Q1 2020 Earnings Call

[music].

Ladies and gentlemen.

Today's conference is scheduled to begin in approximately two minutes nighttime your lunch I can't be placed on musicals.

Told for them.

Three patients.

[music].

Ladies and gentlemen, breeder today's conference is going to begin momentarily.

Actual results may differ materials.

That's remarks may include but are not limited to those associated with decoded 19 pandemic those involving regulatory action clinical development and other matters related to our project cans or pipeline as address relish store and our other products candidate.

Our business and commercialization strategies and expectations that feature gross revenues and assessment them are competitive position and our proposed merger with my vehicle.

P.C.R. most recent forms tend to 10, K. and other filings with the U.S. Securities and Exchange Commission for additional information on the risk that could cause our actual results could differ as a reminder, state mission was today or as of late February 2020, or.

Now turn the call over to our end term care and Mcdougall and.

Thank you Melissa and good morning to everyone joining us call.

We hope everyone listening today and their families are staying safe and healthy during these unprecedented time driven by the cobin 19 pandemic.

The pandemic has impacted almost all aspects of our daily lives and we want to recognize in fact, the healthcare professionals and other essential service workers across the country, who are working tirelessly for a collective benefit.

Well project has seen it impact on its operations, we've still been able to move forward on our commercial clinical development and organizational goal David will provide more color during his business update.

I want it to begin today by discussing our proposed merger with Lantheus hole.

The reconstituted board of directors and I continue to believe that the proposed merger with Lantheus under revised February 2020 term represents the best pathway forward to maximize long-term shareholder value.

The amended merger term, where the culmination of our independence and throw evaluation of the business prospects and operations approach on it.

Both as a Standalone company and in combination with Lantheus.

We believe this combination allows progenics to leverage lantheus longstanding expertise them complex manufacturing supply chain and commercial excellent to bring the potential of Progenics Vedra P.Y.L. and our complimentary P.S.N.A. targeted portfolio to the next level.

The proposed merger would create a stronger combine platform that offers an innovative and diversify diagnostic and therapeutic portfolio.

It also gives our shareholders the opportunity to participate in the future potential upside provided revised terms negotiated by the board.

Under the amended term Lantheus will acquire all of the issued an outstanding share their projects common stock at a fixed exchange ratio and Progenics shareholders receive point pre 1% of a share of Lantheus Comstock for every progenics share.

This is an increase from the point.

250 to exchange ratio under the original agreement.

In addition, progenics shareholders will receive a non tradable contingent value right, where C.D.R. payable in up to two separate cash payments based on future P., while commercial performance subject to the terms and conditions at a C.D.R. agreement to be entered into his clothing.

As a result of these revisions former progenics stockholders aggregate ownership stake will increase to approximately 40% of the combined company up from approximately 35% onto the original agreement terms.

[noise] Dr job, there and Mr. Heinz Mowgli to current members of Progenics for it will join the combined company board upon closing.

<unk>, there and Mr. Mousley bring extensive experience in developing in commercializing radiopharmaceuticals.

<unk> most recently at the radio pharmaceutical company advanced accelerator application now part of Nevada.

They will also bring deep manufacturing operating finance and compliance experience to the Lantheus Board.

<unk> shares our belief in the long term growth potential of our product portfolio and pipeline and together, we have the resources and capabilities to further on lockups values through this combination.

The board now I feel strongly that this is the best direction for the company and it's pipeline.

We do recognize that this process has been longer than expected would the recent rescheduling of the boat. However, we're still fully committed to building shareholder value.

<unk>.

The rescheduling of a special meetings for both sets of shareholders to June 16th is intended to allow progenics and lantheus the time necessary to respond to the pandemic effort.

Effect on each company's business and on the combined entity.

Two teams have continued to plan for the integration of the companies in advance to the potential transaction close to ensure that the transfer of our pipeline remains on schedule along with ongoing development.

In parallel with the transaction and as part of our fiduciary responsibility, we argue Asian scenario planning in the event we.

[noise] [noise] bear with me one second.

