Seeking Alpha
We cover over 5K calls/quarter
Profile| Send Message|
( followers)  

Acorda Therapeutics, Inc. (NASDAQ:ACOR)

Q4 2013 Earnings Conference Call

February 13, 2014 8:30 am ET

Executives

Ron Cohen - President and Chief Executive Officer

Michael Rogers - Chief Financial Officer

Jeff Macdonald - IR

Analysts

Salim Syed - ISI Group

Michael Yee - RBC Capital Markets

David Amsellem - Piper Jaffray

Joel Sendek - Stifel Nicolaus

Blake Arnold - Robert W. Baird

Kumar Raja - Citi

Geoff Meacham - JPMorgan

Phil Nadeau - Cowen and Company

Yi Chen - Aegis Capital

Irene Lau - Leerink Swann

Operator

Welcome to the Acorda Therapeutics Fourth Quarter and Full Year 2013 Financial Results Conference Call. At this time, all participants are in a listen-only mode. There will be a question-and-answer session to follow. Please be advised that this call is being taped at the Company's request. I would now like to introduce your host for today's call, Jeff MacDonald, Senior Director of Corporate Communications of Acorda Therapeutics. Please go ahead.

Jeff MacDonald

Good morning, everyone, and welcome. With me today are Dr. Ron Cohen, our President and Chief Executive Officer; and Mike Rogers, our Chief Financial Officer.

Before we begin, let me remind you that this presentation includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts regarding management's expectations, beliefs, goals, plans, or prospects should be considered forward-looking. These statements are subject to risks and uncertainties that could cause actual results to differ materially, including our ability to successfully market and sell AMPYRA in the United States., third-party payers including governmental agencies may not reimburse for the use of AMPYRA or other products at acceptable rates or at all and may impose restrictive prior authorization requirements that limit or block prescriptions, the risk of unfavorable results from future studies of AMPYRA or our other research and development programs including Diazepam Nasal Spray or from our other research and development programs or other acquired or in-license programs, we may not be able to complete development or obtain regulatory approval for or successfully market Diazepam Nasal Spray or other products under development, the occurrence of adverse safety events with our products, delays in obtaining or failure to obtain regulatory approval of or to successfully market AMPYRA outside of the United States. and our dependence on our collaboration partner Biogen Idec and connection therewith, competition including the impact of generic competition on ZANAFLEX CAPSULES revenues, failure to protect our intellectual property, to defend against the intellectual property claims of others or to obtain third-party intellectual property licenses needed for the commercialization of our products, failure to comply with regulatory requirements could result in adverse actions by regulatory agencies, and the ability to obtain additional financing to support our operations.

These and other risks are described in greater detail in Acorda Therapeutics' filings with the SEC. Acorda may not actually achieve the goals or plans described in its forward-looking statements and investors should not place undue reliance on these statements. Forward-looking statements made in this presentation are made only as of the date hereof and Acorda disclaims any intent or obligation to update any forward-looking statements as a result of developments occurring after the date of this presentation. On a housekeeping note, during Q&A, we would ask participants to limit themselves to one question and one follow-up.

I will now turn the call over to our CEO, Dr. Ron Cohen.

Ron Cohen

Thanks Jeff. Good morning, everyone. Thanks for braving the weather to be with us today. On today's call, I'll provide a recap of our 2013 milestones and we'll follow that with an update on AMPYRA, some color on PLUMIAZ which is the proposed brand name from Diazepam Nasal Spray, and also updates on our other product development programs, and then Mike will provide the Q4 and full year financials and will review our 2014 guidance, and then we'll open the call for your questions.

We achieved several milestones in 2013. Importantly, we further strengthened our IP position around AMPYRA with the issuance of two new U.S. patents that gives us a total of four Orange Book patents, and in addition a fifth pattern was allowed and is now waiting issuance. We filed an NDA for PLUMIAZ which is the proposed trade name for Diazepam Nasal Spray and we're preparing for a potential launch this year. In April we announced positive findings from our dalfampridine proof of concept study in post-stroke deficits and based on those results we're planning to initiate a Phase 3 post-stroke walking deficit study in the second quarter of this year.

