OPKO Health, Inc. (OPK) Q2 2017 Earnings Report, Transcript and Summary

Welcome to the OPKO second quarter business and financial update conference call. At this time, all participants are in a listen-only mode. Following management's prepared remarks, we'll hold a Q&A session. [Operator Instructions] As a reminder, this conference is being recorded August 8, 2017. I would now like to turn the conference over to Anne Marie Fields with LHA. Please go ahead.

Thank you, operator. Good afternoon. This is Anne Marie Fields with LHA. Thank you all for joining today's call. I'd like to remind you that any statements made during this call other than statements of historical fact will be considered forward-looking and as such will be subject to risks and uncertainties that could materially affect the company's expected results. Those forward-looking statements include, without limitation, the various risks described in the company's annual report on Form 10-K for the year ended December 31, 2016 and its subsequent quarterly filings with the SEC. Before we begin, let me review the format for today's call. Dr. Phillip Frost, Chairman and Chief Executive Officer of OPKO will open today's call, followed by Steve Rubin, OPKO's Executive Vice President who will provide an update on the company's various businesses and clinical programs, after which Adam Logal, OPKO's Chief Financial Officer, will review the company's 2017 second quarter financial performance. Dr. Frost will then provide his closing remarks and we'll then take your questions. Now, I'd like to turn the call over to Dr. Frost.

Good afternoon. I'd like to start the call by giving you a brief overview of OPKO as I see it. Our business units are moving forward nicely. Bio-Reference now has a new, stronger than ever management team in place with Dr. Greg Henderson as its head. Dr. Ben Solomon is doing a great job as the new leader at our genetics and sequencing unit, GeneDx. Most recently, Vicky Laughman has taken responsibility for running sales. She had previously done a great job helping to build up the laboratory business at Mayo Clinic. We'll continue to add talent at Bio-Reference and are actively interviewing some terrific candidates. We've developed great alliances for Bio-Reference such as the recently announced one at UCSF and are working with others that can propel the business forward even more rapidly. The 4Kscore test for prostate cancer has the potential I believe to become a major diagnostics tests and continues to look better and better as new clinical utility trials demonstrate its reliability to predict the presence of aggressive prostate cancer with a simple blood test. Mostly recently, a study at Veteran's hospitals confirmed the 4K's test clinical utility in African-American men who have a higher incidence of prostate cancer. RAYALDEE uptake in sales are advancing as payers are coming on board. We'll continue to expand our efforts with this great product for people with chronic kidney disease. Our product development programs are also moving forward and you'll hear more about this Steve, but I want to emphasize too that I've spoken about before because there are special interest to me. They happen to be products that address two of the largest markets in the pharmaceutical industry, obesity with type-2 diabetes and when I'm prosthetic benign prostatic hypertrophy. It's estimated that 50% of men over 60 suffer from symptoms of BPH that's more than 50 million men in the United States. For obesity and type-2 diabetes, Opko has been developing a product long acting oxyntomodulin for some time and I let you know in the past of my great enthusiasm for this potential. It was performing well in our Phase 1 trials, but with the acquisition of Transition Therapeutics over a year ago, we got another oxyntomodulin product, which in a completed Phase 2 trial has 420 patients had already shown safety and efficacy. A controlled blood sugar, low cholesterol and triglycerides and decreased weight. The weight loss was directly related to dose. The issue was that at higher doses, nausea and vomiting became a factor. We are now completing plans for another Phase 2 trial using a dosing schedule that we believe will minimize nausea and vomiting, permitting the administration of higher doses to achieve even greater weight loss than observed in the completed Phase 2 trial which wasn't bad. We hope to begin this trial in fourth quarter to this year or first quarter next year. The second is a product close to my heart, it's a selective androgen receptor modulator with several possible uses that will develop a first benign enlargement of the prostate - benign prostate hyperplasia or BPH. In a 350 man trial, it increased muscle mass and strength, decreased body fat and lower the PSA. Now dogs are commonly used to test BPH drugs such as Finasteride, which is on the market with serious side effects. Our product shrunk the prostate by 60% within three months. We are now making preparations to begin a dose ranging Phase 2b trail during the fourth quarter of this year and because of the uniqueness of this drug candidate that is decreasing track mass and increasing muscle mass while shrinking the prostate size I am more than enthusiastic about its prospects. My view of the big picture is, we have a great business I our bio reference laboratories in which we continue to invest in new management talent, new systems and better controls. As time goes on we expect to see better results for all financial progress particularly cash flow. Against that backdrop we're marketing and selling two great products, RAYALDEE for chronic kidney disease and that can be disease and the 4Kscore test which stands out among a variety of tests for aggressive prostate cancer for its clinch utility and reliability. With RAYALDEE and 4K we will continue to invest in new studies and marketing so that both products will achieve the commercial success they deserve. I think you can see why we're so enthusiastic. And I'll now pass you on to Steve, who will provide more details.

