Elan at SG Cowen Annual Healthcare Conference
Posted: Thu Mar 17, 2005 7:49 am
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Elan at SG Cowen Annual Healthcare Conference
March 16, 2005
MANAGEMENT DISCUSSION SECTION
We will get started here. This next session is Elan and I am pretty sure you all know what they are up to. But joining us today, and we were happy his, is CEO Kelly Martin and Head of R&D Lars Ekman, and the way this is going to work is Kelly is going to spend probably about half the session on some prepared remarks. And then we will open it to Q&A then there will not be a separate breakout session. So, turn it over to Kelly.
Kelly Martin, President, Chief Executive Officer, Director
Thank you and good morning everybody. Thank you for your time and for coming today. I am going to talk about two topics. I want to talk about Elan overall for a number of minutes just to make sure that people understand that they are things going on other then Tysabri. And then we
will obviously talk about Tysabri, Dr. Ekman is President of our Research and Development group.
So, during the Q&A you can address questions to either myself, or Lars or above.
Safe harbor statement as some of you heard me speak I don’t read, but you need to read it. In that interest of time, we will move forward. I want talk through a number of topics just remind people little bit of who we are Elan, I think that’s important for myself to explain to people which
constituents we focus on, some thoughts on our progress from an operational point of view, and then obviously talk about Tysabri.
Elan over the last several years, myself in the leadership team and the Board have talked about operational discipline, leading to focus which leads to results. We have an unshakable commitment to patients across our major focus areas, which is never-ending. We have certain tenacity clearly given the challenges we have had in the last two years, three years, Elan, the entire management team, the board has been a very tenacious company in working through a whole series of issues.
Our approach in research is quite different from many others in the industry. We focus again from a research point of view. I am seeking very original approaches to difficult medical problems, be it in Alzheimer's, autoimmune diseases, Parkinson's etc. and the goal of that, which is a very significant goal is by achieving success there, we would have the ability to change the course of disease and how it’s managed. So, it’s a very different approach to what we are trying to get done
from research point of view and how ultimately we align to patients.
The world is getting more complicated not less; that may be an obvious statement but that is certainly the case. We have multiple constituencies that we keep in mind with all that we do. Now we try to balance our decisions that were in the best interest of all these constituencies but first and foremost our patients, payers, physicians etc., we clearly work with all the regulators both in the US and around the world. We have financial constituents both shareholders and creditors, we have partners that we work with, we have competitors that we compete with. Last but not least the Elan employees are a critical part of the future success of the company. So, we spend a lot of time on focus and making sure that we are communicating with them, where we are going and they are giving us feedback as far as how things are going.
Operational discipline, again those of you who heard me speak, I have gone through this over and over again as far as our commitment to make sure we make progress. Just to remind people, we’ve accomplished in the last couple 2.5 years, we had an overhang on both in SEC corporate
finance and enforcement investigation, both were resolved. We had a shareholder lawsuit overhang, which was resolved. We had a California situation which was also resolved. From a financial point of view, starting 2.5 years ago, we had a lot of financial complexity that we wanted to
make sure we resolved, we had alliance obligation which was retired. We had joint ventures all of which have been either closed down or totally endowment. We had two off balance sheet obligations, and one on call EPLES [ph] all have been retired. We are just shy of $0.5 billion of
investments, 90% of which have been monetized. We currently have $1.5 billion in cash and our first that obligation since until 2008.
We will also make some adjustment on our burn rate. We will announce those towards the end of April, I will think that’s the prudent thing to do given some of the uncertainties around Tysabri. We are working to further solidify and reinforce the fact that our operating discipline is resolute good times or bad. We had two broad focuses in auto-generation and autoimmune. That spans from what we do in research through development and regulatory into the commercial aspects of the
company. From a research point of view, from a focus on results, we have one program currently that’s partnered with Vias [ph] who is an outstanding partner that’s in phase two. We have another program that’s partnered with Vias [ph]; that’s pre-clinical. We anticipate that being in the clinic at some point this year.
