Mesoblast Limited
Q1 2018 Earnings Call Transcript

Published: 15 Nov 2017

[Operator:]

Hello, and welcome to Mesoblast's Financial Update and Operational Highlights Webcast for the 3 months ended September 30, 2017. An announcement and slide presentation have been lodged with the ASX. These materials will also be available on the Investor page at www.mesoblast.com. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. As a reminder, this conference call is being recorded. Before we begin, let me remind you that during today's conference call, the company will be making forward-looking statements that represent the company's intentions, expectations or beliefs concerning future events. These forward-looking statements are qualified by important factors set forth in today's announcement and the company's filings with the SEC, which could cause actual results to differ materially from those in such forward-looking statements. In addition, any forward-looking statements represent the company's views only as of the date of this webcast and should not be relied upon as representing the company's views of any subsequent date. The company specifically disclaims any obligations to update such statements. With that, I would now like to turn the call over to Dr. Silviu Itescu, Chief Executive of Mesoblast. Thank you. Please go ahead

[Silviu Itescu:]

Thank you. Good morning, everybody. I'm very pleased to be presenting today the first quarter financial results and operational highlights. If you could turn to Page 5 of the presentation please, we have a disruptive cellular medicine platform that is based on use of monoclonal antibodies to provide a homogeneous, well-characterized and highly potent cellular population. Slide 6, we're very pleased with our scalable industrialized manufacturing capabilities using our proprietary media formulations, which provide for product delineation and enable commercial-scale yields. If you turn to Slide 7, you can see our broad and deep pipeline, and we're delighted with the status of our maturing late-stage product candidates. Each of these will be addressed in detail. On Slide 8, we believe that our portfolio of advanced product candidates is very well positioned to achieve accelerated approvals under the recently enacted 21st Century Cures Act. Slide 9 broadly covers the intellectual property position. We have an extensive portfolio, which covers compositions of matter, manufacturing and therapeutic applications of potent immunoselected mesenchymal lineage precursors and their progeny, and their IP portfolio of approximately 800 patents granted and in application across all the major jurisdictions globally. Now let's turn to our diverse pipeline of cellular medicines. Our first product candidate is MSC-100-IV for steroid refractory acute graft versus host disease. Slide 12 speaks to the market opportunity for this product candidate. Over 30,000 allogeneic bone marrow transplants are performed globally. We are addressing the number one complication of this procedure, which occurs in about 50% of patients and has a potentially devastating complication of acute graft versus host disease. Already our licensee, JCR Pharmaceuticals, has launched the product in Japan, which has received full approval and is generating sales today. We will focus on the U.S. market in the next few slides. Before I hand over to our Chief Medical Officer, Dr. Donna Skerrett, who will update you on this program, let me briefly take you through our commercial strategy for this exciting product candidate, Slide 13. Firstly, we will be targeting the pediatric market which is a – with steroid-refractory graft versus host disease. This patient population has already demonstrated extensive safety and efficacy data using our therapy. There's a high economic burden and we've already received fast-track designation for MSC-100-IV, providing a pathway for priority review and accelerated approval. In addition, post completion of the program, we will seek to extend the label into adults who have the highest risk for mortality

[Donna Skerrett:]

Thank you, Silviu. So as you've heard graft versus host disease is a serious and life-threatening complication of allogeneic stem cell transplantation and it's really a devastating outcome for the procedure, which is really meant to save someone's life particularly someone who's struggling from cancer or another serious illness. And in my personal experience, I've seen these patients as a hematologist and also now as Chief Medical Officer of this company, working with sites on managing these patients, and so it is quite challenging and I'm thrilled that we're able to share with sites and with you our prior experience with our product, MSC-100-IV, in this indication and our promise of moving towards a licensure goal for this indication. As you've heard, we have extensive experience with this indication. The bulk of the clinical experience comes through an Expanded Access Program which has evaluated MSC-100 in 241 pediatric patients who underwent stem cell transplantation. This program was active in approximately 50 sites across the globe and evaluated children ages 2 months to 17 years who had serious GVHD, Grades B to D, involving the skin as well as many patients' sexual organs. All the patients had failed to respond to steroids, and importantly, many of the patients also failed to respond to multiple prior agents and they were truly salvaged patients. If you look to Slide 14, please, we show the early indicator of outcome which is the overall response rate, which is assessed at day 28 in patients. And at day 28, we're able to evaluate responses in organs to determine response by grade as well as in the individual organs. And what we're showing here is that the overall response rates are approximately 65% and that responses were observed for patients across all GVHD grades and did not differ by baseline organ involvement. On the next slide, 15, we're showing the correlation of day 28 overall response with day 100 survival. So if a patient is a responder at day 28, that individual has an 82% probability of survival at day 100, and that compares to 39% of those patients who are -- in those patients who are nonresponders. So clearly, the response at day 28 is an important indicator of subsequent survival. Now if we go to Slide 16, I mentioned that many of the patients -- in fact, most of those patients have failed multiple lines of therapy. But we also want to get an idea of what responses look like in patients who had only received steroids and then received MSC-100 treatment course. And here, we're showing 2 groups of patients

