Teva Pharmaceutical Industries Ltd (TEVA) 2013 Q3 法說會逐字稿

Good afternoon, ladies and gentlemen, and welcome to the NuPathe third-quarter 2013 earnings call. (Operator Instructions). As a reminder, this call is being recorded. It is now my pleasure to turn the call over to Mr. John Woolford. Please go ahead, Mr. Woolford.

Thank you, Operator, and good afternoon, everyone. With me on today's call are Armando Anido, Chief Executive Officer, and Keith Goldan, Chief Financial Officer. Jerry McLaughlin, Chief Commercial Officer, will also be joining us for the Q&A portion of the call.

We issued a press release detailing third-quarter 2013 financial results early this afternoon. Those of you who may not seen the release, it is available on our website at www.NuPathe.com in the investor relations section. The format of today's call is as follows. Armando will begin with a an overview of recent corporate highlights. Keith will then provide a summary of our financial results for the quarter and Armando will in the prepared remarks with a brief closing followed by Q&A session. Before we begin I would like to remind you that will make various remarks during this conference call that constitute forward-looking statements. All the remarks that are not historical facts are hereby identified as forward-looking statements and include statements regarding the potential benefits, market opportunity and commercial prospects of ZECUITY, our plans to obtain a commercial partner for ZECUITY in the prospect in doing so. We expect manufacture of ZECUITY lunch supplies by the end of 2013 come our commercial plans and timing regarding the launch of ZECUITY, the sufficiency of our existing cash to fund operations and debt service obligations through January 2014 and the transactions being considered to address such capital needs as well as other statements regarding our plans expectations and beliefs regarding future operations, performance, financial conditions, and other events. Forward-looking statements are based upon our current plans, expectations and beliefs and are subject to numerous risks, uncertainties, and assumptions that could cause actual results to differ materially and adversely from those reflected in such statements including our ability to obtain obtain a commercial partner for ZECUITY, our ability to complete the validation demanding process for ZECUITY and manufacture commercial supplies, our reliance on third parties to manufacture ZECUITY, our ability to establish and effectively manage our supply chain, our ability to obtain additional capital to continue as a going concern in launch of ZECUITY, the potential consequences of failing to obtain the additional our capital including a default under our 2012 term on which could result in the acceleration of our payments obligations, and the ability of the lender to proceed against the collateral securing the loan including the exercise of control over our cash and investment accounts pursuant to account control agreements, a default under our office Leach which could result in the acceleration of payments, the breach OR termination of agreements under which will we rely for the manufacturing of ZECUITY and pursuant to which we obtain valuable rights and the need to pursue a plan to license or sell our assets and/or seek bankruptcy protection as well as those other factors discussed under the heading risk factors in our form 10-K for year in December 31, 2012 which is on file with the SEC and available through the investor relations section of our corporate website. As a result, you should not rely on any such forward-looking statements. While we may elect to update forward-looking statements from time to time we specifically disclaim any obligation to do so. Also, today's call may not be reproduced in any form without our express written consent. I'll now turn the call over to Armando Anido, Chief Executive Officer. Armando?

Thank you John. And thank you all for joining us this afternoon. First and foremost, I will not comment specifically we have made substantial progress in securing a partner to maximize the commercial potential of ZECUITY. Additionally, we are on track to have ZECUITY lunch supplies manufactured by year end. We believe this puts us in a good position to secure a commercial partner. And while we have made progress on the partnership and manufacturing fronts, in order to extend our cash runway we're limiting and delaying certain sales and marketing activities as a result we will not commercialize security by year end but we intend to launch as expeditiously as possible after security securing a partner and funding. Specific to our ZECUITY manufacturing activities, we have entered into a commercial supply and license agreement with LCS, otherwise known as Lohmann Therapy Systems for the drug product ZECUITY. In addition, we've made significant progress regarding several key process validation steps and continue to expect to have lunch supplies manufactured by the end of this year. During the quarter, as part of our post marketing requirements we also initiated dosing of patients in a Phase I study of ZECUITY in adolescence with a history of migraine attacks. This open label single-dose study assesses the safety pharmacokinetics, and tolerability of ZECUITY in the these patients. Today oral tablets are the only route of administration currently approved for the acute treatment of migraine attacks in adolescence. An analysis of the landmark American migraine prevalence and prevention study or AMPP, the largest survey of migraine sufferers shows that 5% of boys and 7.7% of girls aged 12 to 19 met the criteria for migraines. Adolescents experience the same cardinal symptoms of migraine as do adults. Headache pain, migraine related nausea, photophobia and photophobia. As reported in a retrospective review, of Glaxo Smith Kline's clinical trials database of 1952 adolescent migrainors, 53% experience nausea making ZECUITY a potentially important new therapeutic option for these patients. Our ongoing study will enroll up to 36 adolescence aged 12 to 17. There will be a similar number of subjects between 12 to 14 years of age and 15 to 17 years of age with distribution of both sexes in each age bracket. We expect to announce results of the study in the third quarter of 2014. And lastly, I also wanted to highlight that the United States patent and trademark office recently issued a notice of allowance for another ZECUITY patent. This patent covers securities two-stage iontophoretic delivery sequence to transdermally deliver sumatriptan. When issued, this patent will provide additional protection for ZECUITY and will be the sixth patent covering ZECUITY to be listed in the Food and Drug Administration's Orange Book. With that I'll turn the call over to our CFO, Keith Goldan to review our financial remarks.

Thank you and good afternoon everyone. We issued a press release detailing financial results and recent operational highlights for the third quarter 2013 earlier this afternoon. We plan on filing our 10-Q shortly after this call.

NuPathe reported a net loss applicable to common shareholders of $7.8 million, eight $0.25 per share for the third quarter of 2013 compared with a net loss applicable to common shareholders of $6.2 million and $0.42 per share for the third quarter of 2012. Third-quarter 2013 operating expenses totaled $7.6 million compared with $5.7 million in the 2012 period. Research and development expenses during the third quarter of 2013 were $3.9 million, up from the $2.2 million in the comparable quarter of 2012. This increase in R&D spending is largely attributable to higher expenses related to commercial manufacturing scale up. This was partially offset by reduced compensation expenses in the 2013 period due to fewer headcount. Selling, general, and administrative expenses were $3.7 million in the third quarter, in line with $2.5 million during the same period last year. Net cash used in operating activities for the nine months ended September 30, 2013 total $12 million primarily the result of spending for normal operating activities including manufacturing scale up and commercial relation expenditures for ZECUITY. During that same period we also use $2.7 million of cash investing activities primarily for the purchase of commercial manufacturing capital equipment for ZECUITY and we generated $2.4 million in financing activities, primarily from the exercise of warrants. At the end of the third quarter, NuPathe had $10.3 million in cash and cash equivalents and working capital of $2.9 million compared with $22.6 million in cash and cash equivalents and working capital of $19.8 million at December 31, 2012. We now expect that our existing cash and cash equivalents will be sufficient to fund operations and debt service obligations through January of. The additional capital that we'll require from operations and debt service obligations beyond that point and launch ZECUITY will depend largely upon the timing scope terms and structure with the commercial partnership for ZECUITY to address our capital needs we're considering a range of potential transactions including corporate collaborations, partnerships, and other strategic transactions, debt and equity financings, and other funding opportunities. However there is no assurance that we'll be able to complete any such transaction before obtaining the additional capital required. I'll now turn the call back to Armando for closing remarks.

Thank you Keith. We want to thank all of our stakeholders for your continued support. As a can see it's been a very busy and productive quarter and with that I'm now happy to take questions. Operator, please begin the Q&A session.

(Operator Instructions). Annabel Samimy, Stifel.

I guess I have to ask you obvious which is you know exactly what has been the rate limiting steps for you guys to secure partnerships? Was it lack of interest for the product? Lack of product to manufacturers or if you could just give us some color there and also, if you are potentially facing a situation where you are even putting bankruptcy issues in your risk statements, is it a standard for corporate partnership has to come down, what are the things that you're looking for now versus what you've sort of been looking for before or does it stay the same? Thanks.

Thanks Annabel for the questions. And I think that in trying to secure a partner, I think there's a number of things that go into consideration. I don't know that I can sit here and point to one in particular. I think that as you kind of take a look at the full package, we have an approved asset that was approved back in January. We then had to undergo all of the manufacturing qualifications and then now going into the validations and that does take time. I think that as some potential partners look at it they want to make sure that we actually will be able to manufacture the products. So I think that's a very positive step for us and I think at the end of the day it's also a matter of do you have -- do they have the right type of structure and do they have the right interest in really making this a significant product and really helping us in making sure that ZECUITY becomes available and becomes available widely to those patients who suffer from migraine related nausea and, hopefully make it a success. So, these collaborations having been in a number of them throughout my career do take time. I think that has everybody is patients gets a little less, it makes it difficult but it the end of the day these things do take a lot of patience and I think that at this point in time, I think that we have made very substantial progress and, I think that with the manufacturing moving onward and being able to ship product at the end of the year, it's necessary. I think we are in the best position that we can be in in order to secure that partner.

Okay well I don't know if you can do this but can you sort of give a little bit more color around what substantial progress means?

Yes. I think that there are so many steps in this I think that for me, the progress that we have made is a very substantial to the point I'm not going to specifically give you details around what that exactly where we are in the process. But I wouldn't be communicating that we've made substantial progress if I didn't think that we have a pretty good chance of securing this.

Okay thank you.

(Operator Instructions). Liana Moussatos, Wedbush Securities.

Are you talking more than one potential partner now?

Beyond the specifics, let me rephrase the question. The -- are we talking to more than one partner? I can absolutely tell you that we are. Yes. What I can't do is give you specifics on the numbers.

Okay.

And it appears there are no further questions at this time. I'd like to turn the conference back over to Mr. Armando Anido for any additional or closing remarks.

Right. Thank you all very much for your time this afternoon and look forward to future conversations. Thank you.

Thank you. That does conclude our conference. You may now disconnect.