We have four other programs that are pre-clinical, our current goals and objects are those programs would be in the clinic within the next 24 months. And we have a very, very significant [indiscernible] in the state in this area particularly around all of beta ameloid [ph] topics, which from
a Alzheimer's point of view is certainly a significant part of the future treatment of Alzheimer's. In autoimmune, we have four additional programs that are preclinical and, again the timing would over the course of the next 24 months. Our goal would be that those programs would move into the clinic as well. So, our research department continues to move on and make progress from a focus point of view and the results will speak for themselves over time.
In developments, Prialt was filed and approved in the US. Prialt was filed and approved in Europe, sonogram was filed and improved in Europe, just today it was announced, we sold the asset Aside [ph] but that file was approved today.
Tysabri was filed for Crohn's in Europe. We are doing the induction trial for Crohn's in the US until the pause. We are doing a Phase II R.A. trial. So, our development group has been very active and credit to the team for moving forward and providing specific and significant results to the upward movement [indiscernible].
All the lines, if you will, drug delivery manufacturing has made significant strides in the last 2.5 years, three nanotechnology transactions have been announced, one with Bros [ph], one with J&J, one with Cornie [ph]. Four additional transactions are pending, we have one contractors anufacturing transaction that was completed with Lilly, two others are pending, we have grown revenue per annum in that business 35% of year, per year and the future looks similar from an opportunity point of view, as it relates to growth.
Our US hospital sales force, we have expanded that by 20% over the course of the last two years, we expanded the coverage by 30% IET Hospitals and we have grown that revenue 15% a year for the last two years. So, our base businesses and functions, our research and development have made enormous strides in the last 2 to 2.5 years. Our GS&O, our drug delivery business have made enormous strides in the last 2.5 years, as well as our hospital sales force.
I think it’s important to keep that in mind, we view Tysabri as an event that occurred, that we are working Biogen and the FDA on moving forward, and I will go into some of my thoughts, which regard to that events. But the best for the company continues to move forward, I think it’s very important for us to stay very focused and moving the parts of the company forward that are going to be critical to the long-term success of the company.
So Tysabri, I have a simple slide – this is my only slide on Tysabri, because as it could be either be a 45 different slide presentation or one. Let’s talk about the facts – the facts around Tysabri. First and foremost in the MS patient populations, there are four populations of patients from a trial point of view that have taken Tysabri or we are involved with the MS trials, placebo patients, Avonex, Avonex plus Tysabri and Tysabri mono-therapy. The Crohn's trials, we finished all the maintenance trials and we were in the process of completing the Crohn's induction trial here in the
US and we had also started the Phase II R.A Trial. There were 5,000 patients roughly that had taken Tysabri from a commercial point of view since the end of November, with the approval in the US and there were roughly 3,000 patients currently in any of those trials that I have menioned.
We had two adverse events in one of those patient populations in the Tysabri Plus, Avonex Trial, I will say that to date, there have been no issues found or uncovered in any of the other trials for MS. Obviously, the placebo patients, the Avonex only patients or the Tysabri mono-therapy
patients, there have been no issues to date found in any of the Crohn's data, any of the Crohn's patients and there have certainly been no issues to date in the Phase II R.A patients. So, we had two adverse events in the combination trial with Avonex and Tysabri.
The third set of facts that’s important is to understand the data. Refresher for those of you who may not know, but I assume you all do, but Tysabri was approved in an accelerated fashion by the FDA. It was approved on the one year data that was submitted to them. The efficacy and the
safety profile which is all on the public domain was very significant. The two year data was released at the top line about two or three weeks ago or so and the full data set of two year data will be released April 12th I believe at the AAN meeting in Miami.
