Operator: Good day, and welcome to the Q2 2017 Financial Results Conference. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Jed Latkin. Please go ahead, sir.

Jed Latkin: Thank you, and welcome, everyone, to this morning's earnings conference call. This call will cover Navidea's financial and operating results for the second quarter ended June 30, 2017, along with a discussion of our key upcoming milestones for the remaining half of 2017. Following our prepared remarks, we will open up our conference call to a question-and-answer session. Also on our call today is Dr. Michael Goldberg, Chief Executive Officer and President of Navidea.

Before we begin our formal remarks, I would like to remind everyone that some of the statements on this conference call may be considered as forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934 as amended that concern matters that involve risks and uncertainties that could cause actual results to differ materially from those anticipated or projected in the forward-looking statements. Words such as expects, anticipates, intend, plans, aims, target, believes, seeks, estimates, optimizing, potential, goals, suggests and similar expressions identify forward-looking statements. These forward-looking statements relate to the effectiveness in the company's bodily fluid-based diagnostic tests as well as the company's ability to develop and successfully commercialize such test platforms for early detection of cancer. The company's actual results may differ materially from those indicated in these forward-looking statements due to numerous risks and uncertainties.

For instance, if we fail to develop and commercialize diagnostic products, we may be unable to execute our plan of operations. Other risks and uncertainties include the company's failure to obtain necessary regulatory clearances or approval to distribute and market future products in the clinical IBD market; a failure by the marketplace to accept the products in the company's development pipeline or any other diagnostic products the company might develop; the company will face fierce competition and the company's intended products may become obsolete due to the highly competitive nature of the diagnostics market and its rapid technological change; and other risks identified in the company's most recent annual report on Form 10-K and quarterly reports on Form 10-Q as well as other documents that the company files with the Securities and Exchange Commission.

These statements are based on current expectations, estimates and projections about the company's business based in part on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Forward-looking statements are made as of the date of this conference call, and except as required by law, the company does not undertake an obligation to update its forward-looking statement to reflect future events or circumstances.

I'd now like to turn the call over to Dr. Michael Goldberg, CEO and President, who will discuss our second quarter financial results and clinical activity as well as our key clinical and operational objectives looking ahead in 2017. Michael?

Michael Goldberg: Thank you, Jed, and thank you to everyone joining Navidea's Second Quarter 2017 Financial Results Conference Call. I'd like to thank you all for taking an interest in Navidea at this very exciting time for the company. It's been quite a transition year for Navidea going from a highly leveraged, money-losing commercial operation with its own dedicated sales force to a revenue-generating development-focused company, leveraging its approved first application of its best-in-class activated macrophage targeting system to address large unmet medical needs in both imaging and therapeutics.

I'd like to begin this call by going over highlights from our clinical pipeline that inures to the benefit of both our imaging and therapeutic assets. With the cash savings and capital provided by our strategic reorientation, we've been able to generate significant imaging data in humans and data with our therapeutic agents in relevant animal models, which reinforces our optimism that this delivery system has the potential to be applied in numerous ways to enable the rapid development and commercialization of products that have well established, large existing market opportunities. Products developed with this technology offer the promise of safer, more efficacious and/or less expensive products, and in many situations, all 3 attributes can be delivered with a single product.

We have generated data and are working with outside experts to accelerate development of products by identifying regulatory pathways that facilitate the most rapid and cost-effective commercial opportunities. We expect to generate a plan that will not hinder the full realization of the broad commercial potential of this technology, will enhance our ability to more rapidly commercialize the technology and attract partners who will partner with us to fund and commercialize products for specific disease indications, which will require significant commercial resources to fully realize the commercial potential. We have generated data with intravenous administration to go along with subcutaneous administration in rheumatoid arthritis and cardiovascular disease and are initiating dosing in IV formulation this quarter in imaging nonalcoholic fatty liver disease, NAFLD, or NASH and cardiovascular disease.

Based on our animal results, we believe we are gaining increased credibility in our assertion that if we can image a disease with our technology, we can treat that disease by applying the correct therapeutic delivery system that effectively targets disease-causing cells with a therapeutic that's delivered intracellularly by targeting the mannose receptor.

Let's start with our progress in rheumatoid arthritis. This past quarter, we continued enrollment in our Phase I/II dose escalation trial. The study in which the first patient was dosed and imaged in February of this year aims to evaluate tilmanocept for the primary diagnosis of rheumatoid arthritis and to aid in the differential diagnosis of RA from other types of inflammatory arthritis. We plan to complete enrollment in the study in the fourth quarter of this year. We have also demonstrated excellent localization in clinically affected joints with both subcutaneous and intravenous administration.

