Novavax, Inc. (NVAX) Q2 2012 Earnings Report, Transcript and Summary

Good day, ladies and gentlemen, and welcome to the Novavax Second Quarter Earnings Conference Call. [Operator Instructions] And as a reminder, this call is being recorded. I would now like to turn the conference over to your host, Mr. John Herrmann. Please go ahead, sir.

Thank you. Good morning, everyone. This is John Herrmann, Vice President and General Counsel of Novavax. Thank you for joining us on today's second quarter 2012 financial results conference call. Both the earnings release from this morning and an archive of this earnings call can be found on the company's website at novavax.com. On today's call are Novavax's President and CEO, Stan Erck; our Vice President and CFO, Fred Driscoll; our Chief Medical Officer, Dr. Greg Glenn; and our Vice President of Medical Affairs, Dr. Louis Fries. Before we begin our prepared remarks, I'll remind you that we will be making forward-looking statements during this teleconference that may include financial, clinical or commercial projections. Statements relating to future financial or business performance, conditions or strategies and other financial and business matters including expectations regarding revenue, operating expenses, cash usage and clinical developments and anticipated milestones, are all forward-looking statements within the meaning of the Private Securities Litigation Reform Act. Novavax cautions that these forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Further information on factors and risks that could affect Novavax's business, financial conditions and results of operations are contained in Novavax's filings with the SEC, which are available at www.sec.gov. These forward-looking statements speak only as of the date of this call and Novavax assumes no duty to update such statements. With that said, I'll now turn the call over to Stan.

