BioCryst Pharmaceuticals Inc (BCRX) 2008 Q2 法說會逐字稿

Ladies and gentlemen, thank you for standing by. Welcome to BioCryst's Second Quarter 2008 Financial Results and Corporate Update Conference Call.

At this time, all participants are in a listen-only mode. (OPERATOR INSTRUCTIONS)

For your information, this conference is being recorded.

I would now like to turn the conference call over to Mr. Stuart Grant, BioCryst's Chief Financial Officer.

[Inaudible - technical difficulty] BioCryst's Second Quarter 2008 Financial Results Conference Call. Joining me on the call today are Jon Stonehouse, Chief Executive Officer of BioCryst; Dr. Thomas Simon, our Senior Medical Advisor; and our new Chief Medical Officer, Dr. William Sheridan.

Before we begin, I will read a formal statement regarding risk factors associated with today's call.

Today's conference call and accompanying slides 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 the U.S. Department of Health and Human Services' 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 Company's most-recent press releases and 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 at 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 view 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.

And I now provide you with an update on our second quarter financials. Before I get to the details, I would like to remind you that the bulk of our revenues are tied to the contract we have with HHF for the development of peramivir. This contract is a cost plus fixed-fee contract. The reimbursement is tied directly to the costs incurred.

In the first half of 2007, we incurred significant costs relating to the clinical development of our peramivir program. At that time, we were advancing a Phase II study of i.m. peramivir in the Northern and Southern Hemispheres, a Phase II study of i.v. peramivir in the Southern Hemisphere, and have begun preparations for a Phase III program of i.m. peramivir. In addition, we were in the process of completing the manufacturing validation for peramivir and transferring the process to a U.S.-based location, plus working with a U.S. based manufacturer to validate multiple formulations.

In contrast, in the first half of 2008, we are focusing our peramivir program on preparations for the ongoing Phase II study of i.m. peramivir in the outpatient setting in the Southern Hemisphere and the ongoing Phase II study of i.v. peramivir in hospitalized patients that is now being conducted in the Southern Hemisphere.

Manufacturing costs for peramivir in the first half of 2008 were greatly reduced as the bulk of required manufacturing was completed through 2007. As a result, you will see on slide number two that the reduction in peramivir-related costs resulted in a reduction in revenues from HHS.

For the second quarter ended June 30, 2008, BioCryst reported revenues of $2.7 million, compared to $13.4 million in the second quarter of 2007.

In addition, for the three months ended June 30, 2008, BioCryst recorded a $4.9 million reserve against revenue in the current quarter for amounts BioCryst previously expected to receive from HHS related to costs incurred for a Phase III i.m. peramivir program, which was voluntarily discontinued earlier this year. The reimbursement of these costs is under discussion with HHS.

Research and development expenses for the quarter were $13.4 million, compared to $19 million in the second quarter of 2007. The decrease is primarily attributable to a reduction in manufacturing costs associated with our peramivir program and the adoption of toxicology costs. The Company is making prudent use of our available resources and is focusing on advancing our late-stage clinical program while spending limited resources on an early-stage program.

General and administrative expenses for the second quarter 2008 were $2.7 million, compared to $2 million in the second quarter of '07. The increase in general and admin expenses is based on an increase in professional fees and personnel-related costs. The net loss for the quarter was $12.7 million, or $0.33 per share, compared to a net loss of $7 million, or $0.24 per share, for the quarter ended June 30 of 2007.

Collaborative and other research and development revenues were $13.4 million for the six months ended June 30, 2008, compared to $22.6 million for the six months ended June 30, 2007. The decrease was primarily due to the previously mentioned reduction in costs and corresponding revenues from HHS related to the Company's contract for the development of peramivir, plus the $4.9 million reserve taken in the second quarter of 2008.

Research and development expenses for the six months ended June 30, 2008 were $35.3 million, compared to $35.2 million for the six months ended June 30, 2007.

This is based on increased costs in our clinical program, an increase in manufacturing costs of forodesine HCL, and increases in personnel and professional costs. These increases were offset by decreases in manufacturing costs for peramivir and the adoption in toxicology costs across our program.

General and administrative expenses for the six months ended June 30, 2008 were $5.6 million, compared to $4.4 million for the six months ended June 30, 2007. The increase in general and admin expenses is based on increase in professional fees and personnel-related costs.

The net loss for the six months ended June 30 of 2008 was $25.8 million, or $0.68 per share, compared to a net loss for the six months ended June 30, 2007 of $15.8 million, or $0.54 per share.

As of June 30, 2008, the Company held cash, cash equivalents, and investments of $74.2 million at its disposal for the development of the pipeline.

BioCryst previously reported a cash burn guidance of approximately 25 to $30 million for the year ended 31 December of 2008. Due to a tight focus on cost control, I am pleased to report that we expect the burn to be closer to the lower end of our original guidance. This anticipated burn does include the potential loss of the $4.9 million of HHS revenue relating to the cost of the discontinued Phase III peramivir program. This reimbursement is currently under discussion with HHS.

That concludes our financial report for the second quarter of 2008, and I will now turn the call over to Jon.

Thanks, Stuart.

Before I provide an update on our clinical programs, I would like to introduce the newest member of our management team, Dr. William Sheridan. Bill joined us in early July from Amgen, where he served as Vice President of North American Medical Affairs. He is a seasoned biotechnology professional whose skills and experience bringing products to market will be a valued addition to our management team. We look forward to working with him as we advance our product candidates.

We had a very productive second quarter here at BioCryst, especially with the peramivir program. Last week, we announced positive results from a Phase II trial of intravenous or i.v. peramivir in the outpatient setting that was conducted by our partner, Shionogi. The randomized double-blind placebo-controlled study enrolled 300 subjects with positive rapid antigen tests indicating acute influenza. Patients were randomized across three study arms to receive either a single dose of 300-milligram peramivir, a single dose of 600-milligram peramivir, or placebo. Treatment was administered within 48 hours of symptom onset.

