Neurocrine Biosciences (
Q2 2011 Earnings Call
July 29, 2011 8:00 a.m. ET
Kevin Gorman - President and CEO
Tim Coughlin - VP and CFO
Chris O'Brien - CMO
Jane Sorensen - Investor Relations
Thomas Wei - Jefferies & Co.
Phil Nadeau - Cowan & Company
Ian Somaiya - Piper Jaffray
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» Neurocrine Biosciences, Inc. Q2 2010 Earnings Call Transcript
Welcome to today’s program. [Operator instructions.] It is now my pleasure to turn the conference over to President and CEO Kevin Gorman. Please go ahead.
Good morning everyone, and thank you for joining us on our second quarter earnings call. I'm joined here this morning by Chris O'Brien, our chief medical officer, and Tim Coughlin, our chief financial officer. Before we give you an update, I would like Jane Sorensen to read our safe harbor statement.
Good morning. I want to remind you of Neurocrine’s Safe Harbor cautions. Certain statements made in the course of this conference call that state the company’s or management’s intentions, hopes, beliefs, expectations, or predictions of the future are forward-looking statements which are subject to risks and uncertainties.
Information concerning factors that could cause actual results to differ materially from those contained in, or implied by, the forward-looking statements is contained in the company’s SEC filings, including but not limited to the company’s annual report on Form 10-K and quarterly reports on Form 10-Q. Copies of these filings may be obtained by visiting the Investor Relations page on the company’s website at www.neurocrine.com.
Any forward-looking statements are made only as of today’s date and we undertake no obligation to update these forward-looking statements to reflect subsequent events or circumstances. Go ahead Kevin.
Thank you Jane. So this morning Tim is going to take you through our financials and Chris will give you an update on all our programs, and then we'll be happy to take any and all of your questions.
Just before we start out, clearly if you've had a chance to read our press release we've met all of our Q2 numbers and they are in line with the guidance that we provided at the beginning of the year. And again, Tim will take you through the details of those.
We're very happy with the way our programs are progressing so far this quarter. Abbott is finalizing the Phase III protocols and continues to be on track to initiate the Phase III program in Q4. In addition, they are progressing nicely on the Phase II trials for uterine fibroids and that is still on schedule to start late in Q3.
These are large and ambitious trials and we're quite fortunate to have Abbott as a partner. It takes their kind of experiences with disease states and the global reach to pull of these trials. But Chris will give you more detail there.
In addition to that, it's been a very successful quarter for our VMAT2 program and you'll be hearing more about what we've been putting in place in order to start our next Phase II program in just a couple of months, as well as the recent FDA interactions that we've had on the program.
Of significant importance is our receipt by the U.S. Patent Office giving us notification allowance on the composition matter patent covering our VMAT2 compound 854. That obviously is extremely important to this program.
So let's get started first with Tim, taking you through our financials.
Thank you Kevin, and good morning to everyone. Yesterday, after market close, we released our results for the second quarter of 2011. It was again another quarter that was in line with our financial plan. We remain on target for both annual and net income of $34-39 million and a net cash burn of $3-6 million for 2011, consistent with our beginning of the year guidance.
Our net income for the second quarter was $2 million, or $0.04 per share, compared to net loss of $5.2 million and our loss of $0.09 in the second quarter of last year. Our year to date net income is $4.9 million, or income of $0.09 per share. This compares to a net loss of $13.8 million for the first half of 2010, yielding a loss of $0.27 per share.
This significant improvement in operating results is a direct result of our collaboration agreements with both Abbott and Boehringer and Ingelheim, which were entered into in June of 2010. Revenue under our collaboration agreements was $12.2 million for the second quarter and $24.7 million year to date.
Amortization of upfront licensing fees was $9.2 million for the quarter and $18.5 million year to date, while reimbursement of internal and external research and development expenses resulted in revenue of $2.9 million and $6.2 million for the second quarter and year to date 2011 respectively.
Research and development expense increased in the prior quarter primarily driven by increased cost related to our VMAT2 program and earlier-stage research programs, offset partially by elagolix expenses being assumed by Abbott.
General and administrative expenses were slightly lower than budget due to lower personnel related costs. We expect research and development to moderately increase through the rest of the year as our VMAT2 program continues to move forward, including expenses from the second Phase II study, 3-month toxicology work, and ongoing product development work. We also anticipate general and administrative costs reverting back to approximately $3 million past quarter for the rest of the year.