Thanks, John, and good morning, everyone. As we discussed in previous calls, the last 1.5 years has been built -- spent building our management team, developing an infrastructure that will allow us to ultimately take a product into the marketplace, and building and managing alliances to support our products into a global market. Although we're far from finished, I'm pleased to report that we're beginning to see the fruits of these efforts. In the last 6 months, we've initiated 3 clinical trials, vaccinating more than 1,100 subjects. Data from these trials are beginning to come out and we recently reported on the first of these trials and expect to report data on our 2 pandemic influenza trials within the next 90 days. In addition, we launched 2 new collaborations, continue to advance our preclinical and clinical vaccine development programs. And that -- both at Novavax and with our joint venture partner in India, and have strengthened our balance sheet. We are now in a stronger position to execute on our clinical and commercial plans, and with that, deliver enhanced shareholder value. I will first talk a little bit about our recent accomplishments and then turn the call over to Fred to summarize the quarterly financial results. After that, we'll take questions. I know that some of you may have technical and scientific questions about our programs and vaccines, and I've asked Drs. Greg Glenn and Louis Fries to be here to help get you answers. Let's start with our seasonal flu vaccine program. The positive top-line results we announced last week from the Phase II dose-ranging clinical trial of our quadrivalent vaccine. As you saw on our recent press release, the study was designed to evaluate both immunogenicity and safety of 3 dose levels of our quadrivalent vaccine in healthy adults between the ages of 18 and 64 years old. As we reported, the trial reached its primary endpoints of demonstrating safety and immunogenicity in all 3 dose levels. As always, we first looked at safety. The safety results are key, not only to this product, but to our entire product platform. And I'm happy to report that we again saw in this trial a clean safety profile and didn't see anything that causes us concern for going forward. I should note that with this last trial, we have now tested our influenza VLP vaccines in over 5,000 subjects. To demonstrate immunogenicity, we measured hemoglobin inhibition or HAI responses at day 21. The 2 primary measurements of immunogenicity that are commonly used for an influenza vaccine are the level of 0 protection, which is the percent of vaccine vaccinees that achieves a certain level of AHI titers in 0 conversion, which is the percent of vaccines vaccinees that achieved a fourfold increase in the level of HAI titer. Quadrivalent vaccine that the FDA 0 protection requirements for all 4 viral stains with 0 conversion levels from 3 out of the 4 strains. The 0 conversion for the remaining strain, the B "Brisbane" strain, fell below the FDA guideline. There are a few potential reasons for this and we have already initiated a number of actions to address this issue before we launch our next Phase II study in 2013. These studies include looking at the details of how one should measure these titers when using a VLP-based vaccine, rather than the traditional egg dry vaccine and also looking at a variety of process development experiments that might further improve the immunogenicity of that single strain, for that matter, all strains. Another aspect of this trial that marks the first for Novavax, was that we met a manufacturing milestone by producing our vaccine in a 1,000-liter scale bioreactor. In fact, we produced each of the strains using a new single-use technology process in a scale that can be easily commercialized both in large markets and in smaller geographic markets. In short, we're all encouraged by these results. We plan to report the full clinical results in future scientific meeting. We reviewed the preliminary findings in detail with our colleagues at BARDA, we will continue to move forward working under the BARDA contract as we design and execute our future seasonal flu program. I look forward to opening the data later this year from our pandemic flu trials. On that note, the pandemic flu program is also making great progress under our contract with BARDA. As you all saw, we have 2 Phase I trials ongoing with our H5N1 pandemic influenza vaccine candidate in adults 18 to 49 years old. These randomized, observer-blind, dose-ranging, placebo-controlled trials are identical except for the use of 2 different adjuvants. Trials are now fully enrolled with top line data expected in the fourth quarter of this year. We expect these results of these trials will enable us to select the best adjuvant of which to move forward in the Phase II clinical testing next year. Turning to RSV. Our efforts to develop a vaccine to prevent RSV were strengthened as a result of the signing of our collaboration with PATH. As we announced a few weeks ago, PATH has agreed to provide approximately $2 million in initial funding to further Phase II dose ranging clinical trial in women of childbearing age. We plan to launch this trial in the fourth quarter of this year. Following this study, PATH has the option to continue to support the maternal immunization program, group to [ph] commercialization by reimbursing us for 50% of our external development cost. This is a really important point because this collaboration effectively can provide non-dilutive financing for Novavax and its shareholders by paying for a significant portion of our external expenses for the RSV vaccine while allowing us to retain global rights to the vaccine. We believe this is a great commercial opportunity for Novavax. As I've said before, there are no RSV prophylactic vaccines approved at present, and the total RSV market opportunity may exceed $5 billion worldwide. If our studies and development program are successful, we will potentially have the first vaccine approved for this disease. PATH collaboration will build upon the excellent safety and immunogenicity results already reported in the Phase I study of our recombinant nanoparticle vaccine candidate. On the basis of these findings, we're moving ahead with the Phase II study in women of childbearing age that I mentioned earlier, to expand the safety and immunogenicity database for our RSV vaccine. We're also planning to initiate a Phase II study in elderly patients later this year. We've not lost sight of the fact that RSV is a serious cause of death and hospitalization in the elderly at a rate similar to influenza, and is thus, an important unmet need and large vaccine market opportunity, which we intend to pursue. At least, from what has been publicly disclosed, we believe that with the imminent initiation of these Phase II trials, our RSV recombinant vaccine will be the most advanced RSV vaccine candidate currently in the clinic today. In addition to the PATH collaboration, we recently launched a collaboration to develop a malaria vaccine with CPLB or CPL Biologicals, our joint venture partner in India. In collaboration with CPLB, we are now working with India's International Center for Genetic Engineering Biotechnology to develop a novel malaria vaccine. This unique public-private partnership combines the advanced vaccine technology of Novavax with the center's malaria vaccine research capabilities and CPLB's vaccine manufacturing capabilities. The project is being funded by India's Department of Biotechnology Vaccine Grand Challenge Program and will be managed by the Malaria Vaccine Development Program, a New Delhi-based not-for-profit established to support the development of malaria vaccines. CPLB has been a great strategic partner and we congratulate them on their continued success. On the capital resource front, we recently strengthened the company's balance sheet by completing a $12 million equity sale to a single institutional investor. This financing, along with cash from our partners and higher second quarter revenues, have improved our cash position, and will allow us to maintain the strong momentum in each of our vaccine programs. However, we appreciate the importance of managing our resources prudently, applying them carefully. I believe this commitment is reflected in our second quarter results which Fred will review for you. Before I turn the call over to Fred, I'd like to leave you with the following key takeaway points. First, our recombinant platform technology has now delivered a broad pipeline of vaccine candidates targeting seasonal and pandemic influenza, RSV, rabies and malaria. We're also working on other targets to add to this pipeline, which we will disclose at a later date. Second, over the next few quarters, we will release clinical data from our 4 clinical trials in pandemic influenza and RSV, which we believe should create significant shareholder value. Third, we have strengthened our balance sheet substantially over the past 6 months. And finally, we continue to create important collaborations such as with BARDA, [indiscernible] LG Life Sciences, ICGEB and Cadila. All of which are designed to help us reach our commercial potential. With that, I will now turn the call over to Fred.

