Seeking Alpha
We cover over 5K calls/quarter
Profile| Send Message|
( followers)  

Neurocrine Biosciences Inc. (NASDAQ:NBIX)

Q4 2009 Earnings Call

February 3, 2010 5:00 pm ET

Executives

Jane Sorensen - IR

Kevin Gorman - President and CEO

Tim Coughlin - VP and CFO

Christopher O'Brien - CMO

Analysts

Brian Abrahams - Oppenheimer & Co

Philip Nadeau - Cowen and Company

Thomas Wei - Jefferies

Stephen Willey - Thomas Weisel

Jason Napodano - Zacks

Scott Gibbs - Odyssey

Operator

Good day, everyone, and welcome to today's program. At this time all participants are in a listen-only mode. Later you will have the opportunity to ask questions during the question-and-answer session. Please note, this call may be recorded and it is now my pleasure to turn the call over to Mr. Kevin Gorman, President and CEO. Please go ahead, sir.

Kevin Gorman

Thank you very much, and thank you, everyone, for joining us this afternoon for our fourth quarter earnings call. Today I am joined by Chris O'Brien, our Chief Medical Officer; Tim Coughlin, our CFO. Before we begin, I would like Jane Sorenson in Investor Relations to read our Safe Harbor Statement. Jane?

Jane Sorensen

Good afternoon. I want to remind you of Neurocrine's Safe Harbor cautions. Certain statements made in the course of this conference call that state the company's or management's intentions, hopes, beliefs, expectations or predictions of the future are forward-looking statements, which are subject to risks and uncertainties. Information concerning factors that could cause actual results to differ materially from those contained in or implied by the forward-looking statements is contained in the company's SEC filings included but not limited to the company's annual report on Form 10-K and quarterly reports on Form 10-Q. Copies of these filings may be obtained by visiting the Investor Relations page on the company's website at www.neurocrine.com. Any forward-looking statements are made only as of today's date and we you undertake no obligation to update these forward-looking statements to reflect subsequent events or circumstances.

Kevin Gorman

Thank you, Jane. So today as always what we're going to do here is Tim will take you through our financials for the quarter and for the year. I'm very pleased that we were able to perform right to our guidance for the entire year, actually getting us right into the low end of the guidance for our burn. Then Chris O'Brien is going to take us through, each of our programs and the progress that we have made. This has been a very good year for us as it turns out for each of our programs and we're very excited as Chris will talk to you about the number of events that we have coming up this year.

So first, I would like to turn it over to Tim.

Tim Coughlin

Thank you, Kevin, and good afternoon to everyone. We released our financial results today, and met our primary financial goal for 2009 of maintaining a cash burn of 50 to $55 million. During 2009 we used just over 50 million in cash and ended the year with approximately 60 million in cash and investments. For the fourth quarter of 2009 the burn was inflated due to a one-time $4 million release payment made to our landlord to vacate approximately 70,000 square feet of real estate. Exclusive of this payment, our burn from operations was approximately $10 million for the fourth quarter.

Our loss for the quarter was 7.9 million or $0.20 per share. This compares to a loss of 28.8 million or $0.75 per share for the fourth quarter of last year. The yearly loss was 51 million or $1.30 per share, compared to loss of 88 million or $2.30 per share in 2008. The reduction in net loss is due to strong cost control measures across all functions within the company and a prioritization of work among clinical and research programs.

Research and development costs, as well as general and administrative costs were in line with our expectations for the fourth quarter and significantly lower than the prior year due to lower personnel costs, lower external development costs and lower professional services costs.

We continue to invest in our elagolix program with the 901 Daisy study, which is now fully enrolled as well as the VMAT2 program, which is preparing for the second Phase I trial in Canada. Additionally, we have been industrious in moving our programs forward through joint ventures with academic or other researchers at little so no cost to Neurocrine. Chris O'Brien, our Chief Medical Officer, will speak to this in his comments as it relates to our urocortin 2 program and CRF program.

