Vaxart Inc (VXRT) 2015 Q3 法說會逐字稿

Good day, ladies and gentlemen. Welcome to the Biota Pharmaceuticals Third Quarter Fiscal Year 2015 Earnings Conference Call. (Operator Instructions) I would now like to turn the call over to Will O'Connor of Stern Investor Relations. Please proceed.

Thank you, Operator. My name is Will O'Connor of Stern Investor Relations. I would like to welcome you to the Biota conference call and webcast to review the Company's third quarter fiscal year 2015 results, and to provide an update on a number of recent corporate developments. This morning we issued a press release which outlines the topics that we plan to discuss today. The release is available at biotapharma.com.

With me today from Biota are President and CEO, Dr. Joseph Patti; Vice President of Clinical Development, Anna Novotney-Barry; and Vice President of Finance, Peter Azzarello.

Before we begin the call, I would like to remind you that today's discussion will contain forward-looking statements that involve risks and uncertainties. These risks and uncertainties are outlined in today's press release and in the Company's recent filings with the Securities and Exchange Commission, which we urge you to read. Our actual results may differ materially from what is discussed on today's call. With that, I will turn the call over to Biota's CEO, Dr. Joseph Patti.

Thanks, Will, and good morning, everyone. This morning I will begin with an update on our development programs and conclude with an overview of our financial results for the quarter. As we outlined in our press release this morning, we are making excellent progress with our pipeline such that by the end of 2015, we anticipate having three active clinical trials. These include our ongoing vapendavir Phase 2b SPIRITUS trial, a Phase 1 single ascending dose and multiple ascending dose trial for BTA-C585, our oral compound for the treatment of RSV, and a Phase 2 trial with 074, a topical gel for the treatment of genital warts we are in the process of obtaining via the Anaconda Pharma acquisition. Let me walk you through a few highlights on our progress with each of these programs.

I am happy to report today that we have 58 clinical sites in the US and Central Europe actively screening and dosing patients with moderate to severe asthma in the Phase 2b SPIRITUS trial. The goal of the study is to enroll approximately 150 laboratory confirmed human rhinovirus-infected patients with moderate to severe asthma, and to report top line data in approximately 12 months. The screening process for the SPIRITUS trial involves identifying patients with an upper respiratory infection leading to a loss of asthma control or asthma exacerbation, and that are classified as having moderate to severe asthma defined by the level of inhaled corticosteroids they are routinely taking. Once screened, the patients will be randomized and will initiate study treatment if they subsequently present to the clinical within 48 hours of onset of symptoms consistent with a rhinovirus respiratory infection.

The primary endpoint of this multicenter, randomized, double-blind, placebo-controlled study is a change from baseline to study day 14 in asthma symptoms and lung function as measured by Asthma Control Questionnaire ACQ6 total score. Key secondary endpoints are focused on safety and tolerability, lung function assessments, such as forced expiratory volume in one second, also known as FEV1, incidents of asthma exacerbation, assessment of the severity and duration of [those] symptoms measured by the Wisconsin Upper Respiratory Symptom Survey-21, or WURSS-21, and virologic assessment, such as changes in viral load. Due to the fact that we recently initiated this trial, it is premature to provide any guidance of how enrollment will track against our goal, but we are pleased with the number of patients that we have successfully screened to date.

I am also very pleased to report that we have successfully completed all required GLP studies to support an IND application for our respiratory syncytial virus fusion inhibitor, BTA-C585. We plan to file the IND next month, and our goal is to initiate a Phase 1 single ascending dose trial of BTA-585 in the third quarter. We are very excited about the potential of this compound and prospects of moving into the clinic later this summer.

In February, we announced that we entered into a definitive agreement to acquire Anaconda Pharma, a privately held biotechnology company based in Paris, France. This morning we reported that we received approval from the French Ministry of Finance and Economics to proceed with the acquisition, which was one of the closing conditions. Closing is dependent upon finalization of other customary closing conditions pursuant to the purchase agreement, and most importantly, approval of the Phase 2 trial by the regulatory agency in Argentina known as ANMAT, where we intend to conduct the planned Phase 2 trial. Once we receive formal approval of the protocol, which we anticipate will occur this month, we intend to proceed with the closing of the transaction.