Thank you, Stan. For the second quarter, we reported a net loss of $5.9 million or $0.05 per share, compared to a net loss of $5 million or $0.04 per share for the second quarter of 2011. In the 6 months ended June 30, 2012, the net loss was $13.3 million or $0.11 per share compared to a net loss of $12.4 million or $0.11 per share for the same period in 2011. Revenue in the second quarter of 2012 increased to $7.1 million as compared to $3 million for the same period in 2011, which represents a 137% increase as a result of the company's contract with BARDA. In conjunction with this increased BARDA revenue, cost of contract revenue increased to $5.1 million in the second quarter of 2012 as compared to $1.2 million for the same period in 2011. Research and development expenses increased to $5.2 million in the second quarter of 2012 as compared to $4.4 million for the same period in 2011, primarily due to higher employee related costs and expenses associated with our new manufacturing facility. General and administrative expenses decreased to $2.7 million in the second quarter of 2012 as compared to $3.3 million for the same period in 2011, primarily resulting from lower employee-related costs partially offset by non-cash expenses associated with our new office facility. As of June 30, 2012, the company had $26.5 million in cash, cash equivalents and short-term investments compared to $18.3 million as of December 31, 2011. Net cash used in operating activities for the first half of 2012 was $10.3 million as compared to $17.4 million for the same period in 2011, a 41% reduction from the prior-year period. Again, due primarily to revenue under the BARDA contract. At June 30, 2012, our working capital position increased from $18.6 million at the end of Q1 to $25.6 million, a 37% improvement. With that -- that concludes our prepared remarks. And operator, we'll now turn the call over for questions.

[Operator Instructions] And our first question, it's from the line of Edward Tenthoff with Piper Jaffray.

Lots of progress in the quarter. Perhaps we can start out with the pandemic opportunity here. You mentioned that we've -- that you've completed enrollment and will be getting data in the fourth quarter. What are the steps beyond that, towards commercialization or procurement?

Okay, this is Louis Fries. We would -- we of course need to continue with the clinical development and this would proceed stepwise through 1 rather quickly accomplished step and then 2 further steps in the clinic. The first will be to look at the results of the 2 Phase II -- Phase I trials -- excuse me, and downselect on one of the adjuvants. To-date, of course, we know nothing about the immune responses because the testing is just getting ready to get started after the receipt of the first set of syrup. We do know, so for, that neither of the adjuvants has been associated with a problematic safety profile. So we will go through a set of decision criteria and downselect on the most advantageous of the 2 adjuvants in consultation with our colleagues at BARDA. We have then elaborated for BARDA and for CBER, a plan for Phase II in which we will optimize the antigen and the adjuvant doses in a trial in young adults of a factorial design in which we'll vary both the antigen and the adjuvant dose. And when we have results from that, when we have the, say, first 3 months results from that, we will take those data and use them to fuel a similar design in elderly subjects. As you are well aware, influenza vaccine responses are generally less in the elderly, and both adjuvant and antigen doses may have to be adjusted for use in elderly subjects. We'll try to do that in a way that we actually use 1 formulation and can simply use different volumes in young adult and elderly subjects. When we have data from the elderly and from young to younger adults to optimize the dose, we'll then proceed to an end of Phase II meeting with CBER, we will design a Phase III trial, which, because there is no pandemic vaccine -- pandemic disease, will be based on immunogenicity and we will target in that the CBER guidance values for both 0 protection and 0 conversion against an H5 strain. Probably in parallel with that study or conceivably after it, depending on CBER's viewpoint, we would do a relatively small study in children, simply to show that children can receive the vaccine safely and have appropriate responses. CBER has been very, very sensitive to the use of pandemic vaccines in children because they receive no immediate benefit from it. But we will establish the basis for approval based on immune responses in young adults and elderly adults. We'll demonstrate that children can receive the vaccine safely in a small study. And that will constitute the data set that we would take forward for accelerated approval under current CBER guidances.

That's very helpful, very detailed update. I appreciate it.

Our next question in queue is from the line of George Zavoico of MLV & Co. George B. Zavoico - McNicoll, Lewis & Vlak LLC, Research Division: I'm looking forward to seeing your results later on. I have a similar question in terms -- regarding the RSV. You're going into women of childbearing age, so they're not yet pregnant. If you show safety and -- if you show immunogenicity, would -- the next step is then to go to women who are pregnant? Is that the next step on that one?

