Brickell Biotech Inc (BBI) 2013 Q3 法說會逐字稿

Good day and welcome, ladies and gentlemen, to the Vical, Incorporated, Financial Results Conference Call. At this time I'd like to inform you that this conference is being recorded and that all participants are in a listen-only mode. (Operator Instructions) I'll now turn the conference over to Tony Ramos, Chief Accounting Officer. Please go ahead.

Hello, everyone. Welcome to our third quarter 2013 financial results conference call. Joining me on the call today is Vical's President and Chief Executive Officer, Mr. Vijay Samant. I will begin with a brief notice concerning projections and forecasts. This call includes forward-looking statements including financial expectations and projections of progress in our independent and collaborative research and clinical development programs that are subject to risks and uncertainties that could cause actual results to differ materially from those projected.

Including in the risks set forth in Vical's annual report on Form 10-K and quarterly reports on 10-Q filed with the Securities and Exchange Commission as well as the specific risks and uncertainties noted in Vical's newest release on third quarter 2013 financial results.

These forward-looking statements represent the Company's judgments and expectations as of today. The Company disclaims any intent or obligation to update these forward-looking statements.

Now I'd like to introduce Vical's President and Chief Executive Officer, Mr. Vijay Samant.

Thank you, Tony, and good morning to all our participants for joining the call. Today we will discuss the status and expectations for our key development programs including a detailed look at the recently started Phase 3 trial of ASP0113 formerly known as TransVax. We'll begin the call today with a review of financial results by Chief Accounting Officer, Tony. Tony, you're on.

Thank you, Vijay. We reported financial results this morning for the third quarter and first nine months of 2013. Revenues were $4.6 million for the first nine months of 2013 compared with $15.2 million for the first nine months of 2012. The decrease in revenues was primarily a result of the $10 million milestone payment we received from Astellas last year for progress in the ASP0113 vaccine program.

Research and development expenses were $12.1 million for the first nine months of 2013 compared with $13.9 million for the first nine months of 2012. The decrease in R&D spending primarily reflects the sub-license payment we made in the first nine months of 2012 related to the Astellas milestone payment.

Manufacturing and production expenses were $11.5 million in the first nine months of 2013 compared with $9.3 million in the first nine months of 2012. The increase in manufacturing and production expenses was driven by increased activity related to our Allovectin program and the Astellas agreements combined with our August 2013 restructuring charges.

General and administrative expenses were $11.5 million in the first nine months of 2013 compared with $9.3 million in the first nine months of 2012. The increase in G&A spending primarily reflects costs associated with our August 2013 restructuring combined with an increase in legal and accounting fees.

The net loss was $29 million for the first nine months of 2013 compared with $15.4 million for the first nine months of 2012 with the Astellas milestone payment last year and the $2.2 million personnel-related restructuring charge this year accounting for most of that difference.

Our Q3 2013 net use of cash was approximately $8.5 million, which is in line with our second half forecasted range of $13 million to $15 million. We ended the quarter with cash and investments of $61 million.

With that, I will now turn the call back to Vijay.

Thank you, Tony. I will begin today with a brief update on our recently terminated Allovectin program. In August we announced the top line results from our Phase 3 trial of Allovectin in patients with metastatic melanoma. The trial failed to demonstrate a statistically significant improvement compared to the first line chemotherapy for either the primary or secondary efficacy endpoints.

Recently we completed the clinical trial report and shared it with our (inaudible). That could go to milestone payment in early October of $0.5 million. I am pleased to announce today that the detailed trial results have been accepted for presentation at a scientific conference in November. The full set of slides will be posted to our website after the public presentation.

Despite the setback from Allovectin program, we are excited about our pipeline overall and the broad applications of our technology. For example, our therapeutic vaccine for herpes simplex virus type 2, is designed to help control outbreaks and shedding in people already infected with the virus. More than 500 million people worldwide, about one of every six in 15 to 49 age group [while] HSV-2 lead to infections. So this represents a significant unmet medical need and a large commercial opportunity.

Most of these subjects in it do not have access to or do not effectively use antiviral drugs, which are the only treatment option at this point. We are on schedule to initiate a Phase 1/2 trial by the end of 2013. We have completed CJV production of our HSV-2 vaccine candidates, and I am pleased to report that we received IND allowance from the FDA yesterday.

We are working towards [initiating] clinical sites and anticipate dosing for the first group of volunteers by the year-end 2013.

Let me take a few minutes to elaborate on the design of our Phase 1/2 trial. This trial will be a randomized double-blind, placebo-controlled study at seven sites in the US. This trial will enroll approximately 150 subjects for our HSV-2 positive and will experience two to nine occurrence per year of general herpes lesions who are otherwise normal and healthy.

Because this is the first time these vaccines are being tested in humans, we plan a dose escalation for the first two cohorts and (inaudible) table safety a full dose of vaccine for the third cohort. Our primary endpoints in the trial are safety for all subjects and efficacy for the third cohort. We expect these symptomatic subjects with a history of recurrent general herpes lesions to share HSV-2 from mucosal tissue an average 20% of the time based upon historical data.

Shedding means that herpes virus DNA could be detected by a sensitive PCR assay from individual subjects. This shedding-rich study was published in 2011 by investigators at the University of Washington. The general shedding rate of HSV was analyzed using a large number of symptomatic subjects who self-collected general swab daily for 60 days. The shedding days was determined by using the number of days a subject had a PCR-positive swab samples divided by the total number of day swabs were collected.