[noise] [noise] [noise] [noise] remain a standalone company.

<unk>. This includes continuing our C. O search was unfortunate attracted to selection of very high quality candidates.

Well as evaluating financing alternative.

Turning to the upcoming vote further details about the time location and record data for the special meetings will be announced it.

We strongly encourage all shareholders devoted our virtual meeting at the transaction requires hi threshold to pass we really do need yours the court.

We look forward to continuing this dialogue in our engagement with our shareholders through this process.

Well now turn the call over to David for business as a natural revealed the quarter David.

[noise] like you land.

I'd like to Echo as comments to think though or health care professionals under central workers across the country, who are working tirelessly during the coded much intended.

We are excited about proposed merger was lantheus on a potential future value creation like combining company can deliver to the shareholders.

Not to our update on the first quarter of 2020 and recent events first on P.Y.R.P. estimate targeted pet imaging agent that enables visualization above bone and soft tissue metastasis impatience with locally about.

The current and or mother started prostate cancer or team has worked especially hard to advance our preparations to follow new drug application with the U.S. food and drug administration. Following the positive Condotte study results in December.

I pretended meetings with the agency were supportive and <unk> Osprey trial data will serve as the basis of our application.

We are pleased that we remain on track to complete our submission an early part of the third quarter of 2020 with the goal of bringing p. while to the market in 2021.

Gene continues to move forward with the commercial launch preparation for a few audio.

Including securing sufficient manufacturing capacity within the various networks of existing cyclotron to optimize future commercial use.

The team is also hosting a series of advisory board meetings with key opinion leaders in order to gain their insights on the future use of the product.

Due to the limitations of conventional imaging and prostate cancer. We believe there is an increase need for diagnostic to support the detection and localisation of prostate cancer metastasis undercurrents.

<unk> appropriate target a treatment.

Do you while has demonstrated the potential to detect prostate cancer, noninvasively and reliably and better informs positions during the treatment planning with the ultimate goal of improving the disease men of one of the most prevalent and growing forms of cancer in the U.S. for men.

They have already been publications highlighting the input to U.R.L. has had on the therapeutic management of patients such as the article published last year and the journal of nuclear Medicine, showing 87% of men have had their treatment plan changed by utilizing P.Y.L. consistent with published literature are recent.

Data from both Osprey unkind or have also demonstrated comparable impact of P.Y.L. on positions decisions on patient treatment planning.

Collectively these data should the filter bank failures and guideline committee such as the National comprehensive cancer network.

With increased usage, a pet imaging agents to help your community is particularly excited by the P.S. and made bindings specificity <unk> compared to other launched pet imaging agents [laughter].

In general F. 18 labeled P.S.M.A. agents, such as P., one off offer important advantages over Galvalume 68 labeled agents, including higher production capacity from the use of a cycle cyclotron and higher image resolution due to the intrinsic to physical properties of 18.

Dis, coupled with a long or half life, Oh, that's 18 of 110 minutes versus 68 minutes rebellion 68 allows for a wider geographical product distribution, which is particularly important given a large number of medical centers.

Prostate cancer patients.

See what I was also complimented by our artificial intelligence platform that is currently in development, which has the potential to improve the diagnostic performance as well as speed and reproducibility of image rage, providing increased commercial potential.

We look forward to advancing these important commercial efforts to ensure a smoothing robust product roll up bending regulatory approval.

Is then mentioned Progenics operations had been impacted by the Cobin 19, pandemic and resulting conditions as many others are experiencing within our industry and beyond.

Oh, if it had been focused on mitigating this impact on our business preserving the integrity of our ongoing clinical study pretend 95.

Diligently managing our capital.

These initiatives have been made an alignment with government regulatory and public health recommendations and regional mandate.

And the first quarter of 2020, we generate at $1.4 million in his address sales.

While we did stand up take in quarterly sales for his address.

Gently many of the multi disciplinary treatment centers that serve fear chromosome <unk> or paraganglioma patience and now closed or have limited external visitors.

The safety of patients in health care providers.

