Q3 2010 Earnings Call
October 25, 2010 4:30 pm ET
Mohammad Azab - Chief Medical Officer
Michael Molkentin - Chief Financial Officer, Principal Accounting Officer and Corporate Secretary
Timothy Enns - Senior Vice President of Corporate Communications & Business Development
Michael McCullar - Head of Discovery Operations
James Manuso - Chairman, Chief Executive Officer and President
George Zavoico - McNicoll, Lewis & Vlak LLC
Robin Davison - Edison Investment Research Limited
Boris Peaker - Rodman & Renshaw, LLC
Good afternoon. My name is Chastity, and I will be your conference operator today. At this time, I would like to welcome everyone to the SuperGen Q3 2010 Earnings Conference Call. [Operator Instructions] Thank you. I will now turn the call over to Mr. Timothy Enns, Senior Vice President of Corporate Communications and Business Development. Please go ahead, sir.
Thank you, operator. Good afternoon, and thank you for joining us today for SuperGen's 2010 Presentation of the Third Quarter Financial Results. With me today are Dr. James Manuso, President and Chief Executive Officer; Michael Molkentin, Chief Financial Officer; and Dr. Mohammad Azab, Chief Medical Officer; and Dr. Michael McCullar, Senior Vice President, Strategy and Discovery Operations. In a few moments, Jim Manuso and Michael Molkentin will deliver remarks on the 2010 third quarter financial results and provide a summary of the quarter and the business outlook. After our prepared comments, we will open the line for questions.
Earlier today, we issued a press release of our financial results. A copy of the press release is available in the Investor Relations section of our website at www.supergen.com. In addition, this call is being webcast and may be accessed via the Investor Relations section of our website. The webcast replay will be available for 30 days.
During the call, we will make projections and forward-looking statements that are based on management's current expectations. Actual results may differ materially from these forecasts and projections due to various factors. There are significant risks and uncertainties in biotechnology research and development. There can be no guarantee that our projects, products or product candidates will progress pre-clinically or clinically as we expect, or that we will ultimately obtain approvals for the indications that we seek. Moreover, even if our products or product candidates are approved in the future, we cannot guarantee they will be commercially successful. The company's results may also be affected by a variety of factors, such as competitive development, launches of new products, the timing of anticipated regulatory approvals or other regulatory actions, the actions of our strategic partners and collaborators with respect to the products we license or co-develop, and patent disputes and litigations. For additional information and discussion concerning the risk factors that affect the company's business, please refer to the company's filings with the Securities and Exchange Commission, including reports on our most recently filed Form 10-K or Form 10-Q. The company undertakes no duty to update forward-looking statements.
Additionally, on November 16, SuperGen will be presenting at the Lazard Capital Markets 7th Annual Healthcare Conference in New York. We will provide additional information closer to the conference, but live and archived webcast of this presentation will be available through the same section of our website.
I will now turn the call over to Dr. James Manuso, who will provide highlights of our accomplishments during the 2010 third quarter.
Thank you, Tim. Good afternoon, and thank you for joining us today for SuperGen's 2010 Third Quarter Conference Call. In the third quarter, SuperGen's fiscal performance improved significantly. At $13.4 million, Dacogen's third quarter royalty revenue increased 28% over the same quarter last year. The quarter tallied a net profit of approximately $4 million, bringing our unrestricted cash, cash equivalents and current and noncurrent marketable securities balance as of September the 30th to approximately $112 million.
For the third time in our history, we expect to be profitable on an annual basis. Our increasingly stronger financial position enables us to readily advance the discovery and development of our pipeline products and to consider product candidates during licensure without seeking external financing. During the third quarter, Dacogen sales grew more substantially than anticipated. In addition, total market size has increased, and based on IMS reports, Dacogen's market share in the United States has grown to more than 41%.
Sales of Dacogen in the rest of the world have also increased. These results are attributed to the aggressive development, sales and marketing initiatives instituted by our partners, Eisai and Johnson & Johnson. With respect to the potential for label expansion or regulatory approvals based on the Dacogen Phase III trial in elderly acute myeloid leukemia, or AML, we are encouraged by guidance from both Eisai and Johnson & Johnson. Both companies have committed to file in 2011. The release and discussion of the data from the Phase III AML trial will be presented at an as yet unspecified scientific forum next year.
Last quarter, I announced the clearance to proceed into first-in-human studies by the Food and Drug Administration, or FDA, of SGI-110, our novel, second-generation hypomethylating agent. The SGI-110 team has advanced this important project. The clinical sites have been initiated, thereby enabling the dosing of MDS and AML patients next month. We're very pleased to be working with a epigenetics Dream Team of the Stand Up To Cancer Foundation on this trial.
One of the goals of the Dream Team is the development of functional epigenetic therapies that demonstrate utility, not only in hematological malignancies, as was the case with Dacogen, but also in solid tumors. We're excited to be at the forefront of epigenetic therapeutics discovery, development and commercialization. SGI-110 is a next-generation hypomethylator intended to follow-up on the Dacogen franchise. This drug is a low-volume, high-concentration, subcutaneous product with a preclinical profile that has demonstrated potent hypomethylation and epigenetic modulation. Its preclinical anticancer and hypomethylating effects have been observed in both hematological and solid tumor models, sometimes with dosing schedules less frequent than currently marketed products.