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Medivation Inc. (NASDAQ:MDVN)

Q3 2008 Earnings Call

November 10, 2008 4:30 p.m. ET

Executives

David Hung – President, Chief Executive Officer, Director

C. Patrick Machado – Senior Vice President, Chief Financial Officer

Lynn Seely – Chief Medical Officer

Rohan Palekar – Chief Commercial Officer

Darryl Messinger – Investor Relations, WeissComm Partners

Analysts

Kim Lee – Pacific Growth Equities

Hanzhong Li – Stanford Group Company

Corey Davis – Natixis Securities

Michael Yee – RBC Capital Markets

Andrew Vaino – Roth Capital Partners

Raymond Myers – Emerging Growth Equities

Ram Selvaraju – Rodman and Renshaw

Ian Sanderson – Cowen and Company

William Tanner – Leerink Swann and Company

Operator

Good afternoon and welcome to Medivation’s Third Quarter 2008 financial results and business progress conference call. Today’s call is being recorded. (Operator Instructions) I would now like to turn the conference over to Ms. Darryl Messinger. Please go ahead ma’am.

Darryl Messinger

Thank you and welcome to Medivation’s third quarter 2008 financial results conference call. On the call today from Medivation are David Hung, President and CEO; Patrick Machado, Chief Financial Officer; Dr. Lynn Seely, Chief Medical Officer; and Rohan Palekar, Chief Commercial Officer.

We issued a press release earlier today, a copy of which can be found at www.medivation.com in the New Section. Before we begin, I would like to remind you that various remarks that we make on this call, including those about our clinical development programs, milestones, future financial plans and prospects, growth opportunities, and competitive positions constitute forward-looking statements for the purposes of the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995.

Any statements contained in this conference call that are not statements of historical facts maybe deemed to be forward-looking statements. Forward-looking statements involve risks and uncertainties that could cause Medivation’s actual results to differ significantly from those projected including without limitation risks related to progress, timing, and results of Medivation's clinical trials, difficulties or delays in obtaining regulatory approval, risks related to Medivation’s collaboration with Pfizer, enrollment of patients in Medivation's clinical trials, partnering of Medivation's product candidates, manufacturing of Medivation's product candidates, competition with Medivation's product candidates should they receive marketing approval, the adequacy of Medivation's financial resources, unanticipated expenditures or liabilities, intellectual property matters, and other risks detailed in Medivation's filings with the SEC, including its quarterly report on Form 10-Q filed today with the SEC.

You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this call. Medivation disclaims any obligation or undertaking to update or revise any forward-looking statements contained in this conference call.

With that I will turn the call over to Dr. David Hung, President and CEO of Medivation.

David Hung

Thank you all for joining us today. The third quarter represented another quarter of significant achievement and progress. I will begin the call with a corporate overview and recap of the success we’ve had, next hitting (ph 00:05:31) on the milestones we’ve laid out earlier in the year and Pat will then provide an overview of our third quarter 2008 financials. I will then conclude with a summary of important upcoming milestones for the company.

Let’s begin with Dimebon, our lead investigational drug candidate for the treatment of Alzheimer’s and Huntington’s diseases. In September, we achieved a significant corporate milestone when we entered into a global partnership with Pfizer for the development of Dimebon. As you maybe aware, we consistently articulated our strategy to pursue a partnership for Dimebon and if collaboration deliver what we thought to accomplish will allow us to achieve our strategic objectives of maximizing the global market opportunity for Dimebon, are retaining a significant role in ongoing development activities, building out our US especially commercial infrastructure and retaining significant economic participation in the Dimebon’s ultimate commercial success.

Our Pfizer partnership also provides us with significant financial resources including the $225 million upfront payment that we received last month up to $500 million in potential development and regulatory milestone plus additional undisclosed commercial milestones based on achievement of targeted global net sales level.

In the US, Medivation (inaudible 00:06:57) profits and losses on a 40% Medivation, 60% Pfizer basis. Medivation will also co-promote Dimebon to specialty positions in the US. Outside the US, Pfizer will be responsible for all development and commercialization costs and will pay Medivation tiered royalties on net sales.

