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Executives

Brenna Mullen – IR

Keith Katkin – President and CEO

Christine Ocampo – VP, Finance

Randall Kaye – SVP, Clinical Research and Medical Affairs, Chief Medical Officer

Analysts

Mike King – Merriman Curhan Ford

Carol Werther – Summer Street Research Partners

Jim McCamant – America HealthCare

Mark Mcinerney – Visium Assets

Avanir Pharmaceuticals, Inc. (AVNR) F1Q10 (Qtr End 12/31/09) Earnings Call Transcript February 2, 2010 11:00 AM ET

Operator

Good morning, my name is Carrie and I will be your conference operator today. At this time, I would like to welcome everyone to the AVANIR Pharmaceuticals' fiscal 2010 first quarter conference call. (Operator instructions) Thank you, Ms Mullen, you may begin your conference.

Brenna Mullen

Thank you and good morning everyone. Joining me on today's conference call is Keith Katkin, President and Chief Executive Officer; Christine Ocampo, Vice President of Finance; and Dr. Randall Kaye, Chief Medical Officer. I will begin the call by addressing our forward-looking statements. Following this, I'll turn the call over to Keith Katkin.

As a reminder, the statements made on this call represent our judgment as of today, February 2, 2010. Our remarks and responses to questions during this conference call may constitute forward-looking statements, including plans, expectations and financial projections, all of which involve certain assumptions, risks and uncertainties that are beyond our control and could cause actual results to differ materially from the expected results expressed in our forward-looking statements.

These forward-looking statements include, among others, statements about our expectations about the likelihood of success in obtaining FDA approval for Zenvia, as well as statements regarding anticipated expenditure levels, future cash balances, clinical development timelines, and intellectual property protection.

We encourage you to take the time to review our recent filings with the Securities and Exchange Commission, which present these matters in more detail as well as related risk factors. AVANIR disclaims any intent to update any forward-looking statements made on this call.

Now, I will turn the call over to Keith Katkin.

Keith Katkin

Good morning everyone. Thank you for joining us on our fiscal 2010 first quarter earnings call. I will start today’s call by providing a brief commentary on our overall business performance before turning the call over to Christine Ocampo, who will review our financial results followed by Dr. Randall Kaye who will discuss our Zenvia clinical development programs.

The first quarter of fiscal 2010 was a very exciting time at AVENIR as we continued to build on the positive momentum created after announcing the STAR trial results in August. With the positive outcome from the confirmatory Phase III STAR trial, we opened the fiscal year by presenting the full Zenvia data set at three prestigious medical conferences. In addition, we announced favorable safety and efficacy results from the open-label extension of the STAR trial, and very importantly we received a notice of allowance from the USPTO that our new patent will soon be issued extending the US patent protection of Zenvia into 2025.

From an operational perspective, we shifted our focus from clinical development activities to preparing the regulatory submission that is necessary to secure FDA approval and initiating commercial readiness activities to support an expected product launch in early 2011.

Last quarter on the regulatory front, with the STAR trial completed, we sought alignment with the FDA on the components of our submission package for the first full response filing. In November, we announced that the company had engaged in a constructive written communication with the FDA, and based on the feedback from the FDA, we planned to proceed with the filing of the full response with existing Zenvia data. Our clinical team is now busy preparing to file the response early in the second quarter of 2010. We remain optimistic that our full response will address the questions raised by the FDA in their approvable letter and will serve as the basis for an approval decision in the fourth quarter of 2010.

In order to prepare for a US launch in early 2011, we have initiated significant commercial readiness in medical affairs activities. We have focused on long lead-time items such as manufacturing and packaging as well as initiating PBA disease awareness programs for physicians and patient audiences. We intend to be very active at important medical meetings in 2010 to raise awareness of PBA among neurologists, psychiatrists, and other physician specialties that manage patients suffering from PBA. We have also been working with key patient advocacy groups to educate their constituencies that are at risk of PBA. Our goal is to educate the market about PBA and create a platform for a successful Zenvia launch in early 2011.

While we are open to evaluating all strategic options, we firmly believe we can successfully commercialize Zenvia ourselves. Members of our senior team have significant commercial experience having launched and managed several blockbuster brands at large pharma and biotech companies. Further, we demonstrated our commercial capabilities at AVANIR by successfully re-launching FazaClo in 2006 and more than doubling the sales trajectory before selling their brand in 2007 to fund the Zenvia confirmatory Phase III STAR trial. We have now begun to staff up key commercial roles including posting openings for a vice president of sales and a head of managed markets. Our actions demonstrate that we have the conviction and expertise to successfully bring Zenvia to market.

In summary, 2010 will be a transformational year for AVENIR. We are on the brink of filing our regulatory application and expect an FDA approval decision before year-end. Considering the imminent filing of the full response to the FDA, our internal commercial expertise, and the allowance of our new patent that provides patent protection in the US in the late 2025, we believe that we are well positioned to create substantial value for our shareholders. We are very excited of the prospect of soon becoming a leading developer and marketer of innovative therapies for central nervous system disorders.

With that, I will now turn the call over to Christine Ocampo who will review our financial results for the first quarter.

Christine Ocampo

Thanks Steve and good morning everyone. My comments today will cover our financial results for the first quarter of fiscal 2010 as well as our expected cash burn for the fiscal year.

In addition to the results summarized in the press release we issued earlier this morning, you can find additional information in our 2009 Annual Report on Form 10-K and our most recent Form 10-Q. I will begin with a discussion of our results for the first quarter.

Our net revenues were $1.5 million for the first quarter of fiscal 2010 as compared to $1.8 million in the same period of the prior year. The decrease in revenue is primarily attributed to an approximately $212,000 decrease in deferred revenue and annual royalty revenue from our license agreement with GSK as well as revenue of $57,000 related to other license agreements. First quarter fiscal 2010 revenues consisted of recognition of deferred revenue of approximately $600,000 and revenue generated from our license agreement with GSK for sales of Abreva in the amount of approximately $886,000. 2009 revenues consisted of the recognition of deferred revenue of $750,000 and revenue generated from our license agreement with GSK for sales of Abreva in the amount of $951,000.

Total operating expenses for the first quarter of fiscal 2010 were $6.3 million compared to $7 million in the same period of the prior year. Our first quarter of 2010 operating expenses consisted of research and development expenses of $3.4 million compared to $4.7 million in the same quarter in the prior year and general and administrative expenses of $2.9 million compared to $2.3 million in the same quarter in the prior year. The decrease in research and development expenses is attributed to the completion of the confirmatory Phase III STAR trial in the fourth fiscal quarter of 2009. The increase in general and administrative expenses is primarily attributed to cost associated with preparation for commercial readiness, and non-cash share based compensation expense of approximately $300,000.

The net loss for the first quarter of fiscal 2010 was $4.8 million or $0.06 per share compared to a net loss of $5.2 million or $0.07 per share for the same period a year ago. We ended the first quarter of 2010 with total cash of $25.6 million and cash used in operations of $6.5 million. We continue to prudently manage our cash and expect our total cash burn in fiscal 2010 to be in the range of $23 million to $26 million including expenses for commercial readiness. We expect that our current cash on hand will be adequate to fund continuing operations and the clinical development of Zenvia beyond the anticipated FDA approval decision date on our PBA application which is expected in the fourth calendar quarter of 2010.

Now, I will turn the call over to Dr Randall Kaye who will provide an update on the progress of our Zenvia clinical program.

Randall Kaye

Thanks Christine and good morning everyone. This is truly a very exciting time here for everyone at AVANIR.

During the first fiscal quarter we conducted our (inaudible) activities on the confirmatory Phase III clinical trial of Zenvia and PBA, presented the data at three prestigious medical meetings, and we are now working diligently to prepare the full response filing with FDA. My comments today will summarize our recent achievements and then provide additional insight into the next steps on the regulatory path towards approval.

