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Friday, March 02, 2007 6:13:50 PM
CC Transcript:
CORPORATE PARTICIPANTS
Amy Sullivan
Idenix Pharmaceuticals - IR
David Arkowitz
Idenix Pharmaceuticals - CFO
Guy Macdonald
Idenix Pharmaceuticals - EVP Operations
Doug Mayers
Idenix Pharmcaceuticals - EVP & CMO
Jean-Pierre Sommadossi
Idenix Pharmaceuticals - Chairman & CEO
CONFERENCE CALL PARTICIPANTS
Robyn Karnauskas
Bear Stearns - Analyst
Rachel McMinn
Piper Jaffray - Analyst
Jason Kolbert
Susquehanna Financial - Analyst
Tim Smith
Citigroup - Analyst
Howard Liang
Leerink Swann - Analyst
Richard Smith
JPMorgan - Analyst
Hari Sambasivam
Merrill Lynch - Analyst
Sumesh Sood
FBR - Analyst
Jessica Li
Goldman Sachs - Analyst
Eugene Trogan
Morgan Joseph Co - Analyst
PRESENTATION
Operator
Good morning, my name is Beth and I will be your conference operator today. At this time I would like to welcome everyone to the fourth-quarter 2006 year end financial results conference call. All lines have been placed on mute to prevent any background noise. After the speakers remarks there will be a question-and-answer session. (OPERATOR INSTRUCTIONS) Thank you. Ms. Sullivan, you may begin your conference.
Amy Sullivan - Idenix Pharmaceuticals - IR
Thank you. Good morning and welcome to Idenix's conference call to discuss our fourth-quarter and year end 2006 results. With me today are Jean-Pierre Sommadossi, CEO, David Arkowitz CFO, Doug Mayers, Chief Medical Officer and Guy Macdonald, Executive Vice President of Operations. Today's discussion contains estimates and other statements that are forward-looking under the Private Securities Litigation Reform Act of 1995. When we discuss our growth, science, products and prospects our point of reference is how we as a company think, expect or believe the future will look based on information as we know it today. Accordingly, these statements are based on current expectations and assumptions that are subject to risks and uncertainties and involve a number of factors that could cause actual results to differ materially. Additional information concerning these factors is contained in Idenix's filings with the SEC, put in our annual report on Form 10-K which are available in the investor section of our website at www.Idenix.com.
When we may elect to update forward-looking statements at some point in the future we specifically disclaim any obligation to do so even if our estimates change and therefore you should not rely on these forward-looking statements representing our estimates as of any subsequent date to today. The agenda for the call is as follows; David will review our financial results and provide financial guidance for 2007. Guy will discuss our progress with the launch of TYZEKA in the U.S. and review the status of worldwide regulatory applications. Doug will discuss the status of our clinical programs and highlight the significant new data presented at EASL, and Jean-Pierre will conclude the formal portion of the call with brief remarks. Then we will open the floor to Q&A. I will now turn the call over to David.
David Arkowitz - Idenix Pharmaceuticals - CFO
Thanks, Amy. Today we reported unaudit financial results for the fourth-quarter and year ended December 31, 2006. At December 31, 2006 our cash, cash equivalents and marketable securities totaled $186.4 million in line with our 2006 guidance of between $170 and $190 million. For the fourth quarter of 2006 we reported total revenues of $15.3 million compared with total revenues of $18.1 million in the fourth quarter of 2005. Total revenues consist of reimbursement by Novartis of Idenix expenses incurred in connection with the development of TYZEKA and valtorcitabine for the treatment of hepatitis B and valopicitabine for the treatment of hepatitis C. The amortization of the license fees received by Idenix in connection with Novartis' license of TYZEKA, valtorcitabine and valopicitabine and product sales of TYZEKA in the United States. We reported a net loss of $23.6 million or a loss of $0.42 per diluted share for the quarter ended December 31, 2006 compared to a net loss of $14.4 million or a loss of $0.27 per diluted share for the quarter ended December 31, 2005.
For the year ended December 31, 2006 we reported total revenues of $67.4 million compared with total revenues of $64.7 million for the year ended December 31, 2005. Total operating expenses for calendar year 2006 were $153.1 million compared with total operating expenses of $120.2 million for calendar year 2005. For the year ended December 31, 2006 we reported a net loss of $75.1 million or a loss of $1.34 per diluted share compared with a net loss of $50.8 million or a loss of $1.03 per diluted share for the year ended December 31, 2005.
Now let me move onto our 2007 financial guidance. We expect to end 2007 with between $100 million and $110 million of cash, cash equivalents and marketable securities. This guidance includes the expected receipt of $20 million in telbivudine related milestones for regulatory approvals in the EU and China. Our anticipated use of cash in 2007 is comprised of expenditures related to our funding of development expenses for the HIV and NNRTI program, HCV and HIV discovery efforts, SG&A expenses, capital expenditures and working capital.
Now I'll turn the call over to Guy.
Guy Macdonald - Idenix Pharmaceuticals - EVP Operations
Thank you, David. As you know TYZEKA the U.S. brand name of telbivudine, was launched in the U.S. at the AASLD meeting late October 2006 within 48 hours of receiving FDA approval. This timing provided an excellent opportunity to reach over 4000 hepatitis focused clinicians who attended the meeting. The Idenix Novartis alliance developed and launched a comprehensive reimbursement of patient support program to help ensure that patients have access to TYZEKA and we believe this program has helped to drive its early adoption.
We've also had early success in gaining access to some important formularies. Specifically TYZEKA is available on most state Medicaid formularies and in New York the single largest Medicaid market for hep B it is available without restrictions. In addition we are working on gaining access to over 60 more formularies in the first half of 2007.
Our marketing campaign is currently being finalized following feedback from (indiscernible). With our full campaign and our highly experienced and skilled field sales team we remain confident that TYZEKA will meet our performance expectations this year.
In addition to the U.S. telbivudine which will be marketed outside the U.S. under the brand name SEBIVO has received approval, or is being recommended for approval in several major markets just 14 months after our first regulatory filing. In the first quarter of 2007 we received CHMP positive opinion in the EU and await full EU approval in the next few months. We re also very excited to report today that we received approval of SEBIVO in China. We believe that this is quite an accomplishment and bodes well for achieving total worldwide annual sales of approximately $20 million on par with [entekavir] first 12 months of worldwide sales.
To prepare for the launch of SEBIVO in Europe over the next 18 months we are assembling a strong European marketing and sales infrastructure. The Idenix European team is working collaboratively with Novartis to take full advantage of the opportunities that our copromotion affords us to make SEBIVO successful in these important markets.
Now I'll turn the call over to Doug.
Doug Mayers - Idenix Pharmcaceuticals - EVP & CMO
Thank you, Guy. It's a pleasure to talk to you for the first time as the chief medical officer of Idenix. I've enjoyed my first month at Idenix working in collaboration with Novartis toward getting approval of SEBIVO in Europe and in China. I decided to join Idenix in January to pursue the opportunity to lead a solid clinical development team supported by a robust virology pipeline of drugs to treat people infected with HIV, hepatitis B or hepatitis C.
I believe the scientific excellence at Idenix is exemplified by the abstracts that have been accepted at the presentation at EASL. Please refer to the EASL abstract press release issued yesterday for a full listing of the accepted abstracts. At this time I would like to briefly update you on our hepatitis C clinical development program and quickly review the status of our HIV development program. First let me update you on the twelve-week Phase I II drug drug interaction and efficacy study which is assessing the pharmacokinetic and pharmacodynamic activity of valopicitabine when used in combination with peggylated interferon and ribavirin in patients with chronic hepatitis C.
This study is now fully enrolled with 117 patients which is approximately 30% more than the 90 originally targeted for enrollment. The primary endpoint of the study is a pharmacokinetic analysis at Day 36 with a secondary endpoint being the antiviral activity at Day 84. In order to compare the double and triple combination of valopicitabine versus standard of care. We originally planning to share top-line data today on the Day 36 review. However, since this is a blinded study we have decided after consultation from Novartis to only release the complete twelve-week dataset once it has been submitted to the FDA. Therefore we anticipate issuing a press release with top-line data this summer and submitting an abstract of the full dataset to a scientific meeting in the fall after we have reviewed the data with the FDA. As we have previously stated based on the fact that prior antagonism in vitro between ribavirin and other nucleosides has not been confirmed in the clinic we remain optimistic that this study will demonstrate a lack of an interaction between ribavirin and valopicitabine.
We are pleased to report that todate safety and tolerance in all treatment arms have been encouraging with no SAE's and only two patients who have prematurely discontinued. Only one patient discontinued due to nausea and vomiting within the first week of treatment.
