Array BioPharma's CEO Discusses F4Q2012 Results - Earnings Call Transcript

Array BioPharma Inc. (ARRY)

F4Q2012 Earnings Conference Call

August 14, 2012, 09:00 a.m. ET


Tricia Haugeto - IR

Ron Squarer - CEO

Mike Carruthers - CFO

Kevin Koch - President and CSO

David Snitman - COO and VP, Business Development

Karsten Witt - VP, Clinical Sciences


Eun Yang - Jefferies and Company

Jim Birchenough - BMO Capital Markets

Matt Lowe - JP Morgan

Mike King - Rodman & Renshaw

Ed Tenthoff - Piper Jaffray



Good day ladies and gentlemen and welcome to Q4 2012 Array BioPharma, Inc. Conference Call. My name is [Cheverly] and I will be your operator for today. At this time all participants are in listen-only mode. Late we will conduct the question-and-answer session. (Operator Instructions)

I’d now like to turn the conference over to your host for today Ms. Tricia Haugeto from Array BioPharma. Please proceed.

Tricia Haugeto

Thank you, [Cheverly], good morning and welcome once again to Array BioPharma’s conference call to discuss our financial results for the fourth quarter and full-year of fiscal 2012. You can listen to this conference call is Array’s website at Also we are using slide today to accompany our remarks. These slides can be downloaded on the Investor Relations home page of our website. In addition a replay of the conference call will be available as a webcast from our website.

I’d like to introduce Array’s Chief Executive Officer, Ron Squarer; and our Chief Financial Officer, Mike Carruthers who will lead the call today. I’d also like to introduce Kevin Koch, our President and Chief Scientific Officer who will provide a summary of recent clinical trial results as well as David Snitman, our Chief Operating Officer and Vice President of Business Development; and Karsten Witt, our Vice President of Clinical Sciences who will be available to answers question as needed.

But before I hand over the call to Ron, I’d like to read the following Safe Harbor statement. The matters we are discussing today include projections or other forward-looking statements about the future results, research and development goals of Array and its collaborators and future financial performance of Array. These statements are estimates based on management’s current expectations and involve risks and uncertainties that could cause them to differ materially from the actual results. We refer you to risk factors discussed in our filings with the SEC including our Annual Report filed on Form 10-K for the year ended June 30, 2011 and in other filings Array makes at the SEC. These filings identify important risk factors that could cause the actual results to differ materially from those in our projections or forward-looking statements.

Now I’d like to turn it over to Array’s CEO, Ron Squarer.

Ron Squarer

Thank you, Tricia, good morning everyone and welcome to our fourth quarter and full-year fiscal 2012 conference call. I hope everyone had a chance to review last night’s press release. We are pleased to report today on our progress across our proprietary and partner programs.

Financially we made great progress in fiscal 2012 recording a double-digit increase in annual revenue while managing our spending and strengthening our cash position. Mike will be drilling down further on these results and providing guidance for fiscal 2013 later in the presentation.

So, turning to Slide 13 and looking ahead, Array is evolving into a late stage development stage company with five programs having the potential for pivotal trial decisions by the end of calendar year 2013. These include two wholly-owned HemOnc programs ARRY-614 and ARRY-520 and three partnered programs selumetinib which is partnered with AstraZeneca, MEK162 partnered with Novartis, and danoprevir, partnered with InterMune and Roche.

With our progress on ARRY-614 for myelodysplastic syndromes and 520 for multiple myeloma, we see a clear internal focus on HemOnc space. We believe that focusing our internal programs will in fact maximize our likelihood for success.

Now taking a quick look back, Array has an incredible legacy in terms to developing great molecule, and its history Array has filed INDs on 18 molecules which remarkable is that 15 of them are still in human development and full 10 of those are currently in Phase 2. One thing to create a molecule it's something very different to have that molecule survive into Phase 2 and we have 10 of those, 7 are partnered with some of the finest companies in the industry such as AstraZeneca, Novartis, Genentech, Amgen, Celgene and others. And we are very excited about those partnerships and they are progressing well.

We have also been able to raise non-dilutive capital very effectively, and just in the past couple of years we have raised about $170 million from high value licensing partnerships. As recently as August of last year we announced the deal with Genentech on a pre-clinical Chk-1 program that included a $28 million upfront payment nearly 700 million in potential milestones and the potential for double-digit royalties. And these types of turns have not been unusual for Array assets. In fact we add up all of the potential milestones related to our partner portfolio a total of $3.4 billion and this is before royalties kick in. And there are additional assets that we will be looking to partner between now and the end of calendar year 2013.

So, currently we have about 90 million in cash as of the end of June and that should sustain us for a good period of time especially as we expect to do more partnering. The next 12 months is going to be very exciting and I will be reviewing some of the key catalyst with you today.

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