So as you know, we've partnered with PATH and that decision on the full clinic development plan hasn't been -- will be coordinated with their outlook. We would believe that the next trials will involve expanding the safety database in women of childbearing age before we go to pregnancy. But we haven't really determined what that safety database number will look like. But it's likely the next trial would expand and focus on the dosing in the population that are not pregnant. The other piece to that is that the -- this trial in women who are pregnant will require what we call a reprotox study in animals where we would study the vaccine. It's a very routine type of toxicology study to do if you're immunizing in a population like this. We would do a reprotox study as well, which can take approximately a year. George B. Zavoico - McNicoll, Lewis & Vlak LLC, Research Division: Okay. But ultimately, the $5 billion that you're talking about in terms of market size, what does that include? Does that include maternal immunization, infant and toddler immunizations as well?

Yes. So what it includes is actually 4 out of the 5 indications that we see. So we've done a market study and we limited it to the U.S. and came up with some pricing estimates and some peak sales estimates and it includes introducing the vaccine for youngsters 0 to 2 years old, for toddlers 2 to 5, for the elderly as an annual seasonal vaccine, and pregnant women to protect the youngest infants. What it doesn't include, but we think is a big opportunity for us to be studied, is the combination of our flu and RSV vaccine for a seasonal respiratory vaccine in the elderly, which we think is a great opportunity but requires a lot more development work. George B. Zavoico - McNicoll, Lewis & Vlak LLC, Research Division: Okay. In getting -- switching over to seasonal. Quick question about -- in your prior press release, you mentioned you were doing process and assay improvements. So could you elaborate a little bit on that? On the assay part, I think you already covered, you basically want to make sure that the assay is for the right antigen in the VLP versus the egg-based vaccines. Is that correct?

That's correct. There are a number of ways to do -- the primary assay for -- that's been used to the license influenza vaccines, is the hemagglutination inhibition assay, as Stan said earlier. And that typically uses antigens that are produced in eggs and it's really optimized for egg-derived -- to match egg-derived vaccines. We don't know if that's the best way of assaying the responses to our vaccine. It may, it may be, but it also may not be. And there are a number of possible variations on that. You can use the VLPs themselves as the source of antigen. The VLPs may be somewhat more closely similar to viruses that actually circulate in mammals, than are that egg-derived viruses. And the typical indicator cell in the hemagglutination inhibition assay is an avian cell, either turkey or chicken red cell. And we've also initiated experiments looking at mammalian cells, because they might match the VLPs a little bit better. It's not at all certain what way those results will go, but we need to explore those types of assays. In addition, it's important to remember that the VLPs are designed to deliver with intent and focus on a second antigen, which is neuraminidase. Neuraminidase is always, kind of, the little brother of hemagglutinin in influenza vaccine responses. But neuraminidase has been shown to have significant capacity -- antibodies to neuraminidase, are known to have significant capacity to modulate influenza disease. Our vaccine delivers neuraminidase. It's been shown to produce responses to neuraminidase and those could contribute to -- those can be measured directly and they can also contribute to neutralization of the virus. And so, we're expanding our net to look at neutralization assays and to look at neuraminidase inhibition assays. So we'll examine all aspects of the vaccine's activity. In terms of the process, as we refine our process, we're getting a much better handle on the amount of process residuals that we need to deal with. Baculovirus proteins, proteins in the cellular production system that need to be removed and indeed live insect baculovirus that needs to be removed. Now that's entirely nonpathogenic for mammals, so it's not really a pathogenicity concern, but we do want to control it very closely as evidence of vaccine purity. And as we refine our process, we're learning a lot more about exactly how much of those residuals we have to remove and the steps that you take in the process are not necessarily benign to the vaccine. They may actually impair the ability of some of the proteins in the vaccine to cause an immune response. So the more carefully we can adjust and refine the conditions that we used to remove residuals and inactivate viruses, the more likely we are to be able to deliver a more immunogenic vaccine. And so we're in the process of examining a lot of those variables right now with some positive results. George B. Zavoico - McNicoll, Lewis & Vlak LLC, Research Division: If the process is changed too much, though, there comes a point where you might have to go back and do a new safety study or is it not going to go that far?

