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Biodel Inc. (NASDAQ:BIOD)

F1Q09 (Qtr End 12/31/08) Earnings Call Transcript

February 5, 2009 5:00 pm ET

Executives

Erik Steiner – VP, Operations

Sol Steiner – Chairman, President & CEO

Gerard Michel – CFO, VP Corporate Development & Treasurer

Alan Krasner – Chief Medical Officer

Analysts

Corey Davis – Natixis

Pamela Bassett – Cantor Fitzgerald & Co.

Matt Kaplan [ph] – Denver Hillman [ph]

Cory Kasimov – JPMorgan

John Newman – Oppenheimer

Liana Moussatos – Pacific Growth

John Ossenus [ph] – Leerink Swan

Operator

Ladies and gentlemen, thank you for standing by. Welcome to Biodel’s first quarter 2009 earnings conference call. (Operator instructions).

I would now like to turn the conference over to Erik Steiner, Vice President of Operations. Please go ahead.

Erik Steiner

Thank you, Mark. Good afternoon and welcome to our first quarter 2009 conference call. Before we start, let me remind you that we will be making forward-looking statements covered under the Private Securities Litigation Reform Act of 1995, and that all of our projections and forward-looking statements represent our judgment as of today. These statements may involve risks and uncertainties that are described more fully in our filings with the SEC, which are also available on our website.

In addition, any forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our estimates change; and therefore you should not rely on these forward-looking statements as representing our views as of any date subsequent to today.

Now joining us on today’s call are Dr. Sol Steiner, Biodel’s Chairman and Chief Executive Officer; and Gerard Michel, our Chief Financial Officer and Vice President of Corporate Development. Also with us is Dr. Alan Krasner, our Chief Medical Officer. After their prepared remarks, we will open the call to your questions.

Now, I’ll turn the call over to Sol.

Sol Steiner

Thanks, Erik. I'll begin with a quick update on our regulatory plans for VIAject. I can confirm that we met with the FDA officials last month to review our Phase III results, answer their questions and discuss our options for submitting a New Drug Application for VIAject as a treatment for diabetes. I'm not going to comment on these discussions until after we have received the FDA minutes from our meeting, at which time we will announce our regulatory plans publicly. I expect this will happen sometime in March and I appreciate your patience until then.

I can however comment on the bioequivalence study of VIAject, which we completed last month. The news here is quite good. We enrolled 40 patients in a single center double-blind study to show the bioequivalence and pharmacokinetic profile of different formulations of VIAject and to examine injection pain in patients with Type I diabetes. Remember, our Phase III study tested a two part 25 IU/cc formulation of VIAject, which required reconstitution and a four times greater injection volume versus the 100 IU/cc formulation of Humulin, which does not. We chose the crossover design to increase the power of the study and so that each patient could act as his or her own control. Each patient was randomized to receive a single subcutaneous injection of one of the formulations on each visit.

I'm pleased to report that bioequivalence was demonstrated between the premix 100 IU/cc liquid formulation of VIAject and the 25 IU/cc lyophilized formulation of VIAject, which has already been shown to have meaningful clinical benefits versus regular human insulin.

As previously discussed, we believe the injection pain seen in our Phase III trial was due to the greater injection volume necessitated by a 25 IU/cc formulation. We are pleased to report that the findings in this study were consistent with our hypothesis. Each of the 40 patients in the trial received a 25 IU/cc and 100 IU /cc formulation of VIAject and was asked to compare any injection pain experience with each formulation of the pain associated with the prandial insulin they normally use.

While 20% of the subjects reported that the pain upon injection was moderately or greatly increased when injected with the 25 IU/cc formulation only 5% of the subjects reported moderately more pain and no patients reported greatly more pain when injected with the 100 IU/cc formulation. While only 30% of subjects receiving the 25 IU/cc formulation reported no pain with injection, fully 45% of subjects receiving 100 IU/cc formulation reported no pain with injection. The balance of the study subjects reported little to no difference in pain when comparing either the 25 IU/cc or the 100 IU/cc formulation to the prandial insulin that they normally use.

We believe these findings validate a shift to the 100 IU/cc formulation, which has comfort, cost, and convenience advantages that make it our preferred formulation going forward. It is less expensive to produce; it is more convenient to deliver, because it can be used in vials and cartridges, with currently available insulin syringes, pen injectors, and pumps, all of which are important for its clinical and commercial potential in the insulin market. We are very pleased with these findings, which we have also reported to the FDA.

