Immtech Pharmaceuticals, Inc. F3Q08 (Qtr End 12/31/07) Earnings Call Transcript

Immtech Pharmaceuticals, Inc. (IMM)

F3Q08 Earnings Call

February 11, 2008 04:30 pm ET

Executives

Eric Sorkin – Chairman, CEO and Pres

Carol Ann Olson M.D. – Chief Medical Officer and Sr. VP

Analysts

John McCamant - Medtech Stock Letter

Robert Giordano – Joseph Lemont

Michelle Ha – Private Investor

Bill Hyatt - Private Investor

Presentation

Operator

At this time I would like to welcome everyone to the Immtech Quarter results conference call.

(Operator Instructions)

Please be reminded that any forward looking statements on today’s call was protected under the Safe Harbor created by the Private Securities Litigation Reform Act of 1995. Please review Immtech’s most recent SEC filings including our quarterly Form 10Q, filed on August 9 for a list of risk factors relevant to the company stock.

With us today are Eric Sorkin, Chairman and CEO and Dr. Carol Olson, Senior Vice President and Chief Medical Officer Immtech Pharmaceuticals.

Mr. Sorkin you may begin.

Eric Sorkin

Good afternoon, thank you for joining us for the call. Joining me today are as mentioned, Dr. Carol Olson, Senior Vice President and Chief Medical Officer and with us today is Gary Parks, Chief Financial Officer. We will start by having our Chief Financing Officer give a summary of the quarterly results. We will then, provide an update on the progress in the quarter, and also an update on the recent development related to our clinical development program or our lead compound Pafuramidine.

Gary Parks

All numbers are rounded to the nearest thousand. For the three months ended December 31, 2007, revenues were $1,835,000.00 as compared to $546,000.00 for the three months ended December 31, 2006. The increase was primarily attributable to revenues relating to a licensing agreement and a research agreement. Loss from operations from the three months ended December 31, 2007 was $5,305,000.00 as compared to a loss from operations of $3,946,000.00 for the three months ended December 31, 2006. The increase was primarily due to an increase in clinical trial cost.

Contract services relating to trials for treatment of PCP increased to $1,438,000.00 from $597,000.00 in the corresponding quarter of the prior year. Net loss attributable to common stockholders for the three months ended in December 31, 2007 was $5,336,000.00 or $0.34 per share, compared to a loss of $3,966,000.00 or $0.28 cents per share in the previous year.

At December 31, 2007, unrestricted cash and cash equivalents were $9,444,000.00 as compared to $12,462,000.00 at March 31, 2007. For the same periods, restricted funds on deposit were $4,962,000.00 and $3,119,000.00, respectively. During the quarter, $5,123,000.00 was received relating to the clinical research sub-contract with UNC Chapel Hill, which in turn was from the founded brand from the Bill & Melinda Gates Foundation and $3 million was received from the licensing agreement with Bioalliance.

Eric Sorkin

During the quarter, we announced the execution of a licensing agreement for Pafuramidine to treat PCP and African sleeping sickness in Europe. As most of you know, we also announced the license agreement with Power Pharmaceuticals earlier in 2007 involving commercialization rights for Pafuramidine in the United States to treat PCP and people living with AIDS. During the quarter, we expanded our team with the addition of Dr. Jubo Liu, as Development Liaison for Clinical Trials. Dr. Liu received his PhD from the Department of Pharmaceutical Sciences at the University of Toronto and his Bachelor of Pharmacy at the Pharmaceutical University in Shenyang in China. He will be working closely with Senior Managers of Immtech in the US to develop growth opportunities in China. His expertise in prior development and extensive knowledge of the sales and distribution system in China make him a strong addition to the team.

We aim to be a provider of Healthcare Solutions on an international basis and to effectively address global health challenges. We plan to increase our efforts in working with global partners and collaborators, while strengthening our capabilities. As always, we thank you for your support.

Before we take your questions, we will have Dr. Olson give you an update.

Carol Ann Olson M.D.