Now let me move to discuss the HCV program abstract that were excepted for presentation at EASL. We've had three primary abstracts accepted for presentation. First is end of treatment or week 48 data from our treatment naive Phase IIb trial that we presented at the conference. The treatment naive abstract which posted yesterday includes week 36 data and as you can see by the data, HCV-PCR negativity rates ended week 24 have been sustained through week 36. From our treatment refractory Phase IIb trial final data will be presented at the Congress including end of treatment response as well as sustained virologic response data. As a reminder this study assessed various doses of valopicitabine in combination with peggylated interferon versus standard of care.
The abstract contains 48 week data from the study. Data for week 48 continued to support valopicitabine as a potential component of future combination regiments for patients who have failed peg interferon ribavirin therapy but also demonstrates the difficulty in fully suppressing hepatitis C virus replication in treatment experienced patients. Due to the minimal efficacy contributed by the peg interferon in prior non responders combination therapy for experienced patients will likely require the combination of two or more novel and complementary agents to achieve optimal clinical outcomes.
With this in mind Idenix and Schering-Plough have completed in vitro experiments with valopicitabine and Schering 503034, Schering-Plough's HCV proteases inhibitor. An abstract on this work has been accepted for presentation at EASL. These in vitro experiments suggest that these compounds when used in combination have additive antiviral activity and complementary resistance profiles and importantly the combination of two agents increases the barrier for developing resistance to either drug.
We are committed to improving the care of patients of chronic hepatitis C and believe that to achieve the highest rate of SVR for genotype I patients a cocktail of multiple novel, small molecules used in combination with the current series of care will be necessary. We believe to achieve the best possible outcome for patients; sponsors must collaborate and explore combinations of investigational agents early in development. When initiated we believe that valopicitabine will have a significant role in combination therapy studies for patients with chronic hepatitis C virus infection.
Moving on to our HIV program the clinical profiles of our two non-nucleoside reverse transcriptase inhibitor compounds were presented at CROI this week. I would like to take a few minutes telling you why we are so excited about the potential for this program. As you know non-nucleoside reverse transcriptase inhibitors or NNRTI's are one part of a combination antiviral regiments called [HEART] for the treatment of patients with HIV infection. However, rapid emergence of NNRTI resistant virus remains a challenge of therapy today.
The preclinical data presented at CROI suggest that IDX 899 and IDX 989 may offer an enhanced resistance threshold with favorable pharmacokinetic and safety profiles. We are pleased to report that we've completed the micro dosing or Phase II study of our two NNRTI compounds and have selected IDX-899 to advance in development as a potential once-a-day oral drug based on its overall profile. While IDX-989 remain in our coffers as a backup. We plan to file a traditional IND for IDX-899 next month and advance this compound into Phase I IIa clinical testing shortly thereafter. Now I will turn the call to Jean-Pierre.
Jean-Pierre Sommadossi - Idenix Pharmaceuticals - Chairman & CEO
Thanks, Guy. The year 2006 was a year of growth for Idenix. We celebrated a number of achievements during our eight years in business. Our employee base grew by more than 25% during the year. We successfully built a U.S. commercial operation including a field force with 20 sales reps, we received approval of our first products for the treatment of hepatitis B in more than 10 countries including the United States were it is marketed as TYZEKA, and we expanded our pipeline with normal compounds for the treatment of HIV and the comprehensive discovery effort in hepatitis C.
We also had a few growing pains as you can expect in clinical development. In our two ongoing clinical trials of our lead drug candidate for the treatment of hepatitis C, valopicitabine or NM283 we had to reduce the dose administered in this trial to either 200 milligrams per day or 400 milligrams per day due to a higher proportion of severe GI side effects of certain patients receiving the 800 milligrams per day dose.
While this presented unique challenges we were pleased to see that the trial and treatment naive patient progressed to 200 milligram per day dose actually appeared to have comparable antiviral activity by week 12 and week 24, as the 800 milligrams per day does. But definitely is much better tolerated. We are now starting the 200 milligram dose in an additional Phase I II trial to assess the combination of valopicitabine with peggylated interferon and ribavirin which as you know is the current standard of care in treatment naive.
The study will continue to 12 weeks to assess the longer-term safety and antiviral activity of the triple combination versus the standard of care. Once we have the final 12 week's data as Doug indicated we will promptly submit it to the FDA and request a meeting to discuss further study to advance the clinical developments of valopicitabine NM283.
For the very difficult to treat patients it's going to be definitely a significant challenge for everyone. And in those patients who are failed interferon based regiments the past (indiscernible) valopicitabine as we believe most likely for all investigational anti-HCV dereg drug. We probably be a combination with either one or more small molecules dereg antiviral. I will go by collaborating with other companies to make valopicitabine an important component of combination therapy.
We are also actively working to expand our pipeline through both organic discovery and collaborative research and development. Our comprehensive HCV discovery efforts focus on discovering Next Generation drug candidate in each of the major classes of small molecules. We are on track to file our first IND for this discovery effort in 2007 and we plan to present some early data in the fall at some scientific meeting. And in addition we have also set a goal of having one drug from each class at IND stage by year-end 2008.
In 2006 our HIV discovery program generated a finding of exploratory IND applications for two NNRTI compounds. As Doug mentioned the initial micro dosing study is now complete and based on the overall profile we have selected the drug candidate IDX-899 to move into further clinical testing which is planned for later this year.
In 2006 we achieved a goal of building an integrated biopharmaceutical company with a skilled group of scientists all that work on discovery and experience preclinical and clinical operations group to advance our drug candidates through development and the commercial organization to promote and sell our product. We now have a solid foundation in place from which to continue to build a leading antiviral franchise with a critical mass of program in each therapeutic area.
On that note I would like to end our formal remarks and open the floor to Q&A. Operator, are there any questions?
TRANSCRIPT
Editor
(OPERATOR INSTRUCTIONS)
Operator
(OPERATOR INSTRUCTIONS) Mark Schoenebaum with Bear Stearns.
Robyn Karnauskas - Bear Stearns - Analyst
This is actually Robyn Karnauskas in for Mark, Mark is on a plane. I just have some questions regarding SEBIVO. Can you give us some clarity? you said that you expect 20 million in sales for the year and I was wondering is that the 20 million in regulatory milestones that you mentioned in your guidance or is that 20 million end-user sales worldwide or in current markets, can you give us some clarity there?
David Arkowitz - Idenix Pharmaceuticals - CFO
Hi, Robyn. It's David Arkowitz. That 20 million is end-user worldwide sales. It does not include any milestones.
Robyn Karnauskas - Bear Stearns - Analyst
Is that in current markets that are approved?
David Arkowitz - Idenix Pharmaceuticals - CFO
That includes expected future approvals as well.
Robyn Karnauskas - Bear Stearns - Analyst
Okay.
Jean-Pierre Sommadossi - Idenix Pharmaceuticals - Chairman & CEO
Actually, Robyn, as we have indicated now we have been approval, close to be approving all the major markets.
Robyn Karnauskas - Bear Stearns - Analyst
Okay. And then my last question regarding the drug interaction data. Have you seen any of the data from the first initial time point, the day 36; do you have any sense of the unblinded data, what you might be expecting?
Doug Mayers - Idenix Pharmcaceuticals - EVP & CMO
At this point we've left the Company's blinded to this data set and its our intent to leave the study blinded until we get to the critical 36 day PK and 12 week viral load drop for our clinical staff. This is important for the clinical staff because we don't want to bias the results of safety or efficacy when we forward the data in to the FDA.
Robyn Karnauskas - Bear Stearns - Analyst
Okay. Great, thanks.
Operator
Rachel McMinn with Piper Jaffray.
Rachel McMinn - Piper Jaffray - Analyst
Thanks very much. I'm wondering what if there's a specific time frame from the FDA once you submit the data, is there a regulatory clock that they have to set up a meeting within thirty days for example?
Jean-Pierre Sommadossi - Idenix Pharmaceuticals - Chairman & CEO
Doug.
Doug Mayers - Idenix Pharmcaceuticals - EVP & CMO
I'm not certain that they have an obligation to respond to us within thirty days. But they will clearly review the data and it is our plan to move forward with discussions with them for an interface two meeting this year.
Rachel McMinn - Piper Jaffray - Analyst
Okay. Just so I am clear here, you are going to communicate to the street once you've met with the FDA or once you've submitted the data to the FDA?
Doug Mayers - Idenix Pharmcaceuticals - EVP & CMO
Our plan is to submit data to the FDA in the end of May on this study. We will then meet with the clinical investigators who conducted the trial and review the data with them. After we've reviewed the data with them and we will then discuss it with the street. So it is our plan probably toward the end of June to issue a press release with the data and then go to a meeting in the fall and probably present several abstracts detailing the information that has resulted from this trial.
