Collegium Pharmaceutical Inc (COLL) 2015 Q2 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Collegium Pharmaceutical second-quarter 2015 earnings call. (Operator Instructions). As a reminder, this conference call is being recorded.

Before we begin today's call we wish to inform participants that the forward-looking statements made today are pursuant to the Safe Harbor provision in Private Securities Litigation Reform Act of 1995.

You are cautioned that such forward-looking statements involve risks and uncertainties including without limitation of the risk an advisory committee will not vote in favor of approval, that we will not attain FDA approval for Xtampza ER and, even if Xtampza is approved, we may not be able to obtain the label claims that we are seeking from FDA.

Furthermore, we are subject to patent infringement litigation relating to Xtampza and may in the future be subject to additional litigation relating to our other product candidates which may be expensive and defeat and delay the commercialization of Xtampza and our other product candidates.

These risks and other risks of the Company are detailed from time to time in the Company's periodic reports filed with the Securities and Exchange Commission. Our future results may differ materially from our certain expectations discussed today.

At this time I would like to turn the call over to Mr. Michael Heffernan, Chief Executive Officer. Please go ahead, sir.

Thank you. Good morning, I am Mike Heffernan, CEO of Collegium, and with me today is Paul Brannelly, our CFO, and Barry Duke, our Chief Commercial Officer. Today we will discuss our second-quarter financial results as well as other key events which include a status update on the following: our commercial organization; the recently announced FDA advisory committee; and our ongoing Purdue patent litigation.

As background our lead product, Xtampza ER, is an abuse deterrent extended release form of oxycodone for the treatment of chronic pain that utilizes our DETERx drug delivery technology. Our NDA was filed in December of 2014 and was accepted by the FDA for review in February of 2015 and we have a PDUFA goal date of October 12, 2015.

As we recently announced, the FDA advisory committee meeting is scheduled to be held on September 11, 2015. This was announced by the FDA this Monday with the release of a federal registry notice. We intend to discuss the overall safety, efficacy and abuse deterrent features of Xtampza ER with the committee.

We will also discuss the key attributes of the product as it relates to the ability to open the Xtampza capsules and sprinkle the product on food or directly into your mouth or administer it through a feeding tube.

This feature differentiates the product from hard to crush ADF formulations that are currently on the market such as OxyContin and Hysingla and has the potential upon approval to address a large unmet need of chronic pain patients that can't swallow pills and thus have limited options for their chronic pain treatment.

Xtampza is a product that is intended to be taken with food because in the presence of food you get the full release of the product in the stomach. We have done a thorough evaluation of the potential clinical ramifications of the food effect by completing specific pharmacokinetic studies.

We evaluated varying meal sizes, we evaluated single dose and steady-state comparisons to OxyContin ADF, we also evaluated the blood level changes that can result if a patient were to be regularly noncompliant with the proposed labeling of take with food.

We have also collected food consumption data on 65,000 doses in our Phase 3 clinical trial to evaluate the effect of food on adverse events and efficacy. We intend to present this data at the FDA advisory committee.

In terms of our patent litigation with Purdue, as a reminder, the litigation was filed by Purdue in March 2015 in Delaware with a backup suit filed in Massachusetts in the same timeframe. Purdue alleged that we had infringed four of their patents, three of which were Orange Book listed but are currently invalid and under appeal in New York and one that is not Orange Book listed.

The case and Delaware was dismissed by the judge in Delaware on August 6. And the case in Massachusetts had been previously voluntary dismissed by Purdue on July 23. Collegium has subsequently filed a declaratory judgment suit in the Southern District of New York; Purdue has again filed patent litigation in Massachusetts as well as filing a motion for re-argument in Delaware.

Needless to say, this is a complex and dynamic situation and we cannot predict or speculate on the outcome or, for obvious reasons, will not today discuss legal strategy. What we can say is that we are very confident in our non-infringement invalidity position and intend to vigorously defend ourselves with the goal of gaining final FDA approval and launching Xtampza ER in as timely a fashion as possible.

A few other key milestones in the quarter I would like to mention. In May 2015 we completed our IPO in which we raised $80 million after completing a $50 million financing in the first quarter. We announced the publication of the Xtampza versus OxyContin head-to-head clinical trial in the Journal Pain Medicine.

