<font color=blue>FAQ as of Oct 26, 2002
Financing
The agreement with Acqua Wellington expires November 30th of this year. How will the Company continue to finance itself beyond November?
We are currently talking to a number of firms about potential financing options, including private and public equity. We also have the option of extending our Acqua Wellington agreement beyond November 30th.
Why have you continued to extend your agreement with Acqua Wellington North American Equities Fund, Ltd.? Don't you feel that each draw drives down the stock value and dilutes the shares?
Our equity line with Acqua Wellington provides the flexibility to raise capital quickly and enables us to maintain our operations as we move forward with plans to commercialize PENNSAID and expand our product pipeline. It saves us the expense and time commitments typically associated with the public offering process, and it's a valuable tool for managing working capital.
How do you expect to make your next payment for the acquisition of Oxo Chemie?
We have four payments remaining over the next four years, with the final payment due November 2006. We have the option to pay in cash, in shares or a combination of both. We will not be pre-announcing our payment intentions.
Regulatory Approvals
You promised investors that you would have approval by August 1st of this year. Don't you think you have misled investors?
In the past we have provided the general public with target dates based on our ongoing discussions with Health Canada and their existing guidelines. In effect, we have passed along expectations based on what the regulators said they hoped to accomplish. However, these are guidelines, not guarantees. We have learned from this experience and we are as disappointed by these delays as our investors.
Is there a continuing dialogue between Dimethaid and the regulatory agencies and if so, why haven't there been any updates by the company since August?
Once a submission goes to any regulatory agency, there is no two-way communication between the company and the agency about the specific application. We-meaning the Dimethaid team and outside consultants with specific expertise-talk to the regulatory agencies frequently in response to contact initiated by the regulatory agency. While some details might be interesting to investors, competitors and the public at large, sharing them would be highly inappropriate and, in fact, counterproductive to the interests of our shareholders. You can be sure, however, that when something definitive happens, we will notify investors immediately.
Once you have approvals from Health Canada, what is the next step? How long will it take you to get to market in Canada?
We have a comprehensive and strategic sales, marketing and distribution plan that will allow us to take PENNSAID to market quickly, and be implemented as soon as we get full regulatory approval. Once we receive our final approved product labeling, we will immediately begin to package and distribute PENNSAID to pharmacists across Canada.
J&J/McNeil Partnership
Since your standstill agreement with McNeil Consumer Healthcare there has been little news. Are you still talking with McNeil about exclusive PENNSAID marketing and distribution in the US? Are you in discussions with any other companies?
McNeil is the preferred US marketing and distribution partner for PENNSAID and we have an exclusivity agreement that precludes us from negotiating with other companies. That being said, we have had interest from several large pharmaceutical companies in the U.S. who are eager to expand their product pipeline by distributing PENNSAID. In the event that McNeil chooses not to exercise its option, we are in a position to move quickly to reach a licensing agreement with another reputable partner.
UK Partnership
Why hasn't Dimethaid announced a new UK partnership agreement?
We are currently conducting a comprehensive market research study, in conjunction with a potential new partner in the UK. And we are continuing to review their operations and plans to ensure they have the resources to market PENNSAID successfully.
Europe
You say you have approvals in several European countries but to date you haven't sold a drop of PENNSAID in those markets. What is the delay and when do you expect to start selling?
Getting marketing approval is only one step in the regulatory process. During the last year, we have formed strategic marketing partnerships for Italy, Malta, Luxemburg, Belgium and the Netherlands. Our partners in Europe are in the process of finalizing their individual marketing plans and completing their sales force training. Additional steps include translating labels, product monographs and other information for each country. PENNSAID will be launched as soon as all the labeling translations are finalized.
You recently applied for approvals in several other EU countries. How long do you expect the process to take?
Despite the title Mutual Recognition Procedure (MRP), our experience has taught us that each regulatory agency has its own set of requirements and timelines. The MRP is a complex review that requires joint approval from ten countries. We will continue to work with them in an effort to reach a consensus in a timely manner.
Why do you partner with these smaller regional companies rather than a big pharmaceutical partner for the distribution of PENNSAID in all of Europe?
