Emergent BioSolutions Inc (EBS) 2007 Q4 法說會逐字稿

Good afternoon, ladies and gentlemen, and welcome to the Trubion fourth quarter and year end 2007 earnings conference call. Today's call is being recorded. At this time, I would like to turn the call over to Trubion Senior Director of Corporate Communications, Mr. Jim DeNike. Please go ahead, sir.

Thank you, and 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 fourth quarter and year ended 2007 financial results. A copy of the press release can be found on our website at Trubion.com. I'd like to remind each of you that today's conference 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 refer 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'd now like to turn the call over to Peter.

Thank you, Jim, and thanks to everyone for joining us today. My comments today will focus on our recent milestones and ongoing initiatives. And Michelle will then provide a summary of our fourth quarter and year ended 2007 financial results and 2008 guidance, and then we'd be delighted to welcome your questions. Many of you know, we announced in December that our partner Wyeth initiated a Phase I/II clinical trial of TRU-015 for the treatment of non-Hodgkins lymphoma. The study is expected to enroll approximately 120 NHL subjects who have undergone two or more prior therapies and have relapsed a refractory disease. Efficacy will be evaluated according to disease response and progression status per the international response criteria for NHL. Participants will receive an escalating dose of four weekly infusions of TRU-015. Once the maximum tolerated dose is confirmed or once the maximum dose to be studied is determined to be safe and well tolerated, an expanded cohort of subjects with realized follicular NHL will be evaluated for efficacy. Patient dosing has commenced and we look forward to reporting the results once the trial is complete.

Also in December Dr. John Byrd and his colleagues at Ohio State University presented data regarding TRU-016 for B-cell malignancies at the 49th annual meeting of the American Society of Hematology. This preclinical data has demonstrated that TRU-016 induces potent ADCC against primary B-CLL cells, demonstrates significant in vivo therapeutic efficacy, and induces potent apoptosis in primary CLL cells. As a result of TRU-016's novel design and unique mechanism of action we believe it may provide patients with improved therapeutic options and enhanced efficacy when used alone or in combination with chemotherapy and/or CD20 directed therapeutics. For those of you unable to attend the ASH meeting we have posted the ASH presentation on our website. In addition we're currently recruiting subjects for our TRU-016 Phase I/II clinical trial for patients with previously treated CLL.

This Phase I/II open label study consists of two parts. The initial portion is a Phase I dose escalation study, evaluating the safety and tolerability of TRU-016 administered over a four week period to patients with relapsed CLL. This phase of the study will identify the maximum tolerable dose and evaluate the pharmacokinetics and immunogenicity of TRU-016. On demonstration of the satisfactory, safety, and tolerability in the Phase I portion, a Phase II expansion cohort will be used to confirm safety and estimate the clinical benefit of TRU-016. We'll provide additional details in a public press release once patient dosing has commenced.

As we announced previously, we presented positive data from a Phase IIb study of TRU-015 for rheumatoid arthritis at the American College of Rheumatology annual scientific meeting in November. Data presented at the meeting demonstrated that TRU-015 for RA was well tolerated and provided significant improvements in managing the signs and symptoms of RA. Additional data presented at ACR demonstrated that repeat administration with TRU-015 was well tolerated and resulted in a consistent pharmacokinetic and pharmacodynamic profile. Both presentations are available on our website.

Looking ahead, we and our partner Wyeth have agreed on the design of the next clinical trial and patient dosing is expected to begin in the first half of 2008. Randomized double blind placebo controlled multi centered trial will examine ways to further optimize efficacy while evaluating dosing schedule options. As we have stated previously we believe this study has been designed in a way that could be supportive of a registration package and we look forward to TRU-015's continued clinical evaluation. Before we open the call to questions, I'd like to turn the call over to Michelle for a summary of our fourth quarter and year ended 2007 financial results.

Thanks, Peter. I'd like to take a moment to review our financial results and then review our 2008 guidance. The revenue for the fourth quarter of 2007 was $5.7 million, compared to $6.4 million for the fourth quarter of 2006. Revenue for year ended December 31, 2007, was $20.1 million compared to $36.5 million for the year ended December 31, 2006. Revenue was within the guidance we had previously provided of between 20 million and $25 million.

Revenue in 2007 was earned through our strategic collaboration with Wyeth and consisted of collaborative research funding and amortization of the upfront fee of $40 million received in January of 2006. The 3 month and 12 month decreases were due to reduced reimbursement revenue from the Wyeth collaboration, as a result of the successful transfer of manufacturing activities for TRU-015 from Trubion to Wyeth during 2007 and decreased revenue from the recognition of the $40 million upfront fee from Wyeth due to a change in the estimated research and development period. These decreases were partially offset by an increase in reimbursable clinical costs related to our Phase IIb clinical trial for TRU-015 which was completed in July 2007. The 12-month decrease was also due to a decrease in milestone revenue in 2007 compared to 2006.

Total operating expenses for the fourth quarter of 2007 were $11.4 million, compared to $12.2 million for the fourth quarter of 2006. Total operating expenses for the year ended December 31, 2007, were $47.3 million, compared to $42.8 million for the year ended December 31, 2006. Revenue expense was below the guidance we had previously provided of 50 million to $55 million.

The three-month decrease was primarily due to a decrease in outside manufacturing costs for TRU-015 again due to the transfer of manufacturing activities to Wyeth during 2007. This decrease was partially offset by again the increased clinical trial costs related to our Phase IIb clinical trial for TRU-015 as well as increased personnel related expenses due to increase in head count. The 12 month increase was primarily due to increased clinical costs related to the TRU-015 Phase IIb clinical study, increased personnel related expenses, and increased outside manufacturing costs related to our TRU-016 product candidate. These increases were partially offset by lower outside manufacturing costs for TRU-015 and lower noncash stock-based compensation charges.

Net loss for the fourth quarter of 2007 was $4.9 million, or $0.28 per diluted common share, compared to a net loss of $4.8 million, or $0.33 per diluted common share for the fourth quarter of 2006. For the year ended December 31, 2007, net loss was $23.3 million, or $1.32 per diluted common share compared to a net loss of $3.9 million or $0.83 per diluted common share for the year ended December 31, 2006. We ended the year with $78.5 million in cash, cash equivalents and investments as of December 31, 2007, that compared to $105.8 million as of December 31, 2006. Operating cash burn was below the guidance previously provided of 28 million to $32 million.

Turning to our 2008 guidance. We anticipate 2008 revenues to be in the range of 15 million to $20 million. Those revenue dollars would be earned through our Wyeth collaboration. Total operating expenses are expected to be approximately 53 million to $58 million for 2008. The planned increase in 2008 operating expenses is primarily attributable to the clinical trial expenses associated with the TRU-015 retreatment study which is being completed by us. Those expenses will be reimbursed by Wyeth as they are incurred. Increases are also attributable to manufacturing clinical costs associated with our own product candidate, TRU-016, as well as increases related to personnel-related expense. Finally operating cash requirements in 2008 are expected to be approximately 35 million to $40 million.

That concludes my update on our financials. I would once again like to thank all of you for joining us today and we look forward to updating you again on our next earnings call and as we open the call to questions, I would also like to remind you that Drs. Burge and Mohler are available for questions as needed. Operator, please go ahead.

Thank you. The question and answer session will be conducted electronically. (OPERATOR INSTRUCTIONS) Thank you. Our first question will come from Shiv Kapoor with KBW.

Thank you for taking my question. I'm not sure if this was covered. I was in and out of the call, but have you mentioned your and Wyeth's plans for TRU-015 regarding multiple sclerosis especially in light of the positive data from Rituxan?

Shiv, thank you very much for the question and we have not spoken to that on this call. We and our partner are aware of that New England Journal publication and it has generated interest on both sides.

Could you quickly go over what indications you're currently expecting to initiate by the end of this year.

What we have discussed previously and on this call is active programs in RA, a program in non-Hodgkins lymphoma, and the expectation of beginning work in systemic lupus.

Okay. Thank you.

(OPERATOR INSTRUCTIONS) And it appears we have no further questions at this time. Dr. Thompson, I would like to turn the call back over to you, sir, for any further comments or closing remarks.

We would like to thank you again for your continued interest in and support of Trubion and we look forward to speaking with you again soon.

Thank you. Ladies and gentlemen that does conclude today's teleconference. We would like to thank everyone for their participation in today's call. Have a great rest of your day.