ImmunoGen Inc (IMGN) 2004 Q3 法說會逐字稿

Good day and welcome everyone to this ImmunoGen third quarter fiscal year 2004 conference call. Today's call is being recorded. At this time for opening remarks and instructions I would like to turn the call over to the Chairman and Chief Executive Officer, Dr. Mitchell Sayare. Please go ahead, sir.

Good afternoon. Thanks for joining us today and welcome to ImmunoGen's conference call for the quarter ended March 31, 2004. With me is Ginger Lavery, our Vice President, Finance and Treasurer. At four o'clock this afternoon we issued a press release that summarizes our financial results for the third quarter of the 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. Before I discuss today's release with you I would like to remind you that this call will include forward-looking statements. And that there are risks and uncertainties that may cause our actual results to differ materially from our expectations.

Description of the risks and uncertainties associated with an investment in ImmunoGen are included in our SEC filings which can be accessed from our website. As can be seen in the financials released today we were able to operate at pretty much cash flow break even for the first nine months of this fiscal year. This is a result of our business model working for us, generate cash-flow by outlicensing our technology platform and use the cash to aggressively build our business.

Our low cash burn for 2004 has benefited from the collaboration we established with Aventis last summer. The $12 million we received up front certainly helped but it's the committed funding that we receive from Aventis every quarter combined with payments from our other partners that help us remain a strong balance sheet as we advance our clinical stage products on our own. We are frequently asked whether the merger of Aventis and Sanafe could impact our receipt of this committed funding.

The answer is no, this is a non-cancelable obligation inherited by the Sanafe Aventis organization. I've been informed by the Vice Chairman of Aventis' management board and by Aventis' Senior Vice President of Corporate Development that Aventis greatly values their relationship with ImmunoGen, that this will not change in the future and they believe Sanafe Aventis will be able to create even more value for its partners. I'm hopeful this is the case, but I take comfort that either way we will get our committed funding. We are pleased with the progress that already has been made in our collaboration with Aventis.

While we no longer control the three compounds they license from us, they all appear to be tracking toward the clinic and we believe the filing of the IND for the lead product, the TAP compound for acute myeloid leukemia remains on target for 2004. And ImmunoGen and Aventis also are actively working together to create additional new anti-cancer therapeutics. Moving on to some of the other products of development, Boehringer Ingelheim continues to say little but you can find through publicly available sources that their TAP compound bivatuzumab mertansine is being tested in Europe in head and neck cancer and in breast cancer. So we expect that they'll present data from these studies at some point in the future.

The first clinical data on Millennium's TAP compound MLM 2704, will be presented at the ABSCO annual meeting on June 6. We don't know the findings but we know that the presentation will be on the first study, the single ascending dose trial. We also know that during the trial Millennium applied for and was granted by FDA the right to retreat patients. The two huN901 DM1 studies underway in relapse small cell lung cancer continued to progress.

We remain on target to initiate our proof of concept study with this compound, in CD 56 positive hemagologic malignancies this year. We also are continuing to make contact with cantuzumab mertansine, our top TAP compound for the treatment of cancers that express canag, such as colorectal gastric pancreatic and other abdominal cancers and many non-small cell lung cancers. As discussed previously, we can't start our proof of concept study with cantuzumab mertansine until the first half of 2005 because we need to make antibody for clinical materials.

In the interim, we are testing various modifications to the product that have come out of our ongoing programs to expand our TAP technology platform. In addition to the development of other classes of effecter molecules, we've also developed a library of matansanoid effecter molecules DM1 as the standard to enable us to select the best product design for every new antibody we work on. For example cantuzumab mertansine's current design works well. A compound reaches and effectively binds to cancer cells, has shown evidence of biological activity and is well tolerated.

We are testing preclinically right now whether tweaking the design of it's effecter molecule is likely to improve its performance in the clinic. But suffice to say regardless of whether we modify its design or leave it as it is the product will consist of our huC242 antibody with four matansanoid effecter molecules each attached to the antibody by a disulfide bond. If we stay with the current design cantuzumab mertansine will advance directly into phase 2A, proof of concept testing. On the other hand, if we modify the product we will need to add a dose ranging leg to the study.

Although this is an additional step we could start this phase I leg earlier than we could start the phase II A study, so we believe that either way the compound will be in phase 2A proof of concept testing in 2005. We will let you know the outcome of the studies underway, the version of the products we will advanced when we discuss our clinical trial plans later this year. We know that with some antibody targets using a variation of our DM1 molecule provides superior results in the lab.

With other targets the current DM1 design provides results every bit as good as alternative designs. All the compounds now in the clinic, QM901, DM1 and LM2704 and bivatuzumab mertansine using the original DM1 design. Ginger Lavery will now discuss hour third quarter 2004 financial results. Ginger?