In Europe, especially, our strategy is to partner with companies that offer local marketing expertise in regional systems, cultures and languages. In recent years, larger pharmaceutical companies have been preoccupied with massive consolidations. We believe these smaller companies haven't been handicapped by these distractions and offer the best fit, focus and attention-to-detail.
Sales Projections
Once you receive marketing approvals, what are your sales projections for North America in the first year? Europe?
This is a highly competitive business. It would be inappropriate to disclose sales projections at this time.
How much PENNSAID has been sold in the Caribbean since it was launched?
The larger markets in the Caribbean require product approval from the country of manufacture. We are pleased with what A.S. Bryden has achieved to date, considering PENNSAID is only available in Barbados, Antigua and St. Vincent. We have received positive feedback from physicians and patients from the area and we look forward to A.S. Bryden expanding their distribution of PENNSAID in the remaining countries.
WF10
When will you announce the results of the phase III trials for WF10?
We are excited about the acquisition of Oxo Chemie and the prospects of the WF10 Phase III trial, and we are currently working with the contract research organization that has been involved with the study from the start to finish verifying the data. That process is now in the final stages. When it's done we can lock the database and meet with the FDA to review our statistical analysis plan for the study, as well as determine the next steps toward further development. Following the meeting, we will unblind the data of the Phase III trial and proceed with the analysis.
Sales force
You brought on a sales force of 40 people last year in anticipation of approvals. What are these people doing other than costing the company money?
Our sales force has been on board for almost a year. During that time they have continued to enhance their product and disease knowledge and selling skills. In addition, they have booked appointments, met with both physicians and pharmacists to introduce themselves and our company, and acquired an in-depth understanding of our customers. As a result of the market insights and customer relationships we have developed, we are well positioned to maximize our sales success with PENNSAID once it is approved.
NASDAQ Listing
What is the status of your NASDAQ listing? Are you in discussions with the exchange?
Current market conditions are driving our ability to proceed on this front. However it is our objective to obtain a listing in the U.S. to introduce Dimethaid to a larger audience and increase shareholder value.
Patents
The patents to your transdermal delivery technology expire in 2006/2007 in the U.S. and in 2008 in Canada. What steps are you taking to prevent generic competition from entering the market at that time?
We are exploring a number of options to protect the exclusivity of PENNSAID in the marketplace. As an example, the U.S. and Europe have provisions for patent extensions related to the amount of time a product spends in regulatory review.
Insiders
According to your most recent information circular, you [Ms. Keeler] have sold over 1,000,000 shares in the last year. Doesn't this demonstrate a lack of confidence in the company and send a negative message to other shareholders?
On the contrary, I, along with Dimethaid's board of directors and senior management, have complete confidence in this company, its products and its future. All our trades are a matter of public record and subject to scrutiny by the exchanges. In addition, a significant number of our employees are shareholders through participation in our employee share purchase plan. We believe it is important for employees to be able to participate in the success of the company.
Corporate Governance
In light of the recent focus on corporate governance in the U.S. and Canada, what steps is Dimethaid taking to improve its corporate governance practices?
In the last fiscal year, we have altered our board composition. Dimethaid's Audit Committee is completely independent, and we have added a new board member, Mr. Brian E. Walsh. We have also established a corporate governance committee to focus specifically on these issues. And we will continue to evaluate our corporate governance practices regularly.
Communications
Why won't the company tell investors what's happening? We feel we are being left in the dark about our investment.
Dimethaid has recently expanded its Investor Relations & Corporate Communications department to ensure effective communication between the company, its shareholders and the public. Our policy calls for the timely disclosure of material information to shareholders and the investment community, while balancing the requirements of The Securities Act and The Food & Drug Act. All corporate updates are communicated through news releases and quarterly reports.
Product Pipeline
What's in the pipeline and how do you intend to commercialize these products?
Dimethaid is truly fortunate to have a rich product pipeline. The challenge is not in finding projects, it is in choosing which ones to pursue first. We continue to make progress on an antifungal drug for treating onychomycosis. WF-10 also holds remarkable potential in many therapeutic categories, including cancer. |
