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Healthcare - Biotechnology - NASDAQ - US
$ 2.21
-0.897 %
$ 1.9 M
Market Cap
-0.14
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EARNINGS CALL TRANSCRIPT
EARNINGS CALL TRANSCRIPT 2015 - Q3
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Executives

Tamara McGrillen - Head, IR Geert Cauwenbergh - President & CEO Caitlin Kontulis - Principal Accounting Officer Pamela Pavco - Chief Development Officer.

Analysts:.

Operator

Good afternoon, ladies and gentlemen and welcome to RXi Pharmaceuticals’ third quarter 2015 earnings conference call. Today's call is being recorded. At this time, I'd like to turn the call over to Ms. Tamara McGrillen, Head of Investor Relations for RXi. Ma’am, the floor is yours..

Tamara McGrillen

Thank you, operator. Good afternoon and thank you for joining us today. We are joined today by our President and CEO, Dr. Geert Cauwenbergh; our Chief Development Officer, Dr. Pamela Pavco and by our Principal Accounting Officer, Ms. Caitlin Kontulis.

I would like to remind listeners that this call will contain certain statements concerning RXi's future expectations plans and prospects which constitute forward-looking statements for the purposes of the Safe Harbor provision under the Private Litigation Reform Act of 1995.

Actual may differ materially from those indicated by these forward-looking statements and as a results of various important factors including those discussed in our most recent Form 10Q filed today with the SEC.

In addition any forward-looking statements represent our views only as of today of this recording and should not be relied upon as representing our views as of any subsequent date. We specifically disclaim any obligations to update such statements. Now I would like to turn the call over to our President and CEO Dr.

Cauwenbergh estimates and expectations. For a detailed list of risk factors that may impact the company's estimates, please refer to the news releases and RXi Pharmaceuticals' SEC filings. Now, I'd like to turn the call over to Dr. Cauwenbergh..

Geert Cauwenbergh

Thank you, Tammy. Good afternoon to everybody. I appreciate you all for joining the call today. Before turning it over to our management team. I want to highlight what word key defining events were exciting in the third quarter and since the end of the quarter.

On the product development from we have provided three month medical results with RXI-109 versus control for our first two cohorts in the RXI-109 1402 study to reduce the recurrence of hypertrophic scars at the scar revision surgery. Dr.

Pavco will provide a more detailed information but the bottom line is that direct clinical assessments of the patients by the treating physicians as well as blinded panel and investigator reviews of all treatment pictures of the incision areas of these patients have shown statistically significant differences in favor of our RX-109 treatment as compared to control.

We announced that we initiated our first trial in pomology with RXI-109 to prevent the progression of retinal scaring, a harmful component of numerous retinal diseases. This phase 1/2 study is in patients with advanced macular degeneration who show a scarring component as a result of the disease progression.

We have also made good progress on the intellectual property front with several patents being issued relating to our RNA platform both in the U.S. and abroad.

We are also working on new submissions focusing on strengthening our IP position for Samcyprone, our collaboration with Biogazelle in Belgium has led to an exciting discovery for our RXi RNA As it was generally believed RNAs were only capable of affecting RNA [indiscernible] this collaborative research as demonstrated that surprisingly our as the RX RNA compounds are also capable of significantly that means more than 60% reducing long non-coding RNA in the cell nucleus.

Apart from that being a remarkable biological finding these results also means that our selves delivering platform might actually have biological relevance for phenotypic disease expressions that before where were believed not to be able to be influenced by RNA high compounds today.

In practical terms for us this finding almost quadrupled the possible targets we can affect with our proprietary self-delivering platform. Closer to human use to the market and to the market our research efforts have also resulted in the identification and selection of two compounds for development as cosmetic products.

These products have shown in vitro with high potency to lower in a dose dependent manner the messenger RNA expression of two enzymes, collagenase and tyrosinase that can cause changes in skin tone and texture as well as in skin pigmentation. The global market for cosmetic products for these two market segments has reached these days $200 billion.

