Q4 2019 Earnings Call

Ladies and gentlemen, thank you for standing by and welcome to the eight higher pharma fourth quarter in full year 2019 conference call. At this time all participants are in listen only mode. After the speaker presentation. There will be a question answer session.

The question. During this session you will need to press star one on your telephone if you require any further assistance. Please press star zero I would not only to hand the conference over to your Speaker Ms. Jill Bardsley Chief Financial Officer. Please go ahead.

Thank you and good afternoon, everyone.

Thank you for joining us today to discuss a terrorist fourth quarter and full year 2019.

Operating results and corporate update we're joined today by Dr. sundry shoe CLO, our president and CEO.

On the call Sanjay will provide an update.

On our corporate strategy, including the clinical development of a T Y or 1923, our recent licensing agreement with cure in Pharmaceuticals, and a antibody program I will then review the financial results at our current financial position before handing it back to Sanjay to open the call up for any questions.

Before we begin I would like to remind everyone that except for statements of historical facts. The statements made by management and responses to questions. On this conference call are forward looking statements under the Safe Harbor provision of the private Securities Litigation Reform Act of 1995.

These statements involve risks and uncertainties that can cause actual results to differ materially from those in such forward looking statements. Please see the forward looking statement disclaimer in the company's press release issued this afternoon I was wells the risk factors and the company's FCC filings and included in our most recent annual report on.

On form 10-K.

Quarterly reports on form 10-Q undue reliance should not be placed on forward looking statements, which speak only as of the date. They are made as facts and circumstances underlying these forward looking statements may change, except as required by law you Terrafirma disclaims any obligation to update these forward looking statements to reach.

Select future information events or circumstances, I will now turn the call over to foundry.

Thank you Joe.

Good afternoon, everyone and thank you for joining us for yearend 2019 results conference call.

During 2019 pizza or significantly progressed the development of workload.

And preclinical pipeline of potential first in class therapies for diseases with one domestically.

And strengthened our balance sheet <unk> close to further advance these programs, what's important and potentially value creating milestones.

Since we last spoke in November we achieved two important milestones for lead product candidate if people are thinking 23.

First quarter is one way clinical trial in patients with pulmonary sarcoidosis.

We announced interim safety results showing study drug you can make peak 23 or placebo.

Observed to be generally safe well tolerated no drug related serious adverse events.

Second we entered or first strategic partnership.

Turing Pharmaceuticals.

For the development and commercialization of like 23 in Japan.

Worth up to 175 million and upfront and milestone payments.

In addition, let me review our other recent news from this current quarter.

We published a paper.

In the need for journal cellular molecular immunology, highlighting the essential role, but here's the deal to get our nation to taste or whores plays into modulation of immune cell engagement and a broad range of disease states, including interstitial lung disease is royalties.

We raised gross proceeds of approximately $20.7 billion from a public offering of common stock.

We appointed Dr. Arthur Mercurial, if we didn't cancer research or that's just scientific advisor to the company.

And finally earlier this week, we announced the award of a Hong Kong Government Grant.

Building high throughput platform the development by specific antibodies.

They are building out our NRP two antibody development program.

29, he was a productive year for us and this momentum has continued in her looked like 20.

Today I will provide further details regarding the progress we don't leave therapeutic candidate pp were 1920 greed.

Advancements in preclinical research and development efforts on NRP, too and PRT Secretaries biology.

Joe will conclude with a review of our financial position.

Before outlining these details I want to discuss the effect of the covert 19 pandemic on our operations.

We are utilizing our best efforts to maintain compliance with government directors and keep our patients investigators sorry personnel and employees Sig.

It does little business disruption as possible.

Oh studies across the globe or being negatively impacted by Cobra Nike and we're also seeing the effects in our 1920 preclinical study.

We're currently enrolling patients for coal were three a horse study.

However, completion of enrollment has been impacted as many sites have curtailed clinical trial operations.

