PGNX

Progenics Pharmaceuticals Inc. (PGNX)

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Progenics Pharmaceuticals (PGNX)

Q3 2012 Earnings Call

November 08, 2012 8:30 am ET

Executives

Amy Martini - Executive Vice President and Co-Leader of Corporate & IR Practice

Mark R. Baker - Chief Executive Officer, Director, Member of Science & Technology Committee and Member of Strategy & External Technology Subcommittee

Angelo W. Lovallo - Principal Financial Officer, Principal Accounting Officer, Senior Executive Director and Treasurer

Analysts

Brian Klein - Stifel, Nicolaus & Co., Inc., Research Division

Alan Carr - Needham & Company, LLC, Research Division

Ryan Martins - Lazard Capital Markets LLC, Research Division

Christian Glennie - Edison Investment Research Limited

Presentation

Operator

Good day, ladies and gentlemen, welcome to Progenics Pharmaceuticals Third Quarter 2012 Results Call. [Operator Instructions] As a reminder, this conference call is being recorded. Now I'll turn the conference over to Amy Martini. Please begin.

Amy Martini

Thank you, Tyrone, and thank you for joining our conference call today to discuss third quarter financial results and the business update. With me on the call today are Mark Baker, CEO; and joining us on the call for the first time, Angelo Lovallo, Senior Executive Director of Financial Reporting and Treasurer.

Before we begin, I will remind you that remarks made on this call that are not historical in nature, may be forward-looking statements, and they are subject to a number of risks and uncertainties. Our actual results may differ materially. Such remarks may include, but are not limited to, those involving regulatory actions related to various formulations of Relistor, our business and commercialization strategies and expectations of future growth, revenues and assessments of our competitive position.

We ask that you please refer to our quarterly report on Form 10-Q and other filings with the U.S. Securities and Exchange Commission for more information on the risks that could cause our actual results to differ. As a reminder, statements made today are as of November 8, 2012, only, and we undertake no obligation to update or revise them.

I'll now turn the call over to Chief Executive Officer, Mark Baker. Mark?

Mark R. Baker

Thank you, Amy, and good morning to everyone. Let me get right into and update on the regulatory and development status of subcutaneous Relistor for chronic use. In July, we received from the FDA a Complete Response Letter, following its review of an sNDA for the subcutaneous Relistor for the treatment of opioid-induced constipation in adult patients with chronic non-cancer pain. We and colleagues from partner company Salix have since conducted an End-of-Review meeting with members of FDA's Gastroenterology division to gain clarity on the approval deficiency outlined in the CRL.

The CRL indicates a single approval deficiency related to the division's concern that there may be a risk associated with the chronic use of mu-opioid antagonists in patients who take opioids chronically for pain. Their concern is related to reports of signs and symptoms they believe may be caused by opioid withdrawal, for example, itching or piloerection or goosebumps, which was seen in a small number of patients. Progenics, reliant on data generated from validated assays and withdrawal administered during our clinical trials, does not believe that opioid withdrawal occurs when patients take Relistor.

The division's concern is that if it exists, opioid withdrawal could increase the risk of cardiovascular events in patients chronically taking Relistor. Baseline data from clinical trials of Relistor, including a year-long safety study and a review of that data by independent experts, we do not believe that there is an increase in cardiovascular events associated with the use of Relistor in this patient population.

In the End-of-Review meeting, the division communicated that in order to demonstrate that this risk does not exist, a very large, well-controlled chronic administration trial would be needed to assess the safety of Relistor prior to its gaining market approval for treatment of patients with OIC who are taking opioids for chronic non-cancer pain. In their discussions with the divisions, Salix expressed the view that the post-marketing clinical and pre-clinical data currently available for Relistor adequately demonstrate an appropriate and expected safety profile sufficient to permit the approval of d existing Relistor sNDA, and we agree with this assessment.

We plan to continue to work with FDA to generate a reasonable path forward for Relistor that can be agreed upon. While we can't definitively predict the duration of interactions with FDA regarding this matter, we are hopeful that a path forward will be determined during 2013.

In parallel, we expect Salix to file 4 marketing authorization in the European Union to expand the subcutaneous Relistor label to include patients with chronic non-cancer pain, based on the existing data package. It is important to note that the CRL and recent discussions with FDA focused on subcutaneous Relistor for patients with chronic non-cancer pain. Regarding the oral formulation, Salix is continuing its development work but will not file the NDA this year. And we will be in discussions with the FDA regarding the path forward for the oral formulation.

Turning our attention now to the already approved patient population, individuals with advanced illness. Relistor year-to-date global sales reported by our collaborators are $28 million, which represents a 53% increase over that period last year. Global sales reported by our collaborators for the third quarter were $4.9 million.

In the first and second quarters of this year, pre-filled syringes were introduced into the distribution channels, and Salix has told us that sales for those quarters reflected destocking. Now that the initial stocking of the pre-filled syringes is largely completed, third quarter reported sales were less as the distributors accessed that inventory. Salix has said that they see a growing trend in prescriptions and recently confirmed a current annualized run rate of $32 million and raised their estimate of peak year sales for sub-Q Relistor in the AI market. And as Salix announced yesterday, the FDA recently cleared an update to the advanced illness label.

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