Emergent BioSolutions Inc (EBS) 2007 Q2 法說會逐字稿

Good afternoon, ladies and gentlemen, and welcome to the Trubion second-quarter 2007 earnings conference call. (OPERATOR INSTRUCTIONS). At this time for opening remarks and introductions, I would like to turn the call over to Trubion's Senior Director of Corporate Communications, Jim DeNike. Please go ahead, sir.

Thank you, Kim. Thanks, everyone, for your continued interest. Joining me on the call today from Trubion are Dr. Peter Thompson, President, Chief Executive Officer and Chairman, and Michelle Burris, Senior Vice President and Chief Financial Officer. Also joining the call for the Q&A are Dr. Dan Burge, Chief Medical Officer, and Dr. Ken Mohler, Senior Vice President of Research and Development.

Earlier today we issued our second-quarter 2007 financial results press release which is available on our website.

I would like to remind each of you that today's call may contain forward-looking statements based on our current expectations. These statements are only predictions, and actual results may vary materially from those projected. Please prefer to Trubion's documents filed with the SEC concerning factors that could affect the Company, copies of which are also available on our website.

I would now like to turn the call over to Peter.

Thank you, Jim, and thank you for joining us this afternoon. During today's call I will provide a brief update on our key programs, and Michelle will provide you with a summary of our financial results, and then we will welcome your questions.

Let me start with an update on our lead product candidate, TRU-015, which is being developed for patients with rheumatoid arthritis. As a reminder, we completed enrollment in January in a Phase IIb randomized double-blind placebo-controlled multicentered clinical trial evaluating patients with rheumatoid arthritis who are also receiving methotrexate as background therapy. Patients in this Phase IIb study were randomized evenly into five groups that received placebo 200 milligrams, 400 milligrams, 800 milligrams or 1600 milligrams of TRU-015. The study was designed to evaluate the safety and efficacy of a single intravenous infusion of TRU-015 compared to placebo for a 24-week period with a protocol specified end point of improvement on a disease activity score or DAS at 12 weeks.

This trial was recently completed, and we and Wyeth are in the process of analyzing the data. As we have stated previously, we expect to report topline results once Trubion and Wyeth complete the final analysis. Since final analysis of the data is still ongoing, it is unclear at this time if our data will be presented at ACR or another scientific forum.

Latebreaking abstract submission for the 2007 ACR meeting is due September 7, and ACR decisions will be made in October. According to ACR abstract guidelines, about 20% of latebreaking submissions are accepted for presentation. Additional opportunities after ACR, of course, include [ULAR] in June of 2008.

As we have stated previously, we are pursuing a number of additional indications in our CD20 alliance with Wyeth. Our partner has recently filed an IND for clinical development of TRU-015 in SLE, and clinical planning is ongoing for TRU-015 for NHL. We will issue press releases after each trial has commenced patient dosing as we have done in the past.

Our proprietary TRU-016 product candidate, a on novel CD37 targeted therapy for B-cell malignancies, remains on track for an IND filing by the end of 2007. As a reminder, we currently retain all development and commercialization rights for this program. We will provide additional on the proprietary programs that are currently in development as they reach the IND planning stage.

Finally, I'm pleased to announce that Kate McKereghan Deeley has joined Trubion as General Counsel and Corporate Secretary. Kate brings to Trubion more than 22 years of industry and corporate legal experience, including her role most recently as General Counsel at Corixa Corporation where she managed all legal aspects of the Company's securities, corporate governance, licensing, manufacturing and supply IP, M&A, commercial matters and litigation.

Before we open the call to questions, I would like to turn the call over to Michelle for a summary of our second-quarter 2007 financial results.

Thanks, Peter. Revenues for the second quarter and the six months ended June 30, 2007 was $5 million and $9.8 million respectively. That compares with $7.8 million and $13.6 million respectively in 2006.

Revenue in the second quarter and the first half of 2007 was earned through our strategic collaboration with Wyeth, and it consisted of collaborative research funding and amortization of an upfront fee of $40 million received in January of 2006. The decrease in revenue is the result of a reduction in reimbursement revenue from Wyeth following the successful transfer of manufacturing responsibilities for our TRU-015 program from our former contract manufacturer, Lonza, to Wyeth.

Total operating expenses for the second quarter and six months ended June 30, 2007 were $13.5 million and $24.4 million respectively. That compares with $10.4 million and $19 million respectively in 2006. The increased operating expenses in the second quarter and first half of 2007 were primarily due to increased clinical trial costs for our lead product candidate, TRU-015 for R&A, increased personnel related expenses and increased expenses for lab supplies to support our research activities.

