Cadence Pharmaceuticals' CEO Discusses Q2 2012 Results - Earnings Call Transcript

Cadence Pharmaceuticals, Inc. (CADX)

Q2 2012 Earnings Call

August 2, 2012, 04:30 pm ET

Executives

Ted Schroeder - President & CEO

Bill LaRue - SVP & CFO

Jim Breitmeyer - EVP & CMO

Scott Byrd - SVP & Chief Commercial Officer

Analysts

Charles Duncan - JMP Securities

Richard Lau - Wedbush Securities

Imran Babar - Cowen

Michael Schmidt - Leerink Swann

Patti Bank - DISCERN Securities

Juan Sanchez - Ladenburg

Greg Fraser - Bank of America

Presentation

Operator

Good afternoon and welcome to the Cadence Pharmaceuticals second quarter 2012 financial results conference call. On the call today are Ted Schroeder, President and CEO, Bill LaRue, Senior Vice President and Chief Financial Officer, Jim Breitmeyer, Executive Vice President and Chief Medical Officer, and Scott Byrd, Senior Vice President and Chief Commercial Officer.

At this time, I would like to inform you that this conference is being recorded and that all participants are in a listen-only mode. At the request of the company, we will open the conference up for questions-and-answers after the management presentation.

Our first speaker is Bill LaRue. Go ahead, sir.

Bill LaRue

Thank you. Good afternoon everyone. Before we begin, I would like to remind you that statements included in this conference call that are not a description of historical facts are forward-looking statements. Forward-looking statements include statements regarding financial guidance, expectations regarding sales and demand, formulary approval, revenue growth, expenses and the market opportunity for OFIRMEV. The status of the recalls of OFIRMEV and related investigation, our expectation that no supply shortages will result from the July 2012 recall, knowing the cost of this recall have a material impact on our financial statements and the date on which we expect to commence enrollment in our post approval pediatric clinical trial of OFIRMEV. You are cautioned not to place undue reliance on these forward-looking statements which speak only as of the day that hereof.

Our actual future results may differ materially from our current expectations due to the risks and uncertainties inherent our business. These risks are detailed under Risk Factors in our most recent Form 10-Q and elsewhere in our periodic reports and other filings made with the Securities and Exchange Commission from time-to-time. All forward-looking statements are qualified in their entirety by this cautionary statement which is made under the Safe Harbor provisions of Section 21E of the Private Securities Litigation Reform Act of 1995 and we undertake no obligation to revise or update the information discussed during this call to reflect events and circumstances after this call.

If anyone has not seen our press release issued today, you can access it on our website at www.cadencepharm.com. We also post and maintain the current version of our corporate presentation on the Investors portion of our website under events and presentations and then corporate overview. Additionally, this conference call is being webcast through our website and will be archived there for future reference. We use the Investors portion of our website as one means of disclosing material non-public information, so we encourage investors to monitor our website in addition to following our press releases, SEC filings and public conference calls and webcasts.

Ted?

Ted Schroeder

Thanks Bill. Good afternoon and thank you for joining us today. I will open by providing a brief overview of the second quarter next Scott will provide an update on our commercial activities for OFIRMEV and then Bill will discuss our financial results. Following our prepared remarks, we will open the call to your questions.

I am very pleased to report that we had a strong second quarter achieving net product revenue growth of 38% compared to the first quarter of 2012; importantly our net product revenue of $11.1 million for the quarter exceeded the financial guidance that we provided last quarter. We believe we are effectively executing on our sales and marketing strategy and that the adoption of OFIRMEV will continue to generate strong revenue growth.

I would like to take a moment to put context around our launch of OFIRMEV. As of June 30, 2012 we sold a total of 3.1 million doses of OFIRMEV since the product launched in January of 2011. When compared to available data on comparable new hospital product launches during the past five years that we have reviewed, on average approximately nine times as many doses of OFIRMEV was sold and doses of those products during the first 18 months after launch. We believe this creates a strong base of OFIRMEV users that will continue to drive growth.

At this point, I would like to turn the call over to Scott who will discuss our commercial operations and sales performance during the second quarter.

Scott Byrd

Thank you, Ted. The second quarter was our best commercial quarter yet, during the quarter we sold over 1.1 million vials of OFIRMEV, an increase of over 300,000 vials or 38% as compared to the first quarter of 2012.

As a result, OFIRMEV’s quarterly IV analgesic unit market share grew to 1.93% in the second quarter of 2012 versus 1.41% in the first quarter. OFIRMEV continues to make inroads in the medical community and gain acceptance to the foundation of a multi-modal approach to acute pain management. There are three drivers that we believe account for the growing demand of OFIRMEV; growth in new customers, increasing order frequency and increasing average of quantities of product ordered by our customers.

The number of unique accounts that have ordered OFIRMEV as of June 30, 2012, increased to nearly 300,200 accounts, which is up 17% from the end of the first quarter of this year. We believe that this is indicative of physician demand for new methods to manage pain and the recognition of the role that OFIRMEV can play in a multi-modal approach to acute pain management.

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