[Silviu Itescu:]

Great. Thank you very much, Donna. Moving on to the next program, and keeping on with the theme, where we're targeting the most severe subset of patients in bad diseases

[Paul Hodgkinson:]

Thanks very much, Silviu. Let's look at Slide 42. Firstly, our cash position. So as you can see, we continue to manage our cash efficiently. So the operating cash flows remain pretty constant over -- in comparison to prior year, were $20.3 million for the quarter. If we actually look at the cash on hand position, we're now standing at $62.9 million at the end of September, having obviously just concluded the successful September entitlement offer of 36 million shares. So $62.9 million in cash. Let's have a look at the profit and loss account in addition to that. So Slide 43. In terms of the revenue line, we can see a promising start to the TEMCELL asset which was launched, I'll remind you, in February 16. It continues to grow over time, and this is our share of the royalty in coming -- coming in. And in addition to that, in this particular quarter, we received a milestone on sales. Again, on Slide 44, looking at the cash-related expenses of research and development, manufacturing and management, you can see that our R&D expenses did increase by $1.4 million or 10%. This is no surprise as we have the CHF development of the program, and we're continuing to fund CHF GVHD and disc. However, as foreshadowed in earlier meetings, we have offset the increased cost within R&D with the savings within manufacturing, which decreased by $2.4 million. And our management and admin costs, again, have continued to reduce as we contain items such as rent and IT costs in the prior period and we're now seeing those full year effects translate through. So with that, I will now hand back to Silviu who'll conclude on the milestones coming for the future quarters.

[Silviu Itescu:]

Thank you, Paul. We're very excited about the upcoming milestones and catalysts for the company. There's some really important milestones that I think you can all look forward to. With respect to MSC-100-IV for pediatric graft versus host disease, we expect to complete enrollment, as you heard from Donna, towards the end of this quarter, with a day 28 primary endpoint data readout sometime during Q1 and the day 100 survival data by Q2 of next year. We're very excited about this program. It will provide us with the ability to have that first launchable product into the U.S. market. MPC-150-IM for advanced and early -- and end-stage heart failure is also in a very pivotal position. The Phase IIb trial in Class IV end-stage heart failure patients has a 6-month primary endpoint readout towards the end of Q1 next year. The full trial data readout is by Q3. Given the high mortality in this patient population, a positive result will be very meaningful. The Phase III trial for Class II and III heart failure targets completion of enrollment by the end of next year, and we would hope that the 2 data sets would bridge each other. Our product MPC-06-ID for chronic low back pain is -- the Phase III trial is expected to complete enrollment towards the end of this year or very early in the new year. And again, given the magnitude of the opioid epidemic, we expect to be able to update the market on how this program is going in the short term. And finally, of course, we continue in advanced discussions with multiple potential partners across these and other product indications in development. Thank you and we would welcome questions.

[Operator:]

Thank you. [Operator Instructions] Your first question is from Mark Breidenbach from Oppenheimer. Go ahead, thanks.

[Mark Breidenbach:]

Hi good morning guys. First question might be one for Donna. We were just wondering with regard to the graft versus host disease trial, if you have a sense for what the FDA is doing as an approvable 28-day response rate and 100-day survival versus the current standard of care. And also is the trial enrolling pediatric patients who are getting the cell therapy immediately after steroids? Or are there opportunities for intervening therapies between steroids and the cell therapy?

[Donna Skerrett:]

Hi, Mark. Thanks for your questions. So your first question regarding the FDA, sounds like the expectations with the FDA in terms of defining success, we did negotiate with the FDA on the assumptions we used to design this trial. And the hypothesis we generated that would provide a comparative expected response from a hypothetical control population. So we have reached agreement with the FDA on what success would look like in the trial. So I would say the answer to your question is yes, we do have a mutual understanding of what would define success for this study. And your second question regarding the patient population, in this trial, patients are going onto this trial after having failed steroids and not having received any other agents. And that does differ a bit from our prior experience where we did patients who treat -- received multiple other agents but we do have experience with the steroid-only population and it's really allowing us to have a very clear idea early on in this disease of where the cell therapy would be utilized and would be mostly effective for this devastating condition.

