XenoPort, Inc. (XNPT)

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XenoPort, Inc. (XNPT)

Q4 2012 Earnings Conference Call

March 11, 2013 5:00 p.m. ET


Ronald W. Barrett – Chief Executive Officer

William G. Harris – Senior Vice President of Finance and Chief Financial Officer

Vincent J. Angotti – Chief Operating Officer

Jackie Cossmon – Investor Relations


Michael Yee – RBC Capital Markets

Brian Abrahams – Wells Fargo Securities

Marko Kozul – Leerink Swann

Gregory Wade – Wedbush Morgan

David Friedman – Morgan Stanley



Good evening. My name is Terry and I will be your conference operator. At this time, I would like to welcome everyone to the XenoPort Fourth Quarter Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator Instructions) Thank you.

I will now turn the conference over to Ms. Jackie Cossmon of XenoPort.

Jackie Cossmon

Thank you, Terry. Good afternoon and thank you for joining us on the call. Here with me today are Ron Barrett, our Chief Executive Officer; Bill Harris, our Senior Vice President of Finance and Chief Financial Officer; and Vince Angotti, our Chief Operating Officer.

Before we begin our discussion of today's news, I would like to note that the information to be discussed on this conference call and webcast, including answers to questions asked during this call will include forward-looking statements that involve risks and uncertainties, including all statements relating to future sales of and all commercialization and promotional plans and activities for Horizants, our current and future clinical development programs and clinical trials, the release of additional clinical trial data and the timing thereof, potential advantages of our product candidates, regulatory actions and submissions, our dependence on our collaborative partners, future sales of Regnite, the therapeutic and commercial potential of Gabapentin and Enacarbil and our product candidates and financial guidance.

XenoPort can give no assurance with respect to these statements and we assume no obligation to update them. For detailed information about the risks and uncertainties that could cause actual results to differ materially from those implied by or anticipated in these forward-looking statements, please refer to the Risk Factor section of our most recent SEC filings, including our discussion of inherent risks of clinical trials and regulatory matters. This webcast is a copyright of XenoPort.

At this time, I would like to turn the presentation over to Ron.

Ronald Barrett

Thanks, Jackie. Good afternoon and thank you all for joining us today. 2012 was an important year for XenoPort and has set up 2013 as a transformational year for the company. I’ll be summarizing our progress in 2012 and describing our development plans for 2013. An important event that occurred in November last year was the re-acquisition of the rights to Horizant and we have been busy preparing to commercialize Horizant starting May 1. Vince will describe our commercial preparations and plans and then Bill will discuss the financials for the fourth quarter and what we expect financially going forward.

The re-acquisition of Horizant represents an exciting opportunity for XenoPort and marks the important transition of the company into a commercial entity. There remains substantial unmet medical needs in the treatment of moderate to severe primary Restless Legs Syndrome which we’ll be referring as RLS and the management of Postherpetic Neuralgia which we’ll refer to as PHN. We look forward to educating key stakeholders about the value of Horizant starting May 1.

The commercial performance of Horizant since its launch in July of 2011 has not met our expectations, but rather than look backward at what we believe went wrong with GSK’s launch efforts, we are focusing on the opportunity soon to be in our hands for a product that is FDA approved for two indications. In our November call when we announced the return of Horizant, we discussed some of the key terms of the termination and transition agreement. These include the $40 million received from GSK, the avoidance of the cost of a large post-marketing RLS trial, studying lower doses of Horizant and enlarged supply of API that will lead to reduced cogs for the foreseeable future. Vince will discuss our target commercial plan intended to grow the Horizant business in a cost efficient manner while maintaining flexibility to expand our commercial efforts in the future.

Before I turn to our development programs, I’d like to say a few words about Regnite, which our partner Astellas launched in Japan in mid-July of last year. Today we reported our first royalty revenue from the sales of Regnite which occurred in the third quarter of last year. We receive a high teen royalty on med sales. Sales in the third quarter were modest, but I should remind you that in the first year after the establishment of pricing for our new prescription product in Japan, physicians are limited to writing prescriptions for two weeks, requiring patients to come back to the physician’s office frequently. We believe that this restriction has likely had some dampening effect on sales, but it will be lifted in May. So we believe we will begin to get a better sense of the opportunity for Regnite in the coming months. Astellas continues to invest in the program with approximately 1200 sales reps involved in promoting Regnite.

Now turning to our development programs. The last patient recently completed their final visit in our Phase 3 trial of AP for the treatment of spasticity in patients with multiple sclerosis. We ended up enrolling 228 patients in the study. Patients from this study can enroll in an open label safety study. We’re also enrolling patients directly into the safety study and we’re close to completing that enrolment.

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