Previously we reported the topline results of the double-blind portion of the Phase III STAR trial of Zenvia in patients with PBA. In October, just eight weeks after unblinding the study, we presented the data from the STAR trial at the American Neurological Association’s Annual Meeting in Baltimore. This was the first time that we presented the full data set including additional analysis of the primary endpoint and all of the secondary efficacy endpoints in the study. Some of the key highlights from the full data set were as follows.

Both Zenvia’s 30/10 and 20/20 groups met the primary efficacy endpoint by demonstrating a significant reduction in daily PBA episode rates relative to the placebo group. A proportion of patients with complete remission of PBA episodes, this is defined as no episodes during the last two weeks of the study, was significantly greater in both Zenvia treatment groups versus placebo with approximately half of Zenvia patients achieving remission. Both Zenvia groups demonstrate a greater proportion of patients compared to placebo that achieved 50%, 75% or a 90% reduction of PBA episode rates versus baseline. Finally, in this study, both doses of Zenvia were safe as well as well tolerated with adverse event profiles and completion rates that were quite favorable compared with the original higher dose formulation.

Also in October, we presented detailed STAR results from the small subset of PBA patients with underlying MS at the Controversies in Neurology Meeting in Prague. A very exciting finding from the MS subgroup was that patients with MS that had moderate-to-severe pain, and this was defined as those patients with a baseline score of greater than and equal to 4 on a 11-point scale are those patients who received Zenvia 30/10 dose reported a statistically significant improvement in their pain scores compared to placebo. This is the second study in which we observed an efficacy signal in MS patients suffering from pain. This provides important proof of concept data for future clinical development in pain.

In November, we announced efficacy, safety and tolerability results from the 12-week open-label extension phase of the confirmatory STAR trial. These long-term STAR data demonstrate that the new lower dose formulation 30/10 of Zenvia provides sustained efficacy by further reducing the frequency and severity of PBA episodes over a six-month treatment period. Furthermore, the new low dose formulation demonstrates a favorable long-term safety and tolerability profile. Over 92% of patients completed the 12 weeks of treatment in the open-label study.

In December, detailed STAR results from a subset of patients with PBA secondary to ALS were presented during a podium session at the ALS Motor Neuron Disease Meeting at Berlin. Both Zenvia groups met the primary endpoint in the subset of patients with underlying ALS by significantly reducing PBA episode rates compared to placebo. In addition both groups made an important secondary endpoint by significantly improving the CNS and Lability Scale scores compared to placebo. In the ALS patients’ subset, Zenvia was found to be generally safe and well tolerated.

We continued to plan to submit our full response to FDA early in the second calendar quarter of 2010. The full response includes a number of components including responses to issues raised by FDA in the October 2006 approval letter, complete study report from the STAR trial both the double-blind and open-label portions, a cardiovascular safety white paper that has been developed in consultation with an outside panel of cardiovascular experts, a detailed mortality assessment that includes a review from a mortality adjudication committee, an integrated safety summary with data from approximately 1600 subjects that have been exposed over the course of ten years of clinical development, as well as our proposed package insert. We (inaudible) will qualify for a six-month review and could lead to an FDA approval decision in the fourth calendar quarter of 2010.

In addition to our team work it is doing with regards to creating the full response filing and prepare for any FDA requested queries during the review period, we are also now building out our medical affairs organization. For example, we have started to hire medical science liaisons that will be charged with interacting with key opinion leaders in Neurology, Psychiatry and General Medicine. This is an important part of our strategy of raising awareness of PBA and building advocacy in the professional communities. Further the STAR trial assuming [ph] committee is finalizing the primary manuscript for submission and has submitted additional abstract of the Zenvia STAR trial data to upcoming prestigious medical meetings.

