Chelsea Therapeutics International, Ltd. Q2 2010 Earnings Call Transcript

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 |  About: Chelsea Therapeutics International, Ltd. (CHTP)
by: SA Transcripts

Operator

Good day, ladies and gentlemen, and welcome to the Chelsea Therapeutic second quarter 2010 earnings call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session with the instructions following at that time. (Operator Instructions). And as a reminder this conference call is being recorded.

And now your host for today’s conference, Kathryn McNeil. Please begin.

Kathryn McNeil

Thanks. Good afternoon and welcome to Chelsea’s second quarter 2010 conference call. We announced our second quarter results this afternoon just after the close of the US financial markets and our press release can be found on our website at www.chelseatherapeutics.com.

Joining me from Chelsea is Dr. Simon Pedder, our President and Chief Executive Officer; Nick Riehle, our Chief Financial Officer; Dr. Art Hewitt, Chief Scientific Officer; and Dr. Bill Schwieterman, Chief Medical Officer.

Before I turn the call over to Dr. Pedder, let me note that some of the remarks you might hear today may contain forward-looking statements about the company’s performance. Actual future results might differ materially from those projected in these forward-looking statements.

Additional information concerning factors that could cause actual results to materially differ from those in these forward-looking statements is contained in our SEC filings and periodic reports under the Securities Exchange Act of 1934 as amended, copies of which are available on our website or maybe requested directly from the company.

With that said, I’ll now turn the call over to Dr. Pedder. Go ahead, Simon?

Simon Pedder

Thanks Kate, and good afternoon, everyone. We appreciate all of you joining today’s discussion. This has been a busy and productive year for Chelsea. And in the last few months, and in fact in the last few weeks, we have really begun to see significant progress across our multiple development programs.

We recently reported exciting news in our fibromyalgia program as the data monitoring committee indicated meaningful efficacy in this Phase II clinical trial and have recommended that multiple Droxidopa/Carbidopa combination arms continue to study completion.

Just this week, we submitted our response to the FDA’s questions on our CH-4051 Phase II trial in rheumatoid arthritis. And we are confident that with minor modifications, we will be able to evaluate CH-4051 as planned and with minimal delay.

Of course, our NORTHERA Phase III registration program and symptomatic neurogenic orthostatic hypotension or NOH continued to take center stage during the quarter as we reported statistically significant long-term efficacy data validating both the symptomatic improvements seeing with chronic NORTHERA treatment and validating the safe and consistent underlying improvements in blood pressure.

Finally, all of us are pretty excited to now be in the final countdown to our NOH Study 301 data. Having now randomized our final patient into Study 301, we were able to begin refining our estimates for the timing of top line data from the study and believe that we’re well positioned to have that data in mid-to-late September of this year.

I will now ask Nick to begin a review of the quarter by providing you with a brief summary of our financial results. And then, I will turn the call over to Art and Bill, who can provide some additional detail on the progress in each of our development programs. Finally, I will have the operator opening the call for any questions.

Nick?

Nick Riehle

Thanks Simon. For the quarter, we had a net loss of $9.9 million or $0.25 per share versus the net loss of $5.3 million or $0.18 per share for the comparable period in 2009. However, you may recall that during the second quarter last year, we recognized a one-time gain of approximately $4.1 million related to the recovery of previously reported impairments associated with our holdings in auction rate securities. Excluding this gain, last year’s second quarter net loss was $9.3 million or $0.31 per share.

For the six months ended June 30th, 2010 we had a net loss of $16.2 million or $0.43 per share compared to a net loss of $12.7 million or $0.42 per share for the prior year period. Again, excluding the ARS gain, our net loss for the first half of 2009 was $17.1 million or $0.57 per share.

Research and development expenses for the second quarter of 2010 were $8.4 million compared to $8.1 million for the same period in 2009. For the six months ended June 30th, 2010 R&D expenses were $13.3 million versus $14.6 million for the comparable prior year period.