That concludes my prepared remarks. Now I will turn the call over to Gerard to review our financial results.

Gerard Michel

Thanks, Sol. Our results for the first quarter of fiscal year 2009 reflect reduced clinical activity with VIAject, ongoing formulation work, increased stockpiling of bulk insulin, and the continued careful management of expenses.

Our first quarter net loss of $10 million was lower than our $11 million loss in the same period in fiscal 2008, and the fourth quarter 2008 loss of $12.7 million. R&D expenses of $8 million were also lower than the previous quarter, primarily due to fewer patients enrolled in the extension trials, offset by an increase in purchases of bulk insulin as we start stockpiling inventory in anticipation of an eventual launch.

First quarter G&A expense of $2.3 million was also lower than previous quarters, principally because of higher stock-based compensation expense in those previous quarters. We ended the quarter with $81 million in cash and cash equivalents, which under current plans, should last until at least the end of fiscal year 2010.

That concludes our prepared remarks. Now we will open the call to your questions.

Question-and-Answer Session

Operator

Thanks very much. (Operator instructions) Our first question today comes from Corey Davis from Natixis.

Corey Davis – Natixis

Thanks very much. I have a couple of questions. First, Sol, when you left the FDA, were you smiling or cursing?

Sol Steiner

It is bigger than a bread box.

Corey Davis – Natixis

Fair enough. Second, in your bioequivalence study, I see that the IU difference but was the volume exactly proportional, in other words the volume was 1/4 less in a higher IU?

Sol Steiner

Yes, that is correct.

Corey Davis – Natixis

And third question, trying to get a difference between the pk and the pd for these two different insulins and I am assuming that the assay you used is the standard pk stuff for bioequivalence. So a, is that true and then b, is it possible that the FDA will ask you to look at something like glucose, because you could imagine the scenario where the injected insulin could – because of its different formations, have different functionality within the body and so yes, the insulin is there in the same amounts, but how do you know whether it is truly lowering glucose in exactly the same manner?

Sol Steiner

It is a good question, Corey. Let me answer the question. We get these studies so that we could use the data for both the Ford and Drug Administration in the United States and EMEA in Europe. Now the FDA only requires for bioequivalence, they only require pharmacokinetic data. But the EMEA requires pharmacodynamic data as well and we collected that data as well, so that we could meet the requirements in Europe. And we did that through the use of a glucose clamp study. On the glucose clamp study is – in many respects, it is the gold standard for measuring the pharmacodynamic effects of insulin. You see how much glucose you have to pump into the patient over time to keep their blood glucose in the normal range of about 90 to 110 mg per desolater. And that is the pharmacodynamic measurement. So we looked at that as well and we came out the same. Did that answer you question?

Corey Davis – Natixis

Yes, it did. I was waiting for the punch line there, it is identical or –?

Sol Steiner

It is not different. There is nothing that is ever identical, but there is no difference in the formulations.

Corey Davis – Natixis

Are there statistical standards for pd?

Sol Steiner

Yes.

Corey Davis – Natixis

They are for pk?

Sol Steiner

I'm sorry the statistical standards for pd, are they – what was the last part of that question?

Corey Davis – Natixis

As wide as they are for pk, or maybe you won’t think they are wide at all but –

Sol Steiner

Well, they are the same to the best of my knowledge.

Corey Davis – Natixis

Okay.

Sol Steiner

So there's no difference in terms of – the standards are based on a percentage, so I think it has to be between – you have to have a consonant, you have to fall such that the value is within a consonant sensible between 80% and 125%.

Corey Davis – Natixis

And I guess last question. You have no plans to do a full-blown clinical trial with this new formulation, is that correct?

Sol Steiner

Well, we have always said from the get go that we would be doing another trial regardless of anything, we will be doing another trial and we have always said that and we will be discussing that. Yes, that is the parts of that that further differentiate us from the analog insulins, because on the 505 B2 we had to go against regular recombinant human insulin, but what the market is interested in I believe and what physicians and patients are interested in is how are we going to stand up against the standard of care today in the United States, which is a, an analog rapid acting insulin such as Humalog or Novolog. So we always plan that from day one, and we still do. When we do that study, we will do it with a 100 IU VIAject formulation, but we will go into details on that after we have gotten the minutes back from the FDA.

Pamela Bassett – Cantor Fitzgerald & Co.

Well, I'm excited for March to come so we can hear what the FDA shared with you and I wonder how those discussions and the fact that you now have all bioequivalence data in hand has changed your discussions with potential partners, if at all.

Gerard Michel

Hey, Pamela, this is Gerard. We have continued to have conversations. Obviously, all the parties to which we have had conversations were easier to pass on this information. Actually it's fairly red hot, so we are in the process of communicating it and we anticipate it will be of great interest to them.

Pamela Bassett – Cantor Fitzgerald & Co.

Can you tell us – can you characterize the quality or change in the types of discussions that you having at this point. Are there more participants, fewer, are you getting down to negotiation breadth tax or is it something we should be looking forward towards year end?

Sol Steiner

I hesitate to give a lot of color, because you know these things can wax and wane. I will just leave it that it is very difficult to predict the course conversations will take and when they will reach a conclusion. So we will continue to move them forward but I'm not going to make any projections with that. I don't think it will serve you there as well.

Pamela Bassett – Cantor Fitzgerald & Co.

Okay. So what are the types of activities that you are pursuing over the near-term until you hear formally from the agency?

Sol Steiner

With the kind of activities, we are stockpiling API; we are making additional commercial batches; we are engaging in our usual research; we haven't stopped that. We have a pipeline of products, we are engaging in research on that. And we will discuss in greater detail our plans for additional clinical trials in March.

Pamela Bassett – Cantor Fitzgerald & Co.

Okay. So speaking of pipeline, what can you tell us about what is next up in the pipeline? As what is the furthest along and maybe you can share a little bit of progress.

Gerard Michel

This is Gerard. I'm taking this just because part of the answer has to do with the finances. Much that Sol should grin, he decided to take the foot off the gas and blame it on me, maybe. On some of that additional work, just try to keep the burn as low as possible. As soon as I think we have clarity on the path forward and we are confident we are in a – the financial house is in good order, I think we are going to push forward and some of you can comment on what you're most interested in pushing forward. But right now, we are kind of taking it slow.

Pamela Bassett – Cantor Fitzgerald & Co.

Okay, fair enough. Thanks very much.

Operator

Next we hear from Matt Kaplan [ph] with Denver Hillman [ph].

Matt Kaplan – Denver Hillman

Hi, guys. Thanks for taking my question. With respect to – just wanted to get a little more color with respect to the pain results that you reported in the BE study. What scale did you use to analyze the pain associated with the injection and can you help us understand what moderately or greatly an increase in pain correlates to?

Alan Krasner

Hi, this is Alan Krasner. So for this study, we had a special case report form, in which each patient after each injection was asked a question about any discomfort associated with the pain. The first question was did you have any pain with this injection. And as you see from the press release, a significant number of patients had no pain at all with the injection, particularly the 100 IU/cc formulation. If they had any sort of pain, we asked them to describe to the investigator whether it was pain that was equal in intensity to the insulin they normally take at home or if it was slightly more, moderately more, or greatly more. And in general, you might expect that the injections which are notably more painful that would fall into the moderate or greatly more categories. That is where we saw the greatest difference between 25 and 100, is that there were very few patients who described even moderately more pain. There were only 5% of patients with the 100 formulation who had moderately more pain and no patients who had greater or more pain, whereas with the 25 formulation, there were 15% with moderately more and 5% with greatly more. So that to me indicates that this 100 IU formulation significantly better tolerates.

Matt Kaplan – Denver Hillman

And in terms of the number of patients that saw the percentage of patients with no difference, what was that?

Alan Krasner

Well, so there were patients who reported equal pain compared to their home injections in this one, and I think that is what you are referring to. So that would have been 25% of the patients with the 100 formulation and 22.5% with the 25 formulation would have had an equal amount of discomfort.

Sol Steiner

That it was equal to the prandial insulin they normally used.

Alan Krasner

They use at home, right.

Matt Kaplan – Denver Hillman

And did you get any sense in terms of what type of pain it was – was it a burning sensation or is it just – what type of pain they were describing?

Alan Krasner

You know, generally the words that are used by the patients are either a mild burning or a mild stinging, and in this study, I think most of the patients used the word burning, but mild.

Matt Kaplan – Denver Hillman

And how did these results that you saw with the 25 international units in this BE study compare with the results that the pain reported in the pivotal Phase III?

