ATNX - Earnings call transcript Q3 2018

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Operator

Greetings, and welcome to Athenex Third Quarter 2018 Earnings Conference Call. At this time, all participants are in listen only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to Tim McCarthy, with LifeSci Advisors. ahead. go Please

Tim McCarthy

results the website. quarter earlier company’s this the thank we detailing and on of replay well joining conference the our a Good an this you update is release also crossed as on third the for results provide of as be website. The and archived available on wire quarter call third news the A morning review call morning, will financial for XXXX. Athenex’ as business company

factors During conference make the including the projections clinical the to actual year call, or company’s financial events, to materially encourage or the past fiscal differ milestones about of future review XXXX events identify course this We company results the and those anticipated in forward-looking forward-looking will you statements. statements specific statements the may beyond. described that in and from filings cause future regarding with and SEC, which

for database in by Dr. website You at Yordon, Kwan, other comments. answer prepared joined Chief Operating Randoll Officer; Medical Officer morning, are and introductory that, I’ll can available Chief Financial With remarks. over our find we in EDGAR several athenex.com. at filings our Rudolf Mr. Chief This the Johnson Investor at section Johnson or SEC questions call officer; Dr. Relations executive Officer; to be Jeff Mr. Chief Executive will the who Sze, to after the the Lau, sec.gov turn

Johnson Lau

everyone. good and morning, Tim, you, Thank

progress announce as were with development our business DSMB, our we So all our trial Safety Beginning cancer very Athenex as make to quarter in planned. X has Monitoring topline data that continue year We Data and recommend this continued trial and we metastatic the serve the both from for far announce be Board Oraxol, and successful, pleased believe study a within Orascovery in commercial a If to substantial of unanimously third for [ph] transformative well we've programs. research our Athenex. this study to busy as expect Phase validation program ongoing XXXX currently the Oraxol it that to and and been a will has breast event proprietary for mid potential in XXXX. recruiting patients the major in

Orascovery identified which Our Oradoxel version pipeline continues and for FDA of dosing IND for Oratecan X oral end of the the October, advance. our advancement studies, the Phase is to also recent our products on to We also both based data. accepted ORA, chemotherapy Eribulin suitable Eribulin. At of for pharmacokinetic regimens

is plan and with on this on-time Our ahead to of IND our that are has accepted very products commence time execution. This of clinical their product eighth the we or proud been trials team in XXXX. in excellent, represents Athenex

commercial Our the research to million perform business $XX.X same quarter was the of consensus million. to speaks for million, third for well. an as increase period compared $XX Revenue year. continues X.X This last by has the XX%

was net per $X.XX reported the in third Our quarter. loss share diluted

of Almirall, Almirall and game this be we are and in in the Almirall pivotal similar a in was loss lot sense studies the a XXX share. is a We a our exclude to believes favorable on and population Athenex venture of Axis affinity offer In have a explore strategic of a third large market undertook own technology treatment which CAR-T economics somewhat through the in creating of research technology establishment In called to Src in program with somehow, Axis an diluted is two to to an tumors. item to patients. data, value you our a the concept very order of solid potentially $XX.X initiative We our Actinic Therapeutics, therapy. net immunotherapy from potentially specific receptor is $X.XX up earlier joint the the which underserved to only believe diluted enhancing our kinase in in potential in that a T-cell T-cells quarter. could per as actually that clinical is with could this if that consensus to changer killing tumor However, its $X.XX over noncash both T-cell reported the advantages together partner important CAR-T important a properties for of a per developing the see million platform share, larger and Xiangxue we add based being actinic Athenex. we product recognize positive data the target that partner disease. below Sciences we is China. manipulate Life tumors of TCR-T way KXX/XXX keratosis keratosis is The patient's to with

Dr. We have provide Officer will news on this. encouraging more recently Chief reported our this of in technology. Rudolf generated Kwan, first the set clinical very Medical details data

As announce promoted August. pleased right Financial we Athenex We Officer Mr. is we the to that the were it Sze moves Randoll important that organization. in managing forward, have Chief people to

across now Randoll, our already former third Senior Also our will we Tim have medical our overview Mr. He Oncology. Cook, Head various of of known clinical is I IPO. be Vice who investment former a banker Oncology has Rudolf integrated over chief Commercial fully We the more detailed to Dr. for Rudolf? President leadership welcome business Worldwide the into Lilly Kwan during of the call turn our since our the team Global officer, quarter. Eli progress at to units.

