NeurogesX Inc. (NGSX)

Q1 2010 Earnings Call Transcript

May 11, 2010 4:30 pm ET

Executives

Carol Ruth – IR, The Ruth Group

Tony DiTonno – President & CEO

Stephen Ghiglieri – EVP, COO & CFO

Analysts

Andrew Vaino – ROTH Capital

Michael Higgins – Rodman & Renshaw

Presentation

Operator

Greetings and welcome to the NeurogesX Inc. first quarter 2010 earnings conference call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator instructions) as a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Carol Ruth of the Ruth Group. Thank you. You may begin.

Carol Ruth

Thank you, operator. Joining us on the call today are Tony DiTonno, Chief Executive Officer, and Stephen Ghiglieri, Executive Vice president, Chief Operating Officer and Chief Financial Officer. Statements in this conference call regarding NeurogesX’s business, which are not historical facts, may be forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995 or the act.

NeurogesX disclaims any intent or obligation to update these forward-looking statements and claims protection of the Safe Harbor for forward-looking statements contained in the act.

Forward-looking statements may include, but are not limited to, statements regarding plan; commercialization and sales strategies; as well as the expected benefits of success strategy and the effects of strategies may have on sales and revenue expectations; expectations regarding reimbursement for Qutenza, including the receipt and timing of any product-specific; reimbursement code; the estimated usage profile of patients, that may use Qutenza and physicians that may prescribe Qutenza; sales and marketing expenses for 2010 and into 2011, including the rate of increase in the such expenses over 2010 and into 2011; the timing and scope of commercial launch of Qutenza in the United States and European Union; the roles and activities of Astellas in commercialization of Qutenza in the European Union; the timing of reentry of NGX-1998 into clinical development; the sufficiency of cash resources to fund the Company’s operations into 2011 and expected source of capital.

Actual results may differ from these discussed here today. The factors that may affect the outcome of forward-looking statements are explained in the risk factors section of our filings with the SEC, including our Form 10-K, which we filed with the SEC on March 19, 2010 and our most recent Form 10-Q for the first quarter 2010 which will be filed with the SEC later this week.

Now I would like to turn the call over to Tony DiTonno, Chief Executive Officer of NeurogesX.

Tony DiTonno

Thanks you, Carol and thank you all for joining us today. Today, we will give you an update on our first quarter 2010 activities and comment on the recent launch of Qutenza. As you know, we are just into the sixth week of launch and so far we are pleased with how things are playing out in the market. Physician interest in Qutenza has been positive. We’re building on this interest to help lay the foundation for long-term sales growth by first gaining physicians commitment to prescribe Qutenza, secondly, training physicians office on how to administer Qutenza, third, educating physician overseas on how to acquire Qutenza and finally, establishing reimbursement for Qutenza as supporting physician and patients reimbursement issues.

I will update you shortly on more of these specifics regarding these activities. Later in the call, Steve will talk more about the first quarter financials and quantify some of the metrics we’re using to gauge early adoption of Qutenza.

With the launch of Qutenza on April, the 5 th of this year, we believe we have added an important end treatment option for patients suffering from PHN and, of course, for the physicians who treat them. To make this possible, we spent the first quarter of 2010 completing the build out of our commercial infrastructure.

We’re very pleased with the talented and season individuals who make up our 40% sales team of representatives and management. This team has in-depth experience selling novel physician administered products and devices and they understand the importance of customer support when it comes to training product acquisition and reimbursement.

One of the metrics early on is to track the number of target physicians that have been reached, meeting, that we have given an initial introduction to Qutenza. During our Investor Day, about 10 days ago, we reported that 845 target physicians had been reached in the first four weeks of our launch. I’m happy to say this number continues to rise and as of last Friday, May, the 7 th our reach had expanded to 1008 physicians. So you can see that we continue to make progress in getting the word out about Qutenza’s availability.

The focus of this initial targeting is on the physicians who primarily treat pain; we identified our target doctors to a screening process (inaudible) high number of PHN patients and practice, physician specialty and the number of pain procedures performed. While these data are not perfect, they help identify a target pool of physicians which we then profile with our sales force to refine our targeting. We don’t expect that every physician who writes high volumes of prescriptions for PHN drugs will automatically be a prime candidate for administering Qutenza.

Qutenza has the added element of meeting a physician practice that has the space and staff available to administer Qutenza. Pain specialists are initially our primary target because they usually have both the space and the staff required.

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