Neurocrine Biosciences' CEO Discusses Q4 2011 Results - Earnings Call Transcript
Neurocrine Biosciences Inc. (
)
Q4 2011 Earnings Call
February 8, 2012 05:00 pm ET
Executives
Kevin Gorman - President & CEO
Jane Sorenson - IR
Tim Coughlin - VP & CFO
Chris O'Brien - CMO
Analysts
Ian Somaiya - Piper Jaffray
Phil Nadeau - Cowen & Company
Jon Lecroy - MKM
Jason Napodano - Zacks
Thomas Wei - Jefferies
Presentation
Operator
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Good day everyone and welcome to today's Neurocrine Biosciences fourth quarter and yearend 2011 results conference call. At this time all participants are in a listen-only mode. But later you will have the opportunity to ask questions during the Q&A session. (Operator Instructions). It is now my pleasure to turn the conference over to Mr. Kevin Gorman, CEO of Neurocrine Biosciences.
Kevin Gorman
Thank you very much. Thank you all for joining us for the fourth quarter earnings call. I am joined here by Chris O'Brien, our Chief Medical Officer and Tim Coughlin our CFO. Before we get started I would like to have Jane Sorenson read our Safe Harbor statement please.
Jane Sorenson
Good afternoon. 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, believes, expectations or predictions of the future are forward-looking statements which are subject to risks and uncertainties. Information concerning factors that could cause the 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. Kevin?
Kevin Gorman
Thank you, Jane. As usual Chris is going to give you an update on our clinical programs. Tim will review the fourth quarter and full-year financials and in addition Tim is going to update those financials with the financing that we closed on last month and he’ll also give you guidance on our burn for
2012. So with that Tim, why don’t you start off?
Tim
Coughlin
Okay, thank you Kevin and good afternoon to all. After the market closed today, we filed our earnings for both the fourth quarter and the full calendar year of 2011. We had another good quarter and met our overall financial plan for 2011. At the beginning of 2011, we guided to net income of $37 million to $39 million. Our net income for the year was $37.6 million.
We also guided to a net cash burn of $3 million to $6 million and end 2011 with approximately $130 million in cash investments and receivables. We met both of these goals ending 2011 with a net cash burn of $4 million and with a $131.7 million in cash investments or receivables. Our net income for the fourth quarter was $1.3 million or $0.02 of income per fully diluted share compared to net income of $2.5 million or $0.04 of income per fully diluted share in the fourth quarter of last year.
Our 2011 net income of $37.6 million or $0.67 per fully diluted share compares favorably to a net loss of $8 million or a loss of $0.15 per share for 2010. This significant improvement in operating results for 2011 is a direct result of two items. The first is a full-year revenue recognition under our collaboration agreements with Abbott and Boehringer Ingelheim. These collaborations both commenced in June of 2010.
Second during 2011, we recognized $30 million of milestones under the Abbott agreement related to the Elagolix endometriosis and uterine fibroids programs. Revenue recognized under our collaboration agreements was $11.1 million in the fourth quarter of 2011 and $77.4 million for the full year.
Amortization of upfront licensing fees was $9.2 million for the quarter and $37 million for the year. Reimbursement of internal and external research and development expenses resulted in revenue of $1.9 million and $10.5 million for the fourth quarter and year-to-date 2011 respectively. Research and development costs were relatively flat year over year. Increased external development costs related to our VMAT2 Program and other research and development costs for earlier-stage programs were offset by a lower external development expenses related to Elagolix as these activities continue to transition to Abbott.
General and administrative costs decreased 6% year-over-year primarily due to lower building overhead costs and continued cost containment efforts. Other income for the fourth quarter of 2011 was $1.7 million lower than the same period in 2010. This decrease is due to a one-time investment gain of $700,000, a couple of million dollars received under the Qualifying Therapeutic Program that was part of the Healthcare Reform Bill. Both of these events occurred in fourth quarter of 2010 and this fourth quarter difference of $1.7 million explains the majority of the difference in the year-to-date change in other income.
For 2012 our financial guidance is a net loss from operations of approximately $9 million to $14 million or $0.14 to $0.21 per share based on the 66 million basic shares outstanding. Revenue for 2012 is expected to be $40 million to $45 million which include a non-cash revenue from amortization of upfront license fees of approximately $34 million. We do not expect to receive any milestones in 2012. This lack of milestone funding accounts for the majority of the decrease in revenue from 2011 to 2012.
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