Conference Call Transcript Part IIConference Call transcript Part II
Announcer: The next question also from the Internet, Yorkton Securities.
Question: Tell me about E. Merck's success with new drug launches in
recent years and their strength of Merck's franchise in oncology, again.
Matt Emmens: OK, I think Merck is, I like to call it a giant that's
not been sleeping but a giant that has been gathering resources over
many years and is now poised to be a global pharmaceutical presence.
It's done this through acquisitions throughout the world, almost in
every major country including the United States and in different
countries we've launched different products but for the first time as
we are in this decade of the 2000's we will be able to introduce
products globally and those products, as I said, will be in oncology,
where we have a number of compounds in the pipeline. We have two phase
II products, this year, in oncology in addition to our collaboration
with Biomira and in metabolism we have a number of compounds for
treatment of diabetes and we're looking at agents for treatment of
obesity at the same time. So as Merck gathers these resources that
have been collected over the years it will be a global force, we think
mid-decade, in terms of it's own research coming to a fruition globally.
Announcer: Our next question is a caller Janice Kraut. Go ahead.
Janice, are you there? OK, we'll take another question from the Internet.
Question: How will the US co-promotion work?
Dr. McPherson: The US co-promotion will work on a split of the
marketing and sales effort with about 60% of that effort being
provided by EMD and Merck KGaA and about 40% of it being provided
through Biomira. I think it's important for us to recognize that
Biomira, in particular, is going to and expects to learn an enormous
amount through this co-promotion and marketing program from Merck
KGaA's global experience with respect to marketing, sales and
distribution, and as we work together, growing together, with EMD. So
that it is going to a 50-50 split on the basis of sales and a 60-40
split in relationship to sales personnel.
Matt Emmens: That collaboration suits us well as we try to enter the
United States market with a marketing force. We plan to have certainly
more than one oncology product in that force calling on oncologists
and Merck's success globally with development including metformin and
also vitsophralol(sp) or Concor gives us the experience in developing
our drugs in large programs in many markets.
Announcer: OK, back to the caller. Janice, are you there?
Janice Kraut: Yes I am, do I have to press something? Can you hear me
OK? It didn't work the last time. Is this going to advance the BLP25
trial, are you going to try to turn it now into a pivotal phase II,
given that you have the resources and support of Merck?
Dr. McPherson: It would be a possibility, Janice, but a remote
possibility, frankly. This is a horrible disease, the median survival,
as I said, is about nine months once the patient is in stage IV or
stage IIIb and if we had eureka and then there was a miracle result in
relationship to improvement in survival, it's conceivable that we
might move to the FDA with the support of EMD and Merck KGaA for a
BLA, but that's not likely and I think it would be improper for me to
suggest that that expectation is high. Our expectation here in a 166
patient trial in 14 centers, 10 of them in Canada and 4 in the UK, is
to reinforce the safety data that we have already seen in our earlier
phase I and small phase II trials and to look for, particularly,
indication of prolongation of disease free interval or stable disease
and improvement in survival that would lead to a proper phase III
pivotal trial.
Announcer: Another question from the Internet.
Question: Is the agreement limited to the vaccines in current trials
or all of Biomira's products?
Dr. McPherson: No, the only two products, at the present time, that
are involved in this particular co-promotion deal are Theratope and BLP25.
Question: Other indications?
Dr. McPherson: Yes, in other indications. We have only discussed two
indication potentials at this particular point in time but we'll
certainly, any indications that come forward will be the result of
negotiations but they will certainly be part of the co-promotion deal.
Announcer: Also from the Internet.
Question: How long is the term of the agreement? And can one party
withdraw?
Matt Emmens: The agreement is fifteen years in length and the parties
can withdraw with some conditions.
Question: What is the advantage to Biomira of partnering Theratope at
this late stage?
Dr. McPherson: Well, I think the first significant advantage to
Biomira is that we bring the substantial experience of Merck KGaA and
particularly EMD in the regulatory arena and once the product is
approved then we have the substantial opportunity to benefit from
marketing, sales and distribution. But I have learned as many people
in biotech have learned that the most dangerous person in a company is
the person who doesn?t know what they don?t know. And we haven't been
through the process of a substantial regulatory BLA and we have not
been through the process of marketing, sales and distribution. So we
thought that in addition to any cash or payments and royalties
associated with Theratope, that the experience that KGaA brings and
EMD brings is critically important.