We also completed the acquisition of a new product franchise in neuropathic pain. This includes the QUTENZA capsaicin patch which is in market, and also a second-generation Phase 3 ready product, NP-1998. We recently relaunched QUTENZA and we're moving forward with development of NP-1998. And envision, we initiated clinical trials for three other drug candidates in 2013. We expect that the Phase 1b trials for GGF2 in heart failure and rHIgM22 in remyelination for MS will read out in 2015.

Turning to AMPYRA, for the fourth quarter, net sales were $84.6 million and full-year sales were $302.6 million, and that represents a 13.7% increase compared to the full-year 2012 sales. By way of reminder, as with a number of specialty pharmaceuticals, first quarter sales for this product typically have been lower than the preceding Q4 sales due to factors such as inventory builds in the fourth quarter, temporary effects of people changing insurance plans and entering the Medicare donut hole at the beginning of year. We expect the similar trend in 2014 and we've taken this into account in our guidance for the year.

AMPYRA has become a standard of care for improving walking in people with MS. Since launch, approximately 90,000 patients in the U.S. alone have tried it. As I previously noted, AMPYRA is protected by a robust patent portfolio that now includes four Orange Book patents with an additional patent allowed in 2013 and waiting issuance now. We believe these patents are strong and will provide us market exclusivity to 2027.

It's worth noting that in November 2013, we successfully defended a European dalfampridine patent against opposition. While the EU intellectual property laws differ from U.S. law, we're pleased by our team's demonstrated ability to defend our IP position around this product.

Our most advanced development program is PLUMIAZ or Diazepam Nasal Spray. Now PLUMIAZ is a treatment for people with epilepsy who experience cluster seizures which are also known as acute repetitive seizures that are not well controlled by their antiepileptic medications. We submitted an NDA to the FDA last year in a 505(b)2 filing using DIASTAT rectal gel as the reference drug. We're preparing for a potential launch later this year and we anticipate that our current infrastructure will support the sales and marketing of the product.

By way of background, of the 2.3 million people with active epilepsy in the U.S., about a third are treatment resistant, and of these, approximately 175,000 experience cluster seizures. The only approved outpatient treatment is DIASTAT and because that product has to be rectally administered, the vast majority of its use has been in young pediatric patients, and many adult patients either visit the emergency room or take no action which places them at increased risk of serious, sometimes permanent injury as you can imagine with cluster seizures.

PLUMIAZ is highly portable and convenient as a rescue medication. Our market research shows a high level of enthusiasm among the epilepsy patients, specialists and caregivers for a rescue medication of this kind. We therefore believe this product has the potential to generate peak annual sales significantly higher than $100 million.

Moving to our other pipeline products, in the second quarter we plan to start a Phase 3 post-stroke study with dalfampridine QD. The study would use a once-daily formulation of dalfampridine. We completed the analysis of a multi-dose PK study using this formulation and while we're unable to show you the data for proprietary reasons, I'm very pleased to report that the PK characteristics met our model projections and surpassed our expectations for QD formulation for this product. Now we're proceeding to scale up manufacturing for clinical trial use and to complete the PK work with a very short routine fed/fasted study that should not impact the timeline.

We're also in continued discussions with the FDA on the Phase 3 study design. As we previously announced, we had a quite constructive meeting with the FDA in December and we're currently incorporating the agency's feedback into the study design. The study design incorporates an interim look as well to confirm the trial is adequately powered, and if this is confirmed, we then plan to start a second pivotal trial at that time which would accelerate the overall Phase 3 program.

With our acquisition of QUTENZA and NP-1998, we now expanded into the neurology subspecialty of pain management. In January, our commercial and medical teams relaunched QUTENZA which is enabling us to meet with physicians, educate them about the use of capsaicin in neuropathic pain management as well as to gain a better understanding of the needs of that community. Our market research shows that the concept of non-systemic pain management therapies is highly appealing to the pain management specialists.

Like QUTENZA, NP-1998 is a capsaicin-based therapy but we believe it has key advantages over the patch. There are several underserved neuropathic pain conditions that together represent approximately 4 million cases in the United States alone. In addition to the current indication for QUTENZA, which is postherpetic or post-shingles neuralgia, these include painful neuropathies due to diabetes, chemotherapy and also HIV AIDS.

