Eurand N.V. (EURX)
Q2 2010 Earnings Call
August 06, 2010 08:30 am ET
Gearóid Faherty - Chairman and CEO
Mario Crovetto - CFO
Bill Newbould - VP of IR
Annabel Samimy - Stifel Nicolaus
Ian Sanderson - Cowen & Company
Frank Pinkerton - Suntrust Robinson Humphrey
David Steinberg - Deutsche Bank
Scott Henry - Roth Capital Partners
Sumant Kulkarni - Bank of America
Rich Silver - Barclays Capital
Greetings, ladies and gentlemen, and welcome to the Eurand Second Quarter 2010 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. (Operator Instructions)
It is now my pleasure to introduce your host, Mr. Bill Newbould, Vice President of Investor Relations at Eurand. Thank you. Mr. Newbould, you may now begin.
Thank you, operator, and welcome everyone. Joining us on the call today are Gearóid Faherty, Chairman and Chief Executive Officer and Mario Crovetto, Chief Financial Officer. I would like to point out that the transcript for today's call will be posted on our website and also provided as a Form 6-K.
During the course of this conference call we will make projections or other forward-looking statements regarding future events or the future financial performance of the company.
The words believe, estimate, anticipate, intend, expect plan or similar instructions are intended to identify forward-looking statements. We wish to caution that such statements are subject risks and uncertainties that could cause actual events or results to differ materially.
Important factors relating to our business including factors that could cause actual results to differ from our forward-looking statements. Are described in our Form 20-F, Form 6-K's and other fillings with the SEC. The company assumes no obligations to update forward-looking statements to reflect actual results changed assumptions or other factors.
I’d now like to turn the call over to Gearóid.
Thank you Bill and good morning, everyone and thanks for joining our call today. As you've seen from our press release this morning the second quarter was another strong course for our business and the highlight of the quarter was the strong growth of our ZENPEP franchise.
Product sales in the quarter were up 22% to EUR29.4 million or $36 million on the same quarter last year. Driving this growth was sales of ZENPEP which more than offset lower revenue from Axcan for ULTRASE and from Pancrelipase, the low cost Pancreatic Enzyme Product or PEP that we stopped shipping when we launched ZENPEP in November 2009.
We are extremely pleased by the progress we have made this quarter with ZENPEP and are optimistic about the products future. I’d like to take a few moments now to review ZENPEP’s recent performance and discuss some of the competitive dynamics that we’ve seen in the pancreatic enzyme market over the last few months.
Since April 23, the last full week before the FDA’s April 28 deadline to stop distribution of unapproved PEP's weekly reach our prescriptions for ZENPEP as reported by IMS have grown nearly four fold from 585 to 2,140 and we’ve more than tripled our market share for ZENPEP from 3% to 10%.
During that same time, we’ve nearly doubled the weekly retail scripts for our low dosed authorized generic Pancrelipase from 581 to 1,070. Taken together our ZENPEP franchise market share has grown from 6% to 15% and increased about 150%. Driving the robust growth in the ZENPEP franchise has been a combination of factors including increased product availability in the distribution channels, improved reimbursement in formulary status, higher brand awareness and physician acceptance due to strong promotional efforts and favorable competitive dynamics.
As I noted earlier, shipment of unapproved PEP's to wholesalers were discontinued at the end of April and government reimbursement was also hottest for most unapproved PEP's at the same time and at the end of May for J&J product. This situation created a window of opportunity for ZENPEP to capture a good part of the ground lost by the competition. We see this window of opportunity continue in the coming months as the new entrant works to fill supply channels and seek reimbursements for their products.
We have also worked hard to ensure that patient access to ZENPEP is not an issue. In an addition to an extensive sampling program initiated at launch we have worked to increase the product availability particularly in the large pharmacy chains.
I am also pleased to report that we have made excellent progress on the reimbursement front in the second quarter. The FDA's enforcement of the April 28, deadline heightened awareness among payers especially where only one approved PEP was listed on their formulary. In these instances payers were actually calling up to initiate contracting discussions.
We now have more then 90% of all covered life's in commercial managed-care and more then 90% of Medicare Part D life's of access to ZENPEP. We also have extensive Medicaid coverage with over but a hand full of states now in the fold.
As one of only two sales forces prior to the recent launch of J&J's product actively promoting their brands to physicians, our share of rights have increased considerably leading to broader market awareness and acceptance. This is especially the case in Cystic Fibrosis for greater awareness of the regulatory situation regarding PEP's makes physicians more willing to switch their patients to an approved PEP. In the larger GI segment the transition to approved PEP's is taking a little longer underscoring for us the opportunity to continue to grow ZENPEP share in the coming months. Our commitment to the Cystic Fibrosis community expand beyond our commercial efforts.