Thank you Phil and good afternoon and thank you all for joining us for today's call. Throughout the first half of 2017 we've made important advancement across all of our business unit. This includes steady progress with a core BRL revenue base, prescription growth and reimbursement gains with RAYALDEE and ongoing progress on a number of new drug development programs. I'll discuss Opko progress across our diagnostics and pharmaceutical businesses. Then I'll turn the call over to Adam for a review of our financial performance. In our diagnostic business, Bio-Reference Laboratories continues to make progress with the bulk of its revenue coming from traditional reference lab testing. We continue to invest in new systems that provide better financial data and more information about customers, products, sales and importantly billing and collections. Our new leadership team has hit the ground running and is introducing new programs that we believe will provide both short and long-term growth opportunities. We have great confidence in the outlook for BRL and with the synergies across diagnostic product lines. We look forward to grow of the number of patients being served, improved 4Kscore sales and progression of the clearest point of care PSA test towards regulatory approval. Let's turn now to an update on 4Kscore tests, our blood tests that provide demand with an elevated PSA test result with a personalized prediction of his chance of developing an aggressive form of prostate cancer. Last year, we leveraged our BRL sales force and significantly increased the number of reps promoting the test. With a strong market access foundation in place, we believe this time to invest in sales and marketing programs that should drive 4Kscore utilization to another higher level. To that end, we recently created a small urologic focused sales force to complement the larger BRL sales team. Our new marketing program will include a regional television ad campaign. In addition, we hope to shortly update you on additional studies that are intended to expand clinical utility of the test. Moving now to the Claros 1 point of care system, this is our novel instrument and chip system to provide rapid high performance blood test results. Claros 1 can run immunoassay test in the physician's office or hospital nurse's station using a single drop of blood from a finger stick, negating the need for a full blood draw or a centralized reference laboratory for many common tests to provide results to patients at the point of care. We successfully completed our analytical validation of the total PSA test and presented our development data at the American Association of Clinical Chemistry last week in San Diego. We remain on track to file a PMA with the FDA by the end of the year. We plan to leverage BRL's marketing, sales and distribution resources for the launch of the Claros 1 system with the PSA test in the United States in 2018. We continue to advance development of our other Claros 1 test with an aim to expand application in a number of important occasions. In particular, we will work on advancing test with our synergies, with our products and programs such as a test for testosterone. GeneDx, our genetic testing unit continues to actively expand its innovative service offerings and its relationships with healthcare providers. We recently extended GeneDx relationship with the University of California Health System for genetic, genomic and molecular testing services. UC Health is one of the nation's leaders in genomics and precision medicine in both the clinic and the lab and they selected GeneDx to supplement their own robust operate of genetic, genomic and molecular testing services across all of their various UC health campuses. In addition to its new client facing test ordering portal, GeneDx has developed a unique clinician focused portal that allows end users to better manage and track their data at a cohort or individual level in a protected and compliant manner. GeneDx continues to work to better understand the genetic causes of a variety of diseases to research and a robust whole exome and whole genome sequencing program. We look forward to ongoing progress with GeneDx as patients volumes grow in its higher end margin business. Turning now to our pharmaceutical business, I'm pleased to report that the RAYALDEE launch continues to build momentum. RAYALDEE is the first and only therapy approved by FDA that both raises 25-hydroxyvitamin D and lowers parathyroid hormone levels with a safety profile similar to placebo. Total prescriptions