Testing in monolayer cell cultures and in culture human skin equivalents have confirmed that the effect of these compounds on the messenger RNA of these enzymes also yields a visual phenotypic end point.

Considering the substantial progress on all these fronts we take particularly pride in the fact that we have been able to achieve these results while keeping our cash burn in line with past quarters and with the projections and estimates that we have provided now for several quarters. Indeed once again.

We have been able to work on a quarterly burn rate between $2 million and $2.5 million and we expect this to continue at around $2.5 million for the next few quarters. We have projected to have sufficient cash into the first quarter of 2016 2017.

From an overall corporate point of view, I also want to mention that on November 3, we received notice from NASDAQ that a company was granted a six month extension to bring its share price back in alignment with the Nasdaq required to have a closing trading price above $1 per share. We will continue to work diligently to achieve that goal.

And now I'm I know I'm hand the call over to Ms. Caitlin Kontulis for the financial discussion.

Caitlin?.

Caitlin Kontulis Secretary

Thank you, Geert and good afternoon everyone. As we reported today total operating expenses for the third quarter of was 2.5 million compared to 2.2 million for the third quarter of 2014. The increase of about $300,000 or 13% from the prior year period was primarily driven by research and development expenses.

Research and development expenses for the three months ended September 30, 2015 were $1.7 million compared with $1.5 million for the three months ended September 30, 2014.

The increase in R&D expenses was primarily driven by a new drug manufacture of our RXI-109 that commenced earlier in the third quarter of this year offset by a reduction in expenses related to the 1301 and 1401 clinical trials as these come to completion.

General and administrative expenses the other component of operating expenses for the three months ended September 30, 2015 were 770,000 compared with $766,000 for the three months ended September 30, 2014. G&A expenses for the third quarter of 2015 were consistent with the G&A expense as for the third quarter of 2014.

Net loss applicable to comment stockholders was $2.5 million for the quarter ended September 30, 2015 compared with $2.9 million for the quarter ended September 30, 2014.

The decrease of about $400,000 or 14% from the prior year period was primarily driven by the reduction in the preferred chair dividend offset by the increase in research and development expenses as previously discussed.

There were no dividends paid on the Series A and Series A1 preferred stock during the three months ended September 30 2015 as compared with the same period in the prior year as all outstanding shares of both series were converted into common stock on May 27, 2015 as a result there are no shares of the Series A and Series A1 preferred stock outstanding and there will be no further dividend payments on these series of shares.

At September 30, 2015 the company had cash and cash equivalents of $4 million and short term investments 8 million for a total of 12 million. Moving to the cash flow in more detail. We had approximately 4 million in cash and cash equivalents at September 30 2015 as compared with 5.1 million in cash in cash equivalents at September 30 2014.

The company raised net proceeds of 9.3 million in equity financing during the first nine months of the year offset by cash used in operations of 5.7 million primarily driven by R&D expenses for the company's efforts in advancing its clinical and pre-clinical development programs with RXI-109 and Samcyprone and the purchase of 8 million in short term investments.

We believe that these existing cash and cash equivalents in short term investments should be sufficient to fund our operations for at least one year. As Gary mentioned in November. The Nasdaq stock market provided written notice.

And granted to the company an additional one 180 calendar days to regain compliance with the minimum bid price requirement set forth in the Nasdaq listing rules. As a result of the extension the company has until May 2, 2016 to regain compliance by maintaining a closing bid price about least $1 for ten consecutive business days.

The company intends to closely monitor the share price of our common stock and if necessary may consider implementing available options to regain compliance. At this time the notice has no effect on the listing of a common stock on the Nasdaq. With that I will turn the call over to Dr. Pavco who will discuss the company's R&D activities..

Pamela Pavco

Thank you Caitlin and hello everyone. The R&D group said been extremely productive in the last few months.

On the call today I will first update you on the advancements we have made in our [Technical Difficulty] dermal and ocular programs and then fill you in on where we are with our first trial evaluating Samcyprone, our immunotherapy therapy compound. Lastly I will touch on some of our most recent progress in the search area.