We have also just engaged a leading clinical development company on advancing an approvable trial design in 2 indications. First, imaging disease-causing activated macrophages, and second, RA. It's our plan to conduct the first study and file for approval of the IV indication for activated macrophages and then seek a partner to work with us to provide funding and, ultimately, commercialize the product post specific RA approval.

The benefit of getting an approval for IV administration is that it will enable us to work with pharmaceutical companies who have an interest in using the product in their research programs to assist in dose selection, patient selection and safety assessment.

We can charge for the use of our products as the costs will be borne by the company and not insurance or Medicare. We have had discussions with companies, which have already indicated their potential interest in discussing buying our products for use in their studies.

On the cardiovascular disease side, Navidea completed a 9-subject study to evaluate diagnostic imaging of emerging atherosclerotic plaque with technetium 99 tilmanocept product dosed subcutaneously. The results of this study were recently published in early release in The Journal of Infectious Disease in January 2017 confirming that technetium 99 tilmanocept product can both quantitatively and qualitatively target noncalcified plaque in the aortic arch. Navidea will begin a trial later this year for expansion of diagnostic imaging of cardiovascular disease, both early- and late-stage soft plaque genesis in the general population using IV dosing. The two sites for the trial have also -- have their clinical trial plans approved.

During the first quarter of 2017, Navidea initiated an imaging study in colorectal cancer with liver metastasis in patients via IV administration of technetium 99 tilmanocept. Navidea is currently enrolling up to 12 subjects with dose modification and interim results from the study, which are anticipated by the end of this year. The clinical imaging study is afforded through a small business innovation or an SBIR grant from the NIH and the NCI.

With Macrophage Therapeutics, we have developed a molecular deliver technology capable of targeting only the disease-causing macrophages by selectively binding to the mannose receptor or CD206. MT1002 and MT2002 Manocept conjugates have shown positive results in 4 completed in vivo studies in well-established mouse models of NASH and liver fibrosis. Both conjugates significantly reduced key disease assessment parameters in the in vivo STAM NASH model. Navidea will launch its NASH clinical imaging study in the coming weeks and enrollment will begin with multiple patient imaging in the fourth quarter of this year.

The demand for NASH imaging products or biomarkers is very, very strong, and we have seen in discussion with more than one company that have indicated to us that they will not advance a product into clinical development without such an agent being available. We have an ongoing animal imaging study and the planned clinical study to demonstrate the potential of our agent in this high-demand area. It is our expectation that with results in hand, we can approach the well-funded industry/government consortium and others to consider working with us to further develop this product for this indication.

We're also exploring the technology for potential therapeutic use in the orphan indication of autoimmune hepatitis. The data from the imaging studies will hopefully confirm utility as well as dosing levels necessary for effective imaging active inflammation in the liver. Based on these results, we should be able to add an anti-inflammatory agent to the delivery backbone to then treat this important market opportunity in a manner that is a lot more effective and safe than current therapeutic approaches.

Autoimmune hepatitis qualifies as an orphan indication as it has a prevalence of less than 200,000 affected in the U.S. Its prevalence is currently estimated at approximately 100,000 and is growing as a result of it being a significant toxicity of numerous immunotherapy drugs. With the progress in curing certain forms of viral hepatitis, autoimmune hepatitis is projected to be one of the leading causes of liver failure in the future.

Current first-line treatment is high-dose continuous steroid use. By targeting the steroid to disease-causing cells, we believe this is an excellent product for our MT2000 class of compounds. It's a great model that will clearly contrast the performance of a targeted delivery with nontargeted delivery.

Reducing side effects, improving treatment outcomes will have a significant impact on health care and health care costs, justifying the potential commercial opportunity as well. We are working with industry consultants to expedite the development and commercialization plan for this imaging and therapeutic program.

In cancer studies, we have continued our work by assessing the impact we have not only on tumor growth but on the mechanism by which we impact the tumor. It is clear with our agents that we effectuated change in the tumor microenvironment, which decreases the natural immunoprotective effect and enhances the antitumor component of the body's natural response to a tumor.

A lot of excitement exists in the oncology community regarding the potential for various checkpoint inhibitors. Currently, the approved agents target receptors produced by the tumors, so only patients with those types of tumors will be eligible for benefits from these agents. It is well known that even in those patients, resistance often develops because there are multiple redundant pathways that tumors develop to protect themselves. Activated macrophages have been shown to be involved in resistance to the existing approved checkpoint inhibitors as they are to anti-angiogenesis strategies, among others, being developed.

In addition, there are new inhibitors being developed that are targeting checkpoint receptors that are not produced by the tumor but only on the macrophages in the tumor microenvironment. This opens a potential for much broader applicability of Macrophage Therapeutics' targeting system. We have actually been approached to see if our products can be used on those. We expect to generate results over the next couple of months.