Astellas Pharma Europe Ltd., which has the rights to the QUTENZA capsaicin patch and the opportunity to obtain the rights for NP-1998 in Europe, is currently assessing the effects of QUTENZA in painful diabetic neuropathy and a data readout is expected this year. Next week, beginning on February 21, data from another Astellas trial called the ELEVATE Study will be presented at the 14th Asian Australasian Congress of Anaesthesiologists in Auckland, New Zealand. This was an open-label randomized multi-center non-inferiority trial which compared the efficacy, tolerability and safety of the QUTENZA patch versus oral pregabalin in several neuropathic pain conditions. Pregabalin is an oral medication which is indicated in the U.S. for treatment of certain neuropathic pain syndromes. So we're forward-looking to that presentation, and once it is out, we'll be able to talk more about that.

NP-1998 represents a potential paradigm shift in the treatment of neuropathic pain, both as a stand-alone therapy and as an adjunct to the existing systemic therapies. We're currently designing a plan to expedite development of what we believe is a truly exciting product.

Looking at the rest of the pipeline, over the past two years Acorda has introduced six new therapies into clinical development, and in additions to the products I just discussed, we initiated three new clinical trials in 2013. Each one of the products that you see on this slide targets a very large unmet medical need. We expect the trial results for rHIgM22 in remyelination and GGF2 in heart failure to read out in 2015.

I'll now turn the call over to Mike who will review with you the financials and our 2014 guidance. Mike?

Michael Rogers

Okay, thank you, Ron. Good morning, everyone. AMPYRA net revenue for the fourth quarter of 2013 was $84.6 million, up 16.4% from $72.7 million for the same quarter in 2012. For the full-year 2013, AMPYRA revenue grew approximately 13.7% to $302.6 million from $266.1 million for the full-year 2012. FAMPYRA royalty revenue from sales outside of the United States was $9.3 million for the full year 2013. Overall, revenue from ZANAFLEX for the full year 2013 was $15.1 million. This includes our own sales as well as product sales to Actavis and royalties received on Actavis sales of generic tizanidine.

Total operating expenses for the quarter ended December 31, 2013 were $79.8 million including $7.1 million in share-based compensation expense, compared to $80.1 million including $6.1 million in share-based compensation expense for the same quarter in 2012. Full-year operating expenses for 2013 were $306.1 million including $25.1 million in share-based compensation expense, compared to $280.2 million including $21.4 million in share-based compensation expense for the full year 2012. The increase in operating expenses is related to the overall growth of the organization to support AMPYRA and the dalfampridine franchise, the expected launch of PLUMIAZ, and the development of our pipeline of products. Our financial position is strong with cash, cash equivalents and investments totaling $367.2 million as of the end of the year.

Moving on to our 2014 financial guidance, in January we announced guidance for several financial measures for 2014. First, our net sales guidance for AMPYRA of $328 million to $335 million represents growth of 8% to 12% over 2013. The guidance on revenue from FAMPYRA royalties, ZANAFLEX sales and royalties on the authorized generic is approximately $25 million, and this includes $9.1 million in amortized FAMPYRA license revenue.

2014 R&D expense guidance is $60 million to $70 million excluding share-based compensation. The increase in spend in R&D over 2013 is a result of advances in our pipeline. We expect at least four clinical trials to be active during 2014. SG&A guidance of $180 million to $190 million excluding share-based compensation includes the investment we're making in preparing for the potential launch of PLUMIAZ as well as supporting AMPYRA.

With that, I will now turn the call back over to Ron.

Ron Cohen

Thanks Mike. So in conclusion, our key priorities for 2014 are listed here. The post-stroke program is built on compelling data from our proof of concept study that indicates that our new QD formulation of dalfampridine has the potential to be the first medical therapy to improve walking in people who have suffered strokes and have permanent walking impairment as a result. A published data indicate that about 7 million Americans have had a stroke in the past and about half of these suffer from continued walking impairments.

