Aspira Women's Health Inc (AWH) 2006 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by. Welcome to the Ciphergen fourth-quarter and year-end 2006 financial results conference call. (OPERATOR INSTRUCTIONS). This conference is being recorded Friday, February 23, 2007.

I would now like to turn the conference over to Sue Carruthers. Please go ahead.

Thank you. Welcome to Ciphergen Biosystems fourth-quarter 2006 conference call. Today we issued a press release for our quarterly and year-end 2006 financial financial release, which is also on our website, and we encourage you to refer to it for more details.

Today's comments contain forward-looking statements. For purposes of the Private Securities Litigation Reform Act of 1995, Ciphergen disclaims any intent or obligation to update these forward-looking statements and claims the protection of the Safe Harbor for forward-looking statements contained in the Act. Examples of such forward-looking statements include statements regarding Ciphergen's expectations for the timing of completion of its ovarian tumor triage test, clinical trials and the related information to the US Food and Drug Administration, its TTP and PAD program plans, expected decreases in operating expenses and projected cash using forwarding the first quarter of 2007. Actual results may differ materially from those projected in such forward-looking statements due to various factors, including the risk that Ciphergen is unable to successfully utilize its resources and execute plans for its diagnostics business. Investors should consult Ciphergen's filings with the Securities and Exchange Commission, including its Form 10-Q filed November 22, 2006 for further information regarding these and other risks related to the Company's business.

At the request of the Company, this call is being recorded. The entire contents of the call, including the presentation and the question-and-answer session that will follow, are the copyrighted property of Ciphergen Biosystems Inc. with all rights reserved. Any redistribution, retransmission or rebroadcast of this call in any form without the express written consent of Ciphergen Biosystems is strictly prohibited.

Now I would like to introduce Gail Page, President and CEO of Ciphergen.

Thank you. Good morning. With me today are Ms. Debra Young, our CFO, and Dr. Eric Fung, our Chief Scientific Officer. 2006 was a year of tremendous accomplishment. We have set a new exciting course for Ciphergen, and we are well on our way to building a preeminent high-value molecular diagnostics business.

Since the close of the Bio-Rad transaction, we had made significant progress in a number of areas. We have restructured our balance sheet, advanced our ovarian triage test into clinical trials and moved two other diagnostic programs forward into development. Quest Diagnostics, our strategic partner for the development of our ovarian test, also has agreed to assist in the development and commercialization for a test to detect peripheral arterial disease. The in vitro diagnostics market is growing and accounts for 25% of all diagnostics or approximately $49 billion worldwide. Not only is the in vitro market expanding, the share of molecular diagnostic technologies within this market is increasing.

Development of proteomic-based tests will accelerate this expansion. Accuracy, reliability and clinical relevance of molecular diagnostics are critical and will improve allocation of health care resources. We believe that diagnostic testing will increasingly rely on examining multiple markers simultaneously and when clinically appropriate examining specific analytes with greater resolution. We are dedicated to commercializing tests and have the distinct capabilities to ensure that the diagnostics we bring to market are successful. Our core technology of translational proteomics is focused on the process of answering clinical questions by utilizing advanced protein separation tools to identify combinations of biomarkers or to better resolve variants of specific biomarkers. 2007 will mark a new beginning for us as we commercialize the first test in ARE valuable pipeline.

We have three goals that drive our development and commercialization efforts. We seek to develop high-value diagnostic tests that help physician stratify patients according to their risk of developing a particular disease. This can give the physician vital information to better characterize, monitor the progression of and select appropriate therapies for these diseases. We are intent on facilitating more efficient clinical trials of new therapeutics by identifying and developing biomarkers that stratify patients according to likelihood of response. In addition, we have to identify biomarkers that can form the basis of molecular imaging targets.

Turning first to our ovarian diagnostic program, last week we announced that we have begun enrollment in a multi-center prospective trial for our ovarian cancer triage test. The trial seeks to demonstrate that the positive predictive value of our test is better than the current standard of care, physical and radiological exams, for distinguishing benign from malignant ovarian tumors. Depending on the prevalence of cancer within the study population, we plan to enroll 700 to 1000 patients at approximately 20 clinical sites. PrecisionMed, a contract research organization or CRO, with expertise in the selection and management of human biological samples will be supporting our efforts with this trial. We anticipate that this diagnostic test will be used as an adjunct to other diagnostic modalities to help physicians in the differential diagnosis of a persistent pelvic mass. Physicians need a diagnostic test that can stratify patients with a pelvic mass into higher risk for ovarian cancer versus those with benign disease.

Let me take a minute and explain why this test is so critical.

Ovarian masses are quite common. About 10% of women develop ovarian tumors each year. The vast majority of these tumors are benign, but the malignant tumors need to be removed as completely and early as possible. Surgeons trained as gynecologic oncologists perform a specific surgery that removes as much cancer as possible and fully evaluates the extent of the disease. Studies have shown that women with ovarian cancer who are operated on by a gynecologic oncologist have a longer median survival of six to nine months and a better chance of being cured. Women with cancer who are initially operated on by a non-specialist often need a second surgery to fully evaluate the extent of the cancer and remove additional cancer. This is where patients can benefit from the information provided by our diagnostic tests. Women with a high risk of cancer would be triaged to the gynecologic oncologist for their initial surgery and get the treatment necessary to improve their chances of survival.

