Marc Rubin – President and CEO
Bob Farrell – EVP and CFO
Titan Pharmaceuticals, Inc. (TTP) Q3 2008 Earnings Call Transcript November 11, 2008 10:00 AM ET
Thank you for holding. Welcome to the Titan Pharmaceuticals third quarter 2008 financial results conference call. At this time, all participants are in a listen-only mode. There will be a question-and-answer session following today's remarks. Please be advised that this call is being taped at the company's request, and will be archived on the company's website for two weeks from today.
At this time, I would like to turn the call over to Dr. Marc Rubin, President and CEO of Titan Pharmaceuticals. Please go ahead.
Thank you operator and thank you all for joining us this morning, and welcome to the Titan Pharmaceuticals call for the third quarter of 2008. With me is Bob Farrell, our Chief Financial Officer; Sunil Bhonsle, our Chief Operating Officer; and Dr. Kate Beebe, Senior Vice President of Clinical Development and Medical Affairs. Today, we will provide you with a summary of our third quarter 2008 financial results, and an update on recent corporate and clinical developments.
As a reminder, certain matters we will discuss today other than historical information consist of forward-looking statements relating to, among other things, our expectations concerning our financial results, available cash, clinical programs, and regulatory strategies. The forward-looking statements are not guarantees of future performance and are subject to a variety of risks and uncertainties that could cause actual results to differ materially from the results contemplated by the forward-looking statements.
These risks and uncertainties are described in our annual report Form 10-K for the year ended December 31st, 2007, and subsequent SEC filings. You are cautioned not to place undue reliance on these forward-looking statements which speak only as of today. We undertake to take no obligation to update or revise the information provided in this call whether as the results of new information, future events or circumstances or otherwise.
To start, I will turn the call over to Bob to review our third quarter financial results, and following that update, I'll provide you with additional information on Probuphine including an update on our activities as we pursue a partnership for the product. Bob?
Thank you, Marc, and hello everyone. For the third quarter ended September 30, 2008, we reported a net loss of $5.8 million or $0.10 per share, compared with 4.3 million or $0.10 per share for the quarter ended September 30, 2007.
Research and development expenses totaled approximately $4.2 million in the third quarter of 2008, compared with approximately $3.1 million in the third quarter of 2007. R&D expenses increased primarily as a result of increased costs associated with the recently completed Phase III clinical trial of Probuphine, as well as the continuation of other planned Phase III clinical trial activities.
General and administrative expenses for the third quarter of 2008 were $1.8 million, compared with $1.5 million in the third quarter of 2007. The increase in G&A expenses is primarily related to increased non-cash stock compensation costs and some market research expenses associated with our Probuphine program for the treatment of opioid addiction and chronic pain.
Turning to our cash position, as of September 30, 2008, we had approximately $12.2 million in cash, cash equivalents, and short-term investments, compared with $30 million at December 31, 2007. At the current level of clinical development activities, our working capital is sufficient to fund our operations through January of 2009.
However, as we noted in the press release yesterday, if we are unable in the immediate future to obtain a corporate partner or otherwise raise the funding necessary to continue development and commercialization of Probuphine, we will be forced in light of our known and contingent financial obligations to pursue various alternatives to partnering prior to year-end. These alternatives include the possible sale of assets, the discontinuance of our product development programs and/or the winding up our business.
This concludes our financial report and I'd like to turn the call back over to Marc.
Okay. Thank you, Bob. So now, I’d like to turn to Probuphine and the latest developments following the recently completed Phase III study. As you know, Probuphine is our novel subcutaneous implant formulation designed using our ProNeura technology to deliver six months of continuous non-fluctuating levels of buprenorphine. Buprenorphine is currently marketed as a sublingual formulation for the treatment of opiate addiction and is sold under the brands Suboxone and Subutex with sales of approximately $0.5 billion worldwide.
Despite the advances in addiction treatment associated with the advent and the uptake of sublingual buprenorphine, there are growing concerns about patient compliance, diversion and abuse. And we believe that Probuphine offers potential to significantly enhance compliance to treatment and minimize diversion while providing effective therapy.
