SuperGen's CEO Discusses Q2 2011 Results - Earnings Call Transcript

SuperGen (SUPG)

Q2 2011 Earnings Call

August 03, 2011 9:00 am ET

Executives

Mohammad Azab - Chief Medical Officer

James Manuso - Chairman of the Board, Chief Executive Officer and President

Michael Molkentin - Chief Financial Officer, Principal Accounting Officer and Corporate Secretary

Timothy Enns - Senior Vice President of Corporate Communications & Business Development

Harren Jhoti - Co-Founder, Chief Executive Officer, Clinical Consultant, Director and Member of Scientific Advisory Board

Analysts

Elemer Piros - Rodman & Renshaw, LLC

John Nelson - State of Wisconsin Investment Board

George Zavoico - McNicoll, Lewis & Vlak LLC

Robin Davison - Edison Investment Research Limited

Presentation

Operator

Good morning, my name is Brooke, and I'll be your conference operator today. At this time, I would like to welcome everyone to the SuperGen Second Quarter 2011 Earnings Conference Call. [Operator Instructions] I will now turn the conference over to Mr. Timothy Enns, Senior VP of Corporate Communications and Marketing. Thank you. Mr. Enns, you may begin your conference.

Timothy Enns

Thank you, Brooke. Good day, and thank you for joining us for SuperGen's 2011 Second Quarter Financial Results Conference Call. With me today are Dr. James Manuso, Chairman and Chief Executive Officer; Dr. Harren Jhoti, President and member of the Board of Directors; Dr. Mohammad Azab, Chief Medical Officer; Dr. Martin Buckland, Chief Business Officer; and Michael Molkentin, Chief Financial Officer. In a few moments, Jim Manuso, Harren Jhoti and Michael Molkentin will deliver remarks on the 2011 second quarter financial results and will provide a summary of our business outlook. After our prepared comments, we will open the line for questions.

Earlier this morning, we issued a press release about 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. A webcast replay will be available for 30 days.

During this 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 preclinically 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 developments, launches of new products, the timing of anticipated regulatory approvals or other regulatory action, the actions of our strategic partners and collaborators with respect to the products we license or co-develop and patent disputes and litigation.

On July 20, 2011, SuperGen closed the transaction to acquire Astex Therapeutics Limited, a U.K.-based biotechnology company. During today's conference call, SuperGen management may take -- may make additional forward-looking statements with respect to SuperGen's ability to realize the benefits of the Astex transaction. More information on the transaction can be found at the website, www.astex-supergen.com.

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. The company undertakes no duty to update forward-looking statements.

In the third quarter of 2011, SuperGen intends to change its company name to Astex Pharmaceuticals, Inc. and expects to be listed on NASDAQ under the symbol ASTX. In the coming months, we'll be presenting at several investor conferences, including the Rodman & Renshaw Annual Global Investment Conference, September 12 to 13, and the UBS Global Life Science Conference, September 19 to 21. Live and archived webcast of these presentations will be available in the Investor section of our corporate website.

I will now turn the call over to Dr. James Manuso, who will provide highlights of our accomplishments during the 2011 second quarter. Jim?

James Manuso

Thank you, Tim. Good morning, and thank you for joining us today for SuperGen's 2011 Second Quarter Conference Call. SuperGen's second quarter was a busy one on the financial, operational and clinical fronts. We posted strong financial results with Dacogen royalty revenue increasing 18% from the prior year quarter, and we earned net income of approximately $900,000. SuperGen ended the second quarter with more than $129 million in cash, cash equivalents and current and noncurrent marketable securities.

Operationally in late July, SuperGen completed the transaction to acquire Astex Therapeutics. The transaction is the first step for us to become Astex Pharmaceuticals, Inc. and change our listing on NASDAQ to the symbol ASTX.

By merging the 2 companies, Astex Pharmaceuticals will have the pipeline, people, partners, process and capital to become a significant force in oncology drug discovery and development. Early last week, we started the physical consolidation of certain processes and activities involving discovery, preclinical development and manufacturing to our Astex U.K. site. Our action initiated a program that will target a total estimated net reduction in force of approximately 44 employees or 24% of current worldwide headcount by year end. This initiative primarily affects research and development personnel. By year end, this process should be substantially complete, allowing us to wind down activities in our Salt Lake City and Pleasanton sites.

We anticipate ending 2011 with a solid financial position while reporting a nominal annual operating loss as indicated in our revised annual guidance. Portfolio rationalization is currently underway and a deep portfolio review will be provided at a future Analyst Day.

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