BioCryst Pharmaceuticals Inc (BCRX) 2007 Q3 法說會逐字稿

Good morning and welcome. On today's call, the Company will discuss the third-quarter 2007 financial results and provide a corporate update. Leading the discussion will be Jon Stonehouse, BioCryst's President and CEO, and Stuart Grant, Chief Financial Officer of BioCryst. After the prepared statement, they will be happy to take your questions. The call is scheduled to last for 30 minutes.

Before beginning, I will read a formal statement regarding risk factors associated with today's call. Today's conference call will contain forward-looking statements regarding future events and the future financial performance of BioCryst. Such forward-looking statements may include predictions regarding current and proposed clinical trials of forodesine HCL, BCX-4208 and peramivir; potential development of compounds not in clinical testing; and cash flow projections, including the benefit of DHHS funding of peramivir. These statements involve known and unknown risks, uncertainties, and other factors that may cause the actual future of events or actual future financial performance to be significantly different from those expressed or implied by the forward-looking statements. Please refer to the section "Risk Factors" in the documents the Company files from time to time with the SEC. Specifically, you may refer to the Company's most recent Form 10-K, Form 10-Q, and Form 8-K, all of which are readily available on our website, www.BioCryst.com. These documents contain and identify additional information regarding important factors that could cause the actual results to differ from those contained in the forward-looking statements. Such information can typically be found in the section marked "Risk Factors" or "Forward-Looking Statements". These statements may reflect the Company's views with respect to future events. BioCryst has no obligation to update or revise these statements. BioCryst cautions that you should not place undue reliance on these forward-looking statements.

Now I would like to turn the call over to Stuart Grant, Senior Vice President and CFO of BioCryst.

Thanks, Jon. Good morning, and thanks for joining our call. As Jon mentioned, the purpose of this call is to discuss the third quarter of 2007 financial results and provide an update to our corporate programs. Our press release issued this morning provides a detailed explanation of our third quarter 2007 financial results, but I will summarize some of the main points for you.

BioCryst reported revenues of $20.5 million in the third quarter of 2007 compared to $1.8 million in the third quarter last year. This increase is directly related to revenues from our contract with HHS for the development of peramivir.

Research and development expenses were $29.7 million in the third quarter of 2007 compared with $16.7 million in the third quarter of 2006. This increase is primarily due to an increase in clinical trial related expenses and manufacturing costs for our lead drug candidates.

The net loss for the third quarter 2007 was $11 million or $0.32 per share compared to a net loss of $15.6 million or $0.53 per share in the third quarter of 2006. For the year to date, collaborative and other R&D revenues increased to $43.1 million for the nine months ended September 30, 2007, compared to $4.1 million recorded in the same period last year. Again, this increase primarily reflects revenue related to the HHS contract.

R&D expenses for the nine months ended September 30, 2007 were $64.9 million compared to $35.9 million for the same period last year. This increase is primarily related to costs associated with the peramivir program, which is being supported by our contract with HHS.

Our net loss for the nine months was $26.8 million or $0.86 per share compared with a net loss of $33.6 million or $1.15 for the same period last year. The net burn for the third quarter 2007 was $5.5 million, reflecting the increased activity in our late-stage clinical program. The burn rate for the rest of this year is dependent on the timing of reimbursement from HHS. We continue to monitor the burn on an ongoing basis, and in January, we will provide guidance for the coming year.

The Company's financial position was further strengthened in August when BioCryst completed a $65.3 million private placement financing with a group of existing BioCryst stockholders. The offering was composed of approximately 8.3 million shares of BioCryst common stock as well as warrants to purchase an additional approximately 3.2 million shares. BioCryst ended the third quarter with $102.2 million in cash, cash equivalents, and investments.

I will now turn the call over to Jon Stonehouse for an update to the Company's clinical programs.

Thanks, Stuart, and thanks to everyone for joining us today. Let me start by addressing the continued development of peramivir.

In September, BioCryst reported preliminary results from a Phase II study of the intramuscular formulation of peramivir. The study was designed to determine if this formulation of peramivir could reduce the duration of symptoms in subjects with acute influenza.

While the results of the trial indicate that a single dose of peramivir demonstrated a treatment effect over placebo, the improvement was not statistically significant. The Company continues to receive and analyze data from this recently completed trial.

In addition, the Company is carrying out additional PK studies to support this analysis. Armed with the further analysis and following discussion with the FDA, the Company is planning to initiate the pivotal program in time to take advantage of the upcoming influenza season.

In addition to our work with the IM formulation of peramivir, we are continuing to move forward with the intravenous formulation, which we believe holds particular promise for hospitalized patients for whom there is currently no approved therapy.

As a reminder, over 200,000 Americans are hospitalized every year due to influenza and its complications, with approximately 36,000 deaths annually. Because there is currently no approved therapy for influenza in a hospital, we are breaking new ground with this study, and work closely with the FDA to develop the protocol for the Phase II trial we initiated in July.

That trial, testing the IV formulation in hospitalized subjects with severe influenza, is designed to compare the efficacy and safety of IV peramivir, to orally administered oseltamivir in subjects who require hospitalization due to acute influenza. We plan to move enrollment of that trial to the Northern Hemisphere and continue that study in the upcoming flu season.

Turning out to our other lead programs, we continue to make progress in the development of forodesine HCL, and in October, enrolled the first patient in a pivotal Phase II clinical trial of oral forodesine HCL in patients with cutaneous T-cell lymphoma, also known as CTCL. That multinational trial is being conducted in accordance with a special protocol assessment, or SPA, agreement between the FDA and BioCryst granted earlier this year.

