使用警語:中文譯文來源為 Google 翻譯,僅供參考,實際內容請以英文原文為主
Operator
Welcome to Isis Pharmaceuticals first quarter financial results conference call.
Leading the call today from Isis is Dr.
Stan Crooke, Isis Chairman and CEO.
Dr.
Crooke, please begin.
Stan Crooke - Chairman, CEO
Good afternoon.
And thanks everyone for joining us on today's conference call to discuss our first quarter financial results.
Lynne will discuss our financials, and then after that I will give you a brief update on how we are tracking against our key goals for 2011.
Joining us on the call today are Lynne Parshall, Chief Operating Officer and CFO, Beth Hougen, Vice President of Finance, and Kristina Lemondtis, Director of Corporate Communications.
Kris, can you read our forward-looking language statement please?
Kristina Lemonidis - Director, IR
Sure Stan.
Good afternoon everyone.
A reminder to everyone that this webcast includes forward-looking statements regarding Isis' business, the financial outlook for Isis, and the therapeutic and commercial potential of Isis technologies and products in development.
Any statement describing Isis' goals, expectations, financials or other projections intentions or beliefs is a forward-looking statement, and should be considered an at risk statement.
Such statements are subject to certain risks and uncertainties, particularly those inherent in the process of discovering, developing and commercializing drugs that are safe and effective for use as human therapeutics, and in the endeavor of building a business around such drugs.
Isis forward-looking statements also involves assumptions that if never materialize or proved correct, could cause its results to differ materially from those expressed or implied by such forward-looking statements.
Although Isis forward-looking statements reflect the good faith judgement of its management these statements are based on facts and factors currently known by Isis.
As a result you are cautioned not to rely on these forward-looking statements.
These and other risks concerning Isis programs are described in additional detail in Isis' Annual Report on Form 10-K for the year ended December 31 2010, which is on file with the SEC.
Copies of this and other documents are available from the Company.
With that I will turn the call over to Lynne.
Lynne Parshall - COO, CFO
Thanks Kris, and good afternoon.
The purpose of the call today is to report our financial performance for the first quarter of 2011.
As usual, I am assuming you have read the details of our quarterly financial results in our press release so I plan to just cover the highlights.
I hope that many of you were able to join us on our recent pipeline call where we highlighted several of our drugs beyond mipomersen that recently achieved milestones.
We anticipate having more of this type of call to discuss in detail advances in the programs in our pipeline.
Today's call will focus primarily on our financial results.
We are right on track to meet our guidance for 2011.
We ended the first quarter with nearly $427 million in cash, and a pro forma net operating loss of $13.4 million.
As we expected, these results reflect a decrease in revenue and an increase in expenses compared to the same period last year but are in line with the trend we reported over the course of last year.
I want to spend a few minutes to review some of the factors impacting our financial performance this year and to talk about how our first quarter financials fit into the rest of the year.
First off, our revenue is just what we expected it to be in the first quarter.
As we look towards the rest of 2011 we have a number of opportunities for revenue in addition to the amortization of the GSK license fee, which was the largest single component of new revenue this quarter compared with the first quarter last year.
We have made significant progress in our collaboration.
This momentum continues just around the corner we should begin the Phase 1 clinical trial for Isis TTRRx, an achievement that should earn us our second milestone from GSK.
We also hope to have an additional development candidate from that collaboration to move into the pipeline this year.
We are very pleased with this innovative collaboration with GSK was chosen this week as the Deloitte Breakthrough Alliance of the Year, and these achievements are further support for this accolade.
A big milestone we expect to earn this year is the $25 million that we will earn when the FDA accepts our NDA filing for marketing approval of mipomersen.
We have factored this milestone into our 2011 financial guidance.
I am sure you saw that Sanofi listed the US and EU filings for mipomersen as important upcoming events for them also.
Now I will move on to our expenses, which as we expected were higher this quarter than in the first quarter of 2010 but lower than the fourth quarter of 2010.
Our expenses are increasing principally because our pipeline is maturing and expanding.
As we stated in our year end call we are continuing to invest in our pipeline, adding new drugs and advancing many of our programs in development.
We have been highlighting advances in our pipeline calls, and will continue to do this in future calls this year.
As our drugs mature, and move into larger longer studies, and we expand our clinical programs to include more indications, the programs become more expensive.
But we believe the investment in creating high quality robust data packages for our drugs before partnering is the best investment we can make.
Our revenue and expenses in the first quarter are both in line with our expectations, and we are on track to meet our guidance of a pro forma NOL in the $40 million range, and cash of more than $350 million.
Our guidance does not include any new transactions, so any new transaction we complete would have a favorable impact.
2011 will be another busy year for us as we and Genzyme prepare for the commercial launch of mipomersen, and as we continue to advance many drugs in our pipeline.
With that, I will turn the call back over to Stan.
Stan Crooke - Chairman, CEO
Thanks, Lynne.
2011 has been a productive year so far, so let me just spend a minute or two discussing some of the accomplishments that we already have under our belt, and then point you toward what to expect next.
So far this year we started a Phase 1 study of our Factor 11 drug, this is an antisense drug to treat abnormal clotting or thromboembolic events.
Abnormal blood clot formation is the leading cause of morbidity and mortality associated with vascular diseases, including heart attacks, deep vein thrombosis, and strokes.
In preclinical models our Factor 11 drug demonstrated potent anticlotting activity, with no increase in bleeding.
That compared very favorable to standard anticlotting agents like heparin and warfarin, and two of the factor 10A inhibitors, each of which causes increases in bleeding.
This is a really exciting drug to us.
We look forward to announcing the results for this study either later this year or early next.
In our Phase 1 study with our CRP drug, we showed statistically significant reduction in CRP in normal volunteers, after only three weeks of dosing the subjects who came in with elevated CRP had an average production of more than 70% from baseline.
The drug was well tolerated with no serious adverse events.
Our Phase 2 studies should start soon, and in these studies we plan to look at both the disease in which CRP is chronically elevated, rheumatoid arthritis, and a situation where CRP is elevated more acutely, autologous stem cell transplantation in patients with multiple myeloma.
These studies should help us quickly demonstrate proof of concept, and then the information that we gain could open a wide disease of disease opportunities for us to choose from for future development.
In each of the mini-primary diseases in which CRP inhibition can prove beneficial, there is a potentially significant commercial opportunity, and either one of them could be a $1 billion opportunity, so we are very, very encouraged and excited about that drug.
Our partner Excaliard has reported very positive data from three Phase 2 studies with EXC 001 showing dramatic improvements of scarring.
We highlighted that in our April pipeline call.
Excaliard has done a fine job and moved very quickly and efficiently in the development of EXC 001, we expect to continue the development to proceed quickly as well.
Excaliard plans next to evaluate EXC 001 in a Phase 2 dose ranging study to identify the optimal dose to use in Phase 3 studies, and the Phase 3 studies are currently being planned.
Again this is a unique opportunity in an area of unmet need, and it is an opportunity that is a bonus to our shareholders since we are investing nothing to get the opportunity.
We are also making progress in our neurodegenerative programs.
This month we were awarded Orphan Drug Designation for a drug in development to treat spinal muscular atrophy.
We expect to begin Phase 1 studies on this drug either later this year or early next year.
We are also making steady progress in a clinical trial of SOD1 to treat patients with amyotrophic lateral sclerosis, or ALS.
Now let me just focus on mipomersen for a minute.
At this year's ACC we presented the data from the last two Phase 3 mipomersen studies that will be a part of our initial regulatory submissions.
We hosted a webcast in which an expert panel of physicians discussed the results from those Phase 3 studies.
