Titan Pharmaceuticals Inc (TTNP) 2008 Q1 法說會逐字稿

Welcome to the Titan Pharmaceuticals first quarter 2008 financial results conference call. At this time, all participants are in listen-only mode. There will be a question-and-answer session following today's remarks. Please be advised that this call is being taped at the Company's request and will be archived on the Company's website for two weeks from today.

At this time, I would like to turn the call over to Dr. Marc Rubin, President and CEO of Titan Pharmaceuticals. Please go ahead.

Thank you, operator, and thank you all for joining us this morning and welcome to the Titan Pharmaceuticals call for the first quarter of 2008. With me today is Bob Farrell, our Chief Financial Officer and Sunil Bhonsle, our Chief Operating Officer. Today we'll provide you with an update of our first quarter 2008 financial results, as well as some additional updates regarding our recent corporate developments in upcoming milestones. As a reminder, certain matters we will discuss today other than historical information consist of forward-looking statements relating to, among other things, our expectations concerning our financial results, available cash, clinical programs and regulatory strategies. The forward-looking statements are not guarantees of future performance and are subject to a variety of risks and uncertainties that could cause actual results to differ materially from the results contemplated by the forward-looking statements. These risks and uncertainties are described in our annual report form 10-K for the year ended December 31, 2007 and subsequent SEC filings. You are cautioned not to replace undue reliance on the forward-looking statements which speak only as of today. We undertake no obligation to update or revise the information provided in this call whether as a result of new information, future events or circumstances or otherwise.

I will turn the call over to Bob to review our first quarter financial results in a few moments, but first, I would like to give you a brief recap of our first quarter corporate developments. Titan is approaching an important and an exciting time period, as we have three late stage product development milestones that we expect to reach during the third quarter this year. We believe that positive outcomes associated with these milestones have the strong potential to be a pivot point to drive our future success. During the first quarter of 2008, we continue to focus on moving forward on our corporate objectives. We've worked hard to ensure that are are pathways of communication are open to the public and we've actively supported and expanded our relationships with the investment community and with the media. With respect to the media, I think we've begun to make nice progress, as evidenced by the attention we've received from certain key media outlets such as "The Financial Times" and the Science Business Exchange, also known as Sci BX which is under the Nature publication umbrella.

In addition, many of you have noticed that two days ago we launched our newly redesigned web site. If you haven't had an opportunity to do so, please take time to explore it at www.titanpharm.com. In April of this year, important data from the open-label pilot study of Spheramine in Parkinson's disease were presented at the 76th annual meeting of the American Association of Neurological Surgeons or AANS which took place in Chicago. Spheramine, as many of you know, is a novel cell0based therapy being evaluated for patients with moderate to severe Parkinson's disease. The pilot study was sponsored by our partner, Bayer Schering Pharma and conducted a Emory University Hospital. It evaluated the safety, tolerability and preliminary efficacy of Spheramine in six patients with moderate to advanced Parkinson's disease.

Very encouraging one year data were previously presented and the current presentation assessed the durability of response over four years. The study's primary efficacy measure was the improvement in the motor score of the Unified Parkinson's Disease Rating Scale or UPDRS. The most important finding from this study was that durability of response was demonstrated with an average of 44% improvement from baseline at 48 months or four years in patients' UPDRS motor scores following a single treatment with Spheramine. This was coupled with improvements in quality of life and in acceptable safety profile with no Spheramine-related serious adverse events reported and with post-surgical headache, which resolved over one to two weeks, being the most common non-serious adverse effect. As you know, Bayer Schering is conducting a Phase IIb multi-center double blind randomized sham surgery controlled study, known as the steps trial, to further evaluate the safety and efficacy of Spheramine. And as we have announced previously, enrollment was completed in this trial in mid 2007 and we expect to announce results from this trial in the third quarter of this year. I will come back in just a few minutes to update you on both Probuphine and Iloperidone but first, I would like to turn the call over to Bob Farrell, our CFO, for a review of our financial results. Bob?

