美國安進 (AMGN) 2002 Q3 法說會逐字稿

Good afternoon. My name is Jeff (ph) and I will be your conference facilitator today. At this time, I'd like to welcome everyone to the Onyx Pharmaceuticals third quarter earnings and company update conference call. All lines have been placed on mute to prevent any background noise and after the speakers' remarks, there will be a question and answer period. If you'd like to ask a question during that time, simply press star, then the number one on your telephone keypad. If you'd like to withdraw your question, press the pound key. Thank you. Mr. Renton, you may begin your conference.

Thank you very much. Good afternoon and welcome to Onyx Pharmaceuticals third quarter 2002 conference call. I'm Hollings Renton, Onyx Chairman and CEO; Scott Geyer, Senior Vice President, Product Development; and Marilyn Wortzman, Controller are also joining me on the call. I'd like to remind you that our remarks today will include forward-looking statements relating to the company's financial results, business prospects, and the development of potential human therapeutic products that involve a number of risks and uncertainties. Actual events and performance may differ materially from our expectations.

Among the factors that could cause actual results to differ materially are the timelines for clinical activity, results of pending or future clinical trials, dependency on third parties to manufacture our products, and changes in the status of the company's collaborate relationships, as well as the risk factors listed from time-to-time in the company's periodic reports filed with the Securities and Exchange Commission. We refer you to these reports, which include the company's 2001 annual report on Form 10-K and its subsequent quarterly reports on Form 10-Q. We do not undertake an obligation to update the forward-looking information we are giving today.

As you know earlier this afternoon, we issued Onyx's financial results for the third quarter of 2002 and in a separate press release an update on our two most important development programs in compliance with Web FT (ph), we are web casting the call on our website and on First Call events. Today I'll be providing some perspective on our two 'V' (ph) product candidates; BAY 43-9006 and all the active small molecule Raf kinase inhibitor in co-development with our partner Bayer Corporation and on ONYX-015, the lead agent in our therapeutic virus program.

First however, I'd like to briefly discuss our financial results. Importantly the results reported where in line with the guidance we provided prior to the start of the current fiscal year. For those of you who have not seen the release, it has been released through PRNewswire and is posted on both Yahoo Finance and on our own website www.onyx-pharm.com. We reported a net loss of $10.8m or $0.50 per share for the quarter and a net loss of $32.5m or $1.61 per share for the nine months ended September 30th, 2002.

These loses reflect higher clinical development and manufacturing expenditures, as well as lower collaborative revenue due to the amendment of agreements with Warner-Lambert last year as previously announced. We reiterate that we are actively seeking a partner for ONYX-015 and follow-on virus products to reduce our burn rate. As of September 30th, 2002, ONYX had cash -- cash equivalence in short term investments of $50.4m, which included a $5m milestone based loan payment received from Bayer in August for the initiation of the Phase II Clinical program.

The commencement of Phase III clinical studies will trigger a $15m loan from Bayer. Importantly, we are pleased to announce this afternoon that we expect to begin Phase III trials in 2003. Now let's continue with BAY 43-9006, this is the top priority program at ONYX, as you know, but equally important, the program remains one of the top priorities at Bayer as well. Jointly, we are moving aggressively to advance this novel anticancer agent into Phase III clinical trials.

We are not disclosing details of the Phase III program at this time because we don't yet have them. Based on conversations with the appropriate regulatory authorities, as well as the results of ongoing trial, we will with our partner develop the Phase III program details and provide more information as appropriate. You will recall that BAY 43-9006 entered its first Phase II efficacy trial in Hepatic Cellular Carcinoma in August of this year, as well as a second Phase II trial in colorectal cancer.

In addition multiple Phase I clinical trials in combinations with different chemotherapeutics are also ongoing. With your permission, I'd like to step back and just remind you that substantial Phase I data were presented at last May's ASCO meeting. This demonstrated that BAY 43-9006 is well tolerated and has a good pharmacokinetic profile. In addition, pharmacodynamic data indicated that the compound is hitting the primary intended target, the enzyme Raf kinase, which is a key component of the Raf signaling pathway that control cell division. This cell-signaling pathway is activated inappropriately in many cancers. Although we were not looking for efficacy in the Phase I trail, we were encouraged to see some signs of anti-cancer activity. There were two confirmed partial responses one in hepatocellular carcinoma and one in renal cell carcinoma and there were additional cases of tumor shrinkage.

There were also a number of patients with stable disease including many who have been on the drug for extended periods of time. At ASCO, the investigators reported 10 patients whose disease was stable for at least six months. These results suggest that BAY 43-9006 could be an important anti-cancer agent with the potential ability to shrink tumors or provide long-term disease control.