Rachel McMinn - Piper Jaffray - Analyst
In terms of switching gears to SEBIVO in China. Can you just remind us what the economics are for Idenix and how quickly Novartis will be able to launch there?
David Arkowitz - Idenix Pharmaceuticals - CFO
I can tell you about the economics of that and basically Novartis in China and a number of other territories is this whole party responsible for commercialization. So it's actually a supply price from Idenix to Novartis and then Novartis is providing, doing all the selling and marketing efforts and incurring those expenses and booking the sales.
Rachel McMinn - Piper Jaffray - Analyst
And have you said specifically what that supply price is?
David Arkowitz - Idenix Pharmaceuticals - CFO
No, we have not.
Rachel McMinn - Piper Jaffray - Analyst
All right, thanks very much.
David Arkowitz - Idenix Pharmaceuticals - CFO
And maybe Guy can talk about the subsequent launch in China, timing of that.
Guy Macdonald - Idenix Pharmaceuticals - EVP Operations
I think the only thing I would really say Novartis are very, very committed to the Chinese market. They've done a lot of premarketing activities and have a very significant sales force and marketing group in place and will be launching shortly. I think the specific dates you would have to contact them.
Operator
Jason Kolbert with Susquehanna.
Jason Kolbert - Susquehanna Financial - Analyst
Can we talk a little bit about the 503034 plus NM283 study, how far is that study gone? When can we expect to hear a little bit more about that?
Jean-Pierre Sommadossi - Idenix Pharmaceuticals - Chairman & CEO
Doug.
Doug Mayers - Idenix Pharmcaceuticals - EVP & CMO
This is an in vitro study so it was a test tube study in which they combined these two drugs in the replicon system and showed that basically when you combine them together they significantly inhibit the development of drug resistance. We are committed to working with the other companies that produce complementary drugs to 283 to move them into clinical development. But at this time we don't have any clinical trials that are ongoing and we need to have discussions with the FDA to discuss a pathway forward for this type of trial.
Jason Kolbert - Susquehanna Financial - Analyst
Is there a thought toward working with other proteases as well?
Doug Mayers - Idenix Pharmcaceuticals - EVP & CMO
We are committed to working with other companies that have drugs that will complement our drug, patients with hepatitis C. That is all we can say at this time.
Jason Kolbert - Susquehanna Financial - Analyst
Can we talk a little bit about the drug drug interaction study. What would the statistical penalty have looked like had you taken a look?
Doug Mayers - Idenix Pharmcaceuticals - EVP & CMO
The trial is actually not powered to get a P value at this time. I think the bigger concern was that at the time we would have had to submit an abstract there was a minority of patients who had reached the critical endpoints of the study. And our feeling was that to unblind the study and present preliminary data which could change by the time all the data came in would have been a mistake. And so we felt it was better to get all the data, have a definitive outcome, reach a conclusion with Novartis on the interpretation of the data and then bring it to the market.
Jason Kolbert - Susquehanna Financial - Analyst
Of the total of 130 patients have all completely -- when do we expect the last patient to complete full dosing?
Doug Mayers - Idenix Pharmcaceuticals - EVP & CMO
Mid-May.
Jason Kolbert - Susquehanna Financial - Analyst
Okay. Terrific. Thank you very much.
Operator
Tim Smith, Citigroup.
Tim Smith - Citigroup - Analyst
Thanks for taking the question, this is Tim Smith for (indiscernible). Can you talk about the nature or remind me of the nature of the discontinuations of the interaction study and was either of them related to NM283?
Jean-Pierre Sommadossi - Idenix Pharmaceuticals - Chairman & CEO
Doug.
Doug Mayers - Idenix Pharmcaceuticals - EVP & CMO
There is one discontinuation of a patient taking -- we don't know what they were taking because it was a blinded study. But there was one patient who had nausea and vomiting early on during the first week and did discontinue from the study. The other patient had a lack of concentration that was attributed by the clinician to peggylated interferon. So at this point there is potentially one withdrawal out of the 117 patients due to potentially nausea and vomiting from 283.
Jean-Pierre Sommadossi - Idenix Pharmaceuticals - Chairman & CEO
I think that also what is important is that we have not had any SAE and no grade three or grade four, so very good safety and tolerance in this clinical study so far.
Doug Mayers - Idenix Pharmcaceuticals - EVP & CMO
What is very clear is that the reduction from 800 milligrams to 200 milligrams has significantly improved the adverse event profile of NM283 with patients having a much better GI tolerability.
Tim Smith - Citigroup - Analyst
Thanks for that. And just one other quick question about that study. I know it is powered for PK and PD measure, but I'm sure the viral load reductions are important among the arms. What is different for you guys, are you and Novartis looking for among the NM283 arms versus the interferon ribaviron arms so you'd feel comfortable moving forward into Phase III?
Doug Mayers - Idenix Pharmcaceuticals - EVP & CMO
At this point we are still having ongoing discussions with Novartis on the critical endpoints to move forward, so that is as much as I can say.
Tim Smith - Citigroup - Analyst
Fair enough. Thanks a lot.
Operator
Howard Liang with Leerink Swann.
Howard Liang - Leerink Swann - Analyst
Thanks very much. I have a question regarding the guidance. Does that include the potential milestone payment from Novartis for NM283 for the end of I think it's successful end of Phase II meeting with the FDA, I think that is about 20 to 25 million.
David Arkowitz - Idenix Pharmaceuticals - CFO
Howard, the guidance of ending 2007 with between 100 and 110 million in cash does not include anything related to NM283 from a license for your milestone payment standpoint. What it does include is as I mentioned is 20 million related to telbivudine regulatory milestones.
Howard Liang - Leerink Swann - Analyst
Okay. And I think you might have been expecting that sometime this year, I guess why not include that in --?
Jean-Pierre Sommadossi - Idenix Pharmaceuticals - Chairman & CEO
Howard, we have included only milestones which have been essentially achieved.
Howard Liang - Leerink Swann - Analyst
Okay. Great. On your preclinical HCV program, I think the plan is to have a another IND candidate; and also you talked about you have programs in each of the major classes. Can you give us an overview or at least you're just encompassing protease inhibitors. Are there other classes that will be the first agent to move forward?
Jean-Pierre Sommadossi - Idenix Pharmaceuticals - Chairman & CEO
The first candidate that we anticipate to move at IND as I have indicated we are on track to file an IND by the end of this year will be a second generation of nucleoside analog. I have indicated recently that new generation can deliver 10 to 100 times more active metabolized triphosphates at delivered sites. We believe that that should lead to an increased efficacy of nucleoside. We are within a few months to have a proof of concept in chimpanzee infected with genotype 1. This has been actually a good prediction for an NM283 in terms of viral load reductions and we anticipate to submit an abstract on that proof of concept in chimpanzees which is second generation of nucleosides for fall meetings.
The other classes entail the non-nucleoside and the PI with different scaffold that are being reporting so far; we are pretty pleased with where we stand today. And as I have indicated I will go over this to having one drug in each class at IND stage by year end 2008. Very likely it will be a non-nucleoside fallout by PI in 2008.
Howard Liang - Leerink Swann - Analyst
Thanks very much.
Operator
Richard Smith with JPMorgan.
Richard Smith - JPMorgan - Analyst
Good morning, everyone. Can you comment on any, have you seen any elements of resistance from the two (indiscernible) trials with valopicitabine?
Jean-Pierre Sommadossi - Idenix Pharmaceuticals - Chairman & CEO
Doug.
Doug Mayers - Idenix Pharmcaceuticals - EVP & CMO
We have seen resistance developed with valopicitabine with a previously described I think it is 8 282 T mutation. But it is occurring less frequently than has been seen with the other classes of drugs. It is our belief though that the HCV is an RNA virus; it will develop resistance to any single drug if you don't completely suppress viral replication. And that we will ultimately need to be combined with other classes of drugs to achieve a significant breakthrough in curing HCV.
Richard Smith - JPMorgan - Analyst
And that data is being presented -- have you presented any of it or are you planning to?
Doug Mayers - Idenix Pharmcaceuticals - EVP & CMO
The resistance data has been shown previously for the compound and we are doing right now a number of studies looking at the emergence of resistance in both our treatment naive and treatment experienced trials. Once we have that data analyzed we will present it, yes.
Richard Smith - JPMorgan - Analyst
Thanks. And just with China, obviously there is a few other products out there in HBV antivirals. How do you plan to -- it seems like data or sales from those compounds seems to be limited. Is there a particular strategy in place to crack that market given there has been a long and tough market to access?
