ImmunoGen Inc (IMGN) 2007 Q1 法說會逐字稿

Good afternoon, ladies and gentlemen, and welcome to ImmunoGen's first quarter fiscal year 2007 conference call. Today's call is being recorded. Now, at this time, it's my pleasure to turn the conference over to Carol Hausner. Please go ahead.

Thank you. Good afternoon, everyone, and thank you for joining us on our quarterly conference call. At 4:00 this afternoon, we issued a press release that summarizes our financial results for the first quarter of our 2007 fiscal year. I hope you've all had a chance to read it. If not, it's available on our website at ImmunoGen.com.

During today's call, we'll make forward-looking statements. Our actual results may differ materially from our projections for a number of reasons, and we encourage you to review the description of the risks and uncertainties associated with an investment in ImmunoGen included in our SEC filings, which can also can be found on our website. With me today are Mitch Sayare, our Chairman and CEO; and Dan Junius, our Executive Vice President of Finance and Chief Financial Officer. Mitch will provide an update on ImmunoGen and Dan will discuss our financial results. We'll then open the call to questions. We'll then open the call to questions. Mitch?

Thanks, Carol. In the past few months, we've made good progress in the development of our wholly owned compounds. Similarly, product candidates that make use of our technology and that are being developed by our partners are also moving forward swiftly. On top of that, you may have noticed a flurry of recent announcements suggesting that some of these partners have gone beyond simple license agreements with us, and they've begun increasingly to access our technical expertise.

So in reviewing all this, I'll start with product developments. We've now learned that all of the abstracts that we submitted to medical conferences this fall have been accepted. These cover the initial findings in our huC242-DM4 trial and from two our huN901-DM1 trials. Next week preliminary data from our phase I study with huC242-DM4 will be reported at the EORTC and CI-AACR meeting in Prague.

Concurrent with the start of the poster session, we'll issue a press release on the findings so you'll have them at the same time as the people at the conference. The presentation will be given by Dr. Tony Tolcher, the principal investigator for the study, and we'll start at noon Prague time. That's 6 a.m. East Coast time, on Wednesday, November 8th. Again, these will be initial findings, since the MTD, the maximum tolerated dose, has not yet been established.

As a reminder, in this study, huC242-DM4 is given once every three weeks to patients with metastatic or inoperable CanAg expressing cancers that have failed treatment with approved therapies. Patients in this study can have any type of CanAg-expressing cancer -- colon, pancreatic, and so forth. Once the MTD is established, only patients with strong consistent expression of CanAg will be enrolled. When we have completed the trial, the next step toward registration of huC242-DM4 is its evaluation in a disease-specific study. We expect to start such a study in the first half of '07 and will provide you with more details at that time.

Then on Friday of next week, we'll report additional data from our huN901-DM1 study, 002. This poster session will also start at noon Prague time, and we'll issue a press release on these findings as well. As a reminder, in this study, huN901-DM1 is given daily for three days every 21 days to patients with small-cell lung cancer or other CD56-expressing solid tumors. This will be interim data as well, since dose escalation here is still underway.

And then next month we'll report the first findings from our multiple myeloma trial with is huN901-DM1, our study 003, at the ASH annual meeting in Orlando. The poster will be presented on December 11th, and we'll issue a press release concurrent with the start of the session at 10:30 a.m. These will be the first clinical data to be reported for huN901-DM1 and the treatment of the liquid tumor.

We also expect to report data from a third huN901-DM1 study, our study 001, in 2007. I'll let you know where once it's been established.

To date, we've enrolled the majority of the patients needed in study 001. We have evaluated several increasingly higher dose levels in study 002, and we've made solid progress in study 003. We are pleased with the sites participating in the study and with the enthusiasm they've shown for the compound.

But, for a variety of reasons, our current supply of huN901-DM1 hasn't kept up with our needs. We are making more of the antibody to remedy the situation, however, in order to assure sufficient material for patients who are already on study and continuing to be treated, we've had to curtail the enrollment of new patients. We expect to fully resume enrollment in all of the trials during the first half of 2007.

Turning now to partner-related developments, there are currently three compounds in clinical testing through our partnerships -- AVE 9633, AVE 1642, and Trastuzumab DM1. We expect this number potentially to increase by two more by mid-2007 and to continue to increase thereafter.

