輝瑞 (PFE) 2009 Q2 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Second Quarter 2009 Icagen Incorporated Earnings Conference Call.

My name is [Latrisse].

I will be your coordinator for today's conference.

At this time, all participants will be in a listen-only mode.

We will conduct a question and answer session towards the end of this conference.

(Operator Instructions) At this time, I would like to turn the call over to your host for today's conference, Dr.

Richard Katz, Chief Financial Officer.

Please proceed, sir.

Thank you, operator.

Good morning, everyone, and thank you for joining us today to discuss our corporate research and clinical progress, as well as our financial results for the second quarter.

With me here today is Kay Wagoner, our CEO, as well as Seth Hetherington, our SVP of Clinical and Regulatory Affairs.

Kay will begin the call today, as usual, with a general corporate overview and then Seth will provide more detailed information on our clinical trials.

Following their remarks, I will give a brief summary of our financial results and then we will all be available to take your questions.

Before we begin, I would like to read the following regarding any forward-looking statements that we may be made 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 of the Private Securities Litigation Reform Act of 1995.

Actual results may differ materially from these forward-looking statements as a result of various important factors, including those discussed in our most recent filings with the SEC.

In addition, any forward-looking statements represent our views only as of today and therefore 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.

So with that, let me now turn the call over to Kay.

Thanks, Rich.

My remarks will be very brief to allow time for Seth, head of our clinical team, to provide more details on our clinical programs.

Let me first turn to our KCNQ program, that is our program for epilepsy and pain, which is beginning Phase II.

We are very pleased to be able to announce yesterday, Monday morning, that as of Friday at about four o'clock, the FDA lifted the partial clinical hold on ICA-105665 for epilepsy.

We had worked very closely with the FDS to address the requests and recently submitted a complete response, including a protocol for our next study in epilepsy patients.

Based on that complete response, the FDA has given us the green light to initiate our next study in epilepsy patients.

In anticipation of this positive news, we have been actively engaged in planning our Phase II-A proof-of-concept study in epilepsy patients who respond with changes on their EEGs when they see flashes of light given under a standardized protocol.

We are now in a position to submit our completed protocol to site for IRB approval.

This protocol for the photosensitivity epilepsy study was designed with international experts, including members of the epilepsy study consortium, and will be conducted at multiple clinical research centers in the US.

Seth will give you more details of this study, which should begin in this quarter and be completed by mid-2010.

The proof-of-mechanism pain study for this same compound, ICA-105665, was not on hold and thus we have already completed our protocol for that study and submitted it to UK regulatory authorities.

This study will be conducted at a single clinical research site in the United Kingdom and involves a study of healthy volunteers exposed to mildly painful stimuli under controlled conditions.

Seth will also give you more details about this study, which will begin enrolling as soon as possible with final data anticipated for early 2010.

Just as a reminder, in the Phase I program, ICA-105665 was well tolerated at all dose levels with no serious adverse events, no dose-limiting toxicities, and no apparent need for dose titration.

The pharmacokinetics were linear, dose proportional, and consistent with twice daily dosing.

All these findings, if they are sustained in future trials, could provide a significant competitive advantage over other currently available drugs, which either have dose-limiting side effects, need to be given three or four times a day, or need to be titrated over an extended period of time before achieving a steady dose and effect level.

Moving to our second clinical program, which is in Phase II, Senicapoc for asthma, this compound is the first KCa 3.1 inhibitor.

KCa 3.1 is a calcium activated potassium channel of the subtype 3.1 and this compound, Senicapoc, blocks or inhibits that channel.

It's in the clinical study development pathway for asthma and represents a new approach to decreasing inflammation and [disindication].

Senicapoc's potential advantages are significant and include at least the following three things.

First, it has preclinical anti-inflammatory effects and thus would be proposed for chronic use to reduce airway inflammation and asthma to prevent or reduce the severity of asthma attacks.

Second, it is well tolerated at all doses tested with no dose-limiting toxicity.