While R&D expenses for the quarter were approximately flat year-over-year, R&D expenses for the first half of 2009 were somewhat lower, reflecting an overall decrease in the number of active clinical trials and a temporary reduction in the cost related to our NORTHERA registration program during the first quarter of 2010 with Study 302 that hasn’t been completed, changes for Study 301 being implemented, and preparations for Study 306 just beginning.

As we mentioned on our last conference call, we are expecting R&D expenses to peak during this – the third quarter as work on Study 306 and the 4051 Phase II trial overlap with the completion of Study 301.

Selling, general and administrative expenses of $1.6 million for the three months ended June 30th, 2010 increased from $1.3 million for the same period in 2009. This was primarily related to increased promotional activities, specifically conference sponsorships and presentations, as well as legal and patent filing expenses related to the management of our intellectual property. Similarly, for the six months ended June 30th, 2010 SG&A expenses of $3 million reflects an increase from $2.7 million from the prior year period.

Looking ahead, we expect to see marketing expenses continue to increase as we ramp our participation in medical conferences over the next several quarters, particularly the larger conferences related to Parkinson’s disease.

Other marketing related expenditures, of course, are also expected to increase during the fourth quarter and into 2011, as we begin to prepare in earnest for the NORTHERA commercialization.

We ended the second quarter with $23 million in cash and cash equivalents compared to $22.3 million at December 31st, 2009. As we reported last quarter, we anticipate that our current resources can fund our ongoing and planned development along with the anticipated increase in commercialization activity passed several clinical milestones and into the first quarter of 2011.

Finally, with the terms for the final liquidation of our auction rate securities having been in place since 2008, we are nonetheless pleased to confirm that as of the end of June, we have successfully completed the liquidation of these assets at their full hard value.

Simon?

Simon Pedder

We’ll now have Art and Bill talk a little more detail on the recent clinical activity underlying those R&D expenses and bring you up to speed on our expectations for the remainder of the year. Art, I’ll let you lead up the discussion.

Art Hewitt

Thank you, Simon. This afternoon, I will begin with an update on our CH-4051 Phase II program in rheumatoid arthritis since as Simon mentioned we submitted our response to the FDA this week.

As most of you are aware, we were prepared to initiate Phase II trial in early June comparing three doses for CH-4051 ranging from 0.3 milligrams to 3 milligrams to a standard 20-milligram dose of methotrexate in patients that has an inadequate response to methotrexate treatment. However, on the day that we were to initiate it on, we received a request from the FDA for additional details regarding our preclinical data set.

Specifically, the agency requested additional histological reports from the lower dose groups of our previously completed toxicology studies to support the proposed Phase II doses. Since we have retained all of these tissue samples, this was just a matter of having the tissue samples process in the mid and low-dose range of groups examined and reported along with the findings from the higher dose groups previously submitted. When we did this, there were no surprises, there were no abnormalities reported.

In addition to providing this data, we also provided more detailed explanations for some of the toxicological findings from our preclinical studies, all of which are entirely and keeping with what one would expect, given the mechanism of action of CH-4051. And antifolates like CH-4051 are intended to block the proliferation of cells and tissues with rapid turnover to achieve their therapeutic benefit.

Of course, at high doses, you begin to run the rates to blocking cell proliferation in non-target tissues, such as the gastrointestinal system, where rapid self proliferation is part of a healthy system.

One of the exciting things about CH-4051 however is we believe we are able to increase the therapeutic window prior to triggering adverse events and toxicities typically associated with antifolates like methotrexate.

Furthermore, there is substantial evidence from both our clinical and preclinical work to suggest that any adverse effects seen at doses higher than our Phase II doses are reversible and treatment is terminated.

In the end, this detailed review of preclinical data for the agency only underscored our confidence in safety and expected tolerability of CH-4051 at doses up towards not exceeding our highest proposed Phase II dose of 3 milligrams.

Nonetheless, our primary objective remains a full and rigorous evaluation of the compound to more fully characterize its therapeutic potential. Therefore, rather than risk compromising the scope of our Phase II data or engaging in a protracted back and forth with the FDA, we have proactively recommended a few minor protocol changes that should mitigate any possible dose-related concerns and allow the trial to get it underway as expeditiously as possible.

In essence, what we are suggesting is a staggered start to the trial, in which we would begin the study as originally designed, but we will hold out initiating patients into the 3 milligram arms until we had treated at least 10 patients at the 0.3 milligram and 1 milligram doses for 12 weeks and both doses are found to be safe and adequately tolerated.

In addition to the safety reviews by data monitoring committee that will trigger the initiation of the enrollment into the high-dose groups, they’re also planning an unblinded interim analysis after approximately half the patients in the 0.3 milligram and 1 milligram dose groups have completed the study to a safety and efficacy of the CH-4051 in these doses.

As a result of these protocol changes and assuming no further discussions with the FDA are needed, we would expect to be able to initiate enrollments into the study early next quarter, so it allows our unblinded interim data for the two lower dose groups sometime in the third quarter of next year and the full study results midyear 2012.

Now switching gears to Droxidopa, I’d like to briefly touch up on the progress and our non-NOH trials before turning the call over to Bill for an update on the NOH program. During the second quarter, we reported the outcome of a planned interim review data from our Phase II fibromyalgia study.

Process of this scheduled data monitoring committee meeting was to review the efficacy of each of the treatment arms and determine if the efficacy data supported dropping underperforming arms in order to increase the power and focus the study resources on those arms most likely to demonstrate a clinical relevant therapeutic benefit, whilst also maintaining appropriate control treatment arms.

Following their assessment of the data, from each of the original 12 arms, using the study’s primary endpoint, a reduction in pain is measured by the Short Form McGill Pain Questionnaire. The DMC recommended that seven of the 12 arms of this study be continued to completion.

This recommendation was based solely on their efficacy analysis as there were no safety concerns associated in any of the study arms. As a result of this recommendation, the study will now focus primarily on various doses of Droxidopa in combination with the higher 50-milligram dose of Carbidopa.

In essence, this was the outcome that we had hoped for when we initiated this study and that provides preliminary confirmation, both the Droxidopa as potential therapeutic application in this indication and that a combination approach preparing Droxidopa with Carbidopa likely increases the central effect of the drug and drives the efficacy in this indication. With these early indicators, we look forward to completing the study and giving more complete picture of the therapeutic benefit.

In parallel to our fibromyalgia study, Dr. Adler at NYU has been pursuing his own evaluation of a Droxidopa/Carbidopa combination therapy in Adult Attention Deficit Hyperactivity Disorder. This trial continues to progress and we are hopeful that Dr. Adler will be able to complete his study by yearend and look forward to being able to share those results with you as soon as they’re available.

As we have previously discussed, we continued to have interest from other independent investigators that would like to study Droxidopa in a broad range of indications and are looking forward to few additional investigator-led studies getting underway this year in Chronic Fatigue Syndrome, spinal chord injury, freezing of gait in Parkinson’s disease, and are moving forward in our discussions with investigators regarding a potential study of Droxidopa in Down’s Syndrome.

Now, while all of this represents some interesting and potentially ground-breaking work in the near term, I too share the excitement surrounding our upcoming Phase III results in NOH.

So I’ll let Bill bring you up to speed on the status of our trials in that program.

Bill?

Bill Schwieterman

Thanks Art. As Simon alluded to at the start of this call, our work this year and particularly this past quarter has resulted in some measurable achievements that collectively bodes very well for the optimum Study 301, achievements that should have a small position to file a strong NDA package. And thinking about our expectations for 301 Study results, there are three key points that pure optimism for positive outcome.

First, we have conducted extensive analysis of the results of Study 302 and have clear and unequivocal evidence of the efficacy of NORTHERA NOH, it is measured by a broad array of both symptomatic and functional assessment criteria. Most importantly, NORTHERA demonstrated a statistically significant improvement in the OHQ composite score relative to placebo, which as you know is our primary endpoint in Study 301.

