Biodel Inc. (BIOD)
Analyst/Investor Research and Development Meeting Conference Call
October 11, 2012, 08:30 am ET
Seth Lewis - BIOD-G
Errol De Souza - President & CEO
Lutz Heinemann - Founder, former CEO & Scientific Advisor Profil Institute for Metabolic Research
Donna Rice - President, Big Picture Health & former President of the Diabetes Health & Wellness Institute
Gerard Michel - CFO & VP, Corporate Development
Steven Russell - Investigator, Massachusetts General Hospital Diabetes Research Center, Boston
Ed Damiano - Associate Professor, Biomedical Engineering, Boston University
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And to get things started, I just want to introduce Errol De Souza, Biodel’s President and CEO. So Errol, please join us.
Errol De Souza
Good morning everyone. Thanks Seth. Let me just take a few moments first to welcome you, seeing so many familiar faces out there. So I am glad you could make it today. We’ve got a great panel today. We had a preview of sort of the presentations last night and I can tell you, went a lot in the field of diabetes. So let me start off very quickly with some introductions and then we’ll get going with the panel.
First to my left is Professor Lutz Heinemann. For those of you who know sort of the premier site that does Phase I, Phase II studies in terms of diabetes Profil, both in Neuss, Germany and now in San Diego where Lutz was the founder and pretty much any diabetes product that you can think about I think goes through Profil in terms of its initial studies. And Lutz will give us a feel for the state of the ultra-rapid-acting insulins and in terms of the competition and why do we even need an ultra-rapid.
Next I would like to introduce to Lutz’s left, Donna Rice. Donna is the recent past President of the Diabetes Health & Wellness Institute, an affiliate Baylor Health Care Systems in Dallas and she is currently President of the Big Picture Health. And Donna will give us a real insight in terms of sort of from patient’s perspective in terms of what it means to live not only with diabetes, but hypoglycemia and that will sort of bridge into our glucagon program which we’ll talk about it late today.
Wrapping up our program today, the Boston boys; we’ve got Dr. Steven Russell from MGH and Ed Damiano from Boston University and they are going to tag team and that will be a treat for us, I think in terms of taking us through bridging both the insulin side and the glucagons side and it’s applications for the artificial pancreas.
Before I get started, I would just want to introduce some of the folks from our Board and internal management team. We have got Barry Ginsberg here from our Board and where are you Ira; Ira Lieberman from our Board of Directors.
From the internal management, we have Gerard Michel who will be a speaker; Gerard you guys know him well, very familiar to most of you our CFO and also Head of Corporate Development. Sitting in the back, we have got Paul Bavier, our General Counsel, and in the front is the man who has made this all happen Erik Steiner, who is one of the founders and Head of Operations.
In addition, we have Dr. Roderike Pohl, who is one of the founders and VP of Discovery and Bob Hauser who is our Head of Manufacturing. Alan Krasner, our Chief Medical Officer who was scheduled to be on the program today sends his apologies; unfortunately there was a medical emergency that there was situation where he had to cancel out at the last minute. So Alan sends his apologies and I will fill in for Alan; can’t do the same job as Alan, but I’ll do my best in terms of moving forward.
So with those introductions let me get started and Paul is in the back and reminding me that I have to read all the forward-looking statements, which will take us through the rest of the morning. But anyway, they are on our website and all the disclaimers are out there.
I have taken you through the introductions, what I would like to do is to remind you that today’s presentation is being webcast. We also have books there for you with all the slides. But a little explanation, the book was printed yesterday. We had a brainstorming session last night, so the presentations will cutback a little bit, so you have probably more in your books than we will go through today. So you know it may be a little bit difficult to follow, but we thought it’s better for you to get more information.
The agenda today, I’ll provide a quick introduction. Lutz will take you through the limitations of current meal-time insulins and what the future holds. I’ll fill in for Alan and tell you what we are doing in the area of ultra-rapid-acting-insulins. Donna will come and then we’re going to shift a little bit to the glucagon side of the equation, talk about the hypoglycemia, the ultimate insulin dose limiter and the use of glucagon in practice.