Guy Macdonald - Idenix Pharmaceuticals - EVP Operations
I'm sorry, Richard. You'll have to talk to the people at Novartis concerning that marketing activity in China.
Richard Smith - JPMorgan - Analyst
All right. Thanks.
Operator
Hari Sambasivam with Merrill Lynch.
Hari Sambasivam - Merrill Lynch - Analyst
Good morning. Just a couple of questions on some of the alternatives on what you might actually find out of this drug interaction study. In the event that I think you've got some form of interaction I am just wondering could you give us a framework of how should we think about the subsequent clinical development plan? And I am just wondering whether this is an either or situation i.e. does it fully interact or does it not interact. Or are there sort of in between scenarios that we should be thinking about and I am just kind of curious as to how should we think about face redesign going from there? Maybe if you can just set out the framework so we can think about it?
Jean-Pierre Sommadossi - Idenix Pharmaceuticals - Chairman & CEO
I think first of all as we have indicated several times we do not expect any drug drug interaction. I wish that we could report today and move on because I think that the topic has been on the table too long. And that is unfortunately it takes time with clinical development to fully address the question. And it is not an assay in the test tube and within 24 hours you can have an answer. With that said, we do not anticipate and there is no scientific rationale to expect such interaction.
I think where we are right now is to try to understand the product profile of 283 and what will be the best development for this product. I think were there is maybe some misunderstanding or difficulties to foresee the future is that basically we are rolling on the forefront of new treatment for hepatitis C. And we are trying to learn how we are going to develop these drugs. I think it's going to be extremely different from the treatments naive standpoint and even the treatment refractory standpoint.
As you can see in the abstract of EASL up here on the Website yesterday what we can take in general is that there is going to be more and more combination therapy of investigational drug that are going to be first evaluate in vitro as we have done with Schering-Plough. But you can see that that is going to be actually expanded hopefully into clinical development and with the blessing of the regulatory authorities. And therefore I think that you can expect very likely a new paradigm shift in the development of new hepatitis C drug.
So how we are going to design the Phase III study, we don't know yet. We are going to evaluate the 12 week data, we are going to evaluate the '06 data, we are going to -- which is the Phase IIb treatment naive. We are going to basically look everything in terms of the product profile and then take a decision what will be the best development path for an NM283 toward achieving market.
Hari Sambasivam - Merrill Lynch - Analyst
Thank you.
Operator
Jim Reddoch with FBR.
Sumesh Sood - FBR - Analyst
Thanks for taking the questions this is actually Sumesh for Jim. I have actually two questions. I was wondering when we would see data for IDX-899, can we expect to see some data by the end of the year? And my second question is on TYZEKA, and what is the differentiation that you are using at least on a marketing prospective between (indiscernible)? Thanks.
Jean-Pierre Sommadossi - Idenix Pharmaceuticals - Chairman & CEO
Doug first question, Guy second.
Doug Mayers - Idenix Pharmcaceuticals - EVP & CMO
As we mentioned we presented the in vitro preclinical data in a poster at CROI this week. It is our intention once we filed the IND to move into Phase Ia II testing. So we will initially run the dose up in healthy volunteers and then move to HIV infected patients. It is our hope to be able to present data by the end of the year on the activity of the drug at one week in HIV infected patients if everything goes well in the healthy volunteers.
Jean-Pierre Sommadossi - Idenix Pharmaceuticals - Chairman & CEO
Guy.
Guy Macdonald - Idenix Pharmaceuticals - EVP Operations
I think as we said previously focusing on very profound rapid viral load reduction, the six-month predictability which really allows physicians to be able to see which patients if you get PCR detectability of six months you have a very strong prognosis of where you are going to be at one and two years and that is going down very well. And then supporting that with our safety profile, pregnancy category B and then our overall pricing and cost-effectiveness. I think all of that wrapped together gives us a very competitive profile against (inaudible).
Sumesh Sood - FBR - Analyst
I apologize I just have one more question. Can you remind us on what the European pricing is going to be for SEBIVO?
Guy Macdonald - Idenix Pharmaceuticals - EVP Operations
We haven't made that available at this time. We will be doing that when we get approval which will hopefully be in the May, June timeframe for the first countries in Europe.
Sumesh Sood - FBR - Analyst
Okay, thank you.
Operator
Jessica Li with Goldman Sachs.
Jessica Li - Goldman Sachs - Analyst
Thank you for taking the question. Could you please provide an update on the bridging study on telbivudine in Japan? And also could you please remind us the milestone payments for Japan approval whether that is comparable to your EU approval milestones? Thanks.
Jean-Pierre Sommadossi - Idenix Pharmaceuticals - Chairman & CEO
We have not initiated any bridging study in Japan yet. This is a decision for Novartis, as you may know Japan is the only country actually that is slightly different, this is actually a global ICH package that we have. We have not decided with our partner today when we would initiate any bridging studies in Japan to move forward in that country. We actually do not have any specific milestones payments attached to the Japanese approval for SEBIVO.
Jessica Li - Goldman Sachs - Analyst
Thank you.
Operator
Eugene Trogan with Morgan Joseph.
Eugene Trogan - Morgan Joseph Co - Analyst
Thank you for taking my question. Congratulations on getting SEBIVO approved in China. Question on what is your impression thus far with TYZEKA in the U.S. market? And is there anything that you've learned so far with having it available in the U.S. for the last couple of months? I know you mentioned last time we met you mentioned that marketing brochure is awaited, you were waiting to receive a marketing brochure from the FDA. Which will enable your sales force to more effectively differentiate some of the differences of TYZEKA or some of the other drugs that are out there. I was wondering if you could comment on that?
Jean-Pierre Sommadossi - Idenix Pharmaceuticals - Chairman & CEO
As Guy has indicated we finally received the feedback from DDMAC so we are very pleased about that. And I will let Guy to go in further details. Guy.
Guy Macdonald - Idenix Pharmaceuticals - EVP Operations
Obviously for the last few months the field force have only been out there talking to physicians with the package insert. I think first because of the holiday period and everything it did take longer to get DDMAC feedback than we would have anticipated. That put it in perspective as we now have that feedback. It's really not just a sales aid, its really the sales aid and our whole campaign now will be introducing into the U.S. market so the reps will now have all the full tools that we originally envisaged. I really think in terms -- we've learned quite a lot -- we've had some good reactions to the messaging that I talked about earlier. And I think now when we have all of our full promotional campaign out in the field we will be able to see how well we are able to do in the U.S. and be able to look at that probably early in the fall, we will have a good idea of how well we are doing.
Eugene Trogan - Morgan Joseph Co - Analyst
Okay. And just to make it clear on the ribavirin NM283 interaction study data. Both (indiscernible) week data. Will that be communicated to the street in the form of a press release?
Doug Mayers - Idenix Pharmcaceuticals - EVP & CMO
Yes. At this time it is our intention once we submitted to the FDA and reviewed it with our investigators to submit a press release of the top-line data and then to submit several abstracts in the fall to give details of the studies in a scientific forum.
Eugene Trogan - Morgan Joseph Co - Analyst
In a scientific forum, not a press release to investors?
Doug Mayers - Idenix Pharmcaceuticals - EVP & CMO
There will be a press release in June once we've reached consensus with Novartis and shown the data to our investigators, then we will move to show all the data in a transparent fashion in the fall.
Eugene Trogan - Morgan Joseph Co - Analyst
But the top-line data will be reported by the end of June?
Jean-Pierre Sommadossi - Idenix Pharmaceuticals - Chairman & CEO
That is right. Basically what we will look to do is just put a press release yes or no and jump into action and present the scientific data with details as Doug indicated in the fall.
Eugene Trogan - Morgan Joseph Co - Analyst
Will we get viral load data in the top-line report?
Jean-Pierre Sommadossi - Idenix Pharmaceuticals - Chairman & CEO
We are not going to discuss today what we are going to issue in the press release. Eugene, what we want to make sure is we are not going to jeopardize any presentation at any scientific meeting but in the same time anything that would be material and as soon as we have it we will communicate to the street.
Eugene Trogan - Morgan Joseph Co - Analyst
Okay, thank you.
Operator
(OPERATOR INSTRUCTIONS) At this time there are no further questions. Ms. Sullivan, are there any closing remarks?
Amy Sullivan - Idenix Pharmaceuticals - IR
Yes, thank you. I just want to thank everyone for your time today and your interest in Idenix. If you have any additional questions please feel free to call; we will in the office all day. Thank you.
Operator
Ladies and gentlemen, thank you for participating in today's conference call. You may now disconnect.