They discussed the overall profile of mipomersen, and its potential value in the treatment of these very sick patients on whom we are initially focusing.
On the webcast they also discussed the fact that long-term treatment with mipomersen continued to demonstrate significant reductions in all atherogenic lipids, and a side effect profile that supports our development and commercialization plans to treat patients who are at very high risk of cardiovascular related death.
When you listen to that call you can hear the excitement that the experts share in having mipomersen available to treat their patients soon.
So clearly mipomersen is an important product opportunity for Isis, equally clearly it is an important opportunity for Genzyme and for Sanofi-Aventis, as well as for the physicians who treat these patients and of course, the patients themselves.
The most significant events of this year should be the mipomersen filings for marketing approval in Europe and the US.
Not only is this an important event for Genzyme and us, it is also important for Sanofi.
In fact Sanofi highlighted mipomersen in the regulatory filings as an important upcoming milestones in both their earnings press release and their conference call last week.
We are obviously very pleased with the progress the teams have made, and now can confidently tell you that the European file willing be in July.
In the US, our initial filing is also on track to be filed in the second half of this year.
Some of the most exciting progress that has been made recently is the evolution of Genzyme's plans for commercialization of mipomersen.
FH patients are underdiagnosed, undertreated, under served.
Creating awareness of the disease so that these patients can benefit from mipomersen is an important part of the Genzyme marketing strategy, and an activity that they are unequivocally good at.
Importantly, the National Lipid Association will unveil its FH Awareness Campaign later this month at its Annual Scientific sessions in New York, where they have organized a multi-prong initiative that will include components specific to patient and physician education, designed to enhance diagnosis and treatment of these patients.
To kick that off, last week the NLA experts published their findings in the Journal of Clinical Lipidology, and conclusions that the NLA experts reached are important to patients with FH, they are important to practitioners, they are important to mipomersen, and they are important to the commercial opportunity as well.
In summary they reached these positions.
FH is underdiagnosed and undertreated.
The cardiovascular risk that FH patients experience is even greater that might prove predicted by their very, very high LDL levels, because they have earlier onset of LDL, so they have a much greater lifetime burden of bad cholesterol.
Nevertheless FH is treatable, and therefore much greater emphasis on early diagnosis and aggressive treatment is warranted.
Diagnosis of FH is to be made based on LDL cholesterol levels, clinical presentation, and/or family history, genetic testing is not needed.
NLA recommends that patients should be referred to lipidologyists, the people who treat these patients, and the people who are already familiar with mipomersen, and waiting for it anxiously.
apo-B and LPa are important risk factors in addition to LDL cholesterol, and combination therapy is indicated to reduce LDL cholesterol and these other risk factors to the lowest level possible.
Finally, payors are advised by the NLA to pay for early diagnosis and aggressive treatment of these patients.
Obviously the NLA positions have important ramifications for mipomersen.
First, they emphasize the importance of reducing all atherogenic lipids, including LDL, apoB, and APOa.
You will recall that mipomersen is the only drug that specifically and directly reduces apoB, it reduces all atherogenic lipids, including LPa and triglycerides.
Second it confirms the wisdom of our strategy for the development and commercialization of mipomersen, and focuses attention on these very needy patients as our first patient groups.
Third, it confirms the key elements of Genzyme's commercialization strategy, earlier diagnosis, addition of mipomersen to other therapies, and referral of these patients to lipidologyists.
Finally, the NLA recommends perform cascade screening on families of dually diagnosed FH patients.
Cascade screening means that once an initial patient is identified the family is screened to identify other members of the family who might be affected.
This will identify we believe many more patients who should be treated with mipomersen.
The bottom line the NLA position supports the registration and commercialization of mipomersen, and support the approaches we and Genzyme are taking.
If you would like to read these papers, we have provided a link on our website to the Journal of Clinical Lipidology.
Mipomersen should benefit also from the added muscle that Sanofi-Aventis will provide.