As you may know we recently announced the three month results of study 1402 in hypertrophic scarring. In this ongoing study we are comparing two dose levels of our RXI109 for the ability to reduce the recurrence of hypertrophic scars after scar revision surgery.

We have completed in a moment in the first two cohorts of this study and evaluated the results at three months for 15 subjects, after scar revision surgery each subject has a least two centimeters of their scar treated with your RXI109 either 5 or 10 per centimeter and a any similar length of the revised area is left untreated for comparison.

This allows us to directly compare the outcome of treatment with RXI109 versus no treatment on the same person. At the time of the evaluation these subject had received five of their six doses in the planned dosing regimens. We use several methods for this comparison.

First the investigator used two standard assessment scales directly score each revised area on the subject in their care.

One was called the patient and observer scar assessment scale or POSAS which allows the investigator to assess the characteristics of a scar for example how red it appears and whether or not it's raised above the skin level or flat.

The second was a VAS or visual analog scale on which the investigator marks on a line to indicate whether the resulting whether there are scar falls between number one which is for a fine line scar to a number ten the worst scar you can imagine.

We also conducted blinded evaluations of photographs of the revised areas at three months post surgery where investigators and several key opinion leaders and the panel of observers were asked to indicate whether Scar A or Scar B appeared better or if there was no difference between the two scar.

In all cases they were comparing RXI109 treated scar to the control untreated scar on the same person, for all four assessments that POSAS [indiscernible] the blinded panel of observers and the blinded panel of investigators and key opinion leaders, RXI109 treated scars were scars was scored significantly better than their control untreated segments.

When comparing the photographs there was complete agreement between investigators and the blinded panel. On average the RXI109 treated side with better selected is better 55% of the time and no difference 19% of the time. These data are presented at Dawson James Conference and the graph of statistics can be found on our website.

There was no difference in safety between the 5 milligram and the 10 milligram dose but the lower dose of 5 milligrams per centimeter resulted in better results. The higher doses of 10 mgs did not result in better clinical appearance. This important finding led us to the decision to continue with the lower dose in an expansion of this trial.

So we’re expecting IRV approval by the end of this week for a protocol amendment that adds two coverts to the study this study 1402 and we have already had a number of subjects that can be enrolled in part of the trial.

The 5 milligram per centimeter dose level will be evaluated in these two additional cohorts but we will be evaluating two different and expanded dosing regimens. Subjects will receive either 8 or 9 doses of RXI109 over six months rather than only six doses over three months as in the first two cohorts that for which I just gave result.

We believe that extending the dosing regimen further into the proliferation stage of hypertrophic scar formation will support a sustained response also objects in all four cohorts of study 1402 will be followed out to nine month pre-surgery to continue the comparison between treated and untreated scar areas and also to see if or when there hypertrophic scar may be given to return.

Comparisons of the RXI109 treated scars or areas at 3,6 and 9 months post surgery will allow us to determine if treatment with 109 for a longer period of time provides a better outcome. This information will be beneficial to us in determining the optimal dosing schedule for Phase 2B or Phase 3 study.

In addition to expanding the 1402 hypertrophic scar trial we also filed an IND for ophthalmology for RXI109 and initiated a Phase 1/2 clinical trial study 1501. As we reported our RXI109 can also be used to target connective tissue growth factor or CTGF in the eye where it is known to be involved in retinal scarring.

Study 1501 will evaluate the safety and clinical activity of RXI109 in reducing the progression of retinal scarring a harmful component of numerous retinal diseases.

Currently there is no effective way to prevent the formation or progression of retinal scars that make or as a consequence of a number of devastating ocular diseases in advanced neurovascular or age related macular degeneration are first area of study and retinal scarring can result in continued vision was loss even if the patient is being treated with an anti-VEGF therapy.

Wet AMD is currently treated with anti-VEGF therapies to block vascular endothelial growth factor or VEGF from causing blood vessel leakiness and the consequential damage to the retina. However as a disease progressing, many advanced patients also experience retinal scaring with leads to further vision loss.

