Catalyst Biosciences, Inc.
Q3 2013 Earnings Call Transcript

Published: 5 Nov 2013

[Operator:]

Good day, ladies and gentlemen, and welcome to the Q3 2013 Targacept, Inc. Earnings Conference Call. My name is Tracy, and I'll will be your operator for today. [Operator Instructions] As a reminder, this call is being recorded for replay purposes. I would now like to turn the call over to Dr. Stephen Hill, Targacept's President and Chief Executive Officer. Please proceed, sir.

[Stephen A. Hill:]

Thank you, Tracy, and good morning to everybody, and thank you for joining us. And with me this morning, I have Alan Musso, our Chief Financial Officer. First, let me inform you that comments made today may include forward-looking statements made under the Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to plans, expectations, objectives or future events, financial results or condition including, for any of our product candidates, the design, scope or other details of clinical trials, the timing for initiation or completion of or for reporting of results from clinical trials or for submission or approval of regulatory filings, target indications or commercial opportunities, as well as AstraZeneca’s development plans for product candidates licensed from us, our cash runway, revenues or expenses, plans, expectations or any other matter that is not historical fact. Actual results may differ materially from those expressed or implied by any forward-looking statements as a result of many factors, including those described under the heading Forward-Looking Statements in our press release from earlier today or in the heading Risk Factors in our most recent Form 10-K or in later filings with the SEC. We caution you not to place undue reliance on any forward-looking statement. Also, any forward-looking statement that is made speaks only as of today and should not be relied upon as representing our views as of any future date. We disclaim any obligation to update any forward-looking statement except as required by applicable law. So with that, once again, we have seen solid progress this quarter in the advancement of promising pipeline of Phase IIb, neuro nicotinic receptor therapeutics, all aimed at addressing unmet patient needs. I'll start by updating briefly each of our clinical programs. As we announced earlier this year, we have now completed patient recruitment in our phase IIb study of TC-5619, our wholly-owned alpha7 modulator, which is a treatment for negative symptoms and the cognitive dysfunction in schizophrenia. We continue to anticipate top line results from this program in December or January. While the positive symptoms of schizophrenia are managed with antipsychotic medications, the so-called negative symptoms such as social withdrawal and extreme indifference, and the cognitive dysfunction symptoms represent large remaining unmet medical needs, which hinder schizophrenics from effectively functioning in the society. An estimated 4.7 million patients in the world's 7 major markets have schizophrenia. And a significant majority of those individuals suffer from negative symptoms and cognitive dysfunction. Our ongoing phase IIb study, was designed to enroll approximately 456 patients at sites located approximately 2/3 in Eastern Europe and 1/3 in the United States. And uses a scale for the assessment of negative system or SANS as the primary endpoint. We are also measuring the effects of 5619 on cognitive dysfunction and overall everyday functioning having designated measures of these as key secondary endpoints. And we continue to look forward to the completion of the study, and sharing results with you. Let me turn now to TC-5214, which we're studying as a treatment for overactive bladder, a disorder that affects 1 in 6 adults in the U.S. and has been shown to seriously impact quality of life. This is a robust phase IIb study designed to enroll approximately 750 patients at over 100 U.S. sites. 5214 is a potent antagonist of alpha3beta4 NNRs, located in or around the bladder, and has a well established safety and tolerability profile stemming primarily from a large clinical program conducted in a different indication. Given the size and design of the study, and the objective regulatory endpoints for this indication, the results, which are anticipated in the first half of next year, should provide us with the clinical data set that will inform us on the potential of TC-5214 to become a first-in-class treatment for patients with overactive bladder. We see a clear need for new overactive bladder medications as currently available treatments have limited efficacy and for many, tolerability drawbacks that can lead to noncompliance and discontinuation of treatment. As we have mentioned previously, we are encouraged by the enrollment progress in the study to date, which has exceeded our additional planning assumptions. Finally, on the clinical side, we also announced earlier this year that we've completed recruitment for our phase IIb study of TC-1734 as a treatment for mild-to-moderate Alzheimer's disease. Patients in this study will receive either TC-1734, our wholly-owned alpha4beta2 modulator or the market leader donepezil as the monotherapy in a head-a-head comparison over a 12-month treatment period. And again, we continue to anticipate reporting top line data from this study in the middle of 2014. The study of neuro nicotinic receptors continues to be an area of promising science, in which great strides have been made over the last decade. And this bring us closer to matching the right drug with the right therapeutic area. We continue to believe that NNRs play a key role in many biological functions and we remain committed to building a pharmacologically diverse pipeline addressing unmet patient needs. Along those lines, our scientists will be presenting later this week, at the 4th biannual satellite meeting to the Society for Neuroscience annual meeting, where leading researchers will be showing advances in the nicotinic field. In addition to sharing information about our ongoing study in schizophrenia, we will be presenting the scientific rational behind our OAB program and our planned Phase IIa study of TC-6499 in patients with diabetic gastroparesis. We continue to believe in the promise of NNR Therapeutics. We remain committed to developing innovative therapeutics that can build health and restore independence for patients. And with that, I would like to turn over the call to Alan for our financial updates, and then we'll take your questions.

[Alan A. Musso:]

Well, thank you, Steve. Let me now briefly highlight our financial results for the third quarter of 2013, which we released earlier today. We ended the third quarter with a balance of $155.1 million in cash and investments. Our net loss was $12.9 million for the third quarter of 2013, compared to a net loss of $7.9 million for the third quarter 2012, the change due primarily to an increase of $3.9 million in research and development expenses. For the 9 months ended September 30, 2013, our net loss was $33.3 million compared to net income of $8.9 million for the corresponding period of 2012, a change of $42.2 million. The change was primarily due to a decrease of $53.3 million in deferred revenue recognition, partially offset by lower research and development expenses of $8.7 million and the non-recurrence in 2013 of restructuring charges incurred in 2012. As we've guided previously, based on our current operating plans, we expect our cash, cash equivalents and investment balance at the end of 2013 to be at least $135 million, and we continue to expect that our current cash resources will be sufficient to meet our operating requirements through at least the end of 2015. And with that, I would like to open up your call for questions.

[Stephen A. Hill:]

So, Tracy, we will be happy to take questions now.

[Operator:]

[Operator Instructions] And your first question comes from the line of Alan Carr from Needham & Company.

[Mark Vignola:]

This is actually Mark on for Alan. I was wondering if you could give us a updates on how things are going over at AstraZeneca with regards to 1446 and the strategic review?

[Stephen A. Hill:]

Yes, not really. It's for them to communicate any progress in that program and we would be secondary communicators of that. So I think that question is best directed to them, and as and when they communicate anything publically, we'll also reiterate that.

[Operator:]

[Operator Instructions]

[Stephen A. Hill:]

Tracy, is there any further questions?

[Operator:]

We have no further questions. So I would now like to turn the call over to Dr. Stephen Hill for closing remarks. Thank you.

[Stephen A. Hill:]

Okay, we appreciate everybody being on the call and we also appreciate that everybody's, like we are, waiting with anticipation for the results of the schizophrenic study towards the end of the year, and we certainly look forward to that and keep our hopes high that we will get positive results from that. So we look forward to that and we will share that with you when we have the information available to hand. Thank you again for your attention, and have a good day.

[Operator:]

Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Good day.