As we have explained on previous earnings calls, the comparison of 2009 to 2008 numbers is not straight forward due to the accounting rules related to our sale leaseback transaction. Rent expense in 2009 is a component of operating expenses contained in R&D, G&A et cetera. While during 2008 rent paid was recorded as a component of interest expense, below the operating loss number. If one were to re-class or rent expense from 2008 into operating expenses for 2008, to show a true comparison of 2008 to 2009 expenses, the reduction in operating expenses from 2008 to 2009 would have been approximately $40 million or a reduction in expenses in excess of 42% in one year.

Additionally, during the fourth quarter of 2009 we received $10 million related to a sale of approximately 4.8 million shares of our common stock to Venrock Associates. We did not draw anything down on our Kingsbridge CEFF program. For 2010 we estimate that our burn will be approximately 40 to 45 million exclusive of any partnering agreements. This burn includes all the activities related to our elagolix and VMAT2 programs, as well as our base research programs. We plan to file our 10-K with the SEC later this week.

With that, I'll turn it back over to Kevin.

Kevin Gorman

Thank you very much, Tim. It was very important that we get out of our obligations on that front building here on our campus, and I want to take this time to congratulate Tim in accomplishing that last year. That significantly decreases our burn in a going-forward rate. Tim is also working with our landlord currently to see what more we can do.

Right now, I'd like to turn it over to Chris O'Brien and he will take us through our programs.

Christopher O'Brien

Thanks very much, Kevin, and thanks to the participants on the call this afternoon. Let's walk through the programs one at a time. As many are aware, we've had a longstanding collaboration with GSK that has resulted into the several molecules moving into clinic targeting the CRF1 receptor. Currently the lead CRF1 antagonist is in a Phase II trial for the treatment of major depressive disorder.

In our recent discussions with GSK, we know this program is moving well and we're on track for the last patient to finish up clinic visit in the summer of late June timeframe, I believe. Then GSK will, obviously, go through the process of cleaning and processing that data. As soon as we get topline results, we'll share them externally. So that's something that we're looking forward to very much for this 679 molecule.

You may also be aware with the CRF1 antagonist 679, GSK has been involved with a program looking at this molecule for the treatment of post-traumatic stress disorder, or PTSD. If you're interested, you can also go on to clinicaltrials.gov and look at two studies that are currently underway with 679.

The first of which announced earlier this year is a collaboration between Emory University and Mt. Sinai Medical Center in New York in conjunction with GSK and this study is a randomized, double-blind, placebo-controlled trial of 679 in approximately 150 patients for six weeks treatment duration.

It is a more typical academic style study, so we would expect that enrollment will be rather prolonged given the fairly careful and rigorous inclusion/exclusion criteria for PTSD subjects in this trial. Again, I think it helps support our understanding that this target is an extremely attractive target and the faith that both GSK and Neurocrine have in the unique pharmacology of 679 and its ability to potentially help patients with depression and PTSD. So keep your eyes out for that later this year.

The next program to talk about is our urocortin 2 program. As we mentioned in our press release today, this continues to move forward given the constraints we've had in terms of resource allocation for urocortin 2. We're very happy that our collaboration with the Cardioendocrine Research Group in New Zealand has been able to obtain funding from their government along with our regulatory support and supply of clinical trial material, actually go into the target population that we've been interested in, that is, patients with Acute Decompensated Heart Failure.

As you know our earlier Phase II study was in stable heart failure patients and now to move into those subjects who are closely fluid overloaded who present to the emergency room or the intensive care unit with a decompensated heart failure are now under study, and they've been enrolling since this past fall.

Likewise, we're very happy that we were able to reach an agreement in collaboration with the University of Edinburgh in Scotland and that they have obtained funding through the British Heart Foundation to support a series of Phase I and Phase II trials looking at very mechanistic type studies to help us understand some of the attributes of urocortin, which may allow us to go into either a different study population than Acute Decompensated Heart Failure or a niche populations, for example, ADHF patient who happen to have renal insufficiency or acute myocardial ischemia.

So, trying to understand that by doing some focused studies looking at biomarkers of cardiac and cardiovascular function and dysfunction, if you will. So that's very exciting, and we're happy that program has moved forward to start enrollment of subjects this spring. So that's the urocortin 2 program, both of those moving along despite our kind of resource constraints.