In the beginning of the third quarter, we announced positive results from our first Probuphine Phase III trial in opioid addiction. This was a randomized placebo-controlled multicenter clinical study. In this study known as PRO-805, Probuphine met the primary and all secondary endpoints and was demonstrated to be an effective treatment for opioid addiction over six-month period following just a single administration.
Following the release of these data, we have been very pleased with the reception Probuphine has received both from opinion leaders and in the addiction community in general. We are also very pleased that these data have been accepted for presentation at the International Society of Addiction Medicines Annual Meeting this month on November 19.
Following the completion of this first Phase III trial, 80% of the eligible patients that completed the trial signed informed consent to enter a follow on open-label lead treatment study known as PRO-807 in which all enrolled subjects received a second set of implants with all implants containing active drug. We’re encouraged by this positive patient response to treatment with Probuphine. This study is currently in process and should be complete by the end of the year.
In our preliminary examination of the safety to date, we believe Probuphine continues to be well tolerated. Patients completing PRO-807, the first Phase III trial can continue treatment in another open-label study known as PRO-809 and this study is also currently enrolling patients.
All of these studies are part of the overall development program for regulatory approval in the U.S., Europe and other countries which requires two adequate well-controlled trials demonstrating efficacy of Probuphine and safety data on 500 patients that have been treated for 6 months or more and at least 100 patients that have been treated for 1 year or more.
The FDA would also like to see a full PK profile for doses utilized in the clinical studies as well as a relative bioavailability study of Probuphine and Suboxone. We have yet to start the second efficacy study and the large open-label study for safety that would complete the development program and we need substantial additional resources in order to accomplish this goal.
Now, let me provide an update on our partnering process. As I mentioned earlier, following the release of our Phase III data, we focused our efforts in seeking potential partners to help us complete the development and the commercialization of Probuphine. With the help of our consultant, JSP Partners, we contacted a large number of pharmaceutical companies, both regional and global companies in the U.S. and Europe.
And while the evaluation of Probuphine by a few of these companies is still continuing, it is taking more time than previously anticipated. And this has been further impacted by our announcement last week that the U.S. Patent and Trademark Office has issued an office action rejecting the method of use claims in our patent application. We are preparing a response to the PTO, but I want to emphasize that this delay in obtaining strong patent coverage limits some of the opportunities.
In addition to the partnering process, as Bob mentioned earlier, we must now consider and analyze all other strategic alternatives and we are in the process of doing just that.
Before I conclude, I would like to briefly touch upon Spheramine and Iloperidone. As you know, following the results of Phase IIb study on Spheramine, our partner Bayer officially decided to discontinue further development of Spheramine. After further review of the data, we’ve seen nothing that changes the reported outcomes and we’ll discontinue additional analysis. Bayer plans to publish the results in the coming months.
Also, Vanda Pharmaceuticals has reported recently that they met with the U.S. Food and Drug Administration in September to discuss the non-approvable action letter that the FDA issued to Vanda regarding Iloperidone. The FDA asked Vanda to provide a complete response to the non-approvable letter highlighting arguments made during the meeting. Vanda expects to submit the complete response within the next few weeks. The timing or outcome of any FDA review of the response is uncertain at this time.
So overall, our near term strategy is to continue to progress our late-stage Probuphine program and maintain the value of this asset with our current limited resources while looking for appropriate partners or other strategic alternatives to support this process, and we will keep you informed of the progress over the next several weeks.
I want to thank you for your continued support and we look forward to updating you on our future progress. Thank you, and we will now turn the call over for questions. Operator?
Thank you. (Operator instructions).
Okay, if there are no questions, I want to thank you operator and thank you all for joining us for today’s call. We look forward to continuing to provide you with Titan updates and discussing our progress with you as we move forward. Have a good day, thank you.
Thank you for your participation in today’s conference. This concludes our presentation. You may now disconnect and have a good day.
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