PLUMIAZ, if approved as anticipated this year, would represent a substantial addition to Acorda's commercial product line and a much needed option for people with breakthrough seizure clusters who currently don't find the available rectal gel acceptable and have to default to emergency room care or no care at all. We have both preclinical and clinical data suggesting that NP-1998 is as effective as the QUTENZA patch which is already on the market for postherpetic neuralgia. However, we believe there are several advantages with respect to the mode of delivery and that therefore NP-1998 represents a potential paradigm shift for the treatment of neuropathic pain of various causes which affect approximately 4 million Americans. We expect to develop and begin to implement our strategy for expediting the development of NP-1998 this year.

Importantly, as Mike mentioned, our financial position is strong with a growing base of over $335 million in annual net revenue, $367 million in cash and negligible debt. We intend to use this financial strength to invest in our highly promising pipeline and potentially to acquire additional products that will fit into our commercial structure and expertise in both neurology and specialty pharmaceuticals. Our goal is to create a balanced portfolio that creates significant near-term value as well as intermediate and longer term opportunities for further value accretion.

So with that, we will open up the call for your questions. Operator?

Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from the line of Mark Schoenebaum from ISI Group. Please go ahead.

Salim Syed - ISI Group

This is Salim in for Mark.

Ron Cohen

Is Mark watching the Croatian hockey match, is that why he couldn't be with us?

Salim Syed - ISI Group

That's exactly why he couldn't be with you. Actually no, I guess the weather played into it too, but I had few questions for you. One is a patent question and one is a tax question. So on the patent, can you just remind us, Ron, what are the key differences between the 2025 patent that was upheld in Europe and the 2027 patent here in the U.S.? And then on tax, Mike, so taxes seem to be jumping around from quarter to quarter, if you could just talk about how we should think about taxes going forward and what are the cash and taxes coming out? Thank you.

Ron Cohen

So Salim, I'm not in a position to talk about the finer points of the patents. There are similarities and some overlaps there as I think you noted. That's something that we could probably take offline and maybe have you talk with our internal IP person, to the extent that she can, and I'll have to check and see how comfortable people are getting into the weeds on that. But an overall comment would be that the European patent had a number of overlaps and similarities to our U.S. patents.

Having said that, I just want to make sure that it's clear that the EU intellectual property laws differ in some respects from the U.S., so you really can't do a direct read-through. From our perspective, obviously we're encouraged that at least in the EU venue our team did a really nice job of defending our patent position but the rules are a bit different and that's something that anyone who's interested would have to parse through with their own patent counsel who is knowledgeable about it. Mike, do you want to…?

Michael Rogers

On the tax side, Salim, a couple of things. One is that in general we're not providing guidance on our effective tax rate at this point. With that being said, there are a number of things that I can point out. Obviously, some of this is I'm sure obvious to you, but there's clearly a difference between cash taxes and the effective rate. On the cash side, we had NOLs at 12/31 2012 of about $205 million. Those have come down a little bit. That will be reported in our 10-K coming up in the next week or so. But we can use those NOLs to offset taxable income up to a certain point. We have, just like individuals, we have alternative minimum tax, and so you could see cash tax rates that are quite low because we can offset most of the income.

On the effective tax rate, it's a little different. You have a statutory rate which is 35% federal and state for us is somewhere in the 6 plus percent, maybe 7%. That's our statutory rate. Now there are going to be differences between book impacts which cause the effective rate to fluctuate, and for a lot of companies if profit is fairly low, then small changes in the difference between book and tax can have a big difference in the effective rate.

So for instance, if our differences in book and tax for instance for the fourth quarter I think were $1 million different, then the tax rate instead of being 50% which you'll see would have been 43%. So you can see that it can have a big difference. As profits get higher, the impact of the difference between book and tax rates does not have such an impact on your effective tax rate.

So although we're not providing guidance, we do expect some variability in the effective tax rate, but our statutory rate is in the 41% to 42% range and our cash tax rate is going to be substantially lower because we have a good deal of NOLs right now to offset income – taxable income. I hope that answers because that's the best I can do for you at this point.

Salim Syed - ISI Group

It helps, thank you so much.

Operator

Our next question comes from the line of Michael Yee from RBC Capital Markets. Please go ahead.

Michael Yee - RBC Capital Markets

Two questions, the first was just trying to understand the timelines in the post-stroke program to the best of your ability. I guess you have kind of stated Phase 3 in Q2 of this year. So when do you think an interim could read out, that's 2015, and walk me through a second study and filing, does that sound like a 2016-2017 timeframe, you think those are reasonable [since you have two] (ph) studies?

