Navidea Biopharmaceuticals, Inc.
Q3 2017 Earnings Call Transcript

Published: 9 Nov 2017

[Operator:]

Good day and welcome to the Navidea Biopharmaceuticals analyst conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Jed Latkin, Chief Financial and Chief Operating Officer. Please go ahead, sir.

[Jed Latkin:]

Thank you, Emily and welcome, everyone, to this morning's earnings conference call. This call will cover Navidea's financial and operating results for the third quarter ended September 30, 2017, along with the discussion of our key upcoming milestones for the remaining half of 2017. Following our prepared remarks, we will open up the conference call to a question-and-answer session. Our call today will be led by our Chief Executive Officer, Dr. Michael Goldberg. But before we begin our formal remarks, I would like to remind everyone that some of the statements on this conference call may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934 as amended. That concern matters that involve risks and uncertainties that could cause actual results to differ materially from those anticipated or projected in the forward-looking statements. Words such as expects, anticipates, intends, plans, aims, targets, believes, seeks, estimates, optimizing, potential, goals, suggests and similar expressions identify forward-looking statements. These forward-looking statements relate to the effectiveness of the company's bodily fluid-based diagnostic tests as well as the company's ability to develop and successfully commercialize such test platforms for early detection of cancer and other indications. The company's actual results may differ materially from those indicated in these forward-looking statements due to numerous risks and uncertainties. For instance, if we fail to develop and commercialize diagnostic products, we may be unable to execute our plan of operations. Other risks and uncertainties include the company's failure to obtain necessary regulatory clearances or approvals to distribute and market future products in the clinical IBD market; a failure by the marketplace to accept the products of the company's development pipeline or any other diagnostic products the company might develop. The company will face fierce competition and the company's intended products may become obsolete due to the highly competitive nature of the diagnostics market and its rapid technological change and other risks identified in the company's most recent annual report on Form 10-K and quarterly reports on Form 10-Q as well as other documents that the company files with the Securities and Exchange Commission. These statements are based on current expectations, estimates and projections about the company's business based in part on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Forward-looking statements are made as of the date of this conference call, and except as required by law, the company does not undertake an obligation to update its forward-looking statements to reflect future events or circumstances. I'd now like to turn the call over to Dr. Goldberg to discuss our third quarter results and clinical activity as well as our key clinical and operational subjects into this final quarter of 2017 and into the New Year. Michael?

[Michael Goldberg:]

