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Theravance Inc. Q3 2010 Earnings Call Transcript

Theravance Inc. Q3 2010 Earnings Call Transcript

Theravance Inc. (



Q3 2010 Earnings Call

October 21, 2010 5:00 pm ET


Rick Winningham - CEO

Mike Aguiar - SVP and CFO

Mathai Mammen - SVP, Research and Early Clinical Development.


Ian Somaiya - Piper Jaffray

John Stephenson - Summer Street

Brian Skorney - ThinkEquity

Ryan Martins - Barclays Capital

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At this time, I would like to welcome everyone to the Theravance Conference Call to review results for the quarter ended September 30, 2010 and top line results from the Phase 2 clinical study with TD-1211 for the opioid-induced constipation (


). (Operator Instructions). Today's conference call is being recorded.

Now, I would like to turn the call over to Mike Aguiar, Senior Vice President and Chief Financial Officer. Sir, you may begin.

Mike Aguiar

With me on the call today are Rick Winningham, our Chief Executive Officer and Dr. Mathai Mammen, Senior Vice President of Research and Early Clinical Development. The primary focus of today’s call will be Mathai’s discussion of the positive proof-of-concept results from the Phase 2 study with TD-1211 the lead compound in our PUMA program.

Before turning the call over to Mathai, I will provide a very brief update of our financial results and after Mathai has done, Rick will close the call reviewing the highlights for the quarter and then finally we will open up the call for questions.

This afternoon Theravance issued two press releases, first detailing the results of our proof-of-concept Phase 2 study with our PUMA compound for the treatment opioid induced constipation and the second detailing third quarter 2010 financial results and recent corporate developments. Copies of these press releases and the slide presentation can be downloaded from our website or you can call Investor Relations at 650-808-4100, and we will be happy to assist you.

Before we get started, we would like to remind you that this conference call contains forward-looking statements regarding future events and the future performance of Theravance. Forward-looking statements include anticipated results and other statements regarding Theravance's goals, expectations, strategies and beliefs. These statements are based upon information available to the company today and Theravance assumes no obligation to update these statements as circumstances change.

Future events and actual results could differ materially from those projected in the company's forward-looking statements. Additional information concerning factors that could cause results to differ materially from our forward-looking statements are described in greater detail in the company's form 10-Q filed with the SEC.

I will now briefly discuss results of the quarter ended September 30, 2010 and review guidance for the full year 2010 expenses.

For the quarter September 30, 2010, Theravance had a net loss of $21.2 million or $0.29 per share. Revenues totaled $5.3 million during the third quarter 2010 and consisted primarily of the amortization of deferred revenues from the company's partnerships with GSK and Astellas partially offset by write-off of $820,000 VIBATIV inventory that is no longer realizable.

Included in revenue was royalty income of $422,000 based upon net VIBATIV sales of $2.3 million in to the wholesale channel. Total operating expenses excluding stock-based compensation were $20.7 million for the quarter and $63.4 million for the year-to-date.

Cash, cash equivalent and marketable securities totaled $192.5 million as of September 30, 2010. This decrease of approximately $18.2 million during the third quarter of 2010 was primarily due to cash used in operations.

We are reiterating our previous 2010 expense guidance of total expenses being at the upper end of the range of $80 million to $85 million. As a reminder, our guidance includes total research and development expense and total general and administrative expense, but excludes stock-based compensation.

With that I will turn the call over to Mathai Mammen, who will discuss results of the Phase 2 study with TD-1211.

Mathai Mammen

I’m very excited to review the top line results from our Phase 1 and Phase 2 clinical studies of TD-1211. Before I discuss the study, design and results, I would like to make a few key points about Opioids and TD-1211.

As many of you know, Opioids are the one of the largest and most effective class of medicine used for managing various pain conditions. Opioids primarily exert their analgesic effect by acting on regions of the brain and spinal cord inside the central nervous system or CNS. However, Opioids also circulate outside the CNS compartment, which result in a wide range of side effect including constipation, nausea and pruritus.

For many patients on opioid therapy, Opioid Induced Constipation or OIC is a significant problem as they are currently no orally observed medicines approved in the US to help alleviate the side effects. TD-1211 was selected as our lead compound for development based on preclinical data that demonstrated excellent peripheral restriction. That is TD-1211 is a highly selected antagonist opioid receptor that is largely excluded from the CNS compartment.

We previously reported positive results from a Phase I single-ascending dose study in healthy volunteers. We said that our plan was to move TD-1211 into and through an efficient program that combined a Phase I multiple-ascending dose study in healthy volunteers and a Phase II dose escalation study in patients suffering from opioid induced constipation. We have completed this combined program on schedule and are now reporting the data here.

I remind you that the slide presentation can be accessed from our website and the slide number referenced during the discussion can be located at the lower left corner of each slide.

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