Titan Pharmaceuticals Inc (TTNP) 2002 Q3 法說會逐字稿

Good afternoon. My name is Kori and I will be your conference facilitator today. At this time, I would like to welcome everyone to the Titan's Pharmaceutical Fiscal 2002 Third Quarter Conference Call. Leading today's call will be Dr. Louis R. Bucalo, Chairman, President and Chief Executive Officer, Sunil Bhonsle, Chief Operating Officer and Robert Farrell, Chief Financial Officer. All lines have been placed on mute to prevent any background noise. After the speakers' remarks there will be a question and answer period. If you would like to ask a question during this time, simply press the number one on your telephone keypad and questions will be taken in the order they are received. If you would like to withdraw your question press the pound key.

Before we begin, I would like to read the following Safe Harbor language. This presentation may contain projections or other forward-looking statements regarding future events of the future financial performance of the company. These projections or statements are only predictions. Actual events or results may differ materially from those in the projections or other forward-looking statements. Please see the company's filings with the SEC, including our most recent filing on form 10-K, for discussion of important risk factors that could cause actual events or results to differ materially from those in the projections or forward-looking statements. Dr. Bucalo you may begin your conference.

Thank you Kori. Good morning and afternoon everyone and thank you for attending Titan's Q3 2002 conference call. On the call with me are Sunil Bhonsle, our Chief Operating Officer and Robert Farrell our Chief Financial Officer. I would like to begin by saying that we are making good progress in our internal product development programs, which are focused in the areas of cancer and central nervous system disorders.

We now have 12 products in development with 7 of these products in clinical testing including 2 products in Phase III clinical testing. Iloperidone for the treatment of schizophrenia, and CeaVac for the treatment of colorectal cancer. I would like to first mention some important items relating to our clinical program. Novartis Pharma AG our development and marketing partner for our Iloperidone recently met with the FDA and now Titan and Novartis are working to determine next steps and strategic alternatives for the Iloperidone development program.

Earlier this year, Titan reported positive results from our pilot clinical study with Spheramine and Parkinson's disease and we are now preparing to initiate a blinded control Phase II study of Spheramine and the treatment of late stage Parkinson's disease in collaboration with our corporate partner for Spheramine Schering AG. Our Phase III clinical study of CeaVac for the treatment of advanced stage D' Duke's colorectal cancer has also been completed, and we plan to unblind this study and announced preliminarily results by year-end. Pivanex, a Histone deacetylase contributor is being developed for the treatment of non-small cell lung cancer, and we are planning to initiate a randomize Phase II clinical study in this indication with Pivanex in combination with current chemotherapy in early 2003. In addition, Gallium Maltolate a novel oil product for the treatment of cancer and cancer-related bone disease is completing Phase I clinical testing and preparing to enter Phase II clinical testing in the near future.

In addition, the preclinical development program for Probuphine, our treatment for opiate addiction is near in completion and we planned to initiate the first clinical study in this indication for early next year. Turning now to the third quarter financial results our financial performance for the third quarter was in agreement with market expectations and reflects the continued progress of our clinical program. I would now like to turn the call over to Bob Farrell who'll discuss our financials in more detail. Bob.

Thank you Lou. In the third quarter 2000, revenues were approximately $158,000 compared to $530,000 for the third quarter of 2001. The decrease in revenue was primarily due to additional licensing fees and SBIR grant revenue, which Titan received in 2001. Our net loss for the third quarter 2002 was approximately $7.3m or 26 cents per share. This compares with $4.8m or 17 cents per share for the same period last year. The increase was related to the fact that we had lower interest revenue this year and also to the progress in our numerous internal development programs, especially completion of the Phase III study of CeaVac, in Dukes' D colorectal cancer. The interest income for the third quarter 2002 was $1.1m compared to $1.8m last year for the same quarter. And as of September 30 this year, we had approximately $81m in cash for marketable securities. Lou?

Thanks Bob. Now I would like to ask Sunil Bhonsle to discuss some of our development programs in a little bit more detail. Sunil.

