Astex Pharmaceuticals' CEO Discusses Q4 2011 Results - Earnings Call Transcript

Astex Pharmaceuticals (ASTX)

Q4 2011 Earnings Call

March 05, 2012 4:30 pm ET

Executives

Timothy L. Enns - Senior Vice President of Investor Relations, Business Development & Corporate Communications, Senior Vice President of Corporate Communications & Business Development and Vice President of Business Development

James S. J. Manuso - Chairman of the Board and Chief Executive Officer

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

Robert Corringham -

Harren Jhoti - Founder, Chief Executive officer and Director

Analysts

Boris Peaker - Oppenheimer & Co. Inc., Research Division

Thomas Yip - McNicoll, Lewis & Vlak LLC, Research Division

Robin Davison - Edison Investment Research Limited

Presentation

Operator

Good day, ladies and gentlemen, and thank you for standing by, and welcome to the Astex Pharmaceuticals Fourth Quarter and Year End 2011 Earnings Conference Call. [Operator Instructions] As a reminder, this conference may be recorded. And now it's my pleasure to turn the call over to Timothy Enns, Senior Vice President, Corporate Communications and Marketing. Sir, the floor is yours.

Timothy L. Enns

Thank you, operator. Good day and thank you for joining us for Astex Pharmaceuticals 2011 Fourth Quarter and Annual 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. Martin Buckland, Chief Business Officer; Michael Molkentin, Chief Financial Officer; Dr. Robert Corringham, Vice President of Clinical Development; and Dr. David Smith, Vice President of Regulatory and Quality Affairs.

In a few moments, Jim Manuso and Michael Molkentin will deliver remarks on the 2011 fourth quarter and fiscal year financial results and our business outlook for 2012. After prepared comments, we will open the line for questions. Earlier today, we issued a press release with our financial results. A copy of the press release is available in the Investor Relations section of our website at www.astx.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 the call, we'll 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 that 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 codevelop and patent disputes and litigation.

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 a few weeks, we'll be hosting our Annual Analyst and Investor Day on Tuesday, March 27 in New York. Live and archived webcasts of these presentations will be available in the Investor Relations 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 fourth quarter and fiscal year. Jim?

James S. J. Manuso

Thank you, Tim. Good morning, and thank you for joining us for Astex Pharmaceuticals' 2011 fourth quarter and year-end conference call. 2011 was a busy year for our company. We completed a major acquisition, rationalized our combined operations and enhanced and prioritized our portfolio of novel drugs. We ended the year with 4 company-sponsored Phase II programs and 4 partner-sponsored drugs in clinical trials. At the same time, we managed our financial resources conservatively, permitting us to deliver a profit for the fourth year out of the last 5 years. It has been 7 years since we last raised money in the markets. For 2012 financial performance, we are guiding to the achievement of approximate cash flow neutrality.

Dacogen royalty revenue rose to $60.5 million last year, representing an increase of 15% from the prior year. The company reported net income of $5.5 million, and we ended the year in a strong cash and marketable securities position of $128 million. As you know, our partner, Eisai, submitted to the U.S. Food and Drug Administration a supplemental new drug application or sNDA, seeking approval of Dacogen in the elderly acute myeloid leukemia or AML indication. We expect to learn the outcome of the FDA's final decision on this application tomorrow, March 6, the PDUFA date. While the FDA's Oncologic Drugs Advisory Committee or ODAC voted 10 to 3 that data in the supplemental NDA did not support a favorable benefit risk profile of Dacogen for the treatment of AML in adults 65 years of age or older, the FDA is not obliged to follow its advisory committee's recommendation. There is currently no approved therapy for elderly AML patients.

Within the second half of this year, the EMA will rule on Janssen-Cilag's Marketing Authorization Application or MAA for Dacogen in elderly AML. The Astex Pharmaceuticals' pipeline now includes 8 potential medicines that are advancing in the clinic, 5 of which are funded and managed by partners. We expect to announce the results of 4 Phase II clinical trial readouts later this year. AT13387, our second-generation HSP90 inhibitor, continues to progress in an imatinib combination Phase II trial for patients with tyrosine kinase inhibitor-resistant gastrointestinal stromal tumors or GIST. Additionally, we will expand the clinical program on AT13387 during the year, and clinical data on the drug will be presented at this year's ASCO conference.

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