For the mono-therapy data, the one year there was 66% reduction in relapses and no significant safety issues. In the two-year data the relapse reduction actually improved slightly to 67% and the all important EDSS score for three months was a reduction of 42% or an improvement of 42% from an EDSS point of view. The data’s important, the data’s critical. The two-year data, I think, will be a very interesting topic of discussion at the AAN meeting in Miami, and underscores the fact that Tysabri from an efficacy point of view is a very, very significant drug indeed. And from a safety point of view, in those categories that I went through currently no issues have been found whatsoever.
I’ll balance that against the patient needs. In MS it was 350,000 patients on drug currently, 50 plus percent of them are what’s known as unstable, i.e., current therapy is not as effective as the patients and/or their [indiscernible] would like it to be and/or the side effects are quite significant.
Addition to that is another 100,000 patients that have already quit therapy for a variety of reasons either the therapy was not effective enough or again the side effects were too severe.
Secondly, Crohn’s patients as you know, have limited therapeutic options, and Crohn’s is a very significant disease as well. Obviously, the focus has been on MS as it should be, but if you look at Crohn’s you look at the patient population, and you look at the medical need the unmet medical
need for the Crohn’s patients, it’s very, very significant. So those are the facts around Tysabri.
Lots of patients through trials, lots of patients have just come in from a commercial point of view.
Two adverse events, very unique adverse events that occurred in patients that were in the combination trial. The mono-therapy data continues to be very strong from an efficacy point of view and as strong from a safety point of view, and the patient population is very significant, focus will need new or better therapy moving forward.
The path forward, working very closely with Biogen and very closely with the FDA. The path forward is as follows. We have committed to do the following things with those 3,000 patients that were in the trials. Roughly 2000 of the 3000 patients were in MS trials, and about 1000 of them
were Crohn’s or R.A. All of those patients will get neurological exams, all of those patients would get physical exams, all of those patients would get there existing MRIs read by central reader. All of the patients would have new MRIs, and they would be read by a central reader. And in certain
circumstances there may be a need for spinal tabs for certain patients.
All 3000 patients will be signed up to do this. We’ve organized again working closely with Biogen on the path forward on this. Current plans have this process taking several months, it’s a logistical challenge to get all of these things done, but I would also tell you that the investigators and the patients are quite enthusiastic as far as getting this done. So that we and Biogen and the FDA can talk about the path forward. The participants in the path forward obviously we integrated and
intimately working with Biogen on all – the same with the FDA about the scientific level and what I will call the policy level keeping the European and other regulators up to speed on all aspects of this, a prudent investigation.
The doctor community, the medical community has had, we’ve had
significant dialog back and forth with the medical community about how to move forward and get their advice and for them to give us a lot of advice about how best to move forward.
We have had enormous response from patients both in terms of e mails, phone calls, in some cases visits patients who heretofore have had less than adequate therapy for their disease, be it Crohn’s or MS and there is an enormous interest on behalf of those patients who are on drug to
help in anyway we can as for as move forward. We have also had a lot of dialog back and forth as you can imagine with the patient efficacy groups and in addition to that, the drug safety monitoring boards for both, for all MS, Crohn’s and R.A. have had a significant amount of dialog.
It's my view from everything that I have seen, again, based on the facts that Tysabri can play a very, very important role in the treatment of MS. The efficacy is spectacular, the mono-therapy safety from everything we have seen so far looks very impressive. We don't know why exactly
there were two patients that had this specific issue in combo. We don't know necessarily if they have to do with combo or had to do with something else. Each of these patients suffice it to say were quite complicated medical patients, they were not straightforward.
So, there is lots and lots of things that we are working again with Biogen and the FDA to investigate thoroughly, to be very prudent on our way forward and upon completion of the process that I just outlined, that I will be hoping to move the product back to availability, to patients, position the right way and in the right way, shape or form.
So, with that, I think the most, the best way to use the rest of the time, another 20 minutes or so, is open it up for Q&A, I am happy to take the questions or I will ask Dr. Ekman to take some of questions and go ahead.
