Final Event Transcript of TLRK conference call, 16-Oct-03 4:30pm
2003-10-17 16:15 (New York)
Q3 2003 Tularik Inc. Earnings Conference Call
Boston, Oct 17, 2003 (CCBN StreetEvents) -- Event Transcript of Tularik Inc.
conference call, 16-Oct-03 4:30pm ET.
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Corporate Participants
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* Tracy McCarty
Tularik Inc - IR
* David Goeddel
Tularik Inc - Founder and CEO
* William Rieflin
Tularik Inc - EVP & CFO, Administration
* Andrew Perlman
Tularik Inc - EVP
* Michael Levy
Tularik Inc - VP of Development and CMO
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Conference Call Participants
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* David Witzke
SunTrust - Analyst
* Tony Forstmann
Forseman Asset Management - Analyst
* Joy Maschau
TCL Partners - Analyst
* Meg Malloy
Goldman Sachs - Analyst
* Jennifer McNeilly
Franklin Templeton - Analyst
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Presentation
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Operator [1]
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Thank you for holding, welcome to Tularik's Q3 2003 financial results
conference call. At this time, all participants are in a listen only mode. There
will be a question and answer session to follow. Please be advised that this
call is being taped. At this time I would like to introduce your host for
today's call, Tracy McCarty, IR at Tularik. Please go ahead.
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Tracy McCarty, Tularik Inc - IR [2]
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Thank you operator. Good afternoon and thank you for joining us today to
discuss Tularik's 2003 Q3 results. With us today from management are Dave
Goeddel, Founder and CEO, Bill Rieflin, our interim CFO and EVP Administration,
Andy Perlman, EVP and Michael Levy, VP of Development and Chief Medical Officer.
Before we get started, let me remind you that some of the statements made today
will be forward-looking and that our actual results may differ materially from
those suggested. Please refer to our most recent SEC filings for information
concerning factors that could cause these differences. The information in this
conference call related to projections or other forward-looking statements may
be relied upon subject to the previous Safe Harbor statement as of the date of
this call, and we undertake no duty to update this information. Now I would like
to turn the call over to our CEO. Please go ahead Dave.
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David Goeddel, Tularik Inc - Founder and CEO [3]
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Thanks Tracy. During the third quarter Tularik made substantial financial and
clinical progress. First, on the financials. I am pleased to announce revenues
of $8.6m, up $3m from the second quarter, largely due to the impact of the Amgen
oncology collaboration which was announced in May. In addition to the
incremental revenue this quarter from the research support payments and
amortization of the equity premium we also recognized 2 milestone payments
corresponding to the selection by Amgen of 2 compounds for advancement. I will
discuss these in more detail shortly.
We continue to manage expenses carefully holding our cash firm and operating
expenses flat compared to the second quarter of this year. As we ramp up our
pivotal trial with T67, initiate phase 3 studies of T47 and T131 and bring
[indiscernible] compounds into clinic we will continue to ensure that each of
our promising projects receives the appropriate level of resources.
As I mentioned earlier, in our third quarter we achieved our first milestones
under our collaboration with Amgen with a selection for optimization of 2 lead
compounds. Both of the selected compounds blocked the activity of the proteins
encoded by specific oncogenes that we have shown or amplified in common tumors
such as lung, breast and liver. The speed with which these milestones were
accomplished is indicative of the strength of our great discovery engine and our
close working relationship with Amgen.
Both teams were energized by this joint effort and by the potential of the
collaboration. Having discovered so many promising anti-cancer targets we are
pleased to have Amgen as a partner, not only for their financial support but
also because their R&D resources that will allow us to capitalize on more and
more targets and accelerate the advancement of more projects toward the clinic.
The progress and the collaboration have been exceptional and I look forward to
sharing with you news of further progress and financial milestones over the
coming months. To remind you, milestone payments are not included in the $125m
in committed funding over the 5-year term of our collaboration.
Turning to our compound and clinical development, I am happy to report that all
4 are progressing as planned. We have now opened 51 sites as part of our
worldwide clinical trials with T67 for the treatment of Apatocellular carcinoma
or ACC. Our goal is enroll 100 patients by year-end and we will provide you with
a patient enrolment update at the end of the year. Once data from the first 100
patients has been collected, the data monitoring committee will conduct an
interim analysis.
T607 our second anti-cancer compound is currently in Phase 2 trials and is
being evaluated in 4 indications, HCC, gastric cancer, ovarian cancer and
esophageal cancer. As indicated previously, we will complete Phase 2 by the end
of the year and share the next steps with you in early 2004.
We have also made good progress with T47 our compound in clinical development
for the treatment of inflammatory diseases such as psoriasis and rheumatoid
arthritis. T47 is now a novel drug candidate that blocks chemokine binding to
CXCR3, an important receptor responsible for immune cell trafficking.
In Phase 1 we saw [indiscernible] exposure and observed no serious adverse
affects. Based on Phase 1 data we can predict the once daily dosing regimen. We
are preparing to initiate the first Phase 2a Proof of Concept study in psoriasis
this quarter. There will be a 28-day double blind [indiscernible] control study
including 40 subjects with moderate to severe disease. Within this study skin
biopsies will be performed on day 1 and on day 29 the major immune cell
infiltrate, skin thickness, expression of the [indiscernible] molecules and the
production of sidokines(ph.) and chemokines(ph.). In both studies we will access
critical response to treatment as well as pharmacokinetics and safety.
In addition, we plan to begin a second Phase 2a study in rheumatoid arthritis
early next year. In the metabolic disease area we continue to advance T131 our
novel insulin sensitizer for the treatment of Type 2 or insulin resistant
diabetes.
The Phase 1 studies with T131 demonstrated good drug exposure and we can
predict once daily dosing. All doses were well tolerated. But you know Phase 1
studies that will help these volunteers are not designed to provide clinically
relevant accuracy data. In our study the volunteers had normal glucose levels at
the outset so we would not expect or desire to see changes in glucose as a
result of treatment with an insulin sensitizer such as T131.
However, we did major levels of a protein called Atopinektin(ph) of a protein
secreted by fat cells which were then reported to improve insulin sensitivity.
Furthermore, it is known that at the Atopinektin levels of modulated even in
healthy people but upon treatment with PK[indiscernible] such as Actose and
Avandia. As a result the change at Atopinektin level conservative biomarker for
T131 activity. The Phase 1 study demonstrated the robust and dose dependent
relationship between T131 and Atopinektin levels over the course of 14 days.
These observations give us confidence in the potential glucose lowering effects
of this drug as we prepare to initiate our Phase 2a Proof of Concept study with
T131 later this quarter.
In this phase we will enroll Type 2 diabetics who have failed diet and exercise
but are na‹ve to drug therapy. These patients will be randomized to receive T131
or a placebo. The primary end point of the study is fasting glucose and
secondary end points include insulin, Atopinektin, hemoglobin A1C, Glucosamine
and lipid levels as well as safety in pharmacokinetic profiles.
One final critical highlight in the quarter was the news that our partner Eli
Lilly intends to advance into phase 2 studies of oral factor 10A inhibitor. The
decision was based on strong Phase 1 results. The Phase 1 study indicated an
impressive safety profile for the drug, and importantly once daily dosing was
associated with suppression of thrombosis markers.
Lilly believes that this drug could be used in both the acute and chronic
studies for multiple indications including Deep Vein Thrombosis, Pulmonary
Embolism and Stroke associated with atrial fibrillation. Needless to say we are
excited about the potential of this compound especially if you have an estimated
$3bn market for anti-coagulants, where we expect to begin Phase 2 shortly at
which time Tularik will receive a milestone payment.
So to recap the third quarter we achieved 2 pre-clinical milestones under our
collaboration with Amgen. All of our clinical programs continue to have progress
towards the market and one of our partners, Eli Lilly announced plans to move
the jointly discover compound into Phase 2 trials, which will trigger a
milestone payment at Tularik.