[Mark Breidenbach:]

Okay. One other question on the -- actually, the RA program, on the data that was recently presented at the ACR conference. Would you say there are any implications for the possibility of re-dosing given that we saw some HLA sensitization and change in donor-specific antibody status?

[Silviu Itescu:]

Thanks, Mark. Look -- well, the data suggests that disease is not cured by the 2 million per kilogram initial dose. So the data suggested that perhaps somewhere between 39 to 52 weeks, a repeat dose could be warranted going forward. Having said that, I think a higher induction dose, 3 or 4 million cells per kilogram, might not only give us a higher remission rate upfront but might give us greater durability. I think that remains to be evaluated. Your question around HLA sensitization, we saw some patients develop anti-HLA antibodies in this group. We have seen a small number of patients develop anti-HLA antibodies in the heart failure population previously. Other studies that we've performed such as disc, we did not see anti-HLA antibodies. Nevertheless, when you do see certain anti-HLA antibodies that have not been associated with any kind of adverse events, nor with any differences in clinical outcomes, we have experience now with several thousand doses in GVHD-treated patients where the cells were repeat-dosed every couple of weeks, and not only do we not see any problems with the repeat dosing but we do not see any drop in efficacy or any evidence of, I guess, neutralization, you might say, from allo antibodies. So I think the short answer is we don't believe that sensitized patients would have any issues with repeat dosing.

[Mark Breidenbach:]

Okay, that's actually very helpful. And then just a quick final one for me. I think previously, with regard to the chronic lower back pain trial, you had been guiding enrollment would be complete by the end of this year. Looks like it's pushed back a little bit now. Are there any particular reasons that it's taking longer than expected?

[Silviu Itescu:]

Look, I think if it's pushed back, it will be pushed back by a couple of weeks. Yes, really immaterial. But whether it's this side of Christmas or whether it's a month later, I think, is the only difference.

[Mark Breidenbach:]

Okay. Fair enough. Alright. Thanks for taking the question.

[Silviu Itescu:]

Thanks Mark.

[Operator:]

Thank you. The next question is from Elemer Piros from Cantor. Go ahead. Thank you.

[Elemer Piros:]

Good afternoon or good morning Silviu. Maybe if I could follow up on the RA durability question. So would you undertake the next trial on your own or with the RA program and show perhaps a higher induction response with the higher doses? Or would you prefer to have a partner take care of that?

[Silviu Itescu:]

We have begun discussions with several potential partners now that we've got a full data set to talk to. I think the RA program is -- it's not just about clinical development. Ultimately, it will be about the ability to commercialize and distribute the product, and that will require a substantial effort. So ultimately, I think there is little doubt that we would want to do that together with an appropriate commercialization partner. In the short term, we're very focused on bringing in partners into our Phase III assets which are closest to commercialization because they will drive the greatest value proposition for the company. And again, until we close several of those outcomes, our resources will be fully focused on those 3 -- Phase III assets. But of course, we're pursuing partnering opportunities in parallel across all these fields.

[Elemer Piros:]

And maybe a follow-up question to Donna. Donna, now that you have an agreement with the FDA on what would be a respectable benchmark versus historical controls, is a 55% response rate at 28 days in that ballpark in the GVHD trial?

[Donna Skerrett:]

Well, we haven't said what that benchmark would be, but I will tell you that it is something that is very consistent with what we have observed all along in our program.

[Elemer Piros:]

Okay. And maybe coming back to Silviu. Silviu, the NIH now expects the full data set from the stage 4 heart failure trial in the third quarter. Any chance that any top line readouts would be available sooner? Or they just want to go for the full Monty?

[Silviu Itescu:]

No, no, no. I think I was pretty clear that the primary endpoint will be available end of Q1. the full secondary endpoints -- survival, hospitalization and quality of life measurements -- will require a full 12 months of -- to complete. So we expect the primary endpoint to be available at the end of Q1.

[Elemer Piros:]

Okay. And maybe one question for Paul. Paul, the $63 million that is -- was available at the end of September 30, all else being equal, what sort of runway would that provide at the moment?

