Final Event Transcript of CVTX conference call, 17-Oct-03 9:00am
2003-10-17 15:09 (New York)
Q3 2003 CV Therapeutics Earnings Conference Call
Boston, Oct 17, 2003 (CCBN StreetEvents) -- Event Transcript of CV Therapeutics
conference call, 17-Oct-03 9:00am ET.
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Corporate Participants
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* Chris Chai
CV Therapeutics - Treasurer, Exec. Dir. IR
* Dr. Lou Lange
CV Therapeutics - Chairman, CEO
* Dan Spiegelman
CV Therapeutics - SVP, CFO
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Conference Call Participants
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* Steve Harr
Morgan Stanley - Analyst
* Mark Monane
Needham & Company - Analyst
* Jim Birchenough
Lehman Brothers - Analyst
* Chris Neek
Merrill Lynch - Analyst
* Dennis Harp
Deutsche Bank Securities, Inc - Analyst
* Ben Stuller
HS Capital - Analyst
* Allan Shei
R&C Corporation - Analyst
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Presentation
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Operator [1]
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Good morning. My name is Janika (ph) and I will be your conference facilitator.
At this time, I would like to welcome everyone to the CV Therapeutics third
quarter earnings conference call. All lines have been placed on mute to prevent
any background noise. After the speakers' remarks, there will be a
question-and-answer period. (OPERATOR INSTRUCTIONS) Thank you. Mr. Chai, you may
begin your conference.
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Chris Chai, CV Therapeutics - Treasurer, Exec. Dir. IR [2]
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Thank you very much. Welcome everyone to the CV Therapeutics third quarter
conference call. I'm joined today by Dr. Lou Lange, our Chairman and CEO and Dan
Spiegelman, our CFO. Let me remind everyone that some of the following remarks
may include forward-looking statements and our actual performance may differ
materially from what we project today. These statements include statements about
future events and statements about our future product development, clinical
programs, commercialization efforts, and operating results. I encourage you to
review the cautionary statements contained in the first paragraph of the MD&A
section of our annual report on Form 10-K, (indiscernible) set forth under the
heading "risk factors" of the business section of our annual report on Form
10-K, the risk factors on our most recent quarterly report on Form 10-Q, and
other documents that we have filed with the SEC for additional information
concerning factors that could cause (indiscernible). CVT disclaims any intent
our obligat
ion to update these forward-looking statements. Now I'd like to turn the call
over to Lou for a review of the quarter.
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Dr. Lou Lange, CV Therapeutics - Chairman, CEO [3]
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Thanks, Chris, and thanks everybody for joining our call today. The Company has
been making a lot of progress on various fronts since I updated you on our last
quarterly call. In terms of recent highlights, we continue to have an active and
ongoing dialogue with the FDA regarding our New Drug Application for Ranexa. As
most of you are aware, we have an upcoming PDUFA date of October 30th this year.
At this point, we have not received an action letter from the FDA. We would
expect to receive formal action from the FDA on (ph) or about our PERFDUFA date,
which is the 30th of October, less than two weeks away. The range of action
letters, as with all action letters, good be an approval, a rejection, or
approvable with minimum/maximum types of requirements. When we receive formal
action from the FDA, we will share that with our investors. In the meantime,
we're continuing in parallel for a number of possibilities, including
preparation for commercialization and preparation for potential advisory
committee meeti
ngs, if in fact we get the opportunity to present at one.
In terms of Ranexa, as you know, it is being developed for potential treatment
of chronic angina. If approved, Ranexa will be the first new class of the
anti-anginals in more than 20 years. Angina is a serious disease that afflicts
6.5 million patients in the U.S. Despite the fact that there are three classes
of older drugs currently approved for angina, i.e. beta-blockers, calcium
channel blockers, and long-acting nitrates, our market research shows that only
17 percent of angina patients experienced zero pain. As a reminder, our NDA
submission contained data from over 3300 angina patients and subjects. There
were five double-blind or people-controlled trials, including our two pivotal
Phase III trials, MARISA and CARISA. MARISA was a monotherapy trail of
ranolazine and CARISA was a combination trial with ranolazine. In addition,
there were three positive Phase II trials, including one which beat Atenolol,
the gold standard beta-blocker, in a head-to-head comparative trial. Finally,
over 15 drug-drug inter
actions pharmacokinetic and special (indiscernible) studies were also included
in our NDA.
Beyond Ranexa, we have a robust pipeline of late-stage products. CVT-3146 is a
selective A2A-adenosine receptor agonist which is being developed for potential
use as a pharmacological stress agent in cardiac perfusion imaging studies. We
anticipate initiating a Phase III trial by the end of this year for CVT-3146. In
addition, data from the CVT-3146 program will be presented next month at the
American Heart Association meeting. We also believe that based on Ranexa's novel
anti-schema (ph) properties without clinically meaningful impact on heart rate
or blood pressure, there are other potential opportunities for Ranexa. We are
considering what the next clinical study for ranolazine might look like.
One alternative is that we may choose to conduct other studies which could
potentially expand any label we may receive if Ranexa is approved. We also may
choose to develop Ranexa for other potential indications, such as unstable
angina, ACS, heart failure, clotications (ph), arrhythmia suppression or
diabetes. Let me just point out that each additional indication would require
further clinical studies, regulatory commission and reviews. Now I will turn the
call over to Dan for financial review of the quarter.
