TESARO's (TSRO) CEO Lonnie Moulder on Q1 2014 Earnings - Call Transcript

This transcript originally appeared on Seeking Alpha.

Title: TESARO's CEO Discusses Q1 2014 Results - Earnings Call Transcript

Symbol: TSRO

Call Start: 16:15

Call End: 16:50


Q1 2014 Earnings Conference Call

April 29, 2014 4:15 PM ET


Jennifer Davis - Senior Director of Corporate Development and IR

Lonnie Moulder - CEO and Co-Founder

Ted English - VP, Controller and Principal Accounting Officer

Mary Lynne Hedley - President and Co-Founder


Robyn Karnauskas - Deutsche Bank

Chris Raymond - Robert W. Baird

Chris - Citigroup

David Friedman - Morgan Stanley

Howard Liang - Leerink Swann

Peter Lawson - Mizuho Securities



Good afternoon, and welcome to the TESARO First Quarter 2014 Conference Call. At this time, all participants are in a listen-only mode. As a reminder, this conference call is being recorded and webcast.

I'll now turn the call over to Jennifer Davis, Senior Director of Corporate Development and Investor Relations at TESARO. Please go ahead.

Jennifer Davis

Thank you, operator. Good afternoon and thank you for joining us today to review TESARO's first quarter operating results. I'm joined today by our CEO, Lonnie Moulder; our President, Dr. Mary Lynne Hedley; and our Vice President of Finance, Ted English.

Earlier this afternoon, we issued a press release detailing our first quarter 2014 financial results. Please note that the slide presentation that we'll refer to during this call is available via webcast on the Investors section of our website, www.tesarobio.com.

Before we begin, I would like to remind you that discussions during this conference call will include forward-looking statements. These statements are subject to a number of risks and uncertainties that could cause our actual results to differ materially from those described in these forward-looking statements. The factors that could cause actual results to differ are discussed in the press release issued today and in our SEC filings, including our Annual Report on Form 10-K for the year ended December 31, 2013.

We may refer to certain non-GAAP financial measures that involve adjustments to GAAP figures. These non-GAAP financial measures are not a substitute for GAAP financial measures, and are unlikely to be comparable to non-GAAP information provided by other companies. We believe non-GAAP measures may be useful to investors as a supplement to, but not as a substitute for, the applicable GAAP numbers.

I'll now turn the call over to Lonnie Moulder, CEO of TESARO. Lonnie?

Lonnie Moulder

Thank you, Jen, and thank you everyone for joining us. This afternoon, I'll review our first quarter accomplishments, Ted will discuss our financial results for the quarter, Mary Lynne will provide an update on our rolapitant, niraparib, TSR-011 and immuno-oncology programs, and finally, I'll briefly summarize the data presentations we have planned for the 2014 American Society of Clinical Oncology or ASCO meeting in June. We'll then open up the call for questions.

We made significant progress with each of our development programs during the first quarter. Following the successful completion of two Phase 3 trials at the end of 2013, we announced in March that enrollment in the third and final trial of rolapitant was complete. We look forward to announcing the top line results as soon as they become available and we plan to present the full dataset from all three pivotal trials at the upcoming ASCO meeting.

We believe that the product profile we now have in hand, will enable us upon approval to bring a meaningful advance in chemotherapy-induced nausea and vomiting or CINV treatment to healthcare providers and patients with cancer.

Patients are being treated both with Phase 3 BRAVO breast cancer, and Phase 3 NOVA ovarian cancer studies of niraparib. And with regards to TSR-011, we continue to enroll additional ALK-positive and TRK-positive patients.

Finally, as you know, we expanded our pipeline via the strategic immuno-oncology transaction we announced in March. This collaboration is off to a great start, and we are quickly moving forward with our programs targeting PD-1, TIM-3 and LAG-3.

I'll now turn the call over to Ted English to review our first quarter financial results. Ted?

Ted English

Thank you, Lonnie. For the first quarter of 2014, TESARO reported a net loss of $49.8 million, compared to a net loss of $18.9 million for the first quarter of 2013. This net loss was primarily driven by the inclusion of a one-time payment of $17 million for acquired in-process R&D expense, which was made in connection with our immuno-oncology agreement with AnaptysBio, and higher R&D expenses versus the year ago quarter.

Research and development expenses increased to $28.1 million for the first quarter of 2014, compared to $16.5 million for the comparable quarter of 2013, as a result of higher costs related to our expanded development activities.

General and administrative expenses increased to $4.7 million for the first quarter of 2014, compared to $2.4 million for the comparable period of 2013, primarily as a result of higher non-cash stock-based compensation expense.

Total non-cash stock-based compensation expense included in our operating expenses for the first quarter of 2014 was $2.5 million, compared to $0.8 million for the first quarter of 2013.

As of March 31, TESARO had approximately $180 million in cash and cash equivalents. This amount includes approximately $94 million in net proceeds that were generated from our follow-on offering of 3.2 million shares of common stock that was completed in February, and also includes $17 million upfront license payment made to AnaptysBio in March.

For the rest of 2014, we expect our operating expenses and cash utilization to increase over the course of the year, as compared to the first quarter of 2014 net of the $17 million to AnaptysBio. These increases will be driven primarily by higher overall costs related to ongoing clinical trials and development programs.

Specifically, we expect that R&D expenses will continue to increase as a result of our niraparib program, primarily driven by activities in support of the Phase 3 NOVA and BRAVO trials. Costs related to our immuno-oncology programs and to a lesser extent efforts with respect to our TSR-011 and IV rolapitant programs.

We expect that these increases will be partially offset by lower costs associated with the oral rolapitant development.

With that, I'll turn the call over to Mary Lynne. Mary Lynne?

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