[Paul Hodgkinson:]

Yes. You've seen in the operational cash flows that we've been consistently running at just north of $20 million. So my view is there's a 9-month runway in that, which we'll, obviously, be able to extend through a conclusion of a partnering deal which has a double benefit of an upfront supplement in the cash reserve, and we expect partners to pick up the clinical development costs going forward, so it lowers the burn further.

[Elemer Piros:]

Thank you very much. That was all from me. Thank you.

[Operator:]

Thank you. The next question is from Kevin DeGeeter from Ladenburg. Go ahead. Thank you.

[Kevin DeGeeter:]

Yes. Thank you for taking my call and the question. Donna and Silviu, can you just comment to – you mentioned chronic graft versus host disease, there's an opportunity to expand that program. Any thoughts with regard to how we can extend some of the learning from the acute graft versus host disease to better understand potential dose level and dose regimen for that patient population? And when might we learn more with regard to a development program on that potential line extension?

[Silviu Itescu:]

Maybe I can have a first shot at this, Donna, then please complement what I'd like to add. Kevin, those are all terrific questions. What's interesting is that the mechanism of action, by which ourselves are likely to impact acute graft versus host disease and chronic graft versus host disease are likely to be overlapping but not identical, and that's because chronic graft versus host disease is thought to have more of a mechanism driven by B-cells such as other autoimmune diseases do, whereas graft versus host disease is driven much more by T-cells. And so that, again, speaks to the beauty and the strength of our cell therapy. It can target multiple arms of the immune system. And chronic graft versus host disease, whilst often preceded by acute, nonetheless, is a separate disease partially overlapping but really in large numbers of patients who may have never have had acute graft versus host disease. And there's recent precedent of a competitor technology that has received fast track approval on the basis of as few as 40 to 50 patients, open label, with chronic graft versus host disease in adults. So there is a precedent. That's how severe the unmet medical need is. And given that we believe that we can target the underlying mechanism of action with a product that is otherwise very safe, this becomes a very important potential indication to both extend the label and create pipeline diversification.

[Kevin DeGeeter:]

Okay. Great. That's actually extremely helpful. And then just maybe with regards -- just a strategic status update with regard to commercialization of graft versus host disease, are you still prioritizing partnering for the U.S. and other major markets for graft versus host disease? Or has your thinking perhaps evolved as this data matures and the thought process with regard to the chronic graft versus host disease clarifies?

[Silviu Itescu:]

As you heard from Donna, we are imminently completing enrollment in this pediatric trial. That -- with the positive readout, it creates a real value inflection point, with only a 28-day readout being necessary to know that we have a successful Phase III and a launchable product. The footprint for the pediatric launch is very, very small. You know that, really, a handful of MS cells would be needed to meet the needs of the product launch in the U.S. More importantly, to our way of seeing things is a potential partnership with a strategic company that shares our vision of the strategy of the product which is use the pediatric launch to establish a beachhead in the U.S. transplant market, then extend the label to the adults with the same disease, which is 4x the population size of the pediatric and label-extend and broaden to the chronic GVHD population. That would be the basis for a commercial partnership, that sort of alignment of strategy.

[Kevin DeGeeter:]

Perfect. Thank you for taking my questions.

[Operator:]

Thank you. The next question is from Ed Tenthoff from Piper Jaffray. Go ahead please.

[Ed Tenthoff:]

Great. Thank you very much. So a lot of good questions, great update. If you could, assuming we get some positive data from the Class IV study next year, is this something where you would be able to file on that for the more advanced patients and then potentially do a supplemental BLA upon the completion of the Class II/III study? It seems to me like there's an opportunity to maybe hit the market fast and almost like you just established a beachhead with respect to the heart failure and cardiovascular market. So what's sort of the strategy from a regulatory standpoint if that one reads out positive?

[Silviu Itescu:]

I think, Ed, you're very, very much, as usual, spot on with the general regulatory strategy. I think clearly, it all depends on the strength of the data. I think this is very much a population that has few alternatives. A mortality that resembles many cancers, 50% mortality. Even with an LVAD in place, the mortality is still 30% to 40% in 12 months with some very bad morbidity and complication rates. I think that if we see evidence of a survival benefit or reduction in major complications, I think the agency -- we will be having some very important discussions with the agency around a potential early launch of this product. And how to then bridge the data from this trial to the larger Class III heart failure population, obviously, will require additional discussions, but I think that's exactly how we're building a step wise progression to a cardiovascular launch.

[Ed Tenthoff:]

It makes a lot of sense. And then maybe a quick follow-up, if I may, just on the disc product. If you could remind me what the time frame is on primary endpoint. Is that something where we could get Phase III data in early '19?