Preliminary results demonstrated that the study met its primary endpoint of achieving improvement in the median time to alleviation of symptoms. This result was highly statistically significant. In addition, safety assessments confirmed that peramivir was generally well tolerated.

We, along with our partner, Shionogi, plan to submit the full data set from this trial for presentation at an upcoming medical meeting. We are very encouraged by these results, which support the clinical efficacy of peramivir in the treatment of patients with influenza. Based on these results, Shionogi has commenced preparations for a Phase III trial of i.v. peramivir in the outpatient setting.

Regarding our own clinical trials with peramivir, we completed a Phase I pharmacokinetic or PK study of i.m. peramivir that compared a new 150-milligram-per-mill formulation to previously study 75 milligram-per-mill formulation.

Previous study suggests that the 300-milligram dose may be on the low end of the dose response curve. This more concentrated formulation allows us to study doses above 300 milligrams, which we believe will demonstrate an increase in response and clinical benefit.

The PK study showed similar bioavailability for the 150-milligram-per-mill formulation and the 75-milligram-per-mill formulation.

The chart on slide five demonstrates this similarity and supports further study of the 150-milligram-per-mill formulation.

The chart on slide six illustrates that there is a dose-proportional increase in Cmax from the 300-milligram to the 600-milligram dose and a further increase from the 600-milligram to the 900-milligram dose.

These PK findings further support the use of the 150-milligram-per-mill formulation in clinical studies of peramivir using doses higher than 300 milligrams.

Additionally, the tolerability and safety profile of the new and old formulations was similar.

As a result of our PK findings, the 150-milligram-per-mill formulation is being used in our Phase II program of IM-peramivir in the outpatient setting.

We initiated a randomized double-blind placebo-controlled parallel group trial in July, comparing a single injection of 600-milligram peramivir to placebo. The primary endpoint of the study is improvement in time to alleviation of symptoms. Secondary endpoints include reduction in viral titers, safety, and tolerability. The trial is expected to enroll approximately 320 patients and is currently ongoing in the Southern Hemisphere. We expect to provide an update on this study in the fourth quarter of 2008.

In addition to our Phase II trial of intramuscular peramivir in the outpatient setting, we are also continuing a Phase II trial of i.v. peramivir in hospitalized patients.

As a reminder, this study is comparing the efficacy and safety of peramivir 200 and 400 milligrams administered intravenously once daily for five days versus oral oseltamivir administered twice daily for five days in adults who are hospitalized with acute influenza. The primary endpoint of this study is time to clinical stability. An update on this trial is expected in the fourth quarter of 2008.

The other programs in our pipeline are progressing steadily. We expect to provide final results on our Phase IIa trial of BCX-4208 for the treatment of psoriasis in the fourth quarter of 2008. The primary objective for this study is safety and tolerability. Following analysis of this data, we will determine the next steps in regards to the development of BCX-4208.

We also continue to make progress in two studies of forodesine hydrochloride, a pivotal Phase II study of -- for CTCL and an exploratory study in CLL.

In conclusion, BioCryst is poised to make significant strides towards advancing our pipeline through the remainder of 2008. We are excited about the progress we have made to date and look forward to updating you on further developments. Thank you for joining us today, and we'll now open it up to any questions.

Thank you. (OPERATOR INSTRUCTIONS)

At this time, we show no questions. I'm sorry; we do have a question now coming from Mr. Ren Benjamin of Rodman Renshaw. Mr. Benjamin, you may go ahead.

Hi, guys. Thanks for taking the questions. I'm sorry, I jumped on the call a little bit late, and you may have answered this, but I want to ask it anyway. Can you give us an update or how things are going in the pivotal CTCL trial?

Hi. Thanks, Ren. This is Bill Sheridan. The patient enrollment in the cutaneous T-cell lymphoma trial is progressing. We're pleased with that, and we look forward to completing that study eventually and understanding the results.

And just as a reminder, this trial is being conduced under a special protocol assessment by the FDA. It's a single-arm study of forodesine hydrochloride as a single agent in patients with relapsed refractory CTCL who have been exposed to multiple lines of therapy, including [fixaratine]. So we look forward to seeing that data.

And can you give me any sort of clarity regarding when you think that could be completed? I think in the past, we were talking about a 2009 timeframe, but is that still on schedule, or did I get the year wrong?

Ren, this is Jon. So, yes, we've said in the past that second half of 2009 is when we expect the results, and we're still on track for that.

Okay, great. Thank you very much.

You're welcome.

Thank you. (OPERATOR INSTRUCTIONS)

We are showing no further questions at this time.

Okay. So in conclusion then, I'd just like to make a couple of points.

I think in my mind there are two key ingredients to drugs getting to market. One of them is well-designed and executed clinical trials, and the other is molecules at work.

On the first point, well-designed and executed clinical trials, I think we've made a huge upgrade with adding Tom Simon at the beginning of this year helping us with peramivir and now with the addition of Bill Sheridan. We've got some very seasoned drug developers that have taken a lot of complex drugs and moved them through development. So we've made a huge improvement and upgrade on that front.

And then with regard to molecules at work, I think we've made -- with peramivir, we've made a step forward. The results of the Shionogi study indicate that peramivir in this study works in patients with seasonal influenza.

So I'm very optimistic about the future of BioCryst, and we look forward to continuing to give you updates on our progress over the course of the year, and as always, we appreciate your interest in BioCryst, and have a great day. Thank you.

Thank you. That concludes today's conference. You may now disconnect your lines.