.
Elan at SG Cowen Annual Healthcare Conference
March 16, 2005
MANAGEMENT DISCUSSION SECTION
We will get started here. This next session is Elan and I am pretty sure you all know what they are up to. But joining us today, and we were happy his, is CEO Kelly Martin and Head of R&D Lars Ekman, and the way this is going to work is Kelly is going to spend probably about half the session on some prepared remarks. And then we will open it to Q&A then there will not be a separate breakout session. So, turn it over to Kelly.
Kelly Martin, President, Chief Executive Officer, Director
Thank you and good morning everybody. Thank you for your time and for coming today. I am going to talk about two topics. I want to talk about Elan overall for a number of minutes just to make sure that people understand that they are things going on other then Tysabri. And then we
will obviously talk about Tysabri, Dr. Ekman is President of our Research and Development group.
So, during the Q&A you can address questions to either myself, or Lars or above.
Safe harbor statement as some of you heard me speak I don’t read, but you need to read it. In that interest of time, we will move forward. I want talk through a number of topics just remind people little bit of who we are Elan, I think that’s important for myself to explain to people which
constituents we focus on, some thoughts on our progress from an operational point of view, and then obviously talk about Tysabri.
Elan over the last several years, myself in the leadership team and the Board have talked about operational discipline, leading to focus which leads to results. We have an unshakable commitment to patients across our major focus areas, which is never-ending. We have certain tenacity clearly given the challenges we have had in the last two years, three years, Elan, the entire management team, the board has been a very tenacious company in working through a whole series of issues.
Our approach in research is quite different from many others in the industry. We focus again from a research point of view. I am seeking very original approaches to difficult medical problems, be it in Alzheimer's, autoimmune diseases, Parkinson's etc. and the goal of that, which is a very significant goal is by achieving success there, we would have the ability to change the course of disease and how it’s managed. So, it’s a very different approach to what we are trying to get done
from research point of view and how ultimately we align to patients.
The world is getting more complicated not less; that may be an obvious statement but that is certainly the case. We have multiple constituencies that we keep in mind with all that we do. Now we try to balance our decisions that were in the best interest of all these constituencies but first and foremost our patients, payers, physicians etc., we clearly work with all the regulators both in the US and around the world. We have financial constituents both shareholders and creditors, we have partners that we work with, we have competitors that we compete with. Last but not least the Elan employees are a critical part of the future success of the company. So, we spend a lot of time on focus and making sure that we are communicating with them, where we are going and they are giving us feedback as far as how things are going.
Operational discipline, again those of you who heard me speak, I have gone through this over and over again as far as our commitment to make sure we make progress. Just to remind people, we’ve accomplished in the last couple 2.5 years, we had an overhang on both in SEC corporate
finance and enforcement investigation, both were resolved. We had a shareholder lawsuit overhang, which was resolved. We had a California situation which was also resolved. From a financial point of view, starting 2.5 years ago, we had a lot of financial complexity that we wanted to
make sure we resolved, we had alliance obligation which was retired. We had joint ventures all of which have been either closed down or totally endowment. We had two off balance sheet obligations, and one on call EPLES [ph] all have been retired. We are just shy of $0.5 billion of
investments, 90% of which have been monetized. We currently have $1.5 billion in cash and our first that obligation since until 2008.
We will also make some adjustment on our burn rate. We will announce those towards the end of April, I will think that’s the prudent thing to do given some of the uncertainties around Tysabri. We are working to further solidify and reinforce the fact that our operating discipline is resolute good times or bad. We had two broad focuses in auto-generation and autoimmune. That spans from what we do in research through development and regulatory into the commercial aspects of the
company. From a research point of view, from a focus on results, we have one program currently that’s partnered with Vias [ph] who is an outstanding partner that’s in phase two. We have another program that’s partnered with Vias [ph]; that’s pre-clinical. We anticipate that being in the clinic at some point this year.
