美國安進 (AMGN) 0 Q0 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Abgenix 2005 fourth quarter and year end conference call. [OPERATOR INSTRUCTIONS] I would now like to introduce Greg Mann, Director of Corporate Communications and Investor Relations at Abgenix.

Mr. Mann, you may begin.

Thank you.

Good afternoon.

Good afternoon and welcome to our fourth-quarter and full-year 2005 conference call.

Our call today will proceed as follows.

Bill Ringo, President and CEO of Abgenix will lead off with highlights from the quarter.

Ward Wolff, our Chief Financial Officer, will then review our fourth quarter and full year financial results.

Dr. Gisela Schwab, our Chief Medical Officer is also on the line today and will be available during the question-and-answer section of our call.

Before beginning we wish to remind listeners that during the course of this teleconference the Company may make projections or other forward-looking statements regarding future events or financial performance.

Abgenix cautions you that such statements reflect only the Company's current expectations and that actual events or results may differ materially from those discussed in the forward-looking statements.

For additional information regarding factors that could cause events or results to differ materially, please refer to the risk factors and cautionary language contained in the documents that the Company files from time to time with the Securities and Exchange Commission, including its report on Form 10-K for the year ended December 31, 2004.

The Company undertakes no obligation to update any projections or forward-looking statements in the future.

I'll turn the call over now to Bill Ringo.

Thanks, Greg, and good afternoon to everyone and welcome to today's call.

The fourth quarter of 2005 was clearly a very eventful period for our company.

And I'd like to review the major highlights.

Working with our co-development partner Amgen, we made excellent progress in the clinical development of panitumumab.

As we announced in November of last year, our pivotal study, study 408, met its primary end point making our fully human monoclonal antibody the first EGFr inhibitor to show an improvement in progression free survival as a single agent for metastatic colorectal cancer patients who have failed standard chemotherapy, including irinotecan and/or oxaliplatin.

The observed improvement is significant and the study data support the flexible dosing and excellent profile of panitumumab.

Based on these positive results, we and Amgen initiated the rolling submission of the BLA in December, 2005.

We will submit the second reviewable unit of the filing in the coming days.

This unit consists of chemistry, manufacturing, and control information.

We expect to submit the final reviewable unit to complete the filing before the end of March this year.

Patient enrollment in the PACCE study continues.

PACCE is a randomized, controlled, open label, phase-3B trial comparing panitumumab plus Avastin and chemotherapy versus Avastin and chemotherapy alone in the first-line treatment of metastatic colorectal cancer.

As Amgen noted publicly on January 26, the study is just over half enrolled.

Amgen has stated that interim data from the PACCE study are not expected to be announced until enrollment is complete later in 2006.

The other major highlight of the fourth quarter was, of course, our merger agreement with Amgen.

We've worked closely with them over the past several years, have tremendous respect for their organization, and are very excited about the opportunity to combine forces with a leader in biotechnology.

We believe the proposed combination of the two companies delivers substantial value to Abgenix stockholders, expands opportunities for many of our employees, leverages the value of our multiple assets, and will enable panitumumab to achieve its maximum potential benefit for patients.

Under the terms of the merger agreement, holders of Abgenix stock will receive $22.50 per share in cash of the effective date of the transaction.

This represents a premium of approximately 54% above the closing price of our shares on December 14, of last year, the last trading day before the announcement of the merger agreement.

The aggregate consideration to Abgenix in this transaction is approximately $2.7 billion, which includes the assumption of our outstanding debt.

The merger process is making excellent progress, and we remain on track to complete the transaction in the late March or early April time frame.

Antitrust review is complete.

On January 18, the Federal Trade Commission granted early termination to the waiting period under HartScottRodino with respect to the proposed acquisition.

The final proxy has been filed and mailed.

We completed the filing with the SEC earlier this month.

No additional reviews, waiting periods, or approvals by US or non-US government agencies are required to complete the transaction.