Thank you to all the shareholders and stakeholders of Immtech. We appreciate the fact that you have been patient and understanding with regards to the clinical hold on the Pafuramidine development program. We take the safety and well-being of the volunteers and patience in our clinical trials and also potential future patients very seriously. We are working diligently to address the issues associated the Pafuramidine clinical hold.

In early January, we provided you with the initial information regarding the abnormal liver function that occurred in volunteers on the ongoing Phase I Safety Study. This study is being conducted to collect additional safe information about Pafuramidine to support the orphan drug indication of African sleeping sickness and Pneumocystis Pneumonia in AIDS patients.

At this time, the abnormal findings related to the liver function have returned to normal in all volunteers. Subjects in the Pafuramidine trials will continue to be monitored to ensure their continued safety and well-being. We have consulted during the past month with experts in drug-induced liver complications, our commercial and consortium partners, our data safety monitoring board and the Governance Council for the African Sleeping Sickness Grant. At this time we have not identified any contributing factors to the abnormal liver findings. We are continuing to evaluate the findings from the Safety Study and all of the other completed and ongoing studies of Pafuramidine and are attempting to determine the mechanism of the liver abnormalities.

The next step is to assess the risk and benefit of Pafuramidine to patient who have African sleeping sickness or PCP in light of our current knowledge of the safety of Pafuramidine. We again remind you that this is an ongoing investigation and we will uphold our ethical responsibilities to the volunteers and patients in our study. We are diligently evaluating all data as it becomes available with regard to the efficacy, safety and tolerability of Pafuramidine.

Over the past few days, we have been informed of new adverse events in volunteers in the Phase I study. These adverse events are being evaluated at the present time and will be reported to the clinical trial investigators for all of our ongoing trials and to the responsible ethics committee and national regulatory agencies as soon as possible. We have not completed informing these relevant entities at this time. With this result, we cannot answer any specific questions or provide further details. We are also striving to ensure that you, our stakeholders and shareholders are informed in a timely manner of new relevant information. As this information becomes available and is confirmed, we will update you.

At the present time, I anticipate that we will be able to provide further information to all of you within the next few weeks. I will now stop at this point in time and we will open the line for questions.

Operator

(Operator Instructions)

Your first question from John McCamant with Medtech Stock Letter.

John McCamant - Medtech Stock Letter

This question is probably for Carol, but whoever could answer it, so over the last few days we have an additional safety signal come out of the trial and what type of details do we have at this point, as far as the previous one was elevated liver enzyme and what type of timeline our looking at going forward and was potentially this is not material information that should have come out before the call?

Carol Ann Olson M.D.

As I mentioned earlier, this events has been occurring over the very past few days. The process of the evaluation is still ongoing. We still do not know exactly what is going on, what the extent is, but as we get more information, we will provide you with that. As you know we are in a very tight timeframe from the time that we have to go through this last process of this week going in to the quarterly report, and we felt that it was important to at least alert everyone that there has been a new safety signal as you defined it, but we are not at liberty, because of the fact that we have not had an opportunity first of all to truly evaluate exactly what it is going on.

But, secondly to inform all the critical people with regard to the investigators and our regulatory responsibilities, our first responsibility is at this point in time are to the safety and the well being of the subjects and as soon as we know what that status is then we will be able to make more public information of available.

John McCamant - Medtech Stock Letter

Thank you Carol, probably then, I guess as follow-on question would be, the problem materialized in December late, we are here on early February and if we have a new safety problem, does that mean that the clock has restarted? We have to fully evaluate what has happen to these patients and that sort of evaluation from previous safety problems in December and then, potentially have some sort of meeting with the FDA, what I am trying to do is get some sort of clarity of when we will have information about whether or not this drug can move forward in the clinic.

Carol Ann Olson M.D.

John, I think your question has to do with whether or not these new events may affect the clinical hold situation.

John McCamant - Medtech Stock Letter

Yes.

Carol Ann Olson M.D.

Okay, at this point in time it is too early to know whether or not these events will actually have any material impact on the clinical hold itself or the timeline. Once we know that information, we will be able to share it, but it is way too early to know at this point.

John McCamant - Medtech Stock Letter

I guess, one quick follow-up, do we have any information about what is going on with the clinical hold that came on in December. Do we have any developments or updates there for investors?

