ImmunoGen Inc (IMGN) 2004 Q1 法說會逐字稿

Good day and welcome, everyone, to this Immunogen first quarter fiscal year 2004 conference call. Today's call is being recorded. With us today is the Chairman and Chief Executive Officer, Dr. With us today is the Chairman and Chief Executive Officer, Dr. Mitchell Sayare, and Vice President and Chief Financial Officer, Mr. Gregg Beloff. Sayare, and Vice President and Chief Financial Officer, Mr. Gregg Beloff. At this time I would like to turn the call over to Dr. Sayare.

Thank you Chris. Good afternoon. Thanks for joining us today and welcome to Immunogen's conference call for our quarter ended September 30th, 2003. 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 the first quarter of our 2004 fiscal year. I hope you've all had a chance to review this release. If not, it's available on our website, Immunogen.com. As always, 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. Descriptions of the risks and uncertainties associated with an investment in Immunogen are included in our website and in our S.E.C. filings.

On September 1st we officially began our research collaboration with Aventis. The kickoff meetings were attended by senior level people from both companies and were highly collaborative in nature. The partnership has gotten off to a good start and I feel confident that this will be a productive relationship for both companies. It's great to have the resources and support of an oncology powerhouse like Aventis behind the products we've licensed to them as well as the products we'll create together. We also began earning R&D funding from Aventis starting September 1st. Over the next three years we'll receive over $50 million in committed research support from Aventis. This funding combined with the other funding components of this collaboration plus our other partnerships enable us to use our cash to build Immunogen in ways not previously possible. We now have more opportunity to develop important products, and that translates into more opportunity to build our business.

Since the announcement of our partnership with Aventis we've been asked various questions about the agreement that I'd like to address here today. One question we're asked is is the $12 million up front payment included in the $50 million of committed funding that Immunogen will receive over the next three years? The answer is no. The $12 million is in addition to the $50 million in committed funding over the next three years. Similarly, the milestone payments earned with product achievements are in addition to the $50 million and are unrelated to the duration of the research collaboration. Let me remind you that the $12 million up front payment is included in the $99 million in total committed funding possible from this agreement over the next five years. Again, the milestone payments we get are in addition to this committed funding, as are, of course, the royalties on sales.

Another question that comes up is can Immunogen continue to outlicense its TAP technology? The answer is yes, we can outlicense our TAP technology to new partners, and Genentech, Millennium and Abgenics have the same rights to take licenses as they had before we established the Aventis collaboration. Plus there is plenty of opportunity for additional TAP products to be developed by new partners as well as by our current partners. And finally, we get asked if our partners will know when Humine 96DM1 and other collaboration products begin clinical testing. And the answer is yes, we expect there to be an announcement related to initiation of clinical testing. This is a collaborative relationship with Aventis, and we have more input into communications than we have with our outlicense partnerships. Of course, we continue to be asked for more details on terms, such as royalties, milestones and the nature of our co-promotion rights which, as is typical with these types of partnerships, we simply can't disclose. I hope the additional information provided here enhances your understanding of the deal.

Moving on to some of our other partnerships, in October our partner Millennium announced that they had initiated their second study with MLN2704. This TAP product consists of our DM 1 effector molecule conjugated to their MLN591 antibody, which targets the prostate specific membrane antigen or PSMA. The multidose, dose escalation study Millennium initiated this October builds on the single dose, dose escalation study they initiated in late 2002. We are pleased with the progress being made by Millennium and by other companies that have licensed our TAP technology. As you know from our S.E.C. filings, we're in discussions with British Biotech, or Vernowis as they're now called, on QN 901-DM1. I should note that Vernowis is continuing to enroll patients in the two clinical trials underway with QN 901-DM1 the Phase II section of the Phase I, 2 study underway in the U.S. and the Phase I study underway in the U.K. Greg will now discuss our first quarter financial statements.

Thanks, Mitch. About a half hour ago we announced our financial results for the three-month period ending September 30, 2003. For the three-month period the company reported a net loss of $4.1 million or 10 cents per basic and diluted share as compared to a net loss of $3.2 million or 8 cents per basic and diluted share in the same quarter last year. Revenues for the three-month period ended September 30, 2003, were at $3.9 million as compared to revenues of $2.3 million for the same period last year. These revenues included $1.2 million of R&D support fees earned pursuant to our collaboration with Aventis. Also included in these revenues were $1.9 million of reimbursements relate to the manufacture of clinical material for several of our collaborators. Total operating expenses for this fiscal quarter were $8.4 million as compared to $6.6 million for the same period last year. Included in these total operating expenses was the cost of clinical materials reimbursed of $1.8 million and R&D expense totaling $4.8 million.