Thanks, Mitch. As noted in today's press release, our collaboration with Aventis along with our other collaborations is having a favorable impact on our financial results and on our cash burn. For the three months ended March 31, 2004, with reported a net loss of $760,000, or 2 cents per basic and diluted share compared to a net loss of $4.6 million, or 11 cents per basic and diluted share for the same period last year.

The significant decrease in our operating loss for the period is primarily attributable to 4.1 million of research funding we earned during the quarter as part of our collaboration agreement with Aventis. For the nine months ended March 31, 2004, we reported a net loss of $760,000 or 2 cents per basic and diluted share compared to a net loss of $4.6 million, or 11 cents per basic and diluted share for the same period last year. The significant decrease in our operating loss for the period is primarily attributable to the $4.1 million of research funding we earned during the quarter as part of our collaboration agreement with Aventis.

For the nine months ended March 31, 2004, we reported a net loss of $6.2 million or 15 cents per basic and diluted share compared to a net loss of $13.1 million or 31 cents per basic and diluted share for the same period last year. The decrease in the net loss for these nine months is primarily attributable to $9.2 million of research funding that we have earned under our Aventis collaboration since the beginning of September, 2003. We ended our third quarter with $101.8 million of cash and marketable securities. This compares with a $101.3 million we had at the end of our 2003 fiscal year. This helps underscore the financial benefit of our collaboration with Aventis. I will now turn the call back to Mitch. Mitch?

Thanks, Ginger. Indeed our collaborations help us financially. They also provide us with another source of validation for our technology. Every new disinterested third party that establishes a multi-million dollar partnership with us should provide you with some comfort. More companies have licensed the right to use our TAP technology than that of all other companies in the immunocongugative field combined and we expect this number will continue to grow this year and in the years to come.

I think in recent months there's been a broader realization that proof of concept of our technology need not come just from ImmunoGen, although it may come from ImmunoGen, say from huN901 DM1 or cantuzumab mertansine. It could also come from Millennium's MLM2704 or from Boehringer Ingelheim's bivituzumab mertansine or from one of the TAP compounds we're developing with Aventis. What is clear is that multiple products are in development by us and our partners that use our technology that each of these products has a potential to validate our technology and that all of these products are a source of potential revenue to ImmunoGen.

What should also be clear is that we are not resting on our laurels. We're committed to maintaining our leadership position in this field through continued expansion of our TAP technology portfolio. Steve, we are ready to open the call to questions.

Thank you. Today's question and answer session will be conducted electronically. To ask a question, press the star key followed by the digit one on your touchtone phone. Please make sure your mute function is turned off so your question will register in the queue. Again, that's star one if you'd like to ask a question. We'll go first to Brian Rye, Janney Montgomery Scott.

Okay, thanks and congratulations on another solid quarter. Just looking down the road a little to the future proof of concept studies with cantuzumab mertansine next year. I know the discussions I believe are still ongoing regarding which specific tumor types will be the subject of those studies so I was hoping you could refresh our memory a little regarding the promising signals seen in the earlier stage studies and if it makes sense to maybe target earlier settings in various tumor types or any other issues involved in the decision-making process.

Thanks, yes. As you know in the case of cantuzumab mertansine, the three phase I clinical studies were conducted on multiply relapsed and refractory patients, so these are patients with metastatic disease, widespread disease with a fair amount of momentum, I should add. And we think that given the evidence of biological activity we saw lots of stable disease in a great number of patients, drops in carcinoma embrianic antigen and a substantial number of patients at the higher dose levels and other factors all suggested to us that were we to treat patients at an earlier stage, that is perhaps after their first relapse or maybe even before where they retain some sensitivity to chemotherapeutics, that we would see more signs of robust efficacy.

And then so it's after that group of patients with higher sensitivity that we are going. So what comes to minds are studies in areas that are poorly served by existing chemotherapeutics that would permit us, therefore, to put our product into those patients at earlier stages. So, for example, pancreatic is effectively treated only with gemcidavine. There's some question of whether or not we could get in before gemcidavine in those patients.

Gastric has no approved therapy, gastric cancer, and G.E. junction, gastroensophogial junction tumors also represents an opportunity to look at patients who are likely to be substantially more sensitive to chemotherapy than were the patients in the three phase I studies undertaken by SmithKline and then Glaxo SmithKline.

That is helpful. Thank you, Mitch.

Sure, Brian.

And our next question, Jason Kantor, W. R. Lambert.

Thanks. Do you have any sense of when we might see data from the N901 DM1 small cell lung cancer study? You know, I guess you are taking over that study, is that correct, how does that work?

