Eiger BioPharmaceuticals Inc (EIGR) 2014 Q4 法說會逐字稿

Good day, ladies and gentlemen and welcome to the Celladon fourth-quarter and full-year 2014 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 follow at that time. (Operator Instructions). As a reminder, today's conference is being recorded. I would like to introduce your host for today's conference call, Mr. Fred Wiklund. You may begin, sir.

Good morning and welcome to Celladon's fourth-quarter and year-end 2014 conference call. This is Fred Wiklund, VP of Investor Relations and Corporate Development of Celladon Corporation. You can listen to our live webcast or replay of today's call by going to the Investors section of our website, celladon.com.

The agenda for today's call is as follows. First, Dr. Krisztina Zsebo, our CEO, will discuss recent corporate highlights and updates and then Paul Cleveland, our President and CFO, will provide a commercial manufacturing update, review the Company's financial results, make a few closing remarks and then open up the call for Q&A.

However, before we begin this morning, I would 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 of 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 statement disclaimer on the Company's press release issued yesterday, as well as the risk factors in our Form 10-K.

In addition, any forward looking statements represent our views only as of the date such statements are made and Celladon specifically disclaims any obligation to update such statements to reflect future information, events or circumstances. Now I'll turn the call over to Celladon's CEO, Dr. Krisztina Zsebo.

Thanks, Fred and good morning, everyone. Thanks for joining us today to review our 2014 year-end results. I am delighted with the excellent progress we have made since our initial public offering in January of 2014. We have met all of our major milestones and I am pleased to see this level of execution reflected in the appreciation of our stock price. We thank all of our investors for the support they have provided us since our IPO allowing Celladon to focus on our primary mission to develop a novel breakthrough product for the treatment of advanced heart failure, while in parallel creating meaningful value for shareholders.

On this morning's call, we will provide recent updates on our MYDICAR development program followed by a business update and then conclude with a financial overview. After our prepared remarks, we will be happy to answer any questions you may have in a Q&A session.

Let me first start with some key MYDICAR development achievements. As a quick reminder, the ongoing CUPID 2 trial is a 250 patient randomized double-blind placebo-controlled international study comparing a single administration of MYDICAR versus placebo added to an optimal heart failure regimen. Subjects in the CUPID 2 study were selected for having substantial risk factors for experiencing hospitalizations for acute decompensated heart failure by requiring an ejection fraction less than or equal to 35% and having had a previous hospitalization within the last six months or having a high level of a serum biomarker for cardiac stress.

The primary objective is to determine efficacy of MYDICAR in patients with New York Heart Association class III or symptoms of heart failure with reduced ejection fraction -- this is also referred to as HFrEF -- by reducing the frequency and delaying heart failure-related hospitalizations compared to placebo patients. We can today report that we have achieved the two criteria needed to close the 12 month primary observation period. The trial has accumulated more than the required 186 adjudicated clinical events and all subjects have been observed for at least 12 months.

Importantly, we have had five data monitoring committee meetings and in all cases, the DMC has advised us to continue the trial as planned. There have been no serious unexpected or drug-related safety reports to the FDA or other health authorities. We are in the process of locking our database for the primary analysis and remain on track for a late April date of unblinding. We look forward to announcing top-line results in a few weeks time.

We are in the planning stages for an additional study with MYDICAR in the HFrEF study population, which we refer to as CUPID 3. We expect this study to be similar in design to CUPID 2. In CUPID 3, we plan to broaden our international experience with MYDICAR by including clinical sites in South America and Asia, in addition to the United States and Europe. Please see our 10-K for our other trial updates.

On the regulatory front, in April of 2014, we announced that MYDICAR was granted breakthrough therapy designation by the US FDA. The relatively new breakthrough therapy initiative is intended to further expedite the development and review of drugs for serious or life-threatening conditions where preliminary clinical evidence suggests it provides a substantial improvement over existing therapies. I also believe it underscores the FDA's recognition of the urgent need for new treatments for this serious and life-threatening condition. At the time of granting, this was only the third breakthrough therapy designation awarded by the CBER division of the FDA and MYDICAR was the first gene therapy product candidate to be granted this designation.

Breakthrough therapy designation has allowed us significant access to the FDA and in the last six months, we have held highly productive meetings and received constructive feedback on topics covering clinical, device, CMC, nonclinical and design of commercial manufacturing facilities. These meetings have provided valuable insights that will significantly aid our future commercialization efforts.