Thank you, Mark. Hello, everyone. For the fist quarter ended March 31, 2008, as expected and planned, we reported a net loss of $5.7 million or $0.10 per share, compared with $3.6 million or $0.09 per share for the quarter ended March 31, 2007. Research and development expenses totaled $3.8 million in the first quarter of 2008, compared with $2 million in the first quarter of 2007. R&D expenses increased primarily as a result of the increased costs associated with the continuing Probuphine clinical trial program. General and administrative expense was $2.2 million in the first quarter of 2008, compared with $1.5 million in the first quarter of 2007. Our G&A expenses increased as a result of additional expenses incurred for market research, product positioning and noncash compensation costs.

Throughout 2008, we are continuing to look at all of our expenses to ensure that they match our planned prioritization of the development programs for our three major opportunities, Iloperidone, Spheramine and Probuphine. Our goal remains to utilize our resources to maximize the potential of our most promising opportunities. Turning to our cash position, as of March 31, 2008, we had approximately $24.3 million in cash, cash equivalents and short-term investments compared with $30 million at December 31, 2007. We currently have approximately 58.3 million shares of common stock outstanding. This concludes our financial report and I would like to turn the call back over to Marc for closing comments and a recap of our upcoming milestones. Marc?

Ok, thank you, Bob. As I mentioned in my opening remarks, we have three important milestones that we expect to reach in the third quarter of this year. And what I would like to do now is quickly recap these key upcoming events. Let's turn first to Iloperidone. Iloperidone is an atypical antipsychotic, which being developed for the treatment of schizophrenia. Vanda pharmaceuticals filed the NDA in September of 2007 and it was accepted by the FDA in November of 2007. We expect an action by the FDA towards the end of July. If approved, Vanda plans to launch Iloperidone in 2009 and Titan will receive between 8% and 10% royalties on global net sales. We're entitled to an 8% royalty and up to $200 million in sales per year and 10% over $200 million per year with no associated expenses.

On May 6th, during their analyst day presentation around the American Psychiatric Association meeting in Washington, Vanda presented a review of the accumulated short-term and long-term data as well as an overview of their preparation for commercialization for Iloperidone. The main points on the product profile were, one, clear demonstration of efficacy across short and long term studies and, two, a potential favorable tolerability profile compared to many of the other atypical antipsychotics, especially with respect to movement disorders, metabolic profile and weight gain and somnambulance. As no single drug works well for all patient with schizophrenia and since cycling between drugs as a result of tolerability issues is common to this disease, Vanda believes that a favorable safety profile coupled with clear efficacy has the strong potential to form the basis of differentiation within the class and the basis for commercial success. Vanda plans to launch Iloperidone in 2009, marketed under the name [Finafta] and they presented an overview of their prelaunch commercialization preparation. Currently, they're focused on four areas of preparation, marketing, the sales force, managed care and distribution. And they have committed to the hiring of key senior executives in both sales and managed care prior to the PDUFA date and I refer you to the Vanda web site for details of the preparations. But we are very encouraged by Vanda's enthusiasm for the Iloperidone opportunity and their continued commitment of resources to support its market entry.

Let's now briefly turn to Probuphine, which is in the large and growing market of opioid addiction. This product is wholly owned by Titan, it is currently in Phase III clinical testing and the first Phase III clinical trial completed enrollment a month ahead of schedule in December of 2007. We expect to have results from this Phase III study in the third quarter of 2008. The overall program is progressing as planned, with an ongoing retreatment study and an open label safety study to begin later this year. We are also beginning a program for Probuphine as a potential treatment in chronic pain, and we plan to begin a Phase II study in chronic pain in the second half of this year. We will update you on our plans for chronic pain in future calls.

Finally, let's move on to Spheramine for Parkinson's disease, which of course I touched on earlier in this call. And as I mentioned, Spheramine is currently in a Phase IIb trial and our third significant milestone this year will be the results from this trial, which are expected third quarter. Supported by the four-year data that I briefly reviewed earlier, we're hopeful that Spheramine will augment the treatment options available to people suffering from moderate to advanced Parkinson's disease in a meaningful way. The FDA has granted both fast track status as well as orphan drug status to Spheramine and we look forward to working with Bayer Schering as we move forward with the development of this very exciting program.

So the remainder of this year promises to be an exciting time period for Titan and we are approaching it enthusiastically. Positive results from our milestones coming up in the third quarter this year offer promise for all of our stakeholders, including patients, shareholders, healthcare providers and employees. We look forward to continuing to proactively communicate with Wall Street and with the press in updating all of you on our progress as we move forward. I want to thank you in advance for your support. At this time, I would like to turn the call back over to the operator for the question-and-answer segment.