The more close to home excitement, obviously, has been with our VMAT2 and elagolix programs. As Kevin mentioned, and as we mentioned in December with the press release, our single ascending dose trial conducted under a CTA in Canada allowed us to make a go decision because we saw a very favorable PK, safety and tolerability profile in the single dose trial in healthy males.

I meet later this month with Health Canada to put the process in place for the second Phase I study that is a repeated dose trial, and after we finish meeting with them this month, and if that goes as planned, then we will institute implementation of the repeated dose trial. I hope to get initiation of that trial underway in April, which would then put us in a position to start a proof-of-concept trial in patients with tardive dyskinesia very late this year, in Q4 of 2010. So very nice progress with VMAT2, things are moving along as planned.

So let's talk then about elagolix and the progress made since our last conversation. As Kevin has mentioned, we're very pleased with the momentum. Again, our goal with this program is to get to end of Phase II meeting with the FDA and to be able to submit a Special Protocol Assessment, or SPA, that will allow us to move into Phase III trial later this year.

In order to accomplish those two goals, we had instituted a Phase II study called the Daisy PETAL, also known as the 901 Study, sorry for the acronyms. That 901 Study began screening patients in September of 2009. That is immediately after our Type C meeting, where we got clarification on end points. Now we're testing to see how that scale performs. The study recruitment went very well. We've had now a lot of experience with Phase II studies. We used our best sites here in the United States, and the goal was to randomize at least 120 women with endometriosis in the 901 Study.

As you may be aware, we stopped the screening in January of this year, the recruitment went quite well, and we expect that the last patient first randomization visit will occur this month in February. You may recall that for all of these trials, we collect baseline pain scores for one menstrual cycle from the start of screening, which begins on one menses to the next menses when randomization occurs, so it's typically about a month.

So screening closed in January. We expect last randomization patient in February and then we will report out top-line results comparing elagolix II placebo on these modified or updated scale for dysmenorrhea and non-menstrual pain in late May of this year. That puts us in a nice position. We're in the process of assembling our end of Phase II meeting package. Now, obviously we have a lot of data from now 18 trials, six Phase II and 12 Phase I trials, around 900 subjects have been in these clinical development programs, well over 600 some women have been on endometriosis, have been treated with elagolix for endometriosis for up to six months.

So the key for us is to assemble this end of Phase II package and the 901 study will be a key component of that package, because this is the one that will allow us to say, here is our confidence about the end points, here is the statistical method that we'll use to meet the FDA's requests, and we'll put that into the SPA and the end of Phase II package.

Now, you may recall that in earlier conference calls and press releases, and in fact, in data that we presented last fall at the American Society of Reproductive Medicine, we showed that elagolix works nicely for dysmenorrhea, non-menstrual pain and dyspareunia or painful intercourse. The challenge we faced in the 702 and 703 studies was that the previous wording on the non-menstrual pain scale that the FDA asked us to try out was such that baseline scores were very low on non-menstrual pain.

So, one of the key elements of the 901 study is that the modified wording on the scale should help us avoid that floor effect. So instead of women coming in with baseline scores that were very low, mean scores, in fact in the 0.8 region we would see them higher than that and that we see a larger percentage of the days during the screening month, the days with moderate or severe non-menstrual pain scores.

The duty of running our clinical trials right now is that we use electronic diaries for data capture which women record their pain scores on a daily basis. Periodically, we get data transfers from the vendor that is processing these electronic diaries, and we get to look in a blinded fashion at the screening data. So I know as patients begin to randomize in the study, what the baselines characteristics of these subjects are. Obviously, I don't look at post-randomization data and that's something that waits until we read out the top-line data.

So, so far, we're very pleased that when we look at the non-menstrual pain scores of women who have randomized in the 901 study, we see that in fact nearly 50% of the screening month days are days with scores of moderate or severe non-menstrual pain. On the zero to three scale that the FDA has asked us to use, what that works out to is a mean score of about 1.4 with a fairly tight variant, namely a standard deviation of 0.6, and that's quite in contrast to what we saw in 702, which was the previous scale 0.8 or 703.89 and this means that we will most likely not have a problem with the statistical floor effect.

So very happy about how the scale is performing so far. The scores are more normally distributed across the none to severe, and this wider dynamic range should be appropriate for us on being able to differentiate elagolix from placebo when we read out the top-line results in May.