[Silviu Itescu:]

So again, I would look at this program in 2 ways. The most traditional and conservative approach is you're looking at a product that looks at durable composite endpoints of 12 and 24 months as per the device guidance in the back pain surgical community. On the other hand, I think, given the opioid epidemic and the mandate to accelerate development of products that are opioid-sparing, given that 50% of opioid prescriptions is in this very target population, we will be looking at -- and under -- particularly under the 20th Century Cures Act, at ways by which we can generate early or intermediate or interim data sets for discussion with the agency.

[Ed Tenthoff:]

Perfect. That makes a lot of sense. I am looking forward to hearing more about that.

[Silviu Itescu:]

Thank you, Ed.

[Operator:]

Thank you. The next question is from Alethia Young from Crédit Suisse.

[Derek Yuan:]

This is Derek Yuan for Alethia. Thank you for taking my questions. My first one is for the GVHD program for the adult population. I mean, do you have to see a positive pediatric data before thinking about that, like, population? Or they're more like a separate patient population? And I mean, for either scenario, could you tell us what kind of data or trial FDA wants to see for adult? And I have a follow-up.

[Silviu Itescu:]

I'll ask Donna to expand on this answer. But I think we have had discussions with the agency, whereby the adult trial design will leverage the pediatric data in a way that will allow us to move seamlessly from a pediatric positive result into a high risk adult population. And the 2 data sets would -- the pediatric data set would underpin what we're doing in the adult program. But in addition to that, the adult program would be buttressed by the extensive data previously generated in an earlier Phase III trial in adults. So with those data, with the signal from those data and the pediatric accelerated approval, the 2 will come together into a relatively short adult study. Donna, can you speak to the signals that were previously seen in the adult subset population with the product?

[Donna Skerrett:]

Certainty. So it's clear from the prior randomized controlled trial that the adult patients with gut and liver involvement had the highest responses to our sales compared to the controlled population. And so that is indeed the target population that we will focus on for the adult study and label extension. And those are the sickest patients with acute graft versus host disease. They are most likely predicted to fail to respond to steroids and therefore high risk and the highest risk of mortality.

[Derek Yuan:]

Okay. Got it. For the back pain trial, I'm wondering for the Phase II study that you have, like, 3-year data already. And maybe could you talk about, like, did you do other kinds of management besides pain reduction? For example, like imaging to look at the disc or any other, like, function or assessment that can give you confidence on the regenerative nature of the drug?

[Silviu Itescu:]

Yes, terrific question. Terrific question. So first of all, with guidance from the FDA, looking at the composite endpoint of both pain and function through specified measurements, when you look at those data, you see separation between the placebo groups and the treatment arms somewhere between 1 and 3 months. You see peak effect between 6 to 12 months. You see a durable effect by 24 months, and then you start to see some waning but still significant benefits through 36 months. The fact that you see that kind of separation between the treatment and placebo groups speaks very much to the biologic nature of the response and, likely, the restorative underlying mechanism of action. We know that what these cells do is that they do a 2-step outcome. They respond to that inflammatory stimulus in the disc by releasing anti-inflammatory factors and they release factors that result in anabolic repair of the disc proteoglycan matrix by stimulating the local cells. That, whilst it's a restorative and regenerative process, is not curative, right? You're not replacing the disc. And so the real question within the Phase II trial -- and by the way, we've seen all of that pathologically and mechanistically in large animal models that have been published. And the real question is since it's not -- we're not replacing and curing the process, is how long does this process last? When do you potentially need to re-dose? And so we've shown you clinically a durable effect in pain and function. On the basis of that, we think that, potentially, the effect lasts at least through 24 months. But yes, we have seen imaging data and we've correlated radiographic data of the intervertebral disc height with responder status, meaning if you're a responder with pain and function versus if you're a non-responder in pain and function. Those patients who were successful responders demonstrated radiographic increase in disc height through 12 months, which is highly suggestive of an underlying restorative process that will guide us in our future studies both in terms of obtaining additional data using imaging in the Phase III as well as potentially guiding when we may want to read those.

[Derek Yuan:]

Got it. That's helpful. And last one, just want to clarify for the disc program, like, primary composite endpoint, which is 12 and 24 months. Will you, like, reveal 12 months data when you have that, or you have to report it at 24 months?

[Silviu Itescu:]

We have in place an approach that will review interim data from this program, and those are discussions that are ongoing with the agency.

[Derek Yuan:]

Okay. Thank you.