And finally, it should be easy to use.

It's given orally once a day and this is a particularly important point, because aside from a few other compound drugs, both corticosteroids and leukotriene inhibitors, which have some limitations, there are very few other asthma therapies that are actually taken by mouth.

Oral dosing obviously has several significant advantages, particularly here over inhalation, sometimes individuals have difficulty with their inhalers, and particularly children have difficulty at times with inhalers and getting the drug to the active site.

So oral administration is an advantage.

We have completed enrollment in both of our proof-of-concept studies in patients with either allergic asthma or in patients with exercise induced asthma.

Both of these studies were very cost effective to be done and will yield important data regarding the usefulness of Senicapoc in asthma.

As we said, we expect to report top line data from the allergic asthma study in the third quarter and the exercise induced asthma study in the fourth quarter.

And in a moment, Seth can answer any questions you may have about these asthma studies.

Let me finish with a bit of a strategic update on our business and corporate development activities.

First, as many of you know, we have a collaboration with Pfizer.

We're working to identify new drugs for pain that work by blocking sodium channels, and over the last quarter we've made substantial progress, and largely due to that progress as well as the excellent working relationship between the respective teams at Pfizer and Icagen.

Pfizer has indicated an interest in extending our collaboration for an additional term.

So what we're doing now is negotiating the details of a renewal of the collaboration.

But in addition to the Pfizer collaboration, we know and recognize the importance of executing additional strategic transactions, primarily because of the difficult external financial environment, which still remains today.

We are still working with JPMorgan as our advisors and we're working towards the goal of completing a transaction as soon as possible.

We have very nice assets to work with, with respect to a transaction.

We have our asthma and epilepsy clinical programs, our research programs that are focused especially on pain, our technology platform, very nice intellectual property at stake.

So we're actively, at this time, engaged in discussions with companies and are open to a variety of potential transaction structures with the goal of maximizing shareholder value.

So with that said, let me turn the call over to Seth to provide more details on our clinical programs, and then to Rich to summarize our financial results for the second quarter.

Thank you, Kay.

There are several key events for the clinical trials that will unfold over the next six to 12 months and I want to take this opportunity to bring you up to date as to where those activities are and give you a general idea of our plan for next year.

We'll start with the 665 program.

Kay mentioned this.

It's our potassium channel compound with targeted indications for epilepsy and pain.

As Kay mentioned, the FDA lifted the partial clinical hold on the epilepsy portion of the 665 development program.

To briefly recap, the hold was placed because of findings in preclinical studies at high doses.

The conditions to lift the clinical hold were threefold.

First, characterize the abnormal movements identified in preclinical studies of 665.

Secondly, to provide an analysis of the safety margin for 665 based on a comparison of the exposures between animals and humans, and third, to provide a full protocol for a proposed study of patients with photosensitive epilepsy.

We completed all three tasks and provided a complete response to the FDA, which subsequently lifted the hold.

Our next study, the photosensitivity study, is a very specialized type that is particularly useful in identifying possible drug ranges for study in future trials.

It enrolls people with a very specific type of epilepsy in that they have responses to flashes of light at very specific frequencies, and these responses can be monitored by the electroencephalogram, or EEG, even though the patients themselves have no clinical signs of epileptic activity.

So with a small number of patients we can test a range of doses.

This is a very useful type of study in the development of 665 because there is no identified maximum tolerated dose for humans.

So the study may allow us to demonstrate activity of 665 on EEG patterns and identify a range of doses to study in other clinical trials.

Many other drugs, such as levetiracetam, brivaracetam, and carisbamate, and others have been investigated in this study early in their development programs.

The doses at which these drugs worked in their photosensitivity trials were the doses that worked well later in clinical trials.

Now, simultaneously with the photosensitivity study, we are also on target to initiate a second proof-of-concept trial for pain.

This trial will be carried out at a single center that's experienced in this type of trial.

Basically, health volunteers will be administered controlled doses of painful stimuli in a three-way crossover design.

