OncoGenex Pharmaceuticals Inc. (OGXI)

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OncoGenex Pharmaceuticals, Inc. (OGXI)

Q1 2010 Earnings Call Transcript

May 6, 2010 4:30 pm ET


Jason Spark – IR

Scott Cormack – President and CEO

Cameron Lawrence – Principal Financial Officer

Cindy Jacobs – EVP and Chief Medical Officer


Simos Simeonidis – Rodman & Renshaw

Stephen Willey – Thomas Weisel Partners

Mark Monane – Needham & Company

Ted Tenthoff – Piper Jaffray



Good day, ladies and gentlemen and welcome to the OncoGenex first quarter 2010 conference call. At this time, all participants are in a listen-only mode. Later we will conduct question-and-answer session and instructions will follow at that time. (Operator Instructions) As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Jason Spark. You may begin.

Jason Spark

Thank you. Good afternoon, everyone. Thank you for joining us for OncoGenex Pharmaceuticals first quarter conference call. The company issued a press release today containing a financial results for the first quarter and three months ended March 31 2010 as well as the review of the company's highlights for the first quarter of 2010. This release is available on the Investor Relations’ page of the company's website at www.oncogenex.com. As a reminder, this call is being and broadcast live on Investor Relation page of the company’s website and the replay of the webcast will be available for 90 days.

Before we begin, I would like to remind everyone that some of the statements made today include predictions, estimates and other information that might be considered forward-looking. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially from our predictions and estimates, as a result of various risk factors, including those identified in our Annual Report on Form 10-K for 2009 filed on March 8, 2010 and our quarterly report on Form 10-Q filed earlier today, copies of which can be accessed on our website.

I will now turn the call over to Scott Cormack, President and CEO of OncoGenex.

Scott Cormack

Thank you, Jason. Good afternoon, everyone and thank you all for joining us. On the call with me today are members of the OncoGenex Senior Management Team, including Cameron Lawrence, our Principal Financial Officer and Dr. Cindy Jacobs, our Executive Vice President and Chief Medical Officer. Cameron will begin today's call with a review of our financial statements for the first quarter. Following Cameron's overview, I will provide the summary of company's achievements for the first quarter 2010 and we'll discuss our near term goal. Cameron.

Cameron Lawrence

Thank you Scott. Recall the end of 2009, we had $26.5 million on our balance sheet as deferred collaboration revenue, which represented the remaining amount we are obligated to contribute to OGX-011 development plan under our agreement our with Teva. As previously discussed when we contribute to the OGX-011 development plan, the deferred collaboration revenue balance will decrease and be recognized it's revenue.

We expect to advertise the remained deferred collaboration revenue over the expected performance period of deliverables under this agreement. We currently expect this performance period to the end of fourth quarter 2012.

In the first quarter of 2010, we contributed $1.9 million of OGX-011 development cost and a quarterly recognized its amount, its revenue which further reduces our deferred collaboration revenue balance to $24.6 million as of March 31, 2010 and additional $2.8 million was recorded in the first quarter of 2010 relating to OGX-011 manufacturing the cost incurred by the company, which are reimbursable from Teva on a cash basis and are included in the accounts receivable as of March 31, 2010, by comparison for the three month ended March 31, 2009, no revenues were recorded.

Research and development expenses for the first quarter ended March 31, 2010 were $6.4 million compared to $1.7 million in the corresponding period of 2009. The increase research and development expenses in the first quarter of 2010 result from our contribution to the OGX-011 phase III clinical trials in the amount of $1.9 million and manufacturing cost in the amount of $2.8 million, the ladder which is reimbursable from Teva.

General and administrative expenses for the first quarter of 2010 were $1.4 million compared to $0.8 million in the corresponding period of 2009. The increase in our first quarter of 2010 was due mainly to higher employee expenses including severance charges, professional fees for legal and accounting services, employee recruitment costs and stock based compensation expense.

The net loss for the first quarter of 2010 was $3 million, compared to $2.4 million in the corresponding period of 2009. The increase large was predominately due to the higher general and administrative cost previously discussed. We finish first quarter of 2010 with $47.6 million in cash, cash equivalent and short-term investment, compared to $64.6 million as of December 31, 2009.

This $70 million decrease in cash, cash equivalents and short-term investments is predominately due to the $10 million payment to Isis mainly in the first quarter of 2010, which was included in accounts payable as at December 31, 2009 as well as, costs incurred in first quarter of 2010 relating to the OGX-011 development plan with Teva, of which $2.8 million is reimbursable from Teva on a cash basis. After considering the $10 million payment to Isis and the $2.8 million reimbursable from Teva, the remaining cash utilization for the quarter was $4.2 million.

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