Vaxart Inc (VXRT) 2012 Q1 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the first-quarter 2012 Nabi Biopharmaceuticals earnings conference call. My name is Stacey and I will be your conference moderator for today. At this time, all participants are in a listen-only mode. We will conduct a question-and-answer session towards the end of the conference.

(Operator Instructions)

As a reminder, this conference call is being recorded for replay purposes. I would now like to turn the presentation over to your host for today, to Mr. Raafat Fahim, President and Chief Executive Officer. Please proceed.

Thank you, Stacey, and good afternoon, everyone, and thank you for joining us today. The news release announcing our first-quarter 2012 financial results is available on our website at www.nabi.com. I would like to remind you that statements that are presented in this conference call that are not strictly historical are forward-looking statements.

These forward-looking statements are not guarantees of future performance, actions or results, and are subject to risks and uncertainties that may cause actual results to differ materially from those in the forward-looking statements as the result of any number of factors.

These factors include, but are not limited to, the risks set forth in our Annual Report on Form 10-K for the fiscal year ended December 31, 2011 previously filed with the Securities and Exchange Commission on March 14, 2012. Additional information is available on the website at www.nabi.com.

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

Let me start by briefly reviewing our proposed merger with Biota. On April 23, 2012, we and Biota Holdings Limited, a Melbourne, Australia, company, executed a merger implementation agreement to form a combined Company that will be named Biota Pharmaceuticals Inc. The merged Company will be listed on NASDAQ and headquartered in the United States. As explained previously, the merger deal has the following features.

Nabi will require all of the shares in Biota in exchange for newly issued shares of Nabi. Nabi will deliver to the merged Company $54 million in cash net of outstanding liabilities. Nabi's cash balances in excess of the $54 million will be returned to existing Nabi shareholders prior to the merger in the form of a dividend, the return of capital, or repurchase of outstanding shares of Nabi common stock or a combination of the above. This amount is currently estimated to be in the range of $25 million to $30 million.

After the completion of the merger, current Biota shareholders will own approximately 74% of Biota Pharmaceuticals Inc. and Nabi shareholders will own approximately 26% of the Company. This relative ownership ratio reflects a 19% premium to Nabi's $54 million cash balance.

Nabi's Board also intends to distribute a contingent value right prior to the merger providing payment rights arising from certain future sale, transfer, license, or similar transactions involving NicVAX to the extent such transactions occur. Immediately following the closing of the transaction, the transitional Board of Directors of the combined Company will consist of six Biota Directors and two Nabi Directors.

Biota's current CEO and CFO will serve as the Chief Executive Officer and Chief Financial Officer, respectively, of the combined Company, and additional US-based executives will be appointed. We believe that the merger will provide Nabi shareholders with potential to participate in the growth of the combined Company.

The merged Company will have three royalty-generating products, Relenza, Inavir, and potentially PhosLyra. It will have two clinical-stage programs, vapendavir, a phase III-ready human rhinovirus program, and laninamivir, a long-acting anti-influenza neuraminidase inhibitor. Laninamivir is already licensed and marketed in Japan under the trade name Inavir and its development in the US is being funded by a contract of $231 million with BARDA.

The combined Company will continue to have an interest in NicVAX, as well as in Biota's preclinical programs including RSV, hepatitis C and an antibiotic. The Board of Directors of both Nabi and Biota consider the merger and the related transactions to be advisable, fair to and in the best interests of the respective shareholders.

Nabi's Board of Directors unanimously recommended Nabi's shareholders approve the shareholder proposals at the shareholders meeting where such matters will be considered. We expect to close the merger in the third quarter of 2012 after receipt of approval by both Nabi's and Biota's shareholders and satisfaction of customary closing conditions and regulatory approvals including Australian courts.

Now let's review the first-quarter financial results. For the quarter ended March 31, 2012, we reported a net loss of $400,000 or $0.01per share compared to a net income of $2 million or $0.05 per share for the prior year. The revenue for the first quarter of 2012 was $600,000, related to amortization of the initial up-front payment received from GSK under the NicVAX option and license agreement.

Revenue in the first quarter of 2011 was $9.2 million and included $3.3 million of amortization of the initial up-front payments received from GSK associated with the PentaStaph sale and NicVAX option and license agreement, $5 million for the completion of the final PentaStaph milestone, and $900,000 for services provided to GSK under the PentaStaph and NicVAX agreement.

Total research and development expenses were $1.5 million for the first quarter of 2012, compared to $5.3 million in the first quarter of 2011. The decrease reflects a substantial reduction in NicVAX-related clinical trials and manufacturing activities. We expect R&D expenses to continue to decline as we wind down the remaining NicVAX clinical trial in the Netherlands.

General and administrative expenses were $1.3 million for the first quarters of both 2012 and 2011. Net cash used in operating activities was $1.5 million in the first quarter of 2012, compared to $8.6 million in the first quarter of 2011. The decrease in cash used is primarily due to a reduction of R&D expenses in the first quarter of 2012, as well as a PentaStaph milestone of $5 million in the first quarter of 2011. We ended the quarter with cash and cash equivalents of $94.9 million, compared to $96.4 million at the end of 2011.

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

Thank you. (Operator Instructions) Your first question comes from the line of Michael [Schechter]. Please proceed.

Good afternoon.

Hi, Michael. How are you doing?

I'm doing well. And you? I'm well, thank you. If we look at the burn rate for the R&D and the G&A in the first quarter, is that reasonable through the close of the transaction?

There are two elements to consider. One, that we are actually clamping down on costs, as you can imagine, is running the rest of the operation for the balance of the period. But at the same time, there are additional expenses in G&A that will surface because of the transaction itself. So in balance, it's very difficult to tell you. We are certainly reducing our costs internally, but there will be increases related to the transaction, Michael.

Are they transaction costs, like bankers and lawyers and printing and all that stuff, or is it something else more like personnel costs?

No, not personnel costs. In fact, we are reducing personnel. No, it is exactly what you said. Legal and bankers and stuff like that.

Okay. And when do you think we'll see the first cut at the proxy?

As we mentioned previously, in the next few weeks. It's very difficult to tell you when exactly, Michael, but we are working at it now.

Okay.

Thank you very much for your questions.

Thank you.

(Operator Instructions) And I would like to turn the call back to management for closing remarks.

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

We thank you for your participation in today's conference. This does conclude your presentation. You may now disconnect, and have a great day.