In addition continued dosing for some existing enroll patients will be delayed.

We will continue to work closely with sites and investigators however.

We expect this could pandemic to delay the timing of work topline phase one be two way study results.

Everyday we learn more about the impact of this pandemic therefore.

It is difficult to estimate what type of delays.

We'll see it on clinical trial results at this time.

We are operating our business remotely.

Provide further updates as its public health crisis unfolds.

No. One returned to are you over 1923 program.

As a reminder, 1923 is currently being evaluated in a phase one be to a randomized double blind placebo controlled multiple ascending dose clinical trial.

36, pulmonary sarcoidosis patients.

In December we announced the results of a preplanned blinded interim.

Analysis of safety and Tolerability, the primary endpoint of more trial.

Interim safety data results announced were from 15 pulmonary sarcoidosis patients who had received a minimum of one dose a blinded study drug.

Study drug was observed to be generally safe well tolerated with no drug related activities.

Consistent with a phase one study results in healthy volunteers.

We were encouraged by these initial findings which provided in early indication for Nike 23 meeting the primary study endpoints of safety and Tolerability.

Im trial.

Further validation of our like 23 program came earlier this year, when we announced the collaboration and license agreement with cure for the development and commercialization of 1923, four idle days in Japan.

Under the terms of the agreement we received an $8 million upfront payment and are eligible to receive up to an additional $167 million in the aggregate.

Upon achievement of certain development regulatory and sales milestones.

As well as tiered royalties on net sales.

We structured the milestones to be weighted more on the development site.

To allow us to realize value from this partnership as a program progresses through the clinic.

Jordan as I'm eating <unk> respiratory because pharmaceutical company.

They have a strong R&D in commercial presence within existing footprint covering all of the key Eau de centers in Japan.

And then the U.S. I hope these represent an area of significant unmet need.

In Japan, and drones development and commercial capabilities will enhance our ability to improve the lives of patients would be serious conditions.

We believe this collaboration further validates 1923 <unk>.

<unk> potentially helps accelerate development in other royalties.

Global development strategy for 1923.

Be led by us.

We will remain sponsor all operational activities outside of Japan.

Including that factory.

Troy will be responsible for funding and executing all research development regulatory marketing and commercialization activities in Japan.

And has initiated development activities, including dialogue with relevant regulatory agency.

The pharmaceuticals, and medical devices agency or the P.M.D.A.

We look forward to working joined at the strategic partner for the advancement of 1923.

Well the circuit doses and other interstitial lung disease is presenting significant opportunity for novel therapeutic approaches they can ideally slower halt disease progression.

And the resulting decline in lung function.

A favorable interim safety results could allow us to advance or trial. We're just evolution preliminary evidence of the potential of 1923 of the treatment option to improve the lives of patients with Pulmicort could know says.

Our partnership with Jordan also allows us to potentially accelerate the development Bank peak 23 in other aisle de indications.

We are focused on all forms of royalties with the exception of your Patrick pulmonary fibrosis or idea, which is the least inflammatory itll be.

These inflammatory out these represent a unique area of opportunity, but there is a lack of clinically proven therapeutic options and limited development activity.

We believe these conditions combined could represent a $2 billion to $3 billion market opportunity for 1923.

Overall, we believe our value proposition to me areas. While these is significant.

Leading pulmonary experts remained very interested in or compound.

Let's shift gears and discuss our efforts to understand the role.

To various other diseases outside while these as we move forward towards developing new differentiated NRP to targeted pipeline opportunities.

I don't be too is a potentially novel therapeutic target for cancer and inflammatory disorders is expression is up very good upregulated open immune cells during inflammation, and then tumors with high tumor expression of NRP to link to worsen patient outcomes.

We continue to expand our leadership position in our Pete you see.

We currently have active scientific collaborations with leading academic institutions.

Through these collaborations.

<unk> pension therapeutic use of selectively targeting the NRP to receptor the context of specific diseases.

