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POZEN Inc. (NASDAQ:POZN)

Q1 2008 Earnings Call Transcript

May 8, 2008 11:00 am ET

Executives

Fran Barsky – Director, Investor Relations

John Plachetka – Chairman, President and CEO

Marshall Reese – EVP, Product Development

Bill Hodges – SVP, Finance & Administration and CFO

Analysts

Lucy Lu – Citigroup

Ken Trbovich – RBC Capital Markets

Larry Neibor – Robert W. Baird

Michael Tong – Wachovia Securities

Angela Larson – Susquehanna Financial Group

Jason Napodano – Zacks Equity Research

Buck Phillips – Vector Fund Management

Jim Tumbrink – BMO Capital Markets

Eun Yang – Jefferies & Co.

Operator

Good morning. My name is Julianne and I will be your conference operator today. At this time, I would like to welcome everyone to POZEN's first quarter 2008 earnings conference call. All participants have been placed in a listen-only mode and the floor will be open for questions following the presentation. (Operator instructions) As a reminder, today's conference call will be recorded.

I would now like to introduce your host for today's conference, Ms. Fran Barsky, Director of Investor Relations. Ms. Barsky, you may begin.

Fran Barsky

Thank you and good afternoon. On behalf of POZEN, I would like to welcome everyone to today's first-quarter conference call. By now, you should have already received a copy of the company's press release. However, if you do not have it, you can access one on the homepage of our Web site at www.pozen.com. You can also access a replay of this conference call on the homepage of our Web site.

Before we begin, I need to remind you that various remarks that we may make about future expectations, plans and prospects for the company constitute forward-looking statements for the purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995.

In particular, any observations that we may make about the expected timing and amounts of royalty payments from GlaxoSmithKline and other revenue expected from our collaboration partners; the prospects for approval of any of our drug candidates, or the way in which the FDA may consider our new drug applications or any particular trial results, future trial plans and the likelihood of results of any future trials, the adequacy of financial resources to accomplish our goals or future revenues are based on our current expectations and are subject to a number of risks and uncertainties, including our inability to know with certainty what standards the FDA will use to evaluate drug candidates and how that may change or evolve over time, how the FDA evaluates data, what the results of future trials may be, whether those trials will cost much more than we had estimated that they will cost or than they have historically cost, how the FDA weighs risks of drugs including risks of drugs that have been in use for many years, the decision of our collaboration partners, our dependence on our collaboration partners for the sales and marketing of our products once approved including our dependence on GlaxoSmithKline for the sales and marketing of Treximet, and whether our resources will be depleted by events other than clinical trials and efforts to obtain regulatory approval such as several lawsuits that have been filed against POZEN by certain individuals.

Additional factors that affect our forward-looking statements are discussed in our most recent annual report on Form 10-K, which is on file with the SEC. In addition, these forward-looking statements represent only the company's expectations as of today. While the company may elect to update these forward-looking statements, it specifically disclaims any obligation to do so. Any forward-looking statement should not be relied upon as representing the company estimates or views as of any date subsequent to today.

With us today from management we have Dr. John Plachetka, Chairman, President and Chief Executive Officer of POZEN; Dr. Marshall Reese, Executive Vice President, Product Development; and Bill Hodges, Chief Financial Officer, Senior Vice President of Finance and Administration.

At this point, I would like to turn the call over to Dr. Plachetka. John?

John Plachetka

Thanks, Fran, and good morning to everybody. I would first like to talk about Treximet, which was approved by the FDA on April 15, and we think that Treximet approval is great news for patients because the pivotal efficacy and safety trials demonstrated Treximet's superiority over placebo on six co-primary endpoints, which was a first for a migraine drug and also its superiority over sumatriptan 85 milligrams as monotherapy, and naproxen 500 milligrams as monotherapy, which is another first for a migraine product.

And in fact, Treximet is associated with so many firsts that it is worth taking a few minutes to talk about some of them. However, before getting into these firsts, let me advise that complete prescribing information for Treximet, including safety information and any warnings associated with the use of the drug is available at www.treximet.com.

Treximet is the first and the only product to be approved which consistently demonstrated superiority over monotherapy with 85 milligrams of sumatriptan or naproxen monotherapy for that matter during its development program. A key requirement for approval was demonstrating 24-hour sustained superiority over these two active comparators, and that was the first time it had been done for a new migraine product.

As demonstrated by the results of the two large pivotal trials, Treximet is the first and only triptan product demonstrating superiority to 85 milligrams of sumatriptan monotherapy. No other triptan has demonstrated superior efficacy to Imitrex to the satisfaction of the FDA that would allow them to include it in their product information, although many of them have tried. And it is important to remember that Imitrex has been considered the gold standard of migraine therapy since the introduction of this life-changing medicine by Glaxo during the 1990s.

As we continue with our first – Treximet as the first migraine product approved by the FDA with a dual mechanism of action and according to the Treximet approved package inserts, the components of Treximet "contribute to the relief of migraine through pharmacologically different mechanisms of action."

Now, we first proposed this in the mid-1990s and it's now widely accepted by headache experts and practicing physicians as proven therapy. Now, we at POZEN are pleased to have pioneered this dual mechanism of action approach to migraine treatment and we were rewarded several years ago with a United States patent. Subsequently, three other patents have issued which add to our proprietary position with respect to this product and the methods of treating migraine headache with a combination of sumatriptan and naproxen.

Treximet is the first migraine product to utilize the parameter sustained pain-free as one of the pivotal trial key endpoints. Treximet was nearly 60% better than sumatriptan monotherapy with respect to this endpoint and more than twice as effective as naproxen. Given the dissatisfaction in the migraine marketplace, we believe that every doctor should be asking their migraine patients if the migraine medicine they currently take, whether it is a prescription product or an over-the-counter product, is providing relief that is fast enough, complete enough or lasts long enough. And if not, doctors should consider Treximet for patients dissatisfied with the current migraine therapy if it is medically appropriate.

For prescribing information on Treximet, you can refer to the package insert, which again can be found at www.treximet.com. Owing to its unique and patented formulation, Treximet is the first triptan product to produce peak triptan blood levels at one hour and to have no delay in this time to peak during a migraine attack. Now, other migraine products have tried to improve their absorption during a migraine attack by creating a tablet that dissolves in the mouth. And it's interesting however that these products actually get absorbed more slowly.

In the case of Merck's Maxalt, Maxalt-MLT produces peak blood levels averaging 1.6 to 2.5 hours, and AstraZeneca's Zomig-ZMT produces peak blood levels at 3 hours, versus 1.5 hours for the regular tablet. So it seems that there is little absorption in the mouth, but that the drug must be swallowed first before it is absorbed and that apparently takes longer with some so-called waterless products.

I know that the list is getting long, but let me continue just a bit longer with some additional firsts. Treximet is the first truly differentiated next-generation migraine product and it is being brought to market by the company that pioneered triptan therapy, GSK, and the scientific aspects of the product are being supported by more than 70 abstracts or full publications. Treximet is the first product ever packaged in a novel patient-friendly dose pack that provides a convenient way for patients to have their migraine medicine readily available any time they need it. And since most migraine attacks come without warning, rapid access to therapy is a key determinant of successful treatment.

Let me sum up by saying that I am so proud of everyone at POZEN and GSK who made this happen, who made Treximet the first approved product from POZEN. Patience, perseverance, tenacity and drive, all of these adjectives have been applied to us, and we welcome them. Now that it is approved, many people are wondering how successful Treximet will be in the marketplace. Well, we have no crystal ball, but our expectations are commensurate with the excellent clinical trial results of Treximet, especially its proven superiority over sumatriptan monotherapy and the fact that the leading migraine treatment company in the world will be selling it.

As migraine care moves from monotherapy to dual mechanism therapy, there is no other company that could introduce the concept better than GSK. They have a strong management team, great focus and an outstanding track record at selling innovative new medicines, especially in the therapeutic area in which they are the industry leader.

Let's take a look at the migraine space as it currently stands. For the last full year, oral triptan sales in the United States approached nearly $2 billion, and more than half of that, 54%, went to GSK. While some analysts have suggested that it will be difficult to switch patients to Treximet and the median estimate of sales for the remainder of the year from the 11 analysts who cover us is $66 million, keep in mind the following.

Treximet is the first new migraine product that will be launched by the market leader with clinical data showing superiority to sumatriptan. That has never happened before. According to Dr. Richard Lipton's research, most patients would readily try a new treatment that offered a migraine sufferer a faster onset to pain relief, better pain relief or longer-lasting pain relief. And we think patients and doctors will respond to Treximet's potential clinical benefits and competitive pricing and give it a try for appropriate patients. And after that, we have confidence that Treximet will do the rest.

Importantly, one of the keys to prescribing a new and innovative therapy like Treximet is getting the word out about its availability and physician education and awareness. And as the leading company in this space, I think GSK is more than up to that challenge.

Now, let me turn the call over to Dr. Marty Reese who will discuss the transfer of the regulatory obligation for Treximet to GSK, and provide an update on our other programs.

Marshall Reese

Thanks, John. As we all know, Treximet received approval on April 15 and I would like to thank all of my colleagues in development here at POZEN as well as at GSK for their dedication and hard work on the program over these past several years. Finally, getting the approval letter made it all worthwhile.

We are in the process of handing over the Treximet IND and NDA to GSK. Regulatory documentation, including full copies of the IND and the NDA for Treximet have been prepared and are ready to be delivered next week to GSK. The final submission to FDA of investigative documentation for their ongoing GSK studies has also been submitted to the IND. The final submission of the transfer of ownership letters by POZEN and GSK is still on target for the middle of next week.

The American Academy of Neurology held their annual meeting April 12 to 19 in Chicago, and the announcement of the Treximet approval the morning of the 16th was great timing and we believe was well met – was met with great expectations by the neurologists at the meeting. GSK presented four new abstracts on Treximet at the meeting from studies they had completed. In fact, there are now over 70 publications that demonstrate the significant advantages of Treximet as a migraine therapy, and more are on the way.

Let me turn to our PN program. As I'm sure you all recall, in August of 2006, we signed the AstraZeneca licensing agreement and we started a Phase III pilot program with our PN 200 formulation while we transferred the technology to AstraZeneca and they prepared the PN 400 clinical supplies. We are pleased to announce today that the complete six months results of the PN 200 Phase III pilot study will be presented as a platform presentation on May 18 at the Digestive Disease Week meeting in San Diego by Dr. Jay Goldstein. Dr. Goldstein is Professor of Medicine with the Department of Medicine at the University of Illinois at Chicago.

The abstract has now been published and is available on the DDW Web site, www.ddw.org. Due to the DDW rules, we are not allowed to discuss the content of the abstract, but we think you will be quite happy as we are with the results. I am pleased to tell you that we have now completed full enrollment in our pivotal PN trials using Phase III protocols previously agreed with the FDA. This is another major milestone which keeps the pivotal efficacy trials on track for completion later in the fall and the NDA submission is on schedule for the first half of 2009.

We are also conducting additional trials at the request of our partner, AstraZeneca, to determine how the product can potentially further benefit patients once it reaches the marketplace. AstraZeneca will pay POZEN for conducting studies during the year.

Finally, let me review the PA 32540 program quickly. We have completed the pivotal bioequivalent study and we are awaiting the QA results. We plan to submit a special protocol assessment for the pivotal Phase III studies in June, and given the increased workload at the FDA, it might take a bit longer than 45 days usually allotted for the SPA process, but we will just have to wait and see how things turn out. In any case, we should be prepared to initiate Phase III after that.

Now, I will turn the call back over to John.

John Plachetka

Thanks, Marty. Let me turn now to Bill Hodges who is going to review our financial results.

Bill Hodges

Thank you, John. Before reviewing the quarterly results, I want to review some financial information related to Treximet. During the second quarter of 2008, POZEN will record both milestone and royalty revenue related to Treximet. We are recording milestone revenue of $20 million in the second quarter, a $10 million milestone for Treximet's FDA approval and a $10 million milestone related to the notification by GSK of its intent to commercialize, and we have already received the cash.

In the second quarter, we expect to begin recording royalty revenue, which is currently estimated to be in the range of $5 million to $9 million. This is an early guidance range that we may update in our quarterly reporting as we see the trends of actual sales. But, please remember that in the POZEN model, we have no offsetting expenses against any of this revenue or against any future revenue from the Treximet product.

Now, to our quarterly results, looking at our financial statements for the first quarter of 2008, revenue totaled $7.8 million as compared to $7.7 million for the same period in 2007. The first quarter revenue was primarily due to the amortization of upfront payments received from AstraZeneca and GlaxoSmithKline agreements and revenue for development work performed under those agreements.

Total operating expenses were $16 million as compared to $10.5 million for the same period in 2007. The increase in operating expenses over the first quarter of 2007 resulted primarily from a $6.7 million increase in the Phase III development costs for our PN 400 program. Our target is to complete the pivotal studies this year and file the PN 400 NDA in the first half of 2009.

The non-cash stock option based expenses were $1 million in the first quarter of 2008. The net loss for the first quarter of 2008 was $7.4 million or $0.25 per share on a diluted basis compared with a net loss of $2.1 million or $0.07 per share on a diluted basis for the first quarter of 2007. At March 31, 2008, cash, cash equivalents and short-term investments totaled $62.6 million compared to $73.9 million at the end of last year. We received $20 million in milestone payments subsequent to quarter-end and have a $4 million receivable balance due from AstraZeneca and GlaxoSmithKline at March 31, 2008.

For the 2008 year, we expect to have total revenues in the range of $62 million to $68 million, which includes the $20 million milestone payment already received from GSK. We are currently estimating the Treximet royalties to be in the range of $5 million to $9 million, but as a reminder, this is an early estimate that may be updated in our quarterly reporting as we see actual net sales data.

Revenue for development work performed under the AstraZeneca agreement is expected to be in the $22 million to $24 million range. Total operating expenses for 2008 are expected to be in the range of $67 million to $71 million. Non-cash stock-based compensation expense of $5 million to $6 million is included in our operating expense estimate. The estimated cash burn for expenses net of payments that we expect to get from AstraZeneca for work performed under our agreement is approximately $40 million. This is higher than previous years due to the conduct of the PN 400 Phase III trials, a substantial part of that which is occurring in this year.

Those are our financial results and outlook. Let me now turn the call back over to Dr. Plachetka. John?

John Plachetka

Thanks, Bill. Let's open it up for questions.

Question-and-Answer Session

Operator

(Operator instructions) Your first question is from the line of Lucy Lu with Citi.

Lucy Lu – Citigroup

Thank you. Good morning.

John Plachetka

Good morning, Lucy.

Lucy Lu – Citigroup

Just curious, is your guidance on Treximet royalty revenue of $5 million to $10 million based on guidance projected from GSK? Just wondering basically the guidance, your guidance, is that based on conversations with GSK?

Bill Hodges

Well, the guidance is POZEN guidance, but we do have some indication from GSK of what they are expecting. But clearly, the guidance is our guidance.

Lucy Lu – Citigroup

Okay. And then am I correct in saying that that translates into approximately $100 million to $200 million in Treximet sales?

John Plachetka

I think the range is somewhere in that neighborhood, yes. GSK is not going to give guidance on sales and we are not going to give guidance on total sales.

Lucy Lu – Citigroup

Okay, but that is approximately the range because …

John Plachetka

You are in the range.

Lucy Lu – Citigroup

Okay, thank you.

Operator

Your next question is from the line of Ken Trbovich with RBC Capital.

Ken Trbovich – RBC Capital Markets

Thanks gentlemen. Actually, it is Ken Trbovich from RBC Capital Markets.

John Plachetka

We knew that.

Ken Trbovich – RBC Capital Markets

Congratulations again on the approval. One point of clarification, I think Bill, when you gave the guidance, if I heard you correctly you said $5 million to $9 million for the second quarter and then you reiterated that guidance for the full year. Could you help us understand?

Bill Hodges

Yes, the $5 million to $9 million is for the full year.

Ken Trbovich – RBC Capital Markets

That is for the full year, okay.

Bill Hodges

Yes, the guidance is for the full year.

Ken Trbovich – RBC Capital Markets

But you expect some portion from initial stocking then it sounds like during the second quarter?

Bill Hodges

Yes, we will start recognizing royalties in the second quarter.

Ken Trbovich – RBC Capital Markets

Okay. And then, with regard to the PN