Rudolf Kwan

X development And primary lesions that clinical each X Phase safe two value day paradigm endpoint highlighting in potential X patients Phase for July XX was studies change in study ointment believe Johnson. for AK We within a actinic keratosis Starting treatment conducted to less in studies met consistent disease. Both have the now than the clearance topical The statistically this two p KXX-XXX between were the announced the of of in treatment significant studies we highly effective of of X.XXXX. their our results with review the KXX-XXX this at and you, the KXX-XXX of clinical clinical therapy and AK. the results has and U.S. activities. Phase for consistency of XXX% with with Thank a areas been

Additionally, formulation we oral the us announced KX-XX that explore Asian we will to for allow and China, KX-XX from formulation other will receive back Pharmaceuticals of to right potential oral globally. the Korea, territories. This Hanmi

reviewed milestone trial the we The on Data the breast that Oraxol the Monitoring achieved. is that cancer. been comparing the congratulated with and independent that have against planned clinical unanimously For an in metastatic trial study Safety Phase Oraxol, paclitaxel recommended reached of DSMB controlled a X trial promising and Board and results interim clinical metastatic XXX cancer randomized analysis the the with Phase second the breast ongoing announcement continue. Athenex important monotherapy intravenous patients recruitment rapid Oraxol monotherapy X The in clinical patient conducted

to in Johnson data the the announce profile trial Society October topline a European of meeting results As the XXXX. failed and who for metastatic Taiwan. in pharmacokinetic encouraging safety highlights potential Phase efficacy in PK cancer data excellent in Oraxol. efficacy in treatment and Oncology chemotherapies plan At mentioned conducted of of breast the clinical we X patients Medical positive mid and clinical The previous encouraging Oraxol we safety presented and

were response. as have Oraxol earlier to conducting of in cancer evaluating see chemotherapies. pleased also are study in Phase a The been we patients have treatment X Ramucirumab the for the first failed year, tumor and well results from tolerated in announced encouraging gastric Oraxol-Ramucirumab that was the combination previous with that We cohort

cohort and higher the The in which we to dose of second is coming Oraxol is have near evaluating plan results weeks. completion

development. Phase both well Our Oratecan candidates and Oradoxel are advancing X

regimens in We are the which X planning half Phase for our first XXXX. initiate dosing we identified have of to

paclitaxel chemotherapy approved for Moving prior at breast Eribulin. is as we is that received patients least application FDA have for disease well on metastatic an version in as treatment tumor resistant is of to drop who for this cancer IV liposacroma. which The ORA, two in the [ph] Eribulin oral of has stage late IND available allowed chemotherapies currently announced and active agent candidate

a clinical in drug first the We the trial number of to clinical initiate expect of other in this half synergistic Orascovery plan XXXX. candidates profile will We create that our pipeline. opportunities with

this pipeline, with receive our whom announced Jeff? will over portfolio then on which preliminary I immuno-oncology and venture, encouraging operations. during TCR-T partnered in file of safety. for are we of have we our our allow Xiangxue joint results also development will Sciences will Finally a China for initiate Therapeutics. with to clinical the therapy forward. with Life patients technology in our signals strategies Jeff This The overview studies to the IND showed a going combination being positive call of pilot our by in U.S., Axis efficacy study conducted treatment form With XXXX. pilot terms the our current of X an turn We Phase intend studies to potential first that, number technology in