We and Amgen have formed joint integration teams representing the various functions of the two companies to ensure that the transition process initiates quickly and advances smoothly once the proposed merger is complete.

We look forward to the vote by our stockholders on March 29.

Pending the outcome of this vote, we expect the transaction to close in late March or early April.

This concludes my opening comments.

I'll now turn the call over to Ward Wolff, our Chief Financial Officer, for a review of our fourth-quarter results and year-end financials.

Thanks, Bill.

Following the close of the market today, we released our operating results for the fourth quarter and full-year ended December 31, 2005.

I refer you to the details in the press release including the financial information attached to the release as the basis for my comments.

In our call this afternoon, I will review our revenues and operating expenses for the quarter and full year and provide some comments on the balance sheet.

Revenues for the fourth quarter of 2005 were 7.6 million compared to 5.9 million for the same period in 2004.

Contract revenues for the fourth quarter of 2005 consisted primarily of fees from technology licensing agreements and included a milestone payment from Pfizer for advancing a XenoMouse derived antibody in the pivotal study.

For the fourth quarter of 2004, revenues included milestone payments from Human Genome Sciences, Chiron, and CuraGen.

Before reviewing our operating expenses for the fourth quarter, I remind you that we took special charges in the second quarter of 2005 for both restructuring and impairment of assets.

In our press release issued today, we included a table that reconciles the GAAP net loss to the non-GAAP net loss for the three month and full-year periods ended December 31, 2005.

My comments on the full-year results will exclude the special charges in order to make the comparisons more meaningful.

Operating expenses for the fourth quarter of 2005 were 50.2 million compared to 47.2 million for the same period in 2004 or a 6% increase.

This increase is primarily related to our research and development expenses and reflects the heightened level of activity in late 2005 related to the advanced development, expanded clinical trials, and anticipated commercialization of panitumumab.

General and administrative expenses for the fourth quarter of 2005 were in line with the prior period -- prior-year period, even when including costs related to the Company's proposed merger with Amgen.

Total operating expenses for the full year 2005 decreased 2% compared to the full year 2004 after excluding the special charges in both periods.

Research and development expenses for the full year 2005 grew 10% while general and administrative expenses decreased 18% on a year-over-year comparison.

This outcome is consistent with our 2005 operating plan, as previously described, to allocate sufficient resources to fund our product portfolio including our 50% share of the increasing development and prelaunch expenses for panitumumab without increasing overall operating expenses from the prior year.

The resulting GAAP net loss for the quarter ended December 31, 2005, was 43.4 million or $0.48 per share, compared to a net loss of 42.9 million or $0.48 per share for the fourth quarter of 2004.

With respect to the balance sheet, we ended 2005 with 332.8 million in cash, cash equivalents, and marketable securities.

Net cash used in operating activities was 26.3 million in the fourth quarter of 2005, compared to 18.8 million in the fourth quarter of 2004.

For the full year ended December 31, 2005, net cash used in operating activities was 87.6 million compared to 130.8 million for the prior year.

Capital expenditures were 2.9 million in the fourth quarter of 2005, compared to 1.7 million in the same period of 2004.

For the full year, 2005, capital expenditures were 6.8 million compared to 8.6 million for 2004.

With respect to our financial results for the quarter, we executed in accordance with the financial metrics of our strategic and operating plans for 2005.

Our plans called for total costs not to exceed the prior year's level while fully funding our product development activity.

We are pleased to see the improvement we made in our overall cost structure during 2005.

With respect to the revised full-year guidance which we provided at the end of the third quarter, we are pleased to report that we achieved financial performance for 2005 within that improved guidance as follows -- revenues of 18.3 million for 2005, or in the same general range of revenues for 2003 and 2004.

Operating expenses of 182.2 million for 2005, excluding restructuring and impairment charges were within the revised range of 175 to 185 million.

In our third quarter 2005 conference call we'd adjusted this guidance downward from the previous range of 185 to 200 million.

Total cash used in operations and capital expenditures of 94.4 million was below the revised range of 95 to 105 million.