Thank you Louis. As Louis highlighted, we've made important progress on a number of areas and let me give you some more information starting with our CNS products. Regarding Iloperidone, which as you know is being developed for the treatment of schizophrenia. Our corporate partner Novartis has met with the FDA to review of the results of the QTc study and it is now working with Titan regarding a division on possible next steps. We will continue to update you as it progresses in a timely manner.

With regard to Spheramine, Titan has previously reported that treatment with Spheramine produce significant improvement in motor function and quality of life in patients with advanced Parkinson's disease. In a completed 12-month pilot study, specifically patients who participated in the study experienced an average of nearly 50 percent improvement in motor function with no serious safety concern. Based on the promising results, Titan and our corporate development partner for Spheramine, Schering are now preparing to initiate a blinded control clinical study of Spheramine and the treatment of late stage Parkinson's disease.

The protocol has now been approved by the FDA and this trial is expected to begin before the end of this year. Next in the CNS pipeline is Probuphine, our treatment for opiate addiction that uses our long-term drug delivery system. Results from pre-clinical testing have already demonstrated the ability of Probuphine to sustain therapeutic levels of buprenorphine for over six months with no adverse effects. Buprenorphine, as you know, is already approved in this indication and we are on schedule to initiate the Phase I study early next year in patients under treatment for opiate addiction. As you know the second part is in our oncology portfolio and talking with monoclonal antibodies, we have three products in development CeaVac, TriAb, and TriGem. As Lou already mentioned the Phase III study of CeaVac for the treatment of advance-stage colorectal cancer has been completed and we expect to have preliminary results by year-end. Also earlier this year, we initiated a Phase II study of therapy with the combination of CeaVac and TriAb for the treatment of effected Dukes D colorectal cancer.

This study is being conducted by the Cancer and Leukemia Group B and funded by the National Cancer Institute. Also in progress the Phase study of CeaVac and TriAb in non-small cell lung cancer conducted by the radiation therapy oncology group and also funded by the NCI. We expect results from these studies to be available in late 2004 and 2005. Moving on to the Pivanex, earlier this year, we presented positive preliminary results from Phase II single agent study of Pivanex and heavily pretreat [Inaudible] patients with non-small cell lung cancer, and we also presented additional preclinical results demonstrating Pivanex's ability to be combined with current chemotherapeutic agents to increase the anti-cancer activity.

Based on these results, we are planning to initiate the randomized Phase II study of Pivanex and combination with current chemotherapy and lung cancer. This study will commence in early 2003 and expect completion in 2005. Another product in the clinic is Gallium Maltolate or orally delivered form of Gallium which is being evaluated in Phase I, II study for numerous cancer types.

The activity of Gallium in a broad range of cancer such as multiple myeloma, metastatic prostate cancer, metastatic bladder cancer and refractory lymphoma as well as bone diseases have been previously demonstrated in the scientific literature using intravenous formulations of Gallium. Phase I data from our studies indicates therapeutic blood levels of Gallium can be delivered with Gallium Maltolate, and we look forward to additional progress including the initiations of Phase II part of these studies. Lou.

Yeah thank you Sunil. At this point I would like to open up the call and answer any questions you might have.

Ladies and gentlemen if you would like to ask a question at this time, you may do so by pressing star followed by the number one on your telephone keypad. Again if you would like to ask a question, press star and the number one on your telephone keypad. We'll take our first question from Joel Sendek.

Thanks. I would tell you though that you are mentioned your meeting with Novartis to talking about their central possibility, if I went through where there is possibility might be and that's first question. The second question on as to what the timing as to when we might learn about the next step.

First, the possibilities are to one that Novartis might continue developing Iloperidone to pursue an NDA permission that is a possibility. The second is that Novartis might determine that Iloperidone did not with their profile for whatever their internal strategic reasons are in that case Novartis would have two alternatives, one would be to seek a sublicense for the product, which they can do contractually, or the other alternative would be to return the product right to Titan. At this point in time we have no information on which of those scenarios Novartis may choose to pursue. With regard to the timing on that decision, Novartis is just reviewing this and we'll have some meetings next month and we expect that we should have some response from Novartis by January on that.

