Q2 2010 Earnings Call Transcript

August 2, 2010 4:30 pm ET


Tim Morris – SVP, Finance and CFO

Leland Wilson – CEO

Peter Tam – President and COO


Jason Butler – JMP Securities

Mike King – Wedbush Securities Inc.

Alan Carr – Needham

Chris James – McNicoll, Lewis, & Vlak



Good day, ladies and gentlemen, and welcome to the VIVUS second quarter 2010 results conference call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will be given at that time. (Operator instructions) As a reminder, today's call is being recorded.

At this time, I would now like to introduce Mr. Tim Morris. Mr. Morris, you may begin.

Tim Morris

Thank you, Joe. Before we get started, I’d like to remind you that during this conference call, VIVUS may make projections or other forward-looking statements regarding future events or future financial performance of the company. We wish to caution you that such statements are just predictions and actual events or results may differ materially. Investors should read the risk factors set forth in the VIVUS Form 10-K for the year ended December 31, 2009 and the periodic reports filed with the Securities and Exchange Commission. These documents contain and identify important factors that could cause actual results to differ materially from those contained in our projections or forward-looking statements.

I will now turn the call over to Mr. Leland Wilson, CEO of VIVUS.

Leland Wilson

Thank you, Tim. Good afternoon and thank you for joining us today. Joining me on the call, along with Tim is VIVUS's President, Peter Tam. On today's call we will summarize our thoughts regarding the recent endocrinologic and metabolic drug advisory committee meeting for Qnexa. Next, Peter will touch on the one-year extension study, OB-305.

Peter will also provide an update on the upcoming presentations at medical conferences and provide an update on the filing for approval of Qnexa in the European Union. On avanafil Peter will recap the results of REVIVE-Diabetes study. And lastly, Tim will give an update on our cash balance.

Obviously, we were surprised and disappointed by the advisory committee outcome and rightfully view this as a setback in the approval process. Based on the comments of each of the voting members, however there may be reason to believe that individual decisions were close and that at least some of the reasons for no votes can be rectified by the PDUFA date.

Our examination of the reasons for the negative votes can be summarized into four key areas, the potential risk for suicide and teratogenicity; the potential for rapid market uptake and resulting large exposure; the lack of longer term data and the desire for a deeper understanding of the Qnexa REMS program.

Since the advisory committee meeting, we have been working closely with the FDA to address these issues. It is not in our best interest to debate these issues in this conference call, but I will briefly summarize our position on each of these topics.

The meeting materials are available on the FDA website and the various analysts and media's have reported on the meeting. Transcripts and replays of the meetings are also available to the public and we would encourage you to refer to these materials for answers to specific questions.

With regard to the risk for suicide, we believe the risks are low, if they exist at all. Despite extensive testing in our clinical program, no signal was detected. We believe the potential risk for suicide can be managed through label warnings and a REMS program that will inform patients and their families to be alert for the emergence or worsening of depression, suicidal thoughts or behavior and or any unusual changes in mood or behavior. This warning currently exists in the topiramate label.

Concerning teratogenicity, it is our position that topiramate is not a teratogen. After 14 years on the market and millions of patient years of exposure at higher dose than those seen with Qnexa, registry data reveals no clear signal for teratogenicity. We believe it is prudent, however to label Qnexa appropriately, educate through REMS and establish a patient registry for which – for the first time, can prospectively collect an appropriate control population.

In addition, since its weight loss is not appropriate in pregnant women, we endorse the FDA's position of pregnancy category X. With respect to concern for rapid market uptake and large exposure, we are exploring with the FDA appropriate ways to limit exposure during the launch phase so that potential risks can be carefully monitored without excessive exposure. Part of this effort will be to assure that only appropriate patients are prescribed Qnexa.

In regards to the need of panel members to see long term data, two year data will be available in early September and hopefully will provide assurance that there were no new risks identified and that known risks remained at or below the level seen in the one-year data. Finally, we have developed a detailed REMS program which will be discussed with the FDA.

In summary, we strongly believe in the approvability of Qnexa and take at least some solace in the comments from one panel member that the FDA – quote, unquote the FDA pays more attention to the discussion rather than just counting beans.

And with that, I'll turn the call over to Peter.

Peter Tam

Thanks, Lee. We have conducted a one-year extension study of patients from the CONQUER study. This study, known as SEQUEL or a OB-305, is a double-blind placebo controlled three arm prospective study across 36 centers comparing Qnexa full and mid doses to placebo over an additional 52 week treatment period. Patients in SEQUEL continued receiving the same treatment they had been receiving in a blinded fashion from the CONQUER study.

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