Vaxart Inc (VXRT) 2009 Q3 法說會逐字稿

Good day ladies and gentlemen and welcome to the third quarter 2009 Nabi Biopharmaceuticals earnings conference call. My name is Alicia and I'll be your coordinator for today. At this time all participants are in a listen-only mode. We will be conducting a question and answer session towards the end of this conference. (OPERATOR INSTRUCTIONS)

As a reminder, this conference is being recorded for replay purposes. I will now turn the presentation over to your host for today's call, Mr. Greg Fries, Manager of Investor Relations. Please proceed.

Thank you Alicia. Good afternoon, and thank you for joining us today. As a reminder, the news release announcing our third quarter 2009 financial results will be available on our website at www.nabi.com. I'd also like to remind you that today's call may include forward-looking statements. These forward-looking statements and related risk factors are more fully discussed in our annual report on Form 10-K for the fiscal year ended December 27, 2008, and in our quarterly report on Form 10-Q for the quarters ended March 28, 2009 and June 27, 2009, both filed with the Securities and Exchange Commission and more information, as I said, is available on our website at www.nabi.com.

Now, I'll turn the call over to Dr. Raafat Fahim, President and Chief Executive Officer of Nabi. Raafat?

Thank you, Greg, and thanks all for participating in the call.

Joining me for today's call is Dr. Paul Kessler, Senior Vice President of Clinical, Medical and Regulatory Affairs, Dr. Matthew Kalnik, Senior Vice President of Strategic Planning and Business Operations, and Mr. Ron Kocak, Controller and Chief Accounting Officer.

We have made significant progress towards achieving our strategic corporate goals and I'd like to review this progress before discussing the quarterly financial results.

Yesterday we announced the successful closing of the sale of PentaStaph and related assets to GlaxoSmithKline. This transaction also included the sale of a separate preclinical program for a vaccine against staph epidermidis. We received a total cash payment of $21.5 million consisting of $20 million associated with the close of the PentaStaph transaction, $1 million for the staph epidermidis program and $500,000 for reimbursement of license fees and clinical materials previously manufactured for the use in the phase I trial for the new toxoid antigens of PentaStaph.

We also had the opportunity to receive additional $26 million for achieving four milestones associated with the PentaStaph deal. We expect to accomplish these milestones over the next year and a half.

In late September we received two grants totaling approximately $10.5 million that will help fund clinical research for our pipeline products. First, the National Institute on Drug Abuse or NIDA awarded NABI $10 million to help fund the first pivotal NicVAX phase III clinical trial.

The second grant of $472,000 was awarded by the Department of Defense Deployment Related Medical Research Program of the Office of the Congressionally Directed Medical Research Programs to help support clinical research on PentaStaph.

Late last year we entered into our cooperative research and development agreement with the US Department of Defense and the Henry M. Jackson Foundation to advance the development of PentaStaph. This grant will offset some of the costs of the upcoming phase I clinical trial for the newest PentaStaph components, PVL and alpha toxin.

Initiation of this clinical trial represents one of the four PentaStaph milestones that I mentioned earlier.

On Monday we announced initiation of the first, NicVAX phase III clinical trial. This study is being funded in part by the $10 million NIDA grant I mentioned earlier. As you may know, we are conducting this trial under a Special Protocol Assessment or SPA, agreement with the FDA, and in accordance with scientific advice that we received from the European Medicines Agency that confirms and supports the trial protocol.

The SPA along with scientific advice significantly reduces our regulatory risk for the NicVAX program.

Separately, our closest nicotine vaccine competitor, Cytos Biotechnology, announced that an interim analysis of their phase II study showed that its vaccine did not achieve the primary endpoint. All these developments solidified our leadership position in the race to market of the world's first vaccine for smoking cessation and relapse prevention.

These events have significantly increased the interest in our program and we are in active discussions with potential strategic partners to further develop and commercialize NicVAX.

In May we disclosed that Biotest Pharmaceuticals Corporation filed indemnification claims for alleged breaches of representation and warranties made by Nabi in the asset purchase agreement associated with the sale of our biological business to Biotest in 2007. Biotest subsequently withdrew the $50.4 million claim in early June resulting in the release of $4.5 million of the escrowed funds to Nabi. The remaining $5.7 million claim was withdrawn on Wednesday and the balance of the restricted cash has been released to us.

Now let's review the third quarter financial results. For the third quarter the net loss from continuing operations was $7 million or $0.14 per share compared to a net loss of $4.6 million or $0.09 per share for the same period in 2008.

General and administrative expense was $2.4 million compared to $2.1 million in the second (sic-see press release) quarter of 2008. The increase was primarily due to legal costs associated with the PentaStaph sale transaction and our defense against the indemnification claims filed by Biotest.

Research and development expense was $4.7 million compared to $3.4 million in 2008. The increase is related to efforts to prepare for the phase III NicVAX trials including manufacturing related activities.

Net cash used in continuing operations for the nine months ended September 26, 2009 was $18.1 million compared to $16.0 million for the 2008 period. The increase in cash utilization was driven by R&D expenses as we prepared for initiation -- for initiating the first NicVAX phase III trial.

We ended the quarter with cash, cash equivalents and marketable securities totaling $103.3 million and not included in this balance is the $5.7 million of restricted cash that was released to us after the close of the third quarter.

That concludes our prepared remarks. Operator, let's turn -- let's open the call for questions.

(OPERATOR INSTRUCTIONS) Your first question comes from [Tavanja Drury] from Deutsche Bank. Please proceed.

Hi, just there was some news in the last 48 hours about Pfizer's smoking cessation drugs having some better data. How does that affect you and how does -- and where exactly do you stand with your partnership discussions?

Are you talking about data about sales data?

No, the data for the existing drug that was shelved. Chantix, I believe.

Yes, but I'm talking about sales data.

Exactly.

Yes, so actually in essence Pfizer has been recovering their sales. They have not recovered fully, in fact their sales are still significantly below the forecast that people estimated for it. So they did recover a little bit from the setback after announcement of the adverse events that they have been showing. And we expect that they will recover a little bit more but they will not reach the level of expectation of Chantix because of the side event -- side reactions or adverse events that they have been showing with the drug.

In terms of our discussions, as I said in the prepared remarks that we are in active discussions with strategic partners for NicVAX.

Thank you.

Thank you.

(OPERATOR INSTRUCTIONS) There are currently no audio questions at this time.

Thank you operator. As you have heard today, we have made great progress on several fronts. We successfully closed the sale of PentaStaph to GSK and received $21.5 million with an opportunity to receive an additional $26 million contingent on four milestone accomplishments.

We received a $10 million grant from the National Institute on Drug Abuse to partially fund the first NicVAX phase III trial. We initiated the first NicVAX phase III clinical trial.

$5.7 million of restricted cash was released to us after the final indemnification claim was withdrawn and in parallel we continue our efforts in controlling our costs. More importantly we advanced our discussions with potential strategic partners to further develop and commercialize NicVAX.

Thank you all for joining us today and thank you for your continued support.

Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect.