Agenus Inc (AGEN) 2009 Q1 法說會逐字稿

Good morning, my name is Tiffany and I will be your conference operator today. At this time I'd like to welcome everyone to the first quarter 2009 earnings 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, Mr. Anstey, you may begin your conference.

Thank you, Tiffany. Good morning, everyone. Welcome to Antigenics conference call to discuss the financial results for the quarter ended March 31, 2009. With me today is Shalini Sharp, the Vice President and CFO. Unfortunately, due to another commitment, our Chairman and CEO, Garo Armen will not be able to participate in the call today.

We hope that all of you have had a chance to review the press release that was issued this morning. During this call we will review the financial results as well as provide a corporate update. We will then have a Q&A session.

But, before we continue, I would like to remind you that this conference call will contain forward-looking statements including statement regarding the development of programs, commercialization activities, clinical trial and publication activities at Antigenics and its licensees and partners. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. Reference to these risks and uncertainties is made in today's press release and they are disclosed in more detail on our most recent filings with the US Securities Exchange Commission. When evaluating Antigenics business and securities, investors should give careful consideration to these risks and uncertainties.

Before we move on, I would like to note that for the purpose of this call, the phrase "net burn rate" means used cash used in operating activities plus capital expenditures, debt repayments and dividend payments. With that, I'll now turn the call over to Shalini Sharp.

Thank you, Robert, and good morning everyone. I will now review our financial results for the quarter ended March 31, 2009. For the first quarter of 2009 Antigenics incurred an net loss attributable to common stock holders of $9.7 million or $0.14 per share. This is compared with a net loss of $11.6 million or $0.21 per share for the same period in 2008.

Antigenics recognized revenues for the quarter ended March 31, 2009 of $621,000 compared with $850,000 during the same period in 2008. Revenues were primarily generated from license fees and royalties. Research and development expenses for the quarter ended March 31, 2009 were $4.9 million compared with $5.7 million for the comparable period in 2008. G&A expenses for the three months ended March 31, 2009 were $3.9 million compared with $5.3 million in 2008.

Our net cash burn for the first quarter of 2009 was $9.8 million compared with $9.4 million for the same period in 2008. The 2009 results reflect among other things the Company's continued efforts in Russia and Europe. We had $24.6 million in cash, cash equivalents and short term investments at the end of the first quarter and we believe our current cash balances are sufficient to fund our operations into 2010. And this concludes the financial portion of the call.

Turning to the overview of our business, in our earning release this morning, we announced that GlaxoSmithKline recently made a significant advancement in its already industry-leading type line of prophylactic and therapeutic vaccines. They have launched the second Phase III trial of their MAGE-A3 antigen specific cancer immunotherapeutic vaccine, which contains QS-21.

The new study in Stage 3 melanoma seeks to measure disease recurrence after surgical resection of the tumor as well as overall survival in addition to other endpoints. As you may recall two years ago, Glaxo launched a Phase III trial of MAGE-A3 based vaccine in non-small cell lung cancer also in the Antigenics setting. We are pleased by the progress Glaxo is making with the cancer vaccine and their focus on earlier stage patients is consistent with our own approach with Oncophage.

There are now three vaccines containing QS-21 in Phase III clinical trials being run by our various licensees. And additional approximately 13 vaccines containing QS-21 are in Phase I and II clinical trials for both therapeutic and prophylactic use. We look forward to the continued advancement of this promising pipeline including the launch of another Phase III study this year.

I will now turn Oncophage, our therapeutic cancer vaccine. We will soon be announcing the first readout of longer term follow up survival data from our patient registry following patients who participated in our Phase III study in agilent renal cell carcinoma which is the most common type of kidney cancer. The preliminary results will be shared at the ASCO meeting in Orlando in June and potentially other medical conferences in the coming months.

A press release will be issued so that the results will be widely available. The patient registry results will add to the body of data that has been generated in support of the efficacy of Oncophage in early stage kidney cancer post surgery. The registry allows us to see the results over an extended period time, which is an important factor in evaluating immunotherapeutics and patient outcomes in the early stage disease setting. We are hopeful that the initial patient registry data will support our ongoing regulatory review with the European Medicines Agency and our marketing efforts in Russia as well as continue to drive support for Oncophage in the broader medical and investor community.

Two other recent developments deserve mention. First, we are delighted to report that Oncophage has been voted the best therapeutic cancer vaccine of 2009 by the World Vaccine Conference, which is a premier event for the vaccine industry held each year. An 11 member panel voted on various awards relevant to the vaccine sector including the best therapeutic vaccine award won by Antigenics. The judge's decisions were based on a variety of criteria including milestones achieved between April 2008 and April 2009, the unmet medical needs that the vaccine addresses, geographical reach and the vaccine's safety profile. This aware, in fact, was received by Glaxo's MAGE-A3 vaccine, which contains QS-21 in 2008. We are grateful to the World Vaccine Conference for this recognition.

Another key milestone has raised the profile of the cancer vaccine space more broadly. Dendreon recently announce that their vaccine provenge met its primary end point of improving overall survival in men with prostate cancer in a large Phase III study. This is excellent news for the prostate cancer community. The strong results of provenge demonstrate the potential collagus patient specific cancer vaccine to have a significant impact on patient outcomes. We congratulate Dendreon on this success and look forward to continued successes for therapeutic cancer vaccines in improving the lives of patients.

And this concludes our prepared remarks. We will now begin the question and answer session. Robert?

Thank you, Shalini. At this time we're ready to take questions. Tiffany, could you please review the Q&A process again?

Yes, sir. (Operator Instructions). Your first question comes from the line of Ren Benjamin with Rodman.

Hi. Good morning and thanks for taking the questions. I guess just maybe we can start off with what exactly is happening with the EMEA review of Oncophage and can you give us a sense of just how the sort of back and forth and the questions are going?

Sure. Thanks for your question, Ren. So we are obviously, right in the middle of the process with EMEA, which involves the various time tables related to the filing taking place, receiving questions from EMEA, replying to those questions, GCT and GMT audits, et cetera. So I think like most companies, we won't be issuing press releases about each small phase of that process, but we are right in the middle of that process of a dialogue with the EMEA and we're pleased with the progress that we're making so far. And what I can tell you is that we're still on track to potentially receive a final decision from EMEA by the end of 2008 or early -- or sorry -- by the end of 2009 or early 2010.

And you mentioned several stages and I know there's a back and forth regarding the questions. If I remember correctly, you had already gotten a response to one set of questions or sorry -- you had already responded to one set of questions. Is that correct or if I'm not correct, can you just tell us so what stage you're at?

Well, as I mentioned, we are in the middle of the question and answer process. So we're currently preparing answers to a set of question the EMEA at the moment, but that can be an iterative process. So there can be more than one set of questions. But we are in the process right now of responding to some questions.

Got it. Regarding the Russian launch, can you give some sort of sense to what's happening there? I would have thought that by now, maybe we would have seen some sort of sales, but can you give us what sort of hurdles are being encountered right now?

Well the two areas of focus in terms of our Russian activities are centered around securing reimbursement from the government for the product and that would be from the national government as well as various regional sources of reimbursement. And the second main thrust of our efforts is around nailing down basically the paperwork involving import and export of vaccine and tumor materials from the country. So this is -- both of these processes, we are still working on as high priorities and if we're able to resolve those in the coming month, we would then be able to launch the product after that.

Is there anything in particular with the reimbursement issues that we should be aware of or is this just pretty much a standard process?

No, I mean there's been no specific hurdle or no specific objection. It's just, unfortunately, a process in terms of the dialogue with the government that is taking longer than we had originally anticipated.

Is there -- do you have sense as to how this could be priced in Russia?