of RAYALDEE in Q2 as reported by IMS increased by 140% compared to first quarter of 2017. Week over week increases in total prescriptions have been observed since the start of the year. The number of nephrologists are prescribing RAYALDEE in Q2 has almost doubled compared to Q1. The RAYALDEE sales have been driven by a sales force comprised of approximately 35 deal based specialists plus five regional managers. Given the sales traction achieved and greater market access for the product, we are in the process of expanding the size of the sales force to a total of approximately 70 strong. Commercial and government insurance reimbursement for RAYALDEE continues to improve driven by our internal market access team. More than 68% of all insured lives have access to RAYALDEE by the end of Q2. And we continue to forecast a more than 70% of insured lives will have access by year end. As expected, the Kidney Disease Improving Global Outcomes or KDIGO organization updated its Clinical Practice Guideline for the Diagnostic, Evaluation, Prevention and Treatment of Chronic Kidney Disease-Mineral and Bone Disorder just prior to the end of Q2. The updated guideline amended the 2009 KDIGO Clinical Practice Guideline and presented revised positions on current standards of care for the treatment of SHPT in patients with CKD stages 3 or 4. Active Vitamin D therapies, including Calcitriol are no longer suggested for routine use in stage 3 or 4 CKD. Nutritional Vitamin D supplements which are used for the majority of patients with stage 3 or 4 CKD remain characterized as an unproven treatment for SHPT. We are aggressively educating nephrologists about the revised guideline through our dedicated medical science liaison team and believe the changes in the recommended standard of care creates significant opportunity for RAYALDEE sales. Further, a new review RAYALDEE, published at expert review of endocrinology and metabolism, highlights the clinical benefits of RAYALDEE. As previously announced, we are advancing the clinical development of RAYALDEE in partnership with Vifor Fresenius Medical Care Renal Pharma. Our planned Phase 2 clinical trial of a higher strength RAYALDEE for dialysis patients is expected to begin in Q4, now that we have received favorable feedback on the trial design from the US Food and Drug Administration. Further, through this partnership, we filed a new drug submission for RAYALDEE in Canada on May and are preparing a new product registration submission for Mexico. We continue to prepare for a final Phase 3 clinical study for Fermagate, our magnesium-based calcium free phosphate binder for hyperphosphatemia in CKD patients on dialysis. Our recently completed preclinical studies have demonstrated Fermagate's ability to limit vascular calcification, a leading cause of morbidity and mortality in CKD. Previously, Fermagate has been shown to be safe and effective in treating hyperphosphatemia in Phase 2 and Phase 3 trials. We are also enthusiastic to be moving forward with the initiation of Phase 2a clinical study later this year with our NK-1 antagonist for uremic pruritus or extreme itching, which is a problem in about half of the patients on dialysis. Moving on to our long-acting human growth hormone product hGH-CTP, which is partnered with Pfizer for worldwide commercialization, our global pediatric Phase 3 hGH-CTP global study in 220 pre-pubertal growth hormone deficient children is underway and we continue enrolling patients. This is a pivotal non-inferiority study, comparing a single weekly dose of hGH-CTP with daily injections of currently marketed growth hormone. This study is using the pen device. The pediatric segment represents approximately 80% of the commercial market for treatment of hGH deficiency. Data from our pediatric hGH-CTP Phase 2 study affirmed that a single weekly injection of our drug has the potential to replace seven daily injections of currently marketed growth hormone in pediatric patients. This study provided pharmacokinetic and pharmacodynamic data supporting a once-weekly treatment with hGH-CTP with an acceptable safety profile. Patients in the Phase 2 extension have been exposed to hGH-CTP for more than three years, providing long term safety data. In addition, we have initiated a pediatric hGH-CTP registration study in Japan. This study will assess the pharmacokinetics and compare efficacy of weekly hGH-CTP to daily Genotropin in Japanese pre-pubertal pediatric growth hormone deficient subjects. With respect to the adult hGH-CTP Phase 3 study, as previously announced, we completed a post-hoc sensitivity analysis to evaluate the influence of outliers on the primary endpoint result using pre-planned multiple statistical analysis protocol. OPKO intends to seek a meeting to discuss possible next steps with FDA. We continue to be excited about the opportunities for OPK88004, a once-daily oral selective androgen receptor modulator or SARM for patients with benign prostate hyperplasia or BPH. We recently held a pre-IND meeting with the FDA regarding this program and in the fourth quarter, we expect to initiate a Phase 2 dose ranging study in patients with BPH. The study we are planning will involve 80 to 120 BPH patients with the goal to identify adequate doses to reduce prostate size for a four month treatment period. We will also examine for improvement in secondary endpoints such as PSA, lean body mass, fat mass and physical function. Turning now to OPK88003, a once-weekly GLP1-Glucagon dual agonist for the treatment of type 2 diabetes and obesity. As previously reported, data from a Phase 2 study with 420 diabetes subjects showed that OPK88003 was superior in weight loss compared with the approved extended release exenatide and placebo. In addition, the data also showed improvement in the lipid profile and similar reduction in HbA1c level as compared to the approved once weekly product. Based on the promising efficacy data and safety profile, we are planning to initiate a dose escalation Phase 2b trial to optimize a dosing regimen that should achieve further weight loss, improved lipid profile and safety. We are currently completing the manufacturer product and expect the trial to begin in early 2018. Let me now update you on our long-acting Factor VIIa-CTP for the treatment of bleeding episodes in hemophilia A or B patient with inhibitors to Factor VIII or Factor IX. We are nearing completion of the Phase 2a dose escalation study of intravenous Factor VIIa to determine safety and explore efficacy endpoints in 24 patients. We're also nearing completion of the Phase 1 study in healthy male subjects assessing acute safety, tolerability, pharmacokinetic and pharmacodynamic profiles of a single subcutaneous administration of this drug. Top line data from both of these studies as well as preclinical data were presented at the Intravenous Society on Thrombosis and Haemostasis that was held in Germany last month. Overall, Factor VIIa-CTP in both IV and subcutaneous administration demonstrated a favorable safety profile and local tolerance following a simple administration with no unexpected adverse events considered to be related to the drug. So in closing, we are pleased with the progress we've made across all business segments these past months, in particular, our sizable revenue provides increasing cash flow that helps fund our commercial efforts and our clinical programs. We have a robust development pipeline of promising product candidates that we continue to advance towards commercialization in markets with significant opportunities, but limited treatment options. Throughout the balance of the year and into 2018, we expect to achieve a number of important critical milestones. We plan to file a PMA for the Claros 1 PSA test and a 510(k) for the Claros 1 testosterone test, initiate a Phase 2 study of a higher dose RAYALDEE as a treatment for CKD patients on hemodialysis, initiate a Phase 2a clinical study of OPK88002, our NK-1 inhibitor for pruritus and dialysis patients, initiate a Phase 2 dose ranging study for OPK88004 or SARM for patients with benign prostate hyperplasia or an enlarged prostate, initiate a Phase 2b study of our oxyntomodulin, OPK88003 to evaluate weight loss and glucose control and initiate a Phase 2a study of OPK88001, our AntagoNAT for the treatment of Dravet syndrome. We continue to focus on five key business objectives at OPKO. We will continue to grow revenue from our core diagnostic business. We will increase contributions from newer products such as RAYALDEE, meaningfully increase the utilization of the 4Kscore test, grow patient volumes for GeneDx and advance our clinical development programs towards commercialization. We look forward to keeping you apprised of our progress with all of these programs, expect our execution will drive value over time. We continue to believe that OPKO Health offers a unique opportunity to invest in a company with diversified risk and potentially significant products at advanced stages of development. With that overview, let me turn the call over to Adam for a discussion of our second quarter 2017 financial performance. Adam?