Alan Krasner

I actually think they correlate very nicely, because again, in the Phase III trials, these were injection discomforts that were reported at adverse events, and in order to write to the level of an adverse event, generally you would expect that patients are experiencing either moderately or greatly more discomfort than they ordinarily experience with insulin injections. And if you look at the prevalence of injection site discomfort from the Phase III trial, immediately after starting the drug, it was up 20% and if you add up in this study, the prevalence of moderately or greatly more pain with the 25 formulation, you get 20%. So it looks very consistent to me with the Phase III data actually. I should point out that in the Phase III trials, when there was chronic dosing for six months, the prevalence fell from about 20% at the beginning to more like 10% at the end of the study. And very few patients actually dropped out from that study because of pain. So therefore, it is clearly mild, it doesn’t interfere with patients’ ability to dose chronically and that is with the 25 formulation. We would expect even (inaudible) better with the 100 with chronic dosing.

Sol Steiner

I will just add that we saw about the same percentage with the Humulin as reporting pain, about 5% I think in the Phase III study.

Alan Krasner

Maybe a little bit lower than that. So it is quite possible if you extrapolate this data with the 100 formulation to say Humulin under the same conditions in a chronic dosing trial, it wouldn't be that far off.

Matt Kaplan – Denver Hillman

And just going back to the original question, there was this DAS scale kind of a 0-10, 11 point scale that you used, or is it just more qualitative in terms of the – as you described it, where patients would designate these four different categories.

Alan Krasner

It was qualitative as I described it. You're asked if it was the same, was it less, was it more, and if so, was it moderately more or greatly more.

Matt Kaplan – Denver Hillman

Great.

Alan Krasner

There were really six categories. Yes. No discomfort, less than usual, equal to usual, slightly more than usual, moderately more than usual, greatly more than usual.

Sol Steiner

They didn't respond with a number like on a scale, no.

Matt Kaplan – Denver Hillman

Thank you.

Operator

Our next question comes from Cory Kasimov with JPMorgan.

Cory Kasimov – JPMorgan

Hi, thanks. Just about all my questions have been answered. Gerard, just one financial one for you. You guys have made it very clear for some time now that no matter what the FDA says, you are going to run another head-to-head study, preferably versus the analogs. Can you just talk a little bit about how you are budgeting that in terms of what this might cost and may be relative to the prior pivotal trials you already ran? Thanks.

Gerard Michel

Yes, I haven't given any specifics as to what that would cost aside from to say, the trial that we have budgeted is one that does cost less than our pivotal trials. The logic behind that is, we believe the comparator is going to be analog, which will greatly assist recruitment; one of the cost drivers is time to recruit. But with analog, the recruitment should be dramatically reduced than in the two pivotal trials. That is the primary cost driver of – the end, depending on the endpoint might be lower as well but you don’t need six months to get an endpoint, three months probably makes more sense. So $15 million was roughly what each of the pivotal trials cost. We are budgeting something south of that. I haven’t set the size to what. What I can tell you is the guides we have given of having at least enough cash to last through the end of fiscal year 2010 did include those scenarios, did include head-to-head trials, sizable ones that we thought would make a significant endpoint that we can, if not change the label, at least detail with.

Cory Kasimov – JPMorgan

Okay, and then to that end, are there any other commercial- like studies that you would like to run prior to commercialization?

Gerard Michel

I mean there might be some small things we would like to do pilot studies and you know Alan and Sol are always talking about doing as pump trials or px trials. We may have a little bit of wiggle room to do those, but I don't think we are in a position to commit to those right now. But we are always trying to think through how to best position the products.

Cory Kasimov – JPMorgan

Okay, thank you.

Operator

John Newman, Oppenheimer is next.

John Newman – Oppenheimer

Hi, there. Just a follow up to the previous question. In the past, you have previously talked about running perhaps a shortened Phase III trial with maybe three-month duration. Is that something you still think is possible or do you think you need to run something in the range of six months? Thanks.

Alan Krasner

This is Alan Krasner again. I still think it is possible. We do have to sort of arrive at the primary endpoint that we want to analyze in this trial, but we do think the shorter trial is very feasible.

John Newman – Oppenheimer

And I know you said that you won't make any comments on the FDA discussion until March, but did you get the sense that the FDA would be comfortable with reliance upon the prior safety data versus a potentially longer study from Biodel?

Sol Steiner

We are not going to talk about any sense or nonsense, but what I will say is I just want to remind you that this study – all the patients in both the – both the Type I patients and the Type II patients we are treating with VIAject for six months. At the end of that six-month period, they were all patients, both VIAject and Humulin were invited to enter into an extension. So we now have safety data for the FDA on a significant number of patients that have been on VIAject for over a year. That is a fairly long time for recombinant human insulin. If that helps you in answering.

