BioCryst Pharmaceuticals Inc (BCRX) 2008 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by.

Welcome to the BioCryst fourth-quarter and year-end 2008 financial results and corporate update conference call.

(Operator Instructions).

I would now like to turn the conference over to Mr.

Stuart Grant, BioCryst's Chief Financial Officer.

Good morning and welcome to BioCrys'st fourth-quarter and year-end 2008 financial results and corporate update conference call.

Joining me on the call today are Jon Stonehouse, Chief Executive Officer of BioCryst, and Dr.

William Sheridan, our Chief Medical Officer.

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

Today's conference call will contain forward-looking statements, including statements regarding future results, unaudited and forward-looking financial information and Company performance or achievements.

These statements are subject to known and unknown risks and uncertainties, which may cause our actual results, performance or achievements to be materially different from any future results or performance expressed or implied in this presentation.

You should not place undue reliance on the forward-looking statements.

For additional information, including important risk factors, please prefer to BioCryst's documents filed with the SEC, which can be found on our Company website.

On the call today I will provide you with an overview of our financial performance for the quarter ended 31 December, 2008 and our year-end results.

I will then turn the call over to Jon who will provide you with a corporate update.

Let me start on slide three.

For the three months ended December 31, 2008, the Company reported collaborative and other research and development revenues of $34.2 million compared to $28.2 million for the three months ended December 31, 2007.

This increase was driven by the recognition of $26.5 million of previously deferred revenue related to the termination of the Company's collaboration with Roche, offset by a reduction in revenue from the contract with HHS for the development of Peramivir.

Furthermore, during the quarter ended December 31, 2007, the Company recognized a $7 million milestone payment received from our partner, Shionogi.

Research and development expenses were $22.1 million for the three months ended December 31, 2008 compared to $29.1 million for the three months ended December 31, 2007.

The decrease in R&D expenses was primarily attributable to a reduction in clinical development costs associated with the Peramivir program, a reduction in manufacturing costs associated with both the Peramivir and the Forodesine HCL programs and a reduction in costs and (inaudible) related to the Company's preclinical programs.

These reductions were offset by an increase in clinical development costs into Forodesine HCL program, as well as the recognition of $8.2 million of previously deferred expenses related to the termination of the Company's collaboration with Roche.

G&A expenses were $2.4 million for the three months ended December 31, 2008 compared to $2.5 million for the three months ended December 31, 2007.

Net income for the quarter ended December 31, 2008 was $10.1 million or $0.26 a share compared to a net loss for the quarter ended December 31, 2007 of $2.3 million or $0.06 a share.

On slide four you will see that for the full year ended December 31, 2008, collaborative and other R&D revenues were $56.6 million compared to $71.2 million for the year ended December 31, 2007.

This decrease was partially driven by a reduction in revenue from the contract with HHS for the development of Peramivir, plus a $4.9 million reserve recorded by the Company during the second quarter of 2008 for amounts that were previously expected to be received from HHS related to costs incurred in the Phase III program of intramuscular Peramivir for outpatient influenza.

The Company had initiated this program and voluntarily discontinued it following a decision to pursue higher doses in the ongoing Phase II study.

Reimbursement of these costs is under discussion with HHS.

Further contributing to the decrease in revenues from 2007 to 2008 was the prior year receipt of a $7 million milestone payment from Shionogi.

This was offset by the recognition of $26.5 million of previously deferred revenue related to the termination of the Company's collaboration with Roche.

R&D expenses were $73.3 million for the year ended December 31, 2008 compared to $94.1 million for the year ended December 31, 2007.

The decrease in R&D expenses was due to a reduction in the clinical development costs and toxicology costs associated with the Peramivir program and the reduction in manufacturing costs associated with both the Peramivir and Forodesine HCL programs.

These reductions were offset by an increase in the Company's clinical development costs for Forodesine HCL, the recognition of $8.2 million of previously deferred expenses related to the termination of the Company's collaboration with Roche, and increases in personnel-related costs, professional fees and operating costs.

G&A expenses were $10.4 million for the year ended December 31, 2008 compared to $9.5 million for the year ended December 31, 2007.

The higher expenses were primarily due to increases in professional fees and operating costs.

The net loss for the year ended December 31, 2008 was $24.7 million or $0.65 a share compared to a net loss for the year ended December 31, 2007 of $29.1 million or $0.89 a share.

Slide five shows you our cash position.

As of December 31, 2008, the Company had cash, cash equivalents and investments of $63.3 million, which is in line with the Company's 2008 guidance.

BioCryst expects the Company's net cash used in 2009 to be between $30 million and $38 million depending on the achievement of certain clinical milestone.

We ended 2008 well within the guidance range provided due to a focused clinical program and tight expense controls, and we begin 2009 with a cash position that will support our clinical program well into 2010.

That concludes our financial report for the fourth quarter and year-end results for 2008, and I will turn the call over to Jon.

Thank you, Stuart, and thank you, everyone, for joining us today.

As you can see in slide six, BioCryst had a successful year in 2008 as we moved our two key programs forward -- Peramivir for seasonal influenza in the outpatient and hospitalized settings and Forodesine hydrochloride for the treatment of cutaneous T-cell lymphoma or CTCL in chronic lymphocytic leukemia or CLL.

Peramivir and Forodesine hydrochloride are currently in pivotal trials -- Peramivir in a Phase III outpatient trial in Japan and Forodesine hydrochloride in a pivotal Phase II study for CTCL in the US.

We also have key partnerships, a strong balance sheet and experienced team to support the advancement of our clinical programs.

In 2009 we expect to continue to make significant progress in the clinic as we focus on the execution of our late stage programs.

I will now provide you with an update on our key programs.

In 2008 we made important progress with our Peramivir program.

Our partner in Japan, Shionogi, reported positive Phase II results of IV Peramivir in the outpatient setting.

This is the first study to demonstrate that a single administration of this potent neuraminidase inhibitor can be effective in treating seasonal influenza.

The Phase II study results were presented in a poster at the joint ICAAC/IDSA meeting last fall and showed that the study met its primary endpoint of time to alleviation of symptoms, as well as all secondary endpoints.

Based on these promising results, this past December Shionogi initiated a pivotal Phase III study of i.v.

Peramivir for seasonal flu in the outpatient setting.

The study is expected to enroll over 1000 patients.

We also initiated our own Phase II trial of i.m.

Peramivir for seasonal influenza in the outpatient setting last July.

The trial began in the Southern Hemisphere and moved to the Northern Hemisphere where we are currently continuing to enroll patients.

The Northern Hemisphere flu season has been light thus far, but assuming it picks up in the coming weeks, we expect to report topline data by the second half of this year.

If the Phase II study is successfully completed, we will then be able to initiate the pivotal Phase III i.m.

Peramivir for seasonal influenza in the outpatient setting in the Northern Hemisphere by the end of 2009.

In October we reported positive data in our exploratory Phase II study in patients hospitalized for influenza.

This study demonstrated Peramivir's potential to fill a significant medical need in treating patients who are hospitalized for acute, serious or potentially life-threatening influenza.

Currently there is no antiviral approved for these hospitalized patients.

The safety and efficacy data from this study will be presented in an oral presentation at the upcoming 11th International Symposium on Respiratory Viral Infection being held in Bangkok.

Along with our colleagues at HHS, we are currently preparing to review this data with the FDA in order to determine the next steps for this program.

In addition to the progress we are making in our Peramivir program, a potential opportunity to differentiate Peramivir has risen as a result of growing evidence of resistance to Tamiflu.

The seriousness of this development is evidenced by a health advisory that the CDC issued in December on the use of Tamiflu in Influenza A.

The emergence of Tamiflu-resistant H1N1 viruses is an important reminder that we cannot be dependent on one antiviral and highlights the need for new treatments.

Peramivir's perennial route of administration, high achieved drug levels and long half-life differentiates it from existing antiviral treatments.

In addition to Peramivir, we also advanced our PNP programs in 2008.

We continue to increase the enrollment of our pivotal Phase II study of Forodesine hydrochloride in patients with relapsed CTCL.

CTCL is a relatively rare disease, and these trials are challenging to enroll.

However, we are making steady progress and have enrolled over 50% of the approximately 130 subjects necessary to complete this pivotal trial.

We expect to announce data from this trial in the first half of 2010.

Moving on to our Forodesine hydrochloride program in CLL, we recently announced interim data from our exploratory Phase II trial in patients with CLL.

While we did not observe clinical responders at this interim look, we found that five out of 13 subjects receiving 200 milligrams of Forodesine HCL once daily had substantial reductions in malignant lymphocytes and that Forodesine HCL was generally safe and well-tolerated at the 200 milligram once daily dose.

In addition, we completed and announced the results of the pharmacokinetic and pharmacodynamic study looking at twice daily dosing of Forodesine hydrochloride.

In comparison to once daily dosing, twice daily dosing has shown to substantially increase drug exposure.

In addition, the levels of PNP inhibition were greater as evidenced by a greater degree of uric acid suppression.

The results from these two studies led us to amend the ongoing exploratory Phase II study to 200 milligrams of oral Forodesine hydrochloride twice daily instead of once daily to examine the potential benefits of increased drug exposure and inhibition of PNP.

We will provide an update on this trial by the end of 2009.

In 2008 we also announced the results from a Phase II study of BCX-4208 in psoriasis.