[Operator:]

Thank you. The next question is from Tanu Jain from Bell Potter Securities. Go ahead. Thank you.

[Tanu Jain:]

Hi Silviu and Donna. Thanks for taking my question. Donna probably one for you regarding GVHD, given the vast experience you've had with the Expanded Access Program in GVHD, could you perhaps give us some sense of what kind of similar or parallel trend you might have seen in the current pediatric trials so far?

[Donna Skerrett:]

Certainly. Thanks for your question. So I mentioned that we conducted an interim analysis and we're about midway through enrollment in this program, and we designed that interim analysis so that it would be informative and give us an idea about our ability to achieve the primary endpoint in -- when enrollment is complete. And that was based on the types of responses we've seen overall in this program through the EAP program. And overall, we saw, and I showed earlier, a response rate of 65%, which varied a little bit by prior exposure, but that is consistently the response rate that we've seen. So if that gives some sort of confidence to others, and it certainly does to me, about where we expect to be for the program, that's what we're aiming for. Our experience has been in that range, if not higher, from some looks.

[Tanu Jain:]

Right. So is it safe to assume that you're seeing that kind of trend at the interim futility point?

[Donna Skerrett:]

The interim analysis that we conducted assured us that we were in the range where we expected to be.

[Tanu Jain:]

Okay, great. Thanks so much.

[Operator:]

Thank you. [Operator Instructions] The next question is from Jason McCarthy, Maxim Group. Go ahead. Thank you.

[Jason McCarthy:]

Hi all, thanks for taking the question, a lot of great questions already – a lot of mine have been answered. Silviu, perhaps you could talk a little bit about the RA study. I know the 52-week data was just recently presented. What are the company's plans around moving to a Phase III program? And how do you position a stem cell therapy versus TNF therapies, especially since they're going biosimilar in the RA market?

[Silviu Itescu:]

Yes. Thank you. Good questions. I think the issue around biosimilar is a very important one, right? So we specifically have targeted the TNF refractory population for 2 reasons. Number one, we believe that our cells preferentially work when there is severe disease on hand, meaning that if you've got a lot of inflammation, a lot of cytokine -- cytokines in the bloodstream, those cytokines serve to activate our cells and that's where our cells are most effective. So the right time to intervene, we believe, is in a patient population that has not responded well to an anti-TNF agent, still has sufficient inflammation, and that's where our cells potentially can be used as a first-line therapy in TNF refractory patients. That's because of their likely potency and effectiveness. In addition to that, from a strategic point of view, you're absolutely right. Given that there's going to be a surge in biosimilars over the next few years, there will be an increased use of TNF agents more broadly, and that will create an even greater requirement for the TNF refractory population. So we're positioning our treatment right in that segment where you'll experience growth but where the unmet need will remain the largest. With respect to how we'll move our program into Phase III, I think it's pretty clear to us that there are 2 questions that require answering. Number one is we haven't achieved the maximum effective dose yet. That's pretty clear. And given that there's no safety concern, we need to go higher as induction therapy. The primary objective of all rheumatologists in this field are to try to induce early remission in these RA patients. We've seen some patients achieving remission early and we've seen a substantial number of patients achieving low disease activity scores early and for durable periods through 39 weeks. Our primary objective is to find the highest safe and effective dose that maximizes remission and low disease activity. And that will be the objective of the next, let's say, Phase IIb program which would be either when we have substantially increased resourcing or when we have a partner on board. The objective would be to define the right treatment regimen as we move the program into Phase III.

[Operator:]

Thank you. The next question is from Dennis Hulme from Edison. Go ahead. Thank you.

[Dennis Hulme:]

Hi, good morning. Thanks for taking my question. Returning to the chronic back pain program, can you talk a little more about how the current composite primary endpoint works? For example, do patients need to achieve those improvements in both pain and function at both 12 and 24 weeks to be considered responders? Or is the -- or that's done differently?

[Silviu Itescu:]

No, no, that's -- no, that's the right -- this has to be a contiguous response at 2 time points for both thresholds of pain and function. So very high bar, right?

[Dennis Hulme:]

Thank you for clarifying that. Yes, it is a very high bar.

[Operator:]

That does bring us to the end of today's call. I will now hand back to Dr. Itescu for closing remarks.

[Silviu Itescu:]

Well, I want to thank everybody for the insightful questions, and thank you for sharing this time with us. Good morning.

[Operator:]

Thank you. That does conclude our conference for today. Thank you all for participating. You may now disconnect.