So very nice progress with the 901 study, the clinical and regulatory teams here although small, they have been working overtime to get this done on time, and in a quality manner, and look forward to coming back to you in late May with the results of the top-line readout.

So I think I'll stop there and turn it back to Kevin.

Kevin Gorman

Thank you very much, Chris. So as you can see we've had a lot of progress. It's very encouraging with the 901 study. What was crucial there is that we needed to see that that the scoring system that we're now using is one that can utilize the full dynamic range and as Chris has told you, that appears to be the case. It's actually parallel and quite well that all CPSSS look back score for a non non-menstrual pelvic pain that we utilized and hit on every single time. That was when we also showed non-inferiority, already in the 603 study to Depo-Provera.

So this year, we have a number of milestones that are going to be coming up early, mid and later year. As Chris has talked about this the initiation of VMAT2 multi-dose studies and then the readout of the 901 that's coming early on in the middle of the year, where we start our in the Phase II meeting, initiate the SPA process, little later in the year we're going to have the VMAT2 readout and on then complete the SPA process and have elagolix ready for Phase III studies at that point in time. Also near the end of the year, we will start the POC study for VMAT2. Its going to be next year that we'll get the urocortin 2 readout and also let's not forget very importantly that we're going to hear this year on our lead CRF antagonist in that Phase II major depression study.

What I think is, sometimes under appreciated and not realized is, that we have five compounds in clinical development currently in this company, two of them in later stage development. Of those five compounds, four of them were discovered and developed here at Neurocrine, including both of the CRF receptor antagonists that are being carried forward by GSK. Elagolix was completely discovered here in our research group, in addition to the three backup compounds that are poised to enter the clinic, and then VMAT2, of course, was discovered and developed here at Neurocrine.

So the research group, while having been currently as lean, we still have several programs in research. The automated processes that we have in place are such that we still anticipate to be able to add a new clinical program each year. They're doing quite well, with our entire automated process here.

So with that, what I'd like to do is open it up for questions at this time.

Question-and-Answer Session

Operator

(Operator Instructions). We'll take our first question from the line of Brian Abrahams with Oppenheimer & Co. Please go ahead.

Brian Abraham - Oppenheimer & Co.

Hi. Thanks very much for taking my questions. First question is for Chris. You mentioned the mean baseline non-menstrual pelvic pain score in the 901 study was 1.4. Does this represent a more recent look compared to that initial look that you were able to take in October? If so, about what percent of patients now have been screened to call have that baseline score?

Christopher O'Brien

So that initial score, what we have seen, Brian, is that as we've taken a couple looks, and I have one more coming up shortly, there is less and less change. So the although, there was a little higher variability and the mean was closer to 1.5, the first look it came down to 1.4, with a second look, that was a reduction in the SD and I think that that number reflects about three quarters of the subjects that will be randomized so far.

Brian Abraham - Oppenheimer & Co.

Okay.

Christopher O'Brien

It should be a pretty stable number. Likewise, the percentage of non-menstrual days that are moderate or severe that's and over the various looks it vary between 47 and 51%. So that's why I say nearly half in the press release

Kevin Gorman

Again having that 50% of the days being moderate to severe and utilizing the old scale that the FDA had given us the language initially that we tested in the 702 study, their 80% of the days were actually absent or mild. So this is performing much better than that old scale.

Brian Abraham - Oppenheimer & Co.

Great. Then, Kevin, can you maybe talk a little bit about, where you are with respect to potential partnership for elagolix at this point? Obviously, the data is coming fairly soon. Is that the main gating factor? Is it possible we might see a partnership before that or should we look for something potentially after that?

Kevin Gorman

Yes, thanks, and we are in negotiations with several partners. Obviously, my preference is to have a deal done with a partner who shares our vision with that as quickly as possible. We do have the 901 data coming up, but, quite honestly, that is going to carry more or less weight depending on the individual partners that we're talking to. Some of them realize that the 901 data has already shown that it is utilizing the full extent of the scale here and so it can be less important to them, others it may be more important to them. So we'll just continue with our process, which is moving along actually quite briskly right now, but it's not done until it's done at this point.

Brian Abraham - Oppenheimer & Co.

Thank you very much.

