Infinity Pharmaceuticals Inc (INFI) 2011 Q1 法說會逐字稿

Welcome to the Infinity Pharmaceuticals conference call to discuss the Company's first quarter 2011 fiscal results. (Operator Instructions.) At this time I would like to introduce your host for today's call, Ms. Jaren Madden, Director of Investor Relations and Corporate Communications at Infinity. Please go ahead.

Thank you, Tanetha, and good afternoon, everyone. Welcome to today's call. With me here today are Adelene Perkins, President and Chief Executive Officer; Julian Adams, President of R&D; and Gerald Quirk, Vice President of Corporate Affairs. The press release issued earlier today details our results and is available on our website at infi.com. Please note that during this call we may make forward-looking statements about our future expectations and plans including clinical development milestones and financial projections.

It's possible that our actual results may differ materially from what we project today, due to the factors described in the risk factors section of the form 10-Q for the first quarter of 2011 that we filed this afternoon. While these forward-looking statements represent our views as of today, they should not be relied upon in the future as representing our then current views. We may update these statements in the future, but are not taking on an obligation to do so. During today's call we will discuss our recent business progress and review our first quarter 2011 financial results. Following our remarks we will open up the call for Q&A. Now I would like to turn the call over to Adelene.

Thanks, Jaren, and good afternoon, everyone. We are going to do things a little differently today. We will keep our remarks brief, focusing on our recent progress with our Business and on the first quarter results announced this afternoon. Then on June 1, we will hold a second conference call to review our pipeline and discuss data included in the abstracts accepted by ASCO. According to the ASCO website the abstracts will be released on May 18, and we look forward to sharing our perspectives on these data shortly before the conference.

We have made considerable progress across our pipeline already this year, setting the stage for several key milestones in the coming months. Let me touch briefly on our most recent achievements. In our Hedgehog program we are continuing to accrue patients in our Phase II trial in IPI-926 in pancreatic cancer. Enrolling the study continues to be a top priority and the study investigators are enthusiastic about 926 and our trial. Based on how accrual is tracking we anticipate completing patient enrollment in this trial by the end of 2011.

We have also initiated an investigator sponsored trial for IPI-926. Our IST program is designed to explore a range of potential indications, as well as to study IPI-926 in combination of both commonly used and emerging treatments. The first IST underway is in patients with advanced head and neck cancer and is being sponsored by Antonio Jimeno at the University of Colorado in Denver. This Phase I trial will explore the potential of IPI-926 in combination with Erbitux in approximately 24 patients. We also expect to initiate additional IST's this year.

We are pursuing indications for IPI-926 that are supported by strong pre-clinical science, and we have rapidly translated our scientific insights to the clinic. At the upcoming ASCO meeting we will present Phase IB data from our trial of 926 in pancreatic cancer, which includes follow-up data from the basal-cell carcinoma patients enrolled in our Phase I trial. In addition we will report data from the Phase IB trial of IPI-504, our HSP90 inhibitor in combination with taxotere. We are completing our analysis of data from the two Phase I dose escalation trials of IPI-493, our oral HSP90 inhibitor, and are on track to providing an HSP90 program update by the summer.

Since inception, we have been disciplined about executing a portfolio strategy to ensure that Infinity's success is driven by a breadth of opportunities. As a result, we have programs directed toward four different targets, each with broad therapeutic potential. And beyond these development efforts, we continue to actively evaluate business development opportunities that complement our existing portfolio.

We are thrilled to have recently expanded our management team with the appointment of Josh Hamermesh as Vice President, Business and Corporate Development. Josh previously helped strategic positions at Pervasis Therapeutics and Genzyme, where he served as Chief Operating Officer of MG Biotherapeutics. Josh has a proven track record of completing in-licensing transactions, structuring strategic alliances and developing strategies that create opportunities for growth, and we are delighted to welcome him to our team.

While we look for additional value-creating alliances, our existing strategic alliance with Purdue and Mundipharma continues to play an important role in building Infinity. It provides us with substantial R&D funding, enabling us to pursue a broad range of therapeutic targets and to execute a rigorous development strategy for our program. This alliance also gives us access to ex-US markets or markets best served by a general GP sales force. We have the US rights to our oncology and inflammation programs which we view as integral to building a fully integrated biotech company that can deliver significant value to patients and shareholders.

We are pleased with the progress we have made so far this year and look forward to reviewing our ASCO abstract with you on June 1. These data together with the continued progress in advancing our pipeline positions us for value recognition in the near term. And with that I will turn the call over to Gerald to highlight our financial results.

Thanks, Adelene. Infinity is fortunate to be in a position of financial strength, which in turn creates important clinical development opportunities. We have the freedom to be highly data driven in our approach and we can rigorously advance our product development programs through trials carefully designed to generate meaningful data that give us confidence in the subsequent registration tabs.

