XenoPort, Inc. (XNPT)

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XenoPort, Inc., (XNPT)

Q1 2009 Earnings Call

May 5, 2009 05:00 pm ET


Jackie Cossmon - IR

Ron Barrett - CEO

Bill Harris - SVP, Finance and CFO

Bill Rieflin - President


July Johnson - Piper Jaffray

Davis Bu - Goldman Sachs

Michael Aberman - Credit Suisse First Boston

Yale Jen - Maxim Group

Raghuram Selvaraju - Hapoalim Securities

Edward Aaron - RBC Capital Markets

Boris Peaker - Rodman & Renshaw

Juan Sanchez - Ladenburg

Greg Wade - Wedbush Morgan

Lucy Lu - Citigroup



Good afternoon, my name is Heather and I will be your conference operator today. At this time I would like to welcome everyone to the XenoPort First 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)

I would now like to turn the call over to Ms. Jackie Cossmon. Ma’am, you may begin your conference.

Jackie Cossmon

Thank you, Heather. Good afternoon and thank you for joining us on the call. Here with me today are Ron Barrett, our Chief Executive Officer; Bill Rieflin, our President; and Bill Harris, our Senior Vice President of Finance and Chief Financial 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 statements related to our current and future clinical development programs and clinical trials and the timing thereof, our partners, clinical development plans, the release of additional clinical trial data and the timing thereof, the regulatory process and the commercial potential for our product candidates. XenoPort can give no assurance with respect to these statements and we assume no obligation to update them.

For a 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 factors section of our most recent SEC filings, including our discussion of the inherent risks of clinical trials. This webcast is a copyright of XenoPort.

At this time I will turn the presentation over to Ron.

Ron Barrett

Thank you, Jackie. Thank you all for joining us on today’s call. 2009 has been an eventful year so far, regulatory and clinical milestones and strategic decisions.

In March the FDA accepted the NDA for 512 that was filed by GSK for the treatment of moderate-to-severe primary RLS.

If approved by the FDA 512 will be the first non-dopamine analgesic agent for the treatment of RLS and could be an important new treatment option for these patients.

We just presented new data from our three pivotal studies at the AAM meeting last week which demonstrated that 512 reduces many of the troubling symptoms experienced by RLS patients including pain and sleep disturbance.

We remained optimistic that these efficacy data generated for the 512 RLS program will result in favorable action by the FDA.

Since the beginning of the year we also announced data from two clinical studies of 512 conducted by our partners. Astellas reported positive Phase 2 results for 512 and an RLS trial conducted in Japan. We look forward to further progress by Astellas towards the approval of 512 for RLS in Japan.

GSK announced results from its trial of 512 in the patients suffering from painful diabetic neuropathy neither 512 nor pregabalin demonstrated a specifically significant difference from placebo from the primary end point. Possibly as a consequence of the high placebo response that was observed in the study.

While we are disappointed that there will likely be a delay in the advancement of GSK's 512 PDN program into Phase 3. We remain encouraged by the efficacy trends in the trial, including additional analysis recently conducted by GSK and the safety of 512 that was observed in the study, we will be working closely with GSK to explore next steps in the program.

Following the acceptance of the GSK NDA for 512. We made an important decision to co-promote 512 in United States. This decision offers the opportunity to maximize the XenoPort stock holder the potential value of our entire product portfolio.

Pending FDA approval 512 as a treatment for RLS we planned to hire 50 to 100 sales reps todetail 512 to physicians that prescribe drugs for the treatment of neurological diseases. GSK will book sales for 512 and maintain a joint P&L for revenues and pre-specified costs will be recorded.

We will then receive a portion of the losses or profits from this joint P&L. Importantly we have structured this agreement to help control costs that go into the joint P&L, for example all development costs for future potential indications are being paid for by GSK. And marketing and sales costs are limited out pocket marketing costs and detail fees for each sales.

We believe that these negotiated terms will be beneficial to XenoPort stock holders but in the event that the joint P&L is not as profitable as we hoped we have the ability to revert at any future time to the original med sales royalty arrangement.

Looking forward, GSK is also running trials testing 512 in post-herpetic neuralgia patients. These trials have recently completed enrollment. Additionally a large study that is evaluating 512 for migraine prophylaxis continues to enroll. We will look forward to the results of the PHN trials later this year.

Turning now to 986 we will be reporting additional data from the Phase 2 clinical trial at the DDW meeting on June 1st. We believe that this data firmly supports the potential of 986 as a treatment GERD sufferers who are incomplete responders to PPI. We are now planning the next trial of test 986 as an adjunctive therapy at PPI in it's incomplete responder population. We hope to begin this Phase IIb trial later this year. We also remain on-track to report the top line results from the 986 Phase II specificity trial by mid year. In addition, we believe we are making good progress enrolling patients in the Phase II safety and pharmacokinetic trial 986 for the treatment of pain associated with acute back spasms and nerve muscular origin.

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