Our ultimate goal is to reduce the scarring that is secondary to advanced wet AMD. RXI109 has the potential to fill this unmet medical need by reducing this continuing damage to the retina and in doing so help preserve vision in these individuals for a longer period of time.

Now tell you a little bit about the study itself, study 1501 is the Phase 1/2 multi-dose, dose excavation [ph] trial conducted in subjects with advanced wet AMD. RXI109 will be administered by intravitreal injection in one eye only. Each subject will receive a total of four doses of RXI109 at one month interval.

After the first dose there will be a period of extensive safety evaluation to assess their ocular health and to determine whether subject can continue on in the study and receive the other three doses. The total dosing period of three months will be followed by a four month observation period.

The safety and tolerability of RXI109 as well as the potential for clinical activity will be evaluated over the course of the study using numerous assessments to monitor the appearance of the retina and to assess visual acuity.

This is a dose escalation study which means that three doses will be evaluated in the small number of subjects in the first trial in order to establish safety information and to help determine the dosing regimen for continued study. As I mentioned before there are no approved therapeutics in the U.S.

for the treatment and prevention of sub-retinal fibrosis. Such a therapy could benefit patients with advanced wet AMD who will be included in the current trial as well as those with other ocular indications that have a scarring component.

Retinal fibrosis or [indiscernible] scarring is also a problem in disorders such as proliferative vitreoretinopathy or PVR and proliferative diabetic retinopathy. We will be exploring disease in wet AMD once we establish safety and tolerability of our RXI109 in this study and begin to establish the initial evidence of clinical activity in the eye.

I've just reviewed the two trials ongoing that are valuing RXI109 in the skin and the eye to reduce scarring. Now I'd like to update you on the status of the development [indiscernible] compound Samcyprone.

Samcyprone is a formulation of a much used small [Technical Difficulty] DPCP has been used for decades as a treatment for recalcitrant wart removal to stimulate hair growth, regrowth in patients with alopecia areata and more recently the even reduction of cutaneous metastases with melanoma.

As it is currently used, the doctor must prescribe the DPCP to be formulated by a compound in pharmacy general and then acetone. There are no standard methods of formulation of how to use it and because it works by causing an immune response, the level of response can vary greatly from person to person.

However some pharmacies will not even compound it even if it is prescribed. There will be several advantages to using an FDA regulated formulation like the one we are developing. First the amount of the DPCP used in our own formulation were a bit lower than that generally used in the acetone formulation.

This should result in reduced side effects that happened into accidental oversensitization when a higher than necessary concentration is used. Second we are developing an optimized dosing regimen so that a standardized response can be expected.

And third the ointment formulation will be easier to prescribe and to use than the acetone formulation allowing ease of application at the appropriate sight on the skin. We believe that these improvements will be appreciated by the doctors who have long been in need of a consistent way to use the DPCP as a therapeutic.

Warts are extremely common and often disappear on their own, however removal of recalcitrant warts and reduction of their recurrence is complicated by the most success rates when using standard treatments.

Standard treatments include physical deconstruction for example by freezing the wart, chemical destruction for example by applying a variety of chemicals that floats growth and break it down or standard immunotherapy such as the DPCP and acetone.

We are in the process of submitting a Phase 2 clinical protocol for the use of an ointment formulation of DPCP which we call Samcyprone in subjects to common warts and we will be initiating this trial before the end of the year. In this trial known as RXI-SCP1502 or study 1502 [indiscernible] and approximately 40 subjects will be treated.

The protocol includes a sensitization phase where the higher dose of 0.4% DPCP ointment is applied to one wart and also to an area of skin on the upper arm. After being sensitized in this way the subjects will enter into the treatment phase where they will receive 10 weekly treatment.

The treatment dose is 10 fold lower than the sensitization dose or 0.04% DPCP ointment. During the trial the words will be scored, photographed and measured to monitor the level of clearance.