We ended the quarter with $91.2 million in cash and investments. Our revenues for the first quarter were $27.2 million compared to $16.3 million in the first quarter of 2010. The increase is the result of greater reimbursement for our R&D activities from our partners at Purdue and Mundipharma in the first quarter of 2011. We expect our revenue to fluctuate from quarter to quarter based on the timing of reimbursed activities and as we fully transition our FAAH program to Purdue.

Our R&D expense for the first quarter was $24.3 million compared to $19.4 million in the first quarter of 2010. The increase was related primarily to advancement of IPI-926 clinical development and the addition of our PI3 kinase program, offset in part by the transition of our FAAH program to Purdue and the completion of existing trials of our HSP90 inhibitors.

G&A expense for the quarter was $4.9 million which is in line with the first quarter of last year. Our net loss for the quarter was $2.3 million, or a basic and diluted loss per share of $0.09 as compared to $8.1 million or $0.31 per share in the first quarter of 2010.

As a reminder, Mundipharma has committed to provide us up to $85 million in R&D support for our Hedgehog, PI3 kinase, and early discovery programs during 2011. These reimbursed expenses are recorded as R&D expense as well as collaborative R&D revenue. Any activities we perform for Purdue to enable their start of Phase II clinical development of IPI-940 later this year is reimbursed above the $85 million cap.

Earlier this year we guided that we anticipate a net cash burn for 2011 of between $30 million and $40 million. We reaffirm that guidance and are providing additional detail as to how we get there. We expect revenue for 2011 to be between $90 million and $95 million, all of which relates to our alliance with Purdue and Mundipharma. This consists of reimbursed R&D expense, the amortization of deferred revenue recorded upon entry into the alliance and reimbursement for FAAH transition activities.

Total operating expenses for the year are estimated to be between $120 million and $130 million and net loss for the year is expected to be in the range of $30 million to $40 million. Our estimated year-end cash and investments balance is anticipated to be between $60 million and $70 million. This does not include proceeds from a $50 million line of credit from Purdue which we anticipate to access in full before the end of the first quarter of 2012, and $110 million in committed R&D funding from Mundipharma in 2012. Based on current plans and in the absence of any business development activity we continue to project a cash runway into 2014, allowing us to generate meaningful data from our programs before next needing to finance.

And with that let me turn the call over to Tanetha for Q&A.

Thank you. (Operator Instructions). Our first question is from Ted Tenthoff from Piper Jaffray. Your question, please.

Great, thank you very much. It is going to be an exciting year, so very much looking forward to seeing you guys in Chicago and the additional data updates. I guess my question has to do a little bit with respect to guidance and sort of what the Mundipharma/Purdue financing looks like. Because it looks to me as if revenues in the quarter from Mundi were higher than actual R&D, and it also seems like guidance for the year now is above the assumed $85 million. So maybe you can just help me understand that a little bit better.

Sure, Ted. So one part of the question is -- are the component parts of our revenue guidance. And so there are three parts of that. One is the collaborative R&D revenue which is the $85 million. In addition to that are the pieces of deferred revenue. So that is the premium on the equity and the amortization of the loan commitment asset which should be amortized over a period of time.

And then the third piece of that, which is additive, is the reimbursement for our FAAH transition activities. So we are doing work to enable Purdue to start Phase II development of 940, transferring the IND, doing some supply work. That is outside of our $85 million budget, so we incur expense and recognize revenue for that throughout the quarter.

Now, the question of the timing for recognizing the $85 million, that is not done on a dollar for dollar basis. We recognize that revenue as reimbursed expenses take place. Those were higher in the first quarter than we anticipate later in the year by virtue of a number of things including a greater percentage of FAAH transition activities, the milestone -- the up front payment to Intellikine that we did the first quarter and the like. Our kind of run rate on kind of clinical trial activities and the like will continue to ramp as we start additional trials and enroll more patients. Just by virtue of the kinetics of when some of that reimbursement took place, our first quarter revenue was higher.

And I think the important point, Ted, is that while we will always see quarter to quarter fluctuation in the R&D expense and the corresponding revenue that we reaffirm our guidance for the total year of the revenue between $90 million and $95 million and the operating expense between $120 million and $130 million.

Thank you. (Operator Instructions.) I would now like to turn the call back over to Adelene Perkins.

Thank you, operator. In closing, we are really pleased with the progress we have made and are excited about the opportunities we have ahead of us this year. We very much look forward to reviewing our pipeline and ASCO abstracts with you on the June 1 call, and we hope to see many of you at ASCO in Chicago. Thank you.

Ladies and gentlemen, thank you for your participation. That concludes the conference. You may disconnect and have a wonderful day.