Ron Cohen

You know, Mike, I can't – unfortunately I don't have the ability…

Michael Yee - RBC Capital Markets

Just broadly speaking, I mean are those crazy timelines?

Ron Cohen

I can't give you broadly or narrowly because I'm much more comfortable waiting until we get the final agreement on the protocol, we have the exact numbers of prospective enrolees, and then frankly you really don't get a handle until you start the study and just start seeing how your assumptions about enrolment play out. But once we're ready to start, I think we'll have a better handle on that, but for now, I don't want to speculate until I get the final on what we're doing in the study.

Michael Yee - RBC Capital Markets

But our timelines should at least include two studies though? Data need to flow through…

Ron Cohen

Yes, and again, assuming the interim looks good and we continue, then we would start the second study at that point.

Michael Yee - RBC Capital Markets

Okay, perfect. And then the follow-up is on a Paragraph IV which you discussed before, remind us when the earliest you think we could see that, I think there's a 60 day acceptance window, so would we expect to see that and I think we're aware of, or at least we are aware of, a couple of DNF, companies you requested DNF, so what are you hearing their challenge, do you expect multiple filers but what are you expecting?

Ron Cohen

We don't have any more information than you do at this point. Your information is the same as ours. FDA has 60 days by statute to accept the filings and then after that the NDA filer actually has 20 days to notify us, and then if an Orange Book listed patent is being challenged by the NDA filer, we have 40 days after they notify us to file a patent infringement suit.

Michael Yee - RBC Capital Markets

Okay, thank you.

Operator

Your next question is from the line of David Amsellem from Piper Jaffray. Please go ahead sir.

David Amsellem - Piper Jaffray

Just a couple. So a big picture question, given the stock since the commercialization in the U.S. of AMPYRA has essentially moved sideways, thinking forward how aggressive do you feel you need to be on acquisition strategy? In other words, do you think you need to prioritize accretive transactions along the lines of what we're seeing in the broader pharma space as a means of driving value creation, just give us something on how you're thinking about that?

Ron Cohen

It's a bit of a mystery to us why we are not getting more credit for what we actually have going on in the Company, let alone AMPYRA as it exists commercially, but be that as it may, we like the pipeline right now a lot, we think it's got some major shots on goal, only one of which – any one of which if it hit would be a game-changer for the Company. We like the near term commercial opportunities with Diazepam Nasal Spray. It's not a mega opportunity but if you look within our P&L structure, a product that is significantly north of $100 million annual sales is significant for us. So we think that's a good thing.

We like the NP-1998 a great deal. We think that that actually has potential to be a surprise to people. When you look at the magnitude of the potential market and the unmet need and you look at what the product potentially can do, we like that a lot. So we're prioritizing that heavily this year in terms of getting a development strategy in place, with a program in place and moving that hopefully towards the market.

Now having said that, we do feel that from a shareholder point of view, it's important that we leverage the strengths of the Company and we have a very strong financial position right now, there are assets out there that we think could be short-term accretive and that is a very high priority for the Company. As I said, we are looking at creating a company that has a balanced portfolio and balanced opportunities for growth over time, and that means short-term opportunities as well as intermediate and long-term, and I think we have some terrific intermediate and long-term, we even have a short-term or two in the bag right now or in our portfolio right now, there's room for more short-term and we are going to prioritize that.

David Amsellem - Piper Jaffray

Okay, and then a follow-up – not really a follow-up, but a question on Diazepam, latest thoughts on pricing, how we should think pricing in the context of brand DIASTAT, are there any premium, any color on that would be helpful?

Ron Cohen

I'm sorry, could you say that again, that was a little garbled, Mike? I'm sorry, David. That's how garbled it was. I thought you were Mike.

David Amsellem - Piper Jaffray

Sure. So Diazepam Nasal Spray, your thoughts on pricing and should we think of pricing at parity or at a premium to brand DIASTAT?

Ron Cohen

I think for obvious reasons we can't commit on pricing right now. I think if you wanted to model on parity with branded DIASTAT, that's probably a good place to start, although we can't commit to where we're going to wind up around that, but I think that's a reasonable place to start your modeling.

