輝瑞 (PFE) 2006 Q1 法說會逐字稿

Good morning. My name is Eduardo and I will be your conference facilitator today. At this time, I would like to welcome everyone to the ICAgen first quarter 2006 earnings conference call.

[OPERATOR INSTRUCTIONS]

It is now my pleasure to turn the floor over to your host, Dr. Richard Katz, CFO. Sir, you may begin your conference.

Thanks Eduardo. Good morning, everyone and thank you for joining us today to discuss ICAgen's corporate research and clinical progress as well as the financial results for the first quarter. We will begin today's call with a company overview with Kay Wagoner, ICAgen's CEO, followed by a review of financial results by me, Richard Katz. In addition, we have with us here Bob Jacobs and Caroline Carr, both Senior Directors in our finance group. Following our remarks, we would be pleased to address your questions.

Before we begin, I would like to just briefly read the following regarding any forward looking statements that we may make today. Various remarks that we may make about the company's future expectations, plans and prospects constitute forward looking statements for purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward looking statements as a result of various important factors included in those discussed in our most recent annual report in our form 10-K as filed with the SEC on March 15, 2006.

In addition, any forward looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. While we may elect to update forward looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our estimates change and therefore, you should not rely on these forward looking statements as representing our views of any date subsequent to today. Now I'll turn the call over to Kay.

Thank you, Rich. Welcome and thank you for joining us today. During the first quarter, we continued on track with patient and side enrollment in our clinical phase III trial of [circ]. Our compound, [ICA] 17043, has brought us orphan drug designation and fast track status.

This trial is a randomized double blind placebo controlled study in 300 patients. The primary endpoint for this study is based on a crisis rate in the ICA 17043 arm versus [phase] inclusive crisis rate in the placebo arm. We are actively working with 57 sites in the U.S. and eight international sites which represent a substantial majority of the sites that will be included in the study.

This quarter, we reported two key events in a search. In January, following the first pro protocol interim safety review, the data monitoring committee, or DMC, recommended continuation of the pivotal phase three trial as planned with no changes in the protocol. This committee meets approximately every six months to review unblended safety data from the study.

During this next meeting, the DMC will conduct both a safety analysis as well as a single planned interim efficacy and futility analysis. Following that meeting, we expect to report on the findings of the DMC in the third quarter. We were also successful in reaching a midpoint of enrollment on schedule in the first quarter with 150 patients enrolled at that time.

Enrollment continues to track according to expectations and our target time frame for the completion of patient enrollment remains the second half of 2006. We expect to be able to clarify the quarter for expected completion of enrollment at our next earnings call. The data from the company's successful completion of our phase II open label extension study, which had previously been reported were presented by Dr. Paul Sorbo, M.D., who is the chief of the Department of Hematology and Oncology at Wayne State University School of Medicine.

He presented this at the Annual Sickle Cell Disease Meeting of the National Institutes of Health in Memphis, Tennessee. The presentation was both well attended and well received. In addition to the phase III circ study, we are now well on our way towards the initiation of our pediatric development program of ICA 17043.

It is important to remember with an average life expectancy for Sickle Cell Disease Patients of 45 years, approximately 50% of these patients are under 18 years of age. Given the life long downhill course patients typically experience over a period of many years and especially given a relatively high risk of stroke in sickle cell disease children.

We believe that it's important to determine the potential use of ICA 17043 as early as possible in the disease course. Several clinical sites have no received investigational review board approval for the initial pediatric study focused on safety pharmico kinetics and pharmico dynamics.

This open label pediatric study will include 28 patients ages 6 to 16 with 21 days on treatment in three dose schedules. Additionally, preparations continue for the initiation on the second half of 2006 on an efficacy study focused on sickle disease patients with secondary pulmonary hypertension, a serious complication estimated to effect approximately 30% of sickle cell disease patients.

Pulmonary hypertension and sickle cell disease patients may be related to the degree of their anemia and hemolosis. Since ICA 17043 was shown in our phase II and open label extension studies to decrease hemalitic anemia, we would hypothesize that this compound would be a special benefit in sickle cell disease patients with secondary pulmonary hypertension.

In summary, by completing clinical studies in adult patients having [vasoaclusive] crises, as well as non-overlapping adult patients with secondary pulmonary hypertension and additionally completing studies in children with sickle cell disease, it is our goal to evaluate whether ICA 17043 can be an effective treatment for most, if not all patients suffering from sickle cell disease.

Our US 50/50 profit share co-promote with [Mac Neil] specialty pharmaceuticals continues to be very collaborative, with both sides actively contributing to the program's progress. [Mac Neil] is especially helpful in the pediatric development program and the preparation of drug product for both adults and children, as well as in the planning for the commercialization of this potential product.

Turning now to other programs. During the fourth quarter, we had provided an update on our [atrial fibrillation] program in which we and BMS had identified atril specific ion channel compounds, selectively targeting a [patonkian] channel expressed in the atria of the heart but not in the ventricles of the heart. BMS conducts the clinical development of this program.

Having successfully completed a phase one safety study on a specific compound, BMS initiated a proof of concept study. As previously reported, as a result of slow enrollment into this proof of concept study, BMS decided to discontinue that clinical trial.

BMS has very recently notified us that it has decided to discontinue development of this specific compound and instead to complete pre clinical development on a backup compound which may be more amenable to the clinical proof of concept study that BMS thinks is key to the clinical development of a compound for atrial fibrillation.

Although this represents a delay in clinical development, we are optimistic that our unique approach to the treatment of this common cardiac arrhythmia remains a sound one and that BMS will move forward with the development of a second compound. Finally, excellent progress continues in the company's internal, clinical and research programs and in the development of the [acelas] collaboration compound.

Acelas continues to evaluate compounds for the treatment of dementia, including Alzheimer's disease, while ICAgen completes essential toxicity studies on compounds with potential utility in the treatment of certain other CNS disorders, including attention deficit, hyperactivity disorder. We look forward to updating you on the status of these programs as they near the clinic. I will now turn the call over to Rich to provide you with the financial update.

Thank you, Kay. I would now like to discuss our financial results for the first quarter. The first quarter results were consistent with our expectations in all material respects and reflect our continued focus on conservative financial management while spending appropriately to fund the continued development of our clinical and pre clinical programs.

Revenues for the first quarter 2006 totaled $1.9 million as compared to $2.0 million during the same period in 2005, representing a decrease of 7%. The decrease in revenues for the first quarter 2006 is compared to the same period in 2005 was primarily due to decreased revenues from the company's collaboration with Abbot laboratories which concluded at year end 2005, partially offset by increased cost sharing from our collaboration with Mac Neil for the further development of ICA 17043.

Operating expenses for the first quarter of 2006 were $9 million as compared to $7.6 million for the same period of 2005, an increase of 19%. The increase in operating expenses for the first quarter of 2006 as compared to the same period in 2005 was primarily due to increased research and development expenses related to the development of 17043 as well as to an increase in G&A expenses.

The adoption of SFAS 123R as of January 2006 resulted in stock based compensation expense of approximately $0.5 million during the first quarter of 2006 as compared to approximately $0.3 million under APB 25 during the first quarter of 2005. Net loss for the first quarter of 2006 totaled $6.7 million as compared to $5.3 million during the same period in 2005, an increase of 27%.

The increase in net loss for the first quarter 2006 as compared to the same period in 2005 was primarily due to higher research and development expenses as well as general and administrative expenses. We ended the first quarter with approximately $41 million in cash and cash equivalents and that will conclude the financial update portion of the call and will now be pleased to open the call for your questions.

Thank you. [OPERATOR INSTRUCTIONS]

Our first question is coming from Bret Holley of CIBC World Markets. Please go ahead.

