Madrigal Pharmaceuticals Inc (MDGL) 2009 Q1 法說會逐字稿

Greetings and welcome to the Synta Pharmaceuticals Corp. first quarter 2009 earnings conference call. (Operator Instructions). As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Robert Kloppenburg, Vice President of Investor Relations and Corporate Communications for Synta Pharmaceuticals Corp. Thank you, Mr. Kloppenburg. You may now begin.

Hello and thank you all for taking the time to join us today. With me are Dr. Safi Bahcall, President and CEO of Synta Pharmaceuticals; Keith Ehrlich, our Vice President and CFO; Dr. Eric Jacobson, Synta's Senior Vice President and Chief Medical Officer; and Dr. Jim Barsoum, the Senior Vice President, Research.

This morning we issued a press release that reported results for the first quarter of 2009. This release can be found on our website at www.SyntaPharma.com.

Before we go any further, I would like to remind everyone that we will be making forward-looking statements during this teleconference call. Such statements, including statements relating to the timing and progress of clinical trials, reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such forward-looking statements.

Risks and uncertainties include the risk that the results of completed clinical trials may not necessarily be predictive of results in larger, later-stage clinical trials, and the other risks and uncertainties described under Risk Factors in our Form 10-K for the year ended December 31, 2008 as filed with the SEC.

Synta undertakes no obligation to publicly update forward-looking statements whether because of new information, future events, or otherwise except as required by law.

I will now turn the call over to Dr. Bahcall, after which we will open the call to questions. Safi?

Thanks Rob. And thank you all for joining us this morning.

Our comments today will be brief because our 2008 year-end call took place on only six weeks ago. I will highlight the developments this quarter and then turn the call over to Keith Ehrlich for a review of our financials.

First, Synta remains in a strong financial and strategic position. We ended the first corner with approximately $85 million in cash. As we have previously stated, this leaves us with sufficient resources to support our activities into 2011.

With three unpartnered assets in various stages of development, we have the ability to bring in capital and generate additional value for shareholders through new partnerships.

We also have a diverse pipeline of exciting (technical difficulty) [drug] candidates, each with distinct mechanisms and therapeutic applications.

Finally, we have an integrated discovery engine, a proprietary chemical compound library, and a strong R&D team, all of which allow us to continue to generate promising new drug candidates and expand our product pipeline.

As you may have read in our press release this morning, preliminary results from the Phase 3 SYMMETRY trial for elesclomol in metastatic melanoma have been accepted for a late-breaker oral presentation at ASCO. We will be issuing an announcement with a specific date, time, and location shortly. Dr. Steven O'Day, the North American PI on the trial, will be the presenter.

We really can't comment on the data at this time beyond what we discussed on our last call, which is that there have been no signs of any specific target organ toxicities or adverse events that might explain previously the reported interim observation of an imbalance of deaths between the two arms of the trial -- and that the survival data are far from mature.

We are looking forward to completing the analyses from this trial and to determining, together with our partner and with our medical advisers, future plans for this program. We will be able to comment on the program in more detail following the ASCO presentation.

With our Hsp90 inhibitor, STA-9090, we are pleased by both the progress in our ongoing trials and the growing interest from investigators for initiating new trials. The dose escalation of our two Phase 1 solid tumor trials is continuing with the drug well-tolerated to date.

We initiated a twice a week Phase 1/2 trial in hem cancers earlier this year, and we are preparing for another trial with a once a week dosing in hem cancers later this year. The results to date, including the two confirmed RECIST responses, the safety profile, the strong preclinical data, and the superiority compared head-to-head with other Hsp90 inhibitors have been very encouraging to us and to the investigators with whom we are collaborating.

The head-to-head comparison data have been particularly important given the high degree of interest in this target in the scientific and medical communities and the recognized desire to improve upon the safety and efficacy of the first-generation 17-AAG family of inhibitors.

At the recent AACR meeting in Colorado, the results from Dr. Geoff Shapiro's lab at the Dana-Farber were presented comparing STA-9090 and 17-AAG in a variety of lung cancer models. 9090 showed superior activity in a broad range of models including models resistant to Tarceva, to ansamycin, and importantly, models resistance to 17-AAG. These results are consistent with those we and other collaborators have seen in multiple other cancer models which we expect will be presented at additional scientific meetings and published in peer reviewed journals over this coming year and next.

Based on this accumulating data and the growing interest we have seen from investigators, we plan to initiate a number of additional Phase 2 trials in solid tumor cancers by the end of the year. We will have more to say about these new trials as we get closer to trial initiation.

We're also making progress with our other programs. To quickly summarize, we are working to complete enrollment of the Phase 2a apilimod clinical trial in rheumatoid arthritis and expect to have results from this trial by the fourth quarter of 2009. The CRACM program, which is partnered with Roche, is also proceeding well, with a goal of filing an IND and initiating a Phase 1 trial year. All our costs associated with the CRACM program are covered by Roche.

Finally, I would like to make a few quick comments about our financial status before handing the call over to Keith.

As I noted, we had approximately $85 million in cash at the end of Q1. Since then our burn rate has been significantly reduced as a result of the restructuring and other cost efficiency actions we implemented after being informed of the results of the SYMMETRY trial. The impact of these cuts, which were announced on March 13, will be more fully realized in our Q2 results.

Our current strong cash position and multiple programs of partnered and fully owned give us considerable flexibility in options. We are in a number of exploratory partnership discussions, and we'll evaluate these as we always have done on a case-by-case basis with an eye to balancing the desire for extra cash runway with the desire to preserve important product rights for our shareholders.

I will now turn the call over to Keith Ehrlich, our Chief Financial Officer.

Thank you Safi. And good morning everyone.

We ended the quarter with $84.8 million in cash, cash equivalents, and marketable securities. This compares to $73.6 million in cash, cash equivalents, and marketable securities as of December 31, 2008.

In the first quarter we earned and received a $10 million milestone payment from GSK and received a $16 million up-front payment under from Roche under our new CRACM inhibitor agreement.

We committed to a restructuring in March that consisted principally of a workforce reduction of a proximately 90 physicians to a total of approximately 130 physicians to better align our workforce to our revised operating plans following the suspension of our SYMMETRY clinical trial. We expensed approximately $1.2 million in connection with the workforce reduction.

We expect our ongoing research and development costs and our general and administrative expenses in 2009 to be significantly reduced from 2008 levels as a result of our suspension of the SYMMETRY trial and related restructuring.

Based upon our current operating plans, we anticipate that our cash resources together with the expected reimbursements and milestones from our Roche agreement to be sufficient to fund our planned operations into 2011.

I will now turn our call back to Safi.

Thanks Keith. I would like to end this portion by thanking our employees for their commitment, hard work, and contributions to our progress this quarter, as well as by thanking our collaborators, advisors, and shareholders for their support. Thank you.

I will now open the call to questions and discussion.

(Operator Instructions). Joel Sendek, Lazard.

Two questions. What -- have you seen the data yet that's going to be presented? That's the first question.

And then the second question, do you have any update on discussions with Glaxo? And have they seen the data?

This is Eric Jacobson. Yes, we have seen the data, and GSK have seen the data, and we continue to analyze the data together and are discussing the program as partners.

The second part of your question, Joel -- it's Safi -- have we had any partnership-related discussions? No.

And the survival data, that's still maybe by end of the year?

Right. We're continuing to follow patients for survival. It's still immature. We anticipate by the end of the year we will have more mature data.

(Operator Instructions). At this time we appear to have no further questions. I would like to turn the call back over to Mr. Bahcall for any closing comments.

Thank you, and I just want to take the opportunity to thank all our employees, collaborators, advisors, for their hard work over the last quarter and the last year.

With that, operator, we will end the call.

Thank you. This does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation.