Spectrum Pharmaceuticals Inc (SPPI) 2011 Q2 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Talon Therapeutics reports second-quarter 2011 financial results conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. (Operator Instructions). As a reminder, today's conference call is being recorded.

I would now like to turn the conference over to your host, Dr. Steven Deitcher, President and CEO of Talon Therapeutics. Please go ahead.

Thank you. Welcome to today's Talon Therapeutics investor update call. Today, Craig Carlson, Talon's Senior Vice President and Chief Financial Officer, and I will provide a general corporate and financial update focused on the key accomplishments of the second quarter of 2011, important events occurring shortly after June 30, 2011 and plans for the remainder of the third quarter.

Before we get started, I would like to remind everyone that Craig and I will be making forward-looking statements. Please visit our Company website at www.talontx.com in order to review our most recent SEC filings and press releases.

It certainly has been a very productive, encouraging and significant three months since our last call. Please note that I expressly came to the Company in mid-2007 in order to build a high-performance team capable of efficiently and proficiently developing Marqibo. Tremendous effort, focus and resolve by this team, consisting of employees, contractors and our global network of clinical investigators, culminated in our most important accomplishment to date. This accomplishment was the electronic submission of our complete, original new drug application, or NDA, to the FDA, seeking accelerated approval for Marqibo.

It is the Company's position that our NDA clearly presents and supports a favorable benefit to risk profile for Marqibo in adult patients with advanced, relapsed and/or refractory Philadelphia chromosome-negative, acute lymphoblastic leukemia, or ALL. Particular effort was exerted to ensure that our NDA and ongoing Marqibo programs are of the highest quality and aligned with the newest FDA requirements for accelerated oncology product approval.

Submission of our NDA in mid-July of this year triggered the start of an initial 60-day review period. On or about the conclusion of this 60-day period, Talon will become aware of whether or not our NDA has been formally accepted for filing by the FDA, and whether we will receive a standard nine- to 10-month review or a priority six-month review. We expect to know the status of our application in the middle of September, 2011.

Assuming that our NDA will be accepted for filing, we are prepared to receive and promptly respond to follow-up questions and data requests from members of the FDA review teams. We are also prepared for the FDA to schedule official preapproval inspections of Talon Therapeutics and a select group of our contract manufacturing facilities.

Under a priority review scenario, we would anticipate participating in an Oncology Drug Advisory Committee, or ODAC, meeting possibly in December of this year and receiving the FDA decision on approval of our NDA as early as January of 2012.

Under a standard review scenario, both an ODAC meeting and FDA decision would be anticipated to come only three to four months later than described for the priority review scenario.

The Talon team has been actively preparing for an ODAC meeting for several months now and actually involved our ODAC preparation consultants in the final review of our NDA itself.

In addition to the NDA, an important component of the accelerated approval process involves reaching agreement with the Agency regarding a post-approval Phase 3 confirmatory study meant to support the future conversion of accelerated approval into full approval. Talon's plans for a confirmatory study were originally discussed with the Agency in 2007. We have been engaged in more frequent and detailed discussions in collaboration with the FDA regarding a proposed confirmatory study ever since the successful completion and analysis of the Phase II rALLy study.

Particularly productive discussions during the second quarter of this year culminated in the submission of a special protocol assessment, or SPA, request prior to submission of our NDA. We expect to hear back regarding our SPA by early September of this year. It is important to note that our NDA was submitted in advance of receiving an SPA, following consultation with the Agency.

The proposed Phase 3 confirmatory study intended to fulfill our post-approval commitment is a global, randomized trial in adults aged 60 years and older with newly-diagnosed and untreated ALL. Because the SPA request is still pending, I will wait to provide comprehensive details of the proposed study. Rest assured that the proposed trial has been designed to address the medical needs of patients, scientific questions of the leukemia physician community and requirements of global regulatory agencies.

Once the FDA formally approves our SPA, Talon intends to rapidly operationalize the study and open it to enrollment prior to an NDA approval action. This is a very aggressive goal in the event of a priority review timeframe.

I will conclude my Marqibo update by reminding everyone that our Marqibo development and future commercial label expansion plans beyond advanced, relapsed and/or refractory adult ALL include front-line adult ALL treatment, front-line adult aggressive lymphoma treatment and pediatric ALL and solid tumor treatment.

The confirmatory study, already mentioned on this call, is intended to address the front-line adult ALL treatment need and opportunity. The international Phase 3 randomized adult lymphoma trial, described during our last call, is intended to address the vast lymphoma need and opportunity. And I am heartened that Talon's Phase 1/2 study of Marqibo in children and adolescents with solid tumors and hematologic malignancies, including ALL, has enrolled its first treatment group at the National Cancer Institute.

Moving on to Menadione topical lotion, I am pleased to announce the imminent commencement of a multicenter, randomized Phase 2 trial of Menadione topical lotion for the prevention and palliation of epidermal growth factor receptor inhibitor induced skin toxicities, sponsored by the world-renowned Mayo Clinic, with investigational drug supply and other support from Talon Therapeutics. After considering the initiation of a Talon-sponsored trial, several corporate partnership opportunities and collaborations with esteemed academic medical centers, the Talon management and Board of Directors decided that the Mayo Clinic-sponsored trial was best for the asset, Company and shareholders.

The Mayo team has taken the oncology lead in studying and publishing about the very common and cancer treatment disruptive skin toxicities caused by drugs such as Tarceva, Erbitux and Vectibix. The Mayo team brings the potential for a speedy trial and high-quality proof of concept data, all without Talon having to give up future development control and any commercial rights to this potentially very valuable product candidate. We expect the data readout as early as the first half of 2012.

This concludes my formal remarks. I will now turn the call over to Craig so that he can discuss the quarterly financial results. Craig?

Thank you, Steven, and thanks again to all our shareholders and prospective shareholders who are participating in the call.

I would like to start out with the statement of operations for the three months ended June 30, 2011. Total operating expenses for the second quarter 2011 were $4.8 million compared to $4.6 million for the same period in 2010. R&D accounted for $3.5 million of the quarterly operating expenses, and the primary reason for the increased expenses was increased use of clinical research organizations, or CROs, and consultants in R&D as part of our Marqibo NDA submission effort.

Talon had a net loss of $6 million and deemed dividends on preferred stock of $1 million, which, when combined, resulted in a net loss applicable to common stockholders of $7 million or $0.33 per share. As a reminder, the deemed dividends attributable to preferred stock refers to the beneficial conversion feature related to the preferred stock agreement and the accretion of the preferred shares each period.

In contrast, the net loss during the three months ended June 30, 2010 was $6.3 million and deemed dividends attributable to preferred stock of $9.3 million, which, when combined, resulted in a net loss applicable to common stockholders of $15.6 million, or a net loss per share of $0.76.

Now moving over to the six-month period ending June 30, 2011, Talon reported a net loss of $16.5 million and deemed dividends attributable to preferred stock of $1.9 million, which, when combined, resulted in a net loss applicable to common stock of $18.4 million, or a net loss of $0.86 per share.

For the six-month period ending June 30, 2010, Talon reported a net loss of $11.8 million and deemed dividends attributable to common stock of $9.3 million, which, when combined, resulted in a net loss applicable to common stockholders of $21.1 million, or $1.04 per share.

For the three- and six-month periods ending June 30, 2011, our expenses have been right in line with our budget projections.

Now we will move on to the balance sheet. As of June 30, 2011, we had current assets of $10.6 million, including cash, cash equivalents and available-for-sale securities of $10.5 million, compared to current assets of $22.9 million as of December 31, 2010.

The total current liabilities as of June 30, 2011 were $5.6 million compared to $6.1 million as of December 31, 2010. As of June 30, 2011, Talon had long-term liabilities of $32.5 million, which was driven by $23.7 million in notes payable and $7.5 million for the investors' right to purchase feature shares of Series A1 and A2 preferred stock.

Also under the line item called Commitments and Contingencies, there is a section called redeemable convertible preferred stock, and that was valued at $30.6 million. So as of June 30, 2011, Talon had total stockholders' deficit of $57.1 million compared to $41.9 million as of December 31, 2010.

Looking forward, we expect expenses to begin to decline during the second half of 2011, as R&D expenses begin to diminish from the concerted effort that was put forth in preparation for the NDA review. As we disclosed in previous SEC filings, including this quarterly filing, we expect to have sufficient cash until late 2011.

I should add that the preferred stock agreement we completed in June 2010 provided the preferred stockholders with the right, but not the obligation, to invest up to an additional $20 million prior to the FDA approval decision on Marqibo, and another option to invest up to $40 million after approval of Marqibo.

Now, to continue operations into 2012, we will need to have additional capital, as we have stated in our SEC documents.

So I have completed the formal remarks on the financial review, and Steven and I will now be available to entertain questions you might have.

(Operator Instructions) Mai Pogue, Pogue Capital Management. I'm sorry. It seems that they have dropped out of queue.

(Operator Instructions) I am not showing any questions at this time, sir.

Well, then why don't you put me back online and I'll thank everyone for their participation?

You may proceed, sir.

Thank you. In the absence of any questions, I want to thank everyone for their attention and their time. Please do not hesitate to reach out to Craig or myself if you have questions following this call. We are extremely enthusiastic about the great accomplishments in R&D over the last several months, a true culmination of several years of hard work. It is exciting, the attitude is upbeat, and I am personally intent on shepherding us forward to get this drug approved.

Again, thank you very much, and look forward to speaking to each and every one of you if you so choose. Thank you.

Ladies and gentlemen, that does conclude today's conference. You may all disconnect, and have a wonderful day.