CORPORATE PARTICIPANTS
Amy Sullivan
Idenix Pharmaceuticals - IR
David Arkowitz
Idenix Pharmaceuticals - CFO
Guy Macdonald
Idenix Pharmaceuticals - EVP Operations
Doug Mayers
Idenix Pharmcaceuticals - EVP & CMO
Jean-Pierre Sommadossi
Idenix Pharmaceuticals - Chairman & CEO
CONFERENCE CALL PARTICIPANTS
Robyn Karnauskas
Bear Stearns - Analyst
Rachel McMinn
Piper Jaffray - Analyst
Jason Kolbert
Susquehanna Financial - Analyst
Tim Smith
Citigroup - Analyst
Howard Liang
Leerink Swann - Analyst
Richard Smith
JPMorgan - Analyst
Hari Sambasivam
Merrill Lynch - Analyst
Sumesh Sood
FBR - Analyst
Jessica Li
Goldman Sachs - Analyst
Eugene Trogan
Morgan Joseph Co - Analyst
PRESENTATION
Operator
Good morning, my name is Beth and I will be your conference operator today. At this time I would like to welcome everyone to the fourth-quarter 2006 year end financial results conference call. All lines have been placed on mute to prevent any background noise. After the speakers remarks there will be a question-and-answer session. (OPERATOR INSTRUCTIONS) Thank you. Ms. Sullivan, you may begin your conference.
Amy Sullivan - Idenix Pharmaceuticals - IR
Thank you. Good morning and welcome to Idenix's conference call to discuss our fourth-quarter and year end 2006 results. With me today are Jean-Pierre Sommadossi, CEO, David Arkowitz CFO, Doug Mayers, Chief Medical Officer and Guy Macdonald, Executive Vice President of Operations. Today's discussion contains estimates and other statements that are forward-looking under the Private Securities Litigation Reform Act of 1995. When we discuss our growth, science, products and prospects our point of reference is how we as a company think, expect or believe the future will look based on information as we know it today. Accordingly, these statements are based on current expectations and assumptions that are subject to risks and uncertainties and involve a number of factors that could cause actual results to differ materially. Additional information concerning these factors is contained in Idenix's filings with the SEC, put in our annual report on Form 10-K which are available in the investor section of our website at www.Idenix.com.
When we may elect to update forward-looking statements at some point in the future we specifically disclaim any obligation to do so even if our estimates change and therefore you should not rely on these forward-looking statements representing our estimates as of any subsequent date to today. The agenda for the call is as follows; David will review our financial results and provide financial guidance for 2007. Guy will discuss our progress with the launch of TYZEKA in the U.S. and review the status of worldwide regulatory applications. Doug will discuss the status of our clinical programs and highlight the significant new data presented at EASL, and Jean-Pierre will conclude the formal portion of the call with brief remarks. Then we will open the floor to Q&A. I will now turn the call over to David.
David Arkowitz - Idenix Pharmaceuticals - CFO
Thanks, Amy. Today we reported unaudit financial results for the fourth-quarter and year ended December 31, 2006. At December 31, 2006 our cash, cash equivalents and marketable securities totaled $186.4 million in line with our 2006 guidance of between $170 and $190 million. For the fourth quarter of 2006 we reported total revenues of $15.3 million compared with total revenues of $18.1 million in the fourth quarter of 2005. Total revenues consist of reimbursement by Novartis of Idenix expenses incurred in connection with the development of TYZEKA and valtorcitabine for the treatment of hepatitis B and valopicitabine for the treatment of hepatitis C. The amortization of the license fees received by Idenix in connection with Novartis' license of TYZEKA, valtorcitabine and valopicitabine and product sales of TYZEKA in the United States. We reported a net loss of $23.6 million or a loss of $0.42 per diluted share for the quarter ended December 31, 2006 compared to a net loss of $14.4 million or a loss of $0.27 per diluted share for the quarter ended December 31, 2005.
For the year ended December 31, 2006 we reported total revenues of $67.4 million compared with total revenues of $64.7 million for the year ended December 31, 2005. Total operating expenses for calendar year 2006 were $153.1 million compared with total operating expenses of $120.2 million for calendar year 2005. For the year ended December 31, 2006 we reported a net loss of $75.1 million or a loss of $1.34 per diluted share compared with a net loss of $50.8 million or a loss of $1.03 per diluted share for the year ended December 31, 2005.
Now let me move onto our 2007 financial guidance. We expect to end 2007 with between $100 million and $110 million of cash, cash equivalents and marketable securities. This guidance includes the expected receipt of $20 million in telbivudine related milestones for regulatory approvals in the EU and China. Our anticipated use of cash in 2007 is comprised of expenditures related to our funding of development expenses for the HIV and NNRTI program, HCV and HIV discovery efforts, SG&A expenses, capital expenditures and working capital.
Now I'll turn the call over to Guy.
Guy Macdonald - Idenix Pharmaceuticals - EVP Operations
Thank you, David. As you know TYZEKA the U.S. brand name of telbivudine, was launched in the U.S. at the AASLD meeting late October 2006 within 48 hours of receiving FDA approval. This timing provided an excellent opportunity to reach over 4000 hepatitis focused clinicians who attended the meeting. The Idenix Novartis alliance developed and launched a comprehensive reimbursement of patient support program to help ensure that patients have access to TYZEKA and we believe this program has helped to drive its early adoption.
We've also had early success in gaining access to some important formularies. Specifically TYZEKA is available on most state Medicaid formularies and in New York the single largest Medicaid market for hep B it is available without restrictions. In addition we are working on gaining access to over 60 more formularies in the first half of 2007.
Our marketing campaign is currently being finalized following feedback from (indiscernible). With our full campaign and our highly experienced and skilled field sales team we remain confident that TYZEKA will meet our performance expectations this year.
In addition to the U.S. telbivudine which will be marketed outside the U.S. under the brand name SEBIVO has received approval, or is being recommended for approval in several major markets just 14 months after our first regulatory filing. In the first quarter of 2007 we received CHMP positive opinion in the EU and await full EU approval in the next few months. We re also very excited to report today that we received approval of SEBIVO in China. We believe that this is quite an accomplishment and bodes well for achieving total worldwide annual sales of approximately $20 million on par with [entekavir] first 12 months of worldwide sales.
To prepare for the launch of SEBIVO in Europe over the next 18 months we are assembling a strong European marketing and sales infrastructure. The Idenix European team is working collaboratively with Novartis to take full advantage of the opportunities that our copromotion affords us to make SEBIVO successful in these important markets.
Now I'll turn the call over to Doug.
Doug Mayers - Idenix Pharmcaceuticals - EVP & CMO
Thank you, Guy. It's a pleasure to talk to you for the first time as the chief medical officer of Idenix. I've enjoyed my first month at Idenix working in collaboration with Novartis toward getting approval of SEBIVO in Europe and in China. I decided to join Idenix in January to pursue the opportunity to lead a solid clinical development team supported by a robust virology pipeline of drugs to treat people infected with HIV, hepatitis B or hepatitis C.
I believe the scientific excellence at Idenix is exemplified by the abstracts that have been accepted at the presentation at EASL. Please refer to the EASL abstract press release issued yesterday for a full listing of the accepted abstracts. At this time I would like to briefly update you on our hepatitis C clinical development program and quickly review the status of our HIV development program. First let me update you on the twelve-week Phase I II drug drug interaction and efficacy study which is assessing the pharmacokinetic and pharmacodynamic activity of valopicitabine when used in combination with peggylated interferon and ribavirin in patients with chronic hepatitis C.
This study is now fully enrolled with 117 patients which is approximately 30% more than the 90 originally targeted for enrollment. The primary endpoint of the study is a pharmacokinetic analysis at Day 36 with a secondary endpoint being the antiviral activity at Day 84. In order to compare the double and triple combination of valopicitabine versus standard of care. We originally planning to share top-line data today on the Day 36 review. However, since this is a blinded study we have decided after consultation from Novartis to only release the complete twelve-week dataset once it has been submitted to the FDA. Therefore we anticipate issuing a press release with top-line data this summer and submitting an abstract of the full dataset to a scientific meeting in the fall after we have reviewed the data with the FDA. As we have previously stated based on the fact that prior antagonism in vitro between ribavirin and other nucleosides has not been confirmed in the clinic we remain optimistic that this study will demonstrate a lack of an interaction between ribavirin and valopicitabine.
We are pleased to report that todate safety and tolerance in all treatment arms have been encouraging with no SAE's and only two patients who have prematurely discontinued. Only one patient discontinued due to nausea and vomiting within the first week of treatment.