In summary, our team has been incredibly busy and productive over the last quarter as we continued to make considerable progress with our Zenvia clinical programs and remain committed to making Zenvia available to patients as quickly and as safely as possible. Thanks for your time and attention. With that, I would like to turn the call back to Keith.

Keith Katkin

Thank you Randall. As I am sure everyone has gathered during the call, we are very excited to be focusing on the regulatory approval and commercialization of Zenvia once again. We remain committed to bringing this important product candidate to market as quickly as possible.

With that operator, I would now like to open the call up for questions.

Question-and-Answer Session

Operator

Thank you. (Operator instructions).

Keith Katkin

As a wait for our first question, I would like to take this opportunity to remind everyone that we are holding our annual meeting of stockholders on February 18 in Newport Beach, California. All stockholders are cordially invited to attend this annual meeting. Any questions, operator?

Operator

Your first question comes from Mike King with Merriman Curhan Ford [ph].

Mike King – Merriman Curhan Ford

Thank you for taking my question and good morning. Just wanted to see if, Randall, if you could perhaps elaborate a bit more on the interaction with FDA, do you guys plan on holding a meeting with the agency prior to submitting your response to the complete response, that is question number one. Question number two is, are you also anticipating at that time having a discussion with respect to a REMS program medication guide and all the things that go along with a REMS program, thank you.

Randall Kaye

Sure, hi, good morning. We have had an ongoing dialogue with FDA obviously over the past three and a half to four years as regards to the full response to the approvable letter. Back in October, we did request a meeting with FDA, which was granted, put together a pretty huge pre-submission package in advance of our meeting, which was going to be in November, and got responses from the FDA in a matter of two weeks, which is actually pretty quick, and based on the responses in our discussion back and forth with the agency, we decided a meeting was not necessary. We felt that we had very good alignment with the FDA that the package that we are putting together addressed all of the issues that were brought up in the approvable letter and that the (inaudible) efficiency give them the ability of providing what we call is a favorable response towards the end of this year.

REMS is an interesting situation. We did supply initially in the original submission a risk map. Risk maps nowadays if you submit them would be considered a REMS but because the timing of it – there is still a little bit of debate of whether we would be subject to a REMS or not. At this point, our plans and intention are to continue to prepare the REMS, we have identified the right group to be working with in terms of all the components of it and are likely to submit a REMS along with the full response to the approvable letter.

Mike King – Merriman Curhan Ford

Okay, so those will go in parallel rather than waiting for feedback from the agency, let’s say, when the NDA supplement is accepted. Is that a fair statement?

Randall Kaye

Yes. At this point, our current strategy is to proactively be providing the content of the REMS to the FDA and not wait for to go through the review process and have them requested late in the game.

Mike King – Merriman Curhan Ford

Right because the follow up to that is do they consider that a major amendment and does that somehow affect the clock?

Randall Kaye

I think they have a good understanding for why we are thinking of submitting a little bit earlier. And just to clarify, the REMS components we intend to submit are what many people refer to as REMS light not the more extensive elements to a sure, safe use. So REMS light is our components like a med guide and perhaps a dear doctor letter.

Mike King – Merriman Curhan Ford

Right, okay and then would you also expect to be subject to an advisory committee meeting sometime between the submission and the assumed PDUFA date?

Randall Kaye

It is always hard to know for sure and I think the best course of action is to plan as if we are going to have one. So we are already involved in identifying potential lenders and being prepared in the event the FDA does request an advisory committee.

Mike King – Merriman Curhan Ford

Okay.

Randall Kaye

We believe at this time the likelihood is low but if there is a 50% or 5% chance, you still have got to plan the same way.

Mike King – Merriman Curhan Ford

Right and then the final question is can you elaborate a little more about this white paper that you mentioned, I think you called it a cardiovascular safety white paper, what can you tell us about that white paper? Can you also tell us who helped you author it and what are the key message points from that?