We and Pfizer have already agreed on a joint development plan for Dimebon and implementation of that plan is well underway. The primary strategic objective of the development plan is to generate data to support as broad and differentiated a label as possible for Dimebon in order to maximize its commercial potential. Plus we inspire that we’ll be initiating additional phase retrial to support use of Dimebon beyond the initial indication of mild to moderate Alzheimer’s disease.

These new trials will include a 12-month study to evaluate the adjunctive use of Dimebon with cholinesterase inhibitors, the standard, the current standard of care treatment for Alzheimer’s disease as well as trials to evaluate Dimebon in patients with moderate to severe Alzheimer’s disease. Both companies will collaborate on these trials which are expected to begin in 2009 and will lead to an NDA filing for the expanded indication in 2011.

Let me now turn to our Phase III connection trial in Alzheimer’s patients which has made some excellent progress. We have opened all of our sites in the US and have received regulatory approvals to begin the study in all other countries. We expect the majority of sites to be opened worldwide by the end of November and we remain on track to complete enrollment in 2009. The dose and duration in this trial is six months.

Recently, we also completed a randomized, double-blinded safety and tolerability study in which all Alzheimer patients received combination therapy with Dimebon and Pfizer’s drug Aricept. The combination was well-tolerated in this trial with no safety concerns. This is encouraging and is the first step to a broader simple program of validating Dimebon in combination with cholinesterase inhibitors that I mentioned earlier.

We also continue to make good progress in our Huntington Disease Program. This summer, we announced results from our Phase 2 trial which show that Dimebon significantly improved cognitive function in patients with mild to moderate Huntington disease. With these data, we believe Dimebon is the first investigational drug to demonstrate a significant benefit in a well-controlled trial in any measure of cognitive function in patients with Huntington disease.

Based on these encouraging findings, we and Pfizer have agreed to initiate our next Huntington disease Efficacy Study next year and our teams are already working together towards that goal. We are excited about the progress that we’ve made in the simple development in Dimebon for Alzheimer and Huntington diseases and we are working diligently with Pfizer to bring Dimebon to the market so patients can gain access to a drug that has the potential to improve how they and their caregivers live with these terrible, debilitating illnesses. Our growing body of data continues to show that Dimebon produces broad clinically meaningful benefits and appears to operate through a novel mitochondrial mechanism of action.

I would now like to turn to MDV3100, our novel androgen-receptor antagonist currently in a Phase 1-2 clinical trial for the treatment of castration-resistant prostrate cancer, also known as hormone refractory prostrate cancer. At last month’s EORTC Oncology Symposium at Geneva, we presented data showing that MDV3100 continues to demonstrate promising safety and efficacy results. The data show encouraging and durable antitumor activity in the three expanded dose groups tested thus far, as measured by PSA declines, radiographic findings, CTC changes and time on treatment.

As of the EORTC, 120 patients had been enrolled in the trial with enrollment completed at doses up to 360 mg per day. A total of 73 patients in the three lowest expanded dose groups 60 mg, 150 mg and 240 mg per day have been followed for more than 24 weeks. Of these 73 patients, 31 patients or 42% have received MDV3100 for greater than 24 weeks. The data also suggests a dose response trend with a higher percentage of patients in the 240 mg per day dose cohorts experiencing 90% reductions in PSA levels, radiographic partial responses and conversion to favorable CTC count to less than 5 post-treatment. MDV3100 has been generally well-tolerated with no reports of serious adverse events being related to the drug.

As the 240 mg per day dose has been well tolerated and appears to be the most effective thus far, we are continuing to escalate the dose. The trial continues to enroll rapidly and we have completely enrolled the 360 mg per day expansion group. Dose escalation is in progress with the 480 mg day dose group and initial dosing has started in the final dose group at 600 mg per day. As a maximum tolerated dose has not yet been reached, these initial data will further clarify the potential of MDV3100 as a treatment option for patients with castration-resistant prostrate cancer who have a poor prognosis and for whom treatment options are limited. We remain on track to seek FDA agreement to begin a pivotal Phase 3 registration study in castration-resistant prostrate cancer patients in 2009.

In summary, we are very pleased with our recent progress. We remain focused on rapidly developing our novel product candidates, as we believe that they have the potential to treat serious disease with critical unmet medicine needs. I will now turn the call over to Pat who will review financial results for the quarter.

C. Patrick Machado

Thanks, David and good afternoon everyone. Today, we released our financial results for the Third Quarter ended September 30, 2008. I will review some of the highlights and refer you to the press release issued earlier today for the full details. We reported a net loss for the quarter ended September 30, 2008 of $20.5 million or $0.68 per share compared with a net loss of $9.4 million or $0.34 per share for the same period in 2007. For the nine months ended September 30, 2008, the net loss was $54.5 million or $1.86 per share compared with a net loss of 22.2 million or $0.80 per share for the same period in 2007.

Total operating expenses for the nine months ended September 30, 2008, were 55.7 million compared with 23.7 million for the same period in 2007. Our operating expenses increased primarily due to increased clinical development costs for both Dimebon and MDV3100 and the build-out of associated support staff and infrastructure. Cash and cash equivalents at September 30, 2008 totaled 20.4 million compared with 43.3 million at December 31, 2007. The September 30, 2008 cash balance does not include the $225 million upfront payment that we received from Pfizer in October. These funds have been invested exclusively in short-term US Treasuries and in money market funds consisting solely of short-term US Treasuries.

Moving forward, Pfizer will fund 60% of US Dimebon-related development costs incurred on or after October 21, 2008, the closing date of our collaboration agreement and 100% of Dimebon-related development expenses outside the US. After giving effect to this cost-sharing, we expect that our Dimebon-related operating expenses will decrease in the fourth quarter of 2008 compared with the third quarter. We intend to provide full year 2009 financial guidance in the first quarter of 2009. Even after taking in account the expanded Dimebon development that David mentioned earlier in this call, the upfront payment and development milestone payments, we are eligible to receive under the Pfizer agreement, significantly exceed our share of presently budgeted development and pre-launch commercialization costs for Dimebon. We intend to apply these excess proceeds toward further funding of MDV3100 development.

We have worked hard to reach the strong financial position we are now in and will strive to retain this strength as we continue to move our programs forward. With that, I will turn the call back over to David.

David Hung

Thanks, Pat. As you have heard, we have accomplished a lot over the past several months and anticipate continued steady milestone achievements and news flow. We expect to achieve all of the following milestones in 2009. Number one, complete enrollment in the Phase 3 Connection study in Alzheimer patients. Number two, begin additional Phase 3 studies of Dimebon in Alzheimer patients to broaden and further differentiate Dimebon’s potential label and maximize this commercial potential. Number three, initiate our next efficacy study in Huntington disease. Number four, report new MDV3100 data at upcoming medical meeting and number five, seek FDA approval to enter into a Phase 3 registration study of MDV3100 in castration-resistant prostrate cancer patients. With that, we would be happy to answer your questions. Operator, please poll for questions.

Question-and-Answer Session

Operator

(Operator Instructions) We’ll take our first question from Kim Lee with Pacific Growth Equities.

Kim Lee – Pacific Growth Equities

Good afternoon. Thanks for taking my questions. The first couple of questions have to do with the Dimebon program. Just wanted to get a clarification, will the monitored severe disease be an add-on indication or will you wait to sell your First NDA in mild patients to include the severe population?

Darryl Messinger

Well, I think Kim, what we really need to do is to have a broad program so that we can maximize the potential of Dimebon and really take full advantage of all of its commercial possibilities. So at this point and time, we’re intending to file together.

Kim Lee – Pacific Growth Equities

Additional Phase 3 trials do you expect to run and what do you foresee as the trial designs for these trials?

Darryl Messinger

At this point in time, we haven’t given details on the specific designs but I think that what we can say is we – and what we have said in the information David just told you is that we will be running an add-on therapy 12-month study to really look at the benefit of Dimebon on top of cholinesterase inhibitor and also, Phase 3 (inaudible 00:18:52) moderate to severe.

Operator

Han Li with Stanford Group.

Hanzhong Li – Stanford Group Company

Thank you. Good afternoon to everyone. Question for Lynn, on the combination, Aricept combination study which you say is safe while tolerated, can you remind us how many patients in the study and what’s the control – the placebo arm and when do we see the efficacy result from this study?

Lynn Seely

Well, this was a study, was a placebo-controlled safety study with a 1-month treatment duration. We did look at the safety profile of Dimebon in combination with donepezil and we found that the combination was very well-tolerated. We didn’t have any patients discontinue the trial due to adverse events or safety problems and so it was very well-tolerated.

Hanzhong Li – Stanford Group Company

Will the patients stay on the drug in extension study of this trial or –

Lynn Seely

We have offered patients the opportunity to continue in an open label extension so there won’t be any placebo-controlled efficacy data.

Hanzhong Li – Stanford Group Company

Okay, how many patients in this study, may I ask?

Lynn Seely

So we have 34 patients in the trial.

Hanzhong Li – Stanford Group Company

Okay. In the near distant future, when shall expect the data presentation from the study?

Lynn Seely

Yes, you’ll – you should expect to see that data presented at one of the upcoming spring or summer Neurology Alzheimer’s Meeting.

Hanzhong Li – Stanford Group Company

Okay and also will this study result trigger a milestone payment from Pfizer?

C. Patrick Machado

Han, this is Pat. We’ve not publicly disclosed what the milestone events are but I think it’s pretty safe to say this is a smaller study and you typically expect to see milestones tied to bigger events.

Hanzhong Li – Stanford Group Company

Okay. When you say bigger, you – that means like completion of patient enrollment?

C. Patrick Machado

Well, what we have disclosed is the total development milestones that we’re entitled to is $500 million under the transaction and just given where we are in development right now in Phase 3, there’s not too many events between now and the first commercial sale. So without being able to tie dollars to events, that’s the relative time frame we’re working with.

Hanzhong Li – Stanford Group Company

Okay and also the new Phase 3 study in moderate to severe Alzheimer patients, is this registration study – how many patients you plan to enroll?

Lynn Seely

We do intend for this to be a registration study and we haven’t set exactly how many patients at this point. I think there’ll be more details coming later.

Hanzhong Li – Stanford Group Company

Okay. Is this the first of a series of Phase 3 studies, like for label extension like disease modifier or once a day modulation?

Lynn Seely

I think that at this point in time, what we’re talking about is the 12-month add-on therapy study program in moderate to severe. Certainly, Pfizer and Medivation are committed to maximizing the commercial potential of Dimebon and so we will be looking to do that but for right now, this is what we’re focusing on for the moment.

Hanzhong Li – Stanford Group Company

Okay and quickly for Pat. The 225 million upfront payment you received from Pfizer in October, how should we recognize the revenue, over what period of time?

C. Patrick Machado

Yes, Han, that’s a very good question. As you know, the SEC revenue recognition rules on these kinds of transactions are very complex so working with our auditors at PWC, we will be getting some SEC input on that and as soon as have that, we will be giving you visibility. But it’s safe to say, that payment will be amortized over a period of time and how long that period of time is, is the subject of the further inquiry that we’ll be undertaking.

Hanzhong Li – Stanford Group Company

Okay. Is 5 to 7 years out of the ball park or is –

C. Patrick Machado

My guess and don’t hold me to this but my guess based on the facts that I understand right now, it will be a shorter period of time than that.

Hanzhong Li – Stanford Group Company

Fine, all right. Thank you very much.

Operator

Next question comes from Corey Davis with Natixis.

Corey Davis - Natixis Securities

Thanks very much. Just have a couple of questions. Looking at clinicaltrials.gov, I noticed a fairly new posting for a Dimebon Phase 1 study looking at the effect on dextromethorphan and should I assume that there’s some sort of a priory reason to think that Dimebon goes through the P450 pathway and therefore might inhibit the degradation of other drugs that go through that pathway?

Lynn Seely

So as you know, in preparation for filing, all programs are required to do drug-drug interaction studies and so we will be conducting a number of drug-drug interaction studies, as well as looking at the safety of Dimebon and special population, such as hepatic and renal impairments. These are all standard check box required studies.

Corey Davis - Natixis Securities

Right, so there’s no reason to suspect that there is any kind of significant drug interaction with Dimebon right now.

