Second Quarter Earnings Calls, In Brief

As second quarter earnings announcement shift into high gear, companies announce changes to manufacturing, progress on their drug launch efforts and their intentions to ramp up business development efforts.

Kyprolis Launch Off And Running

Onyx Pharmaceuticals Inc.’s multiple myeloma drug Kyprolis (carfilzomib) was available for order ahead of schedule on July 27 and began shipping the week of July 31, Chief Commercial Officer Helen Torley said during the company’s Aug. 1 earnings call. A select team of market-access experts, nurses and sales leaders began calling on payers July 23, and the full sales team of roughly 100 reps is being trained now and will deploy later this month. Management did not provide any near-term sales guidance for the launch. Onyx did update selling, general and administrative expense guidance for the year to include the commercial launch of Kyprolis. SG&A is expected to be $210 million to $220 million including the commercial costs. Kyprolis was approved July 20 as Onyx’s first independently owned drug (Also see "Onyx Kyprolis Launch Strategy Includes Speedy Delivery, Premium Price" - Pink Sheet, 20 Jul, 2012.).

Teva Takes A Hard Look At Manufacturing

Teva Pharmaceutical Industries Ltd. has recruited former Bristol-Myers Squibb Co. manufacturing head Carlo De Notaristefani to serve as CEO of Global Operations, overseeing product supply and manufacturing. Consolidation of Teva’s 74 plants, located around the world, is viewed as one opportunity to improve profitability. De Notaristefani led an important productivity initiative at Bristol, consolidating 28 plants down to 12 while enhancing quality, Teva CEO Jeremy Levin said during the company’s second quarter earnings call Aug. 2. Levin – also formerly of Bristol – has been conducting a strategic review at Teva, including the recruitment of new management, since taking over as CEO in May (Also see "Teva’s New CEO Levin Urges “Fiscal, Strategic Discipline,” Reduces 2012 Guidance" - Pink Sheet, 24 May, 2012.).

Allergan Has Cash To Throw Around

Allergan Inc. Chairman and CEO David Pyott is looking to put the $2.7 billion the Botox-maker has on its balance sheet to good use in the near future, but the company isn’t interested in adding to its cosmetic or ophthalmologic portfolio. Instead, Pyott would like to bring in assets in the neurosciences and the urology space. “One of the great things with our mix is that we can be fairly agnostic. It could be a drug. It could be a drug delivered in a device, or it might even be a device,” he said during the company’s Aug. 1 second quarter earnings call. The company created a urology division in 2007 and has since gained approval for the use of Botox(onabotulinumtoxinA) as a treatment for leakage of urine in patients with overactive bladder. The company also has a once-daily oral treatment for OAB.

Acorda Investors Play The Waiting Game

With Ampyra (dalfampridine) sales slowly improving, Acorda Therapeutics Inc. may be recovering, but clarity on dosing of Ampyra will keep investors restless until August. Sales of the ‘walking drug’ for multiple sclerosis patients grew 15.5% from the first quarter and 28% since the second quarter of last year to reach $66 million, said Acorda on July 31 when it announced Q2 earnings (Also see "Acorda R&D Day Explores Pipeline Opportunities" - Pink Sheet, 17 Apr, 2012.). Yet, analysts are still focused on a post-marketing clinical trial that FDA requested from the company to compare the approved 10mg dose of Ampyra with the efficacy of the 5mg dose. Top-line results from that study are expected in August. Should the 5mg dose of Ampyra prove to be just as effective as the currently approved 10mg dose, Acorda will need to seek new intellectual property surrounding the compound. “Obviously, until we see the results we don't know. But going into the result, what we do know based on our previous clinical trial experience … is that one would predict that 5 mg is not going to be as effective as 10 mg across a population,” said Acorda President and CEO Ron Cohen on a conference call. “So we can't guarantee anything. We can only play the odds.”

Warner-Chilcott Mum On Strategic Review Update, Continues To Look For Deals

Warner Chilcott PLC continues to actively look at opportunities to bring assets in house even as CEO Roger Boissonneault assured analysts on a second quarter call on Aug. 3 that its broad strategic review, which it announced in April, remains its top priority (Also see "Warner Chilcott Mum On Potential Suitors" - Pink Sheet, 4 May, 2012.). The company has $530 million in cash and cash equivalents and a healthy cash flow, which analysts are pressing for it to use to do deals. It also has $3.3 billion in long-term debt, but for now, CFO Paul Herendeen said retaining cash on hand to “take advantage of other things that might present itself” is a better use of the cash. Boissonneault reminded analysts that there’s an opportunity cost to re-deploying sales reps from their current, highly profitable products they currently sell to supporting new assets. He and Herendeen argued that while Warner Chilcott “looks at lots and lots and lots of stuff…we can’t force it.” It’s not missing a lot of deals, Boissonneault said, noting that it goes through a lot of deals before making one. The standstill is frustrating, but deal-making does not have a linear approach, the execs argued. Sales for the first six months of 2012 were $1.3 billion, about flat year on year, and earnings were $166 million, more than triple those of the same period a year ago, largely due to cost-cutting and a reorganization of the European business. Oral contraceptives and dermatology businesses were highlights, even as the osteoporosis franchise declined (Also see "Waiting For Blockbusters: Osteoporosis Market Burdened With Black Box Warnings, Reimbursement Woes, And Spare Pipelines" - Pink Sheet, 2 Jan, 2012.) and (Also see "Warner Chilcott’s Launch Of Atelvia Hits Headwinds" - Pink Sheet, 27 Jun, 2011.).