Randall Kaye

Sure. So we have been collecting obviously quite a bit of data with regards to the cardiovascular safety of Zenvia since receiving the approvable letter the focus of the approvable letter was fairly aligned with regards to cardiovascular safety. The white paper puts together all of the data that we have on Zenvia from both the clinical trials as well as non-clinical trials and since the approvable letter there has been additional data that we have been able to obtain, one is the events cardiac safety study that looks specifically at the prolongation of QT seen, small rates seen at the lower new dose formulation of 30/10. It also looks at some of the preclinical data with a rabbit wedge study that looked at torsades de pointes risk in utilizing low doses of quinidine. In addition, it takes a very, very extensive view of quinidine. Certainly quinidine at high doses, I am talking about 1800 mg does have cardiovascular risk and does cause significant QT prolongation. We have been culling the literature to go through the relatively low risk that one sees at these ultra low doses of quinidine.

So, in putting this together, the groups that were utilizing are key cardiologists that are currently up in the community, currently this includes people like Craig Pratt, Peter Kowey, Dan Roden, these are the leaders in terms of the assessment and evaluation of drugs that have the propensity to be arrhythmogenic.

Mike King – Merriman Curhan Ford

Okay, great, let me get back in queue. Thank you.

Operator

Your next question comes from Carol Werther.

Keith Katkin

Good morning Carol.

Carol Werther – Summer Street Research Partners

Hi, how are you? I was wondering if you could give me the current share count.

Christine Ocampo

83 million shares.

Carol Werther – Summer Street Research Partners

Okay, great, and I was wondering if you could update us about your current partnering thoughts?

Keith Katkin

Sure. Good morning Carol, it is Keith. I think on the partnership front, our thoughts and perspectives have been consistent over time, and as I mentioned today in my prepared comments, we continue to have a plan and believe that we can execute on the commercialization of Zenvia by ourselves and that we have demonstrated commercial success through many of the experience that the senior management team has had in the past at that big pharma and big biotech companies as well as demonstrating success here at AVANIR with the product that we acquired FazaClo a number of years ago. That said, we continue to have a high level of interest in the Zenvia program, particularly the PBA program. Our first desire would be to license Zenvia outside of the US but as I have discussed before, the ex-US discussions typically morph very quickly into global discussions given the fact that we are so close to approval here in the US and there is such a limited number of assets that are going to be approved or likely to be approved in 2010 and even fewer within the CNS space.

So for us, we are happy to have the dialogue with companies, we are happy to share the data with them but for us it boils down really to an economic decision at the end of the day, and we have our plans what we believe we can execute on commercially the revenues that we believe that we can generate commercially and the associated profits and contribution margin and in a partnered relationship, we would be open to a partner but we would have to be confident that the overall economics provided through the partnership an AVANIR’s portion of those economics would exceed what we could do ourselves. So, again, we are committed to commercializing Zenvia ourselves but we are open to the possibility of a partnership under the right economic circumstances.

Operator

Your next question comes from Jim McCamant with America HealthCare.

Jim McCamant – America HealthCare

Hi guys. My question is about the approval time, if you are going to get approved in the fourth quarter why wait to launch until the first quarter of next year?

Keith Katkin

Sure, it is a good question Jim. I think we have got a few things which lead us to believe that if we get approvable early in the fourth quarter that we would want to wait to the first quarter, first is launching into the holidays, so anytime you get a drug approval in the fourth quarter, you have to take a look at the proximity to Thanksgiving and the other December holidays to make sure that you can maximize your product launch. You really want to make sure you can get out at least four weeks ahead of Thanksgiving, and if you cannot, then most companies decide to wait until January so that they can maximize their product launch.

For us, on the build out from a commercial perspective, in particular the sales force, we do not plan on hiring the 75 sales representatives ahead of FDA approval. So what we would plan on doing is making conditional offers to those 75 sales representatives in advance of approval and then begin the on boarding process concurrent with FDA approval and typically industry standards are about 12 weeks from the time that you initiate the hiring process for sales representatives, allow them to give notice at their current companies, and then have them come on board sales training typically takes anywhere from four to six weeks, and that sets us up then right into the holidays, I still think that it is best to make sure that we schedule the commercial launch for kick off in 2011 with the commercial launch.

