Brickell Biotech Inc (BBI) 2013 Q4 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 would like to inform you that this conference is being recorded. (Operator Instructions)

I will now turn the conference over to Tony Ramos, Vical's Vice President and Chief Accounting Officer. Please go ahead.

Hello, everyone. Welcome to our 2013 financial results conference call. Joining me on the call today is Vical's Vice 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 the risks set forth in Vical's annual report on Form 10-K and quarterly report on Form 10-Q filed with the Securities and Exchange Commission as well as the specific risks and uncertainties noted in Vical's news release on 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 would like to introduce Vical's President and Chief Executive Officer, Mr. Vijay Samant.

Thank you, Tony, and thank you to participants for joining the call. Today we will discuss the status of our key independent development programs including a detailed look at the recently started herpes simplex 2 study, as well as updates on several clinical trials of ASP0113, formerly known as TransVax.

We will begin the call with a review of financial results by our Chief Accounting Officer, Tony Ramos. Tony, back to you.

Thank you, Vijay. We reported financial results this morning for 2013 which reflected advancement in our HSV-2 and CMV product development programs supported by a strong balance sheet. Revenues were $7.7 million for 2013, compared with $17.5 million for 2012. The decrease in revenues was primarily a result of the $10 million milestone payment received from Astellas last year for progress in the ASP0113 vaccine program.

The net loss was $31.2 million for 2013, compared with $22.9 million for 2012 with the Astellas milestone payment last year and $2.2 million restructuring charge recognized in 2013 accounting for most of that difference. Our net cash -- our net use of cash for the second half of 2013 was approximately $14.1 million, which is in line with our second-half forecasted range of $13 million to $15 million. We ended the year with cash and investments of $55.5 million.

Our recently completed restructuring has had a significant positive impact on our 2014 cash burn rate. In addition, we have taken action to improve the efficiencies of our operations, which we believe will lead to additional cost savings. We are also forecasting an increase in the fully-funded supporting activities we conduct for the ASP0113 program. As a result, we are projecting a net cash burn for 2014 of between $13 million and $16 million. We believe our cash on hand at December 31, 2013, should be sufficient to fund our operations into 2016.

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

Thank you, Tony. I'll begin with our most recent clinical program, our therapeutic vaccine for HSV-2. This vaccine is designed to help control outbreaks and shedding in people already infected with the virus. More than 500 million people worldwide and about 1 out of every 6 in the 15 to 49 age group are living with chronic HSV-2 infection, so this represents a significant unmet medical need and a large commercial opportunity.

Most of these subjects either do not have access or do not effectively use the antiviral drugs that are available, which are the only treatment options at this point. As previously announced, we initiated a phase 1/2 trial in December of 2013. This trial is a randomized, double-blind, placebo-controlled study to be conducted at seven sites in the US. We plan to enroll approximately 150 subjects for HSV-2 (inaudible) who experience two to nine recurrences per year of genital herpes lesions but who otherwise are normal and healthy.

Because this is the first time these vaccines are being tested in humans, we are performing a dose escalation for the first two cohorts and, assuming a favorable safety, a full dose of vaccine for the third cohort. The first cohort has been dosed and we are actively screening the second cohort. Importantly, this is a Phase 1/2 trial. It was designed with primary efficacy endpoints for the third cohort, which includes safety, obviously.

Let me take a few minutes to elaborate on the efficacy component of our Phase 1/2 trial. We expect these symptomatic subjects with a history of recurrent genital herpes lesions to shed HSV-2 from mucosal tissue on an average of over 20% of the time based upon the results of a prior study. We intend to measure viral shedding rates for 60 days before the first vaccination and then again for 60 days after the last vaccination.

This before and after shedding data effectively lets each subject serve as their own control. Because this is a randomized controlled trial we have an opportunity to demonstrate a proof-of-concept for efficacy against a virologic endpoint that is an appropriate [surrogate] for a clinical endpoint, namely recurrence of genital herpes lesions. Just to remind you, we embarked on this clinical trial following solid preclinical data showing that our vaccine could provide significant reductions in HSV-2 lesion recurrences when given therapeutically.

We believe our vaccine composition will be the key to success. Specifically the antigens included in the vaccine, the use of our Vaxfectin adjuvant, and finally the oral vaccine platform using plasmid DNA to stimulate natural protein production pathways, all combine to provide a promising therapeutic HSV-2 vaccine.

In summary, our HSV-2 vaccine trial is proceeding according to plan through initial dose escalation portion. Next I will discuss our CMV vaccine, ASP0113. This product is currently being tested in preclinical trials in partnership with Astellas Pharma that I will briefly describe next. Additional details of each of these trials can be found at www.clinicaltrials.gov. If some of you were at JPMorgan and seen Astellas' presentation, both our Phase 3 and Phase 2 programs were prominently displayed in their pipeline and really the cornerstone of their transplant franchise strategy.

So 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 the registration of ASP0113. That is the Astellas name. For the Phase 3 trial, Astellas is enrolling patients who are CMV seropositive as they are at high risk for CMV reactivation during their post transplant recovery period.

We worked with Astellas to design this Phase 3 trial with a primary endpoint that has the potential to support full approval in all key markets with no post-approval study requirements. The Phase 3 trial incorporates an adaptive design that includes overall mortality as a standalone primary efficacy endpoint or as potentially a part of a composite endpoint. Full approval requires a clinically meaningful endpoint.

