XOMA's CEO Discusses Q1 2012 Results - Earnings Call Transcript

XOMA Corporation (XOMA)

Q1 2012 Earnings Call

May 8, 2012 4:30 pm ET

Executives

Ashleigh Barreto – Investor Relations

John W. Varian – Chief Executive Officer

Paul D. Rubin – Senior Vice President, Research and Development and Chief Medical Officer

Fred Kurland – Vice President and Chief Financial Officer

Analysts

Adnan S. Butt – RBC Capital Markets Equity Research

Matthew L. Kaplan – Ladenburg Thalmann Securities

Megan McCloskey – McNicoll, Lewis & Vlak LLC

Presentation

Operator

Good afternoon, ladies and gentlemen, and welcome to the XOMA Corporation’s First Quarter 2012 Financial Results and Corporate Update Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. (Operator Instructions) As a reminder, this call may be recorded.

I would now like to turn the presentation over to your host for today, Ashleigh Barreto, Investor Relations at XOMA. You may proceed.

Ashleigh Barreto

Thank you, operator. Good afternoon and welcome to XOMA Corporation’s first quarter 2012 financial results and corporate update conference call. On our call today are John Varian, Chief Executive Officer; Dr. Paul Rubin, Senior Vice President, Research and Development and Chief Medical Officer; and Fred Kurland, Chief Financial Officer.

Certain statements made during this call concerning the timing of events related to clinical trials, anticipated size of clinical trials, continued sales of approved products, regulatory approval of unapproved product candidates and anticipated restructuring charges, sufficiency of our cash resources, and anticipated levels of cash utilization or that otherwise relate to future periods are forward-looking statements within the meaning of the Federal Securities laws. These statements are based on assumptions that may not prove accurate. Actual results could differ materially from those anticipated due to certain risks inherent in the biotechnology industry and for companies engaged in the development of new products in a regulated market.

Among other things, the timing of events related to clinical trials and delayed or may never occur as a result of actions or inaction by regulators of present or future collaboration partners. Complications in the design implementation or third party approval of clinical trials, complications in the collection or interpretation of statistical data or unanticipated safety issues; clinical trials may not reach their anticipated size if trials are not initiated or due to enrollment issues such as unavailability of patients, competing product candidates or unanticipated safety issues.

Continued sale of approved products maybe impacted by XOMA’s ability to implement its marketing efforts, competition or unanticipated safety issues, regulatory approval of unapproved product candidates maybe affected by the results of future clinical trials, actions or inaction by the FDA or unanticipated safety issues. Restructuring charges maybe other than more anticipated if we are not estimate properly. Implement additional or different XOMA activities. The period for which our cash resources are sufficient could be shortened if expenditures are made earlier or in larger amounts than anticipated or are unanticipated, if anticipated revenues or cost sharing arrangements do not materialize, or if funds are not otherwise available on acceptable terms.

Anticipated levels of cash utilization maybe other than as expected, due to unavailability of additional licensing or collaboration opportunities. Inability to obtain the services of contract manufacturing or service providers on anticipated terms, higher than expected costs for clinical trials, outsourced manufacturing or other services, the effects of the pace of development spending in light of the terms of XOMA’s existing collaboration agreement or unanticipated changes in XOMA’s research and development programs or other businesses. These and other risks, are described in more detail on XOMA’s most recent filing on Form 10-K and then other SEC filings. Consider such risks carefully when considering XOMA’s prospects.

At this time, I would like to the call over to John Varian, CEO. John?

John W. Varian

Thanks, Ashleigh. Good afternoon, everyone and thank you for joining us. Our last corporate update call was less than six weeks ago, and we used that time to focus on the significant changes we had implemented and the tangible progress we have made since November of 2011. Today, instead of repeating those items, we’ll use time together to provide you with a brief update on our activities over the last six weeks, as well as our near-term clinical development plans. Since the majority of the questions, we’ve received from investors are directly related to these topics. I’ve asked Paul Rubin to conduct a through presentation of our non-infectious uveitis, acne and erosive osteoarthritis studies.

You all have seen in our release that our March fund raising has led to the adoption of several accounting principles that warrant, and I use that word intentionally, discussion. Fred Kurland will walk through the specific elements of our financial results to bear color or require clarity. We will leave plenty of time to address your questions before our hour with you concludes.

You all know XOMA’s express strategy by now, invest in value creating activities. My decision to integrate all our research and development activities under Paul’s leadership is a reflection of this strategy. I believe we must understand the desired clinical and commercial profile of our compounds from day one in order to deliver innovative and valuable products in the future. To achieve this, our diverse expertise in discovery and product development [less] function as one fluid team.

Beginning at the earlier stages of our discovery work in compound formulation, into manufacturing optimization and then throughout the preclinical and clinical development processes. Paul is like minded in appreciating the need to integrate desired commercial profile and an understanding of the anticipated future landscape into all of our product development activities. By embracing the changing market dynamics and future clinical needs, we believe we’ll be able to focus all our activities on bringing high value therapies to market.

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