No, we're very mindful of that. And we're very mindful of staying inside the envelope of adjustments. And I use the word adjustment quite specifically, talking about small changes in the levels of certain reagents that we use, or the conditions under which certain steps are done. But we have quite intentionally avoided anything that would represent a major change in the unit operations in the process. In addition, we are, through a number of new hires that have occurred in the first half of the year, really strengthening our analytical group. And so we're much better able to characterize the product that we have now. And so, we can look at the product that comes out of the old process and look at the product that comes out of the new process by a suite of characterization assays that we didn't have available to us before, and able to give regulatory authorities confidence that, well, this is what we started with and this is what we have now. These are the improvements that we made and it didn't really change the profile of the product. This is not something that needs to go back to square one. So we're paying close attention to that point. George B. Zavoico - McNicoll, Lewis & Vlak LLC, Research Division: Okay. And 1 final last quick question. If you switch from -- in the assay part, from avian turkey, or chicken cells to mammalian cells. Let's just say, for example, that it gives you a better result, that would have to then -- of course, I would think be approved by CBER as well, as an appropriate test for immunogenicity.

It would be. But I think that in the long run, the negotiation with CBER as to exactly what is the underpinning of the approval. It's one that we'll have when we have an entire data package. There is nothing in CBER guidances that dictates exactly how you have to do the assay. Every single one of them elaborates, "This is what we do now. If the company can present appropriate data that another assay is appropriate, we'll consider it." So yes, it is easier to do exactly what's done now. But obviously, if it's more advantageous to adjust the methodology and we go with an adequate and convincing package to CBER, I think we can have that negotiation.

The next question in queue is from Kevin DeGeeter of Ladenberg. Kevin DeGeeter - Ladenburg Thalmann & Co. Inc., Research Division: A number of my questions have been answered, but maybe a few housekeeping ones, it's going to get Fred in here for a moment. Fred, can you -- what was the share count at the end of the quarter?

Share count at the end of the quarter was -- total shares outstanding, about 132 million. Kevin DeGeeter - Ladenburg Thalmann & Co. Inc., Research Division: Great. And it looks like from that number, I guess, you were -- relatively used the ATM in a relatively limited way in the quarter. In light of the financing that was done in the quarter, how do you kind of view the utility of that, at least for the remainder of calendar 2012?

Let me say that the capital raised in the quarter was from the raise that we did that Stan mentioned earlier, the $12 million raised through the single investor. As we've said, Kevin, we will continue to be opportunistic about the utilization of the ATM. I think the good news here is that, as Stan mentioned with the collaboration with PATH, $2 million coming in to the coffers nondilutively is what we like to see. And we also ended the -- which, noteworthy, we ended the quarter with a very heavy receivable from the government, so we also will see, again, cash infusion from BARDA coming in early in this -- next month from operations. So I think my view financially, we've -- the BARDA contract, as I said, it's really improved the overall liquidity of the company. We've seen almost a halving of the cash usage in operations, year-over-year. And we certainly expect that to continue and to get better as the program increases. So I think that's the guidance I'd give you on cash. Kevin DeGeeter - Ladenburg Thalmann & Co. Inc., Research Division: Okay, perfect. I appreciate that. And just maybe one on the clinical side. Have you decided on a final dose range for the RSV programs and whether or not -- plan to include adjuvant in one or both of those studies. And if you have other specific metrics that you're looking at to -- before you make that decision, additional preclinical data, perhaps specific set of discussions with outside advisors, can you just kind of can walk us through the timeline to make that decision so we can kick off the study late this year, Phase II?

Kevin, this is Greg. So just that we are -- these next 2 trials, we'll do a trial in women of childbearing age, and a trial in the elderly. And we'll ask very similar questions in both those trials that relate to the dose of the antigen, the role of the adjuvant. And in the case of the women of childbearing age, whether the 1 or 2 doses will be required based on our Phase I data. So that -- those trials will give us guidance for the future dosing and the inclusion of the adjuvant. Now I should mention, our adjuvant is not a novel adjuvant, it's alum. And so that is a relatively benign regulatory pathway in terms of adjuvant evaluation. We do consult with, as you know, we have a very strong outside Scientific Advisory Board. We have a group that advises both for the women of childbearing age maternal immunization effort, as well as the elderly. And we will, with these trial results, our routine is to consult with them, share the data, get their opinions going forward. So those pieces of information will help us determine the upcoming trial designs.

And our next question in queue is from Chris Marai of Wedbush.