Matt Emmens: I think if we, I said EMD is new in the United States, I
would supplement that statement by saying that the people in it are
highly experienced people that come from top pharma companies
throughout the world and have many, many years of experience, for
example, in regulatory affairs alone, our leader has 25 years of
experience with Merck & Company, Astra-Zeneca, etc. We have people
from Glaxo, we have people from Smith-Kline, we have people from, as I
said, the top pharma companies in the US. So although it's new I think
it would be a mistake to say it's inexperienced, they're very
experienced people. It's a core of people excited about cancer
therapies and the possibility of bringing useful medicines to people
who need them.
Announcer: The next question, also from the Internet, comes from ABC
News. Two-part question.
Question: When do you expect the phase III trial of Theratope to be
completed and is it going up against another agent or is it a
randomized trial?
Dr. McPherson: This is a, the Theratope phase III trial is a
beautifully designed trial. It's a controlled, prospective trial which
is blinded and has two arms, has the great advantage of being done in
a wide variety of communities throughout the world, so that it doesn't
have the so called institutional taint attached to it. We expect to
look at the final analysis for survival somewhere around the third
quarter of 2003 with the expectation that if the statistics warrant
it, in relation to survival and continued support in relationship to
safety, that we would be going forward towards the end of 2003 and the
possibility of launch in the third or fourth quarter of 2004. We have
two interim analyses that are currently in the design, the first
interim analysis is a time to progression analysis, that is these
patients have all been treated with chemotherapy for their metastatic
breast cancer and they have shown either responses or stabilization of
disease and then they are randomized to either the Theratope program
or a non-specific immunotherapy program. The first interim analysis
will start in the third quarter of this year and will look at,
principally, time to progression with an expectation of a trend in
improvement to survival. There's a possibility that that might lead to
a BLA. The next analysis will occur in the third quarter of 2002 with
the possibility that we would go forward with a survival improvement
statistically in 2003 probably with a potential product launch in the
third or fourth quarter. But the reality is that the trial has been
designed statistically to hopefully demonstrate a statistically
significant difference in survival at the 2003 analysis which would
allow for a third quarter or fourth quarter launch in 2004.
Matt Emmens: I would like to add on the beautifully designed study
comment, one of the things that attracted us to Biomira is that we do
think it is a well designed trial, as you know, it's fully enrolled
with over 1030 patients and ongoing at this point, so it's rare to
find a late stage product that has full enrollment: a.) To license and
then b.) We liked having had some experience with cancer vaccines, we
like the fact of the approach, in this was to reduce total tumor load
before the patient was placed on these vaccines. And just for the
audience, vaccines may be misinterpreted, you don't have a total
vaccine against cancer, we are looking for improvements in survival,
you are trying to get the tumor load down and we think vaccines will
work better once you do that with conventional therapy and it's to
prevent the rapid growth of the tumor, prolong life but to say that it
would prevent cancer would be an overstatement.
Dr. McPherson: Yes, we use the word vaccine in this setting because
the product is administered like a vaccine and causes an immunological
response like a vaccine. It's not used in the sense of being a
prophylactic or preventative agent.
Matt Emmens: As I said before, we're interested in products that
stimulate the immune system and make the body aware that the cancer is
there and use the body's mechanisms to attack the cancer.
Dr. McPherson: I think an important additional comment in relation to
this, for particularly breast cancer patients, their families and
advocacy groups that might be listening and watching, is that this
product has an enormous therapeutic index and has the potential of an
enormous therapeutic index when we look at the phase III data should
we see the kind of survival improvements that we saw in our phase II
trials. Because therapeutic index is safety times efficacy and we have
virtually no problems from the perspective of toxicity with this
product other than some local irritation. So we have a very, very
strong possibility of a therapeutic index, which is very high, low
toxicity and improvement in survival.
Matt Emmens: And that's exciting for us because you're finally seeing
many of the 'magic bullets' and biotechnology therapies coming to
fruition. I know there was a lot of press in the 70's and then during
the 80's I think the market embraced them and then didn't embrace them
because the development is really not that much quicker than a small
molecule pharmaceutical but I know everyone at EMD joins me in working
with you towards cancer. We think it?s a worthwhile cause and it's
probably the highest unmet need in the world right now is treatment of
cancers. So as we get more specific agents it's exciting and we hope
they work.