Our panel antibodies developed in house targeting distinct NRP to signaling domains.

For the compelling possibility of developing multiple new well differentiated product opportunities.

We have recently partnered with Dr. Arthur Mercurial as a key scientific advisor to the company.

We had previously been working with Dr. Mercurial lab at the University of Massachusetts Medical School.

Under the collaboration we explored the use of one of Orion RPQ antibodies in triple negative breast cancer models, one of the many cancers, where NRP was implicated.

Results from this collaboration are included in abstract has been accepted by the American Association for cancer research for a poster at its annual meeting.

We will keep you updated as to when it's important data can be sure.

In addition to the well established roll NRP two in mediating cancer girls metastasis and drug resistance. There number of novel application for selective NRP to antibodies, which are also actively exploring.

Earlier this week, we announced that are Hong Kong subsidiary.

Good Biopharma limited.

Together with.

The Hong Kong University of Science and technology.

Been awarded a grant of approximately $750000 to build a high throughput platform.

The development by specific antibodies.

Initially just research will focus on diseases, including cancer in which NRP to over expression is truly implicated.

It by specific antibody approach present, a further differentiated opportunity to elucidate the therapeutic potential going up you too.

And it's co receptors as drug or short targets.

The fact that NRP to interacts directly with the various co receptor molecules.

Including certain Texans integrity.

And chemo kind receptors like CCR seven.

Maybe to prime target for by specific antibodies.

They can target both receptor simultaneously and modulate the activity of the signal in complex.

The two year project is being funded by the Hong Kong governments innovation and Technology Commission under the partnership Research Foundation program.

The grant will fund approximately 50% of the total estimated project costs, but they turn contributing the remaining 50%.

We have collaborated with H. can you risky for many years.

And please great value on this long standing relationship.

Finally, our research collaboration with CSL Behring.

Leading global by Therapeutics company is progressing as planned.

As a reminder, the goal of this collaboration is to identify up to four new I into candidates from our portfolio of T. already since days IP.

We plan on providing an update on this collaboration on our next quarterly call.

Overall, we're very encouraged with our progress and look for completing our trial.

Expeditiously as possible given the current cobot 19 crisis.

Additionally, our pipeline efforts around NRP to into your nice entities biology are advancing both internally and with key strategic collaborators.

I believe we have a unique opportunity to help significant an underserved populations well at the same time, creating long term value for shareholders.

With that I'd like to turn it over to our Chief Financial Officer, Joe brought foot to review our financial results.

Thank you Sanjay total revenues were 400 422000 for the year ended December 31st 2019, consisting of collaboration revenue from my researching collaboration.

And option agreement, let's see ourselves, where we also have the opportunity to receive up to a total of 4.25 million an option piece person to taste program up to a total of 17 million. That's all for sympathies programs I think it's nice to yourself.

Research and development expenses were 14 million and 20.4 million for the years ended December 31st 2019, and 18, respectively. The decrease of 6.4 million was due primarily to a 2.8 million decrease and personnel associated cost mainly as a result of a reduction in.

Force initiated in May 2018.

A decrease of 1.7 million and costs associated with our research collaboration with the scripts Research Institute, which we terminated effective November 2018.

Hey, 1.7 million decrease in preclinical research and development expenses and a decrease of 2.7 million related to lower product manufacturing cost decreases were offset by an increase in a point 7 million related to our 1923 phase one be to a clinical trial.

General and administrative expenses were 9.4 million and 12.4 million for the years ended December 31st 2019, and 18, respectively. The decrease of 3 million was due primarily to a 2.2 million decrease from the May 2018 reduction enforce and a point.

8 million decrease in professional fees as of December 31st 2019, we had 31.1 million and cash cash equivalents and investments subsequent to the ended the year. We received an 8 million upfront payment in connection with the Kieran agreement.

Sunday mentioned under the Karen agreement, we also have the opportunity to receive 167 million an additional milestones as Kieran progressive in their development of 1923.

We also recently raised gross proceeds of 20.7 million and early 2020, and the public offering of common stock.

Which is also not reflected in our yearend cash balance.

Putting your on cash the Kieran upfront and proceeds from our public offering we estimate we will have approximately 50 million in cash cash equivalents and investments at the end of the first quarter of 2020. We believe these cash resources will comfortably allow us to reach significant potentially value creating.

Milestones during 2020.

Also our long term debt decreased from 16 million at year end 2018 to 8.7 million as of December 31st 2019, we are on target to have our loans fully repaid by November 2020.

We believe the combination of licensing revenue grants equity proceeds and continued cost saving measures over this year gives us sufficient cash to comfortably and 2020 with over 20 million in cash.

Now I'd like to turn the call back over to Sanjay before we open it up tick you anymore.

Thanks Jill.

Before opening the call for questions I want to highlight where the last one we have received several questions inquiries from investors.

And analysts about the potential utility.

1923 in treating cold in 19 patients.

That's a covert 19 outbreak continues we are learning more about this virus.

What it does to the body the damage you can pause, particularly to the lungs.

Although many people with cobot 19 have no symptoms are only mild symptoms.

Subset of patients though.

Acute respiratory distress syndrome, or ERP, yes, and may need to be admitted for intensive care.

Based on our understanding of the mechanism of action and making 23.

Including its affecting a number of acute lung injury animal models, we have demonstrated efficacy.

We believe 1923 has the potential to help Cobrand 19 patients who developed payer do yes.

We have formally approached the yesterday on the potential development of 1923.

Including clinical testing.

In this setting.

This engagement is preliminary however.

We felt it was important and let investors know.

As a company looks for ways to help.

With this public health crisis.

We will keep you informed that there are discussions with the agency progress.

We appreciate your interest and continued support and look forward providing updates in the future.

At this time, gentlemen, I'll be happy to take your questions.

As a reminder, ladies and gentlemen to ask a question you want me to press Star one on your telephone to withdraw your question press the pound.

Please stand by wildly compiled the Q any roster.

My first question will come from said by July with Roth Capital Partners.

Thanks, Bobby updates just for clarification.

All the sites when 18 23 currently on hold and Wendy you come back online do you expect them to all be up at the same time or well some of them take longer than others and well you also consider opening your site.

Sure. Thanks, Thanks for that but for the question. So just to clarify they're not all off line.

They were at various different stages or some centers that are continuing to screen.

And dose the other centers, who have said.

We're going to continue dosing, but we're going to maybe take a little pause on screening there are other centers, where if they made that decision do sort of open both of those aspects you know there being a little bit more aggressive I would anticipate it's gonna be really dependent on.

Each center.

What do they see is the burden of overnight seemed to that I never.

And basically Ria portion resources, while at the same time minimizing risk for patients. So it's going to vary I.

I think what you're going to anticipate is.

Hopefully has set or you know get a better handle on this if there are any of those that you don't have sort of been a little bit more impacted with ER center and with our site or trial they'll be able to actually you know maybe open up whereas others.

Hopefully, we'll have just kind of Seattle is progressing well so there's maybe some variation there.

Thank you and then just another follow up here. The grant that was awarded to Penn do you and its T. U S. T. A with background in here now do you anticipate in the salaries net efforts to develop but then you're telling antibodies and any additional comments on you know indications or anything.

Based on what you know I know preclinically.

Sure. So we we had done nice job developing kind of in house, nor Poland antibodies to specific sub domain, so they're not be too.

This grant specifically looking at another angle here and that is a bi specific platform.

A bi specific platform will allow us to potentially create and bodies that not only targets under appeal to a receptor. But also those are Jason important receptors that or proximal because they're going to when those include things like collections integrity.

And.

Some of those other co located with subscription you think about those pathways now you have an additional mechanism could potentially agonize multiple pathways. So.

I like that HQ near the project would they get your tea and what's going on all calling is a bi specific approach. We currently still have all our in house antibody, a because might be nice way for us to agree with you another candidate or that you know targets multiple pathways at once.

Thank you and then just last question here about a CR. We do you know that's them presentations will be virtual they wanted to know if we can anticipate theme you always is.

Yes, we haven't gotten.

Details yet from a CR well, we suspect they are prioritizing clinical level data clinical labs trucks to be presented a more so on line next month.

But we don't know yet.

Right now we're planning of course I have this poster displayed at their annual meeting, which I think is being rescheduled for the fall or should we be asked to present electronic poster or anything online in April.

Certainly, let you know right away.

Thank you.

Thank you and our next question comes from Joe Pan thickness with H.C. Wainwright.

Hi Sunday in Joel Thanks, taking the question Hope you're all hope you and your families are well just wanted to start with the clinical update you gave obviously with regard to the site's update on potential impacts from Cove, It which certainly is unfortunate the one part I wanted to ask about if I heard you correctly I think you said it's also.

Potentially impacting those patients already being dose so I guess I get wanted to get a sense about you know so are there some patients a that might not get their full regimens and and a lot of this I'm sure you don't know the answer to because the FDA still trying to figure it out but you know if regimens are being impacted you know how it might impact.

You know statistical looks or how would you know how you can apply the data to the overall plan at the study even though it's early et cetera.

That's right. So I think that's an excellent question.

We're gonna have to see how.

Those patients who.

Perhaps already enrolled how the p. guys want to handle these folks you could have some individuals were delaying a monthly dose and could be delayed.

For two to four weeks in which case it would be a relative period, there that would be off schedule I think the after youve acknowledged map and understanding that yeah. This is something that a lot of sponsors are dealing with a same time you also may have a patient but towards the end.

They've already gotten hotdogs is a weird to determine dizzy useful for them to get that six those so it's really going to be dependent on on the P.I. I and the patient we have another patients that want to continue but the centers.

Well I want to be a little bit more careful about a them coming back in flip side. We also have some patients that might have some concerns but coming back in so that's something that we're gonna have to monitor.

You can expect to see that some patients who had previously been enrolled potentially could have a skip dose others may could have they don't studies slightly off schedule nimble look to kind of come back on schedule. When a highlight here that we had a pretty long acting PK with our drug.

And I would say even patients if they haven't been dosed for five or or six weeks, even we still expect to see PD effects are based on the PK of our drug.

So we have that I've kind of helping us out here during this period, but again if to determine how long these.

Delays are.

Something that we're working closely with our centers at this time.

Sure no totally understandable. Thanks for that and then just moving to the a the recent announcement out of Hong Kong very exciting you know that the bi specific programs moving forward. So just curious what makes sense a clinic.

Not clinically I'm, sorry, scientifically with regard to what might be on the other side of the bi specific are you looking to target I'm sort of more classical targeting like anti CD three or you know the checkpoint types of components or are you looking it also novel things are you just pretty much open to all options at this point.

I think we have to look you know what the literature and what the evidence.

Already indicates and.

I think the important thing here is.

Nor appealing to is known to co located with things like the plexus pathway or the integrity pathway.

Or CCR seven and these are these are important pathways that have been Minden targeted for example cancer another inflammatory diseases because the advantage we have no real potential with a bi specific platform to manipulate both pathways that wants not only did repellent pathway, but also some.

Those are the other co located receptors.

So I think this is something that we still broadly are looking at cancer in inflammation, but now there's another avenue through this ability to create a bi specific platform.

Can you be too you know potentially more I'd candidates from our antibody program.

Sure sure I'd mentioned that in your prepared comments I appreciate that and then maybe a housekeeping question for Joel If you don't mind I just wanted to see with regard to the million dollar upfront payment, how you're gonna be accounting for that is there going to be a a chunk that you'll recognize immediately and then amortize. Some are just wanted to get a sense.