During the clinical meeting, the FDA provided final approval for the use of our statistic methodology to analyze the CUPID 2 primary endpoint referred to as the Joint Frailty model as a primary method of analysis. Among other things, they communicated that they were satisfied that we had demonstrated that the Joint Frailty model adequately controlled for the false positive rate also known as the type 1 error rate.

We also discussed with the FDA our proposed use of a modified intent-to-treat population for the primary and secondary endpoint analysis, which excludes clinical events that occurred in patients that did not receive MYDICAR or placebo or events which occurred prior to dosing. This represents less than 5% of the clinical events that would have been included in an intent-to-treat analysis. This approach is supported by an ICH guideline, which provides that, in some situations, it may be reasonable to eliminate from the set of all randomized subjects any subject who received no trial medication. Results from both the modified intent-to-treat and intent-to-treat approaches will need to be consistent to demonstrate a treatment effect. We are eager to continue our dialogue with the senior staff at the FDA to determine the most expeditious path to bring MYDICAR to patients with heart failure and expect to have further discussions with them after the CUPID 2 results are available.

Moving on to the regulatory update for Europe. In November of 2013, the EMA agreed that if MYDICAR demonstrates a substantial and highly significant treatment effect in the advanced heart failure population, its safety database of approximately 205 to 230 MYDICAR treated subjects may be sufficient for a safety assessment of a marketing authorization for MYDICAR for the treatment of HFrEF. Unlike the FDA, the EMA has recently indicated that it is not currently satisfied that adequate control of the false positive rate, or type 1 error rate, has been demonstrated by the Joint Frailty model. We believe that extensive simulation studies have demonstrated that the Joint Frailty model provides adequate control of the false positive rate, or the type 1 error rate.

In addition, the EMA stated that for this study to be considered as a single pivotal trial for approval, a more extreme level of statistical significance than 5% would usually be expected. We look forward to continuing discussions with the EMA regarding the use of the Joint Frailty model for the primary analysis.

We have also made progress on the manufacturing front. In December of 2014, we announced that we had conducted initial scaleup of our viral manufacturing process for MYDICAR to commercial scale. This scaleup of primary production and downstream processing to 2000 liters was undertaken with Lonza at their Houston clinical manufacturing facility. Completion of this 2000 liter batch represents the first industrial scale production of a gene therapy vector and highlights Celladon's role as a worldwide leader in large-scale gene therapy manufacturing.

To conclude then, we believe Celladon today is in an excellent position to execute on our vision and goals. The MYDICAR program for heart failure continues to progress and we look forward to sharing the clinical data from our CUPID 2 study in late April. With that overview, I will now turn the call over to Paul Cleveland to provide a commercial manufacturing update and discuss the financial results for the year.

Thanks, Kris. With that R&D update, I will now discuss recent commercial manufacturing arrangements and Celladon's financial results for 2014 and then open up the call for Q&A. First, with respect to commercial manufacturing, we are very pleased that we have now secured agreements for the commercial supply of MYDICAR drug substance, one with Lonza and one with Novasep, each world-class contract manufacturing organizations. These agreements are summarized in our 10-K filing. In each agreement, in exchange for certain reservation fees and payments, we have the option to have Lonza or Novasep, respectively, commence facility construction and commit the parties to a multiyear term for commercial supply of MYDICAR.

Let me now turn to the year-end financial results, which are also included in yesterday's press release and are available, of course, in our Form 10-K. For the year ended December 31, 2014, Celladon reported a consolidated net loss of $34 million compared to a consolidated net loss of $20 million for 2013. This increase was primarily due to increased headcount in support of MYDICAR development and general and administrative expenses associated with being a public company. Research and development expenses were $23 million in 2014 compared to $17 million in 2013 and general and administrative expenses were $10 million in 2014 compared to $3 million in 2013.

Net cash used in operating activities was $29 million in 2014 compared to $16 million in 2013. As of December 31, 2014, Celladon had cash, cash equivalents and marketable securities of $85 million sufficient to fund our operations for at least the next 12 months. I would also like to mention that now that we have been public for a year and are eligible to do so, we will soon be filing a generic shelf registration statement with the Securities and Exchange Commission just as a matter of good corporate practice.