To complement our existing data in cancer, we are looking at various dosing strategies to better time the delivery of our agents to the pathophysiologic demands of the cancers we are seeking to treat. We find it very encouraging that we have had such clear success with a dosing regimen designed for traditional antibody therapeutics and not the very different kinetics of our product. We are repeating and expanding on our previously successful studies by changing the dosing to best reflect the capabilities of our system.

Moving on to antivirals. We ran a series of predictive in vivo screening tests of both the MT100 and MT200 class of therapeutic conjugates against both the Zika and dengue viruses, which included infectivity and viral replication inhibition effectiveness as well as dose-finding studies and mechanisms of action. Navidea completed the first phase of its therapeutic preclinical testing in Zika virus and dengue virus with positive results. Reports have to be completed and publications filed by the end of the year.

The company intends to initiate additional preclinical trials by the first quarter of 2018, after which Navidea will advance both Manocept conjugates towards an IND, investigational new drug ready-stage assuming we can continue to get NIH funding to move these programs forward.

The company also completed a series of predictive in vivo screening tests of MT1002 and MT2002 against leishmaniasis. These results included evaluating the effectiveness of host cell targeting and potential killing as well as dose-finding studies and mechanisms of action. Results of these evaluations are positive and provide a basis for moving forward with additional in vivo testing of the selected conjugates. Arrangements have been made with the NIH, NIAID for additional in vivo testing of the therapeutic conjugates, with results anticipated in the first quarter 2018. Direct results of these evaluations have already been submitted for publication in conjunction with Navidea's collaborators at the NIH.

We've also made some strong advancements in the Kaposi's sarcoma indication. Navidea received IRB approval to initiate a Phase I/II clinical imaging study in KS and will be enrolling patients shortly. The study aims to confirm the safety and effectiveness of intravenously administered technetium 99 tilmanocept as a follow-up to previously disclosed positive subcutaneous imaging results.

To make all this possible, we worked hard to showcase our work and receive grant funding to further develop the pipeline. The MCI awarded Navidea a Fast Track SBIR grant that will provide up to $1.8 million to fund preclinical studies, examine the safety of IV injection of our product, followed by a clinical study for the initial evaluation of the safety and efficacy of SPECT imaging studies with IV technetium 99 tilmanocept to identify and quantify both skin- and organ-associated KS lesions in human patients. The funds for this Fast Track grant will be released in 3 parts, which together have potential to provide resources over 2.5 years with the goal of completing an IND submission for a Manocept construct, consisting of tilmanocept link to doxorubicin for the treatment of KS.

Technetium 99 tilmanocept has also made strong progress in demonstrating effectiveness in an intravenous administration formulation. Navidea's development initiatives in the IV diagnostic space distinguish activated macrophages throughout the body by providing key information that, if successfully developed and commercialized, should significantly enhance therapeutic initiatives with targeting inflammation wherever it occurs in the body including, but not limited to, rheumatoid arthritis, cardiovascular disease, NASH and cancer.

The approval of IV delivered technetium 99 tilmanocept, which provides ultrahigh specificity and sensitivity targeted diagnostic imaging of activated macrophages, will one, springboard for specific therapeutic indications and targeting, will be a springboard; two, provide strong clinical platform data for discussions with potential development and commercialization partners; three, provide developers of therapeutic products with the ability to more rapidly verify the product's effect on the immune system to aid in their dose selection, patient selection and trial design. This usage alone could generate significant revenues as it does not require specific indication approvals, reimbursement, formulary acceptance or physician marketing [ invite ]. And four, demonstrate the effectiveness of our agent mechanistically, thereby, supporting our partnering efforts to complete regulatory submissions and commercialization for specific imaging applications.

I would now like to go over some of the news we've announced for the past quarter on the international commercialization of our product. On June 12, our European partner, SpePharma (sic) [ SpePharm ], an affiliate of Norgine BV, launched LYMPHOSEEK in Denmark, the Netherlands and the United Kingdom. Under terms of this exclusive sublicense agreement, we received an upfront payment, are eligible for milestone payments and will receive royalties on European net sales. And we aim to provide updates as we receive them on sales in upcoming quarters.

On June 20, we entered into an exclusive license and distribution agreement with Sayre Therapeutics for the development and commercialization of technetium 99 tilmanocept in India. Under the terms of the deal, we received an upfront payment and are eligible to receive upcoming milestone payments and double-digit royalties associated with the sale of technetium 99 tilmanocept in India.

Our team is currently working with Sayre on the dossier to submit to the Indian regulatory agency. Feedback from the regulatory agencies will determine if additional clinical studies in India are required for approval in India.

Now I'd like to turn the call back over to Jed who will review our financial results.

Jed Latkin: Thank you, Michael. Our consolidated balance sheet and statements of operations have been reclassified as required by current accounting standards for all periods presented to reflect the line of business sold to Cardinal Health 414 as a discontinued operation. Accordingly, this discussion focuses on describing the results of our operations and if we had not operated the discontinued operation during the periods being disclosed.

Navidea recorded an $86.7 million net gain on a sale to Cardinal Health 414 for the 6 months ended June 30, 2017, including $16.5 million in guaranteed consideration, which was discounted to the present value of future cash flows. The proceeds were offset by $3.3 million in estimated fair value of warrants issued to Cardinal Health 414, $2 million in legal and other fees related to the sale, $800,000 in net balance sheet dispositions and write-offs and $6.5 million in estimated taxes.

Total revenues for the quarter ended June 30, 2017 were $612,000 compared to $1.2 million in the second quarter of 2016. Total revenues for the 6 months ended -- total revenues ended at 6 months were $1.2 million compared to $2.1 million during the same period in 2016. Had the company not recognized the quarterly guaranteed earnout payments at the close of the Cardinal Health 414 transaction, revenues for the 3 months and 6 months period ended June 30 would have been $2.3 million and $3.8 million, respectively. The company will receive guaranteed minimum payments of $1.67 million from Cardinal on a quarterly basis 30 days after the end of each quarter for the next 9 quarters. After that, the company will receive royalty payments based on the total sales of LYMPHOSEEK throughout North America for an additional 7.5 years.

Total operating expenses for the second quarter of 2017 were $5.4 million compared to $3.4 million in the second quarter of 2016. Total operating expenses for the 6 months were $9.2 million compared to $8.1 million during the same period in 2016. Operating expenses for the quarter and the 6 months ended June 30, 2017 includes several onetime charges totaling approximately $2.4 million. Without these onetime charges, operating expenses would have been $3 million and $6.8 million, respectively.

Management has aggressively rightsized the business. Ongoing nondiscretionary expenses will be $5 million or less on a yearly run-rate basis in order to match the guaranteed Cardinal Health payment over the next 9 quarters. This should mean that net of additional discretionary nongrant covered research and development spending, Navidea will generate over $1 million in free cash flow per year.

Research and development expenses for the second quarter of 2017 were $1.2 million compared to $2 million in the second quarter of 2016. R&D expenses for the 6 months ended June 30, 2017 were $1.9 million compared to $4.1 million during the same period in 2016. The net decrease from 2016 to 2017 was primarily the result of the decreases in NAV4694, technetium 99 tilmanocept and NAV5001 development costs, offset by increases in Manocept development costs.

Selling, general and administrative expenses for the quarter of 2017 were $4.2 million compared to $1.4 million in the second quarter of 2016. For the 6 months ended June 30, 2017, they were $7.3 million compared to $4 million during the same period in 2016. The net increase was primarily due to the following: a loss on disposal of assets related to our previous office space of $720,000; increased legal and professional fees of $565,000; termination costs related to an arbitration award of $481,000, loss on termination of our previous office lease of $394,000; and increased net compensation cost of $288,000, including increased incentive-based award, offset by decreased salaries. Overall, payroll has been decreased by more than 50% over the past 12 months.

Navidea's net loss attributable to common stockholders for the quarter ended June 30, 2017 was $5.2 million or $0.03 a share compared to a net loss of $6.7 million or $0.04 per share for the same period of 2016.

Navidea's net income attributable to common shareholders for the 6 months ended June 30, 2017 was $80.4 million or $0.50 a share compared to a net loss of $10.4 million or $0.07 per share for the same period in 2016.

Navidea ended the quarter with $7.6 million in cash and investments, not including the quarterly guaranteed earnout payment of $1.67 million from Cardinal Health 414, which was received after the quarter ended.

We are proud of our execution on the clinical development front for the past quarter, and we remind our shareholders of the upcoming near-term clinical milestone we've laid out on today's call. Our clinical pipeline continues to advance forward with strong data coming out, increased conversations with the FDA and improved negotiating leverage with prospective commercialization partners. We have been steadily growing clarity on our clinical path and derisking the pipeline. I want to thank you all very much for your interest in Navidea and for joining our second quarter 2017 earnings conference call today at this very exciting time for our company.

We would now like to open up the call to take your questions. Before we do, I want to acknowledge that the last earnings call had a technical issue with the Q&A, so we're leaving additional time allocated to Q&A on this call to make certain we address the issues that were not covered in the press release or the call. Operator?

Operator: [Operator Instructions] And we will take our first question from [ Joe Lederman ], a private investor.

