Antigenics Inc. Q1 2010 Earnings Call Transcript

Antigenics Inc. Q1 2010 Earnings Call Transcript
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Antigenics Inc. (AGEN)

Q1 2010 Earnings Call Transcript

April 29, 2010 11:00 am ET

Executives

Shalini Sharp -- CFO and VP

Garo Armen -- Chairman and CEO

Analysts

Ren Benjamin – Rodman

Eric Warwick [ph]

Joe Bidwhack [ph]

Presentation

Operator

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Good morning. My name is Celeste, and I will be your conference operator today. At this time, I would like to welcome everyone to the first quarter 2010 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 session. (Operator instructions).

I would now like to turn today’s call over to Ms. Sharp, CFO. Please go ahead.

Shalini Sharp

Thank you

Celeste and good morning everyone. Welcome to Antigenics' conference call to discuss the financial results for the quarter ended March 31, 2010. With me today is Dr. Garo Armen, Chairman and CEO.

We hope that all of you have had a chance to review the press release that was issued this morning. During this call, we will review the financial results as well as provide a corporate update, and we will then have a Q&A session.

But before we continue, I would like to remind you that this conference call will contain forward-looking statements, including without limitation statements regarding the company’s strategic priorities, past position and potential revenues and savings, and the development, regulatory and commercialization efforts, clinical trial activities, data, results and timelines of the company and/or its licensees and partners.

These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. Reference to these risks and uncertainties is made in today’s press release and they’re disclosed in more detail in our most recent filings with the U.S. SEC. When evaluating Antigenics’ business and securities, investors should give careful consideration to these risks and uncertainties.

For the purposes of this call, the phrase, 'net cash burn' means cash used in operating activities plus capital expenditures, debt repayments, and dividend payments.

With that, I will now review our financial results for the quarter ended March 31, 2010. For the quarter ended March 31, 2010, Antigenics incurred a net loss attributable to common stockholders of $9 million, or $0.10 per share. This is compared with a net loss of $9.7 million, or $0.14 per share for the same period in 2009. The 2010 figure includes $4.5 million in non-cash expenses such as depreciation, amortization, share-based compensation, non-cash interest, etcetera. The 2009 figure includes only $2 million of such expenses.

Antigenics recognized revenues in this quarter of $936,000 compared with $621,000 during the same period in 2009. This increase is primarily due to timing of shipments of QS-21 to our licensees. In the quarters ended March 31, 2010 and 2009, we recorded revenue of $378,000 and $380,000, respectively, from the amortization of deferred revenue that was received previously.

Research and development expenses in the first quarter of 2010 were $4.6 million compared to $4.9 million for the comparable period in 2009.

G&A expenses in the first quarter of 2010 were $3.6 million compared with $3.9 million in the first quarter of 2009. These decreases reflect our cost containment efforts.

Cash, cash equivalents and short-term investments amounted to $23.9 million as of March 31, 2010. Our net cash burn for Q1 2010 was $6.1 million compared with $9.8 million in 2009. This reduction reflects primarily our cost containment efforts. We continue to anticipate that our net cash burn for the full-year 2010 will be in the range of $16 million to $18 million.

Subsequent to the end of the quarter, we issued approximately 954,000 shares of common stock in exchange for $2.3 million in face value of our 5.25% convertible notes. This will result in a savings of about $120,000 in interest expense per year going forward.

The original principal of this note was $50 million, of which approximately $17.7 million remains outstanding after a series of exchange and purchase transactions. Also as of Monday, the company has regained compliance with NASDAQ’s $1 minimum bid price listing requirement, and that matter is now closed.

This concludes the financial portion of the call. I’ll now turn the call over to Dr. Garo Armen.

Garo Armen

Thank you, Shalini. I will begin my comments by first addressing our strategic priorities for the year. These include improving our balance sheet, operating at a reduced burn rate and continuing to create value based on our broad immunology platform, which include our licensed adjuvant, QS-21; Oncophage; and AG-707, which is our herpes simplex II therapeutic vaccine candidate.

With regard to our balance sheet, the objective for the year is to continue to reduce our debt levels. As Shalini mentioned, we've already purchased approximately 32.3 million of the 50 million publicly held convertible debt outstanding. These purchases have reduced our annual interest expense by some $1.7 million a year.

In addition, we’ve cut our overall burn rate. This year, we will be at the rate of less than half of where we were just about two years ago. We continue to look for means of reducing it further by improving operating efficiencies further, and in addition our desired objective is of course to bring partners to complete the development of Oncophage and AG-707.

Partnering these programs would optimize the potential for both given the applicability, for example, of Oncophage to many types of cancers. With a partner, we can see and envision studying two pivotal trial programs in multiple-cancer indications.

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