Eiger BioPharmaceuticals Inc (EIGR) 2013 Q4 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Celladon Fourth Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a Question and Answer session and instructions will be given at that time. (Operator Instructions)

As a reminder, today's conference is being recorded. I would now like to turn the call over to Fred Wiklund.

Good afternoon and welcome to the Fourth Quarter 2013 Conference Call. This is Fred Wiklund, vice president of Investor Relations and Corporate Development of Celladon Corporation. You can listen to our live webcast or a replay of today's call by going to the Investors section of our website, celladon.net.

The agenda for today's call is as follows. First, Dr. Krisztina Zsebo, our CEO will provide the company's summary and discuss recent corporate highlights and updates. Rebecque Laba, our V.P. of Finance, will then review the company's financial results. Kris will then make closing remarks and open up the call for Q&A. And the management team will also be available for Q&A at the end.

However, before we begin this afternoon, I'd like to remind everyone that statements made during this call regarding matters that are not historical facts are forward-looking statements within the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees to performance. They involve known and unknown risks, uncertainties and assumptions that may cause actual results performance and achievements to differ materially from those expressed or implied by the statement. Please see the forward-looking statements disclaimer on the company's press release issued today as well as the risk factor section in our Form 10-K filed with the SEC.

In addition, any forward-looking statements represent our views only as of the date that statements are made and except as required by law, Celladon specifically disclaims any obligation to update such statements to affect future information, events or circumstances.

Now I'll turn the call over to Celladon's CEO Dr. Krisztina Zsebo. Kris?

Thanks, Fred, and good afternoon everyone. Thanks for joining us today. We're excited to hold our fourth quarterly conference call since becoming a publicly-traded company on NASDAQ in late January of this year. We'll be providing recent updates on our development program both for MYDICAR as well as our small molecule program targeting SERCA enzymes.

After our prepared remarks, we will be happy to answer any questions you may have.

Since this is our first quarterly call since going public, I'd like to spend just a few minutes on the scientific and clinical background of our development programs and other aspects of Celladon that we think are essential to achieving our long-term vision. I will then provide a business update and review some of our recent achievements and highlights.

We are applying our leading expertise in the field of SERCA biology towards development of gene therapies and small molecule compounds to correct SERCA deficiencies. SERCA enzymes control calcium movement in all cells and imbalances in calcium occur within disease cells. MYDICAR, our lead product candidate, addresses an underlying enzyme deficiency in the heart of advanced heart failure patients by using gene transfer with a recombinant AAV vector.

We believe AAV vectors provide an ideal vehicle to target SERCA2a to the failing myocardium. AAV particles [patch] freely through the blood vessel walls and perfuse the heart muscle allowing for a simple infusion administration directly to the heart in an outpatient setting. In the U.S., patients are under mild sedation and typically go home the same day.

In our previous clinical studies of MYDICAR, we had demonstrated initial safety and evidence of improvement in a number of parameters important in heart failure therapeutic assessments as well as improved clinical outcome. Specifically, our Phase 2a trial, which we referred to as CUPID 1, demonstrated that high dose MYDICAR provided substantial improvement when added to an optimized heart failure regimen.

MYDICAR high dose subjects had a decreased frequency of cardiovascular events, primary hospitalizations at 12 months versus placebo subject on optimized background therapy. Statistically measuring this treatment effect, we observed a hazard ratio of 0.12 or an 88% risk reduction of these cardiovascular events with a p-value of 0.003.

Importantly, we also improved patients' quality of life and other indicators of heart function. Based on these very encouraging results we advanced MYDICAR into 250 patients Phase 2b trial and patients with systolic heart failure, which we referred to as CUPID 2.

In 2012, we obtained a special protocol assessment whereby the FDA agreed to use time to multiple heart failure related hospitalizations as the primary endpoint for a pivotal trial. Our ongoing CUPID 2 trial enrolled a similar patient population as in CUPID 1 and has identical endpoints as agreed to in the special protocol assessment.

Although we can't predict the outcome, we believe there's a possibility that the FDA may not require us to complete additional efficacy trials of MYDICAR for the treatment of systolic heart failure if the results of our CUPID 2 trial meet the typical FDA guideline requirements for a single trial.