David Amsellem - Piper Jaffray

Okay, alright. Thanks Ron.

Operator

Your next question is from the line of Joel Sendek from Stifel. Please go ahead.

Joel Sendek - Stifel Nicolaus

Just a couple of quick ones, Ron. Just so I'm 100% sure on AMPYRA in stroke, the second trial, will that be the identical design?

Ron Cohen

It should be. There's always the – I mean look, I'm speculating here but I can give you what is right. So we're going to have two dose arms of drug versus placebo, so it's a three arm trial. If in the interim look we get information that allows us to eliminate one of the dose arms, that's a possibility, but the fundamental design would remain the same.

Joel Sendek - Stifel Nicolaus

Okay, good. And then so you know with the FDA already doing a fed/fast study, do you need to have another – is there another hurdle with the FDA to review that or is that more of the…?

Ron Cohen

Not to y knowledge. I mean as long as it looks the way we expect it to, it really has to do with how we design the study, in other words when people are allowed to take the drug. If we don't have the fed/fast data, then we have to make sure that everyone's fasting for a certain amount of time before they take their morning dose, which we'd rather not do. We'd rather just alleviate or eliminate that requirement. So the fed/fasted study would allow us to do that, provided that it came out as we expect. It's a very short study, it should not be a gating factor.

Joel Sendek - Stifel Nicolaus

Okay, got it, and anything else that you need to do before starting that Phase 3?

Ron Cohen

Yes, we need to finalize our agreement with the FDA. As you could imagine, there are quite a number of moving parts. They made some we thought actually very good suggestions when we met with them in December. We have incorporated that into the trial design now. We're going back to them and hopefully they agree that we have incorporated correctly what we believe that they were saying to us. If not, then we'll have to go through another go-round. So that would be a potential gating factor depending on how long that took.

Joel Sendek - Stifel Nicolaus

Oaky, thanks Ron.

Operator

Your next question is from the line of Chris Raymond from Robert W. Baird. Please go ahead.

Blake Arnold - Robert W. Baird

This is Blake calling in for Chris. My question is on FAMPYRA. Has BIIB articulated anything to you with regard to the biggest barriers to uptake in Europe and what the company might be doing to address them? And then just a quick follow-up to that, is the FAMPYRA sales force in Europe, is that separate from the TECFIDERA force?

Ron Cohen

So I can't comment on the sales force. That's really for Biogen to comment and just under the terms of our agreement, I can't comment about how they structure that. With respect to uptake, the uptake actually has been outstanding just in terms of volume, in terms of patients who are trialling it, it's been extremely popular and they've done a good job on that front. The big issue in Europe has been reimbursement. The reimbursement has been below what all of us hoped and expected that it would be and part of it is the perfect storm of getting on the market just as the new regime was beginning to bite with IQWiG in Germany and elsewhere in Europe.

So those are issues that BIIB continues to work on with respect to generating additional data from additional trials that they've been running with FAMPYRA and then hopefully going back to the authorities and trying to get some better terms over time, but that's a process and I have no insight that I can give you as to if or when they will succeed in that. So again, the big issue is not uptake, it's been reimbursement.

Blake Arnold - Robert W. Baird

That's very helpful, thanks.

Operator

Your next question is from the line of Yaron Werber from Citi. Please go ahead.

Kumar Raja - Citi

This is Kumar Raja in for Yaron. What are you seeing with the QUTENZA relaunch and when can we expect any meaningful revenue?

Ron Cohen

So we actually have just relaunched QUTENZA, it's been less than a month, so we're not seeing anything, there has not been enough time. We just trained the sales force in all of the adjunct field force medical affairs and so on, so they are out there now. But we have always said that QUTENZA – we don't expect a lot from QUTENZA at this point. We think it's actually a highly effective and important medication but there are various barriers in the marketplace to widespread and high-volume use.

