Transcept Pharmaceuticals Management Discusses Q2 2012 Results - Earnings Call Transcript

Transcept Pharmaceuticals (TSPT)

Q2 2012 Earnings Call

August 13, 2012 4:30 pm ET

Executives

Thomas P. Soloway - Chief Operating Officer and Executive Vice President

Glenn A. Oclassen - Chief Executive Officer, President and Director

Leone D. Patterson - Chief Financial Officer and Vice President

Analysts

Charles C. Duncan - JMP Securities LLC, Research Division

William Tanner - Lazard Capital Markets LLC, Research Division

Jason M. Gerberry - Leerink Swann LLC, Research Division

Ed Arce - McNicoll, Lewis & Vlak LLC, Research Division

Presentation

Operator

Good day, ladies and gentlemen, and welcome to Transcept Pharmaceuticals Second Quarter 2012 Earnings Conference Call. [Operator Instructions] As a reminder, this conference call may be recorded. I would now like to hand the conference over to Mr. Tom Soloway, Executive Vice President and Chief Operating Officer. Sir, you may begin.

Thomas P. Soloway

Thank you, operator, and good afternoon, everyone. Thank you for joining us today to discuss the Transcept Pharmaceuticals' 2012 second quarter results. My name is Tom Soloway, Executive Vice President and Chief Operating Officer of Transcept. And joining me on the call today are Glenn Oclassen, President and Chief Executive Officer; and Leone Patterson, our newly appointed Vice President and Chief Financial Officer.

After market close this afternoon, we released financial results for the quarter ended June 30, 2012. A copy of this press release is available on our website and has been filed on Form 8-K with the SEC. In addition, we plan to file our Form 10-Q with the SEC this afternoon and encourage everyone to read these documents. We remind you that this conference call will contain forward-looking statements that are intended to be covered under the Safe Harbor provided by the Private Securities Litigation Reform Act. Examples of such statements include, but are not limited to: plans by Purdue Pharma to invest approximately $100 million in the commercialization of Intermezzo, including the timing and nature of the investment; the formation, size and utilization of an Intermezzo sales force and plans to conduct direct-to-consumer advertising, including the timing and feasibility of such plans; the capabilities of the Purdue managed care organization, including providing patient co-pay coupons and our expectations regarding Purdue's ability to successfully commercialize Intermezzo, including via physician and patient education; our expectations regarding future marketing efforts and effectiveness thereof; our expectations regarding the benefits of Purdue's marketing and other efforts on the commercialization of Intermezzo; our beliefs regarding the timing, size and nature of commercial opportunities for Intermezzo, including managed care placement, as well as physician and patient acceptance; our beliefs regarding the challenges facing the commercialization of Intermezzo and Purdue's ability to address such challenges; our expectation of Orange Book listing and receipt of the $10 million milestone payment from Purdue; our expectations regarding the trajectory of prescriptions for and revenue derived from Intermezzo and the timing of such projections; our beliefs regarding intellectual property and product exclusivity for Intermezzo and its importance and duration; our beliefs regarding the accounting treatment and adjustment of royalties on net sales of Intermezzo generated by Purdue; our beliefs regarding the importance of Intermezzo prescription growth as an indicator of success; our beliefs regarding the potential benefits of TO-2061 and our plans to develop TO-2061, our investigational product for the treatment of obsessive compulsive disorder, and expectations for enrollment, completion, top line data availability and the timing of our end of Phase II meeting it with the FDA. These statements are based on information that is available to us today. We may not actually achieve our goals, carry out our plans or intentions, or meet the expectations or projections disclosed in our forward-looking statements. And you should not place undue reliance on these statements.

Our forward-looking statements do not reflect the potential impact of any in-licensing agreements, acquisitions, mergers, dispositions, joint ventures or investments that we may enter into or terminate. Actual results or events could differ materially, and we assume no obligation to update these statements as circumstances change, except as required by law.

For additional information concerning the factors that could cause actual results to differ materially, please see the Forward-looking Statements section in today's press release and the Risk Factors section of our quarterly report on Form 10-Q for the quarter ended March 31, 2012, which was filed with the SEC this afternoon.

And with that, I will now turn the call over to Glenn Oclassen.

Glenn A. Oclassen

Thanks, Tom, and good afternoon, everyone, and thank you for joining the call today. Intermezzo, our lead product, was launched on April 4, 2012, by our marketing partner, Purdue Pharma.

As we've discussed in the past, Purdue is investing as much as $100 million in the first 12 months of the Intermezzo launch, and has created a new sales force of 275 representatives devoted exclusively to the promotion of Intermezzo. Intermezzo was approved by the FDA in November of 2011 as the first and only prescription sleep aid indicated for use as needed for the treatment of insomnia at the time that a middle-of-the-night awakening is followed by difficulty returning to sleep. We are still in the early stages of the Intermezzo launch. Both we and Purdue continue to receive positive feedback regarding patient experience with the product.

Prescriptions are growing at a compounded rate of approximately 4% each week since the beginning of May. But at a weekly total of approximately 1,000 prescriptions, it is clear that significant work remains to establish Intermezzo as an important insomnia product. The job that still remains for us and for Purdue is reflected in the royalty revenue numbers we'll discuss shortly.

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