Zogenix's CEO Discusses Q2 2012 Results - Earnings Call Transcript

Zogenix, Inc. (ZGNX)

Q2 2012 Earnings Call

August 8, 2012 4:30 PM ET


Catherine O’Connor – IR

Roger Hawley – CEO

Ann Rhoads – EVP, CFO, Treasurer and Secretary

Stephen Farr – President and COO


Michael Tong – Wells Fargo Securities

Michael Schmidt – Leerink Swann

Josh (ph) – Stifel Nicolaus

Chris Holterhoff – Oppenheimer



Good day ladies and gentlemen, and welcome to the second quarter 2012 Zogenix, Inc. conference call. My name is Erica (ph) and I will be your coordinator for today. At this time all participants are in a listen-only mode. We will be facilitating a question-and-answer session towards the end of this conference. (Operator Instructions). I would now like to turn the presentation over to your host for today’s call, Ms. Catherine O’Connor. Please proceed.

Catherine O’Connor

Thank you, Operator, and thank you all for joining us this afternoon. With me on today’s call are Roger Hawley, our Chief Executive Officer; Dr. Stephen Farr, our President and Chief Operating Officer; and Ann Rhoads, our Executive Vice President and Chief Financial Officer.

Earlier today Zogenix issued a news release announcing the company’s financial results for the second quarter 2012. We encourage everyone to read today’s news release as well as Zogenix’s quarterly report on Form 10-Q which will be available on our website at www.Zogenix.com.

Roger will open the call with an update on SUMAVEL DosePro. Ann will then review our financial results for the second quarter 2012 and Steve will follow with an update on our development programs including the NDA filings for Zohydro. At the end of the prepared remarks we will open up the call for a question and answer session.

Please note that certain of the information discussed on the call today is covered under the Safe Harbor provisions of the Private Securities Litigation and Reform Act. We caution listeners that during this call Zogenix management will be making forward-looking statements.

Actual results could differ materially from those stated or implied by the forward looking statements due to risks and uncertainties associated with the company’s business. These forward-looking statements are qualified by the cautionary statements contained in Zogenix’s news releases and SEC filings including its annual report on Form 10-K.

This conference call also contains time sensitive information that is accurate only as of the date of this live broadcast, August 8, 2012. Zogenix undertakes no obligation to revise or update any forward looking statements to reflect events or circumstances after the date of this conference call.

Now I’d like to turn the call over to Roger Hawley, Chief Executive Officer of Zogenix.

Roger Hawley

Thank you Catherine, and thanks to everyone for joining us today for our second quarter 2012 conference call. The Zogenix team has been very active and we’re also very excited about our future. We’ve made solid progress in each of our product programs and in financing our operations to build the value of the company. We’ve reached several significant product-related milestones that enhance the long-term outlook for our business.

First, we entered into an exclusive co-promotion agreement for SUMAVEL with Mallinckrodt, the consumer division of Covidien. Second, we received confirmation from the FDA that they have accepted our NDA for review of our lead product candidate, Zohydro ER with a PDUFA date of March 1, 2013. Third, we’ve initiated our Relday Phase 1 Safety and PK study, and fourth, we’re launching our new DosePro technology co-marketing campaign with Battelle.

We also recently raised net proceeds of $65.5 million in an equity offering that gives us the resources to first repay our term debt and also to continue driving the growth of SUMAVEL DosePro with neurologists, headache specialists, and high prescribing physicians through our Zogenix sales team of 95 representatives and we’ll be supporting the re-launch with our new partner, Mallinckrodt.

Second, we’ll be moving forward with the pre-approval and pre-launch preparations for Zohydro ER, and pending approval, launch the first and only single entity extended release formulation of hydrocodone in the second quarter of 2013.

Third, to complete our Relday study by year end and assuming it demonstrates safety and long-acting therapeutic PK profile, we’ll leverage the study results to potentially enter a rest of world partnership that will support the remaining Relday product development while retaining US rights.

Then fourth, to continue advancing our early stage new product opportunities including through our DosePro technology marketing partnership with Battelle. With a strengthened balance sheet and adequate capital to execute our business plans, we are very pleased with our progress and believe we are now well-positioned to continue building value for our shareholders.

Now let me update you on SUMAVEL DosePro results and initiatives including progress with a co-promotion partner along with some brief comments on our strategy for Zohydro and Relday.

On SUMAVEL for the second quarter 2012, we drove over 20,000 total prescriptions in the quarter up 16% over the second quarter of the previous year without a co-promotion effort in the second quarter, total prescriptions were down only 6% from the first quarter of 2012 with the two key components being the Zogenix sales force increased total prescriptions by 6% from all physicians we now call on, including the specific primary care physicians transferred to our team for a total of 16,000 prescriptions generated by our team in the second quarter.

In this quarter, which was the first time without a co-promotion effort, we did see a decline in prescriptions for those primary care physicians which Zogenix was not calling on. We continue to see a strong refill rate of 43% compared to 39% in the previous quarter. We reported net product revenue from sales of SUMAVEL DosePro of $8 million which includes the impact of recording $630,000 increase in the reserve for future product returns in the second quarter.

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