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AVANIR Pharmaceuticals (NASDAQ:AVNR)

F2Q10 (Qtr End 03/31/10) Earnings Call

May 03, 2010 11:00 a.m. ET

Executives

Brenna Mullen - IR

Keith Katkin - President and CEO

Christine Ocampo - VP, Finance

Randall Kaye - CMO

Analysts

Ritu Baral - Canaccord Adams

Mike King - Wedbush PacGrow Life Sciences

Carol Werther - Summer Street Research Partners

Operator

Good morning. My name is Paulie and I will be your conference operator today. At this time, I would like to welcome everyone to the AVANIR Pharmaceuticals fiscal 2010 second quarter conference call. All lines have been placed on mute to prevent any background noise. After the speakers remarks there will be a question-and-answer session. (Operator Instructions). Thank you, Mrs. 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 the call, I'll turn it over to Keith.

As a reminder the statements made on this call represent our judgment as of today, May 3rd, 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 the forward-looking statements.

These forward-looking statements include among others, statements about our expectations, about 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 matters in more detail as well as related risk factors. AVANIR disclaims any intent to update any forward-looking statements made during this call.

Now I will turn over to Keith Katkin.

Keith Katkin

Thank you Brenna. Good morning everyone. Thank you for joining us on our fiscal 2010 second quarter earnings call. I'll start today's call by providing a brief commentary on our overall business performance before turning the call over the Christine Ocampo who will review the financial results, followed by Dr. Randall Kaye who will discuss the submission that we announced on Friday of our complete response to the Zenvia approval level PBA.

The second quarter of 2010 was a productive and exciting time at AVANIR marked by shift from clinical development activities to preparing the regulatory submission of Zenvia for the treatment of PBA as well as market development activities in the receipt of a new patent for Zenvia in PBA. We are delighted that we now have filed for complete response to the October 30th 2006 NDA approvable letter with the FDA and we believe that we have provided the FDA with all of the information they need to access benefit risk profile of Zenvia.

We continue to expect a six month review of application from the agency and expect a PDUFA date in the fourth calendar quarter of this year. Dr. Kaye will provide additional details regarding the regulatory review process in his comments. In the second fiscal quarter we also strengthened our Zenvia intellectual property portfolio. In February the United States patent and trademark office issued a new patent that will extend the period of intellectual property protection in the United States through late 2025, considerably improving the period of patent protection for Zenvia.

With the planed commercial launch in early 2011, the new patent is expected to provide approximately 15 years of protected revenue generation in the United States, and greatly enhances the long-term value of Zenvia. In addition, subsequent to the end of the quarter, we presented detailed Zenvia safety and efficacy data from the double blind and open label extension of the Phase III confirmatory STAR trial in three data posters at the American Academy of Neurology annual meeting in Toronto Canada.

The efficacy and safety data demonstrated the that the new low dose 3010 formulation of Zenvia demonstrated durable long-term efficacy as well as a favorable safety and tolerability profile. Overall we are very pleased with the clinical profile of the new lower dose Zenvia formulations that emerged from the STAR trial.

Our team is also continuing to prepare for a U.S. commercial launch in early 2011. As we announced this morning we are very excited to have hired a Vice President of Sales and Managed Markets, Michael McFadden who will be joining the management team of AVANIR this week.

Michael is an exceptional sales leader and has a rare combination of sales leadership and managed health care expertise. Michael most recently served in leadership roles in sales and marketing and sales and managed markets at Amylin Pharmaceuticals. During the tenure Amylin's managed markets team has consistently been recognized as one of the leading account teams in the industry.

Michael also is responsible for building a special sales team of over 100 sales representatives and launching two first in class diabetes products for the company. Prior to Amylin, Michael held commercial roles at Pharmacia and Eli Lilly. With over 20 years of experience in the pharmaceutical industry, Michael has been involved in marketing some of the most successful blockbuster prescription products and we're very pleased to have Michael on the team.

In addition, we continue to focus on raising awareness of PBA among our target physician audience which manages the neurology patients suffering from PBA. We have started to build out a medical affairs organization by staffing up with medical science liaisons that will interact with key opinion leaders in neurology and psychiatry.