Unknown Analyst: First of all, thank you and all those involved in Navidea's comeback from the damaging litigation we all went through in the last year. Right now, I have a question regarding the possibility of Navidea following up with the Sinotau contract for marketing LYMPHOSEEK in China. I know that there are couple of lawsuits out there right now that are being acted out. One is plaintiff and one is defendant. I was wondering what the sense of urgency is for Navidea to resolve these disputes so that the company can take advantage of the currently easing regulations that the China FDA has developed to expedite the introduction of foreign medical products in China? Is it -- can one of you answer that?

Jed Latkin: Joe, I appreciate the question. As everybody knows, as was announced we received -- we have 2 60-day stays in both pending cases with Sinotau, which cover Tc 99 tilmanocept in China, as well as the 4694 product. We are actively in negotiations to resolve those issues. We hope and expect that they will be resolved within those stay period, which would lead to the dismissal -- the hopeful dismissal of those lawsuits and then moving forward on the product development in China.

Unknown Analyst: Okay. Also, I had one other short question and news is that it was mentioned earlier, a little bit earlier in the call that regular updates would take place regarding sales taking place in European countries that LYMPHOSEEK is currently being marketed in. And I just want to emphasize, I guess, my hope that these updates can be counted on. I know like 15 months ago, there was a promise that regular monthly or 1.5 month updates would occur with the investor community. And they ended after, I believe, 3 months without any explanation. So I'm just hoping that these new -- this new promise of updates for European sales could be maybe combined with the general conference or update by the company so that we investors are not left in the dark with so many questions and so many challenges going in many directions with the company.

Michael Goldberg: Right, this is Michael. I'll take the second part of the question. And Jed, if you want to add, you please add after I finish this. With respect to updates, remember that we have gone through a long period of time from the formation of Macrophage Therapeutics, where because of issues with prior management and board, we were precluded from updating the market with respect to what was happening with Macrophage. In the early days of a company, in early days of the technology, where we were synthesizing new products and beginning initial testing, there were events that occurred that were interesting to update the market with on a regular basis. After the changes in the board occurred and the litigation with CRG started, unfortunately, we were in a period of time where it was difficult for us to focus on moving ahead the various programs as we were involved in, and as you know, continuous litigation and the basic liens on the products were precluding us from doing as much work as we liked. And some of those programs did slow down. Then with the announcement of the Cardinal deal, Cardinal had the right to ask us to refrain from talking as it was so important for us to close that deal so we can get the liens released and we can move the products forward. If there are news events with respect to any key programs, a significant brand to partnership or a significant publication, those news events will be put out. But other than significant events, there is no reason for us to regularly update the market between conference calls every 3 months, as I said, unless something very significant occurs. And as the technology evolves, while we continue to make, what I think is really remarkable products -- progress with some early-stage products on the therapeutic side and later-stage products on the imaging side, I don't think it's necessary unless, as I said, it's material, to have a call in between quarterly conference calls. With respect to sales, these are deals that, and these are all signed years ago by prior management that allow the control of the asset by the partner. And as a result, we don't know what their sales are until and unless they report the sales to us. With the recent launch in Europe, we would expect, based on the U.S., that sales will take some period of time to start to generate to be a meaningful number. All we can commit to you is as soon as we get reports, we will be very happy to communicate to the marketplace. It's unlikely that we're going to report between earnings announcements, unless there's some major event. But assuming that the sales start to pick up and follow a path similar to what we saw in the U.S., we would hope that on a quarterly basis, we will actually be able to announce actual sales numbers. But as of now, really, we have nothing to report, because nothing's been reported to us. Jed, do you want to add anything to that?

Jed Latkin: No, what I would say is that as we go forward, we will make updates available on the sales. But obviously, just to reiterate what Mike said, it will be quarterly or forward. Remember in the U.S., as Mike pointed out, the ramp up was, it took time as it -- as we went through the different centers to start selling the product. In Europe, it's more difficult, because remember it might be in EU, but each individual country has its own set up and these things take time. So the ramp is moving up. The company is starting its distribution, and we would expect that like we said, over the next couple of quarters, there should be some updates to come on the product scale.

Operator: [Operator Instructions] We will move next to [ Mike Recchio ].

Unknown Shareholder: I have one clarification. On the KS timing. Oh, excuse me, on the KS timing, you were talking something about 2 years towards the end of your discussion points. Can you go over that again?

Michael Goldberg: What is it timing on developing the KS product?

Unknown Shareholder: Yes, the KS therapeutics.

Michael Goldberg: Fred, are you on the line? Can you take that more specifically, if not I can review what we said in the prepared statements.

