Vaxart Inc (VXRT) 2011 Q4 法說會逐字稿

Good afternoon, ladies and gentlemen, and welcome to the fourth-quarter 2011 Nabi Biopharmaceuticals earnings conference call. My name is Chris, and I will be your conference moderator for today. Presently, all participants are in a listen-only mode. Later, we will facilitate a question-and-answer session. (Operator Instructions) As a reminder, this conference is being recorded for replay purposes.

And at this time, I would now like to turn the conference over to your presenter for today, Dr. Raafat Fahim, President and Chief Executive Officer of Nabi Biopharmaceuticals. Sir, you may proceed.

Thank you, Chris. And good afternoon, and thank you all for joining us today. The news release announcing our fourth-quarter and year-end 2011 financial results is available on our website at www.nabi.com. I would 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 31, 2011, filed with the Securities and Exchange Commission. Additional information is available on our website at www.nabi.com. Joining me for today's call are -- Dr. Paul Kessler, Senior Vice President, Clinical, Medical and Regulatory Affairs; Dr. Matthew Kalnik, Senior Vice President, Strategic Planning and Business Operations; and Mr. Ron [Cossack], Controller and Chief Accounting Officer.

Needless to say, 2011 was disappointing in that NicVAX did not meet the primary endpoint in two Phase III trials. But as soon as the results were known, we started an aggressive cost-cutting process where we down sized our facilities and further reduced our headcount to the current total of 14 employees. We believe this number of employees is the minimum necessary for compliance with the various regulatory requirements of a publicly traded company, for conducting the strategic alternative process and for wrapping up our ongoing NicVAX trial in combination with CHANTIX in the Netherlands. Additionally, we engaged Piper Jaffray to assist us with exploration of strategic alternatives. This has been an intense effort, and we have made significant progress. We expect to announce the outcome of the process in the coming quarter. Now, let's review the fourth-quarter and year-end financial results.

For the full year, our net loss was $4.5 million, or $0.11 per share, compared to a net income of $0.9 million, or $0.02 per share, for the year ended December 25, 2010. For the quarter ended December 31, 2011, our net loss was $2 million, or $0.05 per share, compared to a net loss of $6.3 million, or $0.15 per share, in the fourth quarter of 2010. Revenue for 2011 was $14.8 million, which reflects amounts recognized under the PentaStaph and NicVAX agreements with GSK. This includes $5.3 million from the initial $21.5 million payment received from GSK for the sale of PentaStaph; $2.5 million from the initial $14 million payment from GSK for the option to license NicVAX; $5 million for the successful achievements of the last PentaStaph performance milestone; and $2 million related to our services provided under the NicVAX and PentaStaph agreement.

Revenue in 2010 was $35 million, reflecting payments recognized under the NicVAX and PentaStaph agreements with GSK. Which includes $13.2 million from the initial $21.5 million payments received from GSK for PentaStaph and $2.1 million from the initial $40 million payment received from GSK for NicVAX; $16 million of revenue related to successful achievement of two PentaStaph performance milestones; and $3.7 million related to services provided to GSK under the PentaStaph and NicVAX agreements, respectively. Research and development expenses were $17.8 million in 2011, compared to $26.1 million in 2010. The decrease reflects a deduction in manufacturing-related clinical activities, related to NicVAX.

General and administrative expenses for 2011 were $5.4 million, compared to $6.2 million in 2010. The decrease is due to the completion of the NicVAX Phase III trials, as well as our continued effort to reduce overall expenses. Both research and development and general and administrative expenses are expected to further decrease in 2012, as we wind down our one remaining NicVAX trial. Net cash used in operating activity was $15.2 million for the full year 2011, compared to net cash provided by operating activities of $39.9 million in 2010.

Cash, cash equivalents, and marketable securities totaled $96.4 million at the end of 2011, compared to $110.7 million at the end of 2010. The decrease in the balance of cash, cash equivalents, and marketable securities is largely due to the $19.6 million from cash used in operating activities from continuing operations, offset in part by the $5 million milestone payment received for the first commercial sale of the new liquid PhosLo formulation under our agreement with Fresenius. This concludes our prepared remarks. Operator, let's open the call for questions.

(Operator Instructions) Charles [Lechiaro].

I just have a couple of small questions. Hopefully you can help me out and get some answers for me. As far as NicVAX, I know you guys were working with GSK on a second generation. Has that stopped completely? Is it totally out of the picture, or is it ongoing? Is it something you guys are in discussions with, or is it basically something you can't talk about?

As far as we know, they have not terminated anything related to the second generation. They would have to inform us, and they have not informed us that they have terminated anything for second generation. So, our assumption is that it's ongoing.

Okay. And as far as you -- I know a while back you guys initiated a stock buyback program with the corporation. Is that completely ended? Is it stopped? Is it something you may consider as part of your strategic options at this stage? Or it's something that is basically just not going on?

The remaining amount of the share buyback is still on the books, but as can you imagine, we are in a strategic alternative process. And anything we do now obviously needs to be taken into consideration within that context of strategic alternatives process. So, I cannot answer you specifically about what the Board will decide to do with that, but as a general comment I could make, is that everything is under consideration for strategic alternative process.

And as far as your strategic options go right now, can you enlighten us a little bit on what direction you are going, as far as -- are there a lot of interested parties? Is it something that -- it could be a merger, a liquidation, it could be one of anything? Or is it something you can't talk about right now?

I cannot give you any specifics. We actually did highlight earlier, when we announced it, that it includes all of what you mentioned.

Okay. My final question will be -- as far as royalties from the liquid PhosLo, is that something that may happen in the future? Is that a long way out in the picture? Or do you guys have no idea as far as what kind of royalties you may get back on that?

Well, we have no visibility on the sales of PhosLo. The royalties obviously depend on sales, and there is a threshold above which we start getting royalties. And so far, obviously, Fresenius has not reached that threshold. So, whether the sales will advance to -- in essence, to allow us to get royalties from the sale of PhosLo, I can't tell you, because we don't have visibility. But it certainly is still, and because they already started sale of PhosLo, so it could happen any time between now and the end of 2016 when the royalty timeline ends.

Okay, great. And the trial in the Netherlands, I believe, with the CHANTIX and the IIb, is that going to end? Do you have any specific timeline on when that is ending? And would that be an upset to the strategic options, that is totally out of the picture, as far as where you are going?

We already announced that the trial in the Netherlands would end, and we will announce the results in the second half of 2012. And as I mentioned in my prepared remarks and in the press release, that we will announce the results of the strategic alternative process in the next quarter. So, clearly, we will announce it before the finalization of the Dutch study.

Okay, great.

Does that answer your question?

Thank you very much. You did a great job. Thank you very much.

(Operator Instructions) And we have no further questions at this time, sir.

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

Ladies and gentlemen, that concludes today's conference. Thank you so much for your participation. You may now disconnect. Have a great day.