Thank you, Steve and good afternoon, everyone. Revenue for the quarter ended June 30, 2017 totaled $314 million and our net loss was $17.5 million, reflecting our ongoing investments in research and development of our pharmaceutical pipeline along with investment in the commercial launch activities for RAYALDEE. Investment in our pipeline during the quarter was approximately $32.6 million and the commercial launch of RAYALDEE resulted in an investment of approximately $8 million contributing to our loss for the quarter. The comparable period of 2016 includes a $50 million benefit from our licensing transaction with Vifor Fresenius for RAYALDEE which contributed to our total revenue of $357 million and net income of $15.5 million during that period. Our revenue cycle management program is in full swing at Bio-Reference and we have seen overall improvement in the collection rates in turnaround within our main clinical lab business, a trend that we began to see in March and continued through Q2. And we expect to accelerate that through the second half of the year. We anticipate these improvements will result in increased levels of profitability within our diagnostics segment at an increasing pace during the second half of the year. Offsetting this progress we continue to experience pricing headwinds within our genomics business, which resulted in an overall decrease in revenue from our services despite increased volumes. We anticipate that these pricing decreases have now stabilized so that the coming quarter's revenue from service should be reflective of our expected increase in volumes. We have not yet recognized revenue from RAYALDEE in our financial statements and we are continuing to develop our estimates for our net sales price. As we continue to bring new insurance formularies online, we will gain a greater ability to estimate how RAYALDEE will be used among the various Medicare Part D and commercial insurance formularies. We estimate that the earliest we will begin recognizing revenue will be in the fourth quarter of 2017. We continue to defer revenue related to products shipped to our wholesale customers until we build sufficient experience in the utilization of RAYALDEE at the retail pharmacy channel. Our balance sheet remains in a strong position to continue the development of our ongoing R&D programs as well as support the launch of RAYALDEE in the US. At June 30, 2017, we had approximately $130 million in cash, cash equivalents in marketable securities on her balance sheet with an additional $50 million in availability under our credit facilities. I'd like to turn the call back now to Phil for any closing remarks.