We also reported progress in the development of BCX-4208, our next generation PNP inhibitor, that's partnered with Roche. In July, we and Roche initiated a Phase II clinical trial to evaluate BCX-4208 in patients with moderate to severe plaque psoriasis. Roche is leading that study, the first Phase II trial to study BCX-4208.

Moving beyond our clinical programs, BioCryst also has a robust discovery engine and preclinical pipeline. We have prioritize several early-stage candidates in areas where our compounds have already shown activity in in vitro or animal models, and expect to file an IND on one of these by the third quarter of next year.

While we are not ready to provide details on specific compounds, I can tell you that these candidates follow well-defined clinical and regulatory pathways in underserved, attractive markets; that we have early exploration work ongoing in autoimmune disease, hepatitis C and gout, and we will look to develop several other novel candidates over time.

So in summary, we continue to make progress in our lead programs, laying the groundwork needed to bring our products to market. In addition to the advances with our peramivir, forodesine HCL, and BCX-4208 clinical programs, our ability to meet our goal of commercializing our products was reinforced by the financial support we received through the private placement we completed in August. We were particularly gratified by the support of these A-list investors, and view their involvement as a validation of our business plan and product development strategy.

As we move forward, we are focused on completing analysis of data from the IM peramivir program by the end of this year, and look forward to updating you on the next steps toward the pivotal program.

Operator, we're ready to take questions.

(OPERATOR INSTRUCTIONS). Ren Benjamin.

My first question and my follow-up following this will be composed of five parts, so I am bypassing this thing.

Can you give us some data or give us an idea as to when we are going to see some additional data regarding the further analysis of the peramivir trial? I know we were going to look at issues like viral load and things along those lines.

And then as part of that, is this data being reviewed in collaboration with HHS or some division of that? And the reason why I ask is, is there a chance that they could look at this data and pull the funding or something along that, or is this committed all the way?

And has the season already started here in the Northern Hemisphere, and how do you define the flu season? That would be my first batch of questions.

As far as the additional data, as I said in the prepared statements, we are continuing to go through the 211 data. We are expecting additional data, like the viral titer, that we still have not received yet, but we expect to get before year-end. And then we've got PK studies ongoing that we want to look at in its totality when we have all of the data collected. So we expect all of that by year end.

In terms of our relationship and working with HHS, we are working very closely with HHS. We have been having ongoing dialogue with them. They are very interested in the data that we have to date and the data that will be coming, and we continue to be encouraged by those interactions with HHS and plan to continue to move toward.

In terms of the flu season starting, we've got reports -- I think I said in previous calls, we have been working real hard since March to identify sites. We've got sites ready for the next programs. And those sites have been communicating with us, and there are states that have flu. But the key to catching the flu season is catching it before the peak hits. And all indications are based on what we see in the CDC web site and what we hear from sites is that there has not been any kind of a spike yet in terms of the flu season.

Okay. And then just regarding the Fodosine trial, can you give us an idea as to how enrollment is going for that trial?

And then maybe a little bit more of a technical question -- I believe, and if you can correct me if I'm wrong, that would be great -- I believe the dose that you settled on in the ongoing pivotal trial is a daily oral dose of about 200 milligrams or so. And it was my impression that -- from, I guess, the previous ASHE data that 80 milligrams per meter squared was what was settled on to be the optimal biological dose. Can you correct me on what I am thinking about -- what could be going wrong in what I am thinking here?

So for the forodesine trial in terms of enrollment, October -- we announced in October the enrollment of the first patient into that pivotal trial. So it's CTCL, and we've got evidence from other drugs in the past that, like Zolinza with Merck and Targretin and others, that these trials take some time to enroll. I am not going to get into the details on how long it is going to go, but since the first patient, we have enrolled additional patients, and we will continue to do that as quickly as we can.

In terms of the dosing, you are correct that the dosing for this pivotal trial is 100-milligram capsules -- two of them, one day. And the cohort that I think you are referring to is 80 milligrams per meter squared. And so that conversion of that cohort then gets us to the 200 milligrams per day.

Chris Holterhoff.

This is actually Rivekah for Chris. Thanks for taking my questions. I have a couple of about the Phase III peramivir. So with the PK studies, do you plan to wait for their results before initiation of Phase III?

So what we said in the prepared statements is that we are doing additional analysis of the Phase II. And we are going to do that -- we have ongoing PK studies, and then we are going to have discussions with the regulatory authorities -- FDA and HHS. And all of that will then inform the pivotal program. So yes.

So do you think you are going to be able to start it in time for the flu season here, or can you give us some idea of the timeline --?

We still believe that we are going to hit this flu season. And it all depends on when that peak comes that I referred to with Ren. But as I said, we expect all this data and the analysis and the discussions to all take place between now and the end of the year. We've got sites ready to go. So from those discussions and that information, we will then move forward with our intentions of moving to a pivotal program for this flu season in the Northern Hemisphere.

And if you don't enroll enough patients here, you are prepared to move the Southern Hemisphere --?

Yes, our strategy again would be to continue to follow flu around the globe. And again, as I have said in previous calls, it all depends on the severity of the flu season in terms of how fast you can enroll.

The one thing that we have learned from the Phase II study is that you need to cast a very broad net. And so one of the things that we have done I think differently this go-round in our terms of our preparation is the number of sites that we have recruited to participate in the upcoming trials is significantly higher than what we did before.

(OPERATOR INSTRUCTIONS). At this time, we have no further questions. Thank you for joining us.