Based on this logic the Phase 3 trial was designed with a primary endpoint of overall mortality in one year after transplant. Astellas has done a remarkable job in ramping this global trial which will eventually recruit up to 100 clinical sites for enrollment in North America, Europe, and Asia.

In parallel to this global Phase 3 HCT trial, Astellas is also conducting a Phase 2 HCT trial in Japan. This small trial was designed to assess safety in the Japanese population in the actual patient population and will allow integration of Japanese HCT patients to do the global Phase 3 study.

The third clinical study underway is a global Phase 2 trial in solid organ transplants, SOT, recipients. For this Phase 2 trial, Astellas is enrolling patients who are CMV seronegative who will receive a kidney transplant from a CMV seropositive donor. This so-called D+ R- patients are at high risk for CMV infection and the disease after transplantation, so we believe vaccination with ASP0113 may provide protection against CMV in this group.

The trial will enroll about 140 SOT recipients and dosing of the first patient was announced in December. The primary endpoint of this Phase 2 trial will be the incidence of CMV viremia after transplantation. We'll also be monitoring several secondary endpoints including CMV disease, CMV-specific antiviral therapy, graft survival, and overall mortality. We will continue to provide updates for this ongoing trial.

It is important to point out that we are fully funded by Astellas in all our support efforts including manufacturing, clinical supplies, regulatory, and other clinical activities. In summary, we are extremely pleased to be working with Astellas; they are a terrific partner and really bring the best in terms of the transplant setting knowledge to the CMV vaccine effort that we are jointly collaborating on.

We are excited to have a Phase 3 trial underway as well as the other Phase 2 trials. We look forward to completing the process as efficiently as possible and we will provide you periodic updates.

In summary, in 2014, we expect to see continued advancement of our ongoing clinical program. The rapid progression towards [completement] of enrollment of our Phase 1/2 trial of our HSV-2 vaccine. Our partner Astellas is making steady progress enrolling patients in its Phase 3 trial of TransVax in stem cell transplant recipients and its Phase 2 trial of TransVax in solid organ transplant recipients.

We will report future progress as it occurs in our quarterly updates. This concludes my prepared comments for the day. Operator, we are now ready to open the call for questions from our invited participants.

(Operator Instructions) Jonathan Eckard, Citi.

Hello. Thanks for taking my question. So first, Vijay, on the HSV program. Based on how the trial is designed, could you point to what you are looking at internally when from the data eventually reads out from this that is going to help compare how you stand against the other HSV vaccines that are in the clinic?

And then I am going to come back with a follow-up question about some of the other pipeline programs.

So I think with that -- talking about the other HSV 2 programs, I think you need to look at two things when you compare our programs with the other programs. The antigens that they are using, the study design that they are using, the definition of what an HSV-2 positive shedding day in an individual is, the precision of the assays that we are using, so you just can't compare the end result. You need to look at the entire study design including the kind of follow-up period that we are doing.

We have a 60-day follow-up period. People having different follow-up periods. So all those need to take into account, but I think we need to show a statistical significance, at least a 30% reduction between the two groups, okay, at minimum.

Okay. And then I don't -- or I either missed it, whatever. But with the burn rate that you guys had predicted for 2014 -- and I didn't see any mention about the CMV prophylactic vaccine program -- I am just wondering, what are some of the other things in the background that are not highlighted in the press release that could play a role in 2014 with regards to the partnering?

I am not sure (multiple speakers) give us an update on some of the other assets and potential partnering opportunities there.

Absolutely. You know, we have been careful not to talk about partnering efforts because it ain't over till it's over till you have a partner, so why prejudge it? But you know, as we said, before I go to CMV, we have been working with Vaxfectin that a couple of big pharma companies in terms of using Vaxfectin in their construct and comparing with their best mousetrap. And those studies take a long time.

These are all preclinical animal studies. Some of the studies are coming to fruition and if those studies indeed point out that the data is better than their own mousetrap that will lead to partnership with Vaxfectin. One of the beauties of Vaxfectin is we have gone and already 100-plus patients I think approximately in humans. We are also embarking on another study with HSV-2.

So I don't want to call anything safe, but I think it is a tolerable adjuvant and it is a new class of adjuvant. It is not a molecular adjuvant, so that could lead to a potential partnership opportunity. CMV, also we are working based on an NIH grant and show that the vaccine responses that we are getting, the antibody responses are towards the epithelial region which are really the kind of antibodies that you require for them to be effective in genital infection.

Once we have that data in hand we will publish that, because that will give us a pathway to prove that this gB concept along with pp65 is indeed a valid concept. Because if you go back and look at the Sanofi study which was a few years ago, the gB protein vaccine, they got neutralizing antibodies in 90%, but they are not utilizing to the right target and therefore the efficacy was less than 40%. We certainly don't want to do that and so this data that we are working NIH -- on a grant from NIH, when that comes out will give us much more confidence, including our partners who we have been talking to for a long time to see whether this is an appropriate target to embark on a study.

We obviously don't have money because the study is a large study to get a proof-of-concept, so those are the two areas that we're working on. Obviously, we're looking at a number of other things to advance our -- broaden our pipeline, but I'm not willing to talk about it at this stage.

Thanks very much.

Ladies and gentlemen, this concludes our question-and-answer session. I will now turn the call back over to Mr. Samant.

Well, thank you for joining us for this call and we look forward to seeing you in other places in the near future. Thank you again.

Thank you. Ladies and gentlemen, this does conclude our conference for today. You may now disconnect.