輝瑞 (PFE) 2006 Q3 法說會逐字稿

Good morning.

My name is Denise and I'll be your conference operator today.

At this time I'd like to welcome everyone to the Icagen third quarter 2006 earnings release conference call. [OPERATOR INSTRUCTIONS]

Thank you.

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

Sir, the floor is yours.

Good morning, everyone.

Thank you for joining us today to discuss our corporate R&D and R&D progress, as well as our results for the third quarter.

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

In addition we have with us here Bob Jacobs, Senior Director in our finance group Following our remarks we'll be pleased to address your questions.

Before we begin, I'd like to 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, including those discussed in our most recent quarterly report on Form 10-Q as filed with the SEC.

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 as of any date subsequent to today.

Now, I'll turn the call over to Kay.

Thank you, Rich.

Welcome all and thank you for joining us today.

I will provide a brief update on our clinical and preclinical program.

As you will remember, ASSERT is Icagen's double blind, placebo-controlled, Phase III multi-center study focused on sickle cell disease patients having at least two vasal-occlusive crises in the year prior to the study. .

The primary end point is a reduction in vasal-occlusive crisis rate.

The program, including the potential drug ICA-17043, or senicapoc, has fast-track status and orphan drug designation.

During the third quarter, our data monitoring committee, or DMC, conducted their one planned interim analysis of safety, efficacy and futility ,and on the basis of that analysis of the overall study, recommended that we continue the trial with a protocol change.

That change, to continue the predefined stratum. which entered the trial on background HU, that is patients taking HU plus ICA-17043 or placebo, but not those that entered the trial without background HU therapy, was implemented during the third quarter.

The trial is continuing to enroll patients into the stratum with enrollment tracking expectations for this group.

This protocol change was unexpected, given the strong data from our Phase II trial and its follow-on 48-week open label extension study, both of which included patients taking background hydroxyurea and those taking only senicapoc.

In those two studies, the drug was generally well tolerated and there were improvements in the hemotological profiles for both groups.

We and the FDA remain blinded to the DMC's deliberation.

As stated, our Phase III trial continues and we are completing a protocol amendment and have submitted a revised statistical analysis plan to the FDA.

Based on our discussions with the FDA to date, we believe that the primary efficacy analysis of crisis rate reduction will be based on the population or stratum of patients who will complete the trial.

That is, those patients on background hydroxyurea therapy.

And further more, that this Phase III clinical trial maintains its status as a single pivotal trial that would support the submission of an NDA, provided that the results are sufficiently persuasive and, as always, that there is an adequate safety database at the time of NDA submission.

Regarding sample size for the ongoing trial, we performed a prespecified review of blinded data, and believe that only a modest increase in the number of patients over that which we had originally planned will be needed to ensure that the statistical power of our study, as originally planned, is maintained.

The original study had planned for approximately 300 patients to be enrolled, with a new plan now submitted to the FDA including a total enrollment of approximately 330 patients.

Enrollment of patients in the hydroxyurea stratum has continued to track expectations and, therefore, with the current plan, completion of enrollment in this typical Phase III trial would be expected during the first half of 2007.

It should be noted that a significant and growing number of sickle cell disease patients take hydroxyurea.

However, given that hydroxyurea reduces facial occlusive crises by only approximately 40%, we believe that, if senicapoc is effective in further lowering the incident of crises and in providing hemotological benefit, the potential market opportunity remains very meaningful in this crisis population on which the current study is based.

In preparation for exploring additional indications for senicapoc, in conjunction with our partner McNeil Pediatrics, we are actively enrolling pediatric patients ages six to 16 in a Phase I/II pediatric safety, pharmacokinetic and pharmacodynamic trial of senicapoc as monotherapy.

Together we are additionally planning two efficacy studies, both of which are targeted to begin in 2007 in different populations of sickle cell patient and for different indications.

Plans will be submitted to the FDA to study senicapoc's monotherapy in pediatric patients who are at an increased risk of stroke and other severe secondary complications of their sickle cell disease.

Additionally, we plan to study the utility of our drug in sickle cell disease patients with pulmonary hypertension, a severe secondary complication afflicting up to 30% of sickle cell disease patients.

Given recent estimates of approximately 120,000 African-American and Hispanic patients in the U.S. with some form of sickle cell disease, approximately 30,000 sickle cell disease individuals may suffer from this life-threatening complication.

Given that in our Phase II trial senicapoc produced a statistically significant decrease in the measures of hemolysis, a factor which is believed to play a role in the development of pulmonary hypertension, this potential drug may be useful in delaying the onset or decreasing the signs and symptoms of pulmonary hypertension in sickle cell disease patients.

We remain very enthusiastic about our sickle cell disease program and our commitment to this underserved and serious medical need.

Turning to some of our other programs, we recently received an update from Bristol-Myers Squibb indicating that our atrial fibrillation program is currently on track to initiate a first-in-man clinical study in the second half of 2007.

This atrial-specific ion channel targeted approach, if effective, will provide relief for this common arrhythmia without leading to an increased risk of life-threatening ventricular arrhythmias.

In addition, Astellas continues to pursue preclinical development of a compound discovered in collaboration for us for memory disorders, including Alzheimer's disease.

With respect to our internally developed free clinical programs, during the third quarter strong progress was made in the Company's broad pipeline of programs, including the following.

In our epilepsy and neuropathic pain program, we have recently nominated a compound for the IND track and expect that, if final preclinical studies are positive, an IND may be filed in 2007.

Moreover, in our chronic pain programs, we are advancing compounds, which selectively target either sodium or calcium channels.