In November 2013, the European Medicines Agency indicated that if MYDICAR demonstrates a substantial and significant treatment effect in the advanced heart failure population and no untoward effects attributable to MYDICAR are observed, a safety database of approximately 205 to 230 MYDICAR-treated subjects may be sufficient to allow for acceptance of a Marketing Authorization Application for MYDICAR for the treatment of systolic heart failure. We therefore believe that if these conditions are met, a Phase 3 trial may not be required for marketing approval in Europe.

If approved, MYDICAR would address a very large commercial market with an urgent need for new and effective therapy. The long-term prognosis associated with heart failure is worse than that associated with the majority of cancers with a mortality rate of approximately 50% at five years following initial diagnosis. There are approximately one million primary heart failure-related hospitalizations and over 280,000 heart failure-related deaths annually in the United States.

The patients we are targeting with MYDICAR currently have 2 remaining treatment options -- a heart transplant and implantation of a left-ventricular assist device. Both of these are invasive, open-chest surgical procedures associated with a host of complications, and there are fewer than 5,000 of these two procedures combined in the United States each year. There are an estimated 280,000 annual deaths from heart failure in this country and, therefore, an enormous treatment gap for these patients. We believe the combination of these factors collectively present a significant opportunity for new treatment modalities in advanced heart failure.

If approved, we estimate that upon launch in the United States there would be approximately 350,000 patients eligible for MYDICAR therapy. Given the tremendous unmet need in this population, we believe the landscape presents very attractive market opportunity for MYDICAR.

Turning now to some of our other programs, let me first briefly discuss the role of SERCA enzymes beyond the treatment of heart failure.

SERCA2a has an important beneficial biological role not only in muscle, but also in blood vessels. It increases in all tissues with exercise training and in preclinical studies increasing SERCA2a and blood vessels with MYDICAR has been demonstrated to inhibit stenosis or vessel blockage. We, therefore, believe that there are opportunities to address unmet needs in a number of disease states such as A.V. fistula maturation failure and pulmonary arterial hypertension.

We have initiated development program with MYDICAR targeting A.V. fistula maturation failure in an end-stage renal disease. These A.V. fistulas are created in the dialysis patient's arm to provide easy access for dialysis, and approximately 50% failed due to vessel blockage and lack of vessel dilation. And we believe MYDICAR may be able to prevent these occurrences.

Our small molecule program targets the SERCA2b enzyme. SERCA2b enzymes control calcium movement in the endoplasmic reticulum in all cells. SERCA2b enzyme levels become deficient when cells are stressed and accumulate unfolded proteins in the endoplasmic reticulum known as E.R. stress. There has been a proliferation of publications in the scientific medical literature supporting the important role of E.R. stress in many diseases, including heart failure, diabetes and neurodegenerative diseases.

We believe we are the industry leader in isolating small molecule modulators of the SERCA2b enzyme. A proprietary novel, first-in-class compounds have demonstrated activity in multiple preclinical models of disease. We look forward to sharing new development initiatives for both MYDICAR and our small molecule program over the next course of the next month and years.

With that background in mind, I'd like to now focus on some recent corporate highlights and upcoming activities.

The past 12 months have been an important year for Celladon as we made significant progress on both our development and operational side of the business. On the corporate front, we successfully completed our initial public offering raising net proceeds of $44.3 million. This level of funding puts us on solid financial footing that we expect will provide funding through the end of 2015.

We also continue to strengthen our board of directors and we are very pleased to have recently elected Dr. Peter Honig, currently head of Global Regulatory Affairs at AstraZeneca and Dr. Patrick Yang, recently retired as global head of Pharmaceutical Technical Operations at Roche to the board. We expect Peter and Patrick to add tremendous technical, scientific and strategic industry expertise to our board.

With respect to MYDICAR, we recently announced the on-time completion of enrolment in the CUPID 2 trial. I want to note that CUPID 2 trial is an event-driven trial and 2 events need to occur prior to unblinding of this trial.