In Aril, at the AAN annual meeting in Toronto in addition to presenting key Zenvia data, educationally we have focused on raising awareness and educating physicians PBA. Overall the feedback from the physicians attending AAN was very positive. The physician interest level in PBA is significant and reinforces our believe that there is a large unmet medical need for FDA approved PBA therapy. We intend to actively support education of healthcare professionals about PBA throughout the second half of this year in order to set the stage for a successful launch of Zenvia planned for early 2011.

In summary, the first half of 2010 has been a period of significant accomplishment. We took several pivotal steps towards our goal to become the leading developer and marketer of innovative therapies for central nervous system disorders. With a complete response to the FDA filed, acceleration of commercial ready initiatives and the allowance of our new patent provides protection into late 2025, we believe that we are well positioned to create substantial value for our shareholders and help a significant number of patients in the U.S. that currently suffer from PBA. We look forward to the transformational year as we move through the approval process and prepare for the launch of Zenvia in the PBA market.

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

Christine Ocampo

Thanks Keith and good morning everyone. My comments today will cover our financial results for the second quarter of fiscal 2010 and the first six months of fiscal 2010, as well as our expected cash trends for the fiscal year. In addition to the financial 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 second quarter. Total net revenues were $994,000 for the second quarter of fiscal 2010, as compared to $812,000 in the same period of the prior year. The increase in revenue is primarily attributed to the increase in royalty revenue resulting from our agreement with the Azur Pharma for the sale of FazaClo. Second quarter fiscal 2010 revenue primarily consisted of the recognition of deferred revenue of $478,000, and revenue generated from our license agreement with Azur Pharma in the amount of $516,000.

Total operating expenses for the second quarter of fiscal 2010 were $7.4 million, compared to $5.8 million in the same period of the prior year. Our second quarter of 2010 operating expenses consisted of research and development expenses of $3.8 million, compared to $3.6 million in the same quarter in the prior year and general and administrative expenses of $3.6 million, compared to $2.2 million in the same quarter in the prior year.

Research and the development expenses in the second quarter of 2010 consisted primarily of final cost attributed to the confirmatory Phase III STAR trial as well as regulatory costs related to the complete response to approvable letter. The increase in general and administrate expenses is primarily attributed to costs related to pre-commercial activities and higher non-cash share based compensation expense.

The net loss for the second quarter of fiscal 2010 was $6.4 million, or $0.08 per share, compared to a net loss of $4.9 million or $0.06 per share for the same period a year ago. Cash used in operations for the second quarter was $4.7 million.

Now moving on to our results. For the first six months of 2010, total net revenues were $2.5 million for the first six months of fiscal 2010, as compared to $2.6 million in the same period over the prior year. Revenues consisted of the recognition of deferred revenue of $1.1 million, royalty revenue granted from our license agreement with GlaxoSmithKline for sales of Abreva in the amount of $886,000, and royalty revenue generated from our license agreement with Azur Pharma in the amount of $516,000.

Total operating expenses for the first six months of fiscal 2010 were $13.8 million, compared to $12.8 million in the same period of the prior year. Operating expenses consisted of research and development expenses of $7.3 million, compared to $8.3 million in the same period in the prior year and general and administrative expenses of $6.5 million, compared to $4.5 million in the same period in the prior year.

The decrease in research and development expenses is primarily attributed to a decrease in clinical trial expenses as the Phase III STAR trial was completed in the fourth quarter of fiscal 2009. The increase in general and administrative expenses is primarily attributed to costs related to pre-commercial activities and higher non-cash share based compensation expense.

The net loss for the first six months of fiscal 2010 was $11.3 million or $0 .14 per share, compared to a net loss of $10.1 million or $0.13 per share for the same period a year ago. We ended the first six months with total cash of $20.3 million and cash used in operations of $11.2 million.

We expect that our current cash on hand will be adequate to fund continuing operations and the clinical development of Zenvia through the anticipated FDA approval decision based 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 for listening and good morning everyone. 2010 has been a period of significant progress and excitement for the entire AVANIR clinical team. We are thrilled to have a complete response to the October 30th 2006 NDA approvable letter and we look forward to the agencies thorough review of the submission.

We believe the complete response addresses all of the open issues raised in the FDA a approval level and we expect should serve as the basis for an approval decision in the fourth calendar quarter of 2010. My comments today will provide insight into the structure and comprehensive nature of our recently submitted filings.

The elements of the complete response are organized into five major modules in compliance with FDA eCTD guidelines. Some of the key components include a comprehensive complete study report from the double blind and open label phases of the STAR trial. They should evolve asset burden of illness white paper, Zenvia cardiovascular safety white paper and this was developed in consultation with an outside panel of experts in cardiovascular medicine.

Respiratory white paper developed in conjunction with an outside ALS pulmonary expert, an integrated safety summary and let's include safety data from the previous trials of Zenvia, a proposed package insert, a proposed REMS and finally, a specific response to each issue that was raised by FDA in the original approvable letter.

We expect the full response initial will qualify as a class two submission and will thus result in a 180 day review period. I would now like to provide you with some additional details with regards to the response by module. The first module includes our specific responses to tissues raised in the approvable letter, proposed labeling as well as a comprehensive proposed risk management plan, also known as a REMS for Zenvia.

The REMS program components that we are pro actively proposing consist of a patient medication guide and a health care professional letter as well as a post marketing surveillance evaluation plan. The second module of the filing provides a series of summary documents for quality, non clinical and clinical. These summaries include drug substances, drug products, pharmacology, toxicology, clinical safety, inefficacy as well as a synopsis of all individual studies.

The third module contains detailed reports of chemistry, manufacturing controlled information on the newer low dose 3010 and 2010 formulations of Zenvia. The fourth module contains detailed non clinical pharmacology, toxicology, absorption, distribution, metabolism and excretion. These are also known as ADME reports.

The fifth and most comprehensive module contains all of the new clinical study reports. The most pivotal report is the final clinical study report for the STAR trial which demonstrated efficacy and safety for the 2010 and 3010 formulations in Zenvia in the treatment of PBA. In addition this module also contains updated safety data from an open labeled safety study with [DMQ] 30/30, two drug-drug interaction studies known as Paroxetine which is a common antidepressant and Memantine which is an NMDA receptor antagonist used in the treatment of patients with Alzheimer's, a comprehensive PK study evaluating several new dosing regimens and a cardiac safety study with Zenvia 3010.

As with any FDA filing, safety is always of the utmost concern. A comprehensive integrated safety summary or ISS is provided which consolidates safety data from the previous trials of Zenvia, regardless of the dose or control group. In addition, a PBA burden of illness, cardiovascular and respiratory white papers helps provide clinical context to further elucidate the benefit risk profile of Zenvia in the target populations.

Our clinical team has been working tirelessly to pull this filing together and ensure the integrity of the electronic submission. The goal of all these efforts is a perfect submission, which responds to all the open issues raised in the approval letter and also one that anticipates any new questions that may have arisen.

We're particularly proud that we've been able to complete this submission within the time frame that we had communicated last summer when we released our top line results. One important side note that’s worth mentioning, after receiving approval letter in 2006, we worked collaboratively with FDA to identify the path forward. Our goal was to make specific formulation changes, that would ultimately result in significant efficacy for the treatment of patients with PBA but overall, improving the safety profile.

We are very pleased with the clinical profiles of the new low dose formulations demonstrated and believe that with proper labeling and risk management, Zenvia can be used safely and affectively for patients suffering from the socially disabling disorder of PBA. This is surely a time of great excitement for our company. This submission has been almost four years in the making and truly demonstrates the dedication that our team has had to this important drug candidate and to the patients who suffer from PBA. We believe that we have compiled a complete response document that should serve as the basis for an approval decision by the FDA which is expected in the fourth calendar quarter of this year.

Thanks for your time and attention. And now I would like to turn the call back to Keith.

Keith Katkin

Thanks Randall. In closing, we're proud of the excellent progress we made in the first half of fiscal 2010. We are pleased with the package we have submitted to the FDA and remain optimistic that we will receive a favorable approval decision. Operator, I would now like to open the call up for questions.

Question-and-Answer Session

Operator

(Operator Instructions). And your first question comes from the line of Ritu Baral.

Ritu Baral - Canaccord Adams

Can you give us any detail on the post marketing trial that you have proposed as part of the REMS program and also what percentage of the application that you submitted will be completely new data? It sounds like there is a lot of new CMC stuff and ADME stuff along with the clinical data from the STAR trial.

Keith Katkin

Sure. Randall you want to take that one?

Randall Kaye

Sure. Just to clarify, the REMS is a risk mitigation strategy and it basically is a way of informing healthcare professionals and patients how to [safe fully] and effectively utilize Zenvia. There is no post marketing trial component as a part of it. It includes a dear doctor letter and it also has a medication guide. There is an evaluation that I had mentioned. It's an evaluation of how well the REMS actually works and you follow that from surveys and knowledge attitudinal surveys over the course of 18 months.

The second, what percent of the application completes new data, well that’s a tough one Ritu. I'd say that a way of looking at this is the size of the database in terms of patients exposed is if at least twice, just in terms of the number of patients exposed, there is some additional preclinical work that we have also provided to FDA as well.

Ritu Baral - Canaccord Adams

Okay and I guess the review division and team within the FDA, are they the same ones that reviewed the previous application or were they different people.

Randall Kaye

The same group. Still within neuro division and same reviewers.

Ritu Baral - Canaccord Adams

So there was no phase for a proposal submitted as part of the package?

Randall Kaye

No.

Operator

And your next question comes from the line of Mike King.

Mike King - Wedbush PacGrow Life Sciences

Can you comment about whether we could expect an advisory panel between now and the PDUFA date?

Keith Katkin

Will you take that one as well Randall?

Randall Kaye

It's an interesting question Mike. I think that a percent likelihood of an advisory committee is relatively low but regardless of that, our going plan is we're assuming that we're going to have one and we're preparing as such. We're in the final stages of selecting an [Adcon] vendor and we'll move forward as if we're going to have one. It will take some time before FDA informs us as such but really the key of it is, you want to be prepared in the event that you have one. So we'll do the work now in the likelihood that there will be one.

Mike King - Wedbush PacGrow Life Sciences

It goes too far back from my recollection but was there one for the first go around on the approval cycle?

Randall Kaye

There wasn’t and I’m not necessarily sure that there would be an obligation on FDA's part to have because Zenvia has two long known components dextromethorphan and clinazine. Neither are new molecular entities. So the FDA would not be required to have an advisory committee.

Mike King - Wedbush PacGrow Life Sciences

Understood. But it’s a novel combination and potentially vulnerable patient population as we've learned. So one could hypothesize that there is a reason for an internal review?

Randall Kaye

Sure. There could be reasons for and reasons against. What I’m confident of is that our clinical team will be prepared in the event we do have one.

Mike King - Wedbush PacGrow Life Sciences

And then perhaps a quick a follow-up on Ritu's question about the post marketing. You did not mention any kind of a patient registry and I know that we just saw an approval for (inaudible) with a 1,500 patient post marketing registry. Has that been contemplated and can we anticipate that if that’s required?

Randall Kaye

Yeah, it's hard for me to comment on the company and their registry. My personal experience is registries come out as you start to go through labeling discussions. But as far as our full response to the approvable letter, we did not propose a registry or any post marketing studies.

Mike King - Wedbush PacGrow Life Sciences

Okay. Sorry I misspoke. It was actually dendreon that got a registry. And then, so we can get some thoughts about market preparation. I know you guys just had a bit event at AAN recently. But between now and again, I resume PDUFA date, what kind of things, what kind of events, what kind of activities can you comment about that will start to sort lay the track for eventual approval and launch.

Keith Katkin

Sure. It's Keith. I think you will continue to see us really focused on community awareness and patient education much like we've been doing and started a few months ago. I suspect that you will PBA awareness advertorials within all of the medical journals. You'll see them also in the patient focused journals that are focused on particular target populations that PBA incur secondary to stroke, ALS dramatically and the MS and the likes.

In addition, you'll see us in all of the major neurology and psychiatry meetings coming up for the remainder of the year. In total we're at about a dozen different medical meetings and that’s because PBA's touches so many different physician types and so many different patient types that we have the opportunity to go to a number of different medical meetings so that we can…

Mike King - Wedbush PacGrow Life Sciences

Any of those in an exotic location?

Keith Katkin

Unfortunately no unless you consider New Orleans exotic which is were APA is but certainly there a good locations for high draws for physicians. So we'll continue to focus on that front. And one of the more exiting things that we're working on that we've partnered with

ITV and PBS for an educational video which highlights really the impact that PBA have on these patients lives which will start to be broadcast towards the next couple of months on PBS stations throughout the United States. And then very importantly, as I mentioned in my talk, we're staffing up our medical affairs department. We currently have three MSL's on staff and we'll be starting all of our outreach to key opinion leaders throughout the nation and do have plans to hire additional MSL's.

Operator

And your next question comes from the line of Carol Werther.

Carol Werther - Summer Street Research Partners

Could you just talk a little bit about how much it's going to cost to launch Zenvia in the U.S and what you're planning for that?

Keith Katkin

Sure and we haven’t gone into a tremendous amount of detail in the past but I definitely think its worthwhile to start to provide more color around that given the close proximity. So in terms of sales and marketing spend, obviously the most important or most expensive and important component of the commercial spend is the sales force which is why we are very pleased that we announced the hiring of Michael McFadden this morning.

So when you're speaking about sales force, we do expect that we'll have a 75 person sales force on the ground at lunch, a typical market comps for a fully burdened sales representative. This includes everything from cars to travel to management. It comes in at about $200,000 a year per sales representative. So that’s a pretty easy math to do. And then the additional expenses that you have beyond that are you have your marketing expense costs.

So those are many of the activities that we're doing now, advertising as well as presence at major medical meetings, advisory board meetings, market research, things of that nature and the other two components of commercial spending are medical fares which is really more focused on the scientific component. But the important part of the organization that we [wont need to build] out all along with the commercialized product and then finally commercial operations which is really managing and making sure that all the components of sales and marketing work together effectively.

Carol Werther - Summer Street Research Partners

Well, how many people do you have at the company now and how many do you think you will have by year end?

Keith Katkin

Right now we have about 25 people. At year end assuming a positive response from the agency which is what we're planning, then that will put us well over 100 by year end.

Carol Werther - Summer Street Research Partners

And then I just wanted to ask about the label and how you think it might read. Do you think it might just be the patients you studied or do you think you will get a broader PBA label?

Keith Katkin

We have had an active dialogue with the FDA going back to the 2005 timeframe and the agreement all along with the FDA has been that if we study Zenvia in two separate neuralgic populations like we did in the STAR trial studying ALS and MS patients then that should be sufficient for a broad label for all patients that have PBA. So that’s our understand of the agreement with the FDA. We do have that in minutes. We hope that the FDA will honor that commitment and that’s what we're planning on.

Operator

(Operator Instructions). Your next question is a follow-up question from line of Rita Baral.

Ritu Baral - Canaccord Adams

You mentioned the number of white papers as part of the submission. Will those be published before approval in any journals?

Randall Kaye

It's Randall. Not in its current state because they're written more for an FDA format but I think certain components in the data that is in there actually would provide some interest context and I've been talking with our group about, I’m putting that out a little bit more formally.

Ritu Baral - Canaccord Adams

And as the application is in, are you guys turning towards looking at your partnership strategy and looking at your European strategy. Is there any new color that you can give us, as well as the [DTN] indication and where that might go?

Randall Kaye

Sure. I'll take those off individually. On the partnership front, as we've stated previously, there is a high level of interest in Zenvia. There are very few assets have the potential to generate revenue in the 2011-2012 timeframe and if you take a look at ones that are unencumbered or don’t have any types of partnerships there is less than a half dozen.

So, we feel that we are in a very strong position from a product perspective and from a value creation perspective. So, as we said along we are happy to have the dialogue and have to having the dialogue with the number of companies. However, for us we’ve spent over 10 years developing then behind over three years developing the new lower dose formulation and we are now six month away from an FDA action date, and now we really believe that this product is going to be approved by the end of the year.

So, with that conviction and being so closed to the finish line so to say for us to do any type of partnership will really require extraordinary economics, so or as I mentioned we are happy to have the discussions, but we will only do something that we feel would be extraordinary compelling for our shareholders.

Ritu Baral - Canaccord Adams

So to step up talk essentially you need post approval economics?

Keith Katkin

Actually, I think that’s kind of the good framework in context I put in [pretty soon].

Ritu Baral - Canaccord Adams

Okay.

Keith Katkin

And then on the European front with the U.S. filing now, our first and foremost priority is to make sure that we promptly respond to any questions that the FDA has during their review process, but along with doing that we are going to start to explore exactly what are our European strategy is and that could be a range of options from meeting with consultants for the EMEA to understand their opinion on our potential submission, potentially a formal advise meeting with the EMEA and in potentially a submission, but I would say its doubtful that we do any kinds of submission to the EMEA in advance of at least having our discussion with our consultants for a normal meeting with the EMEA.