The ultimate goal is to complete is complete eradication of the wart at the end of the 10 week treatment phase so that that area returns to its no normal skin appearance.

Subjects with greater than or equal to 50% partial clearance of the treated warts at the end of the 10 week treatment phase will also be given the option for an additional 10 week course of treatment. As I mentioned we will be initiating this Phase 2 trial before the end of the year.

We are very excited to be getting close to initiating this trial with Samcyprone with an easy to use standard ointment formulation.

In the research area we continue to expand our work on our next selected dermatology target, tyrosinase and collagenase, we recently announced that we have chosen one leads FDR RNA compound for each of these targets that we plan to take court on this [indiscernible] development path.

You may remember that tyrosinase is a key enzyme involved in melamine synthesis which provides the color of your hair and skin. We have been able to show that reduction of tyrosinase with RXI231 results in a reduction of tyrosinase MR&A and a visible reduction of melanin protein in cell culture.

Our goal is to develop marked RXI231 to improve the appearance of the skin. Collagenase is a key enzyme involved in the breakdown of collagen in the skin. Reduction of collagen naturally occurs as you age and as your skin is exposed to the sun. This and this reduced level of collagen leads to the wrinkles that begin to show as we mature.

Reduction of collagen is also a culprit in acne scarring or pitting as it's called where the lack of collagen can result in a small depression. Dated with RXI185 targeting collagenase shows potent activity in reduction of collagenase MR&A and also reduction of collagenase enzyme activity in cell culture.

By reducing the level of the enzyme that causes the cause and breakdown we believe that RXI185 can potentially be used to help improve the appearance, texture and elasticity of the skin. For RXI231 or RXI185 be successful as cosmeceutical we need to develop a topical delivery and this is where our current research is focused.

Topical delivery can be enhanced in the number of ways and we are exploring some of these internally and also in a few ongoing research collaborations.

There are mechanical ways to disrupt the surface layer of the skin including types of [indiscernible] also basically a formulation that serves to enhance penetration past the surface of the skin and are in the process of evaluating a number of these.

Lastly I'd like to close to some of the information on one of our most recent research accomplishments. We recently announced the results in collaboration with a company named Biogazelle which has internationally recognized expertise in RNA gene expression.

One focus of theirs is what is known as long non-coding RNAs, it is now known that there are 60,000 of these [Technical Difficulty] roughly three times as many as the RNAs that code for proteins in the human. For many years these long non-coding RNA were thought to be non-functional.

However we now know that this not the case and many of them have known functions. In fact many are involved in crucial cellular processes including the regulation of gene expression and have been indicated in many diseases in human including cancer cardiovascular diseases, neurological disorders, diabetes and HIV.

For the collaboration with Biogazelle Rxi designed and synthesized panels of sd-xRNAs against a set of eleven non-coding RNA targets selected by Biogazelle. [Indiscernible] cell culture assays and the absence of [indiscernible].

They were able to identify potent sd-xRNAs that resulted in greater than 60% silencing for 10 out of the 11 non-coding RNA targets. Most interesting is that the Sd-xRNA platform supported silencing of long non-coding RNAs that are known to be exclusively located in the nucleus rather than only those located in the side of eyes [ph].

These findings dramatically expand the number of potential sequences that are platform RNA eye compounds are able to target and could result in another area continued research for new therapies for human disease.

So to summarize in the development area, we have reported on the positive effect of RXI109 in reducing scar formatting in this skin of hypertrophic scar subjects, we have expanded study 1402 to include two additional cohorts that will evaluate an expanded dosing regimens.

We filed an IND and ophthalmology and initiated a Phase 1/2 trial advanced wet AMD patients to evaluate our RXI109 for the reduction of sub-retinal fibrosis or scarring.

We manufactured another batch of RXI109 under CGNP which I didn't mention before and we had completed most of the activities necessary to support a trial evaluating [indiscernible] warts and plan to initiate that trial before the end of the year and we’re on track to do that.

