Aug CC part 2:
CRAIG SMITH, GUILFORD PHARMACEUTICALS - CHAIRMAN, PRES. & CEO [5]
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Thanks, Andy. In summary, the second quarter has been an exceptionally busy and
productive period for our organization, as we made solid progress on all fronts.
Our corporate development team completed a major licensing transaction with a
world-class pharmaceutical partner to aid in the commercialization of our
NAALADase inhibitor technology. Our sales and marketing team demonstrated good
progress, increasing the market for GLIADEL, as exemplified by the substantial
increase in net product sales in the second quarter. And finally, our clinical
development team, under the direction of Dr. Valerie Riddle (ph), has continued
to make excellent progress, advancing enrollment in our Phase II clinical
programs, and preparing to begin additional clinical trials of GPI 1485 for a
new indication. We anticipate that this will continue to be an eventful year for
(indiscernible). To summarize, you can look forward to the following upcoming
milestones from Guilford in 2003.
First, achieving GLIADEL revenues in the range of 20 to $25 million. Next,
completing a regulatory filing for approval of GLIADEL in Europe. Third,
completing enrollment of GPI 1485 Phase II Parkinson's disease trial. Four,
commencing the Phase II study of GPI 1485 in post-prostatectomy erectile
dysfunction. Next, announcing the results of the Phase II AQUAVAN coronary
artery bypass graft study in Europe. And finally, completing the Phase II
colonoscopy study of AQUAVAN in the United States.
In addition, we continue to be very busy on the business development front, and
are in active discussions to out-license certain rights to Guilford technology,
and to in-license a new product to be sold by our sales and marketing
organization.
This concludes my remarks this morning. I will now be happy to answer any
questions you may have. Operator, could you please remind the audience of the
Q&A procedure?
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Questions and Answers
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Operator [1]
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(CALLER INSTRUCTIONS). Matt Duffy with Black Diamond Research.
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MATT DUFFY, BLACK DIAMOND RESEARCH - ANALYST [2]
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Good morning. Thanks for taking my call. I just wanted to see -- get a little
more color on the GLIADEL sales in the second quarter. Do you have a breakdown,
or do you have a sense at this point of how much of that usage was first line
versus for recurrent surgery?
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CRAIG SMITH, GUILFORD PHARMACEUTICALS - CHAIRMAN, PRES. & CEO [3]
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Let me turn that question, Matt, over to Mike Kelly, who's the head of our
sales and marketing team.
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MIKE KELLY, GUILFORD PHARMACEUTICALS - HEAD OF SALES [4]
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Hey, Matt. We are currently conducting market research to get a definitive
market share -- from a quantitative perspective. We do have qualitative
information that shows that the majority, if not all of the increase in sales is
for first-line treatment.
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MATT DUFFY, BLACK DIAMOND RESEARCH - ANALYST [5]
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And, so far in the third quarter, are you seeing a continuation of that trend?
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MIKE KELLY, GUILFORD PHARMACEUTICALS - HEAD OF SALES [6]
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Yes.
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MATT DUFFY, BLACK DIAMOND RESEARCH - ANALYST [7]
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Great. Just one other thing on the AQUAVAN front. How important is the fentanyl
portion of the overall treatment regimen?
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ANDY JORDAN, GUILFORD PHARMACEUTICALS - EVP, FINANCE&CFO [8]
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Well, it is a standard of care amongst certainly gastroenterologists and many
other physicians who use primarily Midazolam in the outpatient setting for
conscious sedation. The reason is that most -- in fact all sedative hypnotics do
not provide analgesia. And for example, during a colonoscopy, when the
colonoscope is going around both hypersplenic (ph) and hepatic flexures -- this
can be -- it isn't always -- but can be painful for the patient. So, it's quite
common for an analgesic to be given a long width (ph) with AQUAVAN. Or, with
Midazolam -- Midazolam in particular.
In addition to fentanyl, some physicians will use meperidine, which goes by the
brand name of Demerol. The increasing use of Propofol in that setting, if you
sedate someone deeply enough, you can get away without the use of an analgesic.
And you could certainly do that with AQUAVAN. The disadvantage of using Propofol
in getting them that deep is, as we read the literature, and talk to experts in
the field, you start to incur, with the use of Propofol, episodes of apnea,
hypotension and oxygen desaturation, which are somewhat problematic. So from our
perspective, the ideal would be to bring these patients down to a level where
they're asleep -- not to deeply -- and provide mild analgesia along with the
dose of AQUAVAN. And that's the thrust of the dose-finding work that we're doing
right now.
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MATT DUFFY, BLACK DIAMOND RESEARCH - ANALYST [9]
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Okay. Great. Thank you.
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Operator [10]
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(CALLER INSTRUCTIONS). Gentlemen, there are no further questions at this time.
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ANDY JORDAN, GUILFORD PHARMACEUTICALS - EVP, FINANCE&CFO [11]
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Okay. Well, in closing, let me just say, again, that I hope you've been pleased
with our second quarter performance. We are looking forward, with enthusiasm, to
the second -- the third and fourth quarters of this year. And, I look forward to
the opportunity to share our results with you at our November call covering the
third quarter. Have a good day. Good bye.