Again in our third-quarter 2005 conference call, with the adjusted this guidance downward from the previous range of 105 to 120 million.

In summary, let me say that I'm extremely pleased with our financial performance in 2005 and appreciate the cooperation exhibited throughout our company in achieving our objectives for the year.

In light of our proposed merger with Amgen, we are not providing financial guidance for 2006 at this time.

This concludes my formal remarks.

Thank you for your attention this afternoon and for your interest in Abgenix.

I'll now turn the call back to Bill.

Thanks, Ward.

I'd now like to outline our goals for the first quarter of 2006 and make a couple of closing remarks.

Our first goal along with our partner, Amgen, is to complete the BLA filing for panitumumab before the end of the first quarter.

Next we continue to prepare our manufacturing operation for the production of commercial scale panitumumab in anticipation of product launch.

We remain confident in our manufacturing capability and our ability to meet future demand for panitumumab.

Our third goal is to continue to meet our contractual obligations to our current partners and collaborators.

We have been in active dialogue with these companies to ensure that we understand their needs and their priorities.

The final goal is to prepare for and complete the proposed acquisition by Amgen by late March or early April.

We have already satisfied the regulatory requirements and other major conditions for the transaction.

The transaction is now subject to approval by our stockholders at a special meeting scheduled for March 29.

We expect to be able to finalize the transaction within a few days of this special meeting.

This may be our final investor call with you.

So I'd like to take just a moment to acknowledge the many people whose contributions have been central to the success of Abgenix and panitumumab.

We're grateful to Amgen for being an excellent co-development partner.

I want to commend the organization and management for the collaborative spirit and high degree of professionalism they have shown us.

It's been a great experience working with them.

I wish to extend a special thanks to Abgenix employees, both former and current for their commitment and dedication to the success of our company.

Without them, we would not have been able to generate significant value for our shareholders and create new potential treatments for patients.

Thank you all for your interest and attention this afternoon.

We'll now begin the question-and-answer session.

Operator, would you please review the instructions.

Thank you. [OPERATOR INSTRUCTIONS] Your first question comes from the line of Brian Rye with Janney Montgomery.

Good afternoon and thanks for taking my questions.

Congratulations to everyone there on a great year.

Thank you.

Just wanted to ask in terms of looking ahead for panitumumab, with the discussions ongoing back and forth with Amgen and obviously with the renewed commitment to the junket they've shown by intending to make the acquisition of the Company, could you sort of help us understand what the future develop path might hold in terms of other tumor types.

I know there's already been some sort of mid stage or Phase 2 investigations in prostate and kidney cancer and nonsmall-cell lung.

Are there other tumor types?

I know they spoke very highly of the opportunity they feel is in head and neck and if we might see pivotal studies even later this year.

Also along those lines, if there's any update on enrollment in the second Phase 3 study in colorectal study, the one that's taking place in the US?

Thanks, Brian.

I'm going to let Gisela -- you had multiple questions within that one.

We'll take a shot at trying to some all of them if we can.

Gisela?

Thanks for the question.

Regarding the further development program we are very focused on colorectal cancer and in particular also evaluation of earlier lines of therapy in colorectal cancer.

One such study is ongoing, as you know, the PACCE study that Bill had described in his remarks.

Additional studies, late stage, Phase 3 studies are being planned in second and first line of colorectal cancer therapy.

And also adjuvant therapy.

Additionally, as you mentioned it, Brian, head and neck cancer is of great interest.

And studies are planned in that indication, as well.

Regarding the second pivotal study, the US study which is a single arm colorectal study in patients with advanced colorectal cancer who have failed prior therapy including irinotecan and oxaliplatin, we have not recently updated the accrual status but an interim analysis of that study is not to be submitted in the context of the overall BLA.

Sounds good.

Thank you for the update.

And again, congratulations.

Thanks, Brian.

[OPERATOR INSTRUCTIONS] And your next question comes from the line of Elise Wang with Citigroup.

Hi.

Thanks for taking my question.