In research we have selected a tyrosinase and collagenase SCXRNA to continue a suitable candidate we continue to work toward a topical delivery method that would be suitable for these compounds and we have reported positive results in a collaboration showing that STR RX RNAs are able to target and reduce long non-coding RNAs which open area of therapeutic target.

With that I will now turn the call back to Cauwenbergh..

Geert Cauwenbergh

Thank you, Pam. Since RXI began operations in April 2012 the company has delivered against of it's projected milestones on time and even under budget. Moreover RXI has had an excellent third quarter also this year. Based on expected news flow we feel confident that this trend may continue.

I would be remiss not to mention the headwinds that in the last several months have a affected healthcare and biotech in general and small biotech in particular.

Although there is a broader need and expectation from the public to see new drugs developed and come to market to improve the lives of millions of patients the responsible acts of some companies and individuals as well as a [indiscernible] has affected many companies in our industry including our company.

The investment world is understandably focused in the first place on making money for themselves and for their clients and in a client of uncertainty you will get that effect the confidence with which investments are made and sustained.

I'm confident that over time common sense will prevail and companies with strong technology platforms and clear capabilities to other people based on potentially transformational innovation will try.

I continue to consider RXI Pharmaceuticals as one of those companies and as a result expect our initiatives and their outcome to contribute to announce shareholder value and now back to Tamara McGrillen..

Tamara McGrillen

Thank you, Geert. This now concludes the formal presentation for today. Operator we would like to now pull for questions at this time please..

Operator

[Operator Instructions]. The next question comes from Mark..

Unidentified Analyst

This is actually Matt on for Mark, thanks for taking the question.

Maybe if you could get us sense where you think [indiscernible] paradigm are we thinking maybe a second line to the anti-VEGF therapies or maybe at some point would you consider exploring them in combination with each other?.

Pamela Pavco

I think the combination idea is a very, very interesting one. At the moment more than half of folks under treatment with anti-VEGF therapy develop scars within two years or at least by the time they reach two years.

So one thing we have to sort of try to figure out is it better to wait and start midway through their anti-VEGF treatment or go ahead and start from the very beginning. So one option for us is to do use this is assuming everything goes well in our trials to use our RXI,109 with the current anti-VEGF therapies that are out there.

We also have an anti-VEGF [indiscernible] RNA that we might consider taking for together with RXI109..

Unidentified Analyst

And my next question is there a means that we can measure retinal scarring that [Technical Difficulty]..

Pamela Pavco

There is actually some -- so what we will be doing optical coherent stenography [ph] as well as battery of standard visualizations and taking photographs on things like the photography.

You can't measure the back or look at the back of the eye and see and measure how much scar is there and see whether it's progressing during the course of this trial which is what we hope to prevent from happening.

Obviously you can't use a placebo -- if the patient also has scars in their other eye we can measure follow that other eye as well and we may see a difference between the progression of the scar and the eye that’s not treated compared to the one that is treated that's one possibility for getting some information on clinical activity out of this first trial..

Unidentified Analyst

Last question if we can shift to the pharmaceutical, is this a program that you would intend to developing -- [Technical Difficulty] ..

Geert Cauwenbergh

That’s a very good question. The last thing we want to do is to go too broad with our activities. We received a request to being able to do cosmetically work from few players in the space.

So our intention is to bring it up to a certain point and while we are doing that negotiating with those potential partners to see if we can come to a collaboration so that those potential partners would take some of the word out of our hands at the same time that would allow us to look other compounds in that area because we have multiple candidates that we could look at for development in drugs but separate from the cosmeceutical ones..

Operator

Your next question comes from Katherine. Go ahead, Katherine you’re live..

Unidentified Analyst

I had a couple of questions, the first was on the RXI109, the 1402 study, in regards to the additional cohort.

I was just wondering what colors are what caused or what gave you reason to go on to the additional cohort or going for specific 8 or 9 treatments or is there something that you saw in the initial cohorts or just the decision to just elongate and try to get a little bit more efficacy over the six month period?.