Now let me move to discuss the HCV program abstract that were excepted for presentation at EASL. We've had three primary abstracts accepted for presentation. First is end of treatment or week 48 data from our treatment naive Phase IIb trial that we presented at the conference. The treatment naive abstract which posted yesterday includes week 36 data and as you can see by the data, HCV-PCR negativity rates ended week 24 have been sustained through week 36. From our treatment refractory Phase IIb trial final data will be presented at the Congress including end of treatment response as well as sustained virologic response data. As a reminder this study assessed various doses of valopicitabine in combination with peggylated interferon versus standard of care.
The abstract contains 48 week data from the study. Data for week 48 continued to support valopicitabine as a potential component of future combination regiments for patients who have failed peg interferon ribavirin therapy but also demonstrates the difficulty in fully suppressing hepatitis C virus replication in treatment experienced patients. Due to the minimal efficacy contributed by the peg interferon in prior non responders combination therapy for experienced patients will likely require the combination of two or more novel and complementary agents to achieve optimal clinical outcomes.
With this in mind Idenix and Schering-Plough have completed in vitro experiments with valopicitabine and Schering 503034, Schering-Plough's HCV proteases inhibitor. An abstract on this work has been accepted for presentation at EASL. These in vitro experiments suggest that these compounds when used in combination have additive antiviral activity and complementary resistance profiles and importantly the combination of two agents increases the barrier for developing resistance to either drug.
We are committed to improving the care of patients of chronic hepatitis C and believe that to achieve the highest rate of SVR for genotype I patients a cocktail of multiple novel, small molecules used in combination with the current series of care will be necessary. We believe to achieve the best possible outcome for patients; sponsors must collaborate and explore combinations of investigational agents early in development. When initiated we believe that valopicitabine will have a significant role in combination therapy studies for patients with chronic hepatitis C virus infection.
Moving on to our HIV program the clinical profiles of our two non-nucleoside reverse transcriptase inhibitor compounds were presented at CROI this week. I would like to take a few minutes telling you why we are so excited about the potential for this program. As you know non-nucleoside reverse transcriptase inhibitors or NNRTI's are one part of a combination antiviral regiments called [HEART] for the treatment of patients with HIV infection. However, rapid emergence of NNRTI resistant virus remains a challenge of therapy today.
The preclinical data presented at CROI suggest that IDX 899 and IDX 989 may offer an enhanced resistance threshold with favorable pharmacokinetic and safety profiles. We are pleased to report that we've completed the micro dosing or Phase II study of our two NNRTI compounds and have selected IDX-899 to advance in development as a potential once-a-day oral drug based on its overall profile. While IDX-989 remain in our coffers as a backup. We plan to file a traditional IND for IDX-899 next month and advance this compound into Phase I IIa clinical testing shortly thereafter. Now I will turn the call to Jean-Pierre.
Jean-Pierre Sommadossi - Idenix Pharmaceuticals - Chairman & CEO
Thanks, Guy. The year 2006 was a year of growth for Idenix. We celebrated a number of achievements during our eight years in business. Our employee base grew by more than 25% during the year. We successfully built a U.S. commercial operation including a field force with 20 sales reps, we received approval of our first products for the treatment of hepatitis B in more than 10 countries including the United States were it is marketed as TYZEKA, and we expanded our pipeline with normal compounds for the treatment of HIV and the comprehensive discovery effort in hepatitis C.
We also had a few growing pains as you can expect in clinical development. In our two ongoing clinical trials of our lead drug candidate for the treatment of hepatitis C, valopicitabine or NM283 we had to reduce the dose administered in this trial to either 200 milligrams per day or 400 milligrams per day due to a higher proportion of severe GI side effects of certain patients receiving the 800 milligrams per day dose.
While this presented unique challenges we were pleased to see that the trial and treatment naive patient progressed to 200 milligram per day dose actually appeared to have comparable antiviral activity by week 12 and week 24, as the 800 milligrams per day does. But definitely is much better tolerated. We are now starting the 200 milligram dose in an additional Phase I II trial to assess the combination of valopicitabine with peggylated interferon and ribavirin which as you know is the current standard of care in treatment naive.
The study will continue to 12 weeks to assess the longer-term safety and antiviral activity of the triple combination versus the standard of care. Once we have the final 12 week's data as Doug indicated we will promptly submit it to the FDA and request a meeting to discuss further study to advance the clinical developments of valopicitabine NM283.
For the very difficult to treat patients it's going to be definitely a significant challenge for everyone. And in those patients who are failed interferon based regiments the past (indiscernible) valopicitabine as we believe most likely for all investigational anti-HCV dereg drug. We probably be a combination with either one or more small molecules dereg antiviral. I will go by collaborating with other companies to make valopicitabine an important component of combination therapy.
We are also actively working to expand our pipeline through both organic discovery and collaborative research and development. Our comprehensive HCV discovery efforts focus on discovering Next Generation drug candidate in each of the major classes of small molecules. We are on track to file our first IND for this discovery effort in 2007 and we plan to present some early data in the fall at some scientific meeting. And in addition we have also set a goal of having one drug from each class at IND stage by year-end 2008.
In 2006 our HIV discovery program generated a finding of exploratory IND applications for two NNRTI compounds. As Doug mentioned the initial micro dosing study is now complete and based on the overall profile we have selected the drug candidate IDX-899 to move into further clinical testing which is planned for later this year.
In 2006 we achieved a goal of building an integrated biopharmaceutical company with a skilled group of scientists all that work on discovery and experience preclinical and clinical operations group to advance our drug candidates through development and the commercial organization to promote and sell our product. We now have a solid foundation in place from which to continue to build a leading antiviral franchise with a critical mass of program in each therapeutic area.
On that note I would like to end our formal remarks and open the floor to Q&A. Operator, are there any questions?
TRANSCRIPT
Editor
(OPERATOR INSTRUCTIONS)
Operator
(OPERATOR INSTRUCTIONS) Mark Schoenebaum with Bear Stearns.
Robyn Karnauskas - Bear Stearns - Analyst
This is actually Robyn Karnauskas in for Mark, Mark is on a plane. I just have some questions regarding SEBIVO. Can you give us some clarity? you said that you expect 20 million in sales for the year and I was wondering is that the 20 million in regulatory milestones that you mentioned in your guidance or is that 20 million end-user sales worldwide or in current markets, can you give us some clarity there?
David Arkowitz - Idenix Pharmaceuticals - CFO
Hi, Robyn. It's David Arkowitz. That 20 million is end-user worldwide sales. It does not include any milestones.
Robyn Karnauskas - Bear Stearns - Analyst
Is that in current markets that are approved?
David Arkowitz - Idenix Pharmaceuticals - CFO
That includes expected future approvals as well.
Robyn Karnauskas - Bear Stearns - Analyst
Okay.
Jean-Pierre Sommadossi - Idenix Pharmaceuticals - Chairman & CEO
Actually, Robyn, as we have indicated now we have been approval, close to be approving all the major markets.
Robyn Karnauskas - Bear Stearns - Analyst
Okay. And then my last question regarding the drug interaction data. Have you seen any of the data from the first initial time point, the day 36; do you have any sense of the unblinded data, what you might be expecting?
Doug Mayers - Idenix Pharmcaceuticals - EVP & CMO
At this point we've left the Company's blinded to this data set and its our intent to leave the study blinded until we get to the critical 36 day PK and 12 week viral load drop for our clinical staff. This is important for the clinical staff because we don't want to bias the results of safety or efficacy when we forward the data in to the FDA.
Robyn Karnauskas - Bear Stearns - Analyst
Okay. Great, thanks.
Operator
Rachel McMinn with Piper Jaffray.
Rachel McMinn - Piper Jaffray - Analyst
Thanks very much. I'm wondering what if there's a specific time frame from the FDA once you submit the data, is there a regulatory clock that they have to set up a meeting within thirty days for example?
Jean-Pierre Sommadossi - Idenix Pharmaceuticals - Chairman & CEO
Doug.
Doug Mayers - Idenix Pharmcaceuticals - EVP & CMO
I'm not certain that they have an obligation to respond to us within thirty days. But they will clearly review the data and it is our plan to move forward with discussions with them for an interface two meeting this year.
Rachel McMinn - Piper Jaffray - Analyst
Okay. Just so I am clear here, you are going to communicate to the street once you've met with the FDA or once you've submitted the data to the FDA?
Doug Mayers - Idenix Pharmcaceuticals - EVP & CMO
Our plan is to submit data to the FDA in the end of May on this study. We will then meet with the clinical investigators who conducted the trial and review the data with them. After we've reviewed the data with them and we will then discuss it with the street. So it is our plan probably toward the end of June to issue a press release with the data and then go to a meeting in the fall and probably present several abstracts detailing the information that has resulted from this trial.