Thank you, Jed, and thank you to everyone joining Navidea's Third Quarter 2017 Financial Results Conference Call. I'd like to thank all of you for taking an interest in Navidea at this very exciting time for us. It's been quite a transition year for Navidea, going from a commercial operation with our own dedicated salesforce to a development-focused company, leveraging macrophage targeting system for both imaging and therapeutic products. We typically do these calls by going over highlights from our development pipeline that include imaging and therapeutic assets. But I would like to focus my time this morning on providing evidence from independent, i.e. non-Navidea sources, relating to the desire by the market for products that we are developing. Efforts undertaken since the closing of the Cardinal Health transaction to implement our strategy, designed around the evidence linking the localization of activated macrophages' activity to specific diseases. We have demonstrated significant market expansion potential with our imaging agent in clinical trials across multiple indications, and have made major improvements as well in our therapeutic programs. As we have discussed in previous calls, we have been working to adapt the Navidea commercial strategy to fit the technology and resources available to Navidea at this time without requiring the company to have to finance at this unrealistically low valuation. We have discussed the fact that working with outside experts, we have identified a commercial strategy that will not entail the need to fund long-term expensive clinical development programs that we believe we can use our imaging technology to assist pharmaceutical companies in their development of drugs. This approach will not require specific use regulatory approvals, nor will it require insurance company or government agencies or even hospital formulary approvals of pricing. We indicated that we believe that the market for these applications is in the tens of millions of dollars per year, which should easily bridge the timing and the financing gap to enable developing disease-based approvals with partners who will both fund and commercialize the resulting products. Over the past few months, we have carefully analyzed the data we and our collaborators have generated with our imaging agents in a variety of different indications with subcutaneous and intravenous administration. Our regulatory and clinical teams believe we already have sufficient data to approach FDA with the proposal to seek approval for our imaging agent as a biomarker for identification and localization of inflammation. We believe this is a very high priority target for the FDA, also for pharmaceutical companies and for clinicians in a wide variety of medical specialties. Just this month, in the highly prestigious journal, Nature Immunology, the NIH published a summary of their recently convened workshop titled, Biomarkers of Chronic Inflammation in Disease Development and Prevention, Challenges and Opportunities. For those of you who want to read the whole article, the reference is Nature Immunology, Volume 18, No. 11, November 2017. Rather than provide our assessment of demand for this type of biomarker we believe we have a highly viable solution to this demand, I will directly quote passages from the article. The US National Institutes of Health convened this workshop on disease-promoting chronic inflammation to identify the challenges and needs in the development of clinically feasible strategies for monitoring a person's inflammation status before, during and after disease occurrence. Chronic inflammatory conditions are associated with prolonged release of inflammatory mediators and the activation of harmful signal transduction pathways, all of which contribute to aging-related phenotypes and disease development. In mild, the chronic pro-inflammatory state is correlated with various diseases and disorders such as age-related cancer and degenerative diseases disorders or periodontal tissues and blood vessels, as well as ophthalmological and neurological diseases. This meeting report summarizes current advances, challenges, and gaps in five areas. Number one, the mechanisms of chronic inflammation in disease promotion; two, disease-promoting inflammatory biomarkers; three, imaging of inflammation; four, omics, or approaches to the identification of inflammation biomarkers; and five, the clinical implications of chronic inflammation and prevention strategies. There are many mechanisms of which this inflammation promotes disease. One of the invited presenters described essential role of activation of the NLRP3 inflammasome, a damage-associated molecular patterns in driving age-related disease, as well as its effects on tissue resident macrophages in the aging thymus. Activation of NLRP3 is a possible link between the onset of metabolic disease and lifestyle risk factors such as obesity, a high fat diet and lack of exercise. The inflammasome might be a useful target, they say, for the prevention or mitigation of age-related inflammation-driven conditions. However, therapeutic strategies should be explored with caution because the inflammasome is required for defense of the host against pathogens. For those of you who are not familiar with an inflammasome, they are multi-protein complexes which regulate secretion of pro-inflammatory Interleukin-1b and Interleukin-18 cytokines. Most critical for us, macrophages are the main cells expressing the inflammasome genes. Next, they discuss neuro-inflammation, which is driven in large part by activated microglia, which has an important role in the etiology of progression of age-related nerve degenerative diseases. They say that targeting microglia-mediated inflammation might provide novel solutions for effective treatments for neurodegenerative diseases. They then go on to describe what efforts have been made in the inflammatory biomarkers, and they have already been described. And these include the cellular factors, for example lymphocytes or white blood cells, or molecular factors, for example cytokines, either present in the circulation or localized to tissue. Unfortunately, these markers do not provide anatomical information as to specifically where the inflammation is occurring. For example, the cytokine receptor TNFR and cytokine IL-6 are the most predictive inflammatory markers for the vulnerability of older adults to systemic disease. But without our technology, one doesn't know what the source of those markers would be. Another area that was described as a high priority for development of a biomarker is ocular diseases. Although considerable work has been done to identify biomarkers of dry eye disease, there are currently no markers for the diagnosis classification of the severity or response to treatment for this disease. Despite the caveats that cytokines TNF-alpha, IL-6, IL-17a, IL-8 are consistently elevated in tears during dry eye disease. Circulating inflammatory biomarkers might mean homeostatic tissue remodeling, defense against infection, wound