Frederick Cope: Okay. So, this is Fred Cope. Yes, we essentially received 2 grants from the National Cancer Institute related to KS. As Michael had pointed out, one of those is a key grant related to the imaging, which is the IV delivery of tech 99 tilmanocept. The second grant actually, which we've completed part 1 of that grant already, is the evaluation of the therapeutic in vitro. The second part of that, that's actually been reported to the NIH already. And so the second part now will ensue, which involves the preclinical testing of the selected conjugate, therapeutic conjugate. That is -- those funds are provided by NCI to allow us to file the IND for moving forward with the selected conjugate for KS therapy. I suspect that, that will occur over the next 12 months, that we will attempt to complete all of that and report that to the NCI and the FDA.

Unknown Shareholder: So is that imply there's a possibility, I use the word possibility, for an IND within the next 12 to 18 months?

Frederick Cope: Yes. I mean, all of this, of course, depends on the regulatory dialogue with the agency relative to the testing package that we will require. I think we already have in mind what that package will look like. We will simply pass that by the protocols for those preclinical packages, we'll pass that by the FDA and we'll, of course, discuss that with the FDA and the timing of all of that and the extent of requirements relative to that package, of course, will determine that time line.

Unknown Shareholder: I would like to take this time to complement you, Dr. Cope, and your team internally and externally on advancing this technology. It's amazing. And I don't know if you get enough plaudits for it, but hopefully, someday you will. And the paper you wrote on the -- and the paper you authored on the inextricable axis of the targeted imaging therapy was great.

Frederick Cope: Thank you very much. But a lot of people have contributed to this. The executive team and the clinical operations team, the accounting team, everybody's been part of this. It's really not just any single individual. I think everybody deserves the credit for this.

Unknown Shareholder: Yes. I would second that. One question back to maybe Dr. Goldberg or Jed, is on the timing for a partner. Are you still thinking that it's a large pharmacy or a large bio that you maybe have the potential to partner with? Or is that still unanswerable?

Michael Goldberg: Well, partnering, unfortunately, is a -- it takes two to tango and bottom line is that depending on the product, depending on the opportunity, we'd like to identify the right partner for the right opportunity. So someone who would be a good partner in imaging RA may not be the right partner for the therapeutics of RA, et cetera. But I do believe that we have identified a key group of potential partners on the imaging side and on the therapeutic side. In some cases, they are the same. In fact, there's one company that has come to us -- that has initially come to us on the imaging side and has indicated that their belief is that as we say, if you can image it, we can treat it. There would be no reason if they took an interest on the imaging, they wouldn't take an interest on the therapeutic. There is another company that was initially interested in the therapeutic side of things but then realized that they had some internal conflicts on the therapeutic side but have now turned around and said that they're interested to work with us on imaging with their specific therapeutic product to help develop that product and expedite their own development. So not to duck the question, but partnering is a complex business that requires a nice fit of interest and abilities by the two various parties and the fortunate thing for us is there are many, many potential partners clearly on the therapeutic side, less so on the imaging side. But as we indicated, we think we can commercialize by working with prospective partners, developing therapeutics even before we get regulatory approvals for given indications and we think that, that should help support the development of the imaging programs and we do believe that there are significant enough interest to continue to justify this strategy, which would be we develop the core product. And as you indicated in your question, and I agree with you, that the work that Fred and his team has done in the KS space is excellent. And as I had previously indicated, it's valuable not just because of getting more data with respect to a potential important product for a company the size of Navidea but that all the work that we're doing in KS, both on the imaging and therapeutic side, is very relevant to our partnering discussions on all kinds of other programs. And the reason we're looking at so many different things, much of it funded by outsiders in viruses and other infectious disease areas, which may seem a little off the core anti-inflammatory cancer indication, is because from the perspective of the mechanism of our technology, it's not relevant why the macrophages are activated, only that they are and whether it's because of a viral or an autoimmune or cancer reason, we can target it and use exactly the same approaches, and it doesn't make a difference what the cause is. So these grants that Fred and his team have been generating and have been doing an excellent job at completing and initiating additional ones is very, very valuable for all of our programs. And as we indicated, now that we have some really good data subcutaneous on both the cardiac imaging and the RA and now we are moving into IV, that's valuable not specifically only for the products that we are developing but also to demonstrate with potential future therapeutics that the IV approach and the sub-Q approach are both amenable to therapeutic development, not just for imaging development.

Unknown Shareholder: In prior a year or so ago, there was some, I don't want to use the term speculation, but willingness to advance forward thinking that there might be a JV at some time in the future within 12 months or something. Is there any time frame you can put your ring-fence around it you think you might enter a major JV, because that is actually one of the biggest value generators for a startup bio like Navidea now? Or is that something that you'd prefer not to speculate on?

