Avanir Pharmaceuticals' CEO Presents At Canaccord Genuity 32nd Annual Growth Conference (Transcript)

Avanir Pharmaceuticals, Inc. (AVNR)

Canaccord Genuity 32nd Annual Growth Conference Call

August 14, 2012 9:30 AM ET

Executives

Keith Katkin – President and CEO

Analysts

Ritu Baral – Canaccord Genuity

Presentation

Ritu Baral

Good morning, everyone. Thanks for joining us. I'm Canaccord Genuity Senior Biotech Analyst, Ritu Baral, and thank you for joining us for the Avanir presentation. With us this morning to present is CEO, Keith Katkin.

As many of you know, Avanir has launched and is rolling out NUEDEXTA for pseudobulbar affect, a condition that affects many patients with neurodegenerative diseases such as stroke, traumatic brain injury and Alzheimer’s

Before we begin, I would just point you to the disclosures in your conference materials for the relationship between Canaccord on the banking front but without further ado, here's Keith.

Keith Katkin

Thanks, Ritu, and good morning, everyone. Thank you for joining us for the Avanir Incorporate presentation. I'd like to start with the forward-looking statement as I will be making statements that are forward-looking in nature. I would encourage everyone to look at our quarterly and annual filings available on either the SEC website or the Avanir website.

Avanir is a uniquely positioned specialty biopharmaceutical company focused on CNS therapies and I say uniquely positioned because we have accomplished arguably one of the more difficult aspects of a pharmaceutical company which is obtaining FDA approval of our lead product candidate, NUEDEXTA.

We obtained FDA approval late in 2010 as the first and only FDA-approved therapy for the treatment of pseudobulbar affect and subsequently launched NUEDEXTA in February, 2011.

We're approximately six quarters in the launch right now and the launch is going very well. Our last quarter for the quarter ending June 30th, we posted over $12 million in gross revenues for NUEDEXTA demonstrating that it is a large market opportunity with a high unmet medical need.

In addition, if you look at NUEDEXTA from a mechanistic perspective, NUEDEXTA is an NMDA receptor antagonist and sigma-1 agonist and what that means is it opens up NUEDEXTA for a number of potential follow-on indications.

You can see some of those indications listed here on the slide including central neuropathic pain in multiple sclerosis, agitation and other behavioral disturbances in Alzheimer’s Disease, and also with diabetic peripheral neuropathic pain.

Turning now to an overview of NUEDEXTA, NUEDEXTA is an innovative combination of dextromethorphan and quinidine, and dextromethorphan has been studied for decades for potential uses in a number of CNS-related disorders. The problem with dextromethorphan is its rapidly metabolized by the human body and you can see that here in this chart on the bottom dark blue line. That's 45 milligrams of dextromethorphan given by itself.

You can see the plasma of concentrations are very low and does not allow dextromethorphan to pass the blood-brain barrier. What we discovered is if you can block the body's ability to metabolize dextromethorphan with a very small amount of quinidine, a potent enzyme inhibitor, you can dramatically increase the amount of dextromethorphan in the plasma.

Here you can see just 20 milligrams of dextromethorphan combined with 10 milligrams of quinidine gives you a very large increase in the bio-availability of dextromethorphan, and that's the top line in light blue. That allows dextromethorphan to pass the blood-brain barrier and confer benefits that we've seen in PBA and also be potential benefits in a number of other indications that we're going to be studying.

So taking a look at mechanistically how NUEDEXTA works, you can see NUEDEXTA inhibits both sigma-1 and NMDA, inhibiting NMDA post-synoptically and inhibiting sigma-1 pre- and post-synoptically.

So if you look at the medical literature or if you look at some of the data that we've generated since NUEDEXTA has been approved, you can see that there's a number of potential indications for a sigma-1 agonist and an NMDA receptor antagonist. PBA, as I mentioned, we're FDA-approved for right now.

Talked about agitation and neuropathic pain but you can see a whole host of other potential indications including chorea, movement disorders, depression, autism, memory and for many of these programs, we actually have either investigator-initiated studies underway or we're working with advocacy groups to get funding to study NUEDEXTA in these areas.

As a company, we decided to focus on three of these areas initially; that's PBA, agitation in Alzheimer’s and neuropathic pain, and the reason that we focused on these areas is there's a tremendous market opportunity and it raised significant unmet medical need in these areas.

You can see on this slide, pseudobulbar affect we believe affects over 1.8 million Americans with a very significant market opportunity and has been approved by the FDA but we know that we have to develop that market and that's what we're doing right now with our commercial organization, developing the PBA market.

But turning to agitation in Alzheimer’s, many people don't recognize how large of an opportunity this is with over 5 million patients suffering from Alzheimer’s and a very high percentage of them suffering from agitation at some point during their disease, a very, very significant market opportunity.

Then finally when central neuropathic pain in multiple sclerosis – affects about 30% of the patients with multiple sclerosis, another very significant market opportunity with no approved therapies.

And to give you a sense for agitation in Alzheimer’s, I know that number looks like a very large number but I draw your attention to other NMDA receptor antagonists like Namenda which are approved for Alzheimer’s Disease which they're doing approximately $1.5 billion a year in annual revenue.

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