repair, or prolonged low-level repair response to continuous insult. Unfortunately, they do not provide specific anatomical information that is useful for diagnosis in monitoring of disease progression or regression. There have also been efforts to develop imaging and sensor technologies for the non-invasive and repeated assessment of molecular events. PET imaging, with radio-nucleotide tracer, is a technique routinely used to detect regions of high metabolic activity associated with malignant diseases. One researcher at NIH described a translocator protein; an 18-kilodalton mitochondrial protein that has high expression in macrophages, activated microglia and reactive astrocytes, and serves as a putative biomarker for neuro-inflammation. Results from in vivo MRI cell tracking of inflammatory macrophages have shown this technique can be used to quantitatively assess local inflammation in a mouse model with inflammatory bowel disease, and positively correlates the presence of inflammatory macrophages with the development of colitis-associated dysplasia in preclinical studies. All this provides us with greater comfort, given our results to date, that our agents have the attributes to provide the high-level imaging necessary to validate a useful, broadbased, anatomically precise, activated macrophage biomarker. There was also a lot of discussion among this group regarding the need for a biomarker-enabled disease prediction and prevention. Inflammaging is characterized by chronic, low-grade inflammation and functional decline. Both are hallmarks of aging. Multiple epidemiological studies have provided compelling evidence that elevated serum concentrations of IL-6, TNF, and CRP are associated with age-related decline in physical and cognitive function. Clinical studies of associations between chronic inflammation and inflammatory bowel syndrome have shown that abdominal symptoms track with imbalanced expression and production of pro-inflammatory cytokines and anti-inflammatory cytokines such as TNF, IL-8 and IL-10. Chronic inflammation appears to be associated with functional decline in clinic pathology in many age-related diseases and conditions. Many components contribute to inflammatory damage across a spectrum of chronic disease. These include primarily the role of macrophages in the triggering of damage. So as we can see, the FDA and the NIH, as well as multiple government and corporate consortia, are pushing for the development of inflammatory biomarkers that can provide broadbased access to identification of anatomical disease related to inflammation. Our data in cancer, RA and cardiovascular disease suggest that Navidea has the potential solution to this quest. Given that, we have approached the FDA, and requested a meeting to discuss our data and to gauge their willingness to work with us to advance our technologies of biomarker. We have a meeting in the form of a call scheduled over the next few weeks. In parallel, we are continuing our efforts to advance our IV formulation through approval with a pathology confirmation endpoint. We will scan patients who are scheduled for joint replacement, and then compare the results of the scans with the pathology assessment of their joints. We plan to conduct this study even if the FDA accepts our biomarker without the need for additional clinical studies, as that represents further confirmation of the specificity of our agents. We are also advancing our efforts to test our IV formulation in cardiovascular disease and neuro-inflammation. This work is being done with the same group at Massachusetts General Hospital in Boston who published the subcutaneous data in HIV positive patients. Finally, on the imaging side, we have completed the in-life portion of our NASH animal model imaging study and expect results prior to yearend. We are also about to initiate our first dosings in our NASH clinical imaging study and our next Kaposi's sarcoma study. Moving on to the therapeutic side with our Macrophage Therapeutic subsidiary, we have had a number of key advances. We have successfully created highly effective, from a binding perspective, agents that are built on a much smaller backbone. These agents have similar binding affinity as the larger agents, but their size suggests improved oral and topical formulation potential. This is especially important in our anti-inflammatory conjugates. As we have discussed, corticosteroids are the most effective anti-inflammatory agents available. Unfortunately, toxicity that results from their untargeted delivery makes their use at the effective therapeutic dose highly problematic. That being said, they remain the mainstay of many therapeutic regimens, and as a result, are a leading cause of drug-related adverse events. Across patient populations, the most frequently reported corticosteroid-associated adverse events were psychiatric events, infections, gastric conditions and fractures. Corticosteroid-associated adverse events reported to occur at an incidence of 30% or greater were sleep disturbances, lipodystrophy, adrenal suppression, metabolic syndrome, weight gain, and hypertension. Vertebral fractures were reported at an incidence of 21% to 30%. The cost of managing these adverse events that may occur with corticosteroids can be substantial. The literature reports 1 year per patient costs of up to $27,000 for nonfatal myocardial infarction, and per event costs as high as $18,000 for every fracture. In 2003 to 2004, corticosteroids were the 19th most commonly mentioned, which means ordered, supplied, administered or continued class of drug in ambulatory care visits, used by an estimated 142 per 1,000 persons in the United States. Prednisone alone was the 15th most commonly mentioned drug in US ambulatory care visits with 16.6 million mentions, or 1% of all mentions of drugs. Corticosteroids have dose-related anti-inflammatory and immunomodulatory effects that are mediated primarily by genomic mechanisms, activated by corticosteroid binding to a glucocorticoid receptor inside the cell and their cytoplasm. The direct relationship between corticosteroid dosage and the degree of glucocorticoid receptor saturation is thought to explain the observation that clinical activity generally increases with increasing dosages. Although corticosteroid's a highly effective anti-inflammatory and immunomodulatory agents, they exact such a significant toll with respect to adverse events and toxicity that their use, dose, and duration of use are all severely limited in patients. Corticosteroids have been associated with adverse events that are common and may be severe or life threatening. According to data from the Healthcare Cost and Utilization Project, corticosteroids are the most common specific cause of drug-related adverse events, accounting for about 10% of all drug-related adverse events and 141,000 hospital stays in the United States in 2004. The conclusion from a study published in Clinical Therapeutics, Volume 33, 2011, entitled Incidence in U.S. Cost of Corticosteroid-Associated Adverse Events