Just a quick one around the transaction, I notice there is a termination fee of 75 million payable to Amgen by yourselves if the merger's not completed.

Could you give us the circumstances under which that termination fee could be, in fact, could in fact occur.

Interesting question, Elise.

I would have to go back and really go through the definitive agreement in detail.

But I can tell you I think it's pretty standard.

In terms of the way the events have been defined.

And at this point in time, we're very comfortable moving forward to the shareholder vote that's scheduled for the 29th, of March and closing the transaction a few days after that.

Okay.

I just wanted to see if there's anything else in particular that we should be made aware of.

But thank you.

Not that I'm aware of at this time, Elise.

Okay, thanks.

Thank you for your question.

[OPERATOR INSTRUCTIONS] And your next question comes from the line of Morgan Allen with Vegas Club, Inc.

Hello.

Hi, Morgan.

How are you?

Fine, thank you.

Can you tell me what was the consensus of the estimates for the fourth quarter of '05?

The consensus of the EPS.

Ward, go ahead.

Sure.

The consensus that existed, at least as of the most recent information I saw, Morgan, I believe, was $0.44 loss for the quarter.

As you know, we reported out a $0.48 loss.

And specifically the -- I discussed in my comments the increased operating expenses with respect to not only panitumumab but also referenced the merger expenses.

I will say that analysts have really either concluded their modeling or have not updated their modeling once our -- once the Company announced the merger agreement on December 14.

So I can't speak for all the analysts in terms of how current they maintain their estimates.

What of the actual final earnings per share then?

The final loss for the quarter was $0.48.

So it was $0.48?

Correct.

Can you tell me why it would be that Morgan Joseph would downgrade Abgenix?

I'm sorry?

I read that Morgan Joseph, the broker, downgraded Abgenix?

I don't know the specifics around that, nor do I know the timing.

As I said in some cases, analysts essentially discontinued to follow the Company.

So I don't know if that's related -- if that could be what you're referring to or exactly the timing.

But I'm not aware of the downgrade.

Morgan Joseph did not discontinue its coverage, but they did downgrade.

And I also read that Merrill Lynch downgraded the parent company of Amgen, though they continued the coverage.

They downgraded it from -- I think it was from buy down to hold.

I think, Morgan, in the case of the Company that you're -- you're referencing, that's obviously their decision.

They did so -- we've not had any communication with them as a result of that.

Okay, thank you very much.

Thank you for your question.

Yes.

[OPERATOR INSTRUCTIONS] Your next question comes from the line of Maneesh Jain from TWP.

Just a quick question regarding the manufacturing asset.

Can you give me a feel for what's left for getting any approvals that are left of, for panitumumab for its commercial introduction?

What the timeline might be?

And what any plans are that you would understand for the rest of the asset that wasn't being used previously?

Thanks.

The approvals that are needed in terms of panitumumab would obviously be to complete our BLA filing for the US, which we said that would be done along with our partner Amgen by the end of the first quarter.

And then based on the data received, by the results back from the FDA on their review, that's a requirement.

Secondly, the manufacturing facility will undergo an inspection by the FDA, which will take place sometime later this year.

And that would be required before commercial material could be shipped from that facility.

That's a standard inspection.

We also would intend to be able to make a submission to the European authorities for approval.

And they will also have an inspection of our manufacturing facility, as well.

Great.

Thank you.

You're welcome.

There are no further questions in the queue.

I would now like to turn the call over to Mr. Ringo for closing statements.

Great.

Thank you very much.

Thank you all very much for your -- for participating in the call today.

For your attention and for your interest in Abgenix.

We certainly appreciate that interest over the years and have enjoyed reporting to you the results of the Company in our 10 short years of history.

We now look forward to closing the merger with our partners, Amgen, as mentioned earlier by the end of March, or early in April, and moving forward with the next phase of this company and bringing panitumumab to the marketplace, as well.

Thank you all very much.

Thank you for your participation in today's conference.

This concludes the presentation.

You may now disconnect.

Good day.