QLT's CEO Presents At 30th Annual JPMorgan Healthcare Conference - Conference Call Transcript

QLT, Inc. (QLTI)

30th Annual JPMorgan Healthcare Conference Call

January 11, 2012 11:00 am ET


Robert Butchofsky - President and CEO



Robert Butchofsky

Good morning everyone. Thank you for joining us this morning. I know it's been a long and busy week. So we're glad you could be here to learn about the QLT story.

The story over the past six years during my tenure as CEO hasn't just been a great period for the company. I want to just stop and tell you how we got where we are today. Essentially, we've had a number of issues we've had to deal with. We have broadened the pipeline that forms the basis for the ongoing company. But we had to deal with a number of different issues including litigation on a couple of fronts. We've gone through a series of divestments and associated restructuring for the company.

We've cleaned up our balance sheet by eliminating convertible debt and done a couple of Dutch auctions during that period of time. We've restructured both of our revenue streams. And then we finally settled the last piece of our litigation about two-and-a-half years ago.

I tell you this is not because it's a great part of the story, but I think it's important to understand how we got to where we are today. And also, I think it's helped us to build some credibility with investors, because we've executed on all these things to the most part to the best we could.

So where are we today? The company today is basically very strong ocular-only focus company. There is two programs that form the basis for our pipeline, a synthetic retinoid for two orphan indications, and then a drug delivery system for delivery to the front part of the eye.

We have a strong balance sheet, over $200 million in cash, and we also have a royalty revenue stream from an asset that we divested, Eligard, which is a prostate cancer drug. We've collected about $75 million from that asset and have another $125 million remaining. We carry the net present value of that asset on our balance sheet, which is currently amounting to $109 million.

We're a publicly traded company, about $350 million market cap. So there is a strong underlying asset value in addition to the pipeline which I'm going to spend most of my time focusing on today.

Where are we going? I think the rallying cry for QLT today is that we plan to have three Phase III programs running a year from now in 2013. Again, the retinoid orphan drug development for leber congenital amaurosis and retinitis pigmentosa, and that's going under global development currently. And then also our punctal plug drug delivery program is progressing as well. I'll highlight both of those programs for you.

This is an overview of our pipeline currently. In both of the green arrows for the synthetic retinoid, we plan on progressing towards pivotal studies beginning later this year. We're also doing a confirmatory Phase II study in glaucoma around our proprietary plug delivery system.

I want to start by talking to you about the synthetic retinoid program, QLT091001. The mechanism of action for this drug is we're targeting two specific genetic mutations that take place in the visual cycle pathway. These two mutations take place, first is called LRAT, the second is called RPE65. The RPE65 mutation is the more prevalent of the two. But the essential problem with these two diseases is they block the production of precursors that are vital to the production of rhodopsin.

Rhodopsin is the chemical that's responsible for transmitting light impulses to the brain. So the key elements or signatures of these two diseases are poor functional vision, especially in low light conditions.

QLT001 enters the metabolic pathway just past the second of these two mutations and you can essentially view this as enzyme replacement. We're providing replacement for 11-cis-retinal, which is one of the precursors for the formation of rhodopsin.

The first disease we're targeting is a pediatric disease called leber congenital amaurosis or LCA. This is a disease usually diagnosed soon after birth because of significant visual abnormalities. It's start to be the most devastating of the inherited retinal diseases, because ultimately one-third of these patients progress to total lack of light perception blindness, not just legal blindness, but no light perception blindness.

Nystagmus is a hallmark. That's wandering of the eyes, looking for input from visual stimulus. And again, the two specific genetic mutations we're targeting, LRAT and RPE65, lead to a treatment eligible patient population that we estimate about 2,000 patients worldwide. There is no approved therapeutic treatments for this disease.

The second disease we're targeting is a disease that impacts older patients, meaning impacting juvenile but also up to age 50 or beyond, called retinitis pigmentosa or RP. It's a similar disease to LCA. Only it's adult-onset in nature instead of pediatric. Night blindness is typically the first symptom that patients notice. And again, we're targeting the same two genetic mutations with this disease that we target for LCA.

The overall patient population for retinitis pigmentosa is around 300,000; however, the treatment eligible patient population with these specific genetic mutations we're targeting is around 3,000 patients. So overall between both of these diseases, we have a treatment eligible patient population that we estimate about 5,000 patients on a worldwide basis.

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