So first, I wanted to ask about the potential for a commercial partnership for RSV. Given the collaboration with the nonprofit organization PATH, I noted that it was just for 1 of the 4 indications that you talked about exploring for RSV. So one, does this suggest that you may be interested in division of responsibility for each RSV indication in a potential commercial partnership, with say, a partner executing on some indications while you guys are executing on others. Two, in a potential commercial partnership, are you looking at maintaining some of the commercial responsibilities as well in terms of marketing and rights in certain jurisdictions? And three, finally, it sounds to me like that $2 million from the PATH organization can go a long way in the Phase II trial in women of childbearing age. For modeling purposes, roughly, how large will that trial be?

Okay. This is Stan. I'll answer the third question first. On the PATH, the $2 million that's coming in, that is designed to support just this 1 trial that's coming up and I think it was 330 -- the patient -- the subject population is 330 women.

This is Fred. I would suggest that we could not disclose that, and we would not disclose it. But I would say that the funding would substantially -- and provide a significant portion of the funding of that trial.

As we said in the past, and first of all, I don't predict timing of partnering of our programs with pharmaceutical companies. As everybody knows, these are long discussions, data has to be exchanged, there's lots of back-and-forth and the timing of these partnerships are completely unpredictable. So I won't predict. I will say that since we've been disclosing publicly our data, we have suspected -- and found out that all the large vaccine companies are interested in an RSV program, they either already have their own program going on or they're looking for a new one, or both. And as we said, we think we represent the most advanced, at least publicly disclosed, the most advanced program. So we're talking to all of the interested parties and our goal would be, ultimately, to find a partner who could finance the later stage Phase IIs and Phase IIIs for this program. And whether it's on a regional basis or global basis, that will be negotiated. And what residual rights we have depends precisely on those negotiations.

Okay. Great. And then in terms of your responsibilities, though, you talked about a partner that could finance the later stage. Would you also be responsible for some of the execution on those trials and potential commercialization? Or how are you looking at it at that this point in time?

Yes, again, that depends on what region we're discussing with a partner. It depends on what the partners capabilities are versus ours. We currently have the capability to manufacture sufficient material and sufficient quantities to launch a product. And we have the infrastructure both clinically and regulatory to take it through licensure with what would be an expanded group if we're funded to do that. So I think again it's a negotiation. We're taking it through the manufacturing process and starting into Phase II clinical trials on our own. And how much further we go depends upon the partner.

And our next question is from Edward Tenthoff of Piper Jaffray.

Just a quick follow-up on the new partnership in India and the malaria program. This is pretty interesting, I think. Can you just run through kind of what the process might be there and maybe even add a little bit of detail on how big that opportunity ultimately could be?

Let me start on that. They actually came to us. The ICGEB is an international research organization based in 3 different countries. One of their bases is in Delhi. They were funded by the Department of Biotechnology, which is part of India's equivalent of Health and Human Services. They know us fairly well. We've been to see them over the past couple of years, as we've gotten to know the Indian health service HHS equivalent. They saw the opportunity using for our VLP technology, our recombinant nanoparticle technology to make an improved vaccine -- what could potentially be an improved malaria vaccine, both more potent and broad. And as you know, India has -- malaria is a large problem within India. So the government has decided to fund the initial stage, which is to take -- for us to clone a malaria vaccine candidate and to purify it and provide material to the ICGEB, who will then -- who has an infrastructure set up to do animal models and based upon the data from those animal models, we would then seek funding for the later stage development in Phase IIs and ultimately in Phase IIIs. I think we envision right now that we would support not only the cloning and purification and process development effort, but we would work with our partner in India, which is Cadila Pharmaceuticals Limited Biologics, CPLB, who has a GMP manufacturing facility all the way through fill and finish who would pick up the manufacturing of this vaccine for late stage clinical trials and in conjunction with ICGEB, we would conduct those trials. We expect the program to be fully funded as we go down the road by the various malaria not-for-profit vaccine institutes and governmental organizations. I don't know. I can't put a number of what the market opportunity is. I think we all know that Malaria is a pathogen that causes hundreds of millions of cases of malaria every year. And I think this is the #1 infectious disease, as Dr. Fries tells me. I believe the numbers on the order of their 0.75 million people die annually of malaria, so it's the #1 disease. Obviously, markets that -- to whom we would be selling the product would be primarily low-income markets and so the pricing would have to be -- reflect that, but lots of organizations who would like to support the distribution of a malaria vaccine in Africa and India.

That's really helpful.

And with that, I'm showing no further questions. I'd like to turn it back to Mr. Herrmann for any further comments.

This is Stan. Thank you all for listening in. And we look forward to reporting to you next quarter.