RedHill Biopharma Ltd. (NASDAQ:RDHL) Q3 2018 Earnings Conference Call Transcript
Nov 13, 2018 • 08:30 am ET
Good day and welcome to RedHill Biopharma's Third Quarter 2018 Financial Results Conference Call. Please be aware this conference is being recorded. (Operator Instructions)
At this time, I would like to introduce to the conference RedHill's CEO, Mr. Dror Ben-Asher; Mr. Micha Ben Chorin, RedHill's CFO; Mr. Gilead Raday, RedHill's Chief Operating Officer; and Mr. Guy Goldberg, RedHill's Chief Business Officer. Before we begin, we will read from RedHill's Safe Harbor statement. Please go ahead.
(Forward-Looking Cautionary Statements)
Thank you, Alexandra. Good day everyone, and thank you for joining us. The plan for today is to briefly discuss our third quarter 2018 results and focus on our Phase III program with RHB-104 for Crohn's disease, and upcoming confirmatory Phase III study readout with TALICIA for H. pylori infection, which we are on track to deliver before the end of the year.
H. pylori bacterial infection affects over 50% of the world's adult population and 30% to 40% of the US population. And the 2018 global market is estimated at nearly $5 billion. H. pylori is the strongest risk factor for the development of gastric cancer and a major risk factor for peptic ulcer disease and other conditions.
The medical need is particularly strong and increasing with eradication of H. pylori becoming more difficult. Current standard of care therapies fail in approximately 30% of patients who remain H. pylori positive due to increasing resistance of H. pylori through antibiotics commonly used in standard combination therapies.
Our financial standing is solid as we remain debt free with approximately 43 million total cash on hand, with steadily decline in cash balance through the third quarter of 2018, in accordance with our cost reduction plan. But first Micha, our CFO, will discuss our financial results announced earlier today.
Micha Ben Chorin
Thank you, Dror, and good afternoon, good morning everybody. I'll provide an overview of our financial results for third quarter of 2018, but first is a short summary. Our balance sheet as of September 30, 2018, is solid and debt free and is $43 million in cash and cash equivalents. We continued to see steady decline in operating expenses, in operating loss and in net cash used in operating activities, which all compare favorably to the previous periods and with the guidance we have provided in late 2017.
The operating burn rate of just below $8.4 million in the third quarter is the lowest quarterly burn rate we have seen in the last two years. Our net revenues of $2.2 million and gross profit of $1.6 million for this quarter compare favorably with $1.5 million and $600,000 for Q3 2017.
I will now analyze in more details the main line items. Net revenues for the third quarter of 2018 was $2.2 million compared to $1.5 million in the third quarter of 2017. The increase was due to the advancement of our promotional activities for our commercial products. Gross profit for the third quarter of 2018 was $1.6 million compared to $0.6 million in the third quarter of