And, despite, we now understand the significant drawbacks of the mature design of Study 302, it was nonetheless a strong measure of success by this measure. And by the advantages now with the induction design of 301 and expected decrease in carryover effect, the results from Study 302 becomes even more compelling indicators for a successful outcome in Study 301.

Second, these efficacy conclusions were echoed in the results from Study 303, in which we saw the patients continued to report a significant improvement from baseline, following three months of those enabled treatment and these improvements were matched by a consistent and statistically significant improvement in systolic blood pressure throughout the duration of this study.

Finally, the interest and support of our investigators resulted in our exceeding our adjusted enrollment goals for Study 301. I am very happy to report that earlier this month, we’ve randomized our final patient into the study, having ultimately cut-off enrollment at 167 patients.

As a result, Study 301 now has 90% power to detect a mean improvement over a placebo at 1.2 units in the OHQ’s composite score, assuming a standard deviation of 2.39, the same outcomes we observed in Study 302. Having now completed treatment for all patients in Study 301 and allowing for the anticipated data monitoring, cleaning, data lock and analysis associated with reporting results from a pivotal program, we are anticipating and very much looking forward to reporting top line results in Study 301 in mid-to-late September.

But, first, we’re preparing for 301 data. Now, this we continue to be very active in our efforts to complete Study 306 recruitment by yearend. While the study is only been actively enrolling patients for approximately a month, it has already clear that we have been able to successfully leverage the enrollment interest from Study 301 to get a solid start in Study 306.

We continue to expect that given the increases of ability of NORTHERA syndication, the size of the target patient population and the relative ease of identifying and enrolling Parkinson’s patients with symptomatic NOH say versus MSA or PAF patients, we should be able to complete enrollment in this trial by the yearend.

As we have discussed with you before, our current plan is to file for US approval of NORTHERA in symptomatic NOH next year. We believe that the results in studies 301 and 306, along with ancillary data for another safety studies will provide for a strong filing package.

As we think about our filing strategy, we are fortunate to have a number of factors working in our favor. These include: orphan designation, fast track status and the opportunity for allowing submission, a very high probability of priority review for our submission, and a special protocol assessment for Study 301 that remains in effect and acceptable for the FDA.

All of this highlights the very solid working relationship Chelsea has developed with FDA for this program. Add to this an extensive safety database from the Japanese registration program and the substantial progress that has already been made toward completing our CMC section and you can begin to appreciate the advantageous position we find ourselves in as we approach our NDA filing.

We anticipate not only initiating enrolling submission next year, but also fully expect to have a majority of our submission completed and prepared before the results of 306 are known. As such, we should be able to very quickly drop in the clinical results in Study 306 into our NDA package and complete our submission shortly following the completion of Study 306.

On that note, I’ll turn the call back to Simon.

Simon?

Simon Pedder

Thanks Bill. As both Art and Bill have outlined, there’s a lot to look forward to at Chelsea, both in the coming months and over the next few years. We have taken a number of proactive steps over the past year to strengthen and de-risk our NOH program and believe we are now in a stronger position than ever before to demonstrate the value of Droxidopa in NOH and commercialize our first product candidate.

We are also poised to substantially add to the value proposition for Droxidopa by demonstrating the broad utility and potential therapeutic benefits of enhanced norepinephrine in a number of other significant neurological indications coupled with traditional blockbuster antifolate indications like rheumatoid arthritis.

The potential for Chelsea’s pipeline has grown substantially over the past few years and we will look forward to delivering on the promise of this portfolio in the coming months.

At this point, I would now like to open up the call for any questions you may have on our second quarter results and ongoing programs.

Operator, if you could open the call for questions.

Question-and-Answer Session

Operator

Thank you, sir. (Operator Instructions). Our first question is from Andrew Vaino of Roth Capital Partners. Your line is open, sir.

Andrew Vaino – Roth Capital Partners

Hi, thanks for taking the question. On the seven doses that data monitoring committee said to continue with the fibromyalgia, was there any rational grouping for those seven doses?