We believe that the real interest here is NP-1998. Because of its mode of delivery, it addresses and overcomes the major challenges that the patch has had in the marketplace we believe. So really that's where we're focusing our interest. We would not expect significant revenue – you're talking about a product that at peak before we acquired it, I think in its best year, it did about $2 million. So obviously that's not moving. Even if we double or triple that, and I'm not saying we will, but even if we were to, it's still not moving the needle significantly. What it does do is that it gives our commercial and medical organizations the opportunity to become familiar with the space and to learn from the people in the space and prescribers and whatnot, to have conversations about their needs, so that hopefully if we do develop NP-1998 successfully, we're lock and loaded, we're just ready to go.

And if you think about it, that was very similar to the strategy we had at the very beginning where we brought in ZANAFLEX when we had no commercial organization and that enabled us to get familiarity within neurology specialty marketplace, so by the time that AMPYRA was launched we had already had time under our belt and the education to have what by many accounts was the most successful launch of 2010. So that's really where we see the value of QUTENZA right now.

Kumar Raja - Citi

Okay, thank you. And for [indiscernible], do you plan to give the PDUFA date and do you know if Pfizer has filed for their auto-injector?

Ron Cohen

I'm sorry, I didn't quite hear the question. Can you say it again?

Kumar Raja - Citi

Do you know if Pfizer has already filed for their auto-injector for diazepam?

Ron Cohen

We do not know.

Kumar Raja - Citi

Okay, thank you so much.

Operator

Your next question is from the line of Geoff Meacham from JPMorgan. Please go ahead.

Geoff Meacham - JPMorgan

Ron, question for you on the Phase 3 for post-stroke, what do you guys view as a clinically meaningful improvement in walking speed that you use to I guess inform your power assumptions, and then a follow-up with that be, for the interim look are you just assuming one interim look to inform the next Phase 3?

Ron Cohen

So the answer to the second question is, yes, we are assuming one interim look to inform the next Phase 3. With respect to the meaningfulness, that was part of the discussion with FDA about what they wanted to see and what we agreed would be meaningful. So we're still in the final stages as I indicated earlier of the back-and-forth with them to verify that we're all in agreement. But fundamentally we actually looked at it in more than one way when we were powering the study because based on our MS experience we were able to do that, because in the MS experience we had a number of different ways that cross-validated the clinical meaningfulness. That included the 20% threshold, so it was already present in the literature that about a 20% improvement in walking speed was highly correlated with various measures of improved clinically meaningful measures of improvement in walking. We found that that was also true actually to be exact in the MS trials, it was about 17%.

We also were able – even from the proof of concept study, we had some global measures in the proof of concept study that we were able to map back to the walking speed increases and it looked very much like what we have seen in MS. So we were able to triangulate across the global measures that we used, the 20% threshold that we used, compare it to the MS result and it all looked consistent, no matter what we did. So we gained a lot of confidence there in being able to power the study off of those assumptions.

Geoff Meacham - JPMorgan

Okay, that's helpful. And then just for PLUMIAZ, do you guys expect to have any sort of incremental additional investments in terms of the commercial infrastructure and does the timing of 2014 of the launch matter? Just want to get a sense for your SG&A guidance.

Ron Cohen

Right, so the SG&A guidance took into account the potential launch of PLUMIAZ and obviously there's a fair amount of prelaunch activity that goes into that that requires some investment, but that's really on the marketing side. On the sales side, this fits neatly into the bag of our existing sales force, so we do not need to expand the personnel on the sales force. Actually we don't need to expand personnel. I don't know maybe one or two marketing people, but that's it. So that's one of the reasons that we like the product as much as we do. It's really promotional spend specific to the product but otherwise it fits completely into the bag.

Geoff Meacham - JPMorgan

Okay, perfect. Thanks a lot.

Operator

Your next question is from the line of Phil Nadeau from Cowen and Company. Please go ahead.

Phil Nadeau - Cowen and Company

Just first on NP-1998, at your R&D Day, I think you said that there was an Astellas study of QUTENZA in PDN that was going to inform your development plans for NP-1998. Is that still the case, is that Astellas study still on a critical path, and if so, could you give us some update on when you expect to see data or if you have any data, how does it look?

Ron Cohen

So, we no longer think it's on the critical path because we have some other data. Meanwhile, that has been encouraging to us. And also in examining or in diving deeply into it, our teams have come up with some interesting ways where we might be able to accelerate development. So it's still an important study and we still are looking for those data. We will have them this year. We can't tell you exactly when because it's an Astellas study.