Jim McCamant – America HealthCare

Okay, thank you.

Keith Katkin

Thanks Jim.

Operator

Your next question comes from Mark Mcinerney with Visium Assets.

Mark Mcinerney – Visium Assets

Good morning guys, Randall, a question for you and then congratulations on the success this year. So, just a follow up on Mike’s earlier question about your correspondence with the FDA, and you finally deciding you did not need to sit down and meet with them, is there any particular data point or aspects of the correspondence that gave you comfort that to sit down really was not necessary?

Randall Kaye

Hi Mark, good morning. You know, a lot of the regulatory clinical interactions is also a little bit of a gut feel. The letter that they provided back to us was timely, it was in a couple of weeks. It was clear and straightforward in terms of the responses that they gave. I think overall and kind of looking at the responses, they gave us a lot of assurance that what we were sending was exactly what they were expecting. Some of the things that we thought about a little bit in advance we wanted to get clarity around was the size of the safety database, was the amount of patients that were in the database and how long patients were exposed for, and the response back was that it was fine. We asked a question with regards to additional data whether it would be clinical or non-clinical data, we feel confident that what we were putting in the package was exactly what they were expecting and they came back and they confirmed yes. So, again, it is a bit of a gut feel but the responses back were clear and positive.

Keith Katkin

Mark, it is Keith, I will just add that when the FDA sent their responses two weeks in advance of our meeting, which is pretty much very atypical for the agency, they all but suggested in sending the responses that we go ahead and cancel the meeting. So when the FDA suggests that it means that they think that their response is clear, adequate and that we should be able to move forward. So we felt that given our very positive working relationship with the agency and their suggestion that we had everything that we need in order to move forward with filing the complete response.

Mark Mcinerney – Visium Assets

Okay, just one more question about this white paper on cardiovascular safety, is there any literature that kind of point to any increased cardiovascular risk over time with cleaning and exposure and how long out did you guys go with patients, and the last question is about the rabbit model. I have seen some literature that suggests that when you use quinidine in the rabbit models that are predictive of torsades it is not highly predictive whereas some other agents that do in humans will cause torsades. I was just kind of wondering if you could comment on those points.

Keith Katkin

Let us talk about the rabbit model first, it is a wedge model, it takes literally a chunk of rabbit heart and you infuse quinidine on top of it, you use positive controls in these studies and actually the positive control is quinidine in the approach that we took. As you increase the dose of quinidine, not in low levels, the human equivalents of 10 and 30 and 60 mg but when you get up there into the 900, 1000, 1200 mg range, that is where you see the model becomes positive and predictive where you have torsades de pointes scores that are consistent with what you would expect and what you see in the literature. In lower doses, you see exactly what we saw in our clinical trials, a flattening of QT response, a response that is relatively low and in the infrequency of our layers [ph]. So I actually think that the model was quite helpful.

Mark Mcinerney – Visium Assets

I am sorry, just a quick question about that, so how many (inaudible) would that equate to?

Randall Kaye

In terms of what is infused, I would have to go back and look at the model.

Mark Mcinerney – Visium Assets

Okay, we can talk about that offline.

Randall Kaye

Remember it is an infused, literally poured over --

Mark Mcinerney – Visium Assets

Sure.

Randall Kaye

So it is a concentration, not a weight by dose.

Mark Mcinerney – Visium Assets

Alright.

Randall Kaye

I will talk to you later on that. And then in terms of what is also in the white paper, there is also additional data from the open-label extension study that being the initial study that was done in our ’07 [ph] trial where patients were exposed in excess of two years, that gives a lot more (inaudible) safety data plus the STAR trial had an additional three months of data, all of which having a very consistent finding. Small changes in QTc in terms of mean changes clinically, no events, no torsades, no sudden death, no syncopal episodes, nothing that even looks like a cardiovascular event

Mark Mcinerney – Visium Assets

Okay, great, thanks a lot guys.

