Neurocrine Biosciences Inc. (
Q3 2010 Earnings Call
October 29, 2010 8:30 AM ET
Kevin Gorman – President and CEO
Tim Coughlin – CFO
Chris O’Brien – Chief Medical Officer
Jane Sorensen – Investor Relations
Ian Somaiya – Piper Jaffray
Larry Smith – DLS Research
Stephen Willey – Stifel Nicolaus
Jason Napodano – Zacks Investment Research
Previous Statements by NBIX
» Neurocrine Biosciences, Inc. Q2 2010 Earnings Call Transcript
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Good day, everyone and welcome to today’s program. At this time, all participants are in a listen-only mode. Later you will have the opportunity to ask questions during the question-and-answer session. (Operator Instructions)
It is now my pleasure to turn the conference over to President and CEO, Kevin Gorman. Please go ahead, sir.
Thank you very much and good morning everyone. It’s our pleasure to be here this morning to talk with you about our third quarter earnings results and also the progress that the company’s been making to date. I’m joined this morning by Tim Coughlin our CFO and Chris O’Brien, our Chief Medical Officer and Jane Sorensen, who will now and before we get started read our Safe Harbor statement, Jane.
Good morning. I want to remind you of Neurocrine’s Safe Harbor precautions. 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 neurocrine.com.
Any forward-looking statements are made as of today’s date and we undertake no obligation to update these forward looking statements to reflect subsequent events or circumstances, Kevin.
Thank you, Jane. So the company looks remarkably different than the last time we spoke from a financial standpoint and also from a scientific standpoint, as we continue to progress our programs forward which Chris will be talking to you about. But first let’s get into the financials and Tim will take it from this point.
Okay. Thank you, Kevin and good morning to all. Thank you all for joining us. After the market closed yesterday we released our third quarter earnings. It was another very good quarter for Neurocrine. In short the full impact of our recent collaboration agreements with Abbott and Boehringer Ingelheim is now evidenced in our financial results and because of these two deals our financial position has dramatically improved.
Our net income for third quarter was $3.3 million or $0.6 per share on both the basic and fully diluted earnings per share. This compares to a net loss of $8.2 million or $0.21 per share for the third quarter of last year. Our year-to-date loss is $10.5 million or $0.20 per share compared with 2009 year-to-date loss of $43.1 million or $1.11 per share. The reduction of our net loss is primarily due to the revenue recognized under the two new collaboration agreements, the personal restructuring program that we implemented in the second quarter of last year. And cost control measures across all functions within our company.
Revenue recognized under our collaboration agreement totaled $14.4 million for the third quarter of 2010. $9.2 million of this revenue is realized under the amortization of the up-front licensing fees, the remaining $5.2 million of revenue resulted from reimbursement of internal and external research and development costs.
Research and development expenses as well as G&A expenses were in line with our expectations for the quarter and year today. These expenses are significantly lower than last year’s run rate primarily due to the lower personnel related costs and across-the-board reductions in non-clinical related expenses.
In light of our improved financial position, we continue to focus on our cash burn from ongoing operations. If one were to exclude the impact of our two recent partnerships, we again met our targeted burn from operations for the third quarter that was established at the beginning of this year. We reaffirm our year-end guidance of ending the year with over $130 million in cash and investments and receivables from collaborating partners.
We expect to have an aggregate net loss in the range of $8 to $9 million. We expect expenses to be within our guidance, given the beginning of the year $43 to $46 million in total expenses. For those looking for more details around the financial results, we plan to file our 10-Q with the SEC later today. We’d be glad to entertain any financial questions during the Q&A portion of the call, before right now turn I’ll turn it back over to Kevin for the balance of the presentation.
Thanks, Tim. As you can see that was very concise but very nice, a good financial situation to be in. As was written in there and as we’ve spoken with many of you about -- we are now aggressively pursuing our programs with our partners and then VMAT2 and Urocortin by our selves. And we are going to keep moving those programs forward, because we now have the financial wherewithal.
Having said that, we are going to keep a very disciplined approach to our spends and to the size of this company. We don’t plan on having any remarkable headcount growth in the foreseeable future. I’m not going to speak to you right now about the progress that we are making with them. But I’m going to leave that to Chris O’Brien. He heads of our Joint Development Committee on the Neurocrine side of the Senior Executive Team on both Abbott and our site to find the strategy of the collaboration. So Chris is going to take you through that and also we had a news just last week where we announced that we are going to be taking VMAT2 into a Phase II clinical trial at the end of this year and Chris will speak a little bit more about that. So Chris?