I think on ClinicalTrials.gov, I need to double check this, I believe that on ClinicalTrials.gov the study is due to have closed by the end of the first quarter, and so obviously they may have to have time to analyze it and so on. So I would go with the publicly available information on that. We do think that that's going to be very interesting information and that will potentially open up an additional avenue that we can pursue, but we don't need it to move forward right now with a development plan.

Phil Nadeau - Cowen and Company

Okay, great. And then just second on PLUMIAZ, do you expect there to be an FDA panel for that or because of the 505(b)2, do you think that one may not be necessary?

Ron Cohen

You know, it would pure speculation. We have no information at this point that there would be a panel. It doesn't mean there won't. I guess I'd be somewhat surprised that there were, just given that it's 505(b)2 of DIASTAT and is obviously very well-known medication, but I'd be speculating. So we'll just have to wait and see.

Operator

Your next question comes from the line of Yi Chen from Aegis Capital. Please go ahead.

Yi Chen - Aegis Capital

My first question is, how does PLUMIAZ compare to the other intranasal diazepam products [indiscernible] Neurelis formulation and/or one currently being developed by Biotie Therapies in Finland?

Ron Cohen

Okay, so I can't comment on comparisons to other products. There is no other intranasal diazepam that is on the market at this time. There are some other formulations out there that as far as we know are in earlier stages of development, certainly none that we know of that has filed an NDA. So that's really all I can tell you about that. There is another benzodiazepine in later stages of development as a nasal spray, that's midazolam, which is being developed by Upsher-Smith, and as far as we know based on ClinicalTrials.gov, they are still doing there Phase 3 trial because they cannot do a 505(b)2 as there's no reference product as there is for diazepam in the form of DIASTAT rectal gel.

Yi Chen - Aegis Capital

Thank you. My second question is, in the Phase 3 poet-stoke study for AMPYRA, will there be a responder analysis included like what was the case in the Phase 3 multiple sclerosis trial?

Ron Cohen

There will be a responder analysis among the analyses that are being done. It will very likely not be the original responder analysis that we used in the MS study. You might want to look at the MS label, you will see a couple of bar graphs that are a post-hoc responder analysis that we did using thresholds of improvement, 105, 20%, 30%, and so on. It's much more likely to look like that.

Yi Chen - Aegis Capital

So additionally, is there any potential to seek approval after only one trial considering it is a severe unmet medical need?

Ron Cohen

You know, never say never. If we got a very good result, it's certainly an open possibility that we would discuss it with the agency, but the plan is to do two and to have the second one begin after hopefully a successful interim analysis.

Yi Chen - Aegis Capital

I see. My last question is, do you know who would be the most likely Paragraph IV filers for AMPYRA?

Ron Cohen

You know, that'd be pure speculation at this point. We'll all find out in the next couple of months probably, so I would just wait till then. Again, regardless of who it is, they all have to get through four Orange Book patents plus what we believe will be a fifth patent we'll be issuing this year.

Yi Chen - Aegis Capital

Okay, thank you very much.

Operator

Your next question is from the line of Marko Kozul of Leerink Swann. Please go ahead.

Irene Lau - Leerink Swann

This is Irene in for Marko. For the Phase 3 post-stroke interim, I believe you're still [indiscernible], can you talk a little bit about that therapy, if any or none simplifies adjustment?

Ron Cohen

Okay, I can't go into great detail but the adaptive design is in fact represented by the interim look that we've mentioned, and it is specifically to confirm that we have powered the study adequately for the active measures that we care about. The ideal situation of course would be that we do the interim look and that what comes back is 'just keep going as is', but there is the possibility that they could come back and say, 'well, keep going but increase your sample size by X'. And so, that is built in to ensure that we have sufficient power to hit the end points at the end.

Operator

There are no further questions. I would now like to turn the call back over to Dr. Cohen for closing remarks.

Ron Cohen

That concludes our call for today. Again, thank you all for joining us and have a great rest of the week. Stay warm.

Operator

Thank you. You may now disconnect. Please have a good day.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!

Source: Acorda Therapeutics' CEO Discusses Q4 2013 Results - Earnings Call Transcript
This Transcript
All Transcripts