We have made significant progress in the building of our commercial organization led by Barry Duke who will talk in a few minutes. We've had the issuance of our seventh Orange Book listable patent covering Xtampza ER.

We have also announced many key additions to the management team including the hiring of Jack Weet as our VP of Regulatory and QA, and Mike DeGeorge as our director of Medical and Scientific Affairs.

We recently announced the publication of our Xtampza Phase 3 data in the journal Pain. And we continue to advance our pipeline of products for pain and ADHD which we will be reporting on in future updates.

At this point I would like to hand it over to Paul to discuss our financial results.

Thanks, Mike, good morning, everybody. Since we issued a detailed press release and filed our 10-Q last night I will just review the financial highlights from the quarter.

With the addition of $80 million in gross proceeds from our IPO we ended the second quarter with $112 million in cash. With our current plans and assumptions we believe that our current cash is sufficient to fund operations into mid-2017.

During the first six months of 2015 our net loss was $8.4 million. During that period our cash used in operating activities was $6.1 million. We expect our net loss and cash used in operating activities to increase significantly over the coming quarters as we prepare to launch Xtampza.

I will now turn the call over to Barry Duke for a commercial update.

Thanks, Paul, good morning, everybody. The commercial team has been busy over the last few months and we have been making great strides. We've made key leadership hires in sales, marketing, operations, government affairs, market access and training. Those leaders are in place and building out their plans and hiring their teams as well.

We have developed a detailed commercial build out plan and are prepared to be ready for a potential launch in April 2016. We've also initiated a series of market research and advisory board projects to inform and guide our strategies and tactics. We have several ongoing projects related to positioning and messaging as well as payer contract and pricing strategies.

What we hear are sort of three -- kind of fit in three categories -- what we consistently here. Abuse and diversion issues are top of mind for physicians and physicians are very interested in the unique DETERx technology we have and how it works.

Second, physicians are also intrigued by the lack of dose dumping with Xtampza when manipulated, not only as it relates to this potential abuse deterrence, but also unintentional misuse by pain patients who may inadvertently chew or crush pills.

And then the third category is physicians are finding the flexibility to sprinkle Xtampza as an attractive administration option that they have not had with extended release oxycodone previously -- for patients that dislike or have difficulty swallowing pills and for those that also have a heavy pill burden due to many multiple core comorbidities.

Thus in addition to a core sales team that we'll have deployed against the broader retail markets, we will also have a smaller sales team deployed against the dysphasia opportunity in long-term care and institution settings.

We plan to attend PAINWeek conference the week of September 7. We will have several of our senior leaders on the commercial team there. We look forward to learning and interacting with a key target audience for us there and begin building awareness around Collegium and our technology. And we will continue to build on the awareness at other appropriate medical meetings in the months leading up to launch.

In summary, we are very pleased with our progress over a few short months and are pleased with the quality of commercial professionals that are being attracted to Collegium. We look forward to expanding our footprint over the upcoming months and being ready to launch -- being in a position to launch by April of 2016. I will turn it back over to Mike Heffernan.

Thank you, Barry. At this point we will open it up for questions.

(Operator Instructions). David Amsellem, Piper Jaffray.

Just a couple. So first, Mike, were you surprised that an AdCom was going to be convened for Xtampza? And secondly, what are your thoughts related to Purdue's withdrawing from the July AdCom? And do you think the convening of an AdCom for Xtampza is just the FDA's way of just wanting to get abuse deterrence as a topic into the public forum? I just wanted to get your thoughts there. Thanks.

Thanks, David. Yes, so, I will take the first question. Were we surprised? I don't think we were overly surprised. I think, as you know, Xtampza is a very different technology than the hard to crush tablets or the agonists/antagonists that have been approved in the past.

We have done a number of studies both head-to-head versus OxyContin and are looking to get labeling consistent with the final guidance that the FDA published.

So I don't think we were overly surprised and we will certainly be prepared to highlight the advantages of the product and speak about not only the safety and efficacy of product but also its advantages -- [to be] deterrent advantages and unique flexible dosing advantages when we are at the AdCom.

As it relates to Purdue withdrawing. I can't speculate on why they withdrew. So I am not sure that there is any link that we could put together between the two things. Again, I think the opportunity for the FDA is to make sure that they get outside counsel from the -- outside advisors on recommendations around our product and the potential labeling around our product.

