ImmunoGen Inc (IMGN) 2002 Q4 法說會逐字稿

Good day, and welcome, everyone, to this ImmunoGen, Inc. fourth quarter fiscal year 2002 conference call. Today's call it being recorded. With us today is the Chairman and Chief Executive Officer, Dr. Mitchell Sayare and the Vice President and Chief Financial Officer Mr. Gregg Beloff. At this time, I would like to turn the call over to Dr. Sayare. Please go ahead, sir.

Good afternoon. Thanks for joining us today and welcome to ImmunoGens' conference call for the fiscal year ended June 30th. With me is Gregg Beloff, our Chief Financial Officer. At 4:00 this afternoon we issued a press release that summarizes our financial results for our 2002 fiscal year. I hope you've all had a chance to review this release. If not, it's available on our website, immunogen.com.

At this time, I'd like to remind you that during this call we'll cover material that involves forward-looking statements and that there are risks and uncertainties that may cause our actual results to differ materially from our expectations. The descriptions of the risks and uncertainties associated with an investment in ImmunoGen are included on our website and in our latest filings with the SEC. Before Gregg discusses the financial statements, I'd like to take a few minutes to discuss our recent announcements. I'm sure you all want to know the status of our negotiations with Glaxo SmithKline. This is an important topic for all of us. I hope you can understand, however, that there's not a lot I can say at this time about the negotiations other than that they are underway and are expected to take some time. I wish I could say more, but I can't. One reason is that it would be inappropriate for me to discuss the inner workings of another company and their private discussions with us and we are legally prevented from during doing so by our contract with them. Additionally I don't want to compromise our negotiating position.

What I can talk to you about is ImmunoGen. We are very, very confident in our technology and its potential to truly change the treatment of cancer. We are confident in cantuzumab metansine and are committed to this product and to advancing it into Phase II with or without Glaxo SmithKline. The product has been shown to be well tolerated even at doses as high as 235 milligrams per meter squared. To put this in context, [Mylotarg] which is also a conjugate product that does not use our technology, has an approved dosage of 9 milligrams per meter squared, 25 times lower. In terms of efficacy, it's too early to say very much in part because Phase I studies are not designed to test efficacy. We're encouraged that cantuzumab metansine has shown evidence of biological activity in human cancer patients. Most patients in the Phase I program didn't get the maximum tolerated dose. And they typically had cancer that had failed prior treatment with multiple therapies. In other words, cancer with tremendous disease momentum. As I said, we are currently in negotiations with Glaxo SmithKline. ImmunoGen owns the IMD for cantuzumab metansine and has a contractual right to the clinical data generated to date if Glaxo SmithKline does not advance the product. So if we determined that it is not in our best interests to stay with them, then the product rights will come back to ImmunoGen at no cost to us.

Our goal is rapid advancement of cantuzumab metansine into Phase II either with Glaxo SmithKline, with another partner, or by ourselves at least until we sign another partner. Let me note here that a number of companies have expressed interest in licensing cantuzumab metansine. Both companies that we've contacted and companies that have contacted us when they learned we may have the opportunity to get the product back. So stay tuned. We'll announce the outcome of the Glaxo SmithKline discussions when they are at a stage that is appropriate to be announced.

Moving on to other products. Earlier today we announced that the second Phase I that's been planned for huN901-DM1 has begun. This study is taking place a two major cancer centers in the United Kingdom and is the first steady with an ImmunoGen TAP product in Europe. It evaluates the product when dosed daily for three successive days, with an eighteen day follow-up period. This is a more intensive dosing schedule than the weekly study currently ongoing in the U.S., and we believe these two studies will provide the information needed to select an appropriate dosing schedule for efficacy studies of the product. We continue to make progress with our internal programs such as huN My9-6-DM1 and IGF1 receptor. As well as to work with Genetech, Millennium, Boehringer Ingelheim and Abgenex and with other potential partners on the use of our TAP technologies with their antibodies.

We recently announced exciting data on our Taxane derivatives. Our Taxane derivatives been found to be up to 55 times more to potent than Taxol at killing cancer cells. In fact, we have one derivative that is over 200 times more potent than Taxol in killing multi-drug-resistant cancer cells. This gives us another powerful class of effector molecule to use in our own pipeline products as well as to license to other companies.

In summary, we are making important progress and we remain confident that our technology can lead to a new era in the treatment of cancer. I'd like now like to turn the call over to Gregg to discuss our financial results for the fiscal year ended June 30th.

Thanks, Mitch. About a half an hour ago we announced our fourth quarter and fiscal year 2002 financial results. For the 12-month period, ended June 30, 2002, we reported a net loss to common stockholders of $14.6 million or 37 cents per basic and diluted share, compared to a net loss of $9.6 million or 26 cents per basic and diluted share before the cumulative effect of a change in accounting principle for the same period last year. Revenue for the twelve months ended June 30, 2002 was $5.9 million as compared to revenue of $4.5 million for the same period last year. Revenues for this fiscal year included $1.7 million of previously deferred revenue related to payments made pursuant to existing collaborative agreements as well as payments associated with the new collaboration with Boehringer Ingelheim. Also included in revenues for the twelve-month period ended June 30, 2002, was $3.5 million of reimbursements related to our manufacture of clinical material under certain collaboration agreements.