Our ovarian cancer diagnostic tests have already undergone extensive testing and validation. We have analyzed over 2500 clinical samples from more than 10 sites, the largest proteomics study to our knowledge. We plan to commercialize this test as an FDA approved test kit in the US market. Our goal is to complete the trial and make the submission for clearance with the FDA in the next 12 months.

In addition, the strategic alliance with Quest is another major conduit for commercialization. Together we're reviewing the FDA draft guidance documents which were released in September to ensure that our ovarian cancer program is compliant and reaches physicians in a timely manner. We're taking the steps necessary to commercialize in countries outside the United States. To that end, we have teamed with Emergo Group to help us gain regulatory clearance in various European countries.

In addition to our ovarian tumor triage test, we are evaluating other biomarkers for ovarian cancer diagnostics. Specifically we have early stage programs for tests that could provide a means of surveillance for women who have a high risk profile for ovarian cancer, as well as those who have already begun treatment and need to be monitored for recurrence. The fundamental key to improving outcome for women with ovarian cancer is early detection. We are also investigating markers that could be used in conjunction with medical imaging to improve diagnosis.

Turning now to our pipeline of other potential diagnostics, I want to touch on two tests that we have moved into clinical development over the last quarter -- peripheral arterial disease, commonly referred to as PAD, and thrombotic thrombocytopenic purpura or TTP. We are developing a test in collaboration with Stanford University to aid physicians in the diagnosis of PAD, which is a disorder affecting smokers, diabetics and the elderly. PAD affects approximately 12 million Americans and is underdiagnosed end undertreated. With the rising incidence of diabetes, the incidence of PAD is expected to increase as well. The absence of a blood test contributes to the underdiagnosis of PAD. Our blood test would identify individuals who are more likely to have the condition and triage them to more sophisticated tests for definitive diagnosis and treatment. We are very pleased that Quest Diagnostics accepted this potential test as the second diagnostic under our existing strategic alliance agreement in addition to the current ovarian tumor triage test. Quest will assist us in the development of this blood-based assay for the detection of PAD.

As a leading provider of testing services in the United States with personal health testing on more than 145 million patients, Quest is poised to offer tests to a broad segment of the population and provide the attendant marketing efforts for rapid adoption. It is our intention to work with Quest to expedite release of the PAD assay. To achieve this, we have established a strong working relationship with our colleagues in the marketing and science groups at Quest. We continue to work very closely and effectively with their organization.

The third area for which we are developing a diagnostic is TTP, a disorder of the blood coagulation system that in most cases arises from the deficiency or inhibition of a specific enzyme. We are collaborating with the Ohio State University to commercialize a SELDI-based assay for TTP. We're currently optimizing the assay for commercialization.

As we enter 2007, we have restructured our Company to focus on the commercialization of our diagnostic pipeline. Going forward, our operating expenses are expected to be substantially reduced in 2007 given the reduction of employees. Going forward, we do not anticipate having significant revenue until our diagnostic tests are commercialized. We estimate that the cash used for operations in the first quarter of 2007 will be approximately $5 million.

Over the next 12 months, we anticipate accomplishing the following milestones. First, we intend to complete the prospective clinical trial of our ovarian tumor triage test and submit the results to the FDA for clearance. Second, we will seek registration of our products in the European Union. Third, we will continue to move the programs and TTP and PAD forward through clinical validation studies. We plan to prepare for market launch of TTP in the US. Fourth, working with reimbursement experts at Mosaic, we plan on developing and implementing a reimbursement strategy for our diagnostic tests. Finally, we will continue to bolster our management team specifically in the areas of marketing and commercialization.

We have an exciting business strategy, and we are poised for long-term growth. With a more focused organization of approximately 40 people and a seasoned management team, we believe that we are well-positioned to commercialize our pipeline and become a leader in the high-value molecular diagnostics market.

Operator, we are now ready for questions.

(OPERATOR INSTRUCTIONS). [Rohm Selvarahu], Rodman & Renshaw.

Thank you very much for taking my question, and I would like to congratulate you on the progress that has been made at Ciphergen thus far. I just wanted to ask about the timing for the past regulatory approval of the ovarian cancer test (technical difficulty)-- provide a little more color on that?

Yes, let me refer to Dr. Fung for that.

Our anticipation is that we will complete the trial in 2007 and submit the application to the FDA this year. Obviously after that period, we will work closely with the FDA to ensure timely clearance of the product.

And could you just clarify under which (technical difficulty)-- this would fall?

We're not in a position to discuss that today.

(OPERATOR INSTRUCTIONS). Ms. Page, there are no further questions at this time. I will now turn the call back to you. Please continue with your presentation or closing remarks.

Thanks, again, for joining us today. We are very excited to move forward as a leading specialized diagnostic company, and we look forward to continuing to update you on our progress as we move forward in 2007.

Ladies and gentlemen, that does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your lines.