輝瑞 (PFE) 2006 Q4 法說會逐字稿

Good morning, my name is Melissa, and I will be your conference operator today.

At this time, I would like to welcome everyone to the Icagen Fourth Quarter 2006 Earnings Release 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] If you would like to pose a question during this time, please press star then the number one on your telephone keypad.

If you would like to withdraw your question, press the pound key.

Thank you.

It is now my pleasure to turn the floor over to your host Dr. Richard Katz, Senior Vice President of Finance, Corporate Development and CFO.

Sir, you may begin your conference.

Thank you.

Good morning, everyone and thanks for joining us today to discuss our Corporate Research and Clinical Progress, as well as the Financial Results for the Fourth Quarter and for the Full-Year 2006.

We will begin the call today with the Company overview by Kay Wagoner, our Chief Executive Officer, followed by a review of financial results by me, Richard Katz, CFO.

In addition, we have with us here, Seth Hetherington, who will be available to answer questions following the call -- following the formal portion of the call.

Seth is our Head of Clinical and Regulatory.

Also with us here, are Bob Jakobs and Caroline Karr, Senior Directors in our Finance Group.

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 on our most recently quarterly report on Form 10-Q, as filed by the SEC.

In addition, any forward-looking statements represent our views only as of today and should therefore 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 will turn the call over to Kay.

Thank you, Rich.

Welcome and thank you for joining us today.

First, I will provide a brief update on our preclinical and clinical programs, followed by a summary of recent Corporate developments.

During the fourth quarter 2006, we continued patient enrollment in our pivotal Phase III clinical trial of ICA-17043, also called senicapoc, a first-in-class compound being studied for the chronic treatment of sickle cell disease.

This multinational Phase III ASSERT trial is approximately 80% enrolled.

All patients currently being enrolled in the study have been receiving hydroxyurea or HU for approximately one year prior to joining ASSERT.

HU has been approved for use in sickle cell disease to reduce the frequency of vasal-occlusive crises; however, prior to enrolling in ASSERT, patients have continued to suffer from these crisis, having a history of at least two and in many cases very frequent crises in the year prior to enrollment in our study.

This double-blind placebo-controlled trial is designed to compare vasal-occlusive crisis rate between patients randomized to receive senicapoc and those randomized to receive placebo.

In addition to the multinational Adult Phase III vasal-occlusive crisis rate study, we continue enrollment in our senicapoc pediatric safety pharmacokinetic and pharmacodynamic trial being conducted at eight sites in the U.S.

Enrollment of 6 to 16-year-old patients in this pediatric trial is approximately 70% complete.

These patients receive senicapoc as monotherapy for a period of 21 days with careful monitoring of safety, pharmacokinetic and pharmacodynamic responses to differing doses of the drug.

Following the completion of this study later this year, we plan to initiate subject to discussions with FDA, a pediatric efficacy study focused on the potential for senicapoc to reduce the relatively high risk of stroke in these pediatric patients as evaluated by changes in cerebral blood velocity.

In 2007, we also plan to initiate a Phase II study of senicapoc in sickle cell disease patients with secondarily pulmonary hypertension.

A common and serious complication of sickle cell disease.

This 32-week randomized double blind placebo-controlled study will examine the effect of senicapoc upon six-minute-walk distance in pulmonary hypertension patients with sickle cell disease.

All of these efforts in sickle cell disease and in the development of senicapoc continue within the strong and collaborative relationship that we have developed with Johnson & Johnson, our 50/50 U.S. development and co-promote partner.

Beyond our sickle cell disease program, in the fourth quarter of 2006, and into 2007, we have made strong progress in our broad portfolio of preclinical programs.

In our potassium channel program in epilepsy and neuropathic pain, we advanced a lead compound into final preclinical studies, provided that these studies are favorable, we expect to file an IND in epilepsy during 2007.

The target for this program the KC&Q Channel is a genetically validated target for this indication.

Our candidate compound has substantial efficacy in in a broad array of animal models of epilepsy.

Additionally, it has an excellent safety profile in animal studies to date.

Icagen maintains worldwide rights to this program and continues to build a strong intellectual portfolio and significant know-how in this area.