Anaconda's lead candidate, AP611074, or 074 as we refer to it, is a patented direct-acting antiviral in development for the treatment of condyloma, or anogenital warts, as well as the orphan disease, recurrent respiratory papillomatosis, also known as RRP, both of which are caused by human papilloma virus types 6 and 11.

Condyloma, or genital warts, caused by infection with HPV represents the most frequent and viral sexually transmitted disease in adults worldwide. In the US, about 1% to 2% of the sexually active population between age 15 and 49 develop condyloma as a primary clinical manifestation of HPV infection. Currently, there are no direct-acting HPV topical or oral antivirals available for the treatment of condyloma.

There are two key positive attributes of 074 that attracted us to the opportunity. First, its favorable local skin tolerability profile. In repeated topical applications animal studies and in a six-week Phase 2a trial, 074 did not cause any erosions, ulcerations or edema. This compares very favorably with Zyclara, Aldara or Veregen, currently approved topical treatments for genital warts, which in Phase 3 studies were shown to cause significant local skin reactions in one-third to one-half of those treated. In addition to the favorable local skin tolerability profile, a Phase 2a study with topical treatment of 074 resulted in a 38% decrease in mean baseline wart area compared to 123% increase observed for placebo. Further, 074 treatment resulted in a 56% overall response rate compared to a 38% rate shown in the placebo-treated patients. Taken together, we believe the emerging profile of 074 is promising and it will strengthen our pipeline and fits well with our focus on developing antivirals that address areas of unmet medical need. So, we look forward to filing the transaction as quickly as possible.

Finally, I wanted to mention that our restructuring plan previously announced last year is ahead of schedule and all activities related to the closure of our Melbourne, Australia operation have been completed.

Now, turning to our financial results, as usual, I want to remind everyone that this quarter we are reporting day, which ended March 31, 2015, is our third fiscal quarter, as we have a June 30 fiscal year end. Today we reported net income of $1.2 million for the three-month period ended March 31, 2015, as compared to a net income of $3.2 million in the same period last year. As outlined in more detail in our press release, this $2 million decrease in net income was primarily due to a significant decrease in contract revenue and related margins due to the termination in May 2014 of the contract we previously had with BARDA to develop laninamivir octanoate, as well as $700,000 increase in research and development expense, a $700,000 increase in general and administrative expense, and a $200,000 loss on sale of assets that was supposed to be with the closure of our facility in Australia. These items were partially offset by a $4.1 million increase in foreign exchange due to the gain in US dollar compared to the Australian dollar exchange rate, and $100,000 increase in interest income.

The only items I would like to further highlight this morning for our third quarter fiscal year are the increase in our research and development expense and increase in our G&A expense. The $700,000 increase in our R&D expense was a result of advancing vapendavir into the Phase 2b SPIRITUS trial in February, including clinical and manufacturing costs, as well as increased preclinical and manufacturing costs related to advancing BTA-585 toward an IND filing and initiation of a Phase 1 clinical trial. These increased costs were offset in part by a $300,000 reduction in salaries, benefits and share-based compensation, and a $200,000 decrease in expenses due to reduced research activities.

Our G&A costs increased by $700,000 due to a $400,000 increase in professional legal fees related to the pending acquisition of Anaconda Pharma, as well as a $200,000 increase in salaries, benefits and share-based compensation expense, and $100,000 increase in other expenses. Total transaction costs of approximately $800,000 associated with the pending acquisition of Anaconda Pharma were recorded this quarter.

At March 31, 2015, we held $74.4 million in cash, cash equivalents and short-term investments and long-term investments. We continue to maintain a strong financial position as our liquidity and networking capital position remains virtually unchanged from the end of our prior quarter ending December 31, 2014. That concludes my prepared remarks for today's call. I want to open it up for questions. Operator?

(Operator Instructions) All right, and at this time I'm not showing any questions.

Okay. So, as you can see, the last few months have been very productive at Biota. We are actively screening and randomizing patients with moderate to severe asthma in the Phase 2b SPIRITUS trial of vapendavir at 58 clinical sites and expect to report top line data next year. Following the successful completion of all required GLP studies for BTA-585, we look forward to filing an IND next month and starting a Phase 1 trial next quarter. And I am pleased to report we anticipate closing the acquisition of Anaconda Pharma shortly, and we look forward to initiating a Phase 2 trial with 074 in patients with anogenital warts in the second half of 2015. Thank you for joining us this morning, and have a nice day.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program and you may all disconnect. Everyone, have a great day.