We ended the quarter with $100.7.3 million in cash and marketable securities, which is a very strong cash position. This cash includes the $12 million up front fee that we received from the Aventis collaboration. The up front fee will be recognized as revenue ratably over a five-year period, which is the term of the research program plus the extension periods. The receipt of this up front fee helped to generate $6.5 million of positive cash flow from operations for this quarter. Now, while we don't anticipate being cash flow positive for the full fiscal year, our demonstrated ability to effectively outlicense our technology for a significant return gives me confidence that we'll be on track with our guidance of a net loss between $11 million and $14 million and a burn on an operating basis of between $3 million and $6 million for the full fiscal year. Mitch?

Thanks, Gregg. As the financials show, we're in a very strong position with Immunogen while we support our partners and can now build our business in ways not previously possible. Chris we're ready to take calls or questions from callers.

Thank you, sir. At this time ladies and gentlemen if you would like to ask a question please press the star key followed by the digit one on your touch-tone telephone. If you're using a speaker phone for todays conference please make sure your mute button is turned off, in order for your signal to reach our equipment. Once again if you would like to ask a question at this time please press star one. We'lll pause just a moment to give everyone a chance to signal. And we will take today's first question from Brian Rye with Janney Montgomery Scott.

Good afternoon, Mitch.

Hi Brian.

Just a quick strategic question. I guess after the Aventis collaboration you had talked, I believe on net conference call about Immunogen's strategic vision and how the company might be expanding the breadth of its focus in the months and years to come. I was wondering if you've got any additional thoughts or, you know, strategic, I guess, visions along those lines to share right now?

Well, I've got a whole bunch of thoughts. I'm not quite sure how many we can share, Brian.

I understand.

But we do have, as Gregg detailed, we're not gonna burn a whole lot of cash this year. And we do have a lot of cash in the bank. And that just -- that makes us have or allows us to have a whole bunch of options going forward with strategic planning. So, it is conceivable that during the course of the next few months we may act in a strategic way, perhaps acquiring a product, a technology, a company, and so forth. So, we are out there paying attention to what's available, the availability of a IPO market place for privately-held companies that are in need of funding is not as mature as we hoped it would be by this time. And that gives us an opportunity. So, there's a lot going on, and there seems to be a lot of opportunity. So, we're just taking a fairly aggressive approach toward the future in our strategic planning.

Sounds great. Thanks, Mitch.

As a reminder, ladies and gentlemen, if you would like to ask a question, please press star 1 on your touch phone telephone. Once again, ladies and gentlemen, that is star 1 for questions. And we'll take our next question from Jason Crashaw with Great Specialized Funds.

Afternoon, guys. Nice job on the quarter. A couple of quick questions here. I missed the cash flow from operations number, first of all.

It was $6.5 million positive cash flow from operations, Jason.

Okay. $6.5. And I know you guys haven't provided guidance for next year, but assuming you didn't do anything, which I'm sure you're going to, what do you sort of roughly estimate cash burn would be for '04, or have you not really looked at that yet?

Actually, Jason, we have. And here are the thoughts on the guidance. Net loss ranged between $11 and $14 million for the fiscal year. And then an operating burn of between $3 and $6.

Okay. That's for '04?

That's for our fiscal year '04. So, that ends June 30, 2004.

okay. Great. Next question just would be on the Aventis deal, as far as whatever operational sort of requirements were to be sort of done to sort of, you know, at least get the deal going and the like, whether it be on the R&D side, what were those requirements and where are you along those lines?

Well, as you can imagine, the operation of the Aventis collaboration involves participants both from Immunogen and from Aventis. The Aventis deal has a number of different components, one of which is the advancement of the three products that they license from Immunogen. And each of those products has a group of people who collaborate or who interact with their opposite numbers at Aventis. Similarly, development of the Taxane platform, or the collaboration on the Taxane platform, is also people from Immunogen and Aventis and similarly work on new targets and designing antibody drug conjugates or making antibodies against those new targets also consumes resources both at Immunogen and at Aventis. The good news is that all those resource that are consumed at Immunogen are reimbursed for by Aventis. And so, so far things have been moving along very, very briskly. They send a lot of people to the meetings, and we -- we're having a good time in figuring out the most efficient way to move everything forward.

Okay. Great. Thanks, guys. That's about it.

Once again, ladies and gentlemen, that is star 1 for any further questions . And at this time I'd like to turn the conference back over to Dr. Sayare for any additional or closing comments.

Thank you, Chris. Yes, I do have a closing comment. And that is that our annual shareholders meeting is on the 11th of this month, and I'd like to invite anybody on this call or any of our shareholders to come by to Immunogen at 10:00 a.m. where you'll get additional information about what's happening. Many thanks for your participation this afternoon, and we'll talk to you again in the future.

Once again this does conclude today's conference. We thank you for your participation. You may now disconnect.