Dr. McPherson: Thanks.
Announcer: Our next question is from a caller, Claude at Dundee
Securities. Go ahead Claude.
Question: Good afternoon, good morning and congratulations. I just, I
have two questions. I was late on the call and what are the two
indications for each of the vaccines? That would be the first question
and the second question is the marketing strategy in terms of what
would be the treatment cost and the time that people will have to take
the vaccines for a length of time?
Matt Emmens: Why don't I take, I'll take the cost question, Alex, if
you can take the medical side of it.
Dr. McPherson: Good. Yes. Well, the indications that we are looking at
are breast cancer, metastatic breast cancer for Theratope where we've
completed a phase III clinical trial and in that indication we are
looking for improvement in survival. The indication that we are
looking at, at this point in time, for BLP25 is non-small cell lung
cancer, the smoker's cancer. The second indication that we will be
talking about has to be negotiated and discussed with Merck KGaA and
EMD and that is true for the second potential indication for BLP25, as
well.
Matt Emmens: And pricing has not been established at this point. It's
way early in the process.
Announcer: Our next question, it's also from the Internet.
Question: What is the potential market size for these two products?
Matt Emmens: It would depend, certainly, on the efficacy of the
product and the value to both physicians and more importantly to
patients who have cancer. There's 60,000 new breast cancers diagnosed
every year, just in the United States, so the prevalence is very, very
high. These drugs could be blockbuster drugs, certainly Theratope,
given efficacy, we see it that way but again it depends upon efficacy.
The cancer market is made up of multiple regimens, in other words,
most cancer patients go through 10 or 15 therapies, so most of these
products are additives, so you don't worry so much about
cannibalization, especially with a vaccine it would be pretty much
added on top of conventional therapies. So the market is substantial,
I hate to sound like a businessperson, there's people that need this
drug and there's a lot of them, we want to bring it to market.
Dr. McPherson: Yes, and the numbers that we're talking about for
non-small cell lung cancer, just in the United States, probably
upwards of nearly 90,000. So, the market is not exact and speaking as
a medical oncologist of 25 years standing I can say that I can't think
of a single product that's used and has been approved for therapy of
cancer that a few years after its approval that's not used in
combination with other programs in a variety of cancers. So that, as I
say to the people in Biomira, our job is not to cure cancer, our job
is to get a product onto the market, with our partner Merck KGaA and
EMD, that will be available to oncologists and the patients who need
this product and the oncologists will be the ones who will determine
how to use it in the best setting and the best combination and in the
best way.
Matt Emmens: That's interesting. At EMD we have a, it's not a slogan,
not written on the wall, but we have a thought and our thought is that
the patients are waiting. That's what motivates us.
Dr. McPherson: Yes.
Announcer: We're going to go to a few more questions from the callers.
Go ahead operator? The telephone operator, are you there?
Operator: Yes sir, our next question comes from Mr. Brian McCormack,
he is a private investor, go ahead.
Question: A quick question on the, I was wondering if you could
elaborate on the sharing of the development costs, I presume that is
outside of the $150 million, the value of that is? And also how will
the decisions be made as to what indications to do that in?
Dr. McPherson: Well, the development costs will be jointly shared with
respect to Theratope and BLP25 retroactive to January 1st 2001. And as
for the way in which we expect to manage this alliance, we expect to
manage it through a management committee consisting of three
individuals from EMD and Merck KGaA and three individuals from Biomira.
Announcer: The next telephone question, go ahead.
Announcer: Gentlemen, our next question comes from Mr. Ernest Marmer
of Biomarm. Please proceed with your question sir.
Question: Oh yeah, thank you. My basic concern is, at this moment,
pricing in Europe and the United States is largely divergent in its
history and I have heard that you anticipate charging the same in both
regions for Theratope, do you still hold this?
Matt Emmens: I can tell you that's a surprise to me. We have not
discussed pricing anywhere that I know of, that decision has not been
made.
Dr. McPherson: There's been, as they say, a lot of forward looking
statements made prior to this alliance and certainly pricing will be a
subject of significant discussions between ourselves and Merck KGaA
and EMD.
