Astex Pharmaceuticals (ASTX) Q1 2012 Earnings Call April 30, 2012 4:30 pm ET Executives Timothy L. Enns - Senior Vice President of Investor Relations, Business Development & Corporate Communications James S. J. Manuso - Chairman of the Board and Chief Executive Officer Michael Molkentin - Chief Financial Officer, Principal Accounting Officer and Corporate Secretary Mohammad Azab - Chief Medical Officer Harren Jhoti - Founder, Chief Executive officer and Director Martin Buckland - Chief Business Officer and Director Analysts Robin Davison - Edison Investment Research Limited George B. Zavoico - McNicoll, Lewis & Vlak LLC, Research Division Presentation Operator
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 forecast 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, 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 codevelop 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. The company undertakes no duty to update forward-looking statements. Our Astex annual stockholders meeting will occur on June 22. We invite you to look for your proxy materials in your email or postal mailbox in early May. I will now turn the call over to Dr. James Manuso, who will provide highlights of our accomplishments during the 2012 first quarter. Jim? James S. J. Manuso Thank you, Tim. Good afternoon, and thank you for joining us for Astex Pharmaceuticals 2012 First Quarter Conference Call. During the quarter, we made considerable operational progress on many fronts in discovery, research and in the clinical and regulatory development of our drugs. Our balance sheet remains sound and our financial performance was excellent. We ended the quarter with $126 million in cash and marketable securities and we posted net income of $4.2 million. Dacogen royalty revenue rose to $20.6 million in the first quarter, representing an increase of approximately 21% from the prior year. We're maintaining fiscal year 2012 royalty guidance of up to $67 million.
Last month, our Dacogen partner Eisai received a complete response letter from the U.S. FDA to respond to the application for approval of Dacogen in elderly acute myeloid leukemia or AML. The FDA declined to approve the application. While we're disappointed with the agency's decision, in the second half of this year, the European Medicines Agency, or EMA, will rule on Eisai's sublicensee Janssen-Cilag's Marketing Authorization Application, or MAA, for Dacogen in elderly AML. The FDA and EMA drug review and approval processes are not the same. Historically, there have been applications which one agency has approved and the other has not approved. It is important to note that there is currently no approved therapy for elderly AML patients in any jurisdiction worldwide. Clinical data from SGI-110, our second-generation hypomethylating agent, a follow-on drug to Dacogen, was presented earlier this month at an oral presentation at the American Association for Cancer Research or AACR Meeting. A joint media forum was also held with Stand Up To Cancer, the foundation that is providing funding for the Epigenetics Dream Team, the team that has been collaborating with Astex on scientific and clinical studies of SGI-110. The data presented at AACR confirmed a favorable pharmacokinetic profile of subcutaneous SGI-110. It has a half-life of the active decitabine levels that is up to 4x longer than what is achieved with Dacogen IV infusions. There was excellent hypomethylation in the daily treatment regimen and preliminary complete responses or CRs have been observed and relapsed in refractory AML patients. These responses were evident in those AML patients who achieved the greatest hypomethylation, demonstrating that greater degrees of hypomethylation induced by SGI-110 were correlated with disease response. This correlation is exactly what our clinical researchers sought. SGI-110 will soon begin the Phase II dose expansion stage of the trial in patients with MDS or AML. We expect to have a clinical data update from the ongoing SGI-110 study by December in time for the American Society of Hematology or ASH meeting. Our next stage of the SGI-110 program is to test the drug in solid tumors. We are on schedule to initiate this stage of SGI-110's clinical development in the third quarter of 2012. Our HSP90 inhibitor AT13387 in combination with amuvatinib is progressing in a Phase II trial in patients with tyrosine kinase inhibitor-resistant gastrointestinal stromal tumors or GIST tumors. Data from 2 Phase I trials of AT13387 will be presented at the American Society of Clinical Oncology or ASCO conference in June.Read the rest of this transcript for free on seekingalpha.com