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Avanir Pharmaceuticals, Inc. (AVNR)
Avanir/Optinose License Agreement Conference
July 02, 2013 06:00 PM ET
Ian Clements - Head, IR
Keith Katkin - President & Chief Executive Officer
Greg Flesher - Senior Vice President, Corporate Development & Chief Business Officer
Joao Siffert - Senior Vice President, R&D & Chief Scientific Officer
Rohan Palekar - Senior Vice President & Chief Commercial Officer
Ritu Baral - Canaccord
Thomas Wei - Jefferies
Roy Buchanan - Piper Jaffray
Greg Wade - Wedbush
Mario Corso - Mizuho Securities USA Inc.
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I would now like to turn the conference over to your host for today, Mr. Ian Clements. Please proceed, sir.
Thanks very much, Diamond, and good afternoon, everybody. I'd like to welcome you to our conference call to discuss the exciting deal that we announced with OptiNose after market close today. To discuss the details of this exclusive North American license with OptiNose, I am joined today by our President and CEO, Keith Katkin. Our Chief Business Officer, Greg Flesher. Our Chief Commercial Officer, Rohan Palekar, and our Chief Scientific Officer, Dr. Joao Siffert.
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 product sales and revenue growth over time, future expense levels, and the potential timing of approval of AVP-825, commercial [viability] and acceptance of a new product research, development, supply, manufacturing or commercialization delays or obstacles and delays or rejections in the filing or acceptance of a new drug application and the timing of market entry relative to potential competitors.
Actual results could vary materially from the results anticipated by these statements. These are the examples and this is not an exhausted list. Investors should read the risk factors set forth in Avanir's Form 10-K for the year ended September 30, 2012 and subsequent periodic reports filed with the Securities and Exchange Commission.
With that said, I'd now turn the call over to Keith Katkin. Keith?
Thanks, Ian, and my thanks to each of you for joining us today on such a short notice. Today marks a transformational day for Avanir as we further diversify our CNS product line. After market close today, we announced the transaction that gives Avanir exclusive North American rights to a novel drug device combination product candidate for the treatment of migraines.
This product aligns extraordinarily well with our current infrastructure and if approved has the ability to contribute significant revenues alongside our rapidly growing NUEDEXTA PBA business. This deal marks our second significant business development transaction in 15 months and has the potential to provide a number of value creating milestones to our shareholders in the next 6 to 18 months. More importantly, we are excited about the opportunity to potentially bring this novel product to the millions of patients who currently suffer from migraines.
The product candidate, which we’ll refer to as AVP-825 going forward, contains dry-powder sumatriptan and is delivered via novel device that places the drug deep into the nasal cavity, where absorption is optimal. This device has a potential to transform the clinical profile and delivery convenience of sumatriptan in effect to creating a new and different migraine therapy. As a result, AVP-825 has the potential to provide fast relief with a favorable side effect profile. We believe, the unique delivery device may provide benefits over existing options available to physicians and patients, namely oral nasal sprays and injections.
Adding this new migraine product strengthens our position as a leading CNS specialty biopharmaceutical company. We believe the synergies between NUEDEXTA and AVP-825 will be quite strong allowing us to bring our demonstrated commercial success to the migraine market, a market that has significant customer overlap with our existing NUEDEXTA business.
With that, I'll now turn the call over to Greg Flesher to walk you through the key terms of the transaction.
Thanks, Keith. Once again, we license exclusive North American rights for this NDA-ready product from OptiNose. OptiNose is a drug delivery company that has developed a novel device that can efficiently delivery both liquids and nasal dry-powder deep into the nasal cavity, in effect creating a new product for the sumatriptan product. The company was founded in 2000 and led by an executive team with deep pharma industry experience. Specifically, under the terms of the agreement, OptiNose received an upfront payment of $20 million and is eligible to receive up to an additional $90 million if all of the future clinical, regulatory and commercial milestones are achieved. Avanir will also be obligated to pay tiered low double-digit royalties on sales of product sold in North America.
The IND and all subsequent data required to prepare the new drug application will be transferred to Avanir in the coming weeks and we will take full responsibility for the preparation and ultimate submission of the regulatory application, which Avanir expects to be filed by the beginning of calendar year '14. OptiNose currently has four key issued patents in the U.S. with the last to expire in 2023. In addition, the company has numerous pending applications some of which if issued will extend the patent protection into 2028.