AVE 9633, the lead partner compound, is being evaluated by Sanofi Aventis for acute myeloid leukemia in two phase I trials -- one in the U.S. and one in Europe. We expect data from both of these studies to be reported in the future but not at this year's ASH meeting. And we're delighted that Sanofi Aventis has advanced AVE 1642 into clinical testing. This is the second compound in the collaboration to enter the clinic with more behind it.

We earned a $200 million milestone payment with the initiation of patient dosing in October. AVE 1642 is a naked, or non-conjugated antibody, that we developed and license with Sanofi Aventis from our preclinical portfolio. While we may best be known for our TAP technology, we've also established broad expertise in cancer biology and antibody development that we used to develop AVE 1642.

Sanofi Aventis hasn't disclosed any details of this clinical program due to the competitive nature of the field, so we can't share them with you. However, we can say that they are excited about the compound and its potential to enhance their oncology portfolio overall.

In the past few months, we've had a number of announcements that confirm our view that successful companies with significant drug development experience think a lot of our capabilities and expertise. In May, Genentech retained us to develop a process for them to manufacture commercial-scale quantities of trastuzumab DM1. As you know, trastuzumab is the antibody marketed as Herceptin. You also know that Genentech has comprehensive development expertise, which makes their selection of ImmunoGen for this project particularly noteworthy.

In August, we announced that Sanofi Aventis had exercised the second of its two options to extend the duration of our research collaboration. This collaboration initially was established by Aventis and was inherited by Sanofi Aventis when the companies merged in 2004. It's now been extended twice by Sanofi Aventis, the maximum number of extensions permitted by contract.

They'll have paid us over $90 million by the end of August 2008. Of course, we'll continue to be eligible for milestone payments and royalties on each product developed within the collaboration.

Lastly, in October, Sanofi Aventis licensed rights to use our antibody humanization technology. The ability to humanize antibodies is not an ImmunoGen asset that's widely recognized, however, it's yet another capability that we have in place that enables us to develop novel antibody-based anticancer compounds.

Before I turn the call over to Dan, I want to note that we are particularly pleased that we gained Sanofi Aventis's agreement to release us from the obligation to present new targets to them as part of the research collaboration. This freed us to now use all promising new targets for our own pipeline.

Dan?

Thank you, Mitch, and good afternoon, everyone. Let me walk through the results for the quarter ending September 30, 2006, which is the first quarter of our 2007 fiscal year.

In the quarter just ended, we recorded revenues of $7.8 million, essentially the same value or the same numbers we recorded in the year-ago period. This comprised of research and development support fees of $5.5 million, which was down slightly from the $5.7 million reported last year. Recall that this is primarily funding earned under our research collaboration with Sanofi Aventis but also includes revenue earned under our development license agreements with other of our partners -- Genentech, Myogen, Centocor.

Last year's numbers recall included $1.1 million that was earned in our fiscal 2005 year but was recognized in fiscal 2006 following an activity [light] so last year's number was abnormally high due to that unusual number last year, absent that we were up $5 million year-over-year.

Our license and milestone fees were $1.4 million in the 2007 quarter versus $1.3 million a year ago. This represented the first quarter when we began to recognize revenue from the license that we entered into recently with Biotech.

And the last revenue item, our clinical material reimbursement, was $900,000 in the first quarter of '07. That compares with $800,000 last year.

Operating expenses in the first quarter were $14.9 million, higher than the $13.2 million recorded in the year-ago period. Our research and development expenses were $11.4 million, which compares with $9.5 million in the year-ago period. The increase here was primarily driven by an incremental $1.9 million -- manufacturing and process development activity related to the production of compounds for our clinical tests.

The cost of clinical material reimbursed was $600,000 in the quarter compared to $900,000 in the year-ago period, and our G&A at $2.8 million was equal to last year. This produced a loss from operations in the first quarter of fiscal 2007 of $7.1 million greater than the loss of $5.4 million from operations that we recorded last year.

Our other income was up slightly primarily from more interest income in the quarter 2007 -- first quarter 2007 versus last year, which led to a net loss of $6.3 million versus a net loss of $4.7 million. That's $0.15 per share in the quarter just ended versus $0.11 share loss in last year's first quarter.