Thank you. Are there any questions?

[Operator Instructions] Our first question is from the line of Kevin DeGeeter with Ladenburg.

A few questions on Bio-Reference to begin. First off, it looks like PAMA is likely to be implemented potentially in January, just any updated thoughts on how implementation or legislation may impact Bio-Reference?

So, thanks for the question, Kevin. With PAMA, I think across the board we're active within ACLA. And ACLA has been pushing hard as an organization to get a deferral in place because we continue to think that there are certain laboratory segments that are not included in the current regulation particularly around hospital outreach business. With that being said, if it does implement, Medicare represents about 15% of our overall Bio-Reference revenue. And I think the Clinical Lab Fee Schedule would potentially put pricing pressure on our overall business of 1% to 2% of overall revenue. So it's an important piece of legislation, but from an overall impact perspective we do think we're taking preparatory steps in case it does go into place.

And I believe you called out or mentioned that you're initiating a regional ad campaign. Can you just provide a little bit more specifics with regard to just scope and how you're thinking about how aggressive you may want to be with a direct ad campaign as you build up coverage and payer decision both for Medicare and for [indiscernible]?

We've been very careful about timing on launching our direct to consumer campaign because we wanted to make sure that we had our clinical trials lined up and we wanted to make sure that the urologists were solidly behind the product so that they wouldn't be blindsided if they start getting calls about the product. And we think that by now most urologists are quite familiar with the product and many primary care physicians are as well. And I think that once we go TV advertising and radio advertising for example that will not only alert the public at large, but it will help educate the primary care physicians who might not yet be aware of it. So we're looking forward to that part of the marketing effort.

And one more from me, then I'll get back in the queue. I think it seemed we'll get a readout from the Factor VIIa program shortly here. As you think about next potential steps there, your thoughts on really two topics. First, the competitive landscapes, there are a lot of new products both late stage with sub-cu products such as the one from Roche and also from potentially gene therapy. Is VIIa a program that with a strong profile that you're able to move forward internally and how do you define what is the inappropriate bar to measure a commercially competitive product in that space?

We saw various very high expectations for the product. There are some innovative therapies out there, but as you also know there's questions about those including questions on whether, how assuming those therapies are adopted. Our product as you know is just taking the same [indiscernible] factor that has been administered for years and just making it last longer. So we think that for one, physicians are starting to be more comfortable. Second, even if those therapies make the market it will be bleed throughs and the Roche product for example won't be usable at the acute stage and you'll still need to preferred surgeries and the bleed through. So we think it's still a very significant opportunity, certainly the alternative new therapies out there are exciting and we'll create headwind but from our analysis we think it's certainly a very worthwhile project.

Our next question from the line of Brandon Couillard with Jefferies.

Adam, back on the Bio-Reference business, can you actually break out the impact of the pricing pressure in the genomic services segment on BRLI growth overall because if I do the math and assume that 4Kscore contributed a couple million dollars of revenue in the second quarter, it would suggest that the BRLI business was down I guess about 5% overall.

The GeneDx business on a comparative quarter was down pretty substantially, Brandon. So I think that what you're seeing is we didn't see patient overall volume growth there. But those pricing headwinds really pushed it down.

And you alluded to some new initiatives. Do you think it could reaccelerate revenue growth, when do you expect we could begin to see some of that impact. And can you elaborate on what some of those are?

So I think where we saw the pricing pressures start for GeneDx was in the third quarter of last year. So the comparative quarters going forward, we should see that growth started in the third quarter and really accelerated into the fourth quarter on topline revenue growth. Patient volumes on the clinical lab business have been consistent with prior years. But we've got some activities there that will help accelerate patient volume as well.

Just a couple on 4Kscore, first off, I noticed you reduced the list price for the 4Kscore test down to 595. Could you give us a sense of the rationale for that and perhaps what percentage of the list price most payers are reimbursing at? And then secondly any update you might have for us in terms of your most recent dialog with Novitas on a formal coverage policy.

So as it relates to the list price, so we did bring the list price down to be consistent or more consistent with where the Medicare reimbursement rate is. Now that the 4Kscore has a level 1 CPT code, the way our majority of our insurance contracts are structured is when you have a test on the Clinical Lab Fee Schedule, we're getting paid as a percentage of that Medicare reimbursement. So the higher list price had that if anything a negative impact on utilization for patients who didn't have insurance coverage. So we are pretty consistently getting reimbursed across the board on our 4Kscore test that we're doing and our average reimbursement is not far off from the Medicare fee schedules of just over $600.

You might mention that the Medicare reimbursement is actually scheduled to go up in 2018?

Yeah. So in with PAMA, as Phil mentioned, if PAMA goes into effect, 4Kscore will be one of the tests that actually benefits from that legislation, as our reimbursement rates will go up about 20% from there. You had a second question, I can't remember, sorry.

Novitas?

Yeah. So Novitas continues to reimburse for the test and our conversations and dialog with them have been very positive. There are supporters of the test and I think that it's a benefit to the Medicare beneficiary, so they continue to pay for it, they have not come out with a timeline to issue a coverage decision, however, they are paying for 98 plus percent of all tests adjudicated.