The results demonstrated that BCX-4208 reduced T-cell and B-cell lymphocyte levels and also reduced uric acid levels.

These results support further investigation of BCX-4208 in autoimmune diseases and gout.

We are currently in the process of assessing which disease state to study next and expect to initiate a Phase II trial of BCX-4208 in the second half of 2009.

We are very encouraged by the progress made in 2008 and look forward to continued success in 2009 as we move our product candidates closer to the market.

In closing, I would like to refer you to slide seven and remind you of several key milestones we have upcoming.

In the second quarter of 2009, we plan to report topline results of our ongoing Phase II study of i.m.

Peramivir in the outpatient setting and to provide an update on the next study of i.v.

Peramivir in patients hospitalized for influenza.

In the second half of 2009, we will provide an update on the Shionogi sponsored Phase III trial of i.v.

Peramivir in the outpatient setting and will initiate a Phase II study of BCX-4208.

Lastly, in the fourth quarter of 2009, we plan to initiate a Phase III study of i.m.

Peramivir in the outpatient setting, and we will provide an update on the amended exploratory Forodesine hydrochloride trial in CLL.

2009 will be an important and exciting year for BioCryst.

We have a solid plan to continue to move our products closer to our goal of getting them to market, an experienced team to execute our plan, and financial flexibility to get the work done.

We look forward to giving you updates on our programs as the year progresses.

At this time I will now open the call up to questions.

(Operator Instructions).

Ren Benjamin, Rodman & Renshaw.

Maybe we can start off with the Shionogi Phase III trial.

Can you remind me, it was started fairly recently in December if I am correct.

And can you give us any sort of idea as to the timing of how long this trial will take and how things are proceeding right now?

Yes, you are right.

They started the trial in December.

They quickly got the results from their Phase II and rapidly had discussions with the Japanese regulators and were able to get the trial up in mid flu season in Japan, and we are really pleased that they were able to do that.

It is greater than 1000 patients study.

So that is a big study to complete in one flu season.

But it appears that the flu season is strong in Japan this year, and they are also -- we worked out an arrangement where they are also using sites in Korea and Taiwan.

So it is possible that they could complete it in one year, but again, we will have to see how things progress.

Okay.

And then just sticking with Peramivir, I probably just wrote it down wrong, but you mentioned that the ongoing IV trial for BioCryst, that topline data would be available in the second half of this year?

Is that correct?

No, so what I said is that our outpatient study, which we started in the Southern Hemisphere in July, has been moved to the north, and that assuming that the flu season kicks in, which typically occurs in mid-February, that we would be able to have results in the first half of this year.

In the first half of this year?

And you also mentioned that you will be presenting this data at a conference, right, the one in --

No, no.

The study I just referred to is in the outpatient setting with our intramuscular injection.

What we will be presenting in Bangkok or what will be presented in Bangkok is our hospitalized flu study which we completed late last year, Phase II study, which is the i.v.

once a day for five-day dosing.

Got it.

And when is this conference?

It begins the third week of February, and we have an oral presentation, Dr.

Michael Ison is the (inaudible) around February 23.

Okay.

And when do you plan on going over this data with the FDA?

We are in discussion with the FDA.

We have not disclosed the exact date of that, but we are in progress.

And we will have a regularly scheduled end of Phase II meeting with the FDA.

Okay.

Is it possible then that these discussions could lead to some sort of -- I don't know positive movement, let's say, in the stockpiling arena, or do you think pretty much like the i.m.

we would have to move to a Phase III study?

I think realistically we have always assumed that we need licensure before we actually get stockpiling orders.

So I think that has not changed.

And our goal obviously for the intravenous program for hospitalized flu patients is to try to develop a Phase III program because no drug is currently approved as a treatment for people admitted to the hospital with influenza.

That is a big gap.

I think the good news is that we're making progress.

Shionogi is in Phase III.

We are wrapping up Phase II, so I think we can see NDAs from where we sit today.

Right.

I apologize because maybe my notes are in disarray here.

But this will be the first time that we're seeing this i.v.

data, right?

That is right.

At the presentation?

Okay.

Yes, we had previously announced just topline results, and so the data will be presented in detail by Dr.

Ison.

Got it.

Okay.

And then I guess just from the HHS point of view and the amount of revenue that was recognized, I think, Stuart, you mentioned that $8.2 million out of the $34 million was recognition from the Roche collaboration or recognition after the termination.

Can you tell us how much of that was coming from -- was the remainder coming from HHS, or how much of it was coming from HHS?

We have not all of the revenue details, but what I said of the $56.5 million revenue, $26.5 million of that was from the Roche deferral.

So that was on the balance sheet at the end of last year.