Our balance sheet as of the end of September showed cash and marketable securities of $70.3 million, which compares to $75 million at the end of June, our fiscal year. At the same time, we continue to have no debt or other forms of non-common equity on our balance sheet for capital.

Cash used in operations in the quarter just ended was $4.6 million. That compares with $3.5 million in the first quarter of last year.

Let me then turn it back over to Mitch.

Thanks, Dan. So a lot's going on. To recap some of the main events that we anticipate through mid-2007 -- the initial data for huC242-DM4 will be reported next Wednesday at the EORTC, as I've already said, and we'll have a press release on the findings that morning. Additional data for huN901-DM1 and the treatment of solid tumors will be reported next Friday at EORTC, and we'll issue a release on those data as well. Initial data for huN901-DM1 in the treatment of a liquid tumor, multiple myleoma, will be reported on December 11th at ASH. We'll issue a press release with those findings.

We expect to initiate a disease-specific phase II study with huC242-DM4 in the first half of 2007, and we expect one or two more TAP compounds to be advanced into clinical testing by mid-2007.

I haven't mentioned ASCO in early June, as it's a bit early to project what data will be reported there, however, there is a potential for data with a number of compounds.

And, finally, we expect to continue to have partner-related announcements as well during the course of the next few months. I look forward to keeping you posted on our progress. Carol?

Great, thank you. Operator, we are now ready to open the call for questions.

Very good. [Operator Instructions] Bryan Rye, Janney Montgomery.

Mitch, in looking ahead towards the potential initiation of that phase II study in a disease-specific indication for huC242-DM4 -- I was wondering -- I know it's a bit early, but if you could talk about, broadly speaking, the design of such a study -- if it would be dose-escalating in nature, or if you feel like what you're accomplishing in the phase I would allow you to pick a specific dose, and I would presume that this would be a single-arm study but I was wondering if you could clarify some of those details as well.

Well, I can only do so much until everything is firmly decided and agreed to by the institutions that will be conducting the phase II studies, but what we would anticipate is a single disease, a good CanAg expressor, and we would expect it to be single-arm; we would expect it to be non-pivotal. We would expect it not to be dose-escalating, at least not in any substantial kind of way. I mean, as you can imagine, if, for example, if we haven't dosed on the phase I study, exactly this classification, we might decide to do a modest decide to do a modest escalation starting on a slightly lower dose than what we established the MTD to be. But the MTD is yet unestablished, and so we're not certain what that number will be.

So, in broad strokes, Bryan, that's what it would look like.

Okay, that's helpful and, again, congratulations on the progress, and we look forward to all the data coming out over the rest of the year.

[Operator Instructions] Michael Yee, RBC Capital Markets.

Great, thanks. Mitch, can you talk a little bit about the antibody manufacturing you made comments about in the call about enrollment and give some additional color there. Is that going to affect timelines, things like that?

Yes. The specific antibody in question was the N901 antibody that comprises the N901-DM1 product, and basically what's happened here is demand has outstripped supply insofar as patient dosing is concerned. And so we need to make more antibody than we anticipated, and we're working hard at getting that done.

We hope to be able to -- as I said in my talk earlier, we have ample supply to continue dosing patients that are still on study, and there are patients who continue to be dosed through several cycles, but we don't feel comfortable in dosing new patients until we have ample supply. At the very latest, it would be sometime in the first half of '07, but depending on how many patients can continue on the study and so on and so forth will determine how many new patients we can dose, if any.

So if I had that understanding correctly, no new patients would be enrolled until you could get better understanding of your manufacturing?

It's not a matter of understanding the manufacturing, we're all set there. It's just antibody supply. We don't have ample antibody at this time to make sufficient numbers of batches to continue to dose patients at the high level that we've been dosing them. So I can't tell you what the impact of that will be on timeline, in that it hasn't been assessed yet. We don't know how many patients will continue on study before they progress. The good news is there are patients who are continuing to get many cycles of the drug. The bad news is it's consuming more drug than we thought it would as a result of that.

There are no further questions. I'd like to turn the conference then back to Carol Hausner.

Great, thank you. And thank you all for your attention, and if you have any additional questions that arise afterwards, just give us a call at 617-995-2500. Take care.