Michael Goldberg: Right. Well, let me agree with you that I do think that in terms of the valuation drivers, there is no question that the most important valuation driver would be an independent large commercial partner. Not only does that bring in credibility but it brings significant resources as well as capabilities that a small company like ours can't have. And our strategic reorientation is predicated on signing those partnerships. That being said, in order to sign the right partnerships and make sure that the program advances, we have to do a lot of work. And a lot of work means making sure that not only does our product provide the partner with the expected results that they want to see but that we have the appropriate IP, et cetera, to protect us so that we can be in a position to actually have hard assets to license to the partner. So a long-winded answer not to avoid specifically given the question, but it's a matter of timing. We continue to progress. We think the longer we progress the more valuable we are for partnering. That doesn't mean we're not going to partner sooner rather than later if we can, but it also means based on the economics and how we're working on things and where we're putting our resources that we don't have to take a very, very comprehensive potentially damaging from the perspective of what we can disclose and what we can talk about partnership, if we -- because we have no other choice. So we will do the right deal as soon as we can and for that reason, I don't want to speculate because I don't want to see us in a position where we can get the initial announcements of a deal, but as you often see, you don't have enough teeth in the deal to prevent them from working with competitors. And if you look at the industry, especially in our space alone, look how many deals Bristol-Myers has done. And each time they do a deal, it's very valuable. But when you look at the deals, you see, well, wait a minute, what does that mean for the deal they did 6 months ago, 1 year ago, it appears to be in the same area. We don't want to see ourselves selling ourselves short without having enough leverage to make sure that if the product is not being aggressively developed with the partner, we're stuck. We have so many applications, and so much utility for this technology that we have to find the right partnership. That being said, there are interested companies. There are ongoing discussions. And we just don't want to speculate as to when we will do a deal. It, first of all, it provides too much leverage to the other side in negotiations. And second of all, it potentially puts us in a position where we have to disappoint and we don't want to do that.

Unknown Shareholder: I would like to conclude by saying thank you to you and to the board for saving the company and saving the shareholders. I think there's so much negativity that, that gets lost that there are people who are very thankful for everything that was done in the CRG settlement. And also, thank you for being willing as a company to allow the shareholders to participate eventually in an MT spinoff. There could have been many other ways you went, but that I think is very generous. So as a shareholder, thank you and I appreciate you taking my call.

Michael Goldberg: Thank you, Michael and we do appreciate those words. It's not always easy. Thank you.

Operator: [Operator Instructions] And we will move next to [ Greg Dajion].

Unknown Analyst: I would like to get a status update on the Macrophage spinoff to shareholders. And I know after the CRG settlement, there was talk that there -- that you all will be able to expedite that along. So I'd like a comment on that, please.

Michael Goldberg: Right. So thank you, [ Greg ]. The MT spinout I think has a number of very attractive attributes to it. One, we believe it's a valuable asset that cannot be adequately funded without impinging on Navidea's ability to fully fund the imaging programs. As Jed mentioned, we, on a discretionary basis, can run the company at a profit, based just on the guaranteed revenues that come in from the sales of North American rights for LYMPHOSEEK. So we want to reserve the $7-point-something million in cash plus the $1.67 million that we just got to focus entirely on the late-stage programs on the Navidea side. And because of our stock price being basically in a technically difficult position with respect to getting significant movement, we don't want to have to issue equity at Navidea at these prices and we won't. We think we have adequate capital to fund the development of what we think are very large commercial opportunities, many of them relatively near term, especially if we get the IV approval so that we can sell product to pharma companies as they do their clinical studies. And to put that into some perspective, big clinical studies in cardiovascular could run $300 million and take 5 years. If we can help a company by allowing them to determine the dose by doing a few imaging studies in their early-stage clinical development, so they can get a better test of their population of their dose, they could dramatically shorten and cut the expenses while generating thousands of imaging results for us or sales for us of our products. So that's an interesting commercial opportunity, and we surely don't want to dilute our shareholders at this stage at Navidea. So the Macrophage Therapeutics spinout is a really good idea for a number of reasons. One, it will allow Macrophage to raise money. So of course, that will dilute our Navidea ownership of Macrophage by whatever money we raise, but that will allow us to more aggressively develop products. And if you look at some of the spinouts that have been done from other companies more recently and some of the IPOs in biotech that have occurred, they have occurred at valuations that are multiples of what Navidea is trading for and we believe that we have the assets and with the addition of additional capital to really build a strong team, we can generate revenues that will make -- I mean generate value for Macrophage that would make the ownership of Navidea, whatever's leftover in that position, which should be very significant, very valuable and that could allow us to generate real buying opportunity into Navidea stock because that's the only way people will be able to play the value that MT will generate for Navidea shareholders. But in order to attract that kind of investor, we're going to have to facilitate an exit opportunity for them because they can't put money into situations where they can't make sure that there at least is a liquidity event available doesn't mean they have to exercise or utilize that. So that makes sense to raise the money, to build the team, to enable the valuation of Macrophage as it continues to progress the various programs that we have underway that could generate tremendous value we think for Navidea shareholders. And then finally, having a new currency could allow you, the Navidea shareholders, me, I think, one of the largest, not largest Navidea shareholders, the opportunity to either focus our investments on the later-stage programs that are lower risk maybe not quite as high return versus those who want to be -- take the more riskier approach that has greater valuation upside. And you can -- the shareholders then will have the right or the ability to continue to own both or to sell one, buy more of the other or to diversify into anything else they want. And then the last thing, of course, is we still have a very large short position, which apparently is still pretty active in the stock and clearly active in the chat boards. And I do think by doing the spinout, it would be a way to enable the investors to hopefully get that short position removed because it would be very difficult for the shorts to continue to hedge a position, especially between the period of time when the spin is announced and the spin is effectuated because it will be impossible to hedge the position. So it will be an advantage to the Navidea shareholders as that process is underway. So long-winded comments in terms of why we want to do it. The timing is, this is a high priority, it takes some work and there needs to be some infrastructure built around that. But we're making progress and we should update you -- we will continue to update you as real demonstrable progress is being made. But I would hope that by the next quarterly conference call at the latest, we'll have more information about timing.