Pain responses to capsaicin, which is the active chemical ingredient of pepper, and ultraviolet radiation, are measured after treatment with placebo, ibuprofen, and 665.

The objective of this study is to measure an effect of 665 on pain.

In preclinical studies, 665 demonstrated the ability to reduce pain responses to both of these stimuli.

The estimated time for availability of the data from this trial will be early next year.

Moving on to the Senicapoc asthma program, as we have previously reported, two small Phase II trials completed on schedule and we continue to expect the data in the third and fourth quarters of this year.

The target indication here is the treatment of asthma.

Based on clinical studies, we believe that Senicapoc may have anti-inflammatory activity against immune cells important to the development of asthma.

The first trial to report data will be the allergen-challenge study.

This measures the ability of Senicapoc to reduce the effect of allergens on pulmonary function tests.

In addition, the study will also asses the effects of Senicapoc on markers of airway inflammation, including sputum eosinophils, cytokines, and the fraction of exhaled nitric oxide.

The second study measures the effect of Senicapoc on asthma induced by exercise.

This study was conducted at 15 sites in the US.

Both trials are double-blind placebo controlled, and together will give us complimentary information on the profile of Senicapoc as a potential therapy for asthma.

Now, I'm going to turn the discussion over to Dr.

Richard Katz, our Chief Financial Officer.

Thanks, Seth.

I'm going to limit my comments today to focus on the quarter and I'll be happy to take any questions related to the year-to-date results in the Q&A.

For the quarter, we had revenues, reported revenues of $3.0 million.

This compared to $3.2 million during the same period in 2008.

This slight decrease was due to lower reimbursement for R&D expenses as a result of a reduction in the corresponding expenses associated with our Pfizer collaboration.

Operating expenses for the second quarter of '09 were $5.3 million and this compared to $7.1 million during the same period of 2008.

That represented a decline of about $1.8 million and that decrease was due to a couple of factors, primarily timing related issues related to the study of 665, the decrease in those expenses.

We had a reduction in our patent expenses, and decreased equity compensation expense, non-cash of course.

And these were partially offset by an increase in our expenses related to the development of Senicapoc for asthma.

So putting those factors together, our net loss for the quarter was about $2.4 million, which compared to $3.7 million during the same period in '08, a decline in the net loss of about $1.3 million, and it was driven by the factors that we just discussed.

We ended the quarter with about $24.1 million of cash and we noted that we also had a slight workforce reduction, about 10%, in an effort to control costs.

We're very cognizant of the difficult funding environment that exists today and are doing everything that we reasonably can to make sure that we conserve our capital while at the same time advancing our programs in a very robust fashion.

We had some other cost savings measures as well and we'll detail them more thoroughly in our next quarterly call.

We do believe that we have sufficient capital to run the Company at least through mid-2010 and that will give us sufficient time and capital resources to complete all four of the proof-of-concept studies that Seth has described, the two asthma studies, and the two studies related to 665.

So with that, let me conclude and we'll open the call to questions.

Operator?

(Operator Instructions) And our first question comes from the line of Chris Richard with Merlin Nexus.

Please proceed.

Thank you.

I had just one question for Seth.

What doses of 665 are you planning for both studies, both the epilepsy as well as the pain?

Right, we have studied in Phase I trials doses ranging anywhere from 30 milligrams up to 400 milligrams a day.

So that's the range in which we will work.

For the pain study, we'll just be doing a single dose level.

It'll be a multiple dose study but a single dose level and we'll start at the highest dose of 400 milligrams a day.

And for the epilepsy trial, the photosensitivity trial, we're going to start at a lower dose and there's an algorithm that basically, based on the responses to each cohort, you make a decision on going up or down.

So it can be anywhere in a range, in this case, from 50 to 400 milligrams.

All right, and that's BIT or you're adding both doses?

For the photosensitivity study, you do it all with a single dose and you have a pharmacodynamic readout.

So you're measuring plasma concentrations and looking at responses and lining them up basically.

Okay, thank you.

(Operator Instructions) And our next question comes from the line of Dominique Semon with Merlin.

Please proceed.

Hi, guys.

Take advantage to ask another one for Seth as well.

Seth, could you please, perhaps, expand a little bit on these asthma studies, and tell us what's the difference between the two, the allergen-induced, and the exercise-induced model?

And what would a positive signal in these studies mean really from a clinical perspective?

What's the relevance of these (inaudible) to the disease at large, one?

And two, assuming positive results, what would the next step look like from a clinical development perspective?

Right, those are very good questions.

The differences between the two studies are basically twofold.

One is the stimulus that you're giving to induce a change in pulmonary function.

In one case, it's an inhaled allergen, which is a very controlled and carefully regulated experiment.

So you have good control over the experiment, but it's not really what happens in the real world.

By contract, exercise, and also that population is a very small population.

It's maybe 10%, 15% of all patients with asthma.

But it's useful because you get a readout on airway inflammation by looking at sequential sputum samples and also looking at fractional exhaled nitric oxide.

On the other side of the coin, the exercise-induced asthma study is applicable to probably at least 80% of patients with asthma.

That proportion of patients with asthma actually do have some degree of a trigger of their asthma because of exercise.

So it's a broader population.

So the advantage of this trial is that you get maybe something that's more broadly applicable and perhaps better correlated with what you might expect to see as a result in the clinic.

I think the other part of your question was, and correct me if I'm wrong, how much of a response in these studies is clinically significant.

Because they're done under very controlled circumstances, it's a difficult question to answer.

What you can say is that drugs that are very successfully used in the treatment of asthma have been through one or both of these types of studies and have really gotten their first proof of concept through either one or both of these types of studies.

So it's a very useful study.

I think the other part of your question, I believe, was what would be the next step.

Since both of these studies are done with a single dose of, or single dose level of Senicapoc, we would want to expand into doing a dose ranging study.

What type that would be or what it would look like is really going to depend on the kind of data that we see out from this study.

So it would be premature to say much on that.

Okay, but so, but the allergen challenge, you mentioned measuring I guess inflammation markers in the sputum.

Is that the endpoint or is it going to be FEV1 and more like standard measures of pulmonary function?

The primary endpoint is FEV1 and the standard measuring of effect on pulmonary function tests, and it looks at the late antigen response.

You remember in our previous discussions, I've described that there are two phases of the response to an inhaled allergen.

One is an early response, which occurs within minutes or a short period of time, and then the late antigen response that occurs somewhere around four to ten hours after the allergen challenge.

The late antigen allergen challenge phase is thought to correlate with inflammation and be a good predictor of activity of your compound.

The secondary endpoints are the indicators of airway inflammation, sputum cytokines, a fraction of exhaled nitric oxide, and sputum eosinophils.

And the patients would be their own control, I guess.

It would be for FEV1 some sort of a baseline measure and then with or without drug, right?

Right.

There are two ways to do this.

You can either analyze the change from baseline or you can analyze the difference across the treatment arms because both of these are placebo controlled blinded studies.

And if you compare across the placebos, you use the baseline measurements as a covariant, and that's the type of analysis that we'll be doing.

That's what's specified in our statistical analysis plan.

Okay, and finally timing on those studies so far, the allergen, right, and that could come any day, or am I -- ?

Over the next several weeks.

Okay, and then later the exercise?

The exercise-induced asthma study will follow approximately two months later.

It depends on the rate at which the data is finalized and cleaned up, et cetera, but that gives you a general idea of what we expect.

Yes, okay.

Thanks very much.

Thanks for your questions, Dominique.

And there are no further questions in queue at this time.

All right.

Thank you, operator.

Thank you all for joining us on the call today.

We appreciate it.

We're excited about the progress we're making and we look forward to keeping you apprised.

Thank you for your participation in today's conference.

This concludes the presentation.

You may now disconnect and everyone have a great day.