Jeffrey Yordon

brought to The be completely added section we and ready-to-use think and the used still a good Federal Drug, able potentially on X from Division. meaningful the Endo product until under the QX business XXXB Cosmetic were its QX have XXXB lawsuit list, XX, force Thank the launch the Solutions business, If It's that the products to Class removed approximately been Vasopressin compounded our sell drug in Vasopressin stays the annually. market being Act. in the meantime, considers million list. the you, finalizes commercial would the remove of is significant our them XXXX. currently the issue Athenex against Rudolf, Food, launch had APIs is of In the We and and to product take December try portfolio the benefit while branded both In rate Pharma beyond. XXX run no business, it XXXX If will clear from the continue FDA's to whether has FDA's list. a currently Pharmaceutical vasopressin of at compounding market to stayed product is and current everybody. may we and we continue by with list competitors portion of on to our marketed bags. if is version to and least new continue and Clearly on of FDA in product. could IV of the premix XXXB prefer the morning compounding injectable in they Athenex be not will in Endo our list it then lawsuit Athenex FDA list. August our we the to there specialty in That injection

market the products one At used FDA a widely most there For shortage the is of Pharmaceutical exited of that market the drug this antiemetic it product list. hydrochloride is Division on was has the by an and the key point on is consistently and ondansetron Athenex oncologists. which one of have suppliers glut been

version ourselves XX markets we able total of SKUs. pharma as products supplier shortage We we solutions have our potassium total products Division been of with sodium include currently and bicarbonate, and ondansetron XX sell SKUs. Athenex a reasonable establish markets a at Vancomycin price. leading that Athenex Other XX to spot with chloride. the in sell six Pharmaceutical products

are We new an before four launching with products additional on planning new year two SKUs. end

mid end by by of our expect the in video a website and On of Please be to the exterior the progress we our drone half by a XXXX Dunkirk. XXXX go XXXX. video and finished regular to been for the facility of The whole the should generated are with we New progress very front, York. operational Dunkirk, making we facility happy on update see the manufacturing first in our on have complete to plant be

State York specialty and a being compounded very facility. in with proprietary Our and are their the be is partnership constructed products with grant New oral all private-public funding very, we injectables will Dunkirk grateful manufactured for substantial products XXXB this support. through of

Athenex XXXX. existing or exterior to to We the we the company. our believe finished API that of material well strategically the We on raw Both our for The result are major capacity resources more be also mid shareholders important to building by integrated of our API in manufacturing by using commercial the happy and ability is will be the will is and products end establish in Athenex our target. order report supply facility more oncology XXXX subsidiary facility by fully China to and a commercialize and APIs proprietary will expected Chongqing, can to facility elements in create be of to key more a completed and a value we product great must In deal in give markets. This be advance launches. successful, place the as that business better are infrastructure global sales manufacturing in as commercial

launches. Some the and APD of of clinic facets in include of relationships oncology markets the in such branding the the been in goodwill the the supplying and at all proprietary planned reasonable We've the shortage our which of year accomplishments key successful key the product. oncology divisions able is advance create APS of ondansetron as market to key and establishment prices products this company by hospital of massive largest

have substantially wholesaler our lowered centralized We also costs through distribution agreements.

most portfolio proprietary as KXX-XXX likely Looking of that’s KX-XX. at closest is to the formerly our market known products, one

care the actinic announced that On the Almirall KXX-XXX clinical X strength year, change the standard for and to of of believe earlier has we potential in keratosis. we partner the our positive Phase the

data X from Phase We up are the XX-month awaiting follow now trial. the

for We the products. that Oraxol business marketing seamless have plans KXX-XXX all these a working and facets the will of established launch are proprietary and have both completed of allow to

all We and Both completed completed and have to licenses all complete GSA have this. already we secured agreements. of years licensing to could up state take three activities these

and XX all an to launch. committee of cancer turn the including P&T of to place quickly staffing for members plan relationships prepare for over in call hospitals the comprehensive first now financials. overview have strong have the We will our Randoll I the