Our clinical trial we intend to measure viral shedding rates for 60 days before the first vaccination and then again 60 days after the last vaccination. We have powered the study to detect at least a 30% decrease in viral shedding after vaccination compared to before vaccination. This before and after shedding date, I expect to let each subject serve as their own control. Because this is a randomized control trial, we have an opportunity to demonstrate proof-of-concept for efficacy against an important biological endpoint that is an appropriate surrogate of a clinical endpoint; namely, general herpes lesions. Again, we expect to begin dosing this trial before year-end.

Next, I'll discuss ASP0113 formerly known as TransVax. In collaboration with our partner, Astellas, we announced in June the initiation of a pivotal Phase 3 trial in hematopoietic cell transplant recipients to support registration of ASP0113. This trial is actively enrolling subjects of the United States and will soon be enrolling subjects in other countries.

For the Phase 3 trial, Astellas is only enrolling subjects who are CMV-Seropositive as they are at high risk for CMV activation during the post transplant recovery period before their new immune systems have become fully functional. CMV can lead to a variety of serious complications including pneumonia, organ failure, and death. In short, these are very sick patients, and CMV seriously threatens their chance of success with transplant procedure.

Our vaccine is intended to control CMV during the (inaudible) typically within the first 100 days after the transplant procedure and thereby reduce or eliminate the need for toxic and expensive antiviral drug therapies that are currently used.

By one year post transplant our plan [follow-up] in the Phase 3 trial, the new immune system really is able to control CMV on its own.

As I described in our last earnings call, the Phase 3 trial incorporates an adaptive design that includes overall mortality as a standalone primary efficacy endpoint or as a part of a composite endpoint. We worked with Astellas to design this Phase 3 trial with primary endpoint that has the potential to support full approval in all key markets with no post-approval study requirements. Full approval requires a clinically medical endpoint. Because of this logic, we have designed the Phase 3 to the primary endpoint of overall mortality at one year after transplant.

Astellas expects to complete this trial by the end of 2016. Separately, a blind Phase 2 trial of ASP0113 in sole organ transplant recipients is expected to begin later this year in 2013. This trial will enroll approximately 150 CMV-Seronegative donors who receive a kidney from a CMV-Seropositive donor. So these are what we call the donor-positive recipient-negative patient pairs for a virus of CMV infection after transplantation. So we believe vaccination with ASP0113 may provide protection against CMV in this group. The primary endpoint of this Phase 2 trial will be the incidence of CMV viremia after transplantation will be monitoring several secondary endpoints including CMV disease, CMV specific antiviral therapy, CMV viral load grafts survival and overall mortality and, of course, safety.

We will continue to provide updates when this trial begins enrolling and which is expected to begin enrolling by the end of this year.

In summary, we are extremely pleased to be working with Astellas, who have proven to be an excellent partner for a CMV vaccine program. We are excited to have a Phase 3 trial underway and we're looking forward to completing the process as efficiently as possible.

In our new release this morning, we confirmed our guidance for the remainder of the year. We expect to present data from our Phase 3 trial of Allovectin at a scientific conference in November. We plan to initiate a Phase 1/2 trial of our vaccine for HSV-2 by the end of 2013. Astellas expects to initiate a Phase 2 trial, ASP0113 in SOT patients by the end of the year.

This concludes our prepared comments for today. Operator, we are now ready to open the call for questions from invited participants.

Thank you, Mr. Samant. (Operator Instructions) Jonathan Eckard, Citi.

So, Vijay, I was just was going to ask -- you guys have several assets in the pipeline, which I view that has potential to be monetized and not only would help boost the balance sheet but also could increase the focus to some of the remaining programs, unpartnered programs.

I was just wondering -- is this a focus of the Company -- to monetize one or some of these assets? And, if it is, how high of a priority is it to you at this time?

Business development is always an ongoing priority for any company of our size, which is particularly looking at conserving resources. And the two particular elements, which are obviously monetizable across the broad platform that we have, the first that comes to my mind is Vaxfectin, where we are -- we have said previously working with a variety of companies in use of Vaxfectin as an adjuvant in two or three different settings, which includes cancer, therapeutic vaccines and infectious disease vaccines.

Now, obviously, most of these evaluations for new adjuvants take time because most of these companies like to evaluate an adjuvant in their own mousetrap to make sure it performs better than their own mousetrap. And so those programs have been going on for some time. You saw we recently published data maybe six months ago -- where we tested our adjuvant Vaxfectin with Baxter's vaccine and pretty exhaustive animal models, which lasted almost 18 months, 24 months, make sure that the vaccine adjuvant was very effective almost improving (inaudible) by a factor of 10. So that's an important asset, which we already have two partnerships and that could lead to additional partnership.

The asset that we have, which we always talk about is CyMVectin. We have not been fortunate yet in terms of creating a partnership for that, but that certainly is an asset where we have an IND approved as I have said repeatedly. It's a large, big vaccine target after Gardasil for females of child-bearing years. So those are two examples, but they are on our radar all the time.

And I guess the last thing is if you could remind us, I believe they're disclosed -- what are the pre-commercial milestones that remain for TransVax in both the stem cell transplant and solid tumor program?

We haven't disclosed. I think if I am not mistaken, and you can correct me, that the total milestones that we are -- we plan to receive for the program or the course of the success of that program will be about $130 million, $140 million. I may be off by $10 million, of which we have received about $35 million so far.

Okay. But you haven't broken out -- ?

No, we have not.

And at this time there are no further questions. I'll turn the call back over to Mr. Samant.

If there are no further questions, thank you for joining us for this call, and we look forward to seeing you at some of the upcoming conferences. Thank you again.

That concludes today's conference call. We appreciate your participation.