Another reason for our enthusiasm about BAY 43-9006 is its potential for broad application in cancer treatment. Because the Raf Kinase is downstream of raf, this agent could address patients whose cancer is linked to be patient in the raf gene itself, which is one of the most common mutation of the human cancer as well as patients whose tumors are stimulated by growth factors that activate rafs.

In addition, recent research reported in Asia founded a specific Raf kinase. D' raf is mutated in a significant percentage of melanomas and other cancers. Further validating the approach that we and Bayer are taking. Also there are already two approved products in this important cell signaling pathway. When you consider that BAY 43-9006 may be beneficial and safe for long-term use and is being developed in a convenient oral dosage form, you can see why we and Bayer are excited about the potential of this Novel compound.

And I would like to also mention the terms of our co-development collaboration with Bayer. We have an almost 50-50 profit sharing agreement except in Japan. Getting our shareholders considerable upside potential from the product. In addition, the agreement provides for co-development funding as well as milestone payments including the $5m loan in this last quarter with the commencement of Phase II trials and a $50m loan upon the initiation of the phase III studies. Thus this arrangement provides attractive financial and operating leverage.

In summary, BAY 43-9006 is our top investment priority. It's an orally active agent directed against a genetically validated target in an important growth signaling pathway that is implicated in many cancers. For this reason, Bayer and Onyx are pursuing an aggressive development path and timeline for this project. We are looking forward to seeing data resulting from our ongoing trials in the coming year. And next week on November 20th, we will be releasing additional phase I data from three of our four clinical trial sites at the 2002 EORTC-MCI-AACR meeting in Frankfurt, Germany.

Now let's turn to ONYX-015, our lead therapeutic buyers targeted against cancers with abnormal p53 gene function. When we last updated you in early 2002, we named three milestones that we needed to meet before we could expand to the larger Phase III clinical trials. We are happy to report that we are the chief two of the three milestones and are working on the third. Together with XOMA we've been able to scale up the manufacturing process for [Inaudible] by ten-fold. Also importantly, we recently received FDA approval of our CMC amendment allowing us to use product manufactured at XOMA at this larger scale. Therefore, we believe we significantly reduced the supply constraints for clinical trials. In addition to the staff at XOMA, I would like to recognize the contribution of Scott Geyer and his technical operations team to this key achievement.

Our third milestone was to gain alignment with the FDA regarding the studies needed to achieve marketing approval. We are currently conducting a Phase II study of ONYX-015 in refractory head and neck cancer patients. With the hope that early results from this trial would prove useful in our conversations with the FDA about potential registration in head and neck cancer. We are also keeping open a Phase III trial in recurrent head and neck cancer, but are not actively recruiting patients until we have reached agreement with the FDA regarding requirements for the clinical trials that could lead to marketing approval.

As an additional potential path to approval, we are planning a follow-on clinical trial of ONYX-015 in metastatic colorectal cancer. Our aim is to establish a safe dose in combination with standard chemotherapeutic regimens. We were encouraged to see early signs of activity in this indication in earlier Phase I-II trials. Patients receiving the highest dose experienced extended survival times and tumor shrinkage was observed in several patients who had failed multiple previous rounds of chemotherapy.

This additional registration path in metastatic colorectal cancer, a long with this new supply source of ONYX-015 strengthens our position as we continue to actively seek a partner for our therapeutic virus programs. Our decision to partner this program is driven by the need to reduce our burn rate. In September, we cleared the way for re-partnering efforts, when we reacquired all rights to ONYX-015 and an arm therapeutic virus product from Warner-Lambert without any future financial obligations to Warner-Lambert.

In conclusion, we've set our product development priorities to ensure the best return on our resources going forward. We are excited about the clinical progress of BAY 43-9006 and look forward to its further study and advanced trials in the coming year including moving to Phase III trials in 2003. In the mean time, we are committed to obtain a partner for ONYX-015 and to working together to advance this novel agent toward registration studies.

We are fortunate to have two first in class product candidates in the clinic that target cancer at the molecular level. There are also several other additional pre-clinical compounds that are advancing to the clinic, which unfortunately I don't have the time to discuss in detail on this call. I hope that updates you in the future on those compounds. On behalf of the Onyx team, I want to thank you for your interest in the company and taking the time today to participate in our conference call. So at this time I would be happy to turn it over to questions and answers. I’ll provide the answers, I hope.

At this time, I would like to remind everyone in order to ask a question, please press star, then the number one on your telephone keypad. Please limit yourself to one question. We'll pause for just a moment to compile the Q&A roster. Your first question comes from Wayne Rothanbotham (ph) with Grow Capital.