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MIKE KELLY, GUILFORD PHARMACEUTICALS - HEAD OF SALES [12]
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We have another call there.
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Operator [13]
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You do have an additional question.
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ANDY JORDAN, GUILFORD PHARMACEUTICALS - EVP, FINANCE&CFO [14]
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Can we open up the line?
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Operator [15]
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It's from STEPHEN LOREN.
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STEPHEN LOREN, LEGG MASON - ANALYST [16]
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It didn't accept my beep the first time around. I have just a couple of
questions for you. Number one, I was wondering if you could comment a little
about the stocking situation for GLIADEL -- how much are in the trades (ph) at
this point? You had a big de-stocking event. And is some of this volume just
sort of falling back in, or is this really demand volume that we're seeing?
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ANDY JORDAN, GUILFORD PHARMACEUTICALS - EVP, FINANCE&CFO [17]
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Let me answer that, STEPHEN. The inventory at NSS at the end of the quarter was
exactly the same as the inventory at NSS at the beginning of the quarter.
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STEPHEN LOREN, LEGG MASON - ANALYST [18]
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That's fantastic. Great! A couple of things on the further prospects for your
in-licensing. You've talked about that for a while. I was just wondering if you
could give us an idea what you're looking for at this point and what are the
prices that you are looking at paying out there right now? I know that the
prices for drugs have gone up quite a bit. So, what're you seeing?
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ANDY JORDAN, GUILFORD PHARMACEUTICALS - EVP, FINANCE&CFO [19]
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Well, we're looking for a hospital-based product, with annual sales in the
range of $10 to $50 million that would be synergistic with our sales force,
namely we'd be looking for a product that would be sold to a specific physician
or patient population that could be covered by a marketing and sales
organization, only modestly larger than the one that we currently have. We are
looking at several products, intensively, that meet those criteria. In terms of
the range of prices that people pay out there, from the advice that we've
received from our advisors, this is generally in the range of three to five
times trailing 12-month sales. However, that's heavily dependent upon the
direction sales are going, the prospects for future growth, and so it's very
difficult to make generalizations -- but -- on a case-by-case basis. But those
are -- if you want -- just simply looked at the acquisitions that have occurred,
you would find that most of them fall within that range.
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STEPHEN LOREN, LEGG MASON - ANALYST [20]
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But, I take it you wouldn't be looking at a product that was declining in sales
in your patent expiration, though?
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ANDY JORDAN, GUILFORD PHARMACEUTICALS - EVP, FINANCE&CFO [21]
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That would not be the type of product that we'd be looking for; that is
correct.
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STEPHEN LOREN, LEGG MASON - ANALYST [22]
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One quick question for Andy. Andy, can you just give me a final count on the
number of shares that were bought back in the quarter?
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ANDY JORDAN, GUILFORD PHARMACEUTICALS - EVP, FINANCE&CFO [23]
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Yes, we bought about 1.1 million shares back. That was associated with the
converted (indiscernible), STEPHEN.
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STEPHEN LOREN, LEGG MASON - ANALYST [24]
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Okay. Fantastic. Thanks.
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Operator [25]
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STEVE Saba (ph).
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ANDY JORDAN, GUILFORD PHARMACEUTICALS - EVP, FINANCE&CFO [26]
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Sorry I signed off!
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STEVE SABA, KILKENNY CAPITAL - ANALYST [27]
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Steve Saba (ph) with KILKENNY (ph) Capital. I don't know if you can go into any
more detail on the -- you said you were -- I guess you're expanding the Phase
II. Are you adding more arms to the study? Or are you just enrolling, you know,
a different colonoscopy study? The kind of patients, and also if you could talk
about the small study you did in cabbage. Did you say you'd completed the study?
And did you have results from that?
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CRAIG SMITH, GUILFORD PHARMACEUTICALS - CHAIRMAN, PRES. & CEO [28]
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Let me take them in reverse order. First, regarding the cabbage study. It was
completed. All the patients are enrolled. All of the data has been collected.
What we are doing at the moment -- that occurred as of June 30th. What we have
been doing in the month of July and the early part of August, as best we can
with the vacation schedule in Europe, where the study was done, is to get the
case report forms finalized, get the data on the case report forms checked
against original records to be sure that the quality of the data is high, and
then to create an electronic database which is suitable for analysis. All of
those activities are either have been accomplished or are ongoing. We expect to
be able to evaluate the data, formally, following the protocol, and the analyses
specified in the protocol, shortly; and we hope to be able to announce those
results as soon as we feel it is appropriate. Obviously, we would also intend to
have these results presented in full at the first available anesthesiology
meeting
that's appropriate.
