The Broken Clock

$AMRN Q2-CC post-mortem [w/ some minor snark]

AMRN Looks for a deal…

Steve Schultz Sr. Director of IR

• 0:40 Safe harbor statement
• Schultz gives $AMRN’s website URL as “triple w amarin corp dot com” <- IR guy is a hipster?

CEO Joseph S. Zakrzewski

• 7 patents “in play” w/ USPTO [we’re gonna get ‘em even if we have to grease a few palms]
• 25 patents currently on file w/ USPTO [throw enough shit against the wall, some of it’s gonna stick]
• Also received “intention to grant” letter for MARINE method of use patent in Europe
• <blah blah blah…>
• Ended June 30,2012 w/ $250MM on hand
• Getting ready to file sNDA for high triglyceride w/ ANCHOR results
• Can file ANCHOR based sNDA when REDUCE-IT (cardiovascular outcomes trial - CVOT) is substantially underway expected in 2012 [why are they linked?]
• 3 paths to commercialization …(partner, buyout, solo)
• Launch anticipated in early Q1’13. Various preparatory steps to take for launch.
• Lead suppliers have passed inspections. 
• Accumulate material for launch.
• 6:45 yada yada yada <Vascepa is not Lovaza…it’s Lovaza-Plus!>
• Vascepa exclusivity will be gained through patents, regulatory exclusivity [NCE], maintaining trade secrets [weak] & taking advantage of manufacturing barriers to entry [riiiiiiight…].
• Progress on patent front…
• Issuance of 1 patent, notice of allowance for one application & 5 “reasons for allowance” for others.
• *** NCE reg exclusivity…still in active dialog w/ FDA. Since approval, AMRN has had continued dialog w/ FDA about NCE. “Hopeful” [is not a strategy] for NCE decision in time for inclusion in August Orange Book supplement…but it’s “also possible that decision may go longer.” At this time, FDA has not advised AMRN of a delay [they also have not told AMRN that they will not be allowed to sell blow on street corners] OR a decision [bullshit]. 
• Since we’re still talking w/ FDA, we’re not going to make any more comments OR field questions about it…so everybody shut your pie holes about this.

Near-term potential newsflow

• partnering info
• NCE decision
• addition of 4th supplier
• REDUCE-IT CV outcomes study substantially underway
• sNDA filing using ANCHOR data
• sNDA submission for expanded supply chain
• additional news on patents
• scientific publications & presentation of MARINE data in Germany
• combination product vascepa + “leading” statin
• commercial launch

Financial results update

• $250.3 million on June 30.
• 9:52 <yawn>
• increased costs are due to launch and clinical trials
• Expect to spend ~ $25 - 35 million to stockpile Vascepa for launch inventory [any ideas on what this translates to in potential sales?]…how long can you keep stockpiled fish oil?

Q&A

• Dewey Decimal (JPMorgan) Can you opine [Dewey must be a lawyer] on the recent stock sales? Were they previously planned? Could you have backed out of the sales? How much exposure does Sr. Mgmt still have? Why the F*#(* did you sell??

All sales previously planned. Represent 5% of CEO’s holdings. Fiscal fiduciary management [CEO sounds embarrassed].

• You said you were building launch supplies. How much of a supply do you anticipate $25 - 35 million worth of Vascepa will be?

We aren’t prepared to give guidance on that.

• Canaccord Genuity (??) Where are you on the hiring of sales people? Managers in place? Interviewing reps?

Large supply of sales people because the job market is in the crapper. Sales piece cranks up in october (if & when we get there) [wink wink].

• Will you have “activity” in American Heart Association meeting in the fall?

Yes. Continue CME efforts in many cardiovascular forums.

• Status on manufacturing sNDAs?

Hope to have 1 or 2 filed by EOY. Maybe a 3rd sNDA filed in Q1’13. Announce 4th supplier very shortly.

• You talked about a statin-combination product? Have you picked a final formulation? Are you only moving forward w/ 1 statin?  Or multiple statins? 

We *have* a final formulation, but that’s all we’re going to say. We have a statin or statins picked out [depends on partner/buyer?]. Expect to start statin combo study by EOY.

• Is the formulation a spray-coated capsule?

Not gonna say.

• Tommy Nguyen (Jefferies). Give some color on biz dev. Is there a value creation event (IP/NCE?) that potential partners are still looking for? Or are you beyond that in negotiations? What the F*#*#( is taking so long??

dodge…weave…”discussions continue to increase in activity”…dodge

• On timing of filing of sNDA for ANCHOR. Why are they tied to each other? Can you clarify how clear an understanding you have of the requirement to enroll in the outcomes study before filing? Is there some risk to delay from perhaps an incomplete understanding of the requirement?

Believe we’ll have [sNDA ANCHOR] approval  in 2H’13…we’re comfortable with that guidance…and that’s all we’re gonna say about that.

• Vascepa is listed as 1 of 40 or so cardiovascular medicines on FDA website, but Lovaza isn’t. Does this mean anything significant?

Probably not. FDA is probably just lax on their website [tell me about it].