Randoll Sze

Jeff. you, Thank

million products in due and the result quarter $XX other sales increases for in last API R&D $X.X quarter contract million was per licensing net revenue $XX.X start loss third IP per Net products. we fees an to medical $X.XX million Let This totaled million and there quarter third like compared the million revenue primarily our results of the me of of from compared revenue, from to million increase common was grant sales with the increase and compared to the compared and or recently million XXXX. $XX.X the products company's the cost primarily of expenses technology Xiangxue sales. were same Cost related year. increase the an expenses with year. for to million, in last $XX.X license The to increase million in highlight quarter. $XX million SG&A Axis in for sales, in $X million increase to by for in million, the together clinical sales. offset was share to the primarily period increase $XX of XXXB Sciences, the fair Therapeutics. $X.X establishment last expenses. products the Life What due purchase were our was stock the related of these is connection XXXB with specialty last company's period compared These $XX.X million Out issued These $X.XX to of million TCR-T year. an Revenue a of non-cash launched an in product third to China. fee million sales of and million $XX.X would year. diluted in to here $XX were $X.X quarter to partner a the $X of decreases of licensing or related API device in of $XX.X same R&D million diluted and $XX.X for to the were were share $XX.X value of manufacturing loss

the In at gross or picture $XX.X our looking partner closed would transaction pipeline. have earnings with a per diluted net very reiterate debt our to see been honored in of the proceeds excluding financing would our we approach $XX.X been provide licensing $XXX have of were million fee who that $X.XX validation Advisors share. of strategic people Perceptive For non-cash loss we them more EPS, for and or We like and comprehensive product and equity have to privately capital million. as placed a July, as our and million

into the a issued financing the of million for shares we transaction and for million. senior the remaining million loan of $XX common approximately this $X.X secured of terms part entered As $XX five-year stock

of were $XXX our end our term generated cash will XX, operating enable us into plan together that quarter operating our cash, the cash expenses XXXX. short fund current fourth requirements CapEx be equivalents operating we as cash, investments at million on investments, Based expect our with the cash from terms short and to Our to September activity XXXX. equivalents, and of the

XX, filed our For the XXXX, results please Form months more including the nine details to ended on September XX-Q our with earlier SEC this morning. financial refer for

we from or full revenue the terms to guidance a to of In to end of our of revenue. in of year expect the inclusive partner, looking range million the due lower currently a of fee licensing timing be payment $XXX million currently guidance, are we collaborative XXXX revenue $XXX

on we collaborative that, operational is final back I'll to receive track Johnson? the Johnson and of Our in payment next some this expect business to With half first comments. for return it year.

Johnson Lau

to Thank of Thank support. Their be continues all I continued your progress. to around clinical would hard thank and like team whose to operational the Randoll. drives globe execution the strong. work our you you,

cap Importantly, achieve. the has believe that the fundamental do executing current will will according out set continue the market to Athenex the and team not of to company value met schedule. our we our that milestones affect plan previously We all

Monday, date and to place milestones our we that City would an developments hold December in you investment execution, all to like This York XX. New take I would the to new on date invite that for like on noon we R&D Given X to p.m. all and the plan will mention in R&D to attend. community from of

an and target. on programs additional our markets opportunity we on dive deeper a investors indications and provide to to the to is perspective plan goal gain Our

open Operator? up details everyone the for shortly. provide full now call we’ll the will questions. with With We that,

Operator

question Our [Operator be coming from line question. will your of first Instructions] the proceed MacKay with Kennen RBC. Please Thank you. with

Kennen MacKay

success Justin questions. Hi, for thanks taking Kennen. our on this for quarter is on all the and Congratulations this

first additionally one when on mature versus that mid-year endpoint? XXXX around Oraxol be X for could trial might I you primary then an when trial is And be guidance Thank MBC median that free any for The enrollment the wondering the was the survival had you for progression into you. estimation if Phase have anticipation complete? of

Johnson Lau

Our Rudolph these will Kwan Dr. address Chief Medical Officer questions.

Rudolph Kwan

thank Justin, for the question. you

the and the We data by mid cannot we in see analysis up at and the XXXX. with point. be We expect to be expect and and this power progression different of know expect will continue as this mature. did the free for will give enrollment very line come not of I will as well line survival so target guidance estimate is the monitor we you a endpoint completed the results top survival XXXX the top as response that you will date to time from study study end into whether come of The secondary the But in at said the data. is result so we rate, - we we

Kennen MacKay

thank much. Great, very you

Operator

next Messer Chad of with proceed Please Needham with line Company. & The the is question from questions. your

Chad Messer

Good a the NDA the questions. for submission Great. discussed in for possibility my this. rolling of to the regard past thanks KXX-XXX, morning taking and With you've

if for FDA an discuss potential timing the wondering additional guidance, to guidance that if you any other Just NDA can you've filing? there us possibility on with give is and had opportunity the

Johnson Lau

question. address will this Kwan Dr.