Yes, we there are a couple obligation.

Nations under the licensing agreement that we will be carving out revenue for that we are just starting our analysis of that and we'll have to have.

Evaluation, Dan So I can't say exactly how much will be recognized and how much well well be deferred until those obligations are fulfilled, but I would say the majority of it probably will be recognized a.

The majority should be a fine because all life that's question.

Understood. Okay. Thank you guys and stay well.

Okay. Thank you.

Thank you and our next question will come from Hartaj Singh with Oppenheimer.

Oh, great, it's actually pretty empty and and the commentary and I'm glad to everybody sees during these times. It's got a few questions on getting one is you know so thanks, Ron So that gave a lot of color with Joes question. What cohort are you at sort of just to get.

A rough idea are you sort of that that second cohort of the third quarter. That's your dosing up a in terms of where are you really don't you would deal with the actual cohorts.

We are in our flat.

So these are really going up the final patients in our study.

Looking to complete enrollment.

Got it.

The other question here I know that you know some of these patients were one of the things that you were looking to let's try to demonstrate that instead were tip my children, which I think if that can be done a you know getting down to five milligrams makita, Dan Prednisone I mean, that's a really great initial kind of surrogate endpoint, how did you handle that somebody's.

Piece, you probably already how does steroids.

Cheaper some of them are going from the keeping process. So how would that be handled as you're going through this sort of oh through this time.

Yes, I think that the tapering as a reminder curve is kind of in the first 50 days of Ah from being dose Oh, So we were.

Attempting to get everyone down to five milligrams and the first eight weeks of the trial.

So.

Certainly if anyone's on that two per schedule that can still occur if they've received a dose I think the important thing here is if you.

Don't read dose or or have another dose of 1923, that's where I think the decision has to be made clinically with the investigator around monitoring their costs and shortness of breath.

So it's still very much a real world assessment using those.

Two validated symptom index was that we have and titration is basically done based on the muster cough index and the transitional Dysmenorrhea index.

So that's still going to occur the key component here is.

Really where they are I suppose in our trial or the earlier they are in the trial, that's the active tight attrition and forced Terry deeper.

Once you get past weekend, when we gave that's where much of a real world component kicks in so that's still going to occur I think any important thing here is going be working with the p. eyes to determine how they want to.

Managed dosing here of our drug dirt. During this this <unk> well, we hope is a short short term of pause at some of our centers.

Got it and then I you know I was looking now on on the Oh contrasts I've got I can give 17 centers recruiting I believe you want to get 34 patients on the study to just roughly two patients per person or do you have some sort of flex built into the protocol, whereby let's say for sake of argument, one or two or three centers could dot.

The crude any patients or.

You know you could still maybe add additional patients two centers that can work that our you know in states, where you know there there's lots of <unk> shutdown, well and then you or any kind of sex Act I felt it was a critical.

Sure. Good question. So we wrote the protocol without a patient recruitment cap at any of our centers I think that's actually working toward advantage right now because there are several centers that are still moving forward. So there was then there was not a cap at any of our centers that he could only enrolled 234 patients. It is.

Competitive enrollment so this allows for us to.

If you will see some centers you picked up some of this last year.

We're trying to get 36 patients into our study.

And I think the 17th centers allow US you know the ability to hopefully even.

Yes, if this is a longer term delay a whether some of the oh delays you're in a sense that.

Different regions are going to have different level incidence of covert 19 a impacts.

Yeah, no that got that helps a one and then sorry, just one quick one quick update on that is that how far away from you from getting all the 34 page.

[noise] helpful far away from from completing enrollment weary everybody wants something putting yeah.

Yeah, I mean weren't really in the final stages here.

Couple of patients that's still need to.

You know be enrolled so I would say that if we were approaching the.

Final stages of completing enrollment here before hitting this delay.