Rachel McMinn - Piper Jaffray - Analyst
In terms of switching gears to SEBIVO in China. Can you just remind us what the economics are for Idenix and how quickly Novartis will be able to launch there?
David Arkowitz - Idenix Pharmaceuticals - CFO
I can tell you about the economics of that and basically Novartis in China and a number of other territories is this whole party responsible for commercialization. So it's actually a supply price from Idenix to Novartis and then Novartis is providing, doing all the selling and marketing efforts and incurring those expenses and booking the sales.
Rachel McMinn - Piper Jaffray - Analyst
And have you said specifically what that supply price is?
David Arkowitz - Idenix Pharmaceuticals - CFO
No, we have not.
Rachel McMinn - Piper Jaffray - Analyst
All right, thanks very much.
David Arkowitz - Idenix Pharmaceuticals - CFO
And maybe Guy can talk about the subsequent launch in China, timing of that.
Guy Macdonald - Idenix Pharmaceuticals - EVP Operations
I think the only thing I would really say Novartis are very, very committed to the Chinese market. They've done a lot of premarketing activities and have a very significant sales force and marketing group in place and will be launching shortly. I think the specific dates you would have to contact them.
Operator
Jason Kolbert with Susquehanna.
Jason Kolbert - Susquehanna Financial - Analyst
Can we talk a little bit about the 503034 plus NM283 study, how far is that study gone? When can we expect to hear a little bit more about that?
Jean-Pierre Sommadossi - Idenix Pharmaceuticals - Chairman & CEO
Doug.
Doug Mayers - Idenix Pharmcaceuticals - EVP & CMO
This is an in vitro study so it was a test tube study in which they combined these two drugs in the replicon system and showed that basically when you combine them together they significantly inhibit the development of drug resistance. We are committed to working with the other companies that produce complementary drugs to 283 to move them into clinical development. But at this time we don't have any clinical trials that are ongoing and we need to have discussions with the FDA to discuss a pathway forward for this type of trial.
Jason Kolbert - Susquehanna Financial - Analyst
Is there a thought toward working with other proteases as well?
Doug Mayers - Idenix Pharmcaceuticals - EVP & CMO
We are committed to working with other companies that have drugs that will complement our drug, patients with hepatitis C. That is all we can say at this time.
Jason Kolbert - Susquehanna Financial - Analyst
Can we talk a little bit about the drug drug interaction study. What would the statistical penalty have looked like had you taken a look?
Doug Mayers - Idenix Pharmcaceuticals - EVP & CMO
The trial is actually not powered to get a P value at this time. I think the bigger concern was that at the time we would have had to submit an abstract there was a minority of patients who had reached the critical endpoints of the study. And our feeling was that to unblind the study and present preliminary data which could change by the time all the data came in would have been a mistake. And so we felt it was better to get all the data, have a definitive outcome, reach a conclusion with Novartis on the interpretation of the data and then bring it to the market.
Jason Kolbert - Susquehanna Financial - Analyst
Of the total of 130 patients have all completely -- when do we expect the last patient to complete full dosing?
Doug Mayers - Idenix Pharmcaceuticals - EVP & CMO
Mid-May.
Jason Kolbert - Susquehanna Financial - Analyst
Okay. Terrific. Thank you very much.
Operator
Tim Smith, Citigroup.
Tim Smith - Citigroup - Analyst
Thanks for taking the question, this is Tim Smith for (indiscernible). Can you talk about the nature or remind me of the nature of the discontinuations of the interaction study and was either of them related to NM283?
Jean-Pierre Sommadossi - Idenix Pharmaceuticals - Chairman & CEO
Doug.
Doug Mayers - Idenix Pharmcaceuticals - EVP & CMO
There is one discontinuation of a patient taking -- we don't know what they were taking because it was a blinded study. But there was one patient who had nausea and vomiting early on during the first week and did discontinue from the study. The other patient had a lack of concentration that was attributed by the clinician to peggylated interferon. So at this point there is potentially one withdrawal out of the 117 patients due to potentially nausea and vomiting from 283.
Jean-Pierre Sommadossi - Idenix Pharmaceuticals - Chairman & CEO
I think that also what is important is that we have not had any SAE and no grade three or grade four, so very good safety and tolerance in this clinical study so far.
Doug Mayers - Idenix Pharmcaceuticals - EVP & CMO
What is very clear is that the reduction from 800 milligrams to 200 milligrams has significantly improved the adverse event profile of NM283 with patients having a much better GI tolerability.
Tim Smith - Citigroup - Analyst
Thanks for that. And just one other quick question about that study. I know it is powered for PK and PD measure, but I'm sure the viral load reductions are important among the arms. What is different for you guys, are you and Novartis looking for among the NM283 arms versus the interferon ribaviron arms so you'd feel comfortable moving forward into Phase III?
Doug Mayers - Idenix Pharmcaceuticals - EVP & CMO
At this point we are still having ongoing discussions with Novartis on the critical endpoints to move forward, so that is as much as I can say.
Tim Smith - Citigroup - Analyst
Fair enough. Thanks a lot.
Operator
Howard Liang with Leerink Swann.
Howard Liang - Leerink Swann - Analyst
Thanks very much. I have a question regarding the guidance. Does that include the potential milestone payment from Novartis for NM283 for the end of I think it's successful end of Phase II meeting with the FDA, I think that is about 20 to 25 million.
David Arkowitz - Idenix Pharmaceuticals - CFO
Howard, the guidance of ending 2007 with between 100 and 110 million in cash does not include anything related to NM283 from a license for your milestone payment standpoint. What it does include is as I mentioned is 20 million related to telbivudine regulatory milestones.
Howard Liang - Leerink Swann - Analyst
Okay. And I think you might have been expecting that sometime this year, I guess why not include that in --?
Jean-Pierre Sommadossi - Idenix Pharmaceuticals - Chairman & CEO
Howard, we have included only milestones which have been essentially achieved.
Howard Liang - Leerink Swann - Analyst
Okay. Great. On your preclinical HCV program, I think the plan is to have a another IND candidate; and also you talked about you have programs in each of the major classes. Can you give us an overview or at least you're just encompassing protease inhibitors. Are there other classes that will be the first agent to move forward?
Jean-Pierre Sommadossi - Idenix Pharmaceuticals - Chairman & CEO
The first candidate that we anticipate to move at IND as I have indicated we are on track to file an IND by the end of this year will be a second generation of nucleoside analog. I have indicated recently that new generation can deliver 10 to 100 times more active metabolized triphosphates at delivered sites. We believe that that should lead to an increased efficacy of nucleoside. We are within a few months to have a proof of concept in chimpanzee infected with genotype 1. This has been actually a good prediction for an NM283 in terms of viral load reductions and we anticipate to submit an abstract on that proof of concept in chimpanzees which is second generation of nucleosides for fall meetings.
The other classes entail the non-nucleoside and the PI with different scaffold that are being reporting so far; we are pretty pleased with where we stand today. And as I have indicated I will go over this to having one drug in each class at IND stage by year end 2008. Very likely it will be a non-nucleoside fallout by PI in 2008.
Howard Liang - Leerink Swann - Analyst
Thanks very much.
Operator
Richard Smith with JPMorgan.
Richard Smith - JPMorgan - Analyst
Good morning, everyone. Can you comment on any, have you seen any elements of resistance from the two (indiscernible) trials with valopicitabine?
Jean-Pierre Sommadossi - Idenix Pharmaceuticals - Chairman & CEO
Doug.
Doug Mayers - Idenix Pharmcaceuticals - EVP & CMO
We have seen resistance developed with valopicitabine with a previously described I think it is 8 282 T mutation. But it is occurring less frequently than has been seen with the other classes of drugs. It is our belief though that the HCV is an RNA virus; it will develop resistance to any single drug if you don't completely suppress viral replication. And that we will ultimately need to be combined with other classes of drugs to achieve a significant breakthrough in curing HCV.
Richard Smith - JPMorgan - Analyst
And that data is being presented -- have you presented any of it or are you planning to?
Doug Mayers - Idenix Pharmcaceuticals - EVP & CMO
The resistance data has been shown previously for the compound and we are doing right now a number of studies looking at the emergence of resistance in both our treatment naive and treatment experienced trials. Once we have that data analyzed we will present it, yes.
Richard Smith - JPMorgan - Analyst
Thanks. And just with China, obviously there is a few other products out there in HBV antivirals. How do you plan to -- it seems like data or sales from those compounds seems to be limited. Is there a particular strategy in place to crack that market given there has been a long and tough market to access?
