Q2 Conference Call, Menlo Park, CA
July 31, 2006
8:00 am PT
Q2 Conference Call, Menlo Park, CA
Participants can access the conference call live via telephone by dialing 866-761-0748 (U.S.) or 617-614-2706 (international). The passcode is 86781157. Click here -- to access audio webcast .
COORDINATOR: Good morning ladies and gentlemen and welcome to the second quarter 2006 Geron earnings conference call. My name is Minoshia and I will be your coordinator 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 today's presentation. If at any time throughout the call you require assistance, please key star followed by zero and a coordinator will be happy to assist you. I would now like to turn the presentation over to your host for today's call, Mr. David Greenwood, Chief Financial Officer. Please proceed, sir.
MR. GREENWOOD: Good morning and welcome to the Geron earnings call. I am David Greenwood, Executive Vice President and CFO. With me is Tom Okarma, President and CEO. This is an earnings related conference call and we will begin with a review of the numbers. Our agenda then includes an overview of recent operating highlights and a brief summary of our operating plans for the second half of 2006. Following that presentation by Tom, we will have a Q and A session.
First, two informational items. In the event of forward looking statements made during this call, please understand those comments are made subject to the Safe Harbor Provisions of the Securities Reform Act of 1995. Any forward looking statement involves uncertainty and we refer you to the risk factors detailed in our filings with the SEC. Secondly, as you were advised, all participants are in a listen only mode now. The lines will open for Q and A and this call will be available for replay until August 30, available by webcast. Please go to our website for information. To our financial results.
As you see on the condensed P and L attached to this, this morning's financial announcements, revenues from licensed products for the second quarter were up 17% over the comparable 2/05 period. Total reported revenues, however, are lower insofar as Q2 2005 included a substantial upfront payment related to the formation of a joint venture. Other cash inflows to the company during the quarter included $2.2 million of interest income; we ended the quarter with $181 million cash on the balance sheet. R and D expenses increased substantially, 36% year over year, in the second quarter reflective of the substantial investment we are making in building the product development side of the organization and the cost of clinical trials. The G and A expense line item increased quarter over quarter because we are expensing stock options in 2006. This is of course a noncash charge. As a parenthetical, I can give you comfort on the issues currently in the press with respect to stock options: At no time in Geron's history has there been a practice of backdating options, assigning new hire dates or the like. We have straightforward, fixed policies in place that are not designed to convey advantage.
Consistent with our reported GAP expenses, our cash burn for operations is running higher in 2006. Halfway through the year, I estimate our net burn for the year at about $30 million.
Finally, I would like to thank everyone who joined us for all or part of our Analyst Day program on July 20th. We hope it was informative.
At this point I will turn it over to Tom Okarma. |