First, we need to observe at least 186 cardiovascular events. Second, all patients need to be observed for at least 12 months. In light of these requirements today, we confirm that we are on track for data from this trial in April 2015.

In March 2014, we had our third CUPID 2 Data Safety Monitoring Committee meeting. The committee recommended we proceed with the trial as planned.

As I mentioned earlier on the call, in November 2013, we received written confirmation from the EMA regarding the anticipated regulatory hurdle for filing a Marketing Authorization Application. We were pleased with the outcome from these interactions. Also, in November 2013, the long-term follow-up results from the MYDICAR CUPID 1 trial in advanced heart failure were presented by Dr. Barry Greenberg at the American Heart Association annual meeting.

The key takeaways from these data are as follows. The durability of MYDICAR to reduce cardiovascular events such as hospitalizations was demonstrated with over 80% risk reduction. In addition, terminal events were also reduced. For instance, the survival probability at 3 years was trending higher for patients in all MYDICAR dose groups compared to placebo and especially in the high dose group.

Moreover, a biomarker, which is the presence of MYDICAR vector DNA in the heart tissue was present in 3 high-dosed MYDICAR patients, but not from patients in placebo or lower-dosed groups. Finally and of great importance was that no safety concerns were noted during the 3-year follow-up period.

I also mentioned that we are interested in developing MYDICAR for indications beyond heart failure. One of the clinical applications to use is A.V. fistula maturation failure. At the recent American Society of Nephrology meeting in November SERCA2a deficiencies role in dialysis patients going for A.V. fistula insertion was presented. It was observed that SERCA2a was significantly decreased in blood vessels in subjects undergoing dialysis versus subjects with normal renal function.

In combination with other preclinical studies, the gene expression profile supports a program evaluating MYDICAR in this indication. We will provide periodic updates on our plans for developing MYDICAR in this indication going forward.

Moving onto our small molecule program in February, we announced a research collaboration and option agreement with Servier for the discovery and development of our novel SERCA2b modulators for the treatment of type 2 diabetes and other metabolic diseases.

Under the terms of this agreement, we granted Servier an exclusive option to license the ex-U. S. rights to the program in the field of diabetes and other metabolic diseases for a certain period of time. We expect Servier to initiate some pre-specified, preclinical studies in the near future, and pending the outcome of these studies we would expect Servier to make the decision whether to exercise their option within the next 12 months.

With that overview, I'll turn the call over to Rebecque to discuss the financials.

Thanks, Kris.

The following discussion will focus on our financial highlights for the fourth quarter 2013 and additional information pertaining to the company's initial public offering, which closed in February 2014.

Our financial results for the fourth quarter are included in this afternoon's press release and are available with additional information in our Form 10-K which were filed with the SEC today.

First, I would like to once again state how pleased we have been with the success of our IPO. Because of the support we received from the investment community, we were able to increase the total size of our offerings by 10% and including the underwriters exercise of a [green sheet] raised total proceeds of $50.6 million of net proceeds of about $44.3 million. As Kris has outlined, we believe that we are well-capitalized to drive our lead program to be meaningful clinical milestones expected in 2015.

Moving to our financial results, our cash, cash equivalents and investments were $18.4 million as of December 31, 2013. After adjusting for the effects of both the proceeds from and the cost incurred in connection with the IPO, the company's pro forma cash, cash equivalents and investments as of December 31, 2013 were $64.3 million.

Importantly, with the completion of the IPO, all of the company's preferred stock and convertible promissory notes have been converted into common stock. And as a result, the company has no debt outstanding after the IPO.

Now I will discuss our financial results for the fourth quarter. For the three months ended December 31, 2013, Celladon reported a consolidated net loss of $6.2 million compared to a consolidated net loss of $3.8 million for the fourth quarter of 2012.

Our research and development expenses were $5.2 million in the fourth quarter of 2013 compared with $3.3 million in the fourth quarter of 2012. This increase is primarily due to increased spending on our CUPID 2 clinical trial and manufacturing of our clinical supply for MYDICAR.

General and administrative expenses were $0.8 million in the fourth quarter of 2013 compared to $0.6 million in the fourth quarter of 2012. This increase was largely due to incremental expenses to support company operations in anticipation of going public.