Kevin Gorman

Thank you.

Operator

(Operator Instructions). We'll move now to the line of Phil Nadeau with Cowen and Company. Please go ahead.

Philip Nadeau - Cowen and Company

Good afternoon. Thanks for taking my questions. First one is on 901 data and progression into Phase III trials. It seems given what you've said that starting Phase III by the end of the year is very likely, but could you maybe talk about some of the risks to that that would necessarily wouldn't be able to see, like what's the key risk to the timelines at this point?

Christopher O'Brien

Well, that's very clear. What we've said repeatedly I think publicly is that, we won't initiate Phase III trials without a partnership in place. Because the cost of this Phase III program is substantial and it would not be wise to start a Phase III study program that you couldn't complete.

Kevin Gorman

Right. So I would say is following-on on that is the key risk there is how quickly the partner can come up to speed on this program while all diligence is completed and everything like that is done. The manufacturing supplies for Phase III, most of that manufacturing supplies start Phase III, actually all of the manufacturing supplies start Phase III are already completed. The resupply of Phase III is going to be started fairly shortly. It would be up to the partner to then takeover for the commercial supply. It would be how quickly can the partner come up to speed and get these activities on their docket, so the sooner they come on board, obviously, as the partners realize the more quickly that this can transition into Phase III.

Christopher O'Brien

The other timing piece, of course, is if we submit an endo Phase II meeting request in June, the FDA, obviously, they get to pick when the meeting is and typically that's a couple of months after the meeting request. So for an end of Phase II or Type B meeting that's usually a 60-day clock, but obviously the FDA controls the calendar. The SPA process, which we would submit shortly after that, typically has a 30-day clock for each review cycle. Usually for an SPA, you don't get by with just one review cycle. They're usually say two. Again, that's been baked into the timelines when we talk about being ready both from a regulatory and clinical and CMC point of view to initiate Phase III later in the year.

Kevin Gorman

To be clear, the submission for the endo Phase II meeting would take place in June, very shortly thereafter would be the first SPA submission. As Chris said that normally the FDA will grant the end of Phase II meeting within 60 days, the SPA is within 30 days.

Philip Nadeau - Cowen and Company

Okay. Great. Then what about on the clinical side? You all sound pretty convinced that this new measure that you're using is going to be the right one, but is there still some risk that although it seems like on baseline. The 1.4 number is right where you want to be that it doesn't pick up the typical changes that you'd see in an endometriosis patient brought out by elagolix or kind of anything long those lines, any risks on a clinical side at this point or are we 99.9% of the way through what you need to see clinically?

Christopher O'Brien

I've been doing clinical development long enough that I never know 99.9%. No, of course, there is risk. It's a Phase II study. There is always risk. Am I comfortable with that risk? Absolutely. Am I encouraged that the two pieces we needed, number one, the reduction of the possibility of a floor effect and number two, the separation of elagolix from placebo? I think we've addressed the first and the second will only be when we get the data. Now, we've obviously modeled this closely, and if you've been watching this really carefully, you maybe aware that we initially had this trial, an 80-subject trial, because it was just going to be a directional study. In fact, as we started to see the early screening data, we realized that was a slightly larger sample size. We could have a very robust statistical output from this study, and so that's why we bumped the sample size to 120. So we actually are very comfortable with the assumptions that go into that assessment and the likelihood of having a favorable statistical result.

Philip Nadeau - Cowen and Company

Yes. It's great. That's very helpful. Thank you.

Operator

We'll go next to the line of Thomas Wei with Jefferies. Please go ahead.

Thomas Wei - Jefferies

Hi, thanks for taking my questions. I wanted to just follow up on the last comment there, with the 120 patients now, what sort of improvement in non-menstrual pain are you powered to show off that baseline of 1.4?

Christopher O'Brien

Thomas, thank you. Normally, for power calculations, you kind of know what the effect size is and what the variance is, so you predict that.

Thomas Wei - Jefferies

Sure, I will take that, too.

Christopher O'Brien

Yes. So, well, we haven't used this scale, it's only estimates or assumptions. For a small Phase II study and the effect sizes that we think we get, this is 80% power to see a separation of elagolix from placebo. One of the luxuries of our interaction with the FDA has been their suggestion that we not limit ourselves to simply a look at mean change from baseline that, in fact, for something like non-menstrual pain, which is variable in frequency, variable in intensity, i.e., women don't have it every day, and when they do have it, it is not necessarily severe.