Ritu Baral - Canaccord Adams

And the BPM currently?

Keith Katkin

Sure, and we really view our strategy is moving neuropathic paying strategy, and I say that because the diabetic peripheral neuropathic pain are an important component, but also given the favorable STAR trial results looking at pain secondary to MS, we really think we’ve got a lot of exciting opportunities for Zenvia different types of pain. So, we are in the process right now in developing our clinical development plan for Zenvia related to neuropathic pain and we won’t execute on that plan until we’d FDA approval for PBA as we want to make sure that the agency is really focused.

So we on PBA right now, but we are going to continue to put together that plan, and then on the other side of approval, I’d let Randall to provide color in terms of what we think the best next step is either in MS, pain secondary in MS, diabetic peripheral neuropathic pain or the other indication that we haven’t spent a lot of time talking about would should be agitations secondary to dementia, which is something that the team here but it’s going to go into the commercial team and we are both very excited about, so stay tuned as it relates to future opportunities for Zenvia for technically key takeaway as right now all eyes are focused on PBA because we absolutely need to get better proof for thoroughly open the gateway of the other potential indications.

Ritu Baral - Canaccord Adams

Right, and then last question. Is there anything that the FDA can classify your submission as other than Class I which probably won’t be the case or Class II, is there any sort of timeline that the formal pathway timeline that they can take time wise?

Keith Katkin

As based in our understanding, I think the resubmission guidelines which we referenced in our press release on Friday are pretty specific is by other type Class I or Class II resubmission. Certainly, the FDA reserves the right to essentially see what they want, but I think that its fair to say that the agency has been very responsive throughout the entire PBA program with us up to an including our original filing, which we did receive a priority review for and the FDA did meet the six months action date associated with the original prior review back in 2006. So we're hopeful that they will give this program the right prioritization given it is for a treatment for which there are no FDA approved therapies right now.

Operator

(Operator Instructions). Your next question comes from the line of Mike King.

Mike King - Wedbush PacGrow Life Sciences

Making the follow-up guys; did you file both doses and if so what proposal would be for DMQ 2010?

Keith Katkin

You are going to take that one, Randall?

Randall Kaye

Sure. Like we did propose both doses to FDA, and that was based on the data that indicated both the 2010 and the 3010 provided efficacy and had a very good safety profile overall. We were in our proposed package in short we were not prescriptive with regards to moving from one dose to another mostly because the clinical trial wasn't prescriptive, and how you would move patients from 2010 to 3010. We did provide data efficacy, that indicate is that in some patients, the 3010 provided additional incremental clinical benefits above and beyond the 2010.

Mike King - Wedbush PacGrow Life Sciences

Right and the 2010 you had -- I guess Rand said 3010 you had more significant, and then allow the secondary endpoint. So, I'm just wondering how you wait the benefit on 2010 on the primary versus 3010 on the secondary.

Randall Kaye

Yes. It’s a good point. Mike, I think as we put together the complete response, our framework was to look at the totality of the data and when you look at the totality of the data especially if you just indicated the secondary endpoint, it really does as if here or there is incremental benefit and for the 3010 over the 2010, and we’ve certainly have highlighted that in our submission.

Mike King - Wedbush PacGrow Life Sciences

Okay and then I’ll choose to maybe follow on that. Would you expect that FDA would allow that patient to be treated for an indefinite period even though it was a 12 week trial and 12 week extension when [you] prescribed a period of time that the patient could be on drug, correct?

Randall Kaye

I would expect it to be indefinite given the nature of PBA.

Keith Katkin

Let me get to add to Randall’s comments to you Mike. As part of the submission it was our long-term follow-up with the original higher dose formulations of Zenvia, the 30-30 dose formulation, and that formulation we did have lot of patients of long-term exposure over 100 patients with two years of exposure over 200 patients with over one year of exposure and over 300 patients with the six months longer exposure. So, we do have a fair bit of long-term follow-up data.

Operator

And at this time there are no further questions.

Keith Katkin

Great. Well, thank you everyone for joining us on our fiscal 2010 second quarter earnings call. Very exciting times here at AVANIR and we look forward to keeping you updated on our progress going forward. Thanks very much.

Operator

And thank you. This concludes today’s conference. You may now disconnect.

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