Art Hewitt

Well, yes, I’m not entirely sure what you mean. We were blinded to the decisions of the DMC are clearly there had to be a maintenance of the control arms which presumably would not have been the ones you were going to pick for the purpose of demonstrating efficacy. As the rest are maintained, there is an assumption on our part, because we weren’t actually party to the analysis that those are the ones that did show by in large the highest degree of efficacy.

Andrew Vaino – Roth Capital Partners

And I’m sure, is there anyway to tell from that, if there was any degree of dose dependence?

Art Hewitt

I really can’t speak at this time. But, the one note that we did take was that the recommendation was for maintaining a higher Carbidopa arm.

Bill Schwieterman

Yes, this is Bill Schwieterman. And I’ll just add to what Art said, it’s blinded to us and so we don’t have those kinds of details on that study. But seeing at the high Carbidopa arms, which, of course, are used to drive the drug into the central nervous system by which it would accentuate to meliorate symptoms of fibromyalgia, to us is an encouraging – an encouraging finding by the DMC and one we actually think is consistent with what we would think the mechanism of action of this drug is.

Andrew Vaino – Roth Capital Partners

All right, great.

Operator

Thank you. Our next question or comment is from Alan Carr of Needham & Company. Your line is open.

Alan Carr – Needham & Company

Hi, good afternoon. Thanks for taking my question. I’m wondering if you can dig in the 4051 a bit more. Can you tell us what you think the FDA was looking for and in the preclinical data, and can you elaborate a bit on this trial design, and does this have any impact? Do you have any interim analysis? And I’m wondering if it – what sort of impact that has on statistics for this?

Art Hewitt

Yes, the FDA did not indicate a particular observation that they were looking for. In our case, they just wanted to be very cautious that our calculation of the no-effect dose levels was the most accurate possible. Therefore, what they asked us to provide them was additional data just to be absolutely clear that there were no missed observations in the mid and lower dose groups. When we organized that data and provided it to them that’s exactly what we saw, there were no observations, so we stand by the calculations of our no-effect levels for the purpose of having defined the Phase II doses for the study.

We’ve gone proactively the extra step in order to make sure we can get this study up and running as quickly as possible to actually build in this staggered star or we will investigate the two low doses in a first cohort of 10 patients in each treatment arm, followed by a DMC review of that data initiating the then enrollment into the upward dose in the higher 3-milligram doses.

As far as the interim analysis is concerned, yes, there will need to be some degree. It’s usually quite modest of an alpha spend in order to do an unblinded efficacy analysis. But we do believe that this has value to us, because, although we describe these as low and mid doses by comparison with the CH-15 or four doses that we used in our previous study, which were showing to be equivalently efficacious to a standard dose of methotrexate, these are still sizably higher and so it’s not without possibility that we will be able to identify significant effects at those lower doses. We think it would be useful to the overall program to bring that information on line sooner than later, given the somewhat delayed nature of the staggered testing.

Bill Schwieterman

Yes, and this is Bill. The only thing I’ll add to what Art had to say is, this is through Berry Chowdhury’s [ph] division at FDA. I was at FDA for 10 years as you know and this is a group that is traditionally very exacting about the Phase II dose calculations. And as Art said, there was no particular concerned registered, they were clearly interested in the additional histology data and so forth.

But what we did was really just take the extra step to avoid any protracted discussion with the FDA and modified the protocol in a way that that really I think preserved everything about its integrity and I think with the staggered dose escalation and so forth, it’s going to have a real salutary effect and how it’s perceived at the agency and so forth. And so we went – we went the extra mile on that in this some general discussions from them knowing how they have in the past addressed these sorts of issues.

Alan Carr – Needham & Company

And to clear, and to make sure I have got it’s right. It’s 10 patients at the two low doses for 12 weeks then in an unblinded analysis and then you can move on assuming all goes well and enroll an arm at the high dose?

Bill Schwieterman

Actually, the first analysis will just be a blinded safety review that will allow us to make a decision on opening up the 2-milligram, 3-milligram arms. The unblinded efficacy analysis that I’ve mentioned would be planned for a point in time where we had approximately 50% of the low-dose groups enrolled. And we are targeting it about 50 patients per arm, so more or like 25 patients as opposed to the 10.