Lynn Seely

So I think that, as you know, part of any development program is to understanding the metabolism of the drug and Pfizer and Medivation or what the study implies is that Pfizer and Medivation are working to understand the (inaudible 00:24:21) from Dimebon.

Corey Davis - Natixis Securities

Okay. The next one would be the label expansion studies you described. Would you need two studies in each the moderate to severe, as well as the adjunctive treatment with cholinesterase inhibitors? And would each of those have 12-month endpoint associated with them? Just trying to figure out how many actual discrete Phase 3 studies you’d be starting.

Lynn Seely

I think that (inaudible 00:24:50) the Phase 3 programs are considered as a whole so each one is not completely pulled apart from all of the others and so there will be conversations about that. I think that the current plan includes two moderate to severe studies so that we’re confident that we will, in fact, get the labeling claim.

Corey Davis - Natixis Securities

And do you know what endpoint you’re going to use for that study or what force (ph 00:25:12) to use with the SIB scale, or as a different one?

Lynn Seely

So we haven’t disclosed the details of those studies. We’re still finalizing them.

Corey Davis - Natixis Securities

Does that mean you haven’t picked a dose yet either, that was going to be my next question.

Lynn Seely

Yes, we’re going to discussing the details of those studies at a future time.

Corey Davis - Natixis Securities

Okay and last question. Just with the stock price coming down so much, I guess, it’s partially due to the market as well but that in combination with all the cash that you’ve got from Pfizer, any plans to perhaps to buy back stock any time soon?

C. Patrick Machado

Corey, this is Pat. I think that would be a pretty unusual thing for a development stage pharmaceutical company to do. So, never say never but certainly, no, no immediate plans to do that.

Corey Davis - Natixis Securities

Okay. I guess one more question I thought of. Once you do finalize the plans for the complete Phase 3 program, would you be in position to give some guidance as to what your 40% of the total cost would be?

C. Patrick Machado

Yes, we would anticipate giving full year ’09 guidance at the beginning of the year in our next quarterly call.

Corey Davis - Natixis Securities

Okay. Thanks very much.

Operator

Next is Michael Yee with RBC Capital Markets.

Michael Yee – RBC Capital Markets

Oh great. Hey guys, on the Dimebon new studies, just to be clear. One is moderate to severe population, is that placebo-controlled or is that against Namenda and then on that mild to moderate, that’s 12 months study with cholinesterase background plus or minus Dimebon, is that how I should be thinking about it?

Lynn Seely

Yes, so the 12-month add-on therapy study will be both – it will be, all patients will be on background cholinesterase inhibitor and then they’ll be randomized either to Dimebon to placebo. For the moderate to severe indication, as you know, in that population it’s very difficult not to study on background therapy because the majority of those patients are treated. So again, we haven’t discussed the details of those designs but I think it would be safe to assume they will be on background treatment.

Michael Yee – RBC Capital Markets

Okay and then the pace of enrollment, is it safe to say things are accelerating or they’ve bee steady and thinking about that, how should we best figure out when you’d actually be completing this. I mean, 2009 is a huge window, I mean, are you going to give ever –at any point some sort of update on enrollment or just one day we’re going to see a press release that you’ve completed enrollment.

Lynn Seely

I think at this point, we don’t have plans to give a distinct update on enrollment but suffice it to say, I think we’re very pleased with how enrollment is going. We purposely started the US off in advance, the US has done very well and exceeded our expectations, and now enrollment is ramping up as we bring on the rest of the world.

Michael Yee – RBC Capital Markets

Okay and then lastly on MDV3100, that’s obviously been going well. At what point is final, “final” be released and then have you had or when would you plan to have a end of Phase 2 meeting so we can best gauge when we’re going to start Phase 3?

Lynn Seely

So when you say, final “final”, I think the beautiful thing about this drug is patients are continuing on treatment so this trial will continue until there are no patients on treatment and so there’s not a definitive stop date. But that 600 mg per day dosing group is the final dose escalation group we intend to study. And the only guidance we’ve given at this point and time that we do and plan to talk about is the Phase 2 program starting in 2009.

Michael Yee – RBC Capital Markets

Okay. So you’re going to dose the 600 mg for a couple of months, take the data, have an end of Phase 2 meeting and then start Phase 3.