John Newman – Oppenheimer

Yes, thank you.

Operator

Liana Moussatos from Pacific Growth has our next question.

Liana Moussatos – Pacific Growth

Can you tell us what the non-cash stock option expense was for the quarter and are you planning to redo the Type I trial, is that what you mean with the head-to-head combine that in the design?

Gerard Michel

Let us pick of the first one first. The non-cash, the 123R expense was under $2 million, I think about $1.5 million, I might be $100,000 or so off on that. In terms of repeating the trial, Sol –?

Sol Steiner

In terms of what we have been talking about is going head-to-head with Humalog or an analog insulin such as Humalog or Novolog; and we have also been talking about a three month trial. So that is not a repetition of the trial.

Liana Moussatos – Pacific Growth

So that would be only with Type I?

Sol Steiner

Well, the reason why you – most decisions will treat diabetes, most diabetologists and (inaudible) are going to pay the most attention to how well your drug works in patients with Type I diabetes. And there were a lot of reasons and maybe Alan would like to elaborate on that.

Alan Krasner

I think that is right. I mean insulin is the only treatment that is effective in Type I and so everyone knows that if your insulin product works in Type I, it is insulin and it will work in Type II as well. So it is almost definitional of insulin’s efficacy in Type I diabetes.

Sol Steiner

And it is also in some sense more difficult to treat a patient with Type I diabetes with insulin, because very often the alpha cells as well as the beta cells have been compromised or damaged. So they're not putting out glucagon, which is the ying to the yang of insulin. And so if you can expect that we do it with Type I patients, then it is usually easy to do it with Type II and that is one of the reasons why we would go with Type I patients.

Liana Moussatos – Pacific Growth

Okay and so this trial would be Type I patients with an analog head-to-head, possibly three months and with 100 IU formulation and starting in Q2?

Alan Krasner

The start date I think is open for discussion but the rest of what you said is correct.

Liana Moussatos – Pacific Growth

Great. Thank you.

Operator

And next we will hear from John Ossenus [ph] with Leerink Swan.

John Ossenus – Leerink Swan

Yes, I have another cash question or a financial question. In one of your previous cases, you indicated that in the organ arm supply agreement for the API that you are obligated to purchase between $32 million and $58 million worth of the API over the next nine quarters. How much of that has actually been spent so far? How much do you plan on spending and is there any way to actually delay some of that to preserve some of the cash over the next few quarters?

Gerard Michel

In this last quarter, we purchased $1.7 million. The purchase was – I don’t have the exact numbers on the top of my head but there were de minimus or under $1 million. Right now, our firm obligation is about $26 million from this point going forward. We have the opportunity perhaps to flux that up. In terms of flexing that down materially, that would require some conversations, which may be feasible to do. We have to be careful about clamping down too hard on that, as that stockpile represents launch material and don't want to leave ourselves too thin. So we have brought that down through mechanisms we have negotiated in the contract down to $26 million. Then if we needed to, perhaps we could bring that down further with conversations. We have an excellent relationship with our supplier. But at the moment, we don't think that will be for prudent because I think we would be lowering the top end of our revenue (inaudible) in the first two years.

John Ossenus – Leerink Swan

So how much lead time do they need to supply the material in order not to impact the launch?

Gerard Michel

We have been giving that level of disclosure in terms of what our supplier arrangement is. I will just leave it to say it is a fairly typical arrangement. This is a biological, it is not a small molecule so you can anticipate it will be longer than a small molecule API. But with that said it is also not a dedicated facility of our other purchases of bulk insulin, though there is a little more flexibility when you get it. It is a purpose built and alien cell culture thing for us.

John Ossenus – Leerink Swan

So should we kind of assume that this additional $26 million is going to be spent largely over the next few quarters or will it be quite evenly distributed over the next roughly –

Gerard Michel

You can look into, in the Q, we give disclosure of – that will be coming out tomorrow, (inaudible) it's already out there. And if you want to call later on I can walk you through down the phone, but it is there.

John Ossenus – Leerink Swan

Okay, thanks Gerard. I appreciate it.

Operator

(Operator instructions) And next we hear from Corey Davis with a follow-up.

Corey Davis – Natixis

Two kind of related questions and I should know the answer to this, but is the volume of the 100 IU injection the same volume as Humulin or Humalog?

Sol Steiner

Yes it is. If both of them are 100 international units per cc or cubic centimeter or per milliliter.

Corey Davis – Natixis

And the 100 IUs pertain just to the insulin and doesn't count any of the other stuff that is in there?