We have four other programs that are pre-clinical, our current goals and objects are those programs would be in the clinic within the next 24 months. And we have a very, very significant [indiscernible] in the state in this area particularly around all of beta ameloid [ph] topics, which from
a Alzheimer's point of view is certainly a significant part of the future treatment of Alzheimer's. In autoimmune, we have four additional programs that are preclinical and, again the timing would over the course of the next 24 months. Our goal would be that those programs would move into the clinic as well. So, our research department continues to move on and make progress from a focus point of view and the results will speak for themselves over time.
In developments, Prialt was filed and approved in the US. Prialt was filed and approved in Europe, sonogram was filed and improved in Europe, just today it was announced, we sold the asset Aside [ph] but that file was approved today.
Tysabri was filed for Crohn's in Europe. We are doing the induction trial for Crohn's in the US until the pause. We are doing a Phase II R.A. trial. So, our development group has been very active and credit to the team for moving forward and providing specific and significant results to the upward movement [indiscernible].
All the lines, if you will, drug delivery manufacturing has made significant strides in the last 2.5 years, three nanotechnology transactions have been announced, one with Bros [ph], one with J&J, one with Cornie [ph]. Four additional transactions are pending, we have one contractors anufacturing transaction that was completed with Lilly, two others are pending, we have grown revenue per annum in that business 35% of year, per year and the future looks similar from an opportunity point of view, as it relates to growth.
Our US hospital sales force, we have expanded that by 20% over the course of the last two years, we expanded the coverage by 30% IET Hospitals and we have grown that revenue 15% a year for the last two years. So, our base businesses and functions, our research and development have made enormous strides in the last 2 to 2.5 years. Our GS&O, our drug delivery business have made enormous strides in the last 2.5 years, as well as our hospital sales force.
I think it’s important to keep that in mind, we view Tysabri as an event that occurred, that we are working Biogen and the FDA on moving forward, and I will go into some of my thoughts, which regard to that events. But the best for the company continues to move forward, I think it’s very important for us to stay very focused and moving the parts of the company forward that are going to be critical to the long-term success of the company.
So Tysabri, I have a simple slide – this is my only slide on Tysabri, because as it could be either be a 45 different slide presentation or one. Let’s talk about the facts – the facts around Tysabri. First and foremost in the MS patient populations, there are four populations of patients from a trial point of view that have taken Tysabri or we are involved with the MS trials, placebo patients, Avonex, Avonex plus Tysabri and Tysabri mono-therapy. The Crohn's trials, we finished all the maintenance trials and we were in the process of completing the Crohn's induction trial here in the
US and we had also started the Phase II R.A Trial. There were 5,000 patients roughly that had taken Tysabri from a commercial point of view since the end of November, with the approval in the US and there were roughly 3,000 patients currently in any of those trials that I have menioned.
We had two adverse events in one of those patient populations in the Tysabri Plus, Avonex Trial, I will say that to date, there have been no issues found or uncovered in any of the other trials for MS. Obviously, the placebo patients, the Avonex only patients or the Tysabri mono-therapy
patients, there have been no issues to date found in any of the Crohn's data, any of the Crohn's patients and there have certainly been no issues to date in the Phase II R.A patients. So, we had two adverse events in the combination trial with Avonex and Tysabri.
The third set of facts that’s important is to understand the data. Refresher for those of you who may not know, but I assume you all do, but Tysabri was approved in an accelerated fashion by the FDA. It was approved on the one year data that was submitted to them. The efficacy and the
safety profile which is all on the public domain was very significant. The two year data was released at the top line about two or three weeks ago or so and the full data set of two year data will be released April 12th I believe at the AAN meeting in Miami.