Lynn Seely

I think that at the point in time we have right now, we have data certainly which would warrant moving this program forward and I think the issue for us is determining the optimal dose.

Michael Yee – RBC Capital Markets

Okay, okay. Thank you.

Operator

The next is Andrew Vaino with Roth Capital.

Andrew Vaino – Roth Capital Partners

Hey, thank you for taking my call. Just a quick question on the combination study you guys are planning with the cough syrup. Hypothetically speaking, if I were to take some Dimebon in the lab and mix it up with some liver homogenate, would I see a lot of hydroxylation?

Lynn Seely

So we really haven’t discussed the details of Dimebon metabolism at this point in time.

Andrew Vaino – Roth Capital Partners

Okay, thank you.

Operator

And we’ll go next to Raymond Myers with Emerging Growth Equities.

Raymond Myers – Emerging Growth Equities

Thank you. Just a quick question on the pivotal prostrate cancer study that you expect to do starting next year, would you be planning on just doing one or two pivotal prostrate cancer studies?

Lynn Seely

I think at this point, we’re planning to do one.

Raymond Myers – Emerging Growth Equities

Okay, great. And let me understand a little bit better your reasoning as to why you would extend filing the NDA to 2011 in order to do this additional moderate to severe studies rather than filing for mild to moderate first, and then doing moderate to severe later on as a label extension, can you describe the thought process there?

David Hung

We and Pfizer look at this issue pretty carefully and we both came to the same conclusion that this was the way to maximize the commercial value of the product. We have the broadest label at launch and to have the most aggressive pricing.

Raymond Myers – Emerging Growth Equities

Okay, can I assume that this would then be launched as a combination with Aricept?

Lynn Seely

I think that we’re going to have very nice data, as you know the conduction study is being done in the absence of background of two-dimension therapy. So I think that we would have clear evidence if this drug works well as monotherapy.

Raymond Myers – Emerging Growth Equities

Okay, because it would seem just obvious to the layman that the way to maximize value for Medivation would be to get this on the market as soon as possible, even if that required a lesser label and then beef up the label later on.

David Hung

We certainly have included the possibility of trying on everyway we can to accelerate this program, but I said, if you want to pursue this label, our filing for the label will occur sometime in 2011 for this expanded label. Well, obviously we as a company have always tried to find ways of minimizing our timelines as possible.

Raymond Myers – Emerging Growth Equities

So are you saying – leaving the door open that you could possibly file for a lesser label sooner? And then follow on with the expanded label?

David Hung

Yes.

Raymond Myers – Emerging Growth Equities

So that is still on the table?

David Hung

Certainly possible, yes.

Raymond Myers – Emerging Growth Equities

Okay, thank you. Let me next ask about, whether you have an update for us on the Dimebon analog programs?

David Hung

We have been working for about two years now on analogs, we have made hundreds, I assume maybe even thousands of molecules that we’ve filed patents on, we have extensive efforts in characterizing the molecular pharmacology of Dimebon action and have used that to screen our analogs, and we’re looking for molecules that have the same or enhanced activity compared to Dimebon, but with better (inaudible 00:32:37) and PK.

Raymond Myers – Emerging Growth Equities

Okay, great. Are there any promising new compounds coming out of that program that might enter the clinic?

David Hung

We surely think that we have a number of promising ones that we have not given any feasibility on when they would enter the clinic. But we certainly have a lot of profile, a lot of molecules that we’ve been working on.

Raymond Myers – Emerging Growth Equities

And would these molecules perhaps include other indications for Dimebon, some of us have been helping for some time?

David Hung

Not only would they include potentially other indications for Dimebon, but in our analog program as you might imagine, when we make them, we find something that are more Dimebon-like that have a certain set of indications attached to them, and other things that are less Dimebon-like which may have even other indications attached to them, so we are looking both at molecules to follow on Dimebon in the obvious indications as well as the expanded indications, as well as potentially other molecules and new indications that are not related to Dimebon.

Raymond Myers – Emerging Growth Equities

Is Pfizer working alongside you with this or are they keeping an eye on that, with an eye on partnering with you on those other indications?