So $26.5 million of the $56.5 million was the release of the deferred revenue.

And the bulk of the rest -- the bulk of our revenue comes from HHS, so the bulk of the remainder came from HHS.

Got it.

Okay.

And then I guess just one final question.

You mentioned updated data from the oncology trials potentially at the end of the year, meaning the CLL trial.

Anything at AACR or ASCO this year?

It is too early to be submitting abstracts on the CTCL studies.

We have to complete that study, follow-up on patients and analyze the results before we can really submit abstracts on the CTCL.

And we will see what we have at ASCO after the review committees decide what to accept.

Okay.

So you have submitted -- you have at least submitted some abstracts for it?

Well, we have -- but we cannot say what is going to be acceptable.

No, that is fine.

So then the potential for some data at ASCO?

Perfect, guys.

Thank you very much, and good luck in 2009.

Joseph Schwartz, Leerink Swann.

I was wondering if you could just remind us how the reimbursement of cost works and how the process of your discussions with the HHS works right now, and when we might get closure on whether it will be sufficient to take you through Phase III registration for Peramivir?

Stuart speaking.

So as we incur costs on the Peramivir program, we build that to HHS, the reimbursers for the direct costs that we incur, including the overhead costs incurred within the Company, and then we have a markup on top of that.

So it is a cost plus a fixed fee reimbursement contract.

So as we incur costs, we would effectively reimburse with a markup on that.

We are still well within the bounds of the contract, $102 million right now.

Both of the Phase II programs fully funded.

That still leaves us money on the contract.

After that, our expectation is that with Phase II data, we will go back and have the discussions then about the funding of the Phase III program.

Okay.

That is helpful.

And can you remind us how the endpoints differ in the i.m.

setting versus the i.v.

outpatient setting?

Sure.

Let's just frame it comparing the two different settings.

Acute uncomplicated influenza that most of us have had it once or more in our lifetime you are all familiar with, and that has a very well-established regulatory development pathway obviously because of the existing antiviral Tamiflu and Relenza.

And the primary endpoint that is accepted for registration is a outpatient reported outcome in point called time to alleviation of symptoms.

And patients score in a diary the seven symptoms of influenza on an absent, mild, moderate and severe scale.

And the definition of that endpoint is recovery to either zero or mild for -- all of the symptoms have to get better in other words.

So you calculate the time.

So that is very well worked out.

So for both the intramuscular program that BioCryst is running right now at Phase II and also for the intravenous single administration program that Shionogi is running at Phase III in Japan, it is the same endpoint because it is the same disease, and it is the same regulatory pathway in terms of understanding efficacy.

It is very, very different for hospitalized influenza.

There are not any drugs that have been approved.

Actually if you do a literature search, you get very few cases that even explain the spectrum of illness in patients with seasonal influenza who get admitted to hospital.

So it is a very underresearched field.

And BioCryst is in the lead here, and we're very proud to have completed the first ever study of an antiviral in patients admitted to hospital with influenza.

The only other attempt was aborted after only 20 or so patients were accrued.

In that setting we have to invent it, and we were asked to try to develop an objective endpoint, and in our Phase II exploratory program that we talked about last year, we mentioned what that was.

It was called time to clinical stability.

It was based on studies in the community acquired pneumonia setting, and one of the goals of the experiment was to figure out whether that worked or not in these patients, and it did not transpire so it is not a very good composite.

So as part of our discussions with the regulators, we will determine the appropriate endpoint for the next study.

Okay.

When might we hear about how that might evolve?

Yes, we said first half of this year we would have our discussion with the FDA and come back with our plans for the next steps with i.v.

in the hospital setting.

Okay.

Great.

And can you remind us does Peramivir show activity against both A and B strains, and how does that differ?

Yes, it does, and the activity is done in assays of platforming assays in vitro is the standard way to examine it, and Peramivir has very good activity against both influenza A and influenza B strains in vitro.

And obviously the clinical experiments will teach us a lot more.

And what is the primary IP?

What is the life that is remaining -- the patent life on Peramivir?

We have got composition of matter to 2017 and then the potential for extension as well.

Okay.

And for your Forodesine and CTCL program, how treatment-experienced are the patients that are being enrolled in the CTCL study?

The cutaneous T-cell lymphoma program enrolls patients who have had at least three prior systemic therapies, one of which has to have been bexarotene, so these are quite heavily pretreated patients.

We show no further questions at this time.

I would like to turn the conference back over to Mr.

Stonehouse for any closing remarks.

Thank you.

Again, we appreciate your interest in BioCryst.

As I said earlier, 2009 is a very important year for our Company, and we look forward to giving you updates in the coming months.

Thanks.

This does conclude today's conference call.

Thank you for attending.

You may now disconnect.