輝瑞 (PFE) 2006 Q2 法說會逐字稿

Good morning.

My name is Lynn and I will be your conference operator today.

At this time, I would like to welcome everyone to the Icagen second-quarter 2006 earnings conference call.

All lines have been placed on mute to prevent any background noise.

After the speakers' remarks, there will be a question-and-answer period. (OPERATOR INSTRUCTIONS)

It is now my pleasure to turn the floor over to your host, Richard Katz.

Sir, you may begin your conference.

Okay, thanks.

Good morning, everyone, and thank you for joining us today to discuss Icagen's corporate R&D progress as well as the financial results for the second quarter.

We will begin the call today with a Company overview by Kay Wagoner, Icagen's CEO, followed by a review of financial results by me.

Then in addition we have with us here as well Seth Hetherington, who is the head of our Clinical and Regulatory group, as well as Bob Jakobs and [Caroline Carr], both senior directors in our finance group.

Following our remarks, we will be pleased to answer your questions.

Before we begin, I would like to just 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, or prospects constitute forward-looking statements for purposes of the Safe Harbor provision 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 including those discussed in our most recent quarterly report on Form 10-Q, which was filed at the SEC on May 11, 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.

Therefore you should not rely on these forward-looking statements as representing our views as of any date subsequent to today.

Now I will turn the call over to Kay.

Thank you for joining us today to discuss Icagen's R&D progress.

I will first summarize the status and updates for the sickle cell disease program.

The Phase III trial is called the ASSERT study or A Stratified Sickle Events Randomized Trial and is ongoing as a double-blind placebo-controlled study.

As background, the ASSERT trial as designed is a 300-patient trial in sickle cell disease patients 16 to 65 years of age with a primary endpoint of vasoocclusive crisis rates.

It follows our Phase II proof-of-concept study, which demonstrated statistically significant improvements in a variety of hematological parameters including the primary endpoint of increased hemoglobin in the 10 milligrams treatment arm, which is the dose being used in the Phase III clinical trial.

The Phase III protocol provides for patients with a history of at least two vasoocclusive crises in the year prior to the study to be randomized into one of two arms, the ICA-17043 treatment arm and a placebo arm.

Patients are maintained in the study for a period of up to one year.

The study is being conducted at approximately 65 sites across the U.S. and in selected other countries in collaboration with McNeil Pediatrics.

Until very recently, patients were stratified at enrollment by use of hydroxyurea with approximately 50% of patients enrolled to date taking concurrent hydroxyurea, having been on a stable dose of that medication prior to entering the Phase III ASSERT trial.

Earlier this year, we reported that our independent Data Monitoring Committee or DMC met to evaluate safety in this Phase III trial and recommended that we continue the trial with no changes in the protocol.

Last week, our DMC met again, this time for its one planned interim analysis, which combined efficacy, utility, and safety.

They made the following recommendations, which we have shared with the FDA and which have been implemented.

First, the DMC recommended that enrollment into the trial continue for patients on concurrent hydroxyurea therapy.

Second, for currently enrolled patients not on hydroxyurea, the DMC recommended that study drug be discontinued and that these patients proceed to the end of the study for the standard follow-up period.

The DMC noted that there were no specific safety issues identified and no additional safety assessments are required other than those in the standard protocol.

Finally the DMC requested additional data and will reconvene when these are available.

We expect a second meeting to be completed in the third quarter.

As has been noted, we remain completely blinded to the data on which the DMC made their recommendation, as well as to the deliberations, and thus have no additional information to share.

We are therefore reluctant to speculate on the rationale for their recommendation.

We are confident, however, that the integrity of our clinical trial has been maintained.

In addition to the ASSERT study, during the second quarter of 2006 we initiated our pediatric program of ICA-17043 as monotherapy in a pharmacokinetic, pharmacodynamic, and safety study in patients with sickle cell disease between the ages of six and 16.

Since approximately half of the patients with sickle cell disease are in this pediatric age group, initiating the pediatric program represents an important expansion of our clinical development program for ICA-17043.

This pediatric clinical trial continues with its enrollment.

Plans for initiation of a clinical trial for patients with sickle cell disease who have secondary pulmonary hypertension continued.

Secondary pulmonary hypertension afflicts approximately 30% of patients with sickle cell disease.

This clinical manifestation of sickle cell disease has been linked to homolysis, which is prominent in sickle cell disease patients.

ICA-17043 has been shown to significantly decrease homolysis in sickle cell anemia patients in a Phase II clinical trial.

Finally other research and preclinical programs, including the Company's internal programs in epilepsy and neuropathic pain and its partnered programs in atrial fibrillation and certain CNS disorders such as memory loss, continued with steady progress during the second quarter.

Our leadership at both the senior management and Board of Directors levels was expanded and strengthened recently.

It is important to restate how pleased we are with the appointment of Dr. Seth Hetherington as our Senior Vice President, Clinical and Regulatory Affairs.

Seth brings to Icagen a wealth of experience in clinical drug development and we look forward to his leadership of our clinical team.

In addition, we are pleased to have announced the appointment of Dr. Oye Olukotun to the Icagen Board of Directors.

We look forward to having the benefit of his long and distinguished career in drug development.

Richard Katz, CFO, will now complete this call with our financial report.

Thank you, Kay.

I would now like to discuss our financial results for the first quarter -- I'm sorry, for the second quarter.

The 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 preclinical programs.

Revenues for the second quarter of 2006 totaled $2.6 million as compared to $1.7 million during the same period in 2005, representing an increase of 52%.

This increase in revenues was primarily due to increased cost-sharing reimbursement from our collaboration with McNeil in the development of 17043, partially offset by decreased revenues as a result of the conclusion of the Company's collaboration with Abbott Laboratories at the end of 2005.

Operating expenses for the second quarter of 2006 were $9.4 million.

That is compared to $7.0 million for the same period in 2005, an increase of 35%.

The increase in operating expenses was primarily due to increased R&D expenses related to the development of 17043 as well as to increase in G&A expenses.

The adoption of FAS 123(R) as of January 1, 2006 resulted in stock-based compensation of approximately $0.6 million during the second quarter of 2006, as compared to approximately $0.4 million under APB 25 during the second quarter of 2005.

Net loss for the second quarter of 2006 totaled $6.3 million, as compared to $4.9 million during the same period in 2005, an increase of 31%.

This increase in net loss was primarily due to higher R&D expenses and G&A expenses, partially offset by an increase in revenues.

Revenues for the first six months of 2006 totaled $4.5 million.

This compared to $3.8 million during the same period in 2005, an increase of 20%.

Similarly this increase in revenues was primarily due to increased cost-sharing reimbursement in accordance with our collaboration with McNeil.

That was partially offset by decreased revenues from the conclusion of the Company's collaboration with Abbott Laboratories.

Operating expenses for the first six months of 2006 were $18.4 million as compared to $14.5 million for the same period in 2005, representing an increase of 27%.

This increase in operating expenses was primarily due to increased R&D expenses for the development of 17043 as well as an increase in G&A expenses.

The adoption of FAS 123(R) resulted in stock-based comp expense of approximately $1 million during the first six months of '06.

This compared to approximately $0.7 million during the first six months of 2005 under APB 25.

Net loss for the first six months of 2006 totaled $13.1 million, compared to $10.2 million during the same period in 2005, an increase of 29%.

This increase again was primarily due to higher R&D expenses and G&A expenses, which were partially offset by an increase in revenues.

As of June 30, 2006, cash and cash equivalents were $35.3 million.

That concludes the financial update portion of the call.

We will now be pleased to open the call to your questions.

(OPERATOR INSTRUCTIONS) Richard Smith, JPMorgan.

Just a quick question.

With respect to the meeting with the FDA or DMC and FDA, do you have any sense of timing on that?

You mentioned additional data.

Could you give us a little bit more idea of what that data is?

This is Seth Hetherington.

I'm glad to answer that question.

First of all, we have had a teleconference -- to split up, we had a teleconference with the FDA to discuss the output from the DMC and there certainly may be additional discussions with the FDA depending upon what additional guidance we get from the DMC in the future.

With regard to the timing on the DMC meeting, Kay already mentioned that we expect this to happen by the end of the third quarter of this year.

This allows time to accumulate additional data to get the schedules together for the DMC members and for them to meet and then come to some conclusion.

The additional data that is going to be included will be basically data that is available in the database.

The data that they had at their last meeting only included information that had been gathered -- although it was monitored and it was cleaned data -- as of April 17 of this year.

The data that they are going to be looking at now is additional data that has been entered into the database since that time.

Thank you.

Just with respect to the pulmonary hypertension trial, do you have a sense of timing on when that might start?

We have noted that it should start in the second half of 2006.

We do not have the specific day or month for that, but we are on track to initiate that study in the second half of this year.

Can you remind me is that the same dose, the 10 milligrams QD?

It is.

Okay, thank you very much.

Bret Holley, CIBC.

My question concerns the prevalence of hydroxyurea usage in the pediatric population and whether there is hydroxyurea allowed in the pediatric trial.

In the current -- there are a couple of issues here, first of all the overall use of hydroxyurea in the pediatric population is similar to that used in the adult population.

It probably runs 10 to 20%.

With regard to the current running pediatric trial, which is a pharmacokinetic trial, use of hydroxyurea is excluded.

It is a pharmacokinetic trial.

It runs with 21 days of dosing and the goal here is again to select a dose to take forward into a larger dose for prevention of complications of sickle cell disease in children.

Okay, so would you anticipate in an actual trial directed toward efficacy that you would be dosing 17043 in combination with hydroxyurea in additional trials?

We have not come to any conclusion on that.

We will need additional guidance from the DMC.

It will involve probably discussions with the FDA and remember that this is a different patient population.

We will probably be looking at a different indication.

There may be patient population differences which impact on the use of hydroxyurea whether or not it would be in combination with 170430 or whether 17043 would be utilized alone.

Those questions have yet to be determined and answered.

Okay, thank you.

(OPERATOR INSTRUCTIONS) Maged Shenouda, UBS.

Kay, in your prepared comments you broadly mentioned your preclinical efforts and I was just wondering if you could elaborate a little bit on when you would expect to provide further data, whether it is at a medical meeting or in any other forum.

A variety of posters and presentations are ongoing at meetings upcoming with our neuropathic pain and epilepsy program.

We have the policy until we have an identified compound that is in a final preparation for an IND not to give updates on the specific timelines.

The programs are going well.

We have a great interest from both our on-company and developing these compounds in the clinic, as well as potential partnership opportunities from some of the earlier programs.

So they are going well but until we have a compound that is in that late stage of IND filing, we would not be able to give you a specific timeline.

Okay, thank you.

[Joy Machau], Senvest.

Just wondering about your cash position and potential ways to conserve that while continuing your Phase III trial and additionally continuing development of your other programs.

How can you reallocate in terms of stretching that cash a little bit further?

Yes, Joy, we are looking at ways to conserve capital to extend the timeline that that cash will run for.

We don't have anything more definitive to say at this time about that except that we are certainly aware of the need to conserve cash at this point in our Company's history.

(OPERATOR INSTRUCTIONS) There appear to be no further questions at this time.

I would like to turn the floor back over to Dr. Kay Wagoner for any closing remarks.

Thank you very much.

We appreciate your interest and your questions today.

I think that, as we have said, we are encouraged that we are continuing our clinical trial for 17043, both the ASSERT trial as well as the pediatric program, and look forward to getting the pulmonary hypertension trial off the ground.

As I noted, other programs are going well and we -- as was noted today, we do have cash to provide us an opportunity to produce in the programs we have outlined.

Again, I appreciate your questions and thank you for your interest in Icagen.

Thank you.

This does conclude today's Icagen conference call.

You may disconnect your lines at this time and have a wonderful day.