For something like that, sometimes a mean score and a change from baseline is not the appropriate method, sometimes you're better off looking at a responder analysis. Let's say, half of your days are moderate or severe at baseline, and at the end of treatment, let's say you have a 30, 40, 50% reduction in the proportion of days that are moderate to severe. That's a nice responder type analysis. So we have the luxury of actually being able to do both mean change and responder analysis. So I am looking forward to being able to explore both of those.

Thomas Wei - Jefferies

I guess this gets to the question of how do you interpret the numbers coming out of this, now that you've changed the wording of the scale, so that all the baseline numbers are different? I am still struggling with how to interpret whatever difference it is that you see in the end on this scale. So, I know you're looking at other measures as secondary end points to try to correlate that, may be what might be helpful for me as if you can share with us what you think are? Just remind us what are clinically meaningful improvements on those secondary end points, so that we make sure that we interpret the data correctly when it comes out?

Christopher O'Brien

So in the old days when there was a once a month scale on the old B&B or CPSSS, the definition of clinically meaningful was a one point change in the monthly recall of dysmenorrhea or a one point change in the monthly recall of non-menstrual pain. Now clearly that definition doesn't work any more because if women came in, they had a score of three and they had a one point change, they were considered a responder. Now when in the 702 and 703 studies with the original wording that the FDA proposed there, the magnitude of change is tiny, so one point change doesn't mean anything. If you come in at 0.8 and you have a 0.3 reduction that actually would be a pretty change.

So one, typically what you do exactly as you just pointed out, you take something like one of the secondary end points, in our case the Patient Global Impression of Change at a 7-point Likert-type scale where a four is no change and you have improved side and the worsened side. What we've done with our trials is taken the PGIC and looked at the magnitude of change in those subjects, only those subjects who say they were either much improved or very much improved, and then you get a rough idea of what kind of numeric value on the daily scale might be considered clinically meaningful.

In fact, what you see is that like with most pain scales, clinical meaningfulness begins usually around a 30% reduction and anything over that is typically associated with clinical meaningfulness on the other scale. That's very consistent with the pain literature. I am not disclosing any of the details of my conversations with the FDA, but we have in place a series of things that go to support clinical meaningfulness.

Thomas Wei - Jefferies

That's very helpful. Then just lastly, in the 901 study, the other thing that I am still a little bit confused about is, why not do a single-blind placebo run in during this first month when you're collecting these baseline scores and trying to make sure that you've the right baseline? Wouldn't it have made sense to do a placebo run in so that you just eliminate any sort of unblinded effect on those scores being reported?

Christopher O'Brien

So, that's an interesting question. There are two factors that we put into consideration. In the 702 study, we had a single-blind placebo lead-in period. Surprisingly, it didn't eliminate subjects from randomization too often. We learned a lot about what was required, and we've actually built that in to the inclusion exclusion criteria for the 901 study at baseline. So we're holding the women to a slightly higher standard for randomization in 901 than we have before. That's reflected obviously in the fact that the B&B score that we're seeing in these trials is slightly higher than we have seen before. Now, the other point was, again as I mentioned, as a Phase II study I just wanted some experience with the modified wording of the non-menstrual scale. This wasn't set up to be the definitive pivotal trial. Given the fact that time was really important for that, I needed a rapid readout from 901 and I wanted to keep cost under control on balance, adding the single-blind placebo lead-in, it didn't seem to add that much for this Phase II effort. You can be sure that as I think as we're putting in the SPA for the Phase III, that's an important component going forward.

Thomas Wei - Jefferies

Okay. Thank you.

Operator

(Operator Instructions). We'll go now to the line of Stephen Willey with Thomas Weisel. Please go ahead.

Stephen Willey - Thomas Weisel

Yes, hi. Thanks for taking my question. I was just wondering if you could maybe remind us what the standard deviation where was around the means in the Lilac and Tulip studies and then I guess just based on where you see baseline now and based on the changes of and wording on the scale if you think that there is reason to believe that those deviations will be tightened at all as well?

