AGM transcript 1st sectionAGM Transcript Part I
Mr. Baker: Dr. Alex McPherson, our President and Chief Executive
Officer will now speak to the meeting and describe Biomira's progress
and achievements over the past year.
Dr. McPherson: It's kind of tough for a guy who's used to chalk. Good
afternoon ladies and gentlemen, thank you very much for coming to
Biomira's annual general meeting here in Toronto. We usually start by
mentioning that that's Black Baker, after our chairman Eric Baker and
then remind everybody that's also Edmonton and that's the only day of
the year when the fountain is actually working. This cautionary
statement needs to be taken seriously as it always does, of course,
because we are being web cast, as we speak, and therefore the
accounting of today's presentation is being widely disseminated and
widely disclosed. And today's presentations will contain forward
looking documents or statements and for a complete account of our
official corporate documents you are encouraged to review document
files with the securities regulators.
2000-2001 was an outstanding year for Biomira. We accomplished an
enormous amount and although each little piece might not seem like an
enormous amount, when you take it in totality it really has been an
exceptional year for us. We've been able to establish fast track
status with the FDA for Theratope vaccine, which essentially means
that the product, if it fulfills its statistical requirements, is
recognized as for life threatening conditions and unmet medical needs,
and could lead to a priority review in relationship to its approval
process. We've secured additional financing for the company up to US
$100 million, as of February 2000. We've had three successful Data
Safety Monitoring Board reviews, at the 300 patient, the 600 and the
800 patient date, and these have been very successful. We've completed
enrollment for Theratope, our vaccine phase III trial, in March of
2001. We've initiated our phase IIb clinical trial in non-small cell
lung cancer, the smoker's cancer, with BLP25 vaccine, our follow-on
vaccine. We've enormously strengthened our patent position and I'll go
into that. We've completed enrollment in our phase II BLP25 and
liposomal IL-2 trial. And for the rest of the presentation, BLP stands
for Biomira Liposomal Peptide 25 and L-IL-2 stands for Liposomal IL-2.
And we established an exciting corporate alliance with Merck KGaA.
This program, this collaboration, this co-promotion for Theratope and
Biomira's Liposomal Peptide is unquestionably one of the largest in
the world. It really needs to be seen in perspective and I'm going to
try to take you through this agreement to the extent that it's
possible, given the constraints that we're under, in relationship to
the collaboration agreement. It totaled, in relationship to upfront
payments, and I'll talk about what I'm including here, represents in
excess of US $150 million, in terms of Theratope vaccine and the BLP25
vaccine. And that's excluding, that's excluding, it's critical that
you understand that, shared development costs, the net present value
of future royalties, the new present value of the US co-promotion,
royalty payments and sales milestones. So there's an awful lot that we
are looking at which is probably at least a trebling of the total
value of this deal even looking at it conservatively in relationship
to what is excluded and what is included. Now, what is included? What
is included is an upfront and equity investment totaling approximately
$33.7 million Canadian or $22 million US. That is the equivalent of
about 75% of our 2000 burn rate. That is a very significant upfront
contribution from Merck KGaA to the program in relationship to us
moving those two product candidates forward. In addition, milestone
payments related to BLP25 and Theratope for first and second cancer
indications, upon BLA submissions and regulatory approvals and finally
sales milestones are included in the $150 million plus deal that we're
talking about with Merck KGaA.
Now, what is this deal? Merck KGaA is the founding company of Merck &
Co. of the United States. It is an enormously well recognized
pharmaceutical, chemical entity in the United States. It probably
places about 21st in the listing of pharmaceutical companies in the
world. It was required to abandon its association with Merck & Co.
following the second World War and it has a co-promotion with EMD,
which stands for E. Merck Darmstadt Pharmaceuticals and this
co-promotion that we will have, which is a sharing of revenues in the
United States with EMD will have an independent Biomira sales force.
And the proceeds from the US and Canadian sales are on an equal share
basis, not only are they on an equal share basis but they allow
Biomira to participate in sales, manufacture, marketing and
distribution, so that we can forward integrate as a bio-pharmaceutical
company based here in Canada. In addition, Merck KGaA will equally
share development costs, retroactive to January 1st, 2001 related to
Theratope and BLP25.
Merck will provide us with rest of world royalties, double digit,
industrial norm, solid royalties. They will be responsible for rest of
world clinical trial costs and they will be responsible for
development and marketing outside of the United States, with the
exception of Israel and the Palestinian Autonomy Area. They will
provide, as I said, upfront cash and equity payments as well as
milestone payments. We will be responsible for Canadian marketing,
Merck will be responsible for paying us, in relationship to that
Canadian marketing and they in turn will receive an equal share of
sales. We will be responsible overall for manufacturing worldwide and
will receive appropriate transfer pricing reimbursement. And that's a
critically important component to the overall deal.
