Pain Therapeutics (NASDAQ:PTIE)
Acceptance of REMOXY NDA Resubmission Conference Call
April 13, 2016 08:30 AM ET
Remi Barbier - President and Chief Executive Officer
Pete Roddy - Vice President and Chief Financial Officer
John LaLota - Guest Speaker
George Zavoico - Jones Trading
Kevin Kendra - Gabelli & Company.
Jim Molloy - Laidlaw
Timothy Lynch - Stonepine Capital
Greetings and welcome to FDA Filing and REMOXY Potential Market Opportunity. At this time all participants are in a listen-only mode. And a brief question-and-answer session will follow the formal presentation. [Operator Instructions]. As a reminder this conference is being recorded.
I would now like to turn the conference over to your host Pete Roddy, Vice President and CFO. Mr. Roddy, you may now begin.
Thank you, Rob. Good morning. Thank you for joining us today. Our call today is focused on the REMOXY NDA and this drug candidates’ target market. Yesterday, shortly after close of the market, we issued our press release.
With me on the call today is Remi Barbier, President and Chief Executive Officer and John LaLota, our Guest Speaker.
Please note that during this conference call statements may constitute forward-looking statements for purpose of the Private Securities Litigation Reform Act of 1995 or the Act. Pain Therapeutics disclaims any intent or obligation to update these forward-looking statements, and claims the protection of the Safe Harbor for forward-looking statements contained in the Act.
Examples of such statements included but are not limited to any statements related to the REMOXY NDA and the target market for REMOXY. Such statements are based on managements’ current expectations and involve risks and uncertainties including but not limited to those risks and uncertainties relating to difficulties or delays in gaining full regulatory approval for REMOXY, commercialization of REMOXY, unexpected adverse side-effects or inadequate therapeutic efficacy of our drug candidates, the uncertainty of patent protection for our intellectual property or trade secrets, unanticipated additional research and development, litigation and other costs, the potential for abuse-deterrent pain medications or other competing products to be developed by competitors and results of our clinical or preclinical studies with REMOXY not supporting further development.
For further information regarding these and other risks related to the company’s business, investors should consult the company’s filings with the SEC including the company’s Annual Form 10-K for 2015.
With that, I’d like to turn the call over to Remi.
Thank you, Pete. This is Remi Barbier. And on today’s agenda, I’d like to discuss on this call three items. One is a very brief overview of REMOXY. The second is related to that the REMOXY NDA. And then the third and perhaps the most interesting at this point is the potential commercialization of REMOXY.
And on this last point, we have invited a special guest speaker Mr. John LaLota, is someone that we’ve known for many years.
So, briefly for those who don’t know us or getting to know us, Pain Therapeutics, we’re a small company based in Austin, Texas. And for over a decade, we have pioneered much of the technology, the tools and the techniques that have enabled the development of abuse-deterrent formulations, otherwise known as ADF.
And it’s a field that’s well populated by several, a number of different competitors and companies at this point. And the whole point of ADS is really to make, it’s intended to make opioid drugs more difficult to abuse yet provide steady pain relief when used appropriately by patients. And ADFs are basically one tool, one of many tools to help in the fight against prescription drug abuse.
And our lead drug is called REMOXY of course, which is oxycodone capsules, C2. And REMOXY is a proprietary abuse-deterrent oral formulation of oxycodone. And again, we developed REMOXY to make oxycodone difficult to abuse yet provide 12 hours of steady pain relief when used appropriately by patients.
In 2016, our focus will clearly be on REMOXY and its potential to receive marketing clearance in the second half of this year. And as part of this focus, we really, we’ve set ourselves up to have three priorities. First is to select a commercialization strategy for REMOXY, the second is to maintain physical discipline and the third is to advance the progress of our two earlier stage progress, early stage drug candidates FENROCK and PTI-129 preferably with non-dilutive funding.
At this point, we feel that the acceptance of the REMOXY NDA mark is a very important milestone for Pain Therapeutics. And we’re grateful to all of the people and partners, especially our colleagues at Durect, and patient investors certainly who helped make this innovation a reality.
And of course we look forward to working closely with the FDA during the regulatory review process between now and September.
Let’s switch gears a little bit and talk about the REMOXY NDA. So, we filed the REMOXY NDA back at the end of March in 2016. We had expected to hear from the FDA 30 days later. In fact we heard early, a little bit early. The original REMOXY NDA has priority review status with the FDA. And this is a 505(b) (2), it’s a type of resubmission, it’s a 505(b) (2) NDA for five dosage strengths of REMOXY, 5, 10, 20, 30 and 40 milligrams.
The proposed indication is “For the management of pain severe enough to require daily around the clock long-term opioid treatment and for which alternative treatment options are inadequate.”
I think those of us who have followed the company for a while know that the safety and the clinical efficacy of REMOXY are supported by multiple studies including a very successful Phase III study conducted under a FDA special protocol assessment.
The abuse-deterrents of REMOXY is supported by a body of clinical and non-clinical data including data comparing REMOXY against currently marketed oxycodone products. And the NDA proposes label claims that properly characterized REMOXY’s abuse-deterrent properties including and perhaps especially certain routes of abuse that REMOXY may deter such as injection, snorting or smoking.
The NDA for REMOXY also contains stability data that we believe need FDA criteria and support of a 24-month shelf-life.
Finally, at this point, I also want to say that the NDA includes head-to-head comparison of REMOXY to OxyContin in a number of different assays, invitro-assays. And we intend to release this head-to-head comparison data at this year’s American Pain Society Meeting in Austin on May 11 through the May 14 I believe.
Let’s talk briefly about the commercial potential of REMOXY and then we’ll turn the microphone over to John LaLota. So, REMOXY potentially plays into a very large market. That market is the $2.5 billion market in North America for long-acting oxycodone.
Now, despite the big numbers, we still believe that opioid abuse is a very serious and a very persistent problem. We think that some of the early generation formulations, abuse-deterrent formulations have may have made a dent in the rate of abuse. But we don’t think they go far enough.
And my own opinion is that if there was ever a time for opioid drugs to step up to robust abuse deterrents, this is it. And so, we will continue to review potential launch of commercialization strategies for REMOXY.
At this point, we still have three -- we’re looking at three consensual options. One; is a strategic transaction around the entire company. Second; is a more narrow commercial collaboration for REMOXY, and the third; is to establish commercial capabilities in-house to self-launch REMOXY on our own, probably for a year, couple of years and take it from there.
REMOXY will have competition obviously there are some very good drugs out there both in the categories of oxycodone and outside of oxycodone. But we think REMOXY has the potential to really distinguish itself from competitors. In particular, we believe that REMOXY offers the best-in-class abuse-deterrent properties. We think REMOXY has true twice-daily dosing. We think REMOXY has minimal food-effect. We think REMOXY will have a lack of generic drug substitution also known as AB substitution. And we also believe that there is, we have over 15 years of intellectual property protection.
So, at this point, I’d like to turn the microphone over to John LaLota. John is a consultant to Pain Therapeutics. He is on the call. And he’s got -- he has over 25 years of management experience with pain medications, in particular having directed six major launch campaigns in the pain area, he’s really recognized as one of a four most experts in the commercialization of analgesics. Particular, major brands under John LaLota’s direction during this tenure at J&J and elsewhere included the pain drugs to Progesic, Orudis and Vicodin. And under his direction, I understand all three drugs became market-leaders within a couple of years of launch.
With that, I invite John to join the call.
Thank you, Remi and good morning everyone. Let’s begin by talking about the market dynamics. There were approximately 22 million retail prescriptions written for standard release for ER opioids of 2015, OxyContin accounted for approximately 30%.
In 2015, out of the estimated $10 billion of annual sales within the total opioid marketplace, extended release opioids accounted for approximately $6 billion, while OxyContin captured approximately $2.5 billion.
The market for ER opioids has been steady for the last two years, primarily driven by slow declining OxyContin prescriptions which have been offset by growth from newer branded opioid products.
One key point to note is the fact that the ER market is far less generalized than that of the market for immediate relief or IR products and growth is expected to accelerate as novel abuse-deterrent opioids like REMOXY are introduced.
The 22 million prescriptions written annually for ER opioids include 17 molecules, morphine to primarily tier 1 generics, transdermal fentanyl branded Durogesic still accounted for approximately a third of all the prescriptions. Oxycodone of course brand OxyContin, oxymorphone [indiscernible] analgesics and newer brand of products such as Hysingla and Zohydro which are single end to the hydrocodone products. Tapentadol branded Nucynta ER and hydromorphone [indiscernible] and generics.
Although ER opioids remain the mainstay to appropriate patients for the treatment of severe chronic pains such as cancer and low back osteoarthritis and various neuropathies, patients are now experiencing the potential for reduced access to these drugs as the result of growing public health concerns regarding the abuse as well as misuse of these products.
To put the public health concern into perspective in the U.S., annual debt from prescription opioid overdose has grown substantially from approximately 4,000 in 1999 to over 18,000 today. According to the CDC, it’s over half a million emergency room visits annually due to opioid misuse abuse.
Furthermore estimated that there is currently 4.3 million non-medical uses of pain room, this is a staggering statistic, I’m sure you’ll agree. And we all need to focus on this huge issue.
Now, a little history on the OxyContin problem. After its introduction in 1995, this is over two decades ago, drug abuse is soon realized indicative of more intense high just by crushing up the pills and snorting or dissolving the powder in liquid and then injecting themselves. So, in response to this concern, legislative actions are calling for more comprehensive approach to severe chronic pain management including enhanced [indiscernible] for example physician and patient education, more intense prescription monitoring as well as safe storage as well as disposal. In this cult action also includes the development of abuse-deterrent opioids.
So, abuse-deterrent opioids within this construct of promoting safety become a tool within a universal precautions approach. So the overall strategy then is to strike a critical balance by providing access to appropriate patients while diminishing the potential for abuse, misuse and diversion within the community setting.
So, as you can see, we’re in a midst of a paradigm shift from non-abuse deterrent opioids to that of abuse-deterrent opioids for the treatment of severe chronic pain. So, in addition to regulators and policymakers, clinicians as well as patients are demanding safer options for pain relief that do not compromise the efficacy outcomes provided by opioids.
As you remember safety concerns also led to the reclassification of hydrocodone combination products by the DEA from a schedule three to a schedule two which is a more restrictive classification.
Now, let’s talk about specific unmet needs for abuse-deterrent opioids. Drug abuse is signed at currently marketed ER opioid formulations and that’s including us, desirable because of the large amount of drug substance and the ease in which that they could be tampered with. So with goal of an abuser is to achieve its higher blood level in a shorter period of time that results in a powerful high. And this is achieved when an ER formulation is in fact compromised.
A study of abuse was conducted by NAVPRO in 2010 found that while the introduction of the new formulation has had an impact on the abuse of OxyContin for example, injecting, snorting, smoking, it still remains vulnerable to abuse. In fact in a study published last year in JAMA Psychiatry, on sixth row indicated that the abuse-deterrent formulation of OxyContin was useful as a first line of defense but the affect has not been widespread. In fact 34% of the people continuing to abuse OxyContin easily defeated its methods.
Now let’s talk about REMOXY’s role in addressing this unmet need via its second generation abuse-deterrent features. REMOXY has the potential to be the best-in-class abuse-deterrent extended release opioid. REMOXY incorporates a more sophisticated abuse-deterrent technology that matters incorporated and produced OxyContin OP.
Given this robustness of this abuse-deterrent properties of REMOXY versus that of OxyContin OP less dose stumping and arrived situations along with a favorable feedback that was generated from our physician discussions. We do believe that the risk potential for strong mortal penetration for the REMOXY.
At a recent survey, given formulary access, nearly nine of 10 practitioners stated that they would prescribe a second generation abuse-deterrent ER oxycodone that displayed greater resistance to manipulation and dose stumping compared to that of OxyContin. In fact, after reviewing the REMOXY profile, 80% of those clinicians indicated that they would likely prescribe REMOXY specifically to chronic pain.
Also discussions with managed care executives, it was predicted that REMOXY will obtain wide formulary coverage with little restrictions.
Now, let’s focus on REMOXY’s key attributes. As Remi alluded to, the robust figure of these properties of REMOXY is demonstrated in the Phase III osteoarthritis study provided true twice-daily dosing which may support better patient adherence and enhance the overall value proposition with insurers.
Extremely important to note, and in line with recent CDC recommendations stating that when opioids were first started, clinicians should prescribe the lowest affect dosage. REMOXY will be available at 5 milligrams strength. This represents the lowest extended release oxycodone strength available. But this 5 milligram strength will help differentiate REMOXY from other ER oxycodone brands, will help aid in the transition from short-acting opioids, serve as an initial dose in a properly selected opioid naïve patients, for example in the elderly and aide in overall titration.
In fact, the up-scheduling the of hydrocodone combinations presents unique opportunities to transition patients from taking multiple tablets four times a day to a true BID formulation with REMOXY.
Here is the opportunity. Up to 20% of patients taking ER opioid combinations are in fact chronic pain patients and are appropriate candidates to be transitioned to REMOXY. So, to put this into perspective, 20% of 115 million immediate release opioid prescriptions or 30 million in total are viable patient candidates to transition to, an extended release opioids. Think about this. This is larger than the entire ER opioid marketplace.
REMOXY is a patented product with over 15 years of IP protection. Related to that the FDA just published new draft guidance intended to ensure that generic versions of abuse-deterrent opioids lead the same standards for abuse-deterrents as the reference bankrupt, creating a significant hurdle for generic manufacturers.
In closing, we believe that there is, substantial opportunities for an extended release oxycodone formulation based on second generation abuse-deterrent technologies to gain meaningful traction in the marketplace. Only modest penetration into the broader market will enable significant sales.
The ER market is highly possible approximately 15,000 prescribe. This represents practitioners who do have a solid base to the properly selected patients for ER opioid therapy. So this target audience will be effectively covered by a sales force of REMOXY represents. So, we do expect that REMOXY will initially take share from OxyContin and that’s a given that REMOXY is a second generation abuse-deterrent form of oxycodone and over time we expect REMOXY to penetrate into the broader ER opioid market.
We estimate that low-single-digit penetration into the broader ER opioid market could drive net sales in the area of several hundred million dollars. REMOXY, Pain Therapeutics’ extended release oxycodone represents a second generation of more robust abuse-deterrent technologies which are expected to transform the opioid marketplace and provide long-term sustainable growth.
Remi, back to you.
Thank you, John. If I may summarize what we hear is that the market dynamics are about the blow-up the market for pain meds, especially for those that serves patients with severe chronic pain. And the Markey dynamics are changing in particular because of legislative changes that are afoot as well as we think explosive growth and demand for these types of drugs led by the ageing of the baby-boomers and as John pointed out the shift to abuse-deterrent formulations.
And as with any industry, when you have new dynamics, you’re going to end up with new winners and new losers. And the point I believe of John’s presentation among other things is that, if approved, REMOXY can win big with relatively modest market share.
So, with that, we expect big news around September 2016. And we’d like to open it up to questions.
[Operator Instructions]. Thank you. Our first question comes from the line of George Zavoico with Jones Trading. Please proceed with your questions.
Hi, thank you. Remi, congratulations, John, thanks for the overview of the market, the market summary. My first question, you just got the rights back from Pfizer, a year or two ago. Could you summarize without saying the results obviously because you’re saving that for the meeting in May. Could you summarize what Pfizer did that gave you the confidence now that this NDA will not result in the CRL?
Sure. By the way it wasn’t just Pfizer it was all the partners that worked on REMOXY over the years. Certainly Pfizer and their deep pockets certainly helped us in time of need. But it was also a number of other companies such as our colleagues at Durect who did a, and will continue to do a great job supporting this drug. Bend Research out in Oregon and it’s just a long list of colleagues and partnerships that we’ve worked with over the years.
But in particular what the bugaboo around REMOXY and its lack of approval to date has really been around the manufacturing process and in particular, it’s not that manufacturing process wasn’t in place it’s that it was very inefficient. And so forever 10 batches, that were made several were not made to spec. So, it’s more a problem of efficiency.
And what Pfizer did is essentially took the formulation apart down to its individual components and determine the contribution of each component, rebuilt the formulation back up and along with the rebuild -- stabilized the manufacturing process. Pfizer built out a manufacturing suite that is specific to REMOXY over at Malign Craig [ph]. And they paid for all of that.
So, when you consider all the work that again Pfizer and other partners did, it was a considerable body of data they generated. And the culmination of all this is that at this point we have over 18 months of stability data and we believe that that fits the profile for 24 months of shelf life.
So, in our opinion, the manufacturing process which is again it’s been the bugaboo all along has been stabilized and it’s good to go at this point. But again, it’s the FDA’s call, it’s not Remi’s call.
And regarding production batches, I presume for the NDA, you will have had to have shown evidence that you’ve been able to produce multiple identical batches, is that correct and you’ve already done so, is that true?
Okay. And one question I guess for John, there are couple of outstanding issues with some of your competition. I was wondering if you could comment because even Pfizer’s ALO-02 has been hung-up in with the FDA and so has for different reach the Clegen’s product. Part of that might have been because of the FDA and the CDC, were involved in changing all these guidelines. Could you clarify that at all for us?
Sorry George, I’m not sure if I understand the question correctly with respect to the delay in approval?
Yes, for ALO-02 I mean, it’s missed a couple of PDUFA dates, it’s still sort of hanging there. Basically could you describe the market, the competitive landscape little bit more detailed than you already have?
Well, I’m not certain as to why the delay in the approvals for those particular assets. I could say that from physician’s feedback over the past years that with respect to a physical formulation versus that of a pharmacologic formulation, REMOXY is a very robust physical formulation, highly viscous formulation that physicians tend to prefer versus that of a pharmacologic.
You’d probably remember some of the issues at Ambetter had encountered and Ambetter was in [indiscernible] initially. And then over with significant manufacturing issues with Pfizer sort of potential problems from a patient perspective with respect to leakage and so forth. But I don’t know if that had any bearing whatsoever on the delay.
Okay. I’ll just get back in the queue. Thank you.
You’re welcome. Thank you, George.
Our next question comes from the line of Kevin Kendra with Gabelli & Company. Please go ahead with your question.
Thanks for taking the questions. Maybe to start Remi, couple of questions, first, would you expect an advisory committee meeting related to the REMOXY filing? And then second, if I heard you correctly, I thought you had said that you guys have done abuse -- head-to-head abuse studies with OxyContin. I know you published some of the data from the abuse studies against IR oxycodone which looked very nice. But did I hear correctly that you did do the head-to-head with OxyContin and when would we potentially see that data?
You heard correctly Kevin we did do a series of whole battery of invitro-assays of REMOXY versus OxyContin. And all of that data is part and parcel of the NDA. We expect to publish that data at the American Pain Society Meeting, which is happening right here in Austin, Texas actually this year. And I believe the dates are May 11 through May 14.
Great. And on the AdCom?
AdCom, you might recall that REMOXY actually went through an advisory committee some time ago. And to the extent that the efficacy, the clinical efficacy, the safety and the abuse-deterrent properties of REMOXY are not called in question in the complete response letters. Never-say-never but we don’t see the rationale for another AdCom. But again it’s a possibility.
At some level you almost -- at this point you almost want an AdCom simply because it’s just another opportunity to share our data with clinicians and opinion leaders and so forth. But right now we don’t see an AdCom in the works.
Great. And maybe a question for John. When you look at the competitive landscape, what features do you think will best differentiate REMOXY from some of the other competitors not just OxyContin but should ALO-02 or Clegen’s Expansa. I know you mentioned the benefits of physical versus a pharmacologic. Were there any other aspects of the REMOXY profile that you think might give an edge directly over some of these other second generation products?
I’m going to take a kind of a high-level crack at that and then turn it over to John. Again, it’s all about having the best-in-class abuse-deterrent properties. And, but that’s not enough these days. That may have been enough five or 10 years ago, it’s not enough today. Today you also want true BID dosing. And the reason that’s become very, very important is because some of the legislative changes that are being proposed include not refilling patients’ prescriptions before the full 30 days are up.
So, right now if the patient is on OxyContin and takes the OxyContin three times a day because of its PK profile basically that patient will be out of OxyContin before a 30-day script is up. The Clegen product from what I understand the abuse-deterrence can be very robust but again it’s a generic substitution for OxyContin which also means it’s got a PK profile that in theory shouldn’t look very much like the OxyContin product.
In addition, we have minimal food effects which can be a problem with some of the competitive offerings. And most of all, we don’t see any generic drug substitution for REMOXY whereas we do see the potential, the strong potential for generic drug substitution with some of our competitors.
Those are some of the headlines I see. And obviously, the 5 milligram as John alluded to, that becomes very important because again some of the legislative changes that are afoot, state that clinicians should prescribe the lowest effective dose of an opioid when starting a patient. Those are the headlines. I’ll turn it over to John for little bit more color.
Thank you, Remi. So, Kevin, as Remi just alluded to and again, I noted this in my presentation. There is a huge opportunity just thinking about those 20% of patients that are currently, literally on a rollercoaster every four hours or so being prescribed on these opioids, that leaves us a goal especially over DEA, it’s to reduce the number of tablets on a monthly basis.
So, one is prescribed multiple tablets four times a day, if you could transition those appropriate patients and we have a lot of ideas in terms of how to do that, 5 milligrams BID could absolutely be an adequate start of dose, so you can transition those patients more appropriately. And at the end of the day, I truly believe that there will be better outcomes and better patient adherence as opposed to trying to on an ongoing basis around the clock therapy waking up in the middle of the night and what not would do, break through pain and just not being able to live good quality of life, a true BID is Remi had alluded to, really differentiates REMOXY versus lot of the other competitors.
Great, thanks. I’ll jump back in the queue.
Our next question is from the line of Jim Molloy with Laidlaw. Please proceed with your question.
Hi Remi long-time good to hear your voice again. I had a quick question on some of the commentary made. John commented on 700 million central sales with small 1% or small percentage penetration. Do you concur with John’s characterization of this is a product that could hit several hundred million? And can you talk a little bit about the new abuse resistant rules I know that the FDA is mandating any non-abuse resistant opioids, will get an AdCom. Do you think that helps, significantly helps or hurts the opportunity for REMOXY to get through at this time?
Yes, Jim, you’re right, long-time no speak. Good to hear from you. I did not hear the $700 million number that you heard. So, either I was asleep or so, John.
Several, not 700.
I said several sorry, wasn’t 7, it was several.
Yes, do you concur with the several?
Yes. I think the theme here is that the market opportunity is so big that REMOXY can win big with relatively small market share, that’s the premise. What was the other question?
The new additions as abuse-resistant rules from the FDA are mandating any non-abuse-resistant opioids will get AdComs. And how does that help or hurt the chances for REMOXY to get through the FDA, I know it’s been a long road but does that help or hurt your chance to get it through this time?
Well, I don’t think, someone else having an AdCom helps or hurt us. I think the more AdComs around ADF the more acceptance there will be around ADF. At this point I think ADF are still, I don’t want to say they’re 100% accepted but certainly most physicians, many physicians perhaps have heard of ADF and the potential for ADF to help in the fight against prescription opioid abuse.
REMOXY again, REMOXY had an AdCom, during the AdCom there was informal vote. There was a majority vote in favor of ADF. And again that was at a time when very few physicians or anyone really understood what ADFs were all about. So, I don’t necessarily think that having an AdCom helps or hurts the feel. If anything I think it’s going to help REMOXY just because of the shear robustness of its abuse-deterrent properties.
All right, thank you. And the last question and I know you outlined the three strategies, it seems from the outside looking at the partnership makes the more sense I know that you have brought this drug out in the past. Should you go the partnership route, what’s the best timing, is it pre or post PDUFA date again assuming an approval and if there were a partner, who would be the ideal type partner in your imagination?
Great question. And again, John LaLota’s discussion was not a discussion of our commercial launch plan for REMOXY because we don’t have a commercial launch plan for REMOXY right now. We have options we have ideas on how to build shareholder value over the next 24 months. These are under review by ourselves and more importantly by the board. We think we’ve got three very good options.
From a practical, very pragmatic perspective, it always takes my experience six to 12 months call it to actually close a deal such to the extent that we’re six months in front of the potential approval. I would say you get a lot more value post approval than you could do right now. Right now the due diligence is all 100,000 pages of the NDA versus post approval the due diligence might be more in the regulatory side of things and manufacturing. So but again, these are all things that are under consideration and anything can happen.
In terms of the ideal profile, it really depends, which of the three options we’re talking about. In the case of a strategic transaction, then obviously the more strategic the more shareholder value. In terms of collaboration a more narrow collaboration, what we would be looking for ideally is a partner with a track record of launching and supporting and selling appropriately pain medications into chronic care population.
Great. Thank you for taking the questions. And congrats on the acceptance of the filing.
Our next question is from [indiscernible]. Please go ahead with your question.
Hi, good morning. John touched on it before and I was wondering if you could expand some of the conversation about the patent infringement issues going in the industry specifically between Purdue and Collegium and how you think that would affect Purdue’s flagship product?
Yes, we do not talk about patents or patent litigations on, it’s just -- number one it’s not our battle, number two it’s just not something that we would discuss especially someone else patent litigation issues.
Our next question is coming from the line of Timothy Lynch with Stonepine. Please go ahead with your question.
Yes, hi guys, congrats on getting everything filed to their satisfaction. It’s great news. Just if you do, do it alone and I know you don’t have specific plans yet but just roughly what kind of commercial organization size would you likely need to launch with?
It’s a great question, and again to the extent that we do not have a launch plan in place for REMOXY I will eye-ball the response to your question. I think you can think about starting out with 60 to 70 sales reps and hopefully quickly going up to 100. One of the things we know about this market, the target market for REMOXY is that, it does tend to be very sensitive to marketing and to calls and so forth.
But again, as a small company, we’re at the plan, if we self-launch, the plan would be to win big with a small market share. I think the number I heard which John LaLota was approximately 100 sales force of approximately 100 that feels right to us but again not all at once probably growing up to starting out with 50, 60, 70 and getting up to 100. John, do you concur?
I absolutely do. And with respect to assembling opioid savvy executives, knowing how to basically derive demand and all the various educational initiatives and initiatives really to ensure appropriate access and reimbursement, we’ve had teams in the past that have been successful as we had alluded to basically meeting products into leaders within their respective categories, we could compile a team like that and make Pain Therapeutics and REMOXY extremely successful if in fact it was allowed that Remi decided to take.
And another way to respond is perhaps to say that at cruising altitude, we could expect, we would expect productivity from each sales person between $1 million and $3 million per year, sales of $1 million to $3 per year. And this again at cruising altitude not right out of the gate.
Right, okay, that’s helpful. And then just a follow-up question on partnering/strategic options in your comment on approval time period. Do you think of that 6 to 12 months to get a deal done is that clock kind of starting now or is that kind of in relation to potential approval in September if you kind of catch my drift?
Yes, again to be clear, we’re not guiding with absolute certainty towards that. We don’t have a deal on the table. But if and when a potential partner steps up to the plate and says hi, I want the company or I want the drug, from that point on, it’s typically depending on how well the lawyers get along and how well they play with each other, it can easily be a 6 to 12 month process.
Okay, fair enough. Thank you guys.
Our next question is from the line of George Zavoico with Jones. Please go ahead with your question.
Hi, thanks for taking the follow-on question. This is I guess, this is regulatory. Back several years ago when Purdue came out with the current OxyContin, the FDA pulled the original OxyContin formulation from the market. Part of the reason for that was because they didn’t want a drug that was more easily abused on the market than OxyContin itself. If indeed REMOXY proves to be that much more, have that much more potential abuse-deterrence. What is the possibility that if it’s proven and how would it be proven if that’s the case that it would be better than the others and the others would be then pulled from the market?
Yes, that’s a great point, a point on which we can have a long discussion. But we’ll keep the response short. A couple of comments, number one is, to your point, the FDA is not willing to go in reverse, meaning that if whatever standard of abuse-deterrence is on the market right now, a new entrant, a new drug would have to need or beat that bar. Right now the bar, we feel that the bar is set pretty low just because its currently marketed drugs are basically essentially first generation so the bar is pretty low probably not that difficult for a new entrant to jump in and kind of raise the bar a little bit.
With REMOXY we’re hoping that the bar on abuse-deterrence is raised a lot like quantum amount especially in regards to unapproved routes of administrations such as injection and snorting. If that thesis is correct then it will have several effects. Number one, it will, we will make life -- REMOXY will make life very difficult for generic entrants. I just don’t see how you come into the market with a generic OxyContin with post REMOXY’s approval.
So raising the bar on abuse-deterrence that’s one of four generic entrants, that’s one of the nice side-effects I think of all this legislation that’s going on. The second thing more related to your question is, would the FDA ever take existing currently marketed drugs off the market if there was a more abuse-deterrent formulation?
We think that thesis is in line with the FDA’s thinking. We don’t know how FDA would measure such a thing probably through DEA conduct surveys on a constant basis, NIH does as well. Don [ph] keeps statistics a number of different government agencies keep very good statistics on patterns of abuse both by routes of administration as well as by drugs. And clearly if the record showed that with REMOXY there was relatively low rates of abuse, and especially deaths, low rates of deaths versus more generic and more competitive forms, I would think that the FDA would do the right thing.
But again this is something for, this is probably a discussion, a series of discussions with a series of government agencies over a number of years. It’s not something that’s instant.
Okay, great. Thank you very much Remi. Good job.
Our next question is from the line of Kevin Kendra with Gabelli. Please proceed with your questions.
Hi Remi, thanks for taking the follow-up. I’m just thinking about potential launch-timing, I mean, given all the moving parts between having the consider whether or not to launch with a partner, building large inventories, giving DEA quota. Is it fair to think that it’s probably going to be something in a six-month or longer timeframe from approval before we could see from oxy-launched or is there a way that that window could be shorter or could the window potentially be longer? Maybe just kind of help us ballpark when you might, if you get the approval in September when we could see REMOXY on the market?
Great question. We spend a lot of time thinking about that question and coming up with answers. We don’t have an answer. So again, a little bit of speculation here. But you are correct, typically it can take a number of months by the time you get, it’s not so much about quota, DEA quota. It’s more about getting sufficient drugs, getting the channels in place, training this sales force etcetera. I would say no less than six months a year post approval feels a little bit long.
John, what do you think?
I think that that could be a substantial launch timeframe in approximately three or four months after approval. So I think that gives you enough time after a final, a label, is in fact negotiated, typically it takes about eight weeks in terms of the stocking. And then the contracting would be initiated.
And then Remi, as you alluded to, significant training of respective sales force and alignment regarding targeting the physicians. As we talked about before, this is a highly targeted segment, 15,000 clinicians. So it so far as doing the works of pre-approval which could be gone to minimize the timing impact. I think within a three to four months’ timeframe could be quite viable.
So, Kevin, I think the theme is, we want to do it right. The important thing is appropriate patient prescriptions. And we see that as a several month effort. Is it a 2016 event? No, I see it more as a 2017 event.
All right, great. Thanks for the extra color on that.
Gentlemen there are no additional questions.
I believe that’s it for the questions. So, in closing, again, what we heard is that there are changing market dynamics that are going -- that we feel are going to significantly impact the multi-billion dollar market for pain meds.
Those market dynamics are driven by both legislative changes, huge explosive growth in demand led by baby-boomers and of course the whole shift to abuse-deterrent formulations. And with new market dynamics, come new winners and new losers. We think that if approved, REMOXY can win big with relatively small market share. And with that, we look forward to big-big news in September 2016.
All right. Great thanks for John, joining us on the call today. And thank you all for your time. And we look forward to providing you updates as we go forward with the process of getting REMOXY through the FDA. Thanks very much.
Thank you. This concludes today’s conference. Thank you for your participation. You may now disconnect your lines at this time.
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