Keep in mind that the setting of the operating room provides us with an
excellent opportunity to evaluate much higher doses of AQUAVAN than we will be
administering in the conscious sedation setting. So, from that perspective, it's
going to be very valuable information for us. However, Guilford does not intend
to pursue, through Phase III, the indication in the operating room. And, I say
that not because I know some deep secret about the cabbage study, but because we
feel that the pharmacological profile of AQUAVAN lends itself very well to the
outpatient setting, and potentially for use in the intensive care unit. Its
pharmacological profile, while we think it can be used very successfully in the
operating room there, I think anesthesiologists feel very comparable with using
Propofol.
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STEVE SABA, KILKENNY CAPITAL - ANALYST [29]
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Okay. And --
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CRAIG SMITH, GUILFORD PHARMACEUTICALS - CHAIRMAN, PRES. & CEO [30]
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And in terms of the design of the Phase II program, what we've basically been
doing is doing a dose response of fentanyl in conjunction with varying doses of
AQUAVAN. So, we have been evaluating doses of 0.51 and 1.5 microgram per
kilogram of fentanyl in conjunction with the varying doses of AQUAVAN that we
think would be appropriate for clinical use. The reason for doing that is that
we know there are some physicians out there that use low doses of narcotics,
some physicians out there that use high doses of narcotics. And we want to make
sure that we fully understand the dose response so that we can provide dosing
recommendations to physicians that will allow them a range of fentanyl dosing in
conjunction with whatever dose of AQUAVAN we determine is the best in producing
the desired duration and depth of sedation in the setting of colonoscopy.
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STEVE SABA, KILKENNY CAPITAL - ANALYST [31]
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Okay.
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CRAIG SMITH, GUILFORD PHARMACEUTICALS - CHAIRMAN, PRES. & CEO [32]
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The other thing we've done it is to, again, based upon expert advice -- and a
really tragic experience that we had with Midazolam -- we want to be sure that
we have understood dose response for AQUAVAN in the elderly. If you may recall,
when Midazolam was first launched, there were 80 deaths associated with it
that's resulted in a congressional inquiry. And it was because patients were
being -- elderly patients -- were being given too much Midazolam. And, we
obviously want to learn from that tragedy, and make sure that we have very
carefully studied the effect of the drug in elderly patients, and can give a
good, safe dosing recommendation to physicians in that setting, as well.
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STEVE SABA, KILKENNY CAPITAL - ANALYST [33]
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Okay. Thanks. And just one question on GLIADEL. Has there been any change in
sort of the market for drugs for glioblastoma? One of the things I'm thinking
of, is, you know, at one point, it seemed like a lot of patients were just going
into clinical trials. And I was -- and you know if you had a brain cancer, you
were going into some clinical trial -- are you seeing more or less of that? And
also, are you just seeing -- is the incidents -- you know, if the incidents is
stable? Is it going up? Is it going down?
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CRAIG SMITH, GUILFORD PHARMACEUTICALS - CHAIRMAN, PRES. & CEO [34]
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The incidents of the disease is actually slightly increasing. But I'll turn
over the question of what's going on out in the marketplace back over to Mike
Kelly (ph).
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MIKE KELLY, GUILFORD PHARMACEUTICALS - HEAD OF SALES [35]
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The incidents of the disease, as Craig mentioned, is slightly increasing. The
market dynamics have changed significantly since we received the first surgery
label. As you may recall in the past, one of our biggest challenges was clinical
trials. We competed a lot with clinical trials. That was particular to the
current label that we had. We don't see as much resistance in initial patients
for patients undergoing surgery for the first time that are not being -- they
are being offered GLIADEL in an upfront setting. Whenever you have a proven drug
that has an FDA label, it's much stronger than randomizing (indiscernible)
clinical trial. Those are typically held off for recurrent cases. So, we're not
seeing nearly as much resistance in the up-front setting.
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STEVE SABA, KILKENNY CAPITAL - ANALYST [36]
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And just remind me -- the dose, as far as numbers of GLIADEL Wafers per patient
-- is that the same for recurrent and primary? Or is it different?
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MIKE KELLY, GUILFORD PHARMACEUTICALS - HEAD OF SALES [37]
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It's the same.
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STEVE SABA, KILKENNY CAPITAL - ANALYST [38]
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And what is that number, again?
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ANDY JORDAN, GUILFORD PHARMACEUTICALS - EVP, FINANCE&CFO [39]
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It's as many Wafers as the physician can -- it's dependent upon the size of the
tumor.
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STEVE SABA, KILKENNY CAPITAL - ANALYST [40]
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Right.
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ANDY JORDAN, GUILFORD PHARMACEUTICALS - EVP, FINANCE&CFO [41]
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On average, we see between six and eight Wafers per case.
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Operator [42]
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(CALLER INSTRUCTIONS). We are showing no additional questions at this time.
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CRAIG SMITH, GUILFORD PHARMACEUTICALS - CHAIRMAN, PRES. & CEO [43]
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Let me reiterate my thanks for joining us today, and my enthusiasm for the
second half of the year. And I look forward to sharing our results with you at
the next conference call. Have a good day! Good bye. |
