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Receptos, Inc. (RCPT)

Q1 2014 Earnings Conference Call

May 12, 2014, 08:30 AM ET


Faheem Hasnain - President and Chief Executive Officer

Graham Cooper - Chief Financial Officer

Sheila Gujrathi - Chief Medical Officer


Ravi Mehrotra - Credit Suisse

John Rende - Copernicus Capital



Good day, ladies and gentlemen, and welcome to the Receptos First Quarter 2014 Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a 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 call over to our host for today's conference, Chief Executive Officer, Faheem Hasnain. You may begin.

Faheem Hasnain

Good morning, everybody, and thanks very much for joining us for the Receptos first quarter 2014 earnings call. With me today are Graham Cooper, our Chief Financial Officer; and Sheila Gujrathi, our Chief Medical Officer. Today's call is also being webcast live on our website and will be available for replay until May 26th.

Before we begin, I'm going to ask Graham to handle the forward-looking statement disclaimer. Graham will walk you through our financial results, followed by an update on our clinical development program that Sheila and I will cover. After that, we'll be happy to take any questions you may have. Graham?

Graham Cooper

Thanks, Faheem. Please note that except for statements of historical facts, the statements in this conference call are forward-looking statements under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that can cause actual results to differ materially from those in such forward-looking statements. Please see the forward-looking statement disclaimer on the company's earnings release issued this morning, as well as risk factors in the company's SEC filings. Undue reliance should not be placed on forward-looking statements which speak only as of the date they are made and the facts and circumstances underlying these forward-looking statements may change. Except as required by law, Receptos disclaims any obligation to update these forward-looking statements to reflect future information, events or circumstances.

I will now turn to the financial results for the first quarter. For the three months ended March 31, 2014, Receptos reported a net loss of $21.5 million or $1.01 per share as compared to a net loss of $9.6 million or $5.46 per share for the first quarter 2013. Total revenues for the first quarter of 2014 were $1.4 million compared to $1.5 million for the first quarter 2013.

Total operating expenses for the first quarter of 2014 were $22.8 million compared to $9.1 million for the first quarter of 2013. R&D expenses were $20 million for the first quarter of 2014 compared to $8 million for the first quarter of 2013. The increase in R&D cost is primarily related to increased Phase 2 clinical trial activity and startup costs for our Phase 3 trial of RPC1063 in relapsing MS and increased activity related to the Phase 2 trial of RPC1063 in ulcerative colitis.

G&A expenses were $2.8 million for the first quarter of 2014 compared to $1.1 million for the first quarter of 2013. The increase in G&A expenses is primarily related to the expansion of our operating activities and costs associated with being a publicly-traded company.

As of March 31, 2014, Receptos had $158.6 million in cash, cash equivalents and short-term investments and debt with the principal balance of $5 million. The increased cash balance is partly as a result of the equity offering that we completed in January 2014, which provided net proceeds of approximately $110 million and substantially strengthened the financial position of the company. We now have approximately 22.2 million shares outstanding or approximately 23 million shares on a fully diluted basis.


Faheem Hasnain

Thanks, Graham. There are three major topics that we're going to cover on the call today. First, with regard to RPC1063 in relapsing MS, I want to remind you where we stand with the program and the important data that we expect to report later this year. I'll then ask Sheila to update you on the UC program where our Phase 2 trial of RPC1063 is continuing to enroll with data also expected later this year. Sheila will update you as well on our anti-IL-13 antibody program where we have some exciting progress to report. I'll wrap up with an update on our oral GLP‑1 receptor modulator program. And we'll then be happy to take any questions.

So as you're aware, we completed enrollment of the Phase 2 portion of RADIANCE in relapsing MS last fall and performed an interim analysis of the data in December. Now let me briefly remind you the headline on that interim analysis. Overall, our differentiation profile appeared intact, including an adverse event profile, which has been relatively deemed to be balanced between RPC1063 and placebo groups. Our cardiovascular profile, including starting this heart rate effect, which appeared modest for 1063 treated patients compared to placebo patients, low rates of liver enzyme elevations which appears supportive of the favorable hepatotoxicity profile. And as it relates to efficacy, preliminary clinical activity and reduction in lymphocyte count that appeared to be consistent with data from other S1P receptor modulators on the market or in development.

And with regard to the ongoing Phase 2 trial, we continue to expect the full topline results to be available in mid-2014. We enrolled 258 patients in this trial, substantially greater than the 210 planned as a result of the momentum that was built for the investigators in the latter part of the enrollment period. The primary endpoint in this placebo-controlled trial is reduction in the cumulative number of total of gadolinium enhanced lesions as determined by MRI from week 12 to 24 of the study treatment. We will also be looking at a number of secondary endpoints as well as all of the standard safety and tolerability parameters.

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