In addition to the epilepsy program, we continue to make strong progress in our neuropathic and inflammatory pain program, as well as in our inflammation program.

The pain programs are focused primarily on calcium and sodium channel targets.

One of our pain targets is the sodium channel target SCN9A, to which Icagen holds a sole exclusive sub license.

This target was recently described in the scientific and popular literature as a particularly promising one for the treatment of pain.

In all these areas in which we are identifying new, potentially first-in-class treatments for pain in inflammatory diseases, we have identified compounds that are efficacious in animal's models of disease.

Data from some of our research programs was presented recently at the 2006 society for neuroscience meeting in Atlanta.

With additional work scheduled to be presented at the upcoming ninth anti-epileptic drug or AED conference in Florida.

Our partner of programs in atrial fibrillation and memory disorders are also making steady progress.

Our collaboration with Bristol-Myers Squibb to identify a chronic treatment for atrial fibrillation is in late preclinical studies.

DNS is responsible for conducting the clinical development of this program and has indicated that a first-in-man study is expected to be initiated in the second half of 2007.

Our collaboration with Astellas is also progressing well.

In this program, Astellas has selected compounds for preclinical development for the treatment of memory disorders including Alzheimer's's disease while we have selected other compounds for preclinical development for treating ADHD.

Let me turn briefly to exciting developments at Icagen on the Corporate front.

During 2006, we continued to build our know-how and strong intellectual property portfolio with the issuance of 13 U.S. patents covering a broad range of IN channel small molecule agonist and antagonist and related IN channel technologies.

We additionally strengthened our management team and our Board of Directors.

In June, Dr. Seth Hetherington joined the Company as its Senior Vice President, Clinical Development and Regulatory Affairs.

With over 25 years of experience in both academic medicine and clinical drug development, Dr. Hetherington is well positioned to head our clinical team.

Recently joining our Board of Directors and the compensation committee of the board is Dr. Adeoye Olukotun.

With a long and distinguished career in clinical drug development and management, Dr. Olukotun brings a valuable new perspective to our board.

Finally during the first quarter of this year, we completed a $22 million private placement.

Principle investors included, Greenway Capital, Walker Smith Capital, QVT, Venrock Associates, Alta Partners, NovaQuest, an affiliate of QuintilesTransnational among others.

Having broad participation by both current and new investors was very encouraging, and we believe speaks to the commitment of our investors to the Icagen strategy and the potential of the Company for positive performance.

This transaction provides the capital necessary to draw the continued advancement of our research, preclinical and clinical programs.

I will now turn the all back over to Dr. Katz to provide the financial update.

Thank you, Kay.

I would now like to discuss our financial results for the fourth quarter and the full-year, and I'll mention at the beginning that the results for both the quarter and the year were consistent with our expectations in all material respects.

For the fourth quarter, revenues were 1.7 million as compared to 2.7 million during the same period in 2005, a decrease of 36%, this decrease was primarily due to decreased revenues from our collaboration with Abbott Laboratories which concluded at the end of 2005, as well as to some extent decreased cautionary reimbursement in our collaboration with McNeil due to decreased program expenses in our sickle cell program in that particular quarter.

Operating expenses for the fourth quarter of 2006 were 8.3 million as compared to 8.4 million in the same period of 2005, a decrease of about 2%.

The decrease was due as I mentioned to decrease expenses related to our senicapoc program, partially offset by an increase in stock-based compensation expense that occurred with regard to our adoption of FAS 123(R) as of January 1, 2006.

Net loss for the fourth quarter was 6.2 million and this compared to 5.3 million for the same period in 2005, an increase of 18% due primarily to the decrease in revenues.

Turning to the full-year, revenues for 2006 totaled 8.4 million.

This compared with 8.8 million in 2005, a decrease of 4%, again primarily driven by the decrease in revenues that, as a result of the conclusion of the Abbott Laboratories collaboration at the end of 2005, partially offset by increased cautionary reimbursement for the year from our collaboration with McNeil.

Operating expenses for 2006 were 34.7 million.

This compared to 30.5 million for '05, an increase of 14%.