Operating expenses for the second quarter and first half of 2007 also included non-cash stock-based compensation of $903,000 and $1.7 million respectively. Net loss for the second quarter and six months ended June 30, 2007 was $7.5 million or $0.42 per diluted common share and $12.5 million or $0.71 per diluted common share respectively. That compares to a net loss of $2.1 million or $1.55 per diluted common share and $4.5 million or $3.34 per diluted common share respectively in 2006.

We had $90.3 million in cash, cash equivalents and investments as of June 30, 2007. That compared to $98.4 million as of the end of the first quarter, March 31, 2007. At this time we have not revised our '07 guidance, which we have reiterated in our second-quarter 2007 earnings press release issued earlier today.

Once again, we would like to thank all of you for joining us, and we look forward to updating you again on our next earnings call or at one of the many investor conferences that we will be attending this fall, all of which are also listed on the Investors section of our website. As we open the call to questions, I would like to remind you that Dr.'s Burge and Mohler are also available for questions as needed. Kim, can you please go ahead?

(OPERATOR INSTRUCTIONS). Steve Harr, Morgan Stanley.

A couple of quick questions here. Peter, you said if you were unable to present the data at ACR, you would have it at another date. Is that a hedge the data may not be available by September 7, or is that a hedge that the decision of ACR is unknown?

Well, it is typical for companies, of course, to try to present their findings at scientific meetings, and those meetings obviously delimit the amount of disclosure that you can make prior to the abstracts. So we're just trying to make sure that we have the opportunity to present the data in a peer-reviewed scientific setting.

But I but also -- obviously your possession of the data would probably be deemed material. So I presume you would at least let us know some sort of topline results when you have them in house?

Yes, that has been the plan, and we reiterate that plan. That is our intention once the data has been analyzed by both Trubion and Wyeth, that we will present that in a topline fashion. What we don't know was the answer to your first question. Whether we will be able to file in time for September 7 is one question. We're hoping to do that. The other question, of course, is whether or not we would be a one of the 20%, which, of course, we have no control over.

Sure. Okay. So it is a little bit of both to go the first question.

Yes.

Okay. And then what are the necessary steps to getting 015 up and running in lupus, lymphoma or just oncology in general and multiple sclerosis? Those are all areas that have shown some significant proof of concept at the very least with CD20 target therapies.

I stated that the IND for lupus has already been filed, and so that study is actually already registered on clinicaltrials.gov, and we obviously will announce when patients have been dosed in that study.

For other indications noted, we are working diligently with our partners to move programs forward in an appropriate fashion. There has been expressed interest in moving the NHL program forward, and again we would expect to be able to give you that information once a patient has been dosed.

Joel Sendek, Lazard Capital.

I'm wondering when you started the analysis, you and Wyeth started the analysis on the data that you have so far?

The actual -- remember that last patient was enrolled at the end of January. So to say that final data probably came in as we noted late July, August timeframe. Obviously it has not been in possession for either party very long.

Okay. And in the event that you miss the filing deadline and are still analyzing the data, will you be able to give us some sort of -- that won't necessarily be a material event -- but will you somehow let us know that that is the case just so we will know that the data won't be at ACR? I guess that's the third scenario that might happen.

As I stated earlier, we believe that we will have to provide you topline results. Ideally that is done at the same time as ACR. What we don't know is if that will work that way. But we will provide you all information prior to a public forum.

Okay. So if we don't --?

We won't have a huge -- obviously we don't want to mitigate our detailed data set.

Yes. Okay. And is there -- are there any other smaller conferences you could -- I know obviously ULAR and ACR are the big ones. But just in the interest of getting the data out there, is there any smaller conference between November and June that you could possibly present at?

When we complete our analysis with our partners Wyeth, we will then work with them to find them to find the soonest available appropriate conference to present the data.

Understood. Okay. Great.

(OPERATOR INSTRUCTIONS). William Sargent, Bank of America.

I was just seeing if we could get some insight. Is the SLE Phase I program, is that anticipated to begin in this quarter or sometime before the end of the year?

Dan Burge here. Again, the IND was filed, and so as in most cases, your plan is then to move forward that clinical study as soon as possible after going to the appropriate regulatory review.

And then is there any update on follow-on therapeutic programs behind TRU-016 at this point?

There is not. As noted previously on these calls, the alliance between Wyeth and Trubion is centered around CD20 as a target, and given Trubion's capabilities, it would not be surprising if TRU-015 was the lead candidate in that alliance, but not eventually the only candidate in that alliance.

And as far non our own proprietary candidates, you had mentioned 016, and that is still the intention to file that IND before the end of the year. Follow-on product candidates following 016 we have not disclosed those yet. We will once we have pre-IND clocks to those targets.

It appears that there are no further questions at this time. Dr. Peter Thompson, I would like to turn the conference over to you for any additional or closing remarks.

Thank you very much, and I would like to thank all of the callers for their continued interest in and support of Trubion. We look forward to speaking with you again soon.

This concludes today's conference. Thank you for your participation. You may disconnect at this time.