Rudolph Kwan

discussion approaching FDA in of currently both are We agencies, and EMA. health and variation the

provide mature. discussions as will we these guidance I think

Chad Messer

a just you great. Thanks. chemotherapies. of to plan and that Oradoxel about very I'm platform the of across various I'm at applicability then the And data interested more point. some have Orascovery in broad some if publish Oratecan wondering PK Okay learning

Rudolph Kwan

address Yes, me let this question.

data see Oratecan also submit to I of the to year Oradoxel number provide New from Oradoxel comprehensive the see entire trusted, Day confirming very a so on to the peak to Phase I eribulin abstracts Day XX, in to oral of with the community delighted a to community York more provide of to will as and for glycoprotein answered as on to and that I hope able and so regard will this PK scientific the on irinotecan we're a that of to delighted Oraxol the to platform study able the to a R&D protein insights a well in City the investment the Oral question. substrate. confirm be are platform potential also be I meeting R&D as number fashion. this data we'll platform December in we We plan the the your see next platform starting well very of as or additional ESMO good overview the comprehensive Oradoxel

Chad Messer

forward Yes, looking thank you I'm to your and Day. R&D Thanks.

Rudolph Kwan

Thank you.

Johnson Lau

Chad. you, Thank

Operator

proceed Next Jen is Yale with with Laidlaw. line question question. Please your of from the

Yale Jen

and in the Good maybe a just congrats previous the on Oradoxel. progress question followup questions Oratecan taking morning and thanks terms the on little of for a and and bit

indications there come you what more of one but information may forwards be going is to drugs? be the might Although these out, either cancer for potential tackle

Johnson Lau

Thank Dr. able will Kwan provide you to for details. you be question. your more

Rudolph Kwan

irinotecan the we well Right, the development, those the clinical irinotecan our combination our you and and into will if like a approach areas in indications Oraxol docetaxel. to take also ramucirumab, further in portfolio interesting if paclitaxel of see same for and IV colorectal where discussed The works and certainly hint drug with angiosarcoma, go anti-PD-X R&D details certainly would combination be cancer. both recognized indications we with works orphan definitely Give to after new you go like the opportunity what example, thing Day.

to be is the so Day. the are indication other this explore, tried to and as discuss certainly the at literature oral formulation aflibercept, been nevertheless will an that consider R&D further in So where has possible for formulation used in IV obvious we'll an looking we indication us it with indications was

Johnson Lau

to that is are prove additional part platform according ensure process having are glad lot regulatory that to to the in the first to of effective to ensure a very have we process is to process going our am authorities is of go insight right And approved and reveal after most the fact one regulatory also is to new first and the the I additional time that and little after also terms safe. R&D part regulatory that the say years. the platform be probably I next we to as which have couple any is the to through whole that schedule for our in our to all timing that think is experience through programs well most bit part more job that strings able convinced a of a Yes, have the product progress we is will Day in products the and in works the getting is products important and getting path we and the platform about company our of job therefore the to streamlined investment committee in streamlined important. as the

Yale Jen

facility that and used for process for is just mentioned great one more this the the in the Johnson And is mainly also paclitaxel Okay finishing, thanks - here, detailed Chongqing could that material that's that raw of API be the to Oraxol? API ultimately of you may question in answers. or that’s related be just

Johnson Lau

installation and by Thank the plant. our is which middle that of mentioned equipment is by two including the API is is API plants, have of you and actually actually scheduled Operating form Chongqing one for the plant API Chief first that The to build The just next the to we we the year and question. of the are the a one supporting everything the Officer first renovation complete, is plant. plant second dosage your government

form are We contemplating also half ground the with the in of plant dosage breaking next first year.

in is everything So progress.

