QLT, Inc. (



Q3 2011 Earnings Call

November 3, 2011 8:30 am ET


Karen Peterson - IR Specialist

Bob Butchofsky - President and CEO

Cameron Nelson - SVP and CFO


Steve Yoo - Leerink Swann

John Gibbons - Odin Partners



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» QLT's CEO Reviews Phase II Study for Glaucoma Using Latanoprost Punctal Plug Delivery System - Conference Call Transcript
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» QLT CEO Discusses Q1 2011 Results - Earnings Call Transcript

Welcome to the QLT Inc. third quarter 2011 conference call. (Operator Instructions) At this time, I would like to turn the conference over to Karen Peterson, Investor Relations Specialist.

Karen Peterson

Good morning, everyone. And welcome to QLT's third quarter 2011 earnings conference call. If you have not yet received a copy of our press release, you can find it by visiting our website at www.qltinc.com. The conference call is being webcast live and will be available on our website for the next 30 days.

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Presenting today is Bob Butchofsky, our President and CEO; and Cameron Nelson, Senior Vice President and Chief Financial Officer. Before I turn the call over to Bob, let me review the Safe Harbor statement.

On behalf of the speakers who follow, we caution investors that certain statements in this conference call is forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and constitute forward-looking information within the meaning of Canadian Securities Laws.

For the purposes of this caution, we refer to such statements as forward-looking statements.

Forward-looking statements are predictions only, which involve known and unknown risks, and uncertainties and undue reliance should not be placed on such statements. Certain material factors or assumptions are implied in making forward-looking statements and actual results may differ materially from those expressed or implied in such statements.

For additional information about the material factors or assumptions underlining such statements, and about the material factors that may cause actual results to vary from those expressed or implied in such statements, please consult our earnings press release sent out earlier this morning and available on our corporate website, as well as our filings with the U.S. Securities and Exchange Commission and the Canadian Securities Regulatory Authorities, including the risk factors detailed in the most recently filed annual report on Form 10-K and quarterly reports on Form 10-Q. QLT undertakes no obligation to update such information to reflect later events or developments, except as required by law.

This call also includes a discussion of non-GAAP financial measures as defined by applicable securities laws. The most directly comparable U.S. GAAP financial measures and the information reconciling these non-GAAP finance measures to QLT's financial results prepared in accordance with the U.S. GAAP have been included in the earnings press release issued today and posted on our website.

And with that, I'll turn the call over to Bob.



Good morning, everyone, and thank you for joining us on the call today. Overall, it was a pretty straightforward financial result for the quarter. We generated $500,000 in adjusted EBITDA and now have $204 million in cash on the balance sheet, and another $109 million in net present value of the contingent consideration asset.

I really want to focus my remarks today, starting with the brief overview of our punctal plug program, followed by a retinoid program. And then make a few brief comments about Visudyne sales before turning the call over to Cam to walk you through financial results for the quarter.

Following the positive data that we announced at the end of August from our Glau 11 Phase II trial with latanoprost and punctal plugs and recall that was with plugs placed in both the lower and upper tear ducts of the eye. Now we initiated a proof-of-concept device-only study, using one of our proprietary punctal plug designs that was specifically modified for upper lid placement.

Very pleased to announce this morning, to see the initial retention rate is significantly improved from the rates that we reported using a commercial punctal plug in the upper puncta in the earlier 11 trial. The data we announce this morning shows that we retained plugs in 22 of 27 eyes, a retention rate of 81% at one month.

As a reminder, the retention rates in the Glau 11 drug trial were less than 50% for the upper plug and this was generated with a commercially available punctal plug design. Also something to highlight for you is our experience over the past several years, shows that retention rates for our devices is slightly better in drug trials than it is in the device-only trials.

And usually that is favoring the drug trials by about 5%. And we expect this is the case, because the patients enrolled in the drug trials, generally are more careful about their plugs, since they're aware the device is delivering their daily glaucoma medication.

So this initial retention rate of 81% is encouraging to us. And we'll continue to refine our proprietary upper plug and strive to generate more and longer-term data, to ensure that we have an upper plug that is relatively easy to insert, it's comfortable for the patients and has good retention rates like our proprietary lower punctal plug. You can expect to hear periodic updates from us during 2012 on the progress on the device front.

Now, I want to turn to the drug delivery front. We will soon be initiating two Phase II trials, enrolling approximately 110 to 115 patients in total between the two trials. And the trials are designed to answer the question, what drove the efficacy we demonstrated in the last trial? As a reminder, we demonstrated a 5.7 mmHg reduction and intraocular pressure in one month.

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