XenoPort, Inc. (XNPT)

Life Sciences Management Access Conference Call

August 14, 2012 10:20 a.m. ET

Executives

William Harris – CFO

Analysts

Christopher Marai – Wedbush Securities

Presentation

Christopher Marai

Okay, good morning, thank you for joining us, my name is Chris Marai. I am an analyst here at Wedbush, I work with Greg Wade and David Nierengarten on the biotech team. This morning I would like to introduce XenoPort and Bill Harris their CFO. I’m going to leave it to Bill to describe some of the compelling opportunities ahead for XenoPort. Thank you.

William Harris

Thank you Chris, and thank you Wedbush for the invitation this week here today. Before I get started I would just like to remind you I will be making forward-looking statements that involves risks and uncertainties, and for more information regarding the risks and uncertainties of our business, please refer to the risk factor section of our current SEC filing.

I would like to start by touching on highlights of our business. Gabapentin enacarbil known as Horizant in the US and Regnite in Japan is approved to treat moderate to severe primary Restless Legs Syndrome or RLS in both US and Japan and recently received approval for the management of postherpetic neuralgia in the US.

Our most advanced product candidate [inaudible] is currently in a phase III trial in MS patients with spasticity, we expect top line results from this study in the first quarter of next year and assuming a positive outcome we expect to file an NDA under 505(b)(2) in the second half of next year.

Behind that we have XP21279, an L-dopa prodrug that's completed phase II trials in Parkinson’s Disease, and based on a recent end of phase II meeting we had with the FDA we now believe that a 505(b)(2) NDA is possible with a single head to head study comparing 279 to Sinemet.

Finally, we have XP23829, a novel patented prodrug of monomethyl fumarate or MMF that has potential treatment for relapsing-remitting multiple sclerosis as well as psoriasis that just entered phase I. This is our pipeline of products and product candidates, as you will note our pipeline now run for full spectrum of marketed products, phase III asset and phase II asset, and a phase I asset, all with the nice neuralgia products focus.

All of these compounds are protected by issued composition to matter patents and we own all rights to these compounds with the exception of gabapentin enacarbil in these two territories.

Moving on to gabapentin enacarbil and RLS, Astellas, our partner in Japan, received approval for Regnite in January of this year. In April we established pricing with the government about $2.45 a day cost of treatment. And they recently launched the product on July 10 th. Astellas estimates there are about two million patients with RLS in Japan and they are promoting Regnite with about 1200 reps targeting sleep and neurology specialists.

In the first quarter this year we received a $10 million milestone payment on the approval of Regnite and we will receive a high teen royalty on net sales in Japan and we expect to receive and recognize those royalties one quarter in arrears so the fourth quarter this year we expect to receive our first royalty payment representing the net sales royalty on the third quarter.

Moving to the US, Horizant was approved last year and was launched by GSK just about a year ago. Unfortunately the Horizant RLS scripts have been lack luster which is truly been a disappointment to us. And at this point I don’t have any updates on our dispute in our ongoing litigation with GSK. More recently, however, Horizant received approval for the management of postherpetic neuralgia or PHN in adults in the U.S. and that triggered a $10 million milestone payment that we received from GSK in June of this year.

The Horizant prescribing information includes a simple three day titration to the recommended dose of 600 mg twice a day evidence of efficacy from a 12 week randomized double blind placebo-controlled study. And in averse of that profile for the 1200 dose that is not too dissimilar for placebo.

So moving on to arbaclofen placarbil and spasticity, AP is a prodrug of the R-isomer of baclofen, a racemic drug that was approved back in the 80s for the treatment of spasticity. Now, spasticity marks an interesting market with clear unmet medical need. Spasticity is defined as an abnormal increase in muscle tone that results from a variety of causes including multiple sclerosis, spinal cord injury, stroke, traumatic brain injury, and cerebral palsy.

So the sizeable market it’s largely been served predominantly by two oral foundational agents baclofen and tizanidine both of which are generic. There are about 10 million prescriptions for baclofen and tizanidine combined per year, and they are growing at about a rate of 10% to 15% despite no active promotion. Now, we estimate about 60% of the baclofen prescriptions and about 20% of the tizanidine prescriptions are for spasticity which will result in annual spasticity prescriptions for all users just a little under 4 million a year.

When we looked at spasticity in MS patients, baclofen is clearly the drug of choice here, and you see there is a whole host of other agents in low single digits that are typical add on agents. But baclofen is clearly a predominant drug of choice in this indication. We ask physicians how many of their patients are still on first-line therapy. On the left hand side you can see about 46% of the patients feel all first line therapy for spasticity, and on the right hand side about 42% of the patients feel baclofen first line.

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