Nanosphere, Inc. Q1 2010 Earnings Call Transcript

Nanosphere, Inc. Q1 2010 Earnings Call Transcript
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Nanosphere, Inc. (NSPH)

Q1 2010 Earnings Call

May 6, 2010 11:00 am ET


William P. Moffitt III - Chief Executive Officer

J. Roger Moody Jr. – Chief Financial Officer

Michael K. McGarrity - Chief Marketing Officer


Bruce Cranna - Jefferies & Co.

Jeff Ares - Leerink Swann



- Stephens Inc.

Bill Quirk - Piper Jaffray


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Good day ladies and gentlemen and welcome to the first quarter 2010 Nanosphere, Inc. earnings conference call. My name is Carol and I'll be your coordinator for today. At this time all participants are in a listen-only mode. We will be facilitating a question-and-answer session towards the end of this conference. (Operator Instructions)

As a reminder ladies and gentlemen, this conference is being recorded for replay purposes. Before this call begins, Nanosphere would like to state that certain statements made during this conference call which are not based on historical fact may be deemed to constitute forward-looking statements within the meeting of the Private Securities Litigation Reform Act of 1995.

Because these forward-looking statements involve known and unknown risks and uncertainties, there are important factors that could cause actual results, events or developments to differ materially from those expressed or implied from these forward-looking statements.

Such factors include those described from time to time in Nanosphere's filings with the United States Securities and Exchange Commission. Please note that Nanosphere undertakes no duty to update this information.

It is now my pleasure to turn the presentation over to your host for today's call, Mr. William Moffitt, President and Chief Executive Officer of Nanosphere. Sir, you may begin.

William P. Moffitt III

Thank you, Carol. Good morning everyone and thanks for joining us for Nanosphere's investor conference call covering the first quarter of 2010. In a few moments I'll turn the call over to Roger Moody, Chief Financial Officer and Mike McGarrity, Chief Marketing Officer.

But first let me give you my perspective on our progress and the opportunities for growth we see over the next several quarters. We continue to make progress with all of the programs on a number of fronts, providing the foundation for our goal of building a global molecular diagnostics company with a primary focus on creating value through menu expansion and greater functionality and applicability of our Verigene System.

With that in mind, there are two key points I want to emphasize this morning. First, we're making progress against our timelines for expanding the test menu for the Verigene System in the areas of infectious disease, human genetics, pharmacogenetics and protein assays. These tests will increase the applicability of the Verigene System and will generate increased utilization resulting in greater disposable cartridge volume.

Second, the tests that we have in development address critical needs in the market ranging from faster, more accurate infectious disease assays to pharmacogenetic assays where testing at the point of care to enable timely and accurate therapy is becoming increasingly important. Although the abrupt decline in influenza-like illnesses late last year had a significant impact on the placement of new systems in the first quarter, as we had previously anticipated.

Mike will review with you in a few minutes the continuing development of a strong pipeline of customers seeking to implement molecular methods for diagnosing these illnesses. We are nearing completion of the development work on an expanded respiratory virus panel that will add subtyping to the current test panel and will also include a genetic marker for the resistance to oseltamivir, or commonly known by the trade name Tamiflu. We expect to commence regulatory clinical trials for this product during this quarter.

In parallel, we're working to develop a further expansion of the respiratory panel to include parainfluenza, adenovirus and human metapneumovirus. We expect to enter clinical trials and file with the FDA for this additional expansion later in the year.

At the same time, we're making good progress in the development of a bloodstream infection product which we continue to expect to move into clinical trials about the end of this year. In pharmacogenetics we have concluded clinical trials for our 2C19 assay for clopidogrel metabolism, more commonly known by the trade name Plavix, and expect to submit this to the FDA this quarter. In a few minutes Mike will update you on our work with thought leaders in this field and our overall assessment of the market opportunity for this product.

In cardiology we continue to work on additional testing in support of our intended response to the FDA on our troponin assay. As we have previously discussed, this effort has been complicated somewhat by the issue Beckman has had with its troponin assay, the predicate device for our submission. Until we fully understand this issue, complete the work to respond to the FDA and have a better perspective on this submission it will be difficult to forecast the timing of any market launch. We do intend to respond to the FDA this year.

As you know from previous discussions, we must submit new 510(k)s to the FDA to migrate human genetic assays from the original Verigene System to the Verigene SP. This includes our test for hypercoagulation, warfarin metabolism, cystic fibrosis and hemochromatosis, the latter two being assays we have chosen to introduce only on the Verigene SP.

While we're anxious to migrate these assays to the Verigene SP, the studies necessary to do this are a lower priority than the clinical trials for the respiratory assays 2C19 and troponin assay. We currently intend to commence these migration studies later this year.

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