To conclude, in the last year, Celladon has made significant progress in our clinical development program and precommercial planning, including preparations for commercial manufacturing and other long leadtime activities. Our CUPID 2 trial is proceeding according to plan and we look forward to announcing top-line data from this trial in just a few weeks. Following last year's financing activities, we are well-positioned to advance our pipeline and develop initiatives in 2015 and beyond. And with that, we will now open it up to Q&A.

(Operator Instructions). Brian Klein, Stifel.

I guess first in regards to some of your prepared comments about Europe, I just want to get a better sense of your expectations here in terms of the CUPID 2 trial. So if the trial succeeds and you meet your primary endpoint, is your expectation now that you will not be able to file for approval in Europe?

So we have been guiding for the last recent months that if we just barely cross the finish line in terms of having a p just barely under 0.05 that we think a subsequent trial will be required. The EMA essentially has verified that. I think the interesting aspect of this trial is that both the primary and secondary endpoints are going to be taken into consideration for approval and, as you know, the primary endpoint is looking at recurrent heart failure hospitalizations. However, the secondary endpoint is looking at all cause death, need for an LVAD transplant, and so the combination of those two will also be a factor. For instance, I can imagine a situation where we just barely meet our primary endpoint, but have a strong showing on our secondary, in which case that could influence the decision about whether the larger trial, Phase 3 trial, is required for registration. So it is obviously a complex landscape and we look forward to walking through the data with you.

Okay, great. Thank you. And then just to confirm as well, in terms of the data that you are going to provide to us, you are going to utilize, the primary endpoint and analysis will be including the intent-to-treat population, or will it now be presented as an analysis on patients who have received some type of therapy and you're going to use a modified type of statistical plan?

Well, we are importantly making sure that our top-line press release results will preserve our opportunity to provide a meaningful update in a large cardiology conference in the next year, so I think it's going to be a fine balance. The primary endpoint is a modified intent-to-treat analysis. If there are material differences between the modified intent-to-treat and the intent-to-treat, then we will provide those data as well. However, if it is expected that the differences would be relatively minor giving that there's only a 5% difference in the rate of clinical events between the two, it is likely that we would just make mention of the fact that they are consistent. So it depends on the data.

Right, great. Okay. Then just last question here. Given the fact that you have breakthrough status with MYDICAR following the Phase 2 data for CUPID 2, what sort of opportunity for interaction do you have with the FDA and how quickly can you get the data in front of them to get some sort of feedback?

We are going to be working very diligently to get in front of both the FDA and the EMA and I can't give you a concrete timeline, but it will be a matter of months.

Okay, great. Thank you for taking my questions.

David Nierengarten, Wedbush Securities.

Just a follow-up on the EU's commentary here. Could you maybe run through the logic that the EU used to change their requirements? Was it just statistical powering pure and simple or was there anything else involved?

Well, for the Joint Frailty model, as well as many other statistical methodologies to actually get at the issue of a type 1 error rate, you have to do simulations. And simulations provide a range around a mean. And so the larger the data set that you create in terms of are you simulating 1000 events, 10,000 events, 100,000 events, etc., the tighter that the data converge to the true value. And we ran simulations that we thought were adequate, the FDA thought were adequate, to converge around 5% type 1 error rate. There were a few scenarios that the EMA had asked for where there was a slightly higher than 5% value and that was the basis of their concern.

However, the question and the concern around the type 1 error rate is closely related to the final p value because basically what they want to make sure of that if you come in with a p value of 0.0495, but that's really 0.0495 and not 0.05 something. And so the lower the p value, the less of an issue this becomes.

However, I think that it is important to keep in mind that if you did similar simulation studies, as we have, for even traditional time to first event analyses, you get the same result. That is you are converging around a mean and how close you are to that final value depends on the size of your simulation. So it is kind of a detailed statistical issue.

And then just to be clear, those calculations and etc. were around simulated event rates, not anything they saw in the clinical trial to date. They are, of course, still blinded to that and didn't have any blinded date to base that on or was that based on --?

That's correct, no. No one has really -- we don't know what treatment arm these patients are in and the simulation results were on essentially a random dummy set of random events.

Okay, great. Thanks.

I'm not showing any further questions at this time. I'd like to turn the conference back over to our host.

Great. Thank you very much. I appreciate everyone's interest in participating in today's call and we look forward to updating you in just a matter of a few weeks on the results of our CUPID 2 trial. Thank you very much.

Ladies and gentlemen, this does conclude today's presentation. You may now disconnect and have a wonderful day.