Christopher O'Brien

So the answer to the first question is I don't remember exactly, but I think they were in the 0.8 range. They were almost the same size as the mean if I remember correctly. So it would have been 0.8 and as a mean with a standard deviation like 0.7, something like that. I don't have it in front of me. Sorry, Steven, as to the latter question, we won't know until we see the data since we truly haven't looked at this one before, but I would assume based on the way these scales that tend to work that let say you see a 50% reduction from 1.4, so 0.7, that the standard deviation will be, remain fairly similar in the 0.6 range.

Stephen Willey - Thomas Weisel

Then just kind of thinking about VMAT2, looks like you're going to have proof-of-concept data here by the end of the year. Just kind of wondering how you're thinking about that program strategically and maybe whether your intention to move forward in the Phase II on your own is a function of someone picking up on the elagolix side or is that just something that you intend to move forward right now on your own or would you look to partner that drug?

Christopher O'Brien

Yes, Stephen. So just to be clear, we'd be starting the proof-of-concept study in the fourth quarter of this year.

Stephen Willey - Thomas Weisel

Okay.

Christopher O'Brien

That will read out towards the middle of next year, but to your point, once elagolix was partnered, then that puts us in a position where we can retain VMAT2. Clearly, it's nice to have an asset like VMAT2 that is performing so well, such that we could choose the partner early, we could choose the partner late, and then, ideally, we could choose to take this compound all the way through commercialization since the clinical program is very straightforward. The endpoints there are already assigned and utilized. The competitive landscape is actually wide open for us there. It's a small prescriber base of basically a movement specialist and neurologist that could be handled by a small company moving forward there. So it does offer us quite a bit of latitude.

Stephen Willey - Thomas Weisel

Great. Thank you.

Operator

(Operator Instructions). We'll move now to the line of Jason Napodano with Zacks. Please go ahead.

Jason Napodano - Zacks

Hi, guys. Thanks for taking the question. I think in the past you've mentioned that you were receiving requests from physicians for elagolix use in a compassionate basis. I am wondering if those are still going on and if you got any kind of update on that?

Kevin Gorman

Yes, you are correct. We have, in the past, had investigators come to us requesting that elagolix could continue to be used on a compassionate basis. However, because we're still in a Phase II program and while those requests continue to go on and it is not a life threatening disease, this isn't something that we could actually do until we're well into Phase III.

Jason Napodano - Zacks

Okay. So none of that has actually started.

Kevin Gorman

Correct.

Jason Napodano - Zacks

Okay. Thank you.

Operator

Our next question will come from the line of Scott Gibbs with Odyssey. Please go ahead.

Scott Gibbs - Odyssey

Yes, hi, guys. Can you provide some insight into why you did the Venrock financing?

Kevin Gorman

Certainly. Venrock is an extremely high quality firm. It's known to be a long only. They do a tremendous amount of due diligence. So I've got to commend Venrock for the amount of due diligence that they did on us. Towards the end of the year, when they came to us and we had the opportunity to bring them on board, and we did it through a registered direct process, we decided that we wanted that. They, again, for what I just said, a very high quality firm that has every intent to continue with us for quite a long time.

Scott Gibbs - Odyssey

Okay, great. Thank you.

Operator

This will conclude today's question-and-answer session. I would like to turn the program back over to our presenters for any closing remarks.

Kevin Gorman

Thank you very much. I want to thank everyone for participating today. As you can see, we keep a very tight reign on our burn rate here, again with working on reducing the cost of our facilities which has been substantial in '09 and will continue to work ongoing forward, and we'll utilize every opportunity to control our costs as we go forward.

We have, as I said before, a number of (inaudible) events coming up throughout this year. We're looking forward to it. Our drugs are performing well at this point. So, we will keep you posted as we go along and we look forward to interacting with you at the investor conferences, which we're always active in. Then as the data reads out, you will know it almost in real-time with us.

So with that, again, I'd like to thank you all, and have a good day.

Operator

This does end today's teleconference. Thank you for your participation. You may now disconnect and please enjoy the rest of your day.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!

Source: Neurocrine Biosciences Inc. Q4 2009 Earnings Call Transcript
This Transcript
All Transcripts