Okay, that is helpful. And then just a commercial question. So you have talked about the -- well, there is two commercial questions. One is you talked about the dysphasia opportunity.

So I guess maybe provide a little more color on how you think about it in terms of sales potential into that population. And is this mainly sort of an institutional call point because these are patients that more likely than not are in assisted living or nursing?

And then secondly, in terms of formulary access, can you just talk about what kind of early dialogue you have had with payers and how you are thinking about how the payer landscape is going to shake out? Thanks.

Yes, so I will take the first part of the question on the dysphasia opportunity. So we think of dysphasia as a continuum. One of the things we know is that the data suggests -- both our internal data as well as the FDA's data, that 30% to 40% of Americans have difficulty or can't swallow pills. That could be an ambulatory population.

We also believe, based on our market research, that very few patients are willing to talk to their doctors about that issue, many times because of the embarrassment associated with it. So what ends up happening is these folks may crush, break or grind their medication and put themselves at risk. So that patient population is in the pain specialist's office, not in a specialty forum.

Now if we move down the other end of the continuum to the severe patients where patients are in long-term care facilities, our data suggests that about 65% of people in long-term care facilities cannot swallow pills, they need to crush, break or grind their medication. That is an opportunity for us.

There is also people in palliative care, in hospice and folks who have cancer pain that, again, either can't swallow pills and then don't have a good option for a twice-a-day oxycodone, or have feeding tubes and have limited options in terms of what they can be administered. So we see the opportunity across the entire continuum.

And as Barry mentioned we will call on both call points, the pain specialists, the high prescribing pain specialists, as well as those institutions where we have identified large numbers of pain patients who may have these other swallowing difficulties. Now with that I will turn it over to Barry to talk about the formulary access conversation.

Yes, thanks, Mike. David, we have a lot of work in progress kind of understanding sort of the payer landscape. We certainly understand that is going to be an important component of our success at launch. We have done a fair amount to date and we have a fair amount ongoing.

We generally believe we will have Tier 3 coverage on the commercial plans and we will certainly have to contract in the Part D category and we know that. So we are in the process of better defining that in terms of what our strategy will be around that. So more details to come obviously as we get a little deeper into it.

But we are optimistic that we will understand what we are likely to have at launch and then kind of have a plan in place to sort of increase that access as we move forward.

Okay, thank you.

(Operator Instructions). Serge Belanger, Needham.

I guess first a question on the patent litigation procedures. Just wanted to know if you were at all surprised with the decision from the Delaware Court and if you think any final decision can come before the appeal of the invalidated patents?

Yes, so, I guess what I would say is I am never surprised by litigation. Obviously anything can happen. This is a complex and dynamic case. So we weren't surprised by any stretch and when we filed a motion to dismiss due to lack of personal jurisdiction and the judge agreed with us.

As it relates to whether we will get a judgment prior to the appeal being heard in New York, again, we can't speculate on that, we don't know the answer. We think there is lots of opportunities for us here including the appeal issue. And as you know, if these three patents are not overturned on appeal and not found to be valid, then the patent litigation filed by Purdue would be moot anyway.

So at this point there is no change in your expectations for April launch?

Yes, at this point there is no change in those expectations. As we get clarity on how all of these lawsuits shake out, we will update shareholders when we have a different viewpoint.

Sure. Okay. And then in terms of ongoing marketing activity, just trying to get an idea of what should we expect for the rest of the year and if that will further impact I guess OpEx going forward?

I am going to turn that question to Paul.

Okay, so we will continue to build our commercial infrastructure but -- throughout the end of this year. But we won't pull the trigger in hiring the sales force until we have clarity on when we are going to launch.

So right now the plan would be to hire the sales force, start hiring them right at the end of this year and beginning of next year. But we will continue to spend on the commercial infrastructure that we need to have in place longer-term to prepare for a launch.

Thank you.

Thank you. And at this time I am showing no further questions. I would like to turn the call back over to Mr. Michael Heffernan for any closing remarks.

I would like to thank everybody for their time today and we look forward to updating everybody on future calls. Have a good day.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program and you may now disconnect. Everyone, have a great day.