Guy Macdonald - Idenix Pharmaceuticals - EVP Operations
I'm sorry, Richard. You'll have to talk to the people at Novartis concerning that marketing activity in China.
Richard Smith - JPMorgan - Analyst
All right. Thanks.
Operator
Hari Sambasivam with Merrill Lynch.
Hari Sambasivam - Merrill Lynch - Analyst
Good morning. Just a couple of questions on some of the alternatives on what you might actually find out of this drug interaction study. In the event that I think you've got some form of interaction I am just wondering could you give us a framework of how should we think about the subsequent clinical development plan? And I am just wondering whether this is an either or situation i.e. does it fully interact or does it not interact. Or are there sort of in between scenarios that we should be thinking about and I am just kind of curious as to how should we think about face redesign going from there? Maybe if you can just set out the framework so we can think about it?
Jean-Pierre Sommadossi - Idenix Pharmaceuticals - Chairman & CEO
I think first of all as we have indicated several times we do not expect any drug drug interaction. I wish that we could report today and move on because I think that the topic has been on the table too long. And that is unfortunately it takes time with clinical development to fully address the question. And it is not an assay in the test tube and within 24 hours you can have an answer. With that said, we do not anticipate and there is no scientific rationale to expect such interaction.
I think where we are right now is to try to understand the product profile of 283 and what will be the best development for this product. I think were there is maybe some misunderstanding or difficulties to foresee the future is that basically we are rolling on the forefront of new treatment for hepatitis C. And we are trying to learn how we are going to develop these drugs. I think it's going to be extremely different from the treatments naive standpoint and even the treatment refractory standpoint.
As you can see in the abstract of EASL up here on the Website yesterday what we can take in general is that there is going to be more and more combination therapy of investigational drug that are going to be first evaluate in vitro as we have done with Schering-Plough. But you can see that that is going to be actually expanded hopefully into clinical development and with the blessing of the regulatory authorities. And therefore I think that you can expect very likely a new paradigm shift in the development of new hepatitis C drug.
So how we are going to design the Phase III study, we don't know yet. We are going to evaluate the 12 week data, we are going to evaluate the '06 data, we are going to -- which is the Phase IIb treatment naive. We are going to basically look everything in terms of the product profile and then take a decision what will be the best development path for an NM283 toward achieving market.
Hari Sambasivam - Merrill Lynch - Analyst
Thank you.
Operator
Jim Reddoch with FBR.
Sumesh Sood - FBR - Analyst
Thanks for taking the questions this is actually Sumesh for Jim. I have actually two questions. I was wondering when we would see data for IDX-899, can we expect to see some data by the end of the year? And my second question is on TYZEKA, and what is the differentiation that you are using at least on a marketing prospective between (indiscernible)? Thanks.
Jean-Pierre Sommadossi - Idenix Pharmaceuticals - Chairman & CEO
Doug first question, Guy second.
Doug Mayers - Idenix Pharmcaceuticals - EVP & CMO
As we mentioned we presented the in vitro preclinical data in a poster at CROI this week. It is our intention once we filed the IND to move into Phase Ia II testing. So we will initially run the dose up in healthy volunteers and then move to HIV infected patients. It is our hope to be able to present data by the end of the year on the activity of the drug at one week in HIV infected patients if everything goes well in the healthy volunteers.
Jean-Pierre Sommadossi - Idenix Pharmaceuticals - Chairman & CEO
Guy.
Guy Macdonald - Idenix Pharmaceuticals - EVP Operations
I think as we said previously focusing on very profound rapid viral load reduction, the six-month predictability which really allows physicians to be able to see which patients if you get PCR detectability of six months you have a very strong prognosis of where you are going to be at one and two years and that is going down very well. And then supporting that with our safety profile, pregnancy category B and then our overall pricing and cost-effectiveness. I think all of that wrapped together gives us a very competitive profile against (inaudible).
Sumesh Sood - FBR - Analyst
I apologize I just have one more question. Can you remind us on what the European pricing is going to be for SEBIVO?
Guy Macdonald - Idenix Pharmaceuticals - EVP Operations
We haven't made that available at this time. We will be doing that when we get approval which will hopefully be in the May, June timeframe for the first countries in Europe.
Sumesh Sood - FBR - Analyst
Okay, thank you.
Operator
Jessica Li with Goldman Sachs.
Jessica Li - Goldman Sachs - Analyst
Thank you for taking the question. Could you please provide an update on the bridging study on telbivudine in Japan? And also could you please remind us the milestone payments for Japan approval whether that is comparable to your EU approval milestones? Thanks.
Jean-Pierre Sommadossi - Idenix Pharmaceuticals - Chairman & CEO
We have not initiated any bridging study in Japan yet. This is a decision for Novartis, as you may know Japan is the only country actually that is slightly different, this is actually a global ICH package that we have. We have not decided with our partner today when we would initiate any bridging studies in Japan to move forward in that country. We actually do not have any specific milestones payments attached to the Japanese approval for SEBIVO.
Jessica Li - Goldman Sachs - Analyst
Thank you.
Operator
Eugene Trogan with Morgan Joseph.
Eugene Trogan - Morgan Joseph Co - Analyst
Thank you for taking my question. Congratulations on getting SEBIVO approved in China. Question on what is your impression thus far with TYZEKA in the U.S. market? And is there anything that you've learned so far with having it available in the U.S. for the last couple of months? I know you mentioned last time we met you mentioned that marketing brochure is awaited, you were waiting to receive a marketing brochure from the FDA. Which will enable your sales force to more effectively differentiate some of the differences of TYZEKA or some of the other drugs that are out there. I was wondering if you could comment on that?
Jean-Pierre Sommadossi - Idenix Pharmaceuticals - Chairman & CEO
As Guy has indicated we finally received the feedback from DDMAC so we are very pleased about that. And I will let Guy to go in further details. Guy.
Guy Macdonald - Idenix Pharmaceuticals - EVP Operations
Obviously for the last few months the field force have only been out there talking to physicians with the package insert. I think first because of the holiday period and everything it did take longer to get DDMAC feedback than we would have anticipated. That put it in perspective as we now have that feedback. It's really not just a sales aid, its really the sales aid and our whole campaign now will be introducing into the U.S. market so the reps will now have all the full tools that we originally envisaged. I really think in terms -- we've learned quite a lot -- we've had some good reactions to the messaging that I talked about earlier. And I think now when we have all of our full promotional campaign out in the field we will be able to see how well we are able to do in the U.S. and be able to look at that probably early in the fall, we will have a good idea of how well we are doing.
Eugene Trogan - Morgan Joseph Co - Analyst
Okay. And just to make it clear on the ribavirin NM283 interaction study data. Both (indiscernible) week data. Will that be communicated to the street in the form of a press release?
Doug Mayers - Idenix Pharmcaceuticals - EVP & CMO
Yes. At this time it is our intention once we submitted to the FDA and reviewed it with our investigators to submit a press release of the top-line data and then to submit several abstracts in the fall to give details of the studies in a scientific forum.
Eugene Trogan - Morgan Joseph Co - Analyst
In a scientific forum, not a press release to investors?
Doug Mayers - Idenix Pharmcaceuticals - EVP & CMO
There will be a press release in June once we've reached consensus with Novartis and shown the data to our investigators, then we will move to show all the data in a transparent fashion in the fall.
Eugene Trogan - Morgan Joseph Co - Analyst
But the top-line data will be reported by the end of June?
Jean-Pierre Sommadossi - Idenix Pharmaceuticals - Chairman & CEO
That is right. Basically what we will look to do is just put a press release yes or no and jump into action and present the scientific data with details as Doug indicated in the fall.
Eugene Trogan - Morgan Joseph Co - Analyst
Will we get viral load data in the top-line report?
Jean-Pierre Sommadossi - Idenix Pharmaceuticals - Chairman & CEO
We are not going to discuss today what we are going to issue in the press release. Eugene, what we want to make sure is we are not going to jeopardize any presentation at any scientific meeting but in the same time anything that would be material and as soon as we have it we will communicate to the street.
Eugene Trogan - Morgan Joseph Co - Analyst
Okay, thank you.
Operator
(OPERATOR INSTRUCTIONS) At this time there are no further questions. Ms. Sullivan, are there any closing remarks?
Amy Sullivan - Idenix Pharmaceuticals - IR
Yes, thank you. I just want to thank everyone for your time today and your interest in Idenix. If you have any additional questions please feel free to call; we will in the office all day. Thank you.
Operator
Ladies and gentlemen, thank you for participating in today's conference call. You may now disconnect.
