Titan Pharmaceuticals Inc (TTNP) 2010 Q3 法說會逐字稿

Thank you for holding and welcome to the Titan Pharmaceuticals third quarter 2010 financial results conference call. At this time all participants are in a 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 Sunil Bhonsle, President of Titan Pharmaceuticals. Please go ahead.

Thank you all for joining us this morning and welcome to the Titan Pharmaceuticals call for the third quarter of 2010. On the call today, we have Marc Rubin, our Executive Chairman; Kate Beebe, Senior Vice President of Clinical Development and Medical Affairs; and Brian Crowley, Vice President of Finance.

Before we get into details of the third-quarter performance and an update on the Company, I wanted to remind everyone that 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 through 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 Form 10 registration statement filed with the SEC and subsequent SEC filings. You are cautioned not to place undue reliance on these 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.

Well, having said all that, I would like to turn over the call to our executive chairman, Marc Rubin, for his overview. Marc?

Thank you, Sunil, and hello, everybody. Thank you very much for joining us on this call today. Once again, I think this is been an eventful and also a very good quarter for Titan, as we continue to make really rapid progress on the development of Probuphine. The confirmatory Phase 3 study completed patient enrollment in late September, and this was a full three months ahead of schedule. And I think that speaks to the tremendous interest in the study and in Probuphine on the part of patients as well as the efficiency and the dedication of both our investigators and our team at Titan. So obviously, we are very pleased with this outcome, and I want to express our thanks to the investigators and to the patients for their continued ongoing support.

We have also made great progress in our objective of building awareness of Probuphine among the scientific and the clinical communities. The symposium on Probuphine at the International Society of Addiction Medicines annual meeting in October was very well attended, and this was then followed by the publication in JAMA of the excellent results from the first controlled Phase 3 study of Probuphine.

The scientific data presentations for continue at the Society for Neuroscience meeting in November and the American College of Neuropsychopharmacology in December. Finally, the third quarter royalty income from Fanapt continues to reflect the steady growth in the weekly prescriptions, which were around 1900 total prescriptions per week in the latter part of October. And we remain optimistic that, based on the profile of Fanapt and with Novartis' effort behind it, that this trend will continue.

So the Board is pleased with our progress over the past quarter. And again, my thanks to all of you for listening and participating today. And I will now pass the call back to Sunil.

Thanks, Marc. And I'm back. So now I would like to provide a summary of our financial results and also provide an update on the ongoing Probuphine development program.

Total revenues for the third quarter of 2010 were approximately $3.6 million, consisting primarily of grant and royalty revenues. Grant revenue from the National Institutes of Health in support of the Phase 3 clinical study of Probuphine was approximately $3.2 million, while royalty revenue received from Novartis on net sales of Fanapt was approximately $0.4 million.

Total operating expenses for the third quarter of 2010 were approximately $3.7 million compared with $1.6 million for the third quarter of 2009. The year-over-year increase in expenses resulted primarily from an increase of approximately $2.3 million in research and development expense, and all of this is related to the Phase 3 clinical study of Probuphine that is currently in progress. This was offset in part by a $0.2 million decrease in general and administrative expenses, and this was primarily due to lower non-cash stock compensation and facility-related expenses. Our net loss for the third quarter of 2010 was approximately $0.4 million or $0.01 per share.

At September 30, 2010, we had cash and cash equivalents of $6.4 million. The press release issued yesterday along with the 10-Q filed with the SEC provides additional details of the third-quarter performance. And I won't repeat all of that here, but please feel free to ask any questions, and both Brian and I will be happy to address them.

So, turning back to Probuphine and the development program, I wanted to give you an update on the clinical development of Probuphine, which continues as planned and we are making good progress with the confirmatory Phase 3 study. For those of you not familiar with the study design, let me point out that this study has three arms, a blinded placebo arm, a blinded Probuphine arm and an open-label Suboxone arm. And, as previously indicated, we are on track to get top-line results from this study during the second quarter of 2011.

Patients that are completing this study have the opportunity to enroll in an open-label safety study that will provide safety data on patients treated for up to one year with Probuphine. This is a requirement of the FDA, and we expect to have this information in late 2011 as well.

While the clinical development has been progressing rapidly, we also need to make certain that our contract manufacturing capability keeps pace and prepare the operations for future commercial-scale production as well. All of this work is ahead of us and plans are being put in place to complete these tasks in a timely manner.

So, I would like to first thank Dr. Kate Beebe and her team, including our CRO, and the investigators and their staff for their tremendous efforts for the excellent progress made in this program.

So in a nutshell, as Marc pointed out earlier, there are several very important accomplishments in this quarter. Probuphine clinical study completed enrollment this last quarter and top-line results are expected in Q2 2011. This is an important milestone for this program. The scientific and clinical community continues to learn more about Probuphine through the scientific presentations at important meetings and prestigious publications such as JAMA. These efforts will be ongoing, and we will continue to update you on these as we progress.