Finally, we continue to expect business development to play a significant role
in ensuring our ongoing financial strength. Now I would like to turn the call
over the Bill Rieflin to review the financials.
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William Rieflin, Tularik Inc - EVP & CFO, Administration [4]
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Thanks Dave. First I'd like to review the quarter and then reiterate our
guidance for the remainder of 2003. In the third quarter of 2003 revenues from
collaborative research and development were $8.6m compared to 2002 third quarter
revenue at $5.6m. As anticipated, quarterly revenue increased as a result of our
5-year oncology collaboration with Amgen that was announced in our second
quarter.
Also contributing to the revenue increase in the third quarter were 2 milestone
payments from Amgen, upon their selection of 2 lead compounds for advancement.
Revenue was primarily derived from the Amgen collaboration but also by
collaboration with Japan Tobacco in the metabolic disease area and Sankio in the
area of GPCRs.
Total research and development expenses for the third quarter 2003 increased to
$31.6m from $26.3m for the same period in 2002. Primarily due to a $1.7m
increase in costs related to the progression of our clinical programs and $2.6m
increase in costs related to research headcount and overheads. G&A expenses for
the third quarter 2003 decreased to $2.5m as compared to $2.9m for the same
period last year. Due to a reallocation of facility space that reflected a
deutilization by the general administrative functions.
We begin the fourth quarter with approximately $155.3m in cash and marketable
securities, and that includes $14.1m in cash at Cumbre.
Turning now to guidance for the remainder of the year. We're comfortable with
the fourth quarter consensus revenue estimated of $8m which will include
revenues from collaborations with Amgen, Japan(ph) Tobacco, Mederex and Sankio.
We continue to expect our cash firm for 2003 to be approximately $90m.
Thank you and now we'd like to open the call to your questions.
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Questions and Answers
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Operator [1]
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Ladies and gentlemen at this time we are not hearing our host or speakers, we
ask that you please stay on the line and continue to hold. Please continue. At
this time we will take any questions you may have. If you have a question press
*1* on your touchtone phone and you will be put into the queue. If you would
like to cancel your question press the *#* key on your touchtone phone. Again,
if you have a question press *1*, to cancel press the *#* key. If you're on a
speaker phone please pick up your handset to ask a question.
The first question will come from David Witzke from SunTrust. Please go ahead.
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David Witzke, SunTrust - Analyst [2]
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Thank you here is Han Li as well. I guess first on T67 I wonder if you can tell
us how many patients have now seen the drug and how many at the higher dose than
250mg per meter squared in the Phase 3 trial?
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Michael Levy, Tularik Inc - VP of Development and CMO [3]
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Hi David, Michael Levy here thanks for your question. Well in the Phase 1 and
Phase 2 trials which we have conducted to date over 250 patients have been
exposed to T67 and as Dave mentioned earlier, we need to have a 100 other
patients treated with T67 by the end of this year, and all of the patients being
treated in a Phase 3 program are being treated at the higher dose of 250mg per
meter squared.
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David Witzke, SunTrust - Analyst [4]
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Okay so it's hard to be able to compare the tolerability differences of the 2
doses. I guess we have to wait until after the -- is that the mid year or can
you make any comments on what you've seen?
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Michael Levy, Tularik Inc - VP of Development and CMO [5]
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I can't make any comments now. I can tell you though that we ran a small Phase
1 trial looking at higher doses between completing the Phase 2 trials starting
at Phase 3 trials, and in fact we confirmed the 250mg per meter squared was the
correct dose and that it was well tolerated.
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David Witzke, SunTrust - Analyst [6]
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And regarding the recent Amgen milestones, I assume these are too small
molecule compounds against different oncagene(ph) targets and they have some
additional chemistry optimization yet to be completed, or how would you describe
the stage of the development of these compounds?
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David Goeddel, Tularik Inc - Founder and CEO [7]
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We haven't disclosed the target. I think Amgen will have to do that at the
appropriate time or the nature of the lead molecules. You will recall that the
collaboration with them looked at every possible therapeutic against these sorts
of targets. |