Yes, hi. Kay, I hopped on the call a little bit late and I was wondering, did you provide any kind of update on the timelines for how you would get 17043 approved for pediatric patients and what will it take beyond the proof of concept study in the 28 patients.

Yes, I did not provide a timeline. That would impossible to do right now because we are just initiating the first study in the pediatric population. The first study is a safety pharmico kinetic, pharmico dynamic study expected to be completed sometime in 2006, early 2007, at which time we will begin an efficacy pediatric trial. That efficacy trial is just being completed in its design and once we have that completed design we will have a better visibility on that timeline.

So it is possible that the efficacy draw might be adequate for licensure or expansion of the license in pediatric patients?

Right. Again, that would be difficult to answer until I knew what that pediatric trial was and what sort of agreement we have with the FDA about the plan. It's a little bit premature to be able to answer your question.

OK, that's fair enough. Thank you.

Thank you. Our next question is coming from Mekan Shinoda of UBS. Please go ahead.

Good morning and thanks for taking my question. Can you just add some color on the Bristol Meyers situation, specifically, what is the proof of concept trial they are planning and what would be a backup compound being more amenable to that design?

Actually, most of the questions about this you would have to direct to BMS since they are an exclusive licensee and determine all decisions with respect to the development of the product. As you know, what happened is that they decided to stop that proof of concept study because they were having difficulty in enrolling.

And as a matter of course, when you stop a clinical trial, particularly in the early phases, you look at your plan for the clinical trial. But you also look at other opportunities that might exist in that program. This is a long collaboration in which we had identified a number of compounds. The one that was in development was an early compound.

And as they looked at the opportunities and determined what the best studies were to do, they also looked at their backup compounds and there was one particular compound that had unique properties that they thought would be more amenable to further development. And so they took this opportunity, which is frequently done in the early stages, to substitute a backup compound.

Certainly the first compound could have been developed. Certainly we wouldn't have-- or they wouldn't have put it in the clinical trials if it doesn't have good prospects. But each compound has its own unique characteristics and I think that they thought that upon further reflection that the backup compound had unique properties that would help them more quickly and more efficiently move through the clinical trials program. I'd have to defer the specific questions of the specific details of that to BMS.

OK, thank you. Do you have any-- just to follow up-- do you have any sense of the timing of when this backup compound will hit the clinics?

I don't. They just notified us of this in the last day or so. So we're just evolving in our understanding of the process that they are going through. Hopefully, I'll get more clarity on that soon and will be able to give you a better update on that matter.

Thank you.

[OPERATOR INSTRUCTIONS]

Sir, we don't appear to have any further questions at this time.

OK. Eduardo, why don't we give participants another 30 seconds or so and if there's any further, we'll take them and if not, we'll conclude the call.

Sure. [OPERATOR INSTRUCTIONS]

Thank you. Our next question is coming from Nathan [Tadeghi] with [Kilkenny]. Please go ahead.

Hi guys. Sorry, I came on the call a little bit late. Can you talk a little bit about the expected cash burn in 2006, please?

Sure Nate. We had provided guidance during our end of year call and at that time, we had discussed an operating loss that we were projecting at $27 to $31 million and we had included in that stock based compensation expense of approximately $2 million. So you can determine the cash burn kind of in the middle of that range would be reasonable expectation, somewhere in the mid point of $27 to $31, but allowing for the fact that $2 million of that is stock based compensation expense. There's also a few other non-cash items, but I think it's safe to say that the high 20s would be a reasonable expectation for cash burn.

OK, thank you.

[OPERATOR INSTRUCTIONS] We don't appear to have any further questions.

OK, that's fine. Well, thank you very much for joining us for the call and we'll look forward to continuing to keep you updated on your next call for the second quarter.

Thank you. This concludes today's ICAgen first quarter 2006 conference call. You may now disconnect.