Announcer: Our next caller, go ahead.
Announcer: Our next question comes from Mr. Gary (??) of US (??)
please proceed with your question sir.
Question: Congratulations, McPherson. Your annual meeting is in
Toronto, I think on the 23rd and I think it would also help, I've been
following your stock for three years now and I'm a broker and
everybody knows who I am, that your results in phase II were pretty
phenomenal, if you could repeat those, of course it would rely on
phase III and secondly is when you invest your money for the Nobel
Peace Prize who are you going to do that through?
Dr. McPherson: Ha ha ha! Obviously you. The results in the phase II
trial, the seminal trial, which was conducted at the Cross Cancer
Institute and Guys Hospital in London, demonstrated a median survival,
in metastatic breast cancer patients treated with Theratope after they
had shown progression on one or two lines of chemotherapy, of 26.5
months. A group of patients that were treated with a sub-optimal
treatment of Theratope, which did not include cyclophosphamide as
prior treatment for immunosuppression had a median survival in the 12
to 13 month arena. And a group of patients that were treated with oral
cyclophosphamide in the study, which was a controlled study and was
prospective, had a comparable median survival of 12 to 13 months. So
the difference between the median survival of the two groups that
didn't get the optimal formulation that we're using in the phase III
trial were on the order of 12 to 13 months compared to the optimal
formulation that got the I.V. cyclophosphamide plus the Theratope of
26.5 months. And that's a very, very substantial difference and if we
were to achieve that kind of difference we would have a very, very
powerful statistical difference.
Announcer: We have one more caller. Go ahead caller.
Announcer: There are no further questions at this time, sir. We have
one more on the Internet; maybe we could wrap it up with this.
Question: Has the FDA granted Biomira's Theratope Fast Track status
and what does this mean?
Dr. McPherson: Yes, the FDA has granted Biomira Fast Track status or
designation and the explanation for that is that it?s a product which
is dealing with a life threatening condition and an unmet need. That
simply means Biomira's product is at the front of the queue if it
should show the statistically significant differences, in our
endpoints, that one is looking for and could lead to, but doesn't
necessarily require priority review, which would mean that we would
have a review that would be in the range of six months. Fast Track
status, per se, and all of this is dependent upon the product
achieving successful statistical difference, means that we can present
what's called a rolling BLA or Biological License Application which
means that we can accelerate the process of review.
Announcer: I think one more caller. Go ahead caller.
Second announcer: Our next caller is Mr. Al Cohan from CIBC
Oppenheimer. Please proceed with your question, sir.
Question: Alex, just wanted to ask you a question. Is it true that
Theratope has no side effects? You don't lose your hair, you don't get
nauseous and your quality of life is relatively good? Is that true?
Dr. McPherson: Yes Al, I did, at your request, mention that earlier on
in the presentation. The only significant and relatively minor side
effects that we see with Theratope are effects at the site of
injection and compared to the severity of the disease these minor
irritations with possible minor ulceration are minimal in consequence.
Announcer: No questions, final comments? Alex, final comment?
Dr. McPherson: Well, I think this is a historic day for Biomira. I
can't even begin to say how proud I am of achieving this alliance with
Merck KgaA and with EMD and I'm even more thrilled now that I've had
the opportunity to meet the President and CEO of EMD.
Matt Emmens: I would have to echo that, Alex, it's been a pleasure
getting to know you over the last two days and we hope to have success
over the next two decades, I hope, during the length of our agreement,
hopefully more science and collaboration will come out of both our
companies. On behalf of 33,500 Merck KgaA employees worldwide I
welcome you to a partnership with us. We're a company that's been
based on very smart strategic partnerships over the years and in
Durham I can tell you that we have 100 people there now and we hope
because of this drug, at some point, to have 500 there. And more
importantly we hope that we help hundreds of thousands of people with
cancer in the world through this partnership and through a company
that's made up of people dedicated to treat cancer who know the
patient is waiting and who want to do it in a way that's more kindly
and be a different kind of pharmaceutical company. Thank you.
Dr. McPherson: And I can say all 185 people from Biomira accept your
invitation. Thank you very much.
Announcer: One final moment. Some of the discussion today included
forward looking statements and for more information on forward-looking
statements please refer to the Biomira website at
https://www.biomira.com. Thank you.