And I would anticipate that once we you know get started again, a little bit more actively all of our centers I believe we'll be able to complete enrollment.

Really short amount of time the issue is gonna be let's just see how long a this this health crisis really impacts you know that the more of the trial operations.

Yep.

Last question on this which is that you know if he has already put our guidance two companies I think I mean, it's up fairly a thin document on on clinical trials that are ongoing Oh, you know aside from safety.

Oh assessment or is there enough flexibility built into your protocol, whereby even if it gets sort of pushed back Oh, and let's say you know some these things happened like you said some patients go longer if you maybe miss a dose you've got you might not get patients from one or two centers et cetera, but even if the read out gets pushed back would you still.

Feel comfortable with there being enough you know power statistical data, what didnt, even the study to be able to get a good insight.

I mean, certainly from a safety perspective, we have more than adequate patients to make a safety and Tolerability assessment and we are testing multiple ascending doses here.

If it was just to safety only trial you have enough patients do have started to really look and and have a view on whether or not making 22 safe and tolerated in these patients.

With regards to an activity signal.

I think we had built this out so that.

It's not necessarily powered for phase three level statistical significance. However, I believe it will still be able to detect trends of activity that efficacy in our trial I'm looking at our key endpoints all around steroids faring you know looking at pulmonary function testing.

And then also you know some of the symptom scores as well that's scans as well. So these are all things that I think over time, we'll still be able to assess and determine.

Whether or not we see you know signal of activity here I think you had this occurred you know towards the beginning of the trial you to be lumpy detrimental as he said.

Here as we're trying to complete enrollment finish up here you know, we think we still feel feel good about rebalance and being able to make these calls up once we actually get to that point.

Yeah, no that dynamics, all our sense, we had Scott Gottlieb's call couple of weeks. Good. He said after he has already an intensive discussions about how to work with companies to assist on this I assume that these will be thing well that you know I'm not a their age old working them also last question, which I yeah on the Oh, what you had mentioned the koby 19 and patients that are so.

Nothing on the yard, yes, I do remember thinking to myself that you had some you know some some animal models that seem to go down that pop if you weren't if the regulators were to give you a thumbs up in this regard I know you know we don't want on that's really build up expectations, but how do you see sort of next steps you know would be a one or two center trials would you need more.

Would you have to work with NIH rainy I'd you know at some other companies are doing what would be sort of be you know the next steps that we could see kind of coming out of this this was the progress more and thank you again.

Sure sure so and I think the important point there. It is early it's six preliminary too to get into some of his.

Dialogue. It was important to first you know listen to what the FDA say here.

I think some of the things that you point out around.

Some of the evidence we have an acute lung injury models.

That is compelling.

Demonstrate that we can down regulate cytokine and many of the same side of kinds are involved in the inflammatory damage that you see in some of these early or D.S. case reports.

Given the fact that we have a a good safety margin a good good safety data from phase one data in fact, we also have at existing high and D. These are all things working to our advantage. In addition, we had a quick drug supply that if we wanted to do something you know kind of a compassionate type model these sorts of things.

You know, we're looking to get some feedback from the FDA as far as you know design of that nature things a little bit early start to talk about that typically if you just look at what the other companies some of them are doing.

They're looking for a signal in 2040 60 patients first and then determining whether or not you want to move into a larger keys control type of of studies here to really demonstrate efficacy. So.

I would just say right now it's it's exploratory it's early there is a rationale certainly from the evidence that we already have.

And we have 'cause it he said formally engaged the regulator and you know pending some feedback there I think going for a better idea of next steps.

Great. Thank you all from the questions.

Thank you speakers I'm showing no further questions at this time I will now turn the call back over to management for any further right.

Well. Thanks, Thanks, everyone for your interest and questions.

From all the analysts as they said well look forward to providing updates in the near future and thank you for your support.

Ladies and gentlemen. This concludes today's conference call. Thank you for your participation. You may now disconnect didn't have a wonderful day [noise].

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