I will now turn it back over to Kris.

Thanks, Rebecque.

In summary, we are very excited about the prospects for MYDICAR in our ongoing and future clinical studies. We have a great team with a strong track record of execution and are focused on building shareholder value.

And with that, we'll now open to Q&A.

Operator?

(Operator Instructions).

The first question comes from the [Catherine Hughes] from Barclays.

Hi, it's Catherine for Ying. Thanks for taking my questions. I just have a couple of quick ones. So during your comments earlier you mentioned that if the results of the CUPID 2 trial meet typical FDA guidelines so the Phase 3 trial won't be needed, can you just kind of elaborate on what these typical guidelines are and kind of what do you think the FDA wants to see for p-value to forego the Phase 3 trial?

And also is there any way or any point that the DMC may actually stop the trials if results are very favorable like what we saw on the Phase 2 trial?

And thirdly, for the small molecule programs, when will we first see results from these? And kind of like can you give us a sense of the time line and also what the first indications will be? Thank you.

Thanks, Catherine. With regard to the CUPID endpoint, the FDA has not given us specific guidance. And although there are typically for single trials guidance of targeting a p-value of 0.01, the CUPID 2 endpoint is slightly a different consideration because we have both a primary endpoint count hospitalizations and the secondary endpoint that counts terminal events. And both of these are going to be very important in relationship to the FDA and the EMA's acceptance of this trial. So they specifically have not stuck to their prior guidance about a primary endpoint requiring a P of 0.01.

Regarding the DMC question, the DMC's main role is to monitor for the safety of this trial. Only under extraordinary circumstances would they be in a position to advise us to stop the study for efficacy, and we don't expect that to be a possibility.

And with regards to our small molecule program, there are publications that are in the review process for some of our lead compounds in diabetes and so that is likely going to be the first indication that you'll see in the public domain, and also given our collaboration with Servier, the most likely first indication in terms of clinical development.

Okay, great. Thank you very much.

(Operator Instructions). The next question comes from David Nierengarten from Wedbush Securities.

Hey. Thanks for taking my question. I had a quick question with the recent approval or recommendation or positive data I should say from the Novartis heart failure compound, but not serelaxin. If you could refresh our memories if there's any potential changes in patient's treatment post MYDICAR or any amendments to the clinical trial that would allow any new treatments or different treatments are already listed. Thanks.

Sure. Maybe just a brief review of the Novartis trial, so the compound is called LCZ696. It's a dual angiotensin receptor blocker and natriuretic peptide degradation inhibitor. And we're very pleased that this compound has demonstrated benefit to chronic heart failure patients.

Just a quick recap, the PARADIGM-HF trial targeted approximately 8,000 patients and had a composite endpoint of death and heart failure hospitalizations. They were targeting a total of 15% risk reduction of the composite endpoint in this large study. While we are very encouraged about the early stopping of this trial, we do not believe that it will meaningfully impact baseline characteristics of the chronic heart failure patients.

As a reminder, MYDICAR is an add-on therapy to small molecule drugs and devices for heart failure. And in CUPID 1 and 2, patients were already on maximally tolerated A.R. inhibition.

In CUPID 1, all MYDICAR dose groups demonstrated a reduced hospitalization rate as well as reduced mortality. As a matter of fact, MYDICAR high-dose group versus placebo demonstrated a trend in favor of MYDICAR on overall survival of three years in 9 versus 14 patients. The p-value was 0.11. So really in summary we believe that the potential impact on MYDICAR on these endpoints may really not be that meaningful. We hope that they are able to get this drug approved, but we believe it's going to be just one of them in lieu of background therapies for MYDICAR.

Great. Thanks.

At this time, I am showing no further questions. I would now like to turn the call back over to Kris for closing remarks.

Okay. I just want to thank everyone who joined us today not only for your time and your attention, but really appreciate your interest in Celladon and our efforts to build a great biopharmaceutical company, importantly, to transform the lives of advanced heart failure patients. So I hope you all have a good day and thank you again for joining.

Ladies and gentlemen, that does conclude the conference for today. Again, thank you for your participation. You may all disconnect. Have a good day.