Unknown Analyst: Okay. I appreciate that. One other quick question. As far as the lawsuits go, is that becoming a headwind for future partnerships when they see that we're involved in a lot of litigation and so forth? Are we trying to get that resolved so that there's a better impression of Navidea as far as partnering with outside companies?

Michael Goldberg: Yes. I -- listen, I -- from my interactions with prospective partners, it doesn't come up. It did come up until the liens were released because there really was nothing we could do. We couldn't guarantee anyone that we could even partner anything because of the liens and the public knowledge that essentially the company, at any time, could be foreclosed on by CRG. So it did have a very, very chilling effect up until the liens were released. And that is, unfortunately, the reason why we had to negotiate the kind of litigation end that we did which precluded us from going after CRG for what we think are very, very material damages. But the problem was we could have a situation where the operation was success, but the patient died. We could have won 5 years from now, but we would not have had a chance to develop the products as we wouldn't had the resources to do it. So we did do that settlement, which was critical to getting the liens released. Now the litigation is relatively constrained. There's an amount that we can lose, there's an additional amount we can get back. But I don't think at this stage, that enters into any of the concerns with respect to companies. With respect to the Sinotau litigation, as Jed indicated, to be honest with you, I myself don't really understand what the source of that litigation is. It really is not based on what appears to be any real legal argument. It's more of a strategy to achieve certain business goals, I believe, on their end. But as Jed indicated, it appears that, and Jed has really taken the lead on this, that we've got some common agreement as to how to proceed that hopefully will resolve itself in the relatively near term. But again, I don't believe that, that will have any effect on our ability to do the kinds of deals that we are looking to do. Those deals are much, much more science-based. And the issue there is more than -- the litigation is we've got to do a lot more with our IP. While we have issued IP, we have some really, I think, exciting new IP that's been developed that still has to be filed and prosecuted to some degree to really make sure that we have a broad coverage beyond the expiration of the initial patents, a few licenses in the University of California, San Diego many, many years ago. So those are relatively late in their life span. The good news is we have collected a lot of data that we believe provide us real opportunity for some really new patents that give us real good extension of our global position in this space. And I think that is much more relevant to the partnering discussions than some of this historical litigation, which for the most part, is essentially winding down. Obviously, the values, the numbers are still meaningful. But from a technical perspective, in terms of the value of the technology to someone else, I don't think that's going to withhold their interest or their ability to sign on the dotted line.

Operator: [Operator Instructions] And it does appear there are no further questions at this time.

Michael Goldberg: Okay. Well, look, thank you. I'm kind of surprised. We get a lot of calls between conference calls and a lot of requests for questions, and we're kind of hoping to have more questions. But what I think we're going to do and the plan we're going to do is we're going to start collecting the questions between calls and provide on our website a Q&A of the most -- the common questions that we're getting. And hopefully, that will allow you to make sure that you're getting your questions answered on a more expeditious basis and get updates more quickly. So again, we encourage questions. We encourage interaction with our investors, and we think it is an exciting time at Navidea. We've been through a lot. We are, obviously, highly committed to the performance not just of the technology but of the company and the stock. And we are working as hard as we can to make sure that the programs get developed and as news is generated, we get it out there in the way that is both professional and timely. So again, thank you, and we look forward to speaking with you in the near future.

Operator: This concludes today's call. Thank you for your participation. You may now disconnect.