We believe now particularly with the help of Sanofi, Genzyme has all of the resources necessarily to successfully globally commercialize mipomersen.
We have an exciting year ahead for mipomersen.
However, with 24 drugs in our pipeline, we have many other events to look forward to.
We will continue to report clinical data on many of our drugs in the pipeline, including our SGLT2 drug to treat Type 2 diabetes, our epoC3 drug to lower triglycerides, and our Factor 11 anticlotting drug.
We are making progress in advancing many of the drugs in our pipeline in the next little bit we plan to launch a Phase 2 program to evaluate the benefits of lowering CRP in multiple myeloma in rheumatoid arthritis.
We expect to initiate clinical trials in several more drugs this year.
We expect to add three or more novel antisense drugs to our development pipeline as the year progresses, and this will include our first generation 2.5 antisense drug.
We will continue our efforts to share with you the tactical and strategic rationale for the drugs that we have chosen to put in our pipeline.
Our series of pipeline calls one of which we just had a few weeks ago is highlighting the drugs this year as they reach key points in their development.
And our next pipeline call will be a little later in the year.
We will keep you updated as we schedule that call.
So to finish up, 2011 is an important year.
Mipomersen is front and center, making mipomersen a commercial success, it will continue to be our primary focus this year but in addition the rest of the pipeline and our technology will continue to advance.
With that, I want to thank you all for joining us today, and we will now open the call up for Q&A.
Lacy, if you can set us up, please, appreciate it.
Operator
Thank you.
(Operator Instructions).
Our first question will come from the line of Eun Yang with Jefferies.
Please proceed.
Eun Yang - Analyst
Thanks.
I want to ask you the mipomersen NDA, is it going to be submitted to the Cardio-Renal division or Metabolic division at the FDA?
Stan Crooke - Chairman, CEO
It will be submitted to the Metabolic division of a the FDA.
It has been managed by the Metabolic division of the FDA throughout.
Eun Yang - Analyst
Okay.
Can you give us an update on the 12-month of safety study that you are going to be running in heterozygous patients?
Stan Crooke - Chairman, CEO
We are just finishing the planning of that study with Genzyme and getting it ready to go.
And we will be providing details of that once the study begins but it is in line with all of the plans that we have described for you, which is that we plan additional studies to go to get heterozygous in Europe, and we plan this additional study to gain the severe in the US.
It is in the same size range, those studies are in the same size range as we have described, and they don't include an outcome study.
Eun Yang - Analyst
Okay.
Thanks.
Stan Crooke - Chairman, CEO
You bet.
Operator
(Operator Instructions).
And our next question will come from the line of Shiv Kapoor with Morgan Joseph.
Please proceed.
Shiv Kapoor - Analyst
Thanks for taking my question.
I have a question on your revenues.
What percentage of your revenues, R&D revenue are partner-related, and could you provide us any guidance as to what you expect over the next two quarters and year?
Lynne Parshall - COO, CFO
Shiv, all of our revenue is partner-related, because we don't have commercial sales of products, all of our revenue is from partners or licensing income.
Shiv Kapoor - Analyst
And is most of it amortized, or is some of it recognized as it comes in?
Lynne Parshall - COO, CFO
We have revenue that does both.
The largest component of our revenue this quarter is the amortization of the GSK upfront license fee, but we also very frequently receive milestone payments from partners for achievement of a variety of different things.
For example, when we had the development candidate for TTR, we got a large milestone from GSK, and so all of our partnership agreements provide for milestone payments of different kinds, and with different timing.
We expect to achieve a variety of milestones this year as I said, the next upcoming one will be associated with the start of clinical trials for the TTRRx drugs in the GSK collaboration.
When we achieve milestones, they are not amortized so they are recognized in the quarter in which we receive them in totality.
So up front license fees generally are amortized over the period of performance, and milestones generally are taken in their entirety in the quarter in which they are earned.