And, last but not least, Fanapt continues to show a steady growth trend based on the weekly scripts numbers reported by the analysts.

That is all we have as remarks for today. We thank you for your continued support, and we look forward to updating you about our future progress. And with that I would like to turn over the call for your questions. Operator?

(Operator instructions) [Hank Benstein], Gagnon Securities.

Marc and Sunil, good afternoon; I'm pleased with (multiple speakers) the numbers. I recently heard that the Vanda Pharmaceutical people announced that they had been filing for Fanapt in Australia, and I wondered whether there was any movement at all with respect to extension beyond the US and Canada for sales of Fanapt in the rest of the world.

In terms of the announcement that Vanda made, all that we are aware of is that they are filing in Australia, but we have not received any update beyond the fact that they were filing there. And Vanda has indicated that they are planning on meeting with European regulatory authorities, and that's what they have indicated in their conference call. Those are the only updates that they have really provided at this point.

I see. Has Novartis provided any updates with respect to the depot formulation work that they're doing?

Nothing that is any different than what Vanda provided earlier, which is essentially that they're planning on doing some PK studies later this year and that their preparation for that is in progress right now.

Okay, so I'll switch questions to one question with respect to Probuphine. Do you have -- could you remind us of the approximate size of the potential market for this drug, if it were approved in the normal course?

We have not said what we think the market is going to be for this drug, so I'm not going to give you a specific number. We do know that Suboxone has sold in the range of $1 billion now a year, and that has been increasing steadily really since it came out on the market. We believe Probuphine is very good profile, will be an attractive profile and we'll make inroads in that general arena. But we haven't given a specific number. We're optimistic, though.

Okay, thank you very much, I appreciate it.

(Operator instructions) [Jujdeep Sai], Private Investor.

I was reading yesterday's press conference. It says you have enough funding until second quarter next year. And my concern is, the trial data should be out in the middle of second quarter. Do you have enough funding, or what is the intention to increase funding for post-clinical trials?

Sure. Certainly, our priority is to make sure that we have results from the study that's going right now. And we will have sufficient funds to make sure that we will have those results as well. That was our goal. That's where we are right now, and that's certainly something that we will accomplish.

The -- in our stages beyond that, obviously we continue to look at what are the best ways to add substantial value to the Company. One thing, certainly, we believe (inaudible) the clinical study and positive results as we hoped they would be will certainly add back value, and then we are in a better position to look at all of the alternatives on continued funding for the programs. And our Board continues to look at those. And as you know, there are several avenues. We have, again, in the past, looked at debt. There are various structures of debt financing. And then, of course, there are always equity-related instruments as well that we can look at, if necessary.

Okay, my other question is, do you expect Fanapt sales to increase going forward, and by how much? Because the information given by Novartis or Vanda is very minute. And the inventory, you don't get clarity on that aspect, clearly.

No, I understand, and as much as I would like to provide further clarity, it's something that Novartis and Vanda truly control. And I can only share what they provide. So far, what we see is certainly a steady growth [strain]. Obviously, early this year when this drug was first being introduced, several analysts had different projections on how it would perform, and the current status has been one of steady growth rather than a very rapid ramp. In fact, the only comment I could make with regards to the actual performance of Fanapt and from what has been indicated by both Vanda and Novartis, that's the direction that it's taking. What we do know is that Novartis is fully supporting this and fully behind it, so we expect that trend to continue.

Okay, last question -- is there going to be any data released for interim trials, or are we going to see the data all at once in the middle of the second quarter?

I didn't fully understand that one. Can you repeat it?

Are you guys planning to release some of the interim data in the near-term, or -- the clinical trials that are taking place right now, or are we going to wait until the end of the second quarter to see all of the data all at once?

The way the study is designed and the way the data analysis will happen, it will be at the end of this study. And so the only interim things are, course, the safety committee reviews. And so far, there has been no indications that there are any issues from a safety standpoint at all. So the results really will be all in the second quarter, and that's when we expect the top-line results to be available.

Okay, no problem, thank you guys.

Thank you very much.

And best of luck, and I'll be looking forward to more press releases from you guys, hopefully. Take care.

[Tyler Rubin], Private Investor.

I was wondering if you could shed a little bit of light on the sudden departure of Joachim Kapp from your Board [in case] stock sales at all.

Thank you, Tyler, this is Marc Rubin. All I can tell you is what we have said, which is that Dr. Kapp made a personal decision to sell shares and resign at this time. We are very, very indebted to Friedrich Kopp for all of his service and many contributions over the years, but that was a personal decision that he made.

Okay, thank you.

At this time I show no other questions. I will turn the call back over to you for any closing remarks.

Thank you, everyone, for participating in this call. It's always very helpful to have this opportunity, and we certainly look forward to speaking to you all of you once again in the early part of next year. Bye-bye.

Thank you, sir. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your line.