We're continuing to do all kinds of trials that we think will eventually satisfy all the marks in terms of positive coverage, but - and then trials are important because they're necessary for the marketing in general anyway. So it's not as though we're them especially for that purpose, but - and the trials continue to have great results and demonstrate time and time again that clinical utility of the product, which is what the payers are interested in.

I guess if I could sneak more in. Adam, what were the 4Kscore volumes in the second quarter and then I'll jump back in the queue? Thanks.

It was essentially flat with the first quarter, so just over 18,700 tests.

[Operator Instructions] Our next question is from Yale Jen with Laidlaw and Company.

Just wonder what would be the objective to build another or expand another neurologist, talking to sales teams in the organization that, is that in addition to the original sales reps in that specialty space or what the major objective might be?

So Yale, as you remember, we had a - when we launched the stats ourselves out of our lab in Nashville and we had a small 10% sales force dedicated solely to the urologists. Most of those have been pulled in to the larger BRL team and where their roles are not only selling 4K, but the whole suite of services that BRL offers. A, the sales efforts around 4K are a little bit different than Reference Laboratories' sales and the thought being is we'd like to have a targeted kind of guerilla sales force that can go out to particular areas that we've identified or have high levels of PSAs or high levels of biopsies and really go after those what we think are high users that we haven't had access to before. Keep in mind, the BRL sales force is largely northeast centric, just by the nature of the geography that business is. So having this targeted Salesforce along without this small, we can keep, say, call it the same number, I mean 7 to 10 and with the advertising that we think we can really generate some sales.

And in the prepared remarks, you mentioned that expand our RAYALDEE sales force, just curious what kind of pace that you are planning to have and what will be the metrics you will use to further justify, to evaluate this, the performance of the reps.

So the pace, we're actually in the hiring process now, we hope to obviously have them on board by the fourth quarter and so it's pretty active pace to bring them on board and measurements are the typical metrics that you'd like to see, which are increasing prescriptions and increasing refills. We are targeting the sales force grow around those areas where we have reimbursement, so we want to make sure that in the position that we're visiting that we have solid reimbursement in those areas, so there's no frustration as well as again similar to what I mentioned for 4K, exposure to large nephrology practices or large prescribes of the previously utilized producers. We think we should be - previously utilized products of nutritional and activated Vitamin D.

And the last question I have is for the Factor VII, I think the follow up the earliest question that I'm assuming you guys are going to talk, provide more colors in terms of the two studies, the final data of the first two studies, but let's just assume that the data looks promising, what might be the future step you might take while moving this program forward or is there any other sort of alternative you're thinking about.

Both these doses are single escalating dose, which gives us - gives you some indication certainly on the IV side, which was in the hemophilia patients. But so next steps, assuming we have safety among the doses, we will move into a Phase 2 hopefully slash Phase 3 after talking to FDA, pick your typical doses, I'd say three or four doses to move forward and then as we've mentioned in the past is, we like to them roll that into a single dose and convert the whole study into a 3.

And this will be used predominantly as a prophylactics as on an OnDemand basis.

So we're going to bring both, we're going to bring both the IV and the subcu into development because you will have again I believe, through it and you will have high usage for surgery and keep in mind, novo VII, which is the only, well, not the only, but it's the leading inhibitor product in the market today with 1.7 billion of sales, has no prophylactic use and so most of that is either used for bleeds or surgeries and so that provides us a very big opportunity to drill out both. So we would - we're going to develop both subcu, which can we hope be proven to be useful prophylactically as well as the IP.

So the subcu will be for prophylactics and IV maybe useful on demand? Would that be the general way of looking at that?

Correct.

And that is all the time we have for today. Dr. Frost, please proceed with your presentation or closing remarks.

I just want to thank everyone for participating. And we'll get back to work. Thank you.

Ladies and gentlemen, that concludes your conference for today. We thank you for participation and ask that you please now disconnect.