Pamela Pavco

Well even at the beginning of the study we knew that the time course for hypertrophic scar formation can last over a two year so when we were treating only for the first three months we were really only treating at that very initial time and we are seeing that there is a difference between being treated and the untreated at three months after in this case it was after five doses at that first three month period.

However we believe that if we treat for a longer out further from three to six months we will even have a better response and the treated will be even more resemble normal skin rather than having any remnants of hypertrophic scarring.

The other reason to continue treating is if we continue treating farther into that hypertrophic or proliferation phase of scarring we may dampen down the potential recurrence between for example three months and six months.

So in some cases people that are especially people that are really prone to hypertrophic scarring even if you were to treat for three months. They may begin to get a -- their scar may begin to come back.

So our thoughts on this were to treat for a longer period of time for especially for these people that have that that are in these trials with serious hypertrophic scarring issues and that might not only help them keep the scar from coming back during the treatment but prolong the affect so that it doesn't come back after the treatment is stopped..

Unidentified Analyst

So you'll presumably have a number of readout the initial six months and then follow up readout maybe--.

Pamela Pavco

Absolutely. We’re actually are going to make our first read out at seven months official readout because that's one month after the last treatment that will be received by the subjects in either cohort three or four with either in eight or nine doses and then they're followed up to nine months so we'll have another readout at nine months as well..

Unidentified Analyst

And then I just had a question on Samcyprone well.

I'm just wondering if you could give us an idea of the age group that you're looking at for your Phase 2 face for cutaneous warts and then it looks like it's a relatively quick trial with just the ten weeks if you'll be evaluating as you go on at the ten week so I'm wondering in terms of data if we can expect data to have 2016 on that?.

Pamela Pavco

Sure. So we are starting this trial with in an adult population. While a DPCP in acetone and various formulations have been used in children. We want to establish a nice safety profile in adults before we were before we would move into children. So it's going to be 18 and up.

That does slow down the recruitment just a little bit because obviously the children, the pediatric population has more warts than the older population.

But we felt that was important just to go through the safety portion of this trial first.\ Having said that we expect to be able to rope in fully enroll this trial next year by the end of the here and so with the a sensitization period of time and a 10 week treatment period if we enroll by the end of the year we should be able to have a database lock and be able to look at all the patients by mid-year in 2017..

Operator

Our next question comes from Kenneth. Go ahead, Kenneth you’re live..

Unidentified Analyst

I'm just interested more about the timeframe on this skin lightening franchise how you expect that to progress and what we could expect to see him terms of a timetable for bringing that product hopefully successfully out to market?.

Geert Cauwenbergh

Well.

You can imagine cosmetics or being developed or cosmeceutical are being developed totally differently from drugs, since cosmetics and cosmeceuticals are not intended to treat or prevent diseases but are used to manipulate the appearance of the skin, regulations are different, that means more specifically and importantly that that for cosmeceutical you can only do in vitro work, no animal data before you move into humans.

And so then you basically go to the groups of individuals who are unhappy with their skin tone, texture or pigmentation. And you evaluate the application of the product on their skin to see affects those features.

You can do that objectively by specific methods that have been developed and are widely used in academic centers, you can use chronometers to look at the degree of pigmentation. You can use [indiscernible] measurements on the skin to see how it changes over time and that is something you don’t do immediately on humans.

So the development of cosmeceuticals as a result should go a lot faster. At the same time and that is already what we have done in vitro.

We have seen over the phenotypic change meaning visual effects in the in vitro testing that make us optimistic that if we can provide the product topically to the point that it reaches the lower layers of the epidermis that we hope to see their effect as well. There is what Dr.

Pavco mentioned that one of our key activities today is to see to what extent we can accelerate, improve absorption in the skin, not through the skin in the blood but in the skin in order to optimize the effect..

Operator

There are no further questions..

Tamara McGrillen

Okay. Ladies and gentlemen thank you very much for participating in our call today. And this concludes our call..

Operator

This does conclude today's teleconference. We thank all of you for your participation. You may disconnect your lines at this time and have a great day..

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