These restrictions include visits from the feel based sales team <unk> directly affecting our ability to maintain our product launch initiatives.

We expected as Andrew sales will decrease through the code that 19 pandemic until center restrictions are lifted and patience can regain access to centers for treatment.

<unk> said, we're continuing to receive unprocessed request for both dosimetry and therapeutic doses.

Per hour P.S.M.A. targeted pipeline political programs are focus has been ensuring the safety of the patience positions and hospital stuff involved in the phase two arrow trial of 10 95.

In combination with <unk> and chemotherapy, United Patience with met a static castration resistant prostate cancer.

We called it 10 95 is a small molecule radio therapeutic designed to selectively buying to the extra cellular domain of P.S.M.A.

And that is highly expressed on prostate cancer cells with the removal of the center for pro development and commercialization import alert we had been able to open 11 clinical sites in the U.S. along with six sites in Canada to help support expected increased enrollment in a trial.

The result through the pandemic an out of an abundance of caution progenics has implemented a pause and doing real patient in Rome with the trial for several months for patients who are active and had been randomized for the study. They will continue to receive treatment doses and we'll be monitored for safety and efficacy in a manner that is permissible.

<unk> each clinical site.

And lauded the challenges that we face during the cold because we have made it difficult decision to <unk> promotional spending and furlough at portion of the clinical commercial and medical employees as we continue to excess emerging market conditions.

Before I close I do want to comment on so natural results for the quarter. You can review the details of our financials and the press release, we issued this morning, and then the tend to use it we will file later today.

I'd like to focus on a few key line items [noise].

[noise] first quarter revenue total 6.2 million up from $4.3 million in the first quarter 2019, reflecting rather store royalty income of $4.8 million and $1.4 million of his after sales.

Search in development expenses decrease by $2 million compared to the corresponding prior year period.

Resulting primarily from lower clinical trial cost and costs to transition is ed or manufacturing sites and the 2019 period.

Selling general and administrative expenses increased by $1.3 million compared to the corresponding prior year period, [noise], primarily attributable to legal an advisory fees associated with the execution of the amended merger agreement with Lantheus.

We also recorded noncash adjustments $300000 to changes in the survey estimates of the contingent consideration liability and recognize interest expense at $900000 related to the Royals store royalty back flown.

Net loss for the first quarter was 16.8 million or 19 cents per diluted share compared to a net loss of 18.7 million or 22 cents per diluted share in the corresponding 2019 period.

We ended the quarter with cash cash equivalent of $29.5 million, a decrease of $12.5 million compared to cash in cash equivalents as of December 31st 2019, reflecting primarily cashews, we're operating expenses in capital expenditures, partially offset by the receipt of.

10 million dollar rella store sales milestone.

We believe that with the current cash available.

$10 million bridge loan from Lantheus as part of their renegotiated merger terms and considering our current cash burn is adjusted for covered 19 impact. We believe we have cash available to find operations until September 2020.

Guidance does not reflect any financing alternatives. We are contemplating should we remain I stand alone company.

During the many uncertainties driven by the cold at night team pandemic, our company remains focused on events in our corporate and development initiatives across our P.S.N., they targeted portfolio, including the own time regulatory submission P.Y. now and the phase to study of 10 95.

We plan to provide any additional updates related to the business impact from covert when necessary.

I want to think the entire progenics team for their dedication through this period and continued efforts on the help of our cancer patients in need we look forward to keeping everyone up to date on our developments Oh now turn the call them over to the operator for your questions.

[noise] Star one on your telephone keypad.

[noise] roster.

Again that star.

Question.

No questions at this time.

Okay, but.

I would like to make everyone to joining us on our call today.

I would like to remind you that our special meeting, which is a virtual meeting is on June 16th.

And we would like to encourage shareholders to vote for the transaction and we do have a hard bar to pass. This merger isn't mentioned so we do need your.

We do need your support and this transaction.

Thank you for your support and please stay safe and healthy Goodbye.

Thank you.

Friends call.

Oh.

Yeah.

[music].

[music].

[music].