Alan Carr – Needham & Company

And so the blind – the blinded safety analysis, can you – when would that occur then?

Bill Schwieterman

After we had enrolled 10 patients in two – in each of the low-dose arms in a period of the 12 weeks, so that we can make the decision then to open up the higher dose groups.

Alan Carr – Needham & Company

Okay. Thanks for clarifying that. Okay, that’s it. Thanks for taking my questions. I appreciate it.

Bill Schwieterman

Welcome.

Operator

Thank you. Our next question or comment is from Juan Sanchez of Ladenburg. Your line is open.

Juan Sanchez – Ladenburg

Good afternoon, guys. I had a question on 4501, you’re going to start in Q4, but you need the blessings from the FDA or you can start your own without that blessing?

Art Hewitt

No, yes, do the escalations – I didn’t quite hear you.

Bill Schwieterman

We don’t need the blessings of the FDA. We responded to them – I’m sorry Juan if we didn’t answer your question right. We don’t – we proactively went forward and modified the protocol as is and submitted that in the response of the FDA, so that was the move on our part, that was not a request at all that went forward.

Juan Sanchez – Ladenburg

Yes, but you can’t start the trial at the low doses without hearing back from the FDA or you –

Bill Schwieterman

We’re not going to move forward until we get back from the FDA. That’s correct. That was prudent.

Art Hewitt

The time essence here, Juan, the best time for that response to come in.

Juan Sanchez – Ladenburg

Got it. And the final question is on the Droxidopa program and how are you guys measuring in falls in each one of the trials in 306, in 301, and this is a formal measurement of fall. It can be considered like a real endpoint or it’s just anecdotal?

Bill Schwieterman

Well, I’ll tell you and I’ll will go – let Art comment right after this. We saw, as you know, with the safety analysis, because that was not part of the primary efficacy analysis in 302, a significant benefit for Droxidopa in falls. And this was in a short study as you know that occurred over two weeks in the randomized portion of the study.

And it was so dramatic that we actually take a lot of attention to those data as we would and carefully and prospectively defined in Study 306. A definition for fall of that is included in the efficacy analysis plan and it’s consistent with the way the literature describes fall having had lot and lot of discussions about that.

Now, Art, I know that Art addressed 301, but this a matured study in 301. It’s a week long study. While we may see some benefit in falls in that, we are keenly aware that seven days on after the randomization period is a relatively short time compared to the eight weeks we have in Study 306 to see those falls. But, again, in 301, Art, you can describe how those are captured.

Juan Sanchez – Ladenburg

But 306 is considered to be an efficacy second variant point.

Art Hewitt

Yes, in 306, in 301 as it was in 302, it’s a data that we collect only as adverse events. So if a patient reported adverse events.

Juan Sanchez – Ladenburg

Okay, thank you.

Art Hewitt

And the reason we didn’t – I mean, we’ve always thought that long-term the true benefit of Droxidopa could well express itself in a reduction in falls and the only reason we didn’t prospectively identified in 301, 302 was because we just had a biased that the short treatment periods wouldn’t be sufficient to absorb the effect.

Juan Sanchez – Ladenburg

Got it, thanks a lot.

Bill Schwieterman

You’re welcome.

Operator

Thank you. Our next question or comment is from Liana Moussatos of Wedbush Securities. Your line is open.

Liana Moussatos – Wedbush Securities

Thank you. What new indications might we hear data reports from the investigated initiated trials for Droxidopa between now and yearend?

Art Hewitt

I think the most likely one would be Dr. Adler’s trial in Adult Attention Deficit Disorder or Hyperactivity Syndrome. That’s on track to be at the end of the year. But, and, obviously it’s an investigator-led study and we don’t drive it directly.

Liana Moussatos – Wedbush Securities

Any others?

Art Hewitt

I don’t think so. Not before the end of the year.

Liana Moussatos – Wedbush Securities

Okay, thank you.

Operator

Thank you. Our next question is from Brian Abrahams Jr. of Oppenheimer. Your line is open.

Anoop Amin – Oppenheimer

This is Anoop Amin for Brian. Quick question, sorry, if I missed this. I know that you submitted the preclinical data for 4051 to the FDA, but how soon are you expected to be hear back from them?

Art Hewitt

They have a typical review time of 30 days.

Anoop Amin – Oppenheimer

Okay, all right. And then, I guess the other question is, I saw a slight uptick in R&D guidance, it’s $33 million I think from $30 million in the first quarter, is that correct? And if it is, should we account for all of that in the uptick, in the third quarter?

Nick Riehle

No, that’s really over the course of the year. And we’re running a little higher year-to-date, but we do see much of it in the third quarter, in the second half generally. There are several factors that tie into this. Our extension programs continue to reflect strong interests from patients and investigators, but associated costs accompany that interest.

The additional patients in the 301 Study has added somewhat to the costs. And, finally, we’ve added divisional sites and some additional investigator fees for 306. That, of course, is part of our program to ensure timely recruitment and completion of that recruitment process. And so, that’s – there is the increase that you identified from $30 million to $33 million.

Anoop Amin – Oppenheimer

Okay. Great, thanks for taking our question.

Operator

Thank you. Our next question is from George Danze [ph] of Morgan Stanley. Your line is open.

George Danze – Morgan Stanley

Thank you. My question is about any update on Midodrine any follow-up trials with that? And do you expect your new NDA to be filed to sort of capitalize on the timing of potentially that product being removed or can you kind of comment on that where that is going at this time?

Simon Pedder

I –

Bill Schwieterman

Go ahead, Simon.

Simon Pedder

We haven’t got anymore update from the last letter that Dr. Wilcox [ph] sent out to the Midodrine ANDA holders and Shire saying that two studies needed to start back in February and it had to be completed by June. We haven’t heard anything more on that. Bill, anything more to cover from –

Bill Schwieterman

Nothing more, because there is no more information. I’ll just very briefly state that – and then this is what we’ve discussed in other conference calls. We believe the FDA needs what they say, when they’re talking about the need for Shire to do these particular studies and that’s not just because the letters are awarded in a very exacting ways, because the climate now and the legislation now including the Prescription Drug User Fee Act of renewal of 2007 makes it very, very clear to companies about their obligations post marketing.

And that coupled with the fact that FDA is working with Congress on the safety of drugs post marketing and this is a fairly high profile issue of that, et cetera, et cetera, et cetera, there’s a lot of – there’s a lot of reason to believe that what is happening now with these letters actually is a direct result of FDA’s real interest in making clear to Congress, making clear to the public and making clear to Shire that these particular protocols have been to bond, because that’s part of the lifecycle management of the drug.

So I guess I wasn’t quite so brief as I thought I was going to be, but there’s a lot of – if this was five years, seven years ago, I think all of us wouldn’t have some skepticism about – more skepticism about this. But I actually think – I actually think given the climate and given what the issues are, but this is a real likelihood.

George Danze – Morgan Stanley

Right, thank you.

Simon Pedder

And the fact that those letters went to Shire but also at the four ANDA holders as well, so they’ve been all instructed that, if somebody wants to keep the drug on the market and develop three years of exclusivity, that they – whoever does those studies would receive the three years of exclusivity and obviously keep the drug on the market as long as they did two trials are showed symptomatic improvement. Of course, it’s our belief that these studies have not even been started yet.

George Danze – Morgan Stanley

Thanks so much.

Operator

Thank you. I’m showing no further questions or comments at this time. I would now like to turn the call over to Dr. Pedder for any further remarks. Please sir.

Simon Pedder

I’d just like to thank you all again for participating in today’s call and for some excellent questions. We, of course, are going to be very busy over the next few weeks, but hope to have some good news to share with you in September and we look forward to keeping you updated on our progress. Have a wonderful day. Take care, everybody.

Operator

Ladies and gentlemen, thank you for your participation in today’s conference. This concludes the program. You may now disconnect and have a wonderful day.

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