David Hung

Certainly we are very pleased with our partnership with Pfizer, but the current development effort that we have does not include the analogs, but obviously, they would be a lot of the financial people we would speak to you about. Analogs – if we were to get to difference in development and assess their interest.

Raymond Myers – Emerging Growth Equities

Okay, so new partnerships on additional indications are possible on the horizon?

David Hung

Yes.

Raymond Myers – Emerging Growth Equities

Great! What about other in-licensed compounds, are you looking at other areas for development?

David Hung

I think that – obviously these difficult markets have – when we punished cash poor companies and rewarded cash rich companies, and so we are in an interesting position right now, having a significant amount of cash to get a look at a number of technologies that are in some cases even selling below cash value. And so we are always looking for new opportunities, or you have to assess the attractions of those programs compared to our internal programs, and it’s always kind of a cost benefit analysis that we have to undertake. But we are certainly looking at a number of things outside the company.

Raymond Myers – Emerging Growth Equities

Okay, great. You mentioned at several times that you’ll be promoting Dimebon to specialty physicians yourself. Can you describe, what specialties are you talking about? Are you talking about Huntington’s Disease?

David Hung

We’ll be talking about neurologist and psychiatrist for Alzheimer’s Disease and obviously in Huntington’s Disease, they would also fall under purview of neurology.

Raymond Myers – Emerging Growth Equities

Okay, great. Okay, well thank you very much.

David Hung

Welcome.

Operator

Ram with Rodman & Renshaw.

Ram Selvaraju – Rodman & Renshaw

Thanks very much for taking my questions. I just have a couple of brief questions, with respect to the development of Dimebon in moderate to severe disease, would it be necessary to benchmark Dimebon against Namenda, or sufficient to simply demonstrate an impact of Dimebon in patients who are already being treated with Namenda?

Lynn Seely

I think certainly either/or would be acceptable.

Ram Selvaraju – Rodman & Renshaw

Okay, and then with respect to the additional studies, at what point would you expect to make a decision as to whether or not to go after the disease modification label, and have you specifically excluded that as being part of the initial NDA filing, and also could you talk a little bit about how long such studies might take if you elected to undertake them?

Lynn Seely

I think the standard recommendation is the disease modification studies are 18 months, certainly that’s what the people are going after those indications are, and I think given again our desire to maximize the label while at the same time getting this drug to patients as soon as possible, we have not put a disease modification trial per se in this initial set of trials that we’re discussing with you. Obviously, it’s something that we will continue to consider for future times with our partner Pfizer, but for now it’s not one of the trials that we’re talking about at this time.

Ram Selvaraju – Rodman & Renshaw

Okay, and then with respect to the geographic distribution of patient enrollment in this future study, and the current connection study, could you talk a bit about what you expect the percentage of patients coming from the 30 U.S. sites that you already have up and running, to be once the connection study is fully enrolled, and where do you expect to enroll the bulk of patients for these future studies in moderate to severe disease, and in combination with Aricept?

Lynn Seely

I think I can’t speculate at this time what the ultimate percentage of few outpatients will be in connection, I think clearly we are well aware that we need to have an adequate U.S. representation to be sufficient for regulatory purposes and we are confident that we will achieve that goal, with respect to the other trials that we’re going to be up and going, it’s clearly U.S. and Western Europe will be well represented, as well as other geographical location.

Ram Selvaraju – Rodman & Renshaw

Okay, thank you very much.

Operator

Iam Sanderson with Town and Company.

Iam Sanderson - Town and Company.

All my questions have been answered thank you.

Operator

We’ll go to Bill Tanner with Leerink Swann

William Tanner – Leerink Swann and Company

Thanks, few question for you Lynn on the moderate to severe, I guess understanding that trial descriptions forthcoming, but a priority probably no reason to think not that different than – I guess this Swedish study that Pfizer did for Aricept in that patient population six months.

Lynn Seely

The six month duration is a standard duration to look for and end of the patient population, I think the Swedish study was a nursing home study of just severe patients. So, I wouldn’t assume that that would be identical to the study that we’re hoping to do.

