MediciNova Inc (MNOV) 2011 Q3 法說會逐字稿

Good day, ladies and gentlemen and welcome to the third-quarter 2011 MediciNova Inc. earnings conference call.

(Operator Instructions). At this time, I would now like to introduce your conference presenter for today, Mr. Mark Johnson, Director of Investor Relations and Corporate Development. Sir, you may proceed.

Thank you, everyone, for calling in today. On the call we have five members of -- from MediciNova's senior management, Dr. Yuichi Iwaki, President and CEO; Michael Coffee, Chief Business Officer; Dr. Kirk Johnson, Head of R&D and our Chief Scientific Officer; Michael Gennaro, Chief Financial Officer and Dr. Kazuko Matsuda, Chief Medical Officer. The executive team will provide an updated business presentation followed by a Q&A.

Please note the following Safe Harbor statement. Statements in this call that are not historical in nature constitute forward-looking statements within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include without limitation statements regarding our portfolio of clinical and preclinical product candidates, including patient enrollment information, expected timing of completion trials and our outlook for our business development activities. These forward-looking statements may be preceded by, followed by, or otherwise include the words believes, expects, anticipates, intends, estimates, projects, can, could, may, will, would or similar expressions.

These forward-looking statements involve a number of risks and uncertainties that may cause the actual results or events to differ materially from those expressed or implied by such forward looking statements. Factors that may cause actual results or events to differ materially from those expressed or implied by these forward-looking statements include, but are not limited to, the risks and uncertainties inherent in clinical trials, product development and commercialization, such as the uncertainty and results of clinical trials for product candidates, the uncertainty of whether the results of clinical trials will be predictive of results in later stages of product development; the risk or delays of failure to obtain or maintain regulatory approval; risks regarding intellectual property rights and product candidates and the ability to defend and enforce such intellectual property rights; the risk of failure of the third parties upon whom MediciNova relies to conduct its clinical trials and manufacture its products candidates to perform as expected; the risk of increased costs and delays due to delays in the commencement, enrollment, completion or analysis of clinical trials or significant issues regarding the adequacy of clinical trials designs, or the execution of clinical trials and the timing, cost and design of future clinical trials and research activities; the timing of expected filings with the regulatory authorities; MediciNova's collaborations with third parties and the availability of funds to complete product development plans, and MediciNova's ability to raise sufficient capital when needed; and the other risks and uncertainties described in MediciNova's filings with the Securities and Exchange Commission, including its annual report on the Form 10-K for the year ended December 31, 2010 and the subsequent periodic reports on Forms 10-Q and 8-K.

Undue reliance should not be placed on these forward-looking statements which speak only as of the date hereof. MediciNova disclaims any intent or obligation to revise or update these forward-looking statements.

And now, a brief commentary from Dr. Yuichi Iwaki, President and CEO of MediciNova.

Thank you, Mark, and everyone for joining the call.

We would like to share with you our financial results from the quarter ended September 30, 2011 and our recent accomplishments. These include meaningful financial investment and other financial support from Kissei Pharmaceutical Company; continued progress on MN-221-CL-007 trial; initiation of a repeat dose of COPD trials with MN-221.

To provide more detail, Michael Coffee, Chief Business Officer of MediciNova, will now deliver a brief business presentation.

Thank you, Yui, and good afternoon, everyone. Our goal this afternoon is to review our third-quarter 2011 financial results and discuss our recent developments and our steady progress, summarize our upcoming milestones, review our current financial status and provide conference call participants with an opportunity to ask questions.

First, let's get started with the third-quarter 2011 results, financial results.

The quarter September -- ending September 30, MediciNova reported a net loss of $3.9 million or $0.25 a share. There were no revenues for the quarter.

Research and development expenses were $1.7 million. That's a decrease from $2.2 million in research and development expenses in the same quarter last year, with the decrease due primarily to the completion of the oral absorption clinical trial for MN-221 and related drug manufacturing in 2010 on MN-221 for the treatment of acute exacerbations of asthma and COPD; and also a reduction in personnel costs, offset in part by an increase in spending related to drug product for our Ibudilast development program.

General and administrative expenses were $2.2 million for the quarter. That's an increase from the $2 million in G&A expenses in the same quarter last year, with the increase primarily due to an increase in professional fees due to the establishment of the Chinese JV and a slight increase in personnel costs.

As of September 30, 2011, we had $8.7 million in cash and cash equivalents. In addition, MediciNova has received $10 million in cash from Kissei Pharmaceutical Company during the fourth quarter of 2011 as a result of a private stock sale of $7.5 million and funding of $2.5 million from a clinical development agreement for certain clinical trials related to our lead drug candidate, MN-221.

So as a result of this, we believe given our current run rate that MediciNova now has sufficient capital to continue operations for at least the next four quarters. The capital on hand will be used for funding, development for the completion of the ongoing MN-221-007 trial, as well as additional clinical development for MN-221 in COPD and asthma and for ongoing G&A expenses.

Now in terms of the COPD trial, recently, MediciNova announced the initiation of a Phase 1B clinical trial with MN-221 in patients with stable, moderate to severe chronic obstructive pulmonary disease, or COPD, involving multiple administrations of intravenous MN-221 over several days in typical patients with concomitant illnesses.

The clinical trial will be run under an existing IND application for MN-221 and has completed FDA review. The main focus of the trial will be to test the safety of a repeat administration over several days of MN-221 in patients suffering from moderate to severe COPD. Efficacy valuation will include various respiratory parameters, including forced expiratory volume in one second, or FEV1.

The patient profile will include subjects with other common illnesses and associated medications encountered in the COPD population, including diabetes and cardiovascular complications. Study subjects will receive repeat dose intravenous infusions of 1200 nanograms of MN-221 or placebo under close medical supervision. MediciNova anticipates that optimal treatment of COPD exacerbations with MN-221 may require the repeat dose option. Now this trial is scheduled to commence enrollment by the end of this year.

Now let me give you a brief update on the status of our MN-221-007 Phase 2 trial in patients with acute exacerbations of asthma. The trial continues to experience steady enrollment, and we expect that to continue given the increased incidence of asthma exacerbations during the fall and winter months. The trial enrollment is over 75% complete and we expect to announce top-line results in the first quarter of 2012.

So we thank you for your continued support and are committed to rewarding our shareholders with solid accomplishments.

With that, let me turn it back to Mark for Q&A.

Thank you, Mike. Please take this opportunity to ask management any questions you might have. And if you have further questions after the call, please free to reach out to us at any time. Chris?

(Operator Instructions). Matt Kaplan, Ladenburg Thalmann.

A couple questions. Just first on 221, can you give us a little bit more color on the design of the COPD trial, the Phase 1B, in terms of more of the timing that you expect to potentially read out results; how many patients you think you will look at, and maybe some idea of dosing that you are going to take at in terms of dose level?

Kirk, do you want to take that? Kirk or Kazuko?

Okay. We haven't disclosed too many of the details yet, but we will be posting more of the information of this trial on clinicaltrials.gov fairly soon.

But what I can tell you is that this is a trial wherein we will be administering up to a couple administrations, a couple infusions a day.

We do, as Mike mentioned, anticipate and hope to initiate enrollment in -- towards the end of this year, but we do know that enrollment will continue into first quarter.

And so in terms of projections of when data will come out, you know, it's not clear whether it will be towards the end of first quarter, second quarter. So it may be safest to just say first half.

But it will be a very useful trial from the standpoint of advancing the potential product profile in COPD patients, but also helping fuel some of the safety, package and potential utility even for the asthma product pathway as well.

And how many days can a patient stay on in the trial?

Well, we described it as several days at this point, and I think that's pretty accurate. And we will share more of the details I think later on.

And in terms of other end points --?

Maybe I'll just add, Matt, the reason that we are using a duration that is relevant to the hospital setting, so this isn't -- there is a framework for this.

Okay, fair enough. And then just one more question on that study with respect to the end points. It sounds like you're going to be doing spirometry tests, so FEV1 is one of the things you're looking at. Are you looking at other lung function tests as well?

Yes. We will be monitoring some of the same types of secondary parameters that we have been looking at in the 007 trial as well. And so maybe Dr. Matsuda, do you want to comment on some of the other respiratory parameters?

Also, we are going to check physical peak flow. And we are going to do with spirometry test. And we are going to see -- we tried to find out how the peak flow results is connecting with spirometry test.

Okay.

The reason for that is not many hospital settings or emergency room settings using spirometry tests as a regular basis. And we like to find out; the peak flow test is very reliable [or] not for this kind of patient, so this is kind of an experimental thing that you're looking at physical peak flow test also.

Okay, very good. Just shifting gears a little bit to the 007 steady. Steady enrollment -- you commented on 75% complete. Have you seen an uptick in -- as you expected in enrollment now that you're in the fall/entering winter season where you have your more frequent asthma attacks and stuff like that?

Yes, we have. We have definitely seen in September, October a nice pickup from July and August, similar to what we have seen in a sort of peak performance towards the end of last year. And November is still hard to say, but we are seeing it and we are enrolling, so we will see. We've still got half the month here.

And that still puts you on track to you think complete enrollment later on this year?

Well, we anticipate, as Mark said, data readout by the end of the first quarter. Will some enrollments flip over into January? Perhaps. And so we're -- you know, we've got that as an option just based on the timelines for data analysis and top-line data.

And remind me, you're looking to enroll about 200 patients?

Correct. That's our target.

And -- great. Looking at 166 and Ibudilast, can you give us an update on where that stands, that program?

Yes. There has been, as Yui mentioned, in terms of progress -- and Mike, there has been some progress on that program as well. So, for example, the methamphetamine trial with the UCLA experts is continuing. That's just about halfway enrolled. And then we had -- we mentioned the medication overuse headache trial that was a Phase 2, sort of a Phase 2A/2 trial that was getting off the ground in Australia. And that is getting off the ground and there should be enrollment in November, and potentially even this week. And then we're also -- have made some nice progress on discussions towards potentially seeing the implementation of a phase 2B program in progressive MS. And so we're still early stages.

As you know, our strategy there is to talk to potential partners; potentially also look for other grant-funding sources. And so there's been some progress on that front. And I think we probably won't have much more to say on that until maybe later in the first quarter. But there has been some progress.

Right. Thank you. And then just one more question on numbers, in terms of the $3.9 million net loss, what portion of that was non-cash?

Mike G.?

I'm sorry. I was on mute. Virtually none of it is non-cash.

Okay. No options or non-cash compensation or anything like that in that number?

Yes, so stock-based compensation is a few hundred thousand dollars out of a loss of $3.9 million.

Okay, great. Well, thanks a lot and congrats on the progress.

[Ed Arse], MLV & Co.

Good afternoon. I just wanted to firstly, congratulate you on proceeding forward with MN-221 and initiating the Phase 1B trial.

And also on the recent investments by Kissei. Just had a few questions about how that's going to proceed forward. What's -- what do you envision the term of the COPD program? How long do you envision that taking?

Do you mean the entire program or the phase 1B trial?

Well, yes, I'm sorry, the trial itself.

Well, I think like we had mentioned, we anticipate results in the first half, probably second-quarter timeframe, something like that.

Okay. All right. So, clearly, that will be paid with the cash on hand that you have already?

Yes, correct. And that was part of the interest and emphasis of Kissei in the recent funding.

Right. Right. Do you expect I guess any -- there will be some increase in the rate of operating expenses early on next year for that trial? Or would that be really negligible?

Relatively negligible. It's not a large trial by patient numbers nor site numbers, so --.

Yes, I think there was a question earlier about the trial design in general, but have you disclosed how many new patients you intend to enroll?

We will disclose a little bit more about that later on, not yet. It is within the realm of what you would anticipate for a phase 1B. So -- but we haven't disclosed the numbers yet.

Okay. Fair enough. All right. Thanks again for taking the question.

We have no further questions at this time. I would now like to turn the call back to Mr. Johnson for any closing remarks.

Thank you, Chris. Well we hope this call has been helpful to all of you. We truly appreciate all of your questions and hope we have answered them appropriately. If you do have further questions, please follow up with us at anytime.

Thank you, everyone, for participation today and have a wonderful night.

Ladies and gentlemen, that concludes today's conference. Thank you so much for your participation. You may now disconnect. Have a great day.