For the indications of sleep disorders and attention deficit hyperactivity disorder, we have selected a preclinical compound, which is currently completing a pivotal animal study.

And finally, as a part of our inflammation efforts, we have nominated both topical and oral compounds for further preclinical development or formulation studies.

Data related to two of these programs, our epilepsy neuropathic pain and chronic pain programs, were recently presented at the 2006 neuroscience meeting sponsored by the Society for Neuroscience.

In each of our programs, we are working on novel compounds focused on ion channel targets.

At the current pace of progress, we expect to advance one or more compounds from these programs into the clinic in 2007 or seek partnerships with other companies for further development of these unique opportunities.

I will now turn the call over to Rich to provide you with the financial update.

Thanks, Kay.

I'd like now to discuss our financial results for the third quarter.

These results were consistent with our expectations at all material respects.

Revenues for the third quarter of 2006 totaled $2.2 million, that's compared to $2.3 million for the same period of 2005. a decrease of 7%.

This decrease was primarily due to the conclusion of the Company's collaboration with Abbott Laboratories, which ended at year end 2005, partially offset by increased cost-sharing reimbursement from our collaboration with McNeil with regard to the development of senicapoc .

Operating expenses for the third quarter of '06 were $8 million.

That compared to $7.5 million for the same period of 2005, an increase of 6%.

The increase was primarily due to increased R&D expenses related to the development of senicapoc.

The adoption of FASB 123(R) as of January 1, 2006, resulted in stock-based comp expense of approximately $0.4 million -- $0.4 million during the third quarter of '06, and that compared to about $0.3 million under APB-25 during the third quarter of '05.

Net loss for the third quarter of '06 was $5.5 million.

This compared to $4.8 million during the same period in '05, an increase of 14%.

The increase in net loss was primarily due to higher R&D expenses.

For the nine-month period that ended September 30, '06 revenue was $6.7 million.

This compared to $6.1 million during the same period in '05, so an increase of 10%.

The increase in revenues, that was primarily due to increased cost-sharing reimbursement from our collaboration with McNeil.

And as noted previously, partially offset with decrease revenues from our collaboration with Abbott, which ended at the end of '05.

Operating expenses for the first nine months of '06 were $26.4 million.

This compared to $22.1 million for the same period in '05, an increase of 20%.

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

And the adoption of FAS 123(R) resulted in stock-based comp of approximately $1.5 million.

And that compared to approximately $1 million under APB-25 during the comparable period in '05.

For the nine months -- nine-month period September 30, '06 net loss was $18.6 million.

This compared to $15.0 million during the same period of '05, an increase of 24%.

And the increase in net loss was primarily due to higher R&D expenses, as well as an increase in G&A expenses, partially offset by the increase in revenues noted.

As of September 30th, our cash and cash equivalents approximately $289.8 million.

And that will conclude the financial update portion of the call.

We'll now be pleased to answer your questions.

[OPERATOR INSTRUCTIONS] We'll take our first question from Maged Shenouda of UBS.

Please go ahead.

Sure.

Hi.

Thanks for taking my question.

Just want to talk about the powering assumptions of the sickle cell Phase III trial, now that you've changed the trial somewhat.

Hi, Mike.

Thanks for your question.

Yes.

We were able to look at the blinded data at a prespecified time point.

And the blinded data suggested to us that only a modest increase in sample would be necessary to regain the power that we had initially when we started the Phase III trial.

And that substantially the cause the variance in the crisis rate is lower than we had planned for, anticipated for when we started the trial.

You may remember we had a small set of data from the Phase II trial on which to base our powering calculation.

And it's a time that we looked at -- the prespecified time that we looked at the blinded data, se had a larger sample size -- a much larger sample size, and the actual variance is smaller than we had anticipated originally.

So only a modest increase in sample size is necessary to regain the power that we had to the original plan.

Okay.

Great, thank you.

Thank you. [OPERATOR INSTRUCTIONS] And there appear to be no further questions at this time.

Operator, why don't we wait a minute or so to see if someone else has a question and then, if not, we'll be finished.

Thank you. [OPERATOR INSTRUCTIONS] Thank you.

We have Maged Shenouda of UBS.

Hi.

Just a follow-up on financials.

Rich, could you go over your expectations for R&D as just a run rate now this fourth quarter expense?

Yes.

You mean looking forward into next year, Maged?

Sure, sure.

Also the fourth quarter, more specifically.

Oh, I'm sorry.

Yes, the fourth quarter should look pretty similar to the third quarter.

As we're working on our budget now and we will, you know, be providing guidance as we did last year during our next quarterly call, so I'd like to reserve, you know, reserve that for the next call.

But I -- I'm not expecting a -- you know, a significant change at this point.

There will be some increase in expenditures related to the trials that Kay mentioned, the pediatric program for which we are currently doing the Phase I study -- Phase I/II study.

And provided that goes well, we'll be planning for a pilot study to initiate in '07.

We're also planning to initiate a pilot study in pulmonary hypertension in '07.

Those studies, both of which our pilot are not going to be that large in terms of cost drivers, but there will be some increase of expenditures related to those.

But we'll provide a full update on our next quarterly call.

Great.

Thank you.

Sure thing.

Thank you. [OPERATOR INSTRUCTIONS] There appear to be no further questions, sir.

Okay.

Well, thank you all for joining us today and we'll look forward to updating you again in a few months time.

Appreciate your joining us.

Thank you.

This does conclude today's Icagen's conference call.

You may disconnect your lines and have a wonderful day.