Now, why Merck? Why Merck KgaA? We, certainly as many of you very
patient investors in Biomira have been aware that we have been talking
to a variety of big pharma, big biotech and bio-pharma, for really
quite some period of time and we have been able to narrow it down over
the course of the last year to the point that we came to the
conclusion that this company and its affiliate, EMD, have the right
culture for Biomira and they have set themselves a very aggressive
path to become leaders in the area of biological cancer therapy aiming
to introduce to patients one new therapeutic option to treat cancer
every year starting in 2002.
Merck KGaA is represented today by almost 200 operating companies in
52 countries employing 33,500 people. It has worldwide revenues, in
2000, of EUR 6.7 billion. This is not a small player; it's a
critically important player for us because it has every expectation of
moving the products that we're talking about jointly forward in a
timely way. This is important to their portfolio and it's important to
our portfolio. It's critical that these products not be allowed to sit
on the backbench or on the shelf somewhere while some other
individual's products are moving forward. And we have mechanisms for
ensuring that a timely approach to moving these products forward is in
place.
Now, what is our vision? What are we, as a biotech company based in
Edmonton, Alberta, Canada? Well, we want to move forward from where we
are now, which is a world class research and development organization,
with a substantial experience in clinical and regulatory development
in a wide variety of jurisdictions. We want to move towards forward
integration so that our company through this particular partnership or
collaboration, as well as internal and external identification of
potential portfolio products can in fact become a fully integrated
bio-pharmaceutical company.
Our Theratope vaccine has in fact completed enrollment, under FDA fast
track designation, in 120 trial sites in 11 countries with over, with
1030 patients enrolled as of the end of March. The largest
immunotherapeutic cancer trial, in breast cancer ever held, period. As
I'm wont to say, to the people at Biomira, this trial is so elegantly
designed and has been so rigorously and thoroughly reviewed that if
this product works, this trial will allow it to be seen to work.
That's critical. You can have a good product, which put in a poorly
designed trial, will not achieve the statistical significance that's
necessary to allow you to get an approval or on the other hand you
might have a poor product, which no matter how many patients you
subject to this product you won't get an approval. Now, on the basis
of our phase II data and our work with a variety of focus groups
including the NCI US and the FDA in the United States, we feel
comfortable that this particular trial, which fulfills all the really
important requirements of a phase III trial, it's blinded, it's
randomized, it's treating patients with minimal tumor burden because
they have been treated previously with combination chemotherapy and
seen some evidence of a good response, either stable disease or
partial or a complete response. They are then stratified into
receiving the Theratope product or they receive non-specific
immunotherapy. It's impossible for the patient and it's impossible for
the physician to know which the patient is receiving. It's also a
community based trial, this isn't an institutional trial, we're not
going to have the problem that this trial was run at the NCI US or at
Memorial Sloan-Kettering or at MD Anderson only and then transferred
to Red Deer, Alberta and nobody in Red Deer, Alberta can get the same
results. This trial has been studied in 120 centers in 11 countries,
this is critically important from the perspective of the FDA. It has
two study endpoints, the first study endpoint is time to disease
progression, patients have shown evidence of response to chemotherapy,
they are put onto either Theratope or non-specific immunotherapy and
are followed for evidence of progression. That's a critically
important endpoint in relation to the first interim analysis. The
second critical and even more important primary endpoint is do the
patients live longer? What is the survival? And that's becoming
critical at the level of the FDA. Now our Data Safety Monitoring
Board, which is an external group of four experts, review our data
generally to see whether or not the product appears safe and whether
or not events, which is code for progression or death, whether the
number of events are occurring at approximately the rate that we
presumed they would when we developed the protocol. If they're not,
then we need more patients or we need more time because we won't
achieve, we won't have the possibility of achieving, what we have
presented as assumptions in our protocol. And, of course, if the
safety data indicates that the treatment group is being disadvantaged
and it's clear, then the Data Safety Monitoring Board has to recommend
that the trial be halted. Now, we've had a 300, 600 and 800 patient
review, all three of which have come forward with the same comment,
this product appears safe, the number of events occurring is according
to what you've suggested, continue the trial as proposed. With respect
to potential timelines, the trial has completed enrollment as of the
third quarter of 2001. The final survival analysis, which has to be
done, is a survival analysis comparing the two groups and that should
begin in the third quarter of 2003. And if that is successful, then
product launch should occur sometime in the third or fourth quarter of
2004. In order to take advantage of potentially exciting, even more
exciting, results than we might have anticipated that would occur in
the final analysis we have a second interim analysis, which looks at
survival and looks at the third quarter of 2002, with a potential
market launch of something in the third quarter of 2003. And a first
interim analysis, which will look primarily at time to progression,
because it's a relatively early trial now, all patients will have only
been followed for six months, at this point in time, the trial having
closed the end of March, we're looking at the data as of the third
quarter of 2001, we'll also look for survival trends. If we
demonstrate statistically significant, approvable survival benefit the
FDA will provide us with an approval.
I'd now like to introduce Pat Pangburn. Pat comes to us from Irving,
Texas and she's going to have a few words to say. Pat?
End of Part I