[Jed Latkin:]

Thank you, Michael. Our consolidated balance sheet and statements of operations have been reclassified as required by current accounting standards for all periods presented to reflect the line of business sold to Cardinal Health 414 as a discontinued operation. Accordingly, this discussion focuses on describing the results of our operations as if we had not operated the discontinued operations during the periods being discussed. We recorded $86.7 million net gain on the line of business sold to Cardinal Health 414 for the nine months ended September 30, 2017, including 16.5 million in guaranteed consideration which was discounted to the present value of future cash flows. The proceeds were offset by 3.3 million in estimated fair value of warrants issued to Cardinal Health 414, 2 million in legal and other fees related to the sale, 800,000 net balance sheet dispositions and write-offs, and 6.5 million in estimated taxes. Total revenues for the third quarter of 2017 were 224,000 compared with 1.8 million in the third quarter of 2016. These revenues are grant related and do not include the 1.7 million of payments received from Cardinal Health 414. Research and development expenses for the third quarter of 2017 were 875,000 compared 919,000 in the third quarter of 2016. The net decrease was primarily as a result of decreases in net compensation costs coupled with decreased NAV4694 and NAV5001 development costs, offset by increases in managed asset development costs. Selling, general, and administration expenses for the third quarter of 2017 were 1.7 million compared to 1.8 million in the third quarter of 2016. The net decrease was primarily due to decreases in general support costs such as rent, and deprecation coupled with decreased net compensation costs, offset by net increased legal and professional services. It's important to note that by the end of the year with most of the litigation planned to be behind us, litigation expenses will come down significantly. You will then see that translate into a much lower SG&A expense. Navidea's net loss attributable to common stockholders for the quarter ended September 30, 2017 was 1.5 million or $0.01 per share compared to a net loss of 59,000 or zero per share for the same period in 2016. Had we booked the Cardinal payment as income, the company would have had net earnings of approximately $100,000 or zero per share. This demonstrates our continued adherence to a strict fiscal discipline coupled with the line of payments from Cardinal Health over the next several years. We are proud of our execution on the clinical development front for the past quarter and we remind our shareholders of the upcoming near-term clinical milestones we've laid out on today's call. Our clinical pipeline continues to advance forward, with strong data coming out, increased conversations with the FDA, and improved negotiation leverage, we have been steadily growing clarity on our clinical path and de-risking the pipeline. Thank you all very much for your interest in Navidea and for joining our third quarter 2017 earnings conference call today. We would now like to open up the call to take your questions.

[Operator:]

[Operator Instructions] And our first question will come from [indiscernible].

[Unidentified Analyst:]

Good morning, Jed and Michael. Longtime holder. Can we get a little clarification as to when can we get line of closure on CRG?

[Michael Goldberg:]

Paul, that's an excellent question. As you know, we have the trial is coming up. It's been moved, and it'll be the week of December 11. We expect that the trial will last approximately 1 week, and then technically the judge has up to 90 days to decide, but we anticipate that there will be decision shortly thereafter. Once the decision is reached, it is non-appealable, and we will know. So for the most part, we should know by the end of the year what the decision will be in CRG.

[Operator:]

[Operator Instructions] Our next question will come from [indiscernible].

[Unidentified Analyst:]

Yes, I have a couple questions. Is University of California San Francisco still involved in the Kaposi sarcoma studies?

[Michael Goldberg:]

Yes.

[Unidentified Analyst:]

I just never heard it mentioned lately, so I was just wondering if they were still involved. Secondly, you talk about purpose-built molecules attached to the backbone you differentiate in diagnostics and targeted treatments. Is that purpose-built molecule different for every diagnostic, or is it the same for every diagnostic?

[Michael Goldberg:]

That's a great question, and something we should make sure that all our investors understand. The really beautiful aspect of the imaging agent is that we don't need to know what we're imaging. And that's what's so attractive in terms of all that I described about the biomarker about our product. In addition to letting us know where your activated macrophages, what we tell you is that whatever markers that other people were looking at that they believe are relevant, we let you know whether that is tied to an anatomical issue, or whether that's a general [indiscernible]. So the bottom line is when we're developing a product for RA or for cardiovascular or for NASH or for neuro-inflammation, we've been approached by people who think that that's a very, very important area to image, we don't need to design the molecule any differently. It's exactly the same molecule. And the only thing we need to do is point the camera. So the ability to measure. The camera itself is all exactly the same; it's just a function of deciding where to focus your attention in terms of looking for the agent. In the case of imaging, there's absolutely no difference. In the case of therapeutics, there are going to be some differences, and the differences will be driven not so much by making changes to our molecule so that it could bind differently. It's just a matter of what we want to deliver and what the approach we want to use to make the delivery. So for example in cancer, it's probably very likely that we're going to want an injectable product. In the case of chronic autoimmune disease treatments, with the steroid product, we're much more likely to want to have an oral product. So the changes we'll make, as I described, would be to use a smaller backbone that would therefore be easier to make into an oral product. Or if we were trying to create a product that needed to able to cross the blood-brain barrier as well, smaller typically is easier to formulate to have that activity. So we have degrees of freedom, depending on, again, the disease and the rate at which we want to administer this, the frequency, the duration. We may have different products, but everything is built off of the same delivery system; we just attribute it to different properties based on issues unrelated to the disease, but more related to patient-physician preferences.

[Unidentified Analyst:]

Just a follow up. For security purposes, is that molecule readily determinable by the people using it, or is it private to you guys?

[Michael Goldberg:]

I'm not sure I understand the question.

[Unidentified Analyst:]

Can they reformulate that molecule easily once they start using it, or is it something that you guys, that Navidea has to do?

[Michael Goldberg:]

First of all, from a regulatory perspective, they would not be allowed. That would be against the law. But if you're worried, for example, about certain countries where you have essentially creating false - fraudulent and fake molecules, this would be very, very, very difficult to copy. And the reason is the backbone is a polymer. So anytime you're dealing with polymers, it becomes a very, very difficult product to copy, which is an advantage when you have a patent expiration, but it actually makes it a lot harder. And actually if you look, if you've been an investor in Navidea for a long time, that was one of the reasons it took so long after the clinical studies to get the product approved, because getting polymers approved, since they're not an exact entity, is a very hard thing to get done. But the advantage is once you get it done, which thank god we've done, it becomes very, very hard to make a generic copy. So the answer is technically it's not hard to do what we do to make it, but to make it so that it is exactly what the FDA approved is extremely difficult. And I would find - I would be very surprised if anyone would take the risk of making something that they couldn't quantify and qualify as what we proved in our clinical studies.

[Unidentified Analyst:]

Yes, I was very concerned about as you take it internationally, of it being stolen. I appreciate that answer.

[Jed Latkin:]

The interesting thing, Mike, is that we are very tightly controlling our API. There's very strict quality controls, and nobody will have access to making the API, other than approved vendors by us. It will not be made in any other country other than the approved vendors that we have. That's it.

