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Oncothyreon Inc (ONTY)
Q4 2012 Earnings Call
March 14, 2013 8:30 am ET
Julie M. Eastland - Chief Financial Officer, Principal Accounting Officer, Secretary and Member of New Employee Option Committee
Robert L. Kirkman - Chief Executive Officer, President, Director and Member of New Employee Option Committee
Simos Simeonidis - Cowen and Company, LLC, Research Division
Joel D. Sendek - Stifel, Nicolaus & Co., Inc., Research Division
Mara Goldstein - Cantor Fitzgerald & Co., Research Division
» Oncothyreon Inc Management Discusses Q2 2012 Results - Earnings Call Transcript
» Abbott Laboratories' Management Presents at Barclays Healthcare Conference (Transcript)
Good afternoon, and welcome to Oncothyreon's financial results conference call for the full year and fourth quarter of 2012. With us this afternoon are Dr. Robert Kirkman, Oncothyreon's President and CEO; and Julie Eastland, Oncothyreon's Chief Financial Officer and Vice President, Corporate Development. In the first part of the call, Ms. Eastland will review Oncothyreon's financial guidance for the full year and fourth quarter of 2012. She will also provide financial guidance for 2013. After that, Dr. Kirkman will review Oncothyreon's corporate and pipeline highlights and discuss upcoming milestones. We will then open the call to questions.
Before I turn the call over to Ms. Eastland, let me first remind you that during this call, we will be making a number all forward-looking statements. These forward-looking statements include Oncothyreon's expectations regarding the use and adequacy of cash resources, future expenses, the clinical development of Stimuvax, the commercial outlook for Stimuvax and clinical development risks for PX-866, ONT-10 and ONT-701.
Forward-looking statements involve risks and uncertainties related to Oncothyreon's business and the general economic environment, many beyond the company's control. These risks, uncertainties and other factors could cause Oncothyreon's actual results to differ materially from those projected in forward-looking statements. For a detailed description of these risks and uncertainties, you are encouraged to review our annual report on Form 10-K filed with the SEC and other official corporate documents filed with the securities regulators in the United States on EDGAR, and in Canada on SEDAR.
I would now like to introduce Julie Eastland, Oncothyreon's Chief Financial Officer and Vice President, Corporate Development. Julie?
Julie M. Eastland
Thank you, Julie, and good morning, everyone. As reported in our press release this morning, loss from operations for the year ended December 31, 2012, was $28.5 million compared with $24.7 million for the year ended December 31, 2011. The increase in loss from operations primarily resulted from an increase in research and development expenses to $22 million from $17.9 million, partially offset by a decrease in general and administrative expenses to $6.5 million from $6.9 million.
The increase in research and development expenses in 2012 compared to 2011 was primarily the result of increased development activity for Oncothyreon's product candidate, PX-866. The decrease in general and administrative expenses in 2012 compared to 2011 was primarily the result of a noncash reduction in share-based compensation related to the decrease in fair value of the restricted share unit liability, whose value was affected by the change in our stock price. The reduction in share-based compensation was partially offset by higher salaries and benefits expense due to increased headcount and higher legal and accounting expenses related to our patents and regulatory compliance.
Net loss for the year ended December 31, 2012, was $3.4 million or $0.06 per basic and $0.53 per diluted share, as compared with the net loss of $42.7 million or $1.12 per basic loss and diluted share -- excuse me, for the year ended December 31, 2011. The decrease in net loss was primarily attributable to noncash income of $25.5 million as a result of the change in the fair value of the warrant liability for the year ended December 31, 2012, compared to the noncash expense of $17.6 million for the year ended December 31, 2011. It was partially offset by an increase in operating expenses to $28.5 million in 2012 from $24.8 million in 2011.
As of December 31, 2012, Oncothyreon's cash, cash equivalents and investments were $83.8 million, compared with $66.4 million at December 31, 2011, an increase of $17.4 million or 26.2%. This increase was attributable to the closing of an underwritten public offering in April of 2012, of 13,512,500 shares of Oncothyreon's common stock, which generated net proceeds of approximately $50.3 million.
This increase was offset in part by $27.3 million cash used in operations, $4.1 million cash used in full repayment of a term loan with General Electric Capital Corp and $0.9 million cash used for principal payments on notes, and lastly, $0.8 million cash used in expenditures -- excuse me, capital expenditures during the year ended December 31, 2012.
Before I turn the call over to Bob, I'd like to provide financial guidance for 2013. Please note that we believe this guidance to be correct as of today, circumstances may change, and we assume no obligation to update the guidance.
Expenses in 2013 are expected to be slightly higher compared to 2012, primarily as a result of the continuing development of PX-866 and the ongoing Phase I clinical trial of ONT-10. Oncothyreon currently expects cash used in operations and capital expenditures in 2013 to be approximately $30 million to $33 million. As a result, Oncothyreon estimates that its existing cash, cash equivalents and investments will be sufficient to fund operations for at least the next 12 months.