Adolor Corporation (ADLR)

Q1 2010 Earnings Call Transcript

April 28, 2010 8:45 am ET

Executives

Stephen Webster – SVP, Finance and CFO

Mike Dougherty – President and CEO

Eliseo Salinas – SVP, R&D and Chief Medical Officer

Analysts

Ling Wang – Brean Murray

Jeremiah Shepard – Wedbush

Presentation

Operator

Welcome to the Adolor conference call. At this time, all participants are in a listen-only mode. There will be a question-and-answer session to follow. Please be advised that this call is being taped at the request of Adolor. At this time, I would like to introduce your host for today's call, Stephen Webster, Senior Vice President of Finance and Chief Financial Officer at Adolor. Please go ahead.

Stephen Webster

Thank you, operator. Good morning everyone. Today, we will provide an update of our operations and review our financial results for the quarter-ended March 31st. Before we begin, let me remind you that certain statements on this call may be forward-looking and are subject to risks and uncertainties associated with our business. These statements may concern, among other things, guidance as to future revenue from ENTEREG or anticipated levels of our cash and investments, our operations and prospects, transactions, intellectual property, litigation, the development of pharmaceutical products, clinical trials and any potential approval of our product candidates.

Additional information and risk factors affecting the company's business and financial prospects and other factors that could cause Adolor's actual performance to vary from our current expectations are available in our SEC filings. Investors with further questions should contact me at 484-595-1500. This conference call is being webcast via the Adolor home page and it will be archived for one week after the call. Now, I'll turn it over to Mike Dougherty, our President and Chief Executive Officer.

Mike Dougherty

Thanks, Steven. Good morning everyone and thank you for joining our call today. Before we review our financial results later in this call, we'll provide a review of our progress in this first quarter of 2010, up again with the brief overview of operating performance with ENTEREG and then we'll spend the majority of the call on our research and development pipeline with Eliseo Salinas, our senior VP of research and development and I reviewing important developments from both our delta and opioid bowel dysfunction function programs.

Beginning with ENTEREG, as reported early this morning, first quarter net sales at ENTEREG were $5.3 million, up from net shipments in the year ago quarter of $2 million and up just over 8% from $4.9 million in the fourth quarter of 2009. We saw increases in hospital registrations, formulary approvals and the number of reordering hospitals this past quarter as well.

We estimate that ENTEREG is now on formulary at nearly 575 of the key 1400 hospital accounts that perform 80% of bowel section surgeries in the United States, an increase of approximately 75 hospitals in the first quarter. We count 550 of these hospitals now as reordering hospitals, another important metric of us, representing an increase of 50 hospitals since December 31, 2009.

And finally, another 50 of these hospitals effective registration under our EASE program this quarter, brining total registrations to 925 or about two thirds of this key accounts. Most fundamentally, we continue to note repeated observations of the benefits that this first in class product provides. Both the patients in terms of decrease length of stay and the hospitals institution in terms of pharmacoeconomic benefits. With all of these, our expectations for continued growth in ENTEREG sales remain and we are reiterating the guidance first offered in late February for 2010 net sales of ENTEREG in the range of $30 to $35 million.

Turning to our development programs, the first quarter saw a continued progress in both our delta program and our opioid bowel dysfunction program. As you recall from our year end update, 2010 will be a very important time period with respect to each of these programs, the year end which we advance into proof-of-concept studies and OBD and under important Phase II proof-of-concept data in our delta program.

I'll now ask Eliseo to offer more detailed update on our progress in R&D in the first quarter. Eliseo?

Eliseo Salinas

Thanks, Mike. As Mike mentioned, 2010 will be an important year in terms of milestone regarding our development programs. In the delta receptor agonist program, Pfizer and we recently completed enrollment in the phase IIA study of both ADL5859 and 5747 in patience with osteoarthritis of the knee.

This is four-armed study, enrolled over 400 patients comparing each compound against placebo and oxycodone CR for two weeks. We were pleased with this period enrollment and the overall quality of execution of this study which is completing ahead of schedule.

We anticipate sharing the results of this important trial in June or July of this year. These are significant study in result of our program and we are very excited to be in because of data. These also osteoarthritis of the knee study represented the first time that ADL for example saving has been accessed in efficacy studies and the first time we’ve conducted an efficacy study with ADL at 5A59 with specific attention paid to potential food effects and with our reformulated compound.

Osteoarthritis remains an important area in need of noble approaches to pay management and an important franchise for our partner [ph], Pfizer. Positive result in this trial will represent a critical step forward for this program and importantly, a decision to move forward into phase IIB studies would result in a $15 million milestone payment from Pfizer.

Read the rest of this transcript for free on seekingalpha.com