[Operator:]

[Operator Instructions] We'll move next to Joe Pellicane.

[Unidentified Analyst:]

My question is, number one, to see if we can clarify. I know you haven't had your meeting with the FDA, but for the biomarker, how would it look - or past a commercialization, what are we looking to get out of our meeting with the FDA? Is this something that Navidea will do on its own, or will Navidea partner with another big pharma in order to bring this to the goal line?

[Michael Goldberg:]

Let me take that question, and I'm sure you have a follow up. The biomarker is something that we will develop completely on our own. In fact, our clinical and regulatory team thinks we have an excellent argument to say that we've already completed the work that's necessary to get [Technical Difficulty] meeting we have scheduled in the next few weeks. Assuming that that won't [Technical Difficulty], the question is having to commercialize it. And Jed and I are actually right now in Berlin [Technical Difficulty] European, almost 2 dozen major pharma companies. And I can say almost every major company has an interest in this biomarker, should we get this to the marketplace. Now most of the interest is on the therapeutics, developed therapeutics, but when they hear that we may have this biomarker reviewing that paper, the interest level is extremely high. In terms of commercializations more broadly, in addition to us working with pharmaceutical companies and their consortia of pharma companies and NIH and others, academic groups looking at specific biomarkers in NASH and cardiovascular disease, et cetera, we believe that that would be a relatively easy thing for us to sign up companies on our own. Of course as we look to expand beyond clinical studies to more clinical use of the biomarker, we may be working with CROs and other entities, major companies that have a relationship either in the diagnostic or imaging space, to partner with us on a regional basis and on certain indications.

[Unidentified Analyst:]

Okay. Thank you. Another question I had was just with regards to our investor relations. I know our strategy is that an institutional strategy, but obviously in the last year, we've had a share price that gets manipulated, very low volume, and we're really not in institutional investment now because of the low share price. Has the company, have you thought - what can we do to sort of break where like in a malaise, where no matter what news comes out, the share price goes back to 40-something cents. Ideally, once we get the share price above $1.00 a share again, it gives us a better currency to raise money, shareholders are more happy. What can we do to bridge the gap to get us from where we are today to make us a more viable investment for big institutions?

[Michael Goldberg:]

This is - we don't have the time to go into the detail. And this is an area that as you well know, Joe, we've thought about and strategized a lot about. The fundamental issue is really this. It's a supply-demand issue, and large investors are not going to buy the stock knowing that there's no one for them to sell to. They need to have liquidity. It's unfortunate that retail investors, again, don't have the capacity to buy enough shares to keep the stock price up. So as you correctly stated, the stock will run up and then it will come down because there are always going to be buyers and sellers in the stock. So what we are doing, and the two things that I think can change this sort of vicious cycle and put us on a virtuous cycle is, one, making it crystal clear that we're not going to do a financing. Not here, and pardon me, not at $1.00. That's not what our objective is, and that's not what our goal is. Our strategy, especially with the biomarker and with the strategy to move the imaging programs ahead, is to make it crystal clear to investors that the only way to buy the stock is to buy it in the open market; that they're not going to have a chance to buy it from us. And that takes a tremendous amount of education, because typical biotech companies are always financing. Every time you see a slight run up in the stock price, the next thing you see is the financing down 20% in warrants, et cetera. We're not going to do that. And the other piece of this is we're going to raise money into Macrophage Therapeutics, because in that case, it will not dilute the Navidea shareholders. Yes, it will dilute to some degree the Navidea ownership in Macrophage, but we're more than confident that that will do three things; one, it will reinforce the perspective that Macrophage will proceed, and Macrophage has value and is interesting to sophisticated healthcare investors. And that will mean anyone who didn't participate in that deal with only have an opportunity to participate in the Macrophage through owning Navidea stock. Two, it will make our job, Jed's and my job, that much easier to convince institutions and sort of the bigger retail investors, who could move the stock by buying it, that we really are serious. We are not going to be doing the financing. And if you bought the stock and bought it at $0.40 and moved it to $0.70, you're not going to wake up the next day and your deal gets spun around you at $0.60. That's the fear that a lot of them have. And the more we can do to convince them that will never happen, the more I think someone will say, you know what, this is a $2.00 stock, a lot of good things are happening. We had some problems, we got knocked down. I'm still buying it, even if I have to move it to $0.75 and someone else will move it to the next point. And the third piece of this is Macrophage will have the resources. We've been making tremendous progress, but we've been doing it with nickels and dimes. And to get the kinds of big deals, and to get the kind of terms that we want, and to really make this product move aggressively, we're going to need more resources. But I think those resources will make the value that we own, Navidea owns of Macrophage, so much more valuable, that investors as well are going to say, wow, I can own all this, the biomarker, all the progress we're making in so many other areas in Navidea, and I can have a meaningful stake in Macrophage, and despite it's too cheap, I'm going to buy it. So I think those two things can be accomplished. I think the data that we've generated, the data that Fred and our regulatory team are generating on the imaging and biomarker, and the really exciting stuff we're developing on the therapeutic side, is going to attract those type investors. And I think we will be able to be highly, highly credible, especially as we make progress on the biomarker from a regulatory perspective. From a technical perspective, I think we've made all the progress we need. I think all that together will break this cycle, and we'll go from an illiquid penny stock, to you'll see that any liquidity will actually go in our favor as people really have to bid up the stock to participate in owning this biomarker and owning the other imaging programs, as well as this very, very exciting therapeutic program.