Jeffrey Yordon

free deal studies. they're they capacity to great that of our a to is currently products a clinical sales of capacity able lot large have This sell. going of going generate and be to to for a now actively implications they their use The up portfolio that

So about this. excited we're really

studies. Okay, in a is strong INDs color a that, let that active also eight different pipeline. little here We remember already me add R&D very more we clinical have have bit

would support more continue what public to to in and the do fashion, more operation in need are Government contemplating is to a We therefore are the such New successful domain I the and are ensure that us to to to coupled important. the supply what very, Western like thank achieving providing a together in have come support is with API China the they Chongqing York building we we to together. also very because actually non-disruptive than

So continue we and executing our both stakeholders. we'll that very value are to to for building we the grateful the maximum to that facilities governments and capture ensure

Yale Jen

Okay appreciate very the great see and forward days. that’s comprehensive. I look that. Again and to R&D congrats very,

Johnson Lau

you, Yale. Thank

Operator

the next The Instructions] Please [Operator you. Matt Ladenburg of question Thank with from your is question. line with Kaplan Thalmann. proceed

Matt Kaplan

guys. Hey background noise. the for apologize I

give to I now progress to out if could a first to get getting in wanted but off as be response of terms if sense guess wanted from Thank getting of little the that what more you're on some thinking the in quarter, about that more a objective and the primary bit of design completing terms you’re of Phase Just read close us differentiate great? will that congratulate could it color you you expecting closure rate study how the and could on the in dig data, during I paclitaxel to the Oraxol we and to the X and you. endpoint involvement

Johnson Lau

Dr. address will your Thank Matt. you, question. Kwan

Rudolph Kwan

of of both was those the study the a IV label in and safety. differentiate of setting paclitaxel from Oraxol efficacy terms in designed Matt, to monotherapy

the and meet histamine we associated not steroid in, the will with nor meet with IV going not and and IV convenience know paclitaxel oral infusion. infusion will each So

safety safety the profile oral PK reiterating mainly forward is in further the convenience important the an on with administration, efficacy differentiation translate to area, obviously into improve and we So neuropathy. of we safety the comparison are in part. And area as keep looking and

that is extreme data continued the evolving. how We track to interest, with set

is with to the profile comparison monotherapy on the by confirmed the read in In a factor. response end reset FDA although overall using question, designed And criteria earlier that efficacy, survival the study terms are the overall acceptable generate endpoints relatively that are discussed survival in response efficacy based build is and another study. they projected that in as radiological of a free T-PK progression secondary differentiating main point we do x-ray better on independent and of as

is based that facility promising study I through this look our the we designed by our interim So to predefined include DSMB and that that. criteria January criteria. show say an all data effective think on are And track both of data on the

R&D leave I will Day. I that think to that able at a bit sufficiently elaborate I more would at be the and to

Johnson Lau

And our Matt factor that superiority a followed very to mean our again convenience incidence by critical It that of not most path also of by the in only efficacy, primary emphasize major understand profile followed being Thank demonstrate efficacy you, let we want ensure me good safety convenience is reduction let emphasized and having objective online, third again terms people is is followed to in is in here. efficacy, the convenience. the that by actually one the neuropathy. number Matt. The then actually I safety me

Matt Kaplan

color. helpful. Okay, thanks that for That’s very

Johnson Lau

Matt. Thank you,

Operator

for and like the have session the and Johnson the turn to call we to would end question-and-answer remarks. of you. closing reached gentlemen, Ladies Lau Thank I back

Johnson Lau

from another joining execution for team. and you forward look all quarter earnings our call Thank good our you to company today. to We our of of

in on forward R&D December more regard for our you time. delighted share also Thank PM your to to of Bye-bye. and programs during we R&D York for will again from be with New you seeing perspectives X meeting. We look to in all more to that XX, noon City Day

Operator

today's concludes conference. This

for you your lines this at may You Thank participation. disconnect you time.

Athenex (ATNXQ) 14 Nov 182018 Q3 Earnings call transcript