Shiv Kapoor - Analyst
So that would hold true for mipomersen milestones in the future?
Lynne Parshall - COO, CFO
Absolutely.
Shiv Kapoor - Analyst
Okay.
And so in the next few quarters this rate of about $20 million per quarter, is that the right assumption going forward?
Lynne Parshall - COO, CFO
In this quarter we had a small milestone payment, but when you look at the largest single component of revenue which is amortization of GSK license fee that will stay flat over the course of the year, but in the quarters in which we earn milestones, for example the quarter in which we start the TTR clinical trial, or the quarter in which the FDA accepts our NDA filing for mipomersen, we will have milestones that will obviously increase that revenue in that quarter.
Shiv Kapoor - Analyst
Okay.
Stan Crooke - Chairman, CEO
Shiv, I think it is awfully hard for somebody on the outside to parse what happens with us quarter by quarter.
I think the things that we said that are really important is we are right on track to meet our guidance, and our guidance does not include any new transactions.
Shiv Kapoor - Analyst
Fair enough.
That is very helpful.
Thank you.
Stan Crooke - Chairman, CEO
You bet.
Operator
Our next question will come from the line of Nick Bishop with Cowen and Company.
Please proceed.
Nick Bishop - Analyst
Hello, good afternoon.
Thanks for taking my questions.
I just had one quick one.
I wonder if you can elaborate at all on Sanofi's marketing plans, and how they relate to the new guidelines that will be coming out later this month?
Specifically you mentioned that they would involve driving towards early diagnosis, addition of mipomersen to other therapies, and driving referral to lipidologists, can you elaborate a little bit on mechanistically how that is going to be accomplished?
Stan Crooke - Chairman, CEO
Lynne, do you want to take that?
Lynne Parshall - COO, CFO
Sure.
The key elements of the Genzyme marketing plan because of the Genzyme business unit is the business unit that is going to continue to work with this drug, the key elements of their plan are to number one, focusing on lipid specialists, and directly marketing to the physicians who treat these very high risk patients.
Number two, and a key element to their strategy is increasing awareness of FH, and increasing referrals from other physicians to the lipid specialist.
So that focus will be on cardiologists, internal medicine specialists, et cetera.
They already at the upcoming NLA meeting that is happening in New York in a couple of weeks have a very significant presence, and have actually quite a number of medical meetings leading up to this, and so again the focus is on early diagnosis, appropriate referrals, aggressive treatment.
And so they have been planning all of this in advance of the new FH guidance that has come out.
So the guidance is very, very supportive of the plan that Genzyme has had all along to market mipomersen.
Stan Crooke - Chairman, CEO
And technically, there is a lot o of work going on that takes off from where we begin, with identifying the lipid centers, the lipidologyists, characterizing the kinds of physicians who see these patients primarily, what the referral characteristics are, and of course, the profile of the drug and the NLA guidance just plays perfectly into what our hopes for mipomersen are, which is that it is a drug that will be used in combination with maximum dose lipid lowering therapy, to get patients to as low level of LDL, APO-b, LPa, and triglycerides as possible.
Nick Bishop - Analyst
Okay, that is helpful.
That is all.
Thanks for hosting the call.
Stan Crooke - Chairman, CEO
Thanks.
Operator
At this time, we have no further questions in queue.
I would like to turn the call back over to Dr.
Stan Crooke for any closing remarks.
Stan Crooke - Chairman, CEO
If there are no more questions then, I want to thank you for participating in our call.
We are right on track for our annual financial guidance, and we are right on track with the pursuits of mipomersen, in that I think we are tremendously benefited by the NLA positions that have just been announced.
And the participation of Sanofi in our relationship.
And finally, I think you should expect lots of entertaining news this year from our pipeline of drugs, other than mipomersen.
Operator
Thank you for your participation in today's conference.
This concludes your presentation.
You may now disconnect.
Good day everyone.