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Dan Spiegelman, CV Therapeutics - SVP, CFO [4]
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Thank you, Lou. Earlier today, we issued our third quarter financial press
release, so please refer to the release for the complete details. Let me focus
my comments this morning for the third quarter on two main areas -- operating
expenses and cash. Operating expenses for the third quarter were 33.7 million
compared to 27.4 million for the same quarter in 2002. The increases in
operating expenses for the quarter was primarily due to increased sales and
marketing and related commercialization efforts for the Ranexa program. These
increases were partially offset by reduced research and development expenses
related to manufacturing and last year's NDA filing efforts for the Ranexa
program.
Operating expenses for the nine months ended September 30, 2003 were 81.8
million compared to 85.9 million for the same period in 2002. This decrease in
operating expenses for the nine-month period was primarily due to a relatively
lower level of research and development expenses associated with the Ranexa
program for that nine-month period. This reduction in research and development
expenses was partially offset by increased sales and marketing and related
commercialization expenses for the Ranexa program, which, as mentioned earlier,
were higher in the third quarter. We ended the quarter with cash, cash
equivalents and marketable securities of approximately 461.9 million compared to
410.9 million at December 31, 2002. This increase was primarily due to the
issuance of our $100 million convertible debt in June of this year. With respect
to operating expense guidance, our 2003 guidance remains the same --
approximately 120 to 130 million for the full year.
Before I turn it over to the operator for Q&A, I would like to say that we
recognize that many of you are interested in learning more about every detail of
our ongoing dialogue with the FDA. Formal action by the FDA on the Ranexa
program will clearly qualify as material, and when we get that action, we will
share that information with you when we receive it. Please understand that until
we receive definitive information from the Agency, we cannot comment on the
details of our ongoing dialogue. That would not be productive (ph). We have
PERDUFA date of October 30, 2003, and we would expect to be in a position to
give you updates from the FDA, assuming we receive formal action at that time.
When we do receive formal action, we will share that action information with
you. Now I will turn the call over to the operator for Q&A.
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Questions and Answers
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Operator [1]
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(OPERATOR INSTRUCTIONS) Steve Harr from Morgan Stanley.
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Steve Harr, Morgan Stanley - Analyst [2]
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Good morning, guys. I don't want to -- tell me if I'm going out of line here,
but I just wanted to know, Lou, if you could give us a little bit of an outline
of what would be expected in terms of timing on your hearing about potentially
being on the FDA panel in early December?
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Dr. Lou Lange, CV Therapeutics - Chairman, CEO [3]
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Steve, the timing's totally up to the FDA. The thing that is superseding that,
of course, is the PERDUFA date, which is coming up. The FDA has made it clear to
most companies that it is hitting its action date. We don't really expect that
to be different for CVT. So we expect on or about the 30th of October to hear
formally from the FDA where they stand on our application. And that could result
in a range of possibilities that include panels that are already scheduled,
panels that are not scheduled, or any other kinds of action dates. So the
near-term event really is the PERDUFA date, as we understand it today.
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Steve Harr, Morgan Stanley - Analyst [4]
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Okay. So -- but there is no requirement, for example, (indiscernible) beyond
the December panel that you would hear six to eight weeks ahead of time?
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Dr. Lou Lange, CV Therapeutics - Chairman, CEO [5]
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There is no requirement for that.
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Steve Harr, Morgan Stanley - Analyst [6]
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My second question, Dan, could you just give us an update on where you are at
Acqua Wellington and how many of those shares you have sold and what is left
that you could still draw down?
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Dan Spiegelman, CV Therapeutics - SVP, CFO [7]
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We opened a new line of $100 million at the -- I forget exactly what the date
was, but earlier this year. In the last quarter, we did a draw of 15 million, so
there's 85 million left.
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Steve Harr, Morgan Stanley - Analyst [8]
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All right. Thanks a lot.
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Operator [9]
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Mark Monane from Needham & Company.
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Mark Monane, Needham & Company - Analyst [10]
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Good morning. A couple of questions. Please could you give us your opinion from
your market research about current state-of-the-art and angina therapy. Do we
need angina therapy despite the fact we have stents and 2b3as and heparin
alternatives? What is the need for new medicines in chronic angina and what is
the competitive landscape in your opinion?
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Dr. Lou Lange, CV Therapeutics - Chairman, CEO [11]
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Interesting question, Mark. Despite all of modern intervention and the older
classes in the anti-anginal group, still 6.5 million people with chest pain
today that studies say. So that means they have not been cured by all of our
fancy new procedures, which are pretty good. Even more interesting,
post-angioplasty, a recent publication came out, 60 to 80 percent of patients
are still on anti-anginals, and they all drop blood pressure and change heart
rate, as you know. So Ranexa, because of this non-hemodynamic mechanism of
action, could potentially be very useful for these people. And as we said in the
intro, 83 percent of angina patients still have pain. So, this area is wide
open, and with no new class launches to calcium blockers in the '70s, I think
there is potentially very interesting opportunities for CVT here.
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Mark Monane, Needham & Company - Analyst [12]
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Terrific. One more question. You are on the Bio Board. Do you have any insights
for us on the FDA and working with Bio? Recently, there was a strategic
announcement that the FDA and the cancer group is really going to work closer
with the NCI. Do you see such a development happening in cardiovascular? What
insights can you give us about biotechnology and the Bio Board and the FDA? |