For the mono-therapy data, the one year there was 66% reduction in relapses and no significant safety issues. In the two-year data the relapse reduction actually improved slightly to 67% and the all important EDSS score for three months was a reduction of 42% or an improvement of 42% from an EDSS point of view. The data’s important, the data’s critical. The two-year data, I think, will be a very interesting topic of discussion at the AAN meeting in Miami, and underscores the fact that Tysabri from an efficacy point of view is a very, very significant drug indeed. And from a safety point of view, in those categories that I went through currently no issues have been found whatsoever.
I’ll balance that against the patient needs. In MS it was 350,000 patients on drug currently, 50 plus percent of them are what’s known as unstable, i.e., current therapy is not as effective as the patients and/or their [indiscernible] would like it to be and/or the side effects are quite significant.
Addition to that is another 100,000 patients that have already quit therapy for a variety of reasons either the therapy was not effective enough or again the side effects were too severe.
Secondly, Crohn’s patients as you know, have limited therapeutic options, and Crohn’s is a very significant disease as well. Obviously, the focus has been on MS as it should be, but if you look at Crohn’s you look at the patient population, and you look at the medical need the unmet medical
need for the Crohn’s patients, it’s very, very significant. So those are the facts around Tysabri.
Lots of patients through trials, lots of patients have just come in from a commercial point of view.
Two adverse events, very unique adverse events that occurred in patients that were in the combination trial. The mono-therapy data continues to be very strong from an efficacy point of view and as strong from a safety point of view, and the patient population is very significant, focus will need new or better therapy moving forward.
The path forward, working very closely with Biogen and very closely with the FDA. The path forward is as follows. We have committed to do the following things with those 3,000 patients that were in the trials. Roughly 2000 of the 3000 patients were in MS trials, and about 1000 of them
were Crohn’s or R.A. All of those patients will get neurological exams, all of those patients would get physical exams, all of those patients would get there existing MRIs read by central reader. All of the patients would have new MRIs, and they would be read by a central reader. And in certain
circumstances there may be a need for spinal tabs for certain patients.
All 3000 patients will be signed up to do this. We’ve organized again working closely with Biogen on the path forward on this. Current plans have this process taking several months, it’s a logistical challenge to get all of these things done, but I would also tell you that the investigators and the patients are quite enthusiastic as far as getting this done. So that we and Biogen and the FDA can talk about the path forward. The participants in the path forward obviously we integrated and
intimately working with Biogen on all – the same with the FDA about the scientific level and what I will call the policy level keeping the European and other regulators up to speed on all aspects of this, a prudent investigation.
The doctor community, the medical community has had, we’ve had
significant dialog back and forth with the medical community about how to move forward and get their advice and for them to give us a lot of advice about how best to move forward.
We have had enormous response from patients both in terms of e mails, phone calls, in some cases visits patients who heretofore have had less than adequate therapy for their disease, be it Crohn’s or MS and there is an enormous interest on behalf of those patients who are on drug to
help in anyway we can as for as move forward. We have also had a lot of dialog back and forth as you can imagine with the patient efficacy groups and in addition to that, the drug safety monitoring boards for both, for all MS, Crohn’s and R.A. have had a significant amount of dialog.
It's my view from everything that I have seen, again, based on the facts that Tysabri can play a very, very important role in the treatment of MS. The efficacy is spectacular, the mono-therapy safety from everything we have seen so far looks very impressive. We don't know why exactly
there were two patients that had this specific issue in combo. We don't know necessarily if they have to do with combo or had to do with something else. Each of these patients suffice it to say were quite complicated medical patients, they were not straightforward.
So, there is lots and lots of things that we are working again with Biogen and the FDA to investigate thoroughly, to be very prudent on our way forward and upon completion of the process that I just outlined, that I will be hoping to move the product back to availability, to patients, position the right way and in the right way, shape or form.
So, with that, I think the most, the best way to use the rest of the time, another 20 minutes or so, is open it up for Q&A, I am happy to take the questions or I will ask Dr. Ekman to take some of questions and go ahead.
.