[Operator:]

Our next question will come from Brian Brennan with National Securities.

[Brian Brennan:]

Tactical, but just to piggy back on your last thoughts about that Macrophage and you guys looking potentially to tap into that subsidiary. Can you maybe give the shareholder what will it - what does MT need, I guess from a data perspective, to attract that investment, number one? And then number two, are you able to maybe commit to a timeline where you could see something like that play out?

[Michael Goldberg:]

I've invested a lot in this company financially, but I don't have the kind of dollars to write the check that I'm looking for in terms of what Macrophage deserves and what it needs. Since I don't write the check personally, I'm not going to give you a timeline because I can't commit to that. But I can tell you that we have looked in terms of comparables. And I would ask you guys to look at comparables of companies that are developing the next-generation checkpoint regulators, which I described earlier as the innate immunology-based checkpoint regulators. Companies like Forty Seven, Tioma. There are a bunch of these companies that have generated what I would suggest are meaningful venture/crossover rounds in the $50 million, $60 million, $80 million range preclinically, with compounds and with programs that are highly competitive among themselves, and do not have what I believe is the breadth and scale of the data that we have collected already. And I think that the biggest difference in terms of timing for their deals versus our deal is principally that they have a fully developed team in place that allows them to attract a commercial partner who has significant capital that they're willing to risk, but don't have the management to oversee the process. So I do believe that the staging is important. And we are going to be hiring and doing maybe a smaller initial round that will very quickly morph into a much, much larger round along the size of those numbers, and that is a top priority of ours. And while I can't tell you the timing, I can tell you that the data we have is as good or better, and I think our competitive position is a lot better than some of those companies I mentioned. So the capital is there, the technology is there, and pieces are in place. There's a lot of interest in working at Macrophage. And I just say stay tuned. It's a high priority. And I wish I could write the check, because this is an investment that I'd love to make, but I don't have that kind of money to do it. So until I can actually write the check myself, I'm not going to put a timeline on it.

[Jed Latkin:]

Thank you, Brian. Are there any other questions?

[Operator:]

It appears there are no further questions at this time, sir.

[Michael Goldberg:]

Okay. Well, thank you everybody, and we want to get to - let everyone get back to their day jobs, and Jed and I have a whole bunch of more meetings left today. So we just want to thank everyone for joining us. And I believe Jed is going to host more of those calls in between the conference calls so that for those of you who either didn't get a chance today or didn't have the time to participate, we are interested in making sure that our investors have their questions answered. You own the company, and it's important to us that we address your concerns to the best of our ability. And sometimes we can't answer your questions, but it's important for you to know what we can and what we can't address. So we thank you for participating, and we look forward to updating you on the progress we're making with FDA and our various clinical and preclinical programs. Thank you very much.