• Ram S (Avis capital?)? Supply situation. Have you had discussions w/ BASF following their acquisition of Equitech? What’s the status of your relationship w/ BASF and their commitment to large scale manufacturing of omega-3 fatty acids? [What the F@#@$ is Ram asking? Just spit it out. Don’t pussy foot around asking touchy-feely questions about your relationship].

CEO’s lips move, but say nothing

• REDUCE-IT. What are the other CV outcomes studies being performed with other drugs that are ongoing related to triglyceride lowering and how does REDUCE-IT compare?

Not the best person to ask about other people’s trials.

• Can you provide color on higher doses of Vascepa?…you didn’t reach a maximum effective dose. Will you run higher-dose trials?

[Seems lukewarm about higher dose trials.] MDs can dose at whatever dose they want.

• What about pricing of Vascepa, esp relative to PCSK9 (e.g., AMG-145) inhibitors?

 We’re looking to shift [market] share (eat Lovaza’s lunch) and expand the market…our goal is to get to Tier 2 as quickly as possible.

A lot of exciting times over the next 60 to 90 days [probably shouldn’t read too much into this]

Notes on $ALXA Adasuve CRL CC

• Ladies & Gentlemen, give it up for Mr. Thomas King, CEO of $ALXA!! [crickets]
• [Safe Harbor yada yada]
• Adasuve CRL was issued by CDER. CRL noted 1 deficiency related to facility inspections & manufacturing:

“during a recent inspection of the mountain view california manufacturing facility for this applicant, our field investigator conveyed deficiencies to the representative of the facility. Satisfaction [sic?] resolution of these deficiencies is required before this application may be approved.” [as others have pointed out, King does not say this is the ONLY issue brought up in the CRL. He just says that there is 1 manufacturing issue in the CRL].

• $ALXA believes these deficiencies are medically device specific and readily addressable.
• No new clinical or safety issues identified and there were no other deficiencies outlined in the CRL [lots of wiggle room here. Was the old stuff brought up?].
• CRL said REMS discussions [related to bronchospasm] can continue after response to action letter has been submitted.
• CRL has comments on draft product labeling including what they believe to be a near final draft of package insert [Seems like everybody says this].
• Primary manufacturing issue is that Adasuve manufacturing process validation is “incomplete”. $ALXA makes 3 batches of each dosage strength and analyzes each batch to demonstrate “that our manufacturing process is viable [whatever that means. makes no sense.]”.  
• $ALXA has completed manufacturing process validation for 10mg dose, but not for 5 mg [why the f@#$% not?].
• But we still need to talk to FDA about this because our interpretation could be totally wrong. We’re going to talk to them ASAP.
• [blah blah blah yada yada yada]

Q & A: Q & A was like a police lineup: 2 hobos and 1 perp (real ‘analyst’)

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A non-fancy rant on Obesity

Hi. You may be here b/c I just tweeted about a pissing match I got into with Nate Sadeghi-Nejad over his recent comments on obesity.

This is my rebuttal and it is probably the last I’ll say about it for a while.

That being said, there are a lot of words down there and if you don’t want to read them, you can turn back now. My feelings won’t be hurt.

The pissing match started with Nate suggesting that obesity was a ‘disorder’, rather than a ‘disease’. I’m not going to talk about the fact that these terms are poorly defined and if you asked 10 people their definition, you’d get 10 different overlapping answers.

Rather, despite the vague definitions, my guess is that Nate uses disorder to mean a condition that is less severe and more personally controllable (and therefore less deserving of sympathy) than a full-blown disease, whose effects are essentially uncontrollable by the individual. Of course, this is a flawed understanding of disease for the simple reason that many diseases have both environmental (controllable) and hereditary (uncontrollable) contributions (e.g., Alzheimer’s, Parkinson’s, numerous cancers). But Nate reserves his condescension exclusively for the disease (or disorder) of obesity.

The pissing match ended on Friday with Nate’s Incidence Challenge. Nate tweeted:

“Name a disease other than T2DM [Type 2 Diabetes] that has a similar incidence curve. NSCLC being considered.”

Twitter doesn’t give you much room to say what you mean, but what I think he means is  this: unlike other diseases (except Type 2 Diabetes) the incidence of obesity has exploded over the past 30 years, so it can’t possibly be a) a disease and b) influenced by hereditary factors.

So, let’s see. First off, Nate tries to tie one hand behind my back by saying that I’m not allowed to use the disease that immediately disproves his argument—Type 2 diabetes. Second, incidence has nothing to do with the definition of disease. Even if we accept his handicap of throwing out Type 2 diabetes, diseases are not defined by whether or not they have a particular type of incidence.

A more appropriate definition of disease (and hopefully Nate would agree) is that it is a pathological condition whose manifestation [sorry, fancy word] is at least partly out of the control of the sufferer. Does this definition hold for obesity? Absolutely. There are truckloads of studies tying obesity to genetic and epigenetic* conditions, with the heritability of obesity ranging from 6% to 85% in different groups (see here here here here here here here here here here here and here for a small sample of studies).