William Tanner – Leerink Swann and Company

And then, understanding that you probably – the MMSC (ph 00:38:53) scores in the phase 2 trial that you guys have already completed would have been higher, I mean is there anything as you look at those patients with lower MMSC scores, can you see any stratifications, I guess presume later some rationale, or some hint of the efficacy to make you want to go after that?

Lynn Seely

Yes, we have presented our data on the moderate population as well, if we do divide the patient population in the Lancet study, the 12-month data in to mild and moderate patient populations, the moderate patients had really robust and dramatic results almost a 10 point difference between – for over placebo at 12 months, so I think we have good reason to believe that this drug might be efficacious in a moderate to severe patient population.

William Tanner – Leerink Swann and Company

Okay, and then just the last question on 3100 – so if you got 31 patients and you got 42% have been treated for more than 24 weeks, I mean presumably they would be treated until they progress, is that the way to interpret this?

Lynn Seely

That’s correct.

William Tanner – Leerink Swann and Company

Okay, so presumably perhaps a sub-optimal therapeutic dose you’re having about close to 50% of your patients having a TTP in excess of six months?

Lynn Seely

Yes.

William Tanner – Leerink Swann and Company

Okay.

David Hung

Yeah, bill I think the point we will make on MDV3100 program is that – if we are going to these higher doses, but if we were to stop today, I think that our data right now are pretty comparable to (inaudible 00:40:24) and we’d like to see whether higher doses might yield even greater efficacy and it would be nice to establish an MTD even though we haven’t have that yet.

William Tanner – Leerink Swann and Company

Right, that was my point, they seemed to be pretty close and presumably you might be able to get a little bit higher, but it seems like 42% TTP six months – at least a six month TTP is reasonably robust. All right, thank you.

Operator

Kim Lee with Pacific Growth Equity.

Kim Lee – Pacific Growth Equity

Thanks for taking the follow-up question, I’m just a bit confused can you go over again the year following strategies for Dimebon and Alzheimer’s disease, are you going to file your NDA in 2010 for mild to moderate patients, or you’re going to file one NDA in 2011 that will include mild, moderate, and severe patients, and how many pivotal trials are going to be used for that filing.

Lynn Seely

I think Kim, we’re trying to set ourselves up, so that we can maximize the potential of this thread by running multiple trials, and it will give us an opportunity to have the optimal time to file based upon the label we would expect to achieve, and right now this appears to be the 2011 time frame with just expanded indication and we’ll certainly be considering any opportunity to do that sooner, based upon the recommendations of the commercial colleagues, I mean one of the reasons we did this field with Pfizer was because they well know how to capitalize on this commercial opportunity.

Kim Lee – Pacific Growth Equity

So, why not just file on the connection study?

Lynn Seely

That certainly is an upside potential, and if the data are robust and commercially we decide that that’s the best option for the drug, then that would be certainly a possibility that would consider.

Kim Lee – Pacific Growth Equity

So, what do you see as the label for Dimebon?

Lynn Seely

I fully expect to see that Dimebon is used for the treatment of Alzheimer’s disease in mild to severe patients, and that achieve full dose of monotherapy as well as adjunctive therapy to the currently approved drug.

Kim Lee – Pacific Growth Equity

Thanks, and one other question in Huntington’s disease, recently a nature public publication revealed the concept that mitochondrial permeability pores may be essential in mitochondrial malfunction as it like to Alzheimer’s Disease. When do you think that you will present incremental MLA data for Dimebon in Huntington’s?

David Hung

We have a pretty robust effort right now, trying to characterize this at the different molecular pathways that Dimebon acts through, but we are using some of that information (inaudible 00:43:18) analog program, and until we fill that we have sufficient confident around the intellectual property around those molecules and probably not being disclosed, with sub-molecular targets until we’re confident with RIP, but at that point, obviously we would be very interested in inserting that information.

Kim Lee – Pacific Growth Equity

Great, thanks.

Operator

Right now, I’d like to hand the call back to Dr. David Hung.

David Hung

Thanks all for participating in this call, we’re going to be presenting on November 18th at the Lazar Capital Market, 5th Annual Healthcare Conference and hope to see many of you there, and the upcoming investor and medical conferences. Thank you.

Operator

Ladies and gentlemen that concludes today’s conference. Thank you for your participation, you may now disconnect.

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