Crescent Biopharma Inc (CBIO) 2014 Q3 法說會逐字稿

Good day, ladies and gentlemen and welcome to the Quarter 3 Targacept Earnings Conference Call.

My name is Matthew and I will be your Operator for today. At this time, all participants are in listen-only mode. We will conduct a question-and-answer session toward the end of this conference. (Operator Instructions).

Now, I would like to turn the call over to Dr. Stephen Hill, President and CEO. Please proceed, sir.

Thank you, Matthew and good morning to everyone and thank you for joining us today. With me this morning is Alan Musso, our Chief Financial Officer.

First, let me inform you that comments made today may include forward-looking statements made under the Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to plans, expectations, objectives or future events, financial results or condition, including any of our product candidates, the design, scope or other details of clinical trials, the timing for initiation or completion of or reporting of results from clinical trials or for submission or approval of regulatory filings, target indications or commercial opportunities, as well as our cash runway, revenues or expenses, plans, expectations or any other matter that is not a historical fact.

Actual results may differ materially from those expressed or implied by any forward-looking statement as a result of many factors, including those described under the heading forward-looking statements in our press release from earlier today or under the heading risk factors in our most recent Form 10-K, or in later filings with the SEC. We caution you not to place undue reliance on any forward-looking statement. Also, any forward-looking statement that is made speaks only as of today and should not be relied upon as representing our views as of any future date. We disclaim any obligation to update any forward-looking statement except as required by applicable law.

So with that, first, I'd like to provide a brief update on our ongoing assessment of strategic options that will shape our future business. Our current assets include a healthy cash balance in excess of $100 million, extensive intellectual property and clinical data related to our neuronal nicotinic receptor portfolio, a group of employees with broad ranging experience in R&D program of the Company management and of course, our public listing. Behind those assets is an experienced biotech investor base which remained supportive to the Company over a number of years.

Our desire is to identify a strategic path that balances the needs of all of our key stakeholders and to do so quickly, but thoughtfully. As such, it is our intent to identify a limited number of preferred strategic priorities before the end of this year. This may include, but not be limited to, a strategic combination with another company, a broadening of our portfolio by in-licensing, a partial or substantial return of cash to investors or a combination of these options. In parallel, we will continue to be disciplined in controlling our expenses in order to maximize the cash resources available for the benefit of our shareholders.

Turning then to our current operations, we have underway an exploratory clinical trial of TC-6499 in the indication of diabetic gastroparesis. At the current rate of recruitment, we anticipate concluding this trial providing headline results in the first half of 2015. We do not anticipate initiating any new studies with our NNR agents prior to determining our future strategic direction. With the conclusion of our collaboration with AstraZeneca, we now have unencumbered rights to a range of compounds that may have utility in Parkinson's disease. Whilst we have no current plans to pursue this indication ourselves, the program may be of interest to CNS-focused third parties, and we intend to explore out-licensing options to this and other NNR programs.

With that, I'd like to hand over the call to Alan for a brief financial update.

Thank you, Steve. Let me now briefly highlight our financial results for the third quarter of 2014, which we released earlier today.

We ended the third quarter with a balance of $114.5 million in cash and investments and marketable securities. For the third quarter of 2014, we had a net loss of $4.9 million compared to $12.9 million for the third quarter of 2013. For the nine months ended September 30, 2014, we reported a net loss before income taxes of $24.5 million compared to $33.3 million for the corresponding 2013 period. The lower net losses for the 2014 period were due primarily to lower research and development expenses.

And with that, we'd like to open up the call for your questions.

Thank you. (Operator Instructions) Alan Carr, Needham & Company.

It sounds like you're still pretty open minded when it comes to BD strategy here. Is anything narrowed with respect to maybe if you do with in-license or acquire another company, if there are certain indications that you'd be focused on, and then also in the assets that were returned from AstraZeneca, did this -- the end of this collaboration, did that only bring back 1446 or there are other compounds that came back with that, and I guess can you review whether or not, I guess, list those and what sort of opportunities might be for those either in-house or if you out-license them? Thanks.

Yes. So with regard to first question, we're probably agnostic in terms of therapeutic area or disease focus when it comes to business development activities. So we're open-minded about that, and certainly are exploring beyond CNS and certainly beyond NNR Therapeutics. So really what we're looking for is opportunities -- with scientific opportunity to make a difference in patients' lives where we believe we could add value to those programs with the resources that we have.

With regard to AstraZeneca, that was primarily the 1446 compound and there were some other compounds that were embraced by that program, but clearly the lead compound was the primary compound of interest. We also have some data in some of the other NNR compounds, which we had been considering independently, the AZ program in Parkinson's disease, particularly levodopa induced dyskinesias. So we have a little bit of data and some interest around that and we believe that now that we have the AZ program back unencumbered, that package of compounds in data maybe interesting in PD, LID particularly.

Alan, your burn looks like you dropped a bit in the third quarter, are you still maintaining the same financial guidance for the year?

Yes, Alan. We haven't provided any update or financial guidance than when we reported 2Q earnings, we guided that we would have approximately $107 million in cash and investments at year end. We haven't provided any update since then.

Alright, thanks very much.

(Operator Instructions) Tom Swaney, Harwood.

One of the strategic possibilities you mentioned of course joint ventures or what not, but you also mentioned potential return of capital to shareholders. I haven't heard that before from you. Could you maybe expand on that?

Yes. As we mentioned, we've been in close communication with our major shareholders and I think our logic is to maximize the, if you like, the alignment between what we feel is [right decision] for the Company and what our shareholders who at the end of the day own the Company believe. So we would want to keep enough cash in the Company to support whatever programs we choose to support going forward, but maybe not more than that. So one way, I'll -- giving our investors some freedom to choose how their money is invested is to return some of that cash, different mechanisms of doing that, whether it's through a share buyback or a tender offer or a dividend. So [we should be] all embracing in our strategic review, so that we keep all of those possibilities under consideration, again in the hope of aligning what we choose to do with the broad needs of our different shareholder groups.

And I think you mentioned that you might -- any major announcements will be done by the end of the year, is that?

Well, we haven't given any [hard fresh] deadline, but we have communicated that we wish to conclude the strategic review, if you like, before the end of the year and at that point, hopefully, be in a position where we've identified what is our route forward and be in a position, hopefully, to communicate that, but there is no hard deadline to do that. That's just the time frame for guidance.

Okay. Well, thank you very much.

Thank you for your question. I would now like to turn the call over to Dr. Hill for the closing remarks.

So thank you for -- everybody for listening. Also at this point, I want to say a big thank you to all of our employees, the Board of the Company for their support during a period of somewhat uncertainty as we decide how to move the Company forward in the future. So I want to thank our employees, particularly for their support in that process and thank all of you for your patience and for your interest in the Company and enjoy the rest of the week. Thank you.

Thank you for joining in today's conference, ladies and gentlemen. This concludes the presentation. You may now disconnect. Good day.