Okay. And then quickly on Spheramine, when the phase II starts - - can you give us any guidance on how long that study will last?

Yeah, about 2.5 years. The accrual will probably take about a year. The formal follow-up period is one year for each patient that's when the primary analysis will be performed. So, we consider about 18 months from the completion of accrual but probably a reasonable estimate for about 2.5 years.

Thank you.

Thank you Joel.

The next question comes from Dennis Harp.

Hi, Lou and gang. First question on the CeaVac data that are potentially coming out by year end. If those data are positive, is there a route by which you could register the product early?

Well, this is an important question but as you know for any indication obtaining approval based upon a single study is a challenging thing. It is possible that if the results of the study are very significant and very robust that we will discuss with the FDA the possibility of submitting a BOA for the product, but that would really be dependent upon the type of results we get. It is also possible that we may get very good results and the FDA would like to see a second study to confirm the results of this study. So, at this point in time, we are not in a position to say which of either of those would occur if in fact we get positive results.

Okay and then second question is on the study being planned for, here I mean to mention that blinded and controlled, how does that work given that there is a surgical procedure involved and how does it remain blinded to the surgeon?

That's a very good question. It's not blinded to the surgeon. What happens is the patient goes to a surgery center where he or she will either receive Spheramine treatment which as you know is a stereotaxic injection type of surgery or they will simply be pressed for that procedure and they will perform a very small incision which the patient will not know is different from the actual treatment. So the time of the procedure, the preparation etc. is approximately the same. The physician who evaluates the potential benefit of the treatment as well as the patient are both blinded and that evaluation occurs in a separate center from where the surgery occurs. So those two things are separated so that the surgeon is not involved in a subsequent follow-up and evaluation of the patient, unless of course there are situations the surgeon will need to address. But the evaluation and the evaluating physician are in a separate side and the patient does not know whether or not he or she has been treated with Spheramine and that is what's called a Sham (ph) surgery, which is just a minor procedure.

Okay, thank you.

Thank you Den.

At this time, I would like to give everyone an addition moment to ask a question by pressing star and the number one on your telephone dial pad. We will take our next question from Barbara Rosenfeld.

Yes. Thanks for taking my question, I am with Lowe Partners. Most of my questions were answered. But I wondered was were you a party to the discussion that Novartis had with the FDA and I wondered what was the status of the depot form of Iloperidone that you once were working on?

Okay. Thank you Barbara. Yes, we attended the meeting with the FDA that Novartis recently held. So, we were a party to those discussions. We did not play a lead role in those discussions, but we did participate. We did attend those meetings. With regard to the depot formulation for Iloperidone the further development of that is currently on hold, pending a decision on whether or not to proceed with the oral formulation. So, no additional work with the depot formulation is perceiving at this time.

May I ask a further question?

Certainly.

Are you prepared to pursue it further, if it seems that it is approvable with a warning [Inaudible] Iloperidone?

lloperidone, the clearest answer that we can give on that right now it's possibly again depending upon the final approval pathway that would be chosen for Iloperidone. The meeting with the FDA indicated that it may be possible to continue to develop Iloperidone and they outlined what they would like to see and if successful in that effort it would be possible to submit an NDA for the products. So, there is still the possibility to pursue that. If the product were to return to us, we would of course have to look at the cost of completing that program. We certainly believe based upon the data that exists so far but there is a role for Iloperidone and it is worth to continue to develop the product, but we would certainly look at that very closely and potentially seek an additional partner to help us complete that development if we were to pursue it

Thanks.

Thank you.

There are no further questions at this time. Gentlemen, are there any closing remarks?

No, I would like to just thank everyone for participating in the call today. Thank you all very much.

This concludes today's Titan Pharmaceutical third quarter conference call. You may now disconnect