Hi Hollings. How are you doing? Two quick questions. One is, can you expand over more on the B-raf (ph) discussion on malignant melanoma, specifically in terms of the role of function of B-raf in malignant melanoma cells and other digit (ph) essential mediator of causing the mutations and then some rumors circulating I know that you don't like to comment on rumors, but the question is, there is some talk that there is some additional responses and one of them possibly being in a patient of malignant melanoma. So, I was wondering if you had any thoughts on that. And second, if you can maybe discuss a little color on one of the abstracts from Ash coming from where CML outpatients who were resistant to, I am sorry, CML cells that were resistant to Glevac. It seemed that 9006 had an affect in killing those cells and might be an interesting target to look at in terms of Glevac resistant patient's in CML.

Sure. Thanks for the questions Wayne. Yeah, there was a very important scientific paper in nature about the middle of this year from the welcome trust, the senior Institute who has the cancer genome project underway there. And the first new gene that they identified that is mutated in human cancer is B-Raf, which is then a specific type of the Raf Kinase, which is our exact target Raf Kinase. So, it has provided not only the genetic validation that we had had previously for Raf and activation of Raf but validation of Raf specifically as a target in human cancers. And it is pretty clear; I think that based on this data as well as follow-on publications in colorectal cancer that where there are B-Raf mutations, it seems to be the mutation that is driving the hyperactive growth in those tumors.

So, we think that is a very exciting new data and obviously provide some additional genetic validation for potentially melanoma and maybe other subsets of other cancers to be targeting based on this genetic finding. And I think you are absolutely right Wayne, I am not going to comment on any rumors that are floating around there in terms of activity. At this stage, we treated very few patients with malignant melanoma, but obviously the genetics make it an interesting potential target. In addition, as you noted from the abstracts that are now published for the upcoming Ash meeting, clearly I believe that has been an important new product, but in many cases patients go on to become resistant to Glevac, and what we have shown preclinically and what we report on is Ash is that the half way is active and there is preclinical evidence that these Glevac resistant cells can be impacted by a Raf Kinase Inhibitor. Next question.

Your next question comes from Alex Hiddo with A.G. Edwards.

I was just wondering if you could tell us a little bit more about the data we'll see it EORTC will that be a follow-up on the patients who were presented at ASCO or will there be additional patients in that presentation?

Sure thanks Alex. The data will include largely an update of the patients but there had been additional patients that have been treated over the last six months since that data was presented. So it's going to be ongoing follow-up of patients that were on study at that time plus some additional patients that were added over the following six months. So it is in fact involves three of the four sites that were on the initial Phase I safety studies and we'll provide an update on the experience the data across the all four centers in that Phase I study. So it is an update and again just to reiterate what I have mentioned on the call itself where we saw a couple of confirmed partial responses to the shrinkage and we reported on ten patients whose disease was stable out at least six months and clearly we will now have further experience with those patients.

At this time, I would like to once again remind everyone in order to ask a question, please press star then the number one on your telephone keypad. Your next question comes from Rachel McManon with Piper Jaffray.

Hi guys, I have a couple of questions here, I am wondering if you can comment on the two assays -- two trials, how the enrollment is going there and if the data will be -- if you think you'll have data in time for ASCO?

Okay, so the -- obviously these studies as we've mentioned started in August, so it's really on in the studies with the number of sites up, but other sites being added to the studies. We do not release the enrollment numbers publicly, but there are a number of sites open and accruing. The status of these studies for ASCO, I think, we can't really predict what would be available at this time. The abstracts for ASCO are due late December. So there are a number of issues that will determine whether these would be potential abstracts that will be filed. I am sorry, we really can't predict unfortunately at this time Rachel.

At this time there are no further questions, are there any closing remarks?

Well, my closing remarks are again we really do appreciate the interest. We are excited about the fact that we are moving aggressively with Bayer on the BAY 43-9006 compound and that we plan on being in phase III studies in 2003. We think there is a lot of very positive things about the compound in terms of its broad applicability, it's targeting a validated pathway where other compounds have been approved in the fact that it's already active. So, we are quite excited, as well as our colleagues at Bayer are excited.

And then we would - - we are committed to the Biotherapies. We believe that these are all the way to treat cancer. It's obviously been an area that Onyx has led the way and we recognize that to be able to carry those forward aggressively. We are going to need to partner and therefore our strategy there is to seek that partner and we hope to provide updates to you when that occurs. So, again appreciate your participation and look forward to keeping you updated in the coming months.

Ladies and gentlemen, if you have any additional questions, you are invited to e-mail then to ir@onyx-pharm.com. Thank you for joining today's conference. You may now disconnect.