This increase was primarily driven to increase R&D expenses, mostly related to our sickle cell program and as I mentioned it increased the stock-based compensation expense with respect to FAS 123(R)'s adoption.

Net loss for 2006 was 24.8 million compared to 20.2 million for '05 an increase of 23%.

Again, due primarily to higher R&D expenses and an increase in stock-based compensation expense.

In terms of our cash position as of year-end 2006, our cash and cash equivalents totaled 25.1 million.

In addition, as Kay mentioned, we raised approximately 22 million in a recent private placement.

That is gross proceeds.

The transaction closed in early February.

And as Kay mentioned again it was completed with a broad range of highly regarded institutional and other accredited investors.

We were pleased with the results of the transaction.

Turning to financial guidance.

During 2007, we expect revenues to be in the range of 7 to 9 million.

This revenue guidance is based upon expected revenues from our collaboration with McNeil and does not include any potential additional revenues from any new collaborations that we might form during the year.

Research and development expense during '07 is expected to be in the range of 29 to 33 million, and will be driven largely by expenditures related to the Company's sickle cell program, including our Phase III study, the pediatric program, and the initiation of a study in patients with secondary pulmonary hypertension.

It will also be driven by our programs in epilepsy and neuropathic pain and our earlier staged research programs.

Generally and administrative expense starting '07 is expected to be in the range of 5 to 6 million and we expect the operating loss for '07 to be in the range of 26 to 30 million.

This guidance includes the affect of stock based compensation in accordance with 123(R) and for 2007 we expect stock base compensation to be approximately 2.5 million.

So that will conclude the update, the financial update portion of the call and we will now be pleased to open the call to your questions.

Thank you. [OPERATOR INSTRUCTIONS] We will pause for a moment to compile the Q&A roster.

Thank you.

Your first question is coming from Richard Smith with JPMorgan.

Yes, good morning.

Just for clarification.

When do you anticipate to complete enrollment the ASSERT trial, is it first half?

The enrollment is 80% complete, and we are -- have stated before about mid 2007 is our expectation.

And then what is the next time point after that?

Well, the study is a 12-month study, so the last patient in will be out in the mid-2008 time frame, and then we will wrap up the study closer to the end of 2008 with the filing either the end of 2008 or early 2009.

And is there -- there is a DNC review every six months.

Is there one coming up?

Right.

The -- this is Seth Hetherington from Clinical and Regulatory.

The charter states that the DNC will meet at approximately six-month intervals and that next six-month time point is in the early second quarter of this year and we are pulling together the operations for that now.

Okay.

Just one other question, with respect to the pediatric trial, I believe that is monotherapy, can you just provide us with why you think monotherapy and pediatrics will be different from what you've seen in monotherapy and -- in adults?

Sure.

Let me preface this to just emphasize something Kay said earlier, and then as we do anticipate a discussion with the FDA around this entire program and the key points in that discussion would be to basically to first assure and have agreement with the FDA that we, in fact, do have an appropriate dose for children based on the Phase I pharmacokinetic study that's being run now, and secondly to introduce to them the concept of cerebral blood velocity as a marker of risk for stroke.

Stroke is ultimately the clinical benefit or reduction of risk is the ultimate clinical benefit that we are trying to bring to these patients.

And finally to have a discussion with them on the overall strategy for the development of senicapoc for prevention of stroke in children.

Now that said, what we know about the use of hydroxyurea in children is that it is lower than that in adults.

It does not have a specific label indication for pediatrics.

I think that coupled with the fact that the type of indication we are going after is really very different from what is being developed in the adult population really speaks to asking the question, is -- model therapy approach appropriate for this indication and this patient population.

That combined with the safety profile that has emerged from our Phase I study which is really not raised any questions at all about the safety of senicapoc.

I think sets the stage for a very productive discussion with the FDA as to the use of monotherapy and its appropriateness.

Thank you very much.

Thank you.

Once again, if you would like to pose a question, that is star one on your telephone keypad.

There appear to be no further questions.

I would like to turn the floor back over to management for any closing comments.

Well, we -- we thank you for joining us today on the call, and we look forward to keeping you updated on our progress and I think that will conclude it then.

Thank you.

This concludes today's Icagen conference call.

You may now disconnect.