Total operating expenses for this fiscal year were $26.4 million as compared to $20.3 million for last year. Included in total operating expenses for this period was R&D expense totaling $17.7 million as compared to R&D expense of $15.2 million last year. The increase in total operating expense includes $3.3 million of cost related to clinical materials made on behalf of our collaborators. Despite these expenses, we only used $16 million of cash in operations in the twelve months ended June 30, 2002. We ended the year with an extremely strong cash position of $137.800,000. I'm very pleased with our financial results and I believe that we have the cash to support both our internal product pipeline as well as support our collaborators.

As we stated in our last conference call, we will provide fiscal year 2003 financial guidance when we know the outcome of the Glaxo SmithKline negotiations. The reason we must wait until the outcome of the negotiations is the revenues and costs associated with each of the potential outcomes varies. For example, if Glaxo SmithKline continues to develop the product, our operating expenses will be lower than if we take back the product and develop it ourselves. The third outcome, which is the relicense of the product to a new collaborator would also have distinct revenue and cost implications. Therefore, we believe it is premature to give financial guidance at this time. We plan for this year to be a productive year with respect to product advancing and collaborator support, and in conclusion we feel that we have the cash position necessary to achieve these goals.

Thanks, Gregg. We have time to take a few questions.

Today's question and answer session will be conducted electronically. At this time if you'd like to ask a question, please press the star key followed by the digit one on your touch tone telephone. Once again, if you'd like to ask a question at this time, please press star one. We'll pause for just a moment to give everyone a chance to signal. As a reminder, ladies and gentlemen, that is star one for any questions. We'll take our first question from Aktar Samad from Bear Stearns.

A couple of questions. First, could you tell us whether the IND filings for some of your partners to the best of your knowledge if those are still on tract for BI, Millennium and Genentech?

We know that Boehringer and Ingelheim and Millennium are on tract. At our last conference call, we announced that the Genentech product is under review with Genentech and we are uncertain at this time as to when that will IND will be filed.

Okay. Could you also tell us, give us a sense of what the burn rate might look like if you were to take this product forward yourself? I don't know if you commented on that in the past.

No, we haven't. But as Gregg says, it will be more than if a third party either Glaxo SmithKline or another company were to take the product forward. But I can't give you the magnitude. We will, as soon as we know it, as soon as the outcome of the GSK negotiations are clear, we'll come up with the data and very quickly report what it will be.

Great, thank you.

Once again as a reminder, that is star one for any further questions. We'll take our next question from Brian Rye with Raymond James.

Good afternoon. It's sort of a broad question when you consider all the INDs that both your partners and yourself are going to be filing over the next 12 to 18 months, and in addition the possibility of regaining the rights to cantuzumab metansine. You look around at other companies that have products in Phase II and Phase III are, in many cases going back to the drawing board and either resizing trials or starting over from scratch completely given the new environment we are perceived to be under with the FDA. Have you taken anything away from that and any strategy implications for you guys as you go into the clinic in a major way hopefully in the next two or three years?

A very good question, Brian. As of this point, we have two products that are moving -- that we are developing ourselves moving toward IND. We are being very cautious about the sorts of data that we gather in anticipation of IND filing. I don't think that the IND that we file and the protocols that we propose to test these products with for Phase I are likely to be influenced very much by what's going on today with FDA. The later stages, obviously, have regulatory submissions will be. Insofar as what our partners, how our partners view this, we don't know. We haven't noted any significant changes in protocols or IND content or timeline. So I think we're pretty comfortable with what it is we are doing now.

Okay. Thanks, Mitch.

Sure.

As a reminder, that is star one for any questions. Next to Bruce Platt with Robert W. Baird.

You mentioned in your introduction that a number of companies have contacted ImmunoGen about the product you've been working on with Glaxo. I was just wondering with the generic lack of information that we've been able to get on this because of the confidentiality agreements, what information are those companies using to even determine the fact that they want to approach you about this?

That's a great question. What they're using are the data that have been reported at ASCO and at the EORTC meetings. And any sorts of public filings that we've made. And from that we infer that based on the intensity of their interests, we are inferring that they've gotten the kind of data that they need to pursue this. We're not saying that we have proposals on the table. I'm sure that there will be significant due diligence where we go forward with the partner other than Glaxo SmithKline. That would have to be undertaken by that partner, and that due diligence hasn't commenced since we're still in negotiations with Glaxo. But there's a lot of public information about the products and data that has been gathered so far is of quite a bit of interest to these companies.

Thank you.

Sure.

And, gentleman, it appears we have no further questions at this time.

Thank you. Thank you all for participating. We appreciate it and will be talking to you fairly soon.

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