Sol Steiner

That is correct.

Corey Davis – Natixis

But the other stuff doesn't increase the volume.

Sol Steiner

It doesn't increase the volume, no.

Corey Davis – Natixis

Okay. And then the burning sensation that you mentioned on the pain, do the other insulins cause that kind of pain as well? I mean it was my impression that it was simply the higher volume of the 25 unit injection that was causing the pain, but – could it be your stuff that is in there that is causing the pain, not just the stick of a needle and the volume of the stuff going in?

Alan Krasner

Well, the exact description of the discomfort, burning versus stinging is very nonspecific and subjective based on each report and I would say, when someone has discomfort with any insulin injection, they could use the same word. There is nothing different about the qualitative description of what patients describe when they get VIAject injection versus any other injection. The only question has been the relative frequencies between VIAject end control in the Phase III trials and again we think with this 100 formulation, that treatment here is much closer to the marketed insulin.

Corey Davis – Natixis

Okay, thanks

Sol Steiner

I should also remind you that in the two pivotal Phase III trials, we didn't look just at stinging. We looked at four aspects of injection site discomfort. There was redness, there was swelling, there was itching, and there was a stinging. And the only place that we found any difference was with the stinging, where there was more with VIAject than it was with Humulin, but we didn't see redness, swelling, itching with VIAject in those long two pivotal Phase III trials.

Corey Davis – Natixis

Okay.

Operator

Anything further, Mr. Davis?

Corey Davis – Natixis

No. that was good. Thank you.

Operator

(inaudible) is next.

Unidentified Analyst

Hi, guys. Congratulations on a successful bio study, it is a huge milestone. Most of my questions have been asked, but the first one was on – Sol, you have detailed a clinical trial against the analog. If I remember correctly, that should be run in conjunction with an FDA review of the NDA, correct? It is more of a labeling study than a registration trial?

Sol Steiner

Yes, sir.

Unidentified Analyst

Okay. The second question I had – a series of questions related to the API. First of all, what is the shelf life of the API when you guys get it?

Sol Steiner

Okay, let me elaborate on that. The active pharmaceutical ingredient, which is regularly common human insulin, comes as a powder and is frozen. The shelf life in some respects is indefinite, and I will explain what I mean by that. The manufacturer says we have done testing in real-time and certified this for five years, okay? So that is one. You now can retest it and recertify it for additional time. So that is why I say it is almost – when you keep this material in the dry state and frozen, it has a very, very long shelf life. Now you have to go through the process of re-analyzing and recertifying it, but that is not the question. It is once you have formulated.

Unidentified Analyst

So Gerard, I know it is going to say this in the Q, but maybe you could give a preview, how much in terms of dollars did you buy in the quarter?

Gerard Michel

$1.7 million.

Unidentified Analyst

$1.7 million and what does that equate to in terms of doses?

Gerard Michel

I have done that calculation before, but to be honest, we have not given the cost per kilo which you could back into and we prefer not to give out our cost per kilo. Excuse me for having to try to do that, as well.

Unidentified Analyst

Okay, very good.

Sol Steiner

That is an awful lot of doses.

Unidentified Analyst

That is an awful lot of doses?

Sol Steiner

Yes.

Unidentified Analyst

What you think roughly a commercial launch buy would be to stockpile?

Gerard Michel

Again, what we have said is, right now our contractual commitments from this point forward are total about $26 million and we have said in the past, that should be adequate for about 3 years of commercial supply.

Unidentified Analyst

Okay, guys. Congratulations again.

Operator

Next we hear from John Newman with Oppenheimer.

John Newman – Oppenheimer

Hi, thanks for taking the follow-up. In the bioequivalence study, you said that each patient received both the 25 IU and the 100 IU formulation. I'm just wondering were those injections given at the same site or were they given in different arms?

Alan Krasner

No, they're given the abdomen, and the sites are rotated, but they are rotated within a limited spectrum of areas in the abdomen. So you would never give two injections in exactly the same place.

John Newman – Oppenheimer

Right. Great, thanks.

Sol Steiner

And they're also separated by about a week.

Alan Krasner

Right, they're not on the same day, there's usually a week between them.

John Newman – Oppenheimer

Okay, thank you.

Operator

At this time, we have no further questions in the queue. I will now turn the conference over to our host for any closing or additional remarks.

Sol Steiner

Thank you with joining us today and for your continued interest in Biodel and we look forward to updating you on our next conference call.

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