Then Gerard and I will tag team in terms of Gerard taking you through some details in terms of the glucagon market and I’ll talk about sort of the R&D side in terms of glucagon and then we’ll finish up with Steven and Ed in terms of the bionic pancreas. And we’ll open it up for Q&A after each presentation as long we keep on time, we will allow one or two questions, otherwise we’ll hold them to the end in terms of finishing up.
Okay. So let me start off with just setting the background in terms of Biodel. Biodel focuses on diabetes and into the two areas you’re going to hear about today, both in insulin and in glucagon. We come up with our products usually based on a platform technology in developing formulations which pharmacokinetics and stability of known FDA products. So in other words, the risk in terms of the unknown of the active ingredient is taken out. We deal with insulin or with glucagon.
The other part of the process which is different I think at Biodel relative to some of the other companies been associated with, we effectively use this 505(b)2 regulatory process which is a very different development cycle. As an example, we'll talk about glucagon that’s going to go sort of from beginning to NDA filing and you are talking about a couple of years that’s a very rapid cycle and even the ultra rapid acting insulin has a cycle of about four years or five years.
The markets, I think will speak for themselves in terms of the multi-billion dollar markets. The pipeline which most of you in the audience are quite familiar with, our recombinant human insulin based ultra rapid acting prandial insulin, just moves into phase II study and the top line data will be in 3Q ‘13.
For the analog base, ultra rapid acting prandial insulin, well the study has started, today we're going to announce the study has started and we're on track to report the top line data early in 2013.
We talked about the liquid stabilized glucagon formulation. We were targeting the NDA in 2014. We won't really talk about the research programs that are on our plate but I am going to introduce one new one to you in terms of a concentrated form of an ultra-rapid-acting-insulin.
Just from a resources standpoint, we closed the books at the end of June with about $44 million in cash and that time we had just completed and over subscribed pipe financing for about $18.5 million that’s about 18.1 million shares outstanding and we have about 40 employees just straight north of here in Danbury, Connecticut.
This slide is sort of diabetes 101 but its also meant to put in perspective sort of where the competition is and where we hope to grow the market. So if you’re facing life as a Type 1 diabetic obviously you are lacking insulin but you still have the task of maintaining glucose in the normal range.
So the first form of insulin therapy that you would go through is basal insulin, Lantus marketed by Sanofi-Aventis a product I know well I used to be head of researcher at (inaudible) when Lantus was developed. Lantus probably has the bulk of the market its in fact now the best selling product in diabetes, it’s over $5 billion.
Revenue from Novo Nordisk has a very small share of the market but as you know (inaudible) is going to give Lantus some good competition. That takes care of the sort of the low basal levels of insulin that are required throughout the day but then at meantime when you have got spikes of glucose increases you need to take care of that. And then you’ve got prandial insulin which stores spikes and you can see those shown over here.
And two best selling prandial insulins currently in the market are Humalog from Eli Lilly and NovoLog from Novo Nordisk. Apidra which is sold by Sanofi-Aventis has a very small share relatively small share of that market. So that puts in perspective sort of the insulin part of the picture and let me talk about the ultra rapid acting and Lutz will give you an overview. This is the segments that we really hope to grow because of the unmet medical needs that Lutz will talk about.
And then you have got the other side of the equation in terms of glucagon. Glucagon is just the opposite of insulin and that blood sugar and currently glucagon there is only one set of products in the market for glucagon and that's a rescue indication in terms of severe hypoglycemia, that's going to be an area that we really hope to grow the market, you will see where the unmet medical need is, but that's only the tip of the iceberg in terms of glucagon because as Ed and Steve will tell you this is an area that we truly think can be grown as a franchise in terms of multiple other indications related to glucagon.
And when we talk about the bionic pancreas my four man’s analogy is we are trying to maintain glucose levels or you could think if it as driving upon trying to maintain the speed, try doing that with only an accelerator or only a break essentially that's what we have. I think and with glucagon we would have both an accelerator and the break to maintain the speed extremely well.
So that's the overall picture that will summarize sort of the areas where we hope to make differences in terms of going to market. So in those areas, we have multiple programs at Biodel, if you look at the markets here in terms of basal, prandial and glucagon, you can see the growth as forecast over the next decade in all of those areas and in particular you can see glucagon has a very small share of the market, Gerard will take you through that, that we hope to grow and the color coating is related to the Biodel programs that are here and again we are going to focus first on the ultra rapid acting prandial insulin and then come back and talk about the glucagon with medical needs and then the Biodel programs here today.
So with that I am going to stop, keep us on time and turn it over to professor Lutz Heinemann who will take us through the limitations of current meal-time insulins and what the future holds.
Good morning everybody. I assume my old (inaudible) good German [beer] for his nice advertisement block for profit. So if you have some more question come along I am happy to answer them. With that, I would like to proceed now with my presentation here and probably I should acknowledge my conflict of interest and in other words I have long standing interest it was Biodel and corporate [throughput] a number of years, there are these number of people in the room and I am somewhat proud of that I am able to make this statement.
Errol already introduced you a little bit in the physiology of insulin, and here you have some key numbers that I believe are somewhat interesting to see. So if you are eating nothing for 24 hours you still have need of approximately 24 units of insulin over full day and if you then decide okay sometimes it is nice to have some food, so you have a chance of estimating how many insulin you need to cover your [primary] insulin requirements.
The physiology of insulin secretion is a complex one and I will not go into detail however, we should keep in mind that we and you will see over and over again in my presentation but if you see in the periphery is only that what has (inaudible) the liver and we should therefore be careful that we not try to mimic the hexamer insulin level that we're measuring in the periphery. In other words, these spikes and this is a complex pattern that we’ve seen with insulin secretion over the day, which was measured in a periphery is too low in comparison to that, once it better sets in the (inaudible) and secreted towards the liver.
So having this secretion pattern here in mind, it was clearly the idea of the modern diabetes therapy, monitoring daily injections to mimic this pattern by applying for the rapid-acting-insulin and to apply also basal insulin here and it's a summation of the metabolic effect of the rapid-acting and the basal insulin, which would then have here the plasma insulin profile more or less mimic.
Is it important to have this rapid upstroke here in insulin level that we’ve seen here? This figure should highlight a little bit. If you measure insulin level frequently, in healthy subject might that be obese or lean, you can see this half here first, insulin secretion very rapidly, and so trigger if you see something to immediate cephalic response, there is a rapid increase here in circulating insulin level, followed by a slower increase and decline, depending a bit on the body weight.
If you look at patients with Type II diabetes, this initial response here is missing. Has this any impact on first hypoglycemic; it was an interesting experiment performed showing here the increase in blood glucose levels overtime after meal; if you measure blood glucose increases here in patients with Type II diabetes, there is no initial increase in insulinemia. We have higher excursion here after the meal. However, if you are infused intravenously insulin, the first 30 minutes you can see a drastically lower postprandial glycemic excursion; in other words the first insulin pulse there has an impact.
There are numerous factors and I’ll not go here through all the details here that are listed here that have an impact on postprandial glycemic excursions. The reason for showing this little list here is that you must be aware of it when it comes to good clinical experimental studies, meal related studies that we want to perform in order to evaluate the benefit of for example an ultra-fast-insulin. If you don’t take all these factors into account especially the pre-prandial glycemic insulinemia had to be more or less identical on the different study base. In other words, you must take care of the standardization otherwise you have no meaningful results. And to be honest, if you check many of the publications that are around, from my point of view in many of these studies not much or not enough attention was paid to this requirement.
So what is this? This is an old story that I would like to show you, it’s so called pizza, coke and tiramisu study and it was clearly an idea of my former boss Michael Berger. When we had a visitor from Eli Lilly showing us the first data from insulin lispro; this was something very novel at this point in time. We said, come on, let’s test it with something extreme, something all good diabetologists tells their patient not to eat; in other words, a pizza, a regular coke and a tiramisu. So this is what the diabetologists would tell you; this is forbidden for patients.