Carol Ann Olson M.D.

With that regard again, I will repeat that we basically have completed all the review about the safety data from our prior studies that we have completed. We are in the process of doing final evaluations of the studies that were ongoing at the time of the clinical hold and we are expecting to stay on our timeline of having something into FDA within the next four to six weeks. That basically has been pretty much our timeframe and that is still moving on that time frame.

Operator

Your next question comes from Robert Giordano with Joseph Lemont.

Robert Giordano – Joseph Lemont

First of all, you have to be complimented for being forthcoming in this fashion. I think we all appreciate that.

Assuming worst case that the trials are suspended, would you comment on what the company would look like under those circumstances and your go-forward plans?

Carol Ann Olson M.D.

I think it is too early to make any speculations with regard to go-forward. Right now, our primary concern is to address the clinical hold.

Eric Sorkin

But, we do have Drugs Discovery Program in hepatitis C, the fungal and the multi drug-resistant anti-bacterial. We have also been looking at some other things, obviously we have a very confident clinical staff and we would look to utilize them fully, but that thought is a thing, for some reason, thinking about giving up half the remedy at this point in time and we are absolutely are not.

Robert Giordano – Joseph Lemont

No, I clearly did not mean it that way, looking at your cash reserves and your funding, it did occur to me from our prior conversations that you had alternatives and I simply wanted to explore them with you.

Eric Sorkin

Yes and we absolutely do. We have an extensive patent state in very hard and null areas. We would actually potentially have back-up compounds to the lead drug Pafuramidine, but of course, it would be on new timelines. So, what we think is best for the company is to assess Pafuramidine and see where we are right now and work with all the different organizations that Carol mentioned and she just tap the line, but obviously, there are other organizations we are also working with.

Operator

Michelle Ha, a private investor.

Michelle Ha – Private Investor

I do not know if you have the answers to these, but did the safety signal occur in the same cohort as the initial ones for the liver tox?

Carol Ann Olson M.D.

Michelle we are not able to address that particular question at this point in time. Hopefully, we will able to give you more information about cohorts, somewhere in the next few weeks, as we get more information.

Michelle Ha – Private Investor

Okay and you cannot talk about the nature of the issue at all or, any information at all on the safety issue that you can talk about?

Eric Sorkin

Michelle, honestly we are willing to talk, at this point in time, except for the fact that we are on a quarterly call and questions that are going to come out is anything with, so we are just trying to be as forthcoming as possible.

Carol Ann Olson M.D.

Our first priority again, I would say, we really have to respect the rights and the safety of all of our subjects in our trial is well, and we also have to comply with all of our regulatory requirements regarding good clinical practice. And so, those will be the first items that we will address and as soon as we have addressed those and have a clear view of what is going on, right now, we do not have a clear view of what is going on. We will be able to provide more public information.

Michelle Ha – Private Investor

Okay and well, would that information be put in a press release or will you have another conference call or do you have any idea of how that information will be disseminated?

Carol Ann Olson M.D.

I think it will depend on what the nature of the information as we have to disseminate as to whether or not it will be via press release and/or by a call.

Operator

Your next question comes from Bill Hyatt, another private investor.

Bill Hyatt - Private Investor

Curious as to whether or not you are still on track with the new drug application for African sleeping sickness, which was mentioned as being filed this quarter?

Eric Sorkin

Yes, Bill the clinical hold has put hold on everything regulatory for the company. So, the short answer will be no, we will not be filing the new drug application for Trypanosomiasis or African sleeping sickness this quarter.

Bill Hyatt, Private Investor

Can you make any comment about where you are at with any partnership activities for hepatitis C development?

Eric Sorkin

Not at this point of time, it is in the drug discovery stage and basically any relationships take quite awhile to finish up and until we have something completed, we would not want to speculate after getting something signed up.

Operator

There are no further questions at this time, management are there any closing remarks?

Eric Sorkin

I just want to thank all our diligent shareholders for their time and understanding. Thank you.

Operator

Thank you so much for dialing for in today’s conference call. Ladies and gentlemen, you may now disconnect.

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