(OPERATOR INSTRUCTIONS) We'll pause momentarily to compile a list. Your first question comes from the line of Ram Selvaraju of Rodman and Renshaw. Please proceed.

Thank you very much for taking my questions. Three very quick questions. The first on Iloperidone. Could you speak a little bit about where Vanda is in the development of the once monthly or once every four weeks dosing form and how they might plan to roll that out following potentially the -- a positive regulatory decision on the Iloperidone NDA?

Sure, Ram. What we know is Iloperidone has been through Phase II testing with the depo formulation. And this would be a once monthly dosing of Iloperidone. So that compares favorably to the every two weeks with the current depo formulation. Vanda at this point, has not announced specific plans for timing of continuation with this program. So, we will wait to see what they decide to do following the PDUFA, but we know this is ready to move on as Phase II is completed.

My second question is with respect to the DITPA program. I saw from the press release that development has been discontinued in the indication of congestive heart failure. Could you talk about the current status of this molecule with treatment of hypercholesterolemia?

Sure, I can. And just for those of you who aren't familiar with this, DITPA is a thyroid hormone analog. Yes, we did announce that the results for the congestive heart failure study really did not support moving ahead with this program. DITPA, of course, is still in our stable of compounds. We have made, though, a very conscious decision now not to focus resources on the early programs and specifically to focus all of our resources on moving ahead with late stage programs, our internal resources, of course, being focused on Probuphine which is the program that Titan is running. So, for the time being, we really are going to place the emphasis on the late stage programs that can bring value to the Company in the earlier time frame, while we continue to look at further possibilities for DITPA.

Okay. But it has not been officially discontinued for hypercholesterolemia? Is that correct?

We're not -- we're not progressing studies now for hyperlipidemia with DITPA.

Okay. The third question is with respect to Probuphine, if there were to be a situation where a patient on Probuphine overdosed on an opiate drug, would it, A, be considered potential exacerbation of the situation to leave the implant in? And what, if that is the case, what would be the most expeditious way to treat such a patient? Is it possible to remove the implant rapidly? What kind of safety concern is there, if any, in such a situation?

Sure. Well, a couple of points, Ram. First of all, bupamorphine is a mixed agonist antagonist. So it does not have all of the properties of the pure agonist in and it has a relatively good safety profile. t is rather hard to overdose with bupamorphine itself. You can push the dose higher and we get a feeling effect with respect to respiratory depression, for example, with increasing doses. Having said that, if any patient overdoses with an opiate, no matter what opiate it is and no matter which opiate they might have on board, the most appropriate therapy is immediate initiation of an opiate blocker like intravenous Naloxone and that will reverse all opiates. Also, with Probuphine, you can easily remove the implants and the levels of Probuphine will almost immediately drop to zero. So both of those would be the appropriate way to go in that setting, if it occurred.

Okay. So, just to clarify. There is not expected to be any additive safety concern with the implant in the patient, even if the patient does overdose on an opiate drug.

No. We don't expect there to be any additive safety concern. Of course, we're assessing that in the ongoing trials. But remember that bupamorphine also has some opiate blocking activity, so actually it serves to block the effects of some opiates until one gets to very high doses.

Okay. And just to clarify, with respect to the chronic pain program, do you have a sense of how large this program would be, how many patients you expect to enroll? And what kind of design and approximately what the time line would be for that to report results?

Ram, we haven't announced that yet. We're still in the formative stages. We're refining the design of the Phase II program. We have completed our first advisory panel with opinion leaders who are enthusiastic about this. We will let you all know the design of the Phase II study, as soon as we have refined it, and we'll share our plans for Phase III beyond that as soon as we've formulated those. But we're not there yet.

Okay. Thank you very much.

Thank you.

(OPERATOR INSTRUCTIONS)

Okay. If there are no further questions, and there don't appear to be at this point, I want to thank you all again for your interest in Titan. We look forward to an exciting balance of the year. As a reminder, we will l be making a corporate presentation at the Rodman & Renshaw Fifth Annual Global Healthcare Conference in Monte Carlo on May 19th at 4:15 local time. And we invite you to access our presentation through our live webcast, which will be housed in the investor relations section of our website at www.titanpharm.com. Thank you all again for your time and your interest.

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Have a good day.