Titan Pharmaceuticals Inc (TTNP) 2003 Q2 法說會逐字稿

Good afternoon, my name is Susan, and I will be your conference facilitator today. At this time, I would like to welcome everyone to the Titan Pharmaceuticals second quarter 2003 conference call. Leading today's call will be Dr. Louis R. Bucalo, Chairman, President and Chief Executive Officer, Sunil Bhonsle, Chief Operating Officer, Dr. Frank Valone, Executive Vice President of Clinical Development and Regulatory Affairs, 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, you simply press the star key followed by 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 conference 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 and those in the projections or other forward-looking statements. Please see the company's filings with the SEC, including most of our recent filing on Form 10-K for a 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. Hello everyone and thank you for attending Titan's second quarter 2003 conference call. On the call with me is Sunil Bhonsle, our Chief Operating Officer and Bob Farrell, our Chief Financial Officer. The first six months of the year have been very busy and we are excited about the progress we are making in our four core programs. I'd like to first discuss several items in these four core areas. With regard to Pivanex, our histone deacetylase inhibitor with broad-spectrum anti-cancer activity, we initiated a randomized Phase II-b clinical study of Pivanex, in combination with the approved chemotherapeutic agent docetaxel, in second line of therapy of non-small cell lung cancer in June. We also presented new data about Pivanex at the American Association of Clinical Research in July and we look forward to presenting additional information this week on Pivanex at the World Conference on Lung Cancer.

With respect to Pivanex, we reported two-year follow up data from the pilot clinical study at the American Academy of Neurology meeting which demonstrated substantial sustained benefit in motor function two years after treatment in our pilot clinical study. In December, we initiated a randomized, Phase II-b clinical study of Spheramine in advanced Parkinson's disease in collaboration with our corporate partners Schering AG. We have enrolled the first cohort of 12 patients and the study is proceeding on schedule.

With respect to Gallium Maltolate, our novel oral product for the treatment of cancer and bone disease, we are completing a Phase I dose escalation clinical study, expect to launch the Phase II portion of the study by the end of the year.

In addition, regarding Probuphine, our novel treatment for opiate addiction, we initiated our pilot clinical study with this product and we have enrolled the first cohort of six patients and continuing the study on schedule. That's a quick summary of the status of our core product development programs and now I'd like to turn to the financial results and have Bob Farrell discuss our financials in more detail. Bob?

Thank you, Louis. Operating expenses for the second quarter of 2003 were approximately $7m compared with operating expenditures of $8.3m for the second quarter of 2002. For the first six months this year, operating expenditures were approximately $14m compared with operating expenditures of $17m for this first six months of 2002. This is a 17.7% reduction and it is primarily due to our strategy of focusing on four core programs and reducing our other operating expenses.

Our net loss for the second quarter 2003 was approximately $6.7m or $0.24 per share compared to $7m or $0.25 per share for the same period last year. For the first six months this year, the net loss was approximately $13.2m or $0.48 per share compared to $12m or $0.43 per share for the first six months of 2002.

For the first six months of this year, revenues were approximately $28,000 compared to $2.5m for the same period last year. The higher revenue last year was primarily due to a milestone payment that Titan received from Schering AG Germany for Spheramine and that was received in the first quarter of 2002.

Interest income, net of other expenses for the second quarter this year was approximately $309,000 compared to $1.1m for the second quarter last year. For the first six months of 2002 the interest income net of other expenses, excuse me, for 2003 the interest income net of other expenses was approximately $776,000 compared to $2.5m for the same period in 2002. The difference was related to lower interest rates and a lower average cash balance.

And as of June 30, 2003, the end of the second quarter, we had approximately $59.6m in cash and marketable securities. For 2003 as Louis mentioned we continue to focus our internal resources on four core product development programs and at this point I'll turn back to Louis.

All right. Thank you Bob. Now, I would like to open up the call and help answer any questions that people may have.

Thank you. The question and answer session will be conducted electronically, if you would like to ask a question, please do so by pressing the star key, followed by the digit one on your touch-tone telephone. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. We will proceed in the order that you signal us and will take as many questions as time permits. Once again, please press star one to ask a question. And we will pause a moment to assemble the roster. We will take our first question from Joel Sendek with Lazard.

Thanks. Just a couple of questions here on milestones. First of all on Spheramine, are you still on track to complete enrollment in this study in the first half of next year?

Yes Joel, this is Louis. We have added a number of additional sites and we have been very pleased that the interest in this study and we feel based up on the additional sites both for neurosurgery centers as well as recruitment sites, neurology centers that we should be able to meet those goals. So, we are still on track for our enrollment as well as potential completion of the study in the second half of '05.

Okay. So, it's completion of the study or data in the second half of '05?

Would be completion of the study and then of course depending up on how long it takes to review and finalize the data analysis.

Okay, and then on Pivanex, what about data there in the new non-small cell lung cancer trial, end of next year, does that look--?

Yes, that's still again an appropriate target. That study is proceeding on schedule and the study should be completed towards the end of that year and again just depending up on the time for the analysis, we should be able to bring that data in by the end of the year or very soon thereafter.

Okay and then looking at burn rate and cash, my rough calculations leave me to see you have got about two years cash from now and I am wondering if there is any milestones from sharing or anyone else that I am missing as far as what your plans are beyond the two years, it seems like some of these milestones kind of get you into '05 and I am wondering what your financing plan is between now and then?

Right. We have enough capital to last us through the end of '05. We have a number of programs that are currently in process and will be in process through the end of '04. However, those programs won't continue to expend that amount of cash through '05. So in fact our current cash position, we are able to go through the end of '05. There are no particular milestone payments per se between now and then, but certainly we hope to have a number of value adding events by the end of '04. So we have a year of cash by the time we have a number of potential milestones which include the results from Pivanex as you mentioned, also preliminary results from the studies with Gallium Maltolate, we should have our first Phase II results completed by that time as well as the final results from the pilot clinical study with Probuphine. So, we should have by the end of '04 a number of events, which we believe is favorable with, certainly serve as value-enhancing events and then by the second half of '05 look for the Spheramine results.

Okay and then any update on business development opportunities for your rights to Iloperidone?

We know that Novartis is at this point actively looking at the potential for out licensing of Iloperidone, we don't have any specific details but we know that is an active process and it is one to which Novartis is devoting a substantial amount of diligence, but we don't have any particular information at this point in time.

Any idea when we might get an update on that or when you might get an update on that?

We'd be looking for an update sometime in about two months from Novartis. We don't have any specific date scheduled, but that's about the timeframe we'd expect to have an additional update from them.

Okay. Great. Thanks a lot.

Thank you Joe.

Once again, if you would like to ask a question, please press star, one, on your touch-tone telephone.

Well, it appears, there are no further questions at this time. Dr. Bucalo, I would like to turn the conference back over to you for any additional or closing remarks.

Well, we just want to thank everyone again for attending today's conference call. We continue to make progress in our four key product areas and we are very encouraged by the progress we have made so far. And we look forward to updating everyone on additional progress for the second half of this year. Thank you everyone for participating. With that we would end the conference call.

That concludes today's conference. Thank you for your participation.