize exposure. It's much better to keep patients on their interferon, even at a lower dose than to discontinue. So this was going on even up until the time when the protocol, and at that time you remember, obviously, everybody who had not already been down-titrated was shifted to 900. Some patients were already on doses below 900 at that time. So they were obviously left on the dose that they were down-titrated to. I am obviously still blinded to the treatment assignments, so I can not tell you my treatment assignment, what has happened. I don't perceive a major sea-change in the conduct of the study, since that protocol amendment, but obviously I reserve the right to comment on that when I have actually seen the data and mapped them all over the counter. We are obviously very interested in this and we went to great lengths to try to keep patients in the study, keep exposures appropriate for signs and symptoms that were observed. We could have lost this, if we had had a wholesale rush to the exits, and I do not believe that that has happened. So I believe we have got a study that is fully incubating with the end of treatment in both studies. I am really looking forward to seeing what was actually going on in that study that lead to what happened. Am I helping you with that? Joseph Schwartz - Leerink Swann: Yes, I think that is helpful. And then if I could follow-up on Albuferon as well. In terms of the non-inferiority bands that you have chosen, how confident are you that the FDA is on board with the comparisons that you have proposed and the magnitude of the fact that will be considered, statistically, non-inferiority. Is non-inferiority just given their problems with non-inferiority trials recently?

We have cleared in the Phase II agreement. This was a point of very specific discussion in the Phase II discussion with the FDA where we set the boundary to be excluded of 12%. That roughly would translate into the statistical outcome being met if Albuferon was no more than 5% of observed worse than Pegasys. Non-inferiority trial design, that's a whole day's conversation. You do better in non-inferiority trials when you've got more external data to point to. We were fortunate that we had the data comparing native interferon placebo then having comparison between Pegasys to native interferon. So there is fair amount of data that pointed that a 12% margin is being clinically meaningful. I am going to say I do not think that was a great point of contention during the discussion. So I am pretty comfortable, short of us actually going and getting an SPA which we chose not to do because of the time that that would have taken, that we having agreement on that boundary. Joseph Schwartz - Leerink Swann: Okay. Great. Thanks so much.

You are welcome.

There are no further questions in the queue, I would like to turn the call back to Mr. Watkins for further closing comments. H. Thomas Watkins: Thank you, operator. I want to thank everybody for your participation and interest in Human Genome's conference this afternoon. We are obviously proud of what we are accomplishing, and we look forward to continue to meeting you and discuss our progress as we move forward. Go on and have a nice afternoon

And once again, that does conclude today's conference. We thank you for your participation. Have a great day.