That is correct, Jason. As you know there were some data that were disclosed at last year's ASCO from the U.S. phase I escalating dose portion of the phase I study. We are not certain when data will be disclosed for either the phase II portion or the U.K. study. I mean, you know, ERTC would in the fall would be a likely time but we are not certain of that, Jason, quite frankly.

And you mentioned you are looking at variations in the conjugation technology, whether with the driving link or what have you, can you talk a little bit more about what some of the iterations you are exploring are? How much research you are putting by behind this effort, what's up with the permutations you've come up with already?

Yea, I mean, the effort I can't talk very specifically about the chemistry behind this because of, you know, patent applications that have either not been filed or are about to be filed. But we have an ongoing group, it's not a large proportion of what we do here but we have an ongoing group that looks at a variety of different effecter molecules, the DC1 you know about, the taxines you heard us talk about and the DM1 for the mertansinoids are also part of that so they've got some attention in that group at ImmunoGen. I would not call it a big effort here.

Okay. Thank you.

As a reminder, that's star one on your touchtone phone for questions. And we'll go next to Gary Mohelner.

Hello, Mitch. You partially covered it on the last question, but what I was going to ask about was the patent that we saw on the net at least for the new link or an improved link or can you tell us any more about that?

Actually we can't talk about that. Perhaps it's some sort of scientific conference we can talk about it but we can't talk about it here.

Thank you, anyway.

No problem.

And we have a follow-up question, Jason Kantor, W. R. Hambrecht.

Great. Could you just tell us what kind of steps you've taken, what is actually progressed in terms of, you know, getting the manufacturing up and running for I guess it's cantuzumab mertansine? And when you mentioned that you might be able to start a phase 1 portion earlier. Isn't that also gated by manufacturing so how would you expect that you could start that soon?

A good question, Jason. Let's distinguish manufacturing of antibody from manufacturing of final product. The issue with cantuzumab mertansine and the delay in getting it into the clinic result from the amount of naked antibody we have on hand. We have no problem manufacturing the conjugate from naked antibody and the DM1 that we have in our Norwood facility for GMP suites and we manufacture for all of our clinical partners, including our own products.

In fact we manufactured large batches of six of our TAP products that are in the clinic or have been in the clinic from that will facility. Having said that, the issue is the naked antibody. So we would have sufficient supply of naked antibody for a phase I study given the way phase I studies are structured.

You know, you start at a very low dose and you move up ascending those one dosage level at a time and there are time delays between the completion of the dosage level and when you can dose the next level and so forth and that would give us ample time to prepare materials for the phase II portion of that. But if we had to move right into phase II we'd feel uncomfortable with the amount of material we have on hand now to be able to manufacture sufficient conjugate to be ready to do all the patients in a phase II study.

So when do you think you'll have sufficient, when do you think you can start a phase I study at the soonest?

We haven't given -- we haven't given a time frame on it but it would be sooner than we would start the phase 2A study where we could just do that. By sooner I mean by months sooner.

Okay.

Not just a week or two.

Thanks.

As a reminder, star one for questions. We will go next to Larry McCarthy.

Hi, Mitch. Nice going, nice quarter reports. Just a quick question. I asked it once before. Back in September of last year you mentioned about a deal that should come about in the next couple months, and needless to say, we are all still waiting for it. Can you make any comments about that?

Another out license arrangement, you mean?

Yes.

Yes. Well, we are looking at doing another out license deal this year and we are working very hard at trying to get it completed and I'm pretty confident, Larry, that we will be able to deliver one. Recall that there are really two different sources of companies that we can do these arrangements with. One are companies with whom we already have done arrangements and have given them rights to look at more than a single antibody to go to actually develop a product they have to take a license to that particular antibody target. So that would be one source from existing partners. Another source would be from partners whom we haven't talked to anybody about yet except them. And one of those two sources is what we are likely to, likely to be the source of a deal that we will announce sometime this year. So I'm pretty confident of that, Larry, that we will do at least one more deal this year.

Okay. Let me just go one step further. It's really not a question, it's a statement. When you mention that, I think it was late or mid-September last year, I'm not sure but when you mentioned it and said you know, in a few months it made us all think, boy this sounds like it's almost there. I guess it wasn't.

Well, okay, Larry, if there's a question in there I will be happy to answer it but otherwise I can't really comment. But thank you.

And having no further questions, Dr. Sayare, I would like to turn the conference back over to you for any additional or closing comments.

No, that's it. I want to thank everybody for listening. And I appreciate your attention and look forward to talking to you again at some point in the future.

That does conclude today's conference. Thank you for your participation. You may now disconnect.