Well, we have not publicly disclosed a price in Russia and we are still in the process of putting the final touches on our distribution arrangements in Russia. So we're not able to disclose specific pricings. But what I can tell you is that we do expect the pricing to be in line with the pricing that you see for cancer biologics in the US. So we would still expect to see the pricing in that same sort of range in Russia as well.

Got it. And I guess there's one --

But I can't give you a specific dollar value at this time.

Pardon me?

But I can't give you a specific dollar value at this time.

Got it. And I guess just one final question. Regarding the logistics of how this may work. Now I understand you, of course, have done a world-wide randomized Phase III trial and so this has already been worked out to a smaller scale. But how does -- how would the importation and the export of the vaccine occur with Russia? I mean would you guys have to start a new manufacturing plant there? Would it -- could you give us a sense as to how sales -- the sales would be achieved?

Sure. It really -- we do not immediate plans to set up manufacturing in Russia and there's no requirement that we do so, so we will continue to manufacture product our of our Lexington facility and really the logistics are not dissimilar to the logistics that were in our clinical trials. So the vaccine will -- I'm sorry. The tumor will be shipped frozen to our Lexington facility where we'll make the vaccine from the tumor material and ship the vaccine back frozen to Russia. There will be a distribution arrangement with a local party that will assist us with those logistics. And also they will assist us on the payment side and the collection side. But really the process is not too different from what was encountered with the clinical trials.

Got it. Moving on to the glioma trial, I think there's of the last update approximately two-thirds had been enrolled. Can you give us an idea as to how that trial is ongoing and when we might see some preliminary data?

Well, as you know, that trial is being run out of UCSS by Dr. Andrew Parsa and so it's not a trial that we're running so the disclosure of data from that trial is something that will be Dr. Parsa's decision in terms of the time frame, however it is a Phase II trial and he would be able to have a look at that data at various periods during the trial so he would have some flexibility to disclose that data as the trial continues. But at the moment there are not immediate plans that we're aware of of any presentations that are upcoming on glioma in the next few months.

Okay. Regarding QS-21, do you guys have a sense as to when the GSK Phase III trials -- obviously the melanoma trial just got started but I guess non-small cell lung cancer trial -- when we might see some of these top line results?

Well, I believe that they are taking an interim look at the data and then there would obviously be the final analysis as well. So I believe that those results from the interim and final analysis will be emerging in 2010 and 2011. But again, that's not our program, so we would need to rely on GSK's disclosure regarding that program.

Right. And you mentioned that GS-21 would be in another Phase III trial sometime this year. Can you tell us what trial and what product that would be?

Well, unfortunately because of our confidentiality agreements with the various licensees, we're not at liberty to disclose that trial until the licensee discloses it. But we will issue a press release when that takes place so you won't miss it.

Okay. And then I guess one last question regarding the programs that are on hold Aroplatin and AG-707, any plans to get those programs sort of off of hold or is that just not a focus right now?

At the moment, to be honest, because of resource constraints, we are trying to dedicate our resources to the programs that have near-term commercialization potential. So Aroplatin and AG-707 as much as we would like to invest further in those programs, I don't think that's in the cards in the short term. We would be open to potential partnerships for those programs with third parties and we would be open to investigator sponsored research on those programs but we would not at this time look to be funding additional clinical trials internally for those programs.

Got it. Well, thank you very much and good luck.

You're welcome. Thanks for your questions.

(Operator Instructions). At this time, sir, there are no further questions.

Thank you. I'd like to remind the listeners today that a replay of this call will be available approximately two hours from now through midnight Eastern time on May 21, 2009. Please dial 1-800-643-1687 from the US or 706-645-9291 internationally. The access code is 96604786. Replay will also be available on our Company's website in approximately two hours. If you have additional questions after today's call, please call us at 1-800-962-2436.

Thank you.

This concludes today's conference call. You may now disconnect.