Analyst Conference Summary

Biotechnology

date: November 8, 2018 @ 1:30 PM Pacific Time
for quarter ending: September 30, 2018 (third quarter 2018)

Forward-looking statements

Overview: Xerava antibiotic approved by FDA in the quarter.

Basic data (GAAP):

Revenue was $1.2 million, down sequentially from $11.6 million, and up from $4.1 million year-earlier.

Net income was negative $19.6 million, down sequentially from negative $9.5 million, and up from negative $30.0 million year-earlier.

Diluted EPS was negative $0.37, down sequentially from negative $0.18, and up from negative $0.63 year-earlier.

Guidance:

Cash is sufficient to operate until Q2 2020.

Conference Highlights:

Revenue decrease was due to timing of U.S. government awards for R&D.

Guy Macdonald, Tetraphase CEO, said "During the third quarter of 2018, we reached our most significant milestones as a company to date – the regulatory approvals of Xerava for the treatment of complicated intra-abdominal infections (cIAI) in both the U.S. and Europe, followed by the commercial launch of Xerava in the U.S. in October. We are also pleased to have entered into a loan agreement for up to $75 million, the first $30 million tranche of which extends our cash runway into the second quarter of 2020 and provides us with additional flexibility to support a strong launch of Xerava in the U.S. Beyond Xerava, we look forward to milestones for our earlier-stage programs, including completion of our Phase 1 multiple ascending-dose study for oral TP-271, in development to target respiratory infections, and initiation of a bronchopulmonary disposition study for TP-6076, targeted against Acinetobacter baumannii and other MDR pathogens."

Made a deal to license Xerava in China with Everest Medicines and received a $2.5 million milestone payment.

Xerava has a broad label. Field force is highly experienced. Looking at 780 tier-1 accounts. Wholesale acquisition price is $175 per day. Priced to penetrate the growing intra-abdominal market.

Positive data for Xerava was presented to the IDSA and ACCP conferences.

But Xerava (eravacycline) did not work for cUTI (complicated urinary track infections), so that program was discontinued in Q1 2018.

Cash and equivalents ended at $97 million, down sequentially from $111.2 million. No debt.

TP-6076, a fully synthetic tetracycline, had data from a Phase 1 study were at IDSA. Will advance to a second, bronco-pulmonary disposition study in Q1 2019.

Further down the pipeline, TP-271 completed its Phase 1 dosing study.

Operating expense was $21.1 million, consisting of R&D $11.7 million and G&A $9.5 million. Loss from operations $20.0 million. Other income $0.4 million.

Q&A summary:

Type of doctors and Xerava traction? Feedback from the field has been very positive, from surgeons, pharmacists, and GI physicians.

Phase 3 trial in China? With Everest in China, we have no guidance on the start timeframe.

We are told we have a great alternative to carbapenems. We have seen a pretty rapid uptake. We should have some data when we report again in Q1 next year.

Cash plan does not yet include larger trials for 6076 or 271.

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