Randall Kaye

Thanks Mark.

Operator

You have a follow-up question from Carol Werther with Summer Street Research.

Carol Werther – Summer Street Research Partners

I was just wondering if the focus of the REMS also were all cardiovascular or there were other things you are looking --

Randall Kaye

That is a good question Carol. The REMS generally is supposed to mimic the areas of your package insert, in particular the med guide essentially puts it into a language that is understandable for patients and caregivers, not so much prescribers. So if you think about a combination of dextromethorphan and quinidine in the areas that one would want to focus in on, one area would be in combining with other drugs that prolonged QT interval, one would be in combination of drugs for which there might be a drug-drug interaction. That would be drugs that are inhibitors are substrates of 2D6 or drugs that might have an impact on 3A4. So the verbiage [ph] are sort of the major areas. So the verbiage basically provides cautionary statements to inform their doctors about any other concomitant medications that they are on. It is not as sophisticated as you think. It basically puts it down into a language that is useable and understandable by patients because package inserts are completely not understandable and it goes into the basics which in this instance is discuss with your doctor if you are taking any other medications.

Carol Werther – Summer Street Research Partners

Thanks Randall.

Operator

(Operator instructions) You do have a follow up question from Mike King with Merriman.

Mike King – Merriman Curhan Ford

Thanks for taking the follow up, just to probe a bit further on the topic of QT, Randall, can you talk about is there any one metric in the mind of the FDA as far as – is there an absolute threshold of milliseconds or a comparative one against Moxifloxacin or some sort of composite of the full spectrum of data for quinidine that the FDA is going to use to make its assessment on its comfort level with the propensity of Zenvia to cause QT prolongation?

Randall Kaye

Mike, it is the exact question that we have asked our cardiac advisors and I wish and they wish they could say there is one thing to look at and one thing only. QTc is a reasonable thing to look at in terms of the thorough QT studies but the guidance essentially says if it is less than 5, do not worry about it, if it is greater than 20, you have got a problem with the further development of your drug. And if it is somewhere 5 and 20, we need to look at this a little bit more closer. So the answer to your question is it comes down to benefit risk at an overall view of the drug. And based on the data that we have seen from the STAR trial from an efficacy standpoint, knowing that there are no other drugs out there that are approved for patients with PBA, that these patients are significantly socially disabled by these diseases and have no treatment options, it comes down to benefit risk. There are many ways that we can ensure that Zenvia can be provided to patients safely and as well as providing the efficacy that they need.

Keith Katkin

Mike I will just build on Randall’s comment a little bit just giving you some real world examples. Many people do not realize that common drugs like erectile dysfunction drugs are associated with QT changes, then if you look at Levitra, Cialis and you look at their package inserts, you will see QT changes very similar to what we have observed with Zenvia. So there is no hard and fast rule and I think these drugs are essentially the quintessential life style drugs. Here we have got Zenvia that is providing huge benefit for these patients, significant relief allowing them to integrate back with their family and have a social life again. So we think on the risk benefit spectrum compared to any new drug certainly we are in good order and that is why we are feeling very good about where we are at now in the overall QT profile which we do think is dramatically improved versus the original formulation.

Mike King – Merriman Curhan Ford

Okay thanks.

Keith Katkin

Thanks Mike.

Operator

At this time there are no further questions. Are there any closing remarks?

Keith Katkin

Great. Thank you everyone for joining us on the first quarter earnings call and we look forward to keeping you updated on our progress throughout the year.

Operator

This concludes today’s conference, you may now disconnect.

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Source: Avanir Pharmaceuticals, Inc. F1Q10 (Qtr End 12/31/09) Earnings Call Transcript
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