BioMed Realty Trust, Inc. Q1 2010 Earnings Call Transcript

BioMed Realty Trust, Inc. Q1 2010 Earnings Call Transcript
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BioMed Realty Trust, Inc. (BMR)

Q1 2010 Earnings Call Transcript

May 4, 2010 1:00 pm ET

Executives

Rick Howe – Director, Corporate Communications

Alan Gold – Chairman and CEO

Matt McDevitt – EVP, Real Estate

Kent Griffin – President, COO and CFO

Analysts

Brendan Maiorana – Wells Fargo

Chris Kattan [ph] – Morgan Stanley

Jordan Sadler – KeyBanc Capital Markets

Rich Anderson – BMO Capital Markets

John Guinee – Stifel Nicholas

Presentation

Operator

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Good day, ladies and gentlemen and welcome to the Q1 2010 BioMed Realty Trust earnings conference call. My name is Carmina, and I will be your operator for today. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session. (Operator Instructions). As a reminder, this conference is being recorded for replay purposes.

I would now like to turn the conference over to your host for today, Mr. Rick Howe, Director of Corporate Communications. Please proceed, sir.

Rick Howe

Thank you, Carmina. And welcome everyone. Today's first quarter 2010 earnings call includes a slide presentation to accompany our prepared remarks. If you are not currently viewing the slides and would like to, please go to www.bioMedreally.com, click on the Investor Relations tab on the left and then click the Q1 2010 BioMed Realty Trust Inc. earnings conference call link. We will also be posting these slides on the Investor Relations tab of our website. Presenting today are Alan Gold, Chief Executive Officer, Matt McDevitt, Executive Vice President Real Estate and Kent Griffin, President and Chief Financial Officer.

Now, before we begin, I would like to remind everyone of the Safe Harbor statement included in yesterday's news release. The Private Securities Litigation Reform Act of 1995 provides a Safe Harbor for certain forward-looking statements including statements made during the course of today's conference call. These forward-looking statements are based on the company's current expectations and involve significant risks and uncertainties, some of which are beyond the control of the company and are subject to change based on various factors. Actual results may differ materially from those expressed or implied by the forward-looking statements. For a detailed discussion of some of the ongoing risks and uncertainties of the company's business, I refer you to the news release issued yesterday and filed with the SEC on Form 8-K as well as the company's other SEC filings including its most recent annual report on Form 10-K and quarterly reports on Form 10-Q. The company disclaims any intention or obligation to update or revise any forward-looking statements whether as the result of new information, future events or otherwise.

With that said, I will now turn the call over to Alan Gold. Alan?

Alan Gold

Thank you, Rick. And welcome to BioMed's first quarter 2010 earnings call. We're extremely pleased to have a lot of positive things to talk about this morning. First, the Life Science Industry continues to have strong fundamentals. Second, we had a very strong first quarter. We executed 155,000 square feet of leasing and announced both our first new acquisition and our first new build to suit transaction in quite some time. We also had record revenue, rental revenues of $70.6 million for the quarter and announced funds from operations of $0.33 per diluted share. Third, new investment opportunities, one which closed just yesterday and the second of which we also expect to close in the second quarter. I will let Matt talk about each of these opportunities in a moment.

And finally, the tremendous milestones we have achieved related to our capital structure. BioMed Realty Trust received investment grade corporate credit ratings from both Moody's Investor Services and Standard & Poor's. We are pleased with these significant milestones, less as transformational events but more as validations of the effectiveness of our business model, our discipline execution and our prudent management of our capital structure. Over the long term, I believe that the investment grade credit ratings and the access to the unsecured credit will have a very positive impact on our company. Which Kent will discuss further.

BioMed stands today as the first and only REIT dedicated, exclusively to the Life Science Industry with an investment grade corporate credit rating. Now I'd like to touch on the state of the Life Science Industry which as always is really at the heart of our business model. 2010 is off to a very solid start for the industry, as evidenced by the 30% appreciation of the MX biotech index in the first quarter. And we see continuing scientific advancements and innovation and importantly continued success in raising capital which ultimately translates into greater demand for space.

Partnering transactions totaling $6.1 million or $6.1 billion were completed in the first quarter of 2010. A 29% increase over the same quarter last year. One particular partnering transaction of note announced during the quarter was the collaboration between Isis Pharmaceuticals and GlaxoSmithKline for which Isis is eligible to receive almost $1.5 billion in license fees and milestone payments. And importantly following the announcement of the collaboration, Isis and BioMed entered into a build to suit agreement, once again demonstrating the linkage between raising capital and the leasing of space.

Financing transactions reached $2.9 billion in the first quarter including the IPO for Ironwood Pharmaceuticals which raised over $203 million in net proceeds for our tenant at 301Binney in Cambridge. And the Pace to follow on public equity transaction increased dramatically in the first quarter, up 78% over the same period last year to just over $1 billion. Venture capital activity demonstrated some modest improvement over the prior quarter. $1billion invested in the first quarter, including a $25 million Series D financing for revance therapeutics in January.

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