Avanir Pharmaceuticals, Inc. (AVNR)
F2Q13 Earnings Call
May 8, 2013 4:30 PM ET
Ian Clements – Head, IR
Keith Katkin – President and CEO
Christine Ocampo – VP, Finance
Rohan Palekar – EVP and Chief Commercial Officer
Joao Siffert – Chief Scientific Officer
Christopher Marai – Wedbush
Ritu Baral – Canaccord
Carol Werther – Summer Street
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I would now like to turn the call over to your host, Dr. Ian Clements, Head of Investor Relations. Please go ahead.
Thanks, Francis, and good afternoon everybody. I’d like to welcome you to our conference call to discuss our financial and operating results for the fiscal 2013 second quarter.
To discuss these results, commercial and clinical initiatives, I am joined today by several members of our leadership team. Our President and CEO, Keith Katkin will lead the call today by providing a brief strategic overview of our business. After Keith, our Vice President of Finance, Christine Ocampo will review our quarterly results. Our Chief Commercial Officer, Rohan Palekar will highlight NUEDEXTA performance followed by Dr. Joao Siffert, Chief Scientific Officer who will provide the pipeline update. For the Q&A portion of today’s call, we will also be joined by Dr. Randall Kaye, Chief Medical Officer; and Greg Flesher, our Chief Business Officer.
During the course of this conference call, we will be making certain forward-looking statements. These statements are subject to numerous risks and uncertainties and reflect our current expectations and judgments. Examples of these forward-looking statements includes statements relating to our expectations for NUEDEXTA sales and revenue growth including market opportunity, future expense levels, the timing and success of future development of AVP-923 for other indications, the potential approval of NUEDEXTA in new markets, and the timing and success of the development of AVP-786. Actual results could vary materially from the results anticipated by these statements. Investors should read the risk factors set forth in Avanir’s Form 10-K for the year ended September 30, 2012 and periodic reports filed with the Securities and Exchange Commission.
With that said, I will turn the call over to Keith Katkin. Keith?
Thanks Ian, and my thanks to each of you for joining us on our call today. We are building a leading mid-cap biopharmaceutical business designed to provide innovative new therapies to patients with high unmet needs. During the past few months, we have made significant progress towards this goal. First, our growing NUEDEXTA PBA franchise in the United States, the number of PBA patients benefiting from NUEDEXTA has steadily grown each month. We continue to see strength in our PBA franchise and deliver record prescriptions, the most recent of which annualized nearly $90 million in gross sales. Second, our pipeline, from a clinical perspective, we continue to make progress in our Phase 2 trials exploring the therapeutic benefit of AVP-923 in Alzheimer’s disease, central neuropathic pain and Parkinson’s disease. Third, from a regulatory perspective, the positive opinion from CHMP and recommendation for a broad PBA level for NUEDEXTA with a key step in the regulatory process toward having the first and only evidence-based treatment for PBA approved in the European Union.
Our primary goal as stated previously is to identify a partner that will broadly commercialize in Europe as well as partner with Avanir to help accelerate follow-on indications. I look forward to keeping you apprised of the progress we make. I am very pleased with the excellent progress we have made over the past quarter and the achievements the organization continues to make.
I will now turn the call over to Christine Ocampo to address our financial results. Christine?
Thanks Keith and good afternoon everyone. In addition to the financial results summarized in the press release issued earlier this afternoon, you can find additional information, including full year information in our upcoming Form 10-Q which will be filed by Friday.
We reported total net revenue for the second fiscal quarter of 2013 of $17.4 million as compared to $10 million for the comparable period in fiscal 2012, a year-over-year growth of approximately 74%. For the second fiscal quarter of 2013, we recorded record gross product sales of NUEDEXTA of $20.8 million and record net sales of NUEDEXTA of $16.5 million. During the quarter ended March 31, 2013, our gross to net discount was 20.7% compared to 19% in the prior quarter. The increase in gross to net discount is primarily attributable to a number of new payor contracts as well as the impact of a 3.3% price increase that became effective as of January 9, 2013.
First quarter wholesale inventories as of March 31, 2013 were estimated to be 3 to 4 weeks. Gross margin on the sales of NUEDEXTA for the first fiscal quarter of 2013 was 94.4%. Research and development expenses were $8.9 million for the quarter ended March 31, 2013, compared with $6.4 million for the same period in the prior year. This includes a one-time milestone payment of $2 million to Concert Pharmaceuticals for advancement of AVP-786 which was accrued in the second fiscal quarter. In the second fiscal quarter of 2013 our R&D spend was primarily attributed to costs associated with our multiple ongoing clinical studies, medical affairs and EMA regulatory expenses.