But hey, we can ignore all the research because Nate was chubby once and he started to exercise and he’s not chubby anymore. So it must work for everyone.

Levadex: A dud in waiting

More snarky thoughts on $MAPP.

Quick! What’s the best selling ergotamine-based anti-migraine drug on the market?

You don’t know?

Neither do I. The reason I don’t know the answer to that question is because the ergotamine market is so small and Balkanized that information about revenue from ergotamine-based meds doesn’t register in various google searches like this and this. 

HOWEVER, if you poke around long enough, you’ll see that Valeant Pharmaceuticals, makers of Migranal (dihydroergotamine nasal spray), arguably the best known ergotamine-based anti-migraine drug, sold a staggering $13 million of the stuff in 2008. They haven’t bothered to break down their sales of Migranal since then, but I think we can safely assume that it’s still selling south of $50 million a year.

And yet, there are some Nostradamuses out there predicting that MAP Pharmaceuticals’ Levadex (orally inhaled dihydroergotamine) is poised to sell $400 - $750 million a year (depending on which addled investor is writing about it on seeking alpha)…because…because…well, there’s no good reason to suspect it will sell anywhere near that amount*. And there are plenty of reasons to suspect that Levadex (if approved) with be a ho-hum steady-Eddie $20-50 million-a-year drug.

If you want a sober and cogent analysis of why Levadex will be a dud, see here and here and here. 

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$ECYT $MRK Conf Call on deal for EC145 (suicide bomber version of Vitamin B9)

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Why $VVUS’s Qnexa will be approved sooner rather than later

Vivus’s anti-obesity medication, Qnexa, has a 4/17/12 PDUFA date looming. 

Here’s my abbreviated rationale for why it will be approved.

• Vivus’s 1/9/12 announcement indicating that the FDA had asked Vivus to remove the contraindication of childbearing-women from the proposed Qnexa label was a strong positive indication. 
• The advisory committee vote recommending approval was also strongly positive (20+, 2-), and it provided political cover for FDA decision makers.
• Qnexa results meet/exceed FDA guidelines for development of anti-obesity meds. You can’t keep moving the goalposts on people.
• Qnexa’s active ingredients (topiramate & phentermine) are already on the market.
• There’s nothing else approved on the anti-obesity front except for orlistat, which is about as effective as a waterproof towel.

There have been rumors about a possible delay in Qnexa approval due to haggling over REMS issues. I don’t know anything about that, but the simpler view is that the FDA keeps its word and renders a + verdict on 4/17/12. 

I currently have no position in $VVUS.

$AVII Conference Call / Postmortem

My take home message: There’s more uncertainty surrounding the functionality of the exon-skipped version of dystrophin than I had initially suspected. They are hoping[praying] that their version of dystrophin is still somewhat functional and that they will see a clinical benefit after 24 weeks.

CEO:

• dystrophin protein can be produced w/ [our] drug therapy
• highly statistically significant
• american academy of neurology (AAN) meeting on 4/25. AAN meeting/presentation will give more data.
• primary endpoint was dystrophin production as a % of normal
• p = 0.002 for 30mg/kg/week cohort
• average of > 20% of dystrophin + fibers…medical literature suggests this level is associated with better clinical outcomes…based on animal models and in Becker’s (milder) muscular dystrophy.
• consistency across all of patients…range of 15.9% to 29.0% of novel dystrophin fibers in 30 mg cohort. Results determined in blinded fashion by histologists and multiple samples per patient.
• We asked the question, “Can higher dose (50mg/kg/week) also increase dystrophin levels in a shorter timeframe (12 weeks)?” No. Results are clear. [ed: Why is this true? Shouldn’t you start making dystrophin more or less immediately? Maybe ‘interesting’ biology here.]
• Rollover extension study will assess whether 50mg/kg/week shows dystrophin and a clinical benefit.
• Through 24 weeks, no treatment related adverse events, no serious adverse events either.
• [CEO sounds strained. “LOOK YOU BASTARDS, THESE ARE GOOD DATA! STOP SAYING THE GLASS IS HALF EMPTY!!!!]
• Didn’t see clinical benefit in running walking tests.
• Extension study is now open label. Expect more biopsy data and other clinical benefit data in 2H of 2012.

[operator now sounds stoned]

Lazard: Congrats! Ages of patients? Any color? Were they really sick?

• Baseline characteristics consistent across cohorts. Avg age ~9 years. “good distribution” of ages [what exactly is a “good” distribution here?]. Still evaluating each individual patient [post-hoc mining]. 

  Is the dystrophin that is produced diffuse across biopsy/muscle sample?

• Very consistent across many samples, but we haven’t looked at other muscle groups [aside from bicep].
• Other speaker: Ed Kaye, CMO. Very happy that dystrophin levels were about 20%…should see clinical benefit “over time.” [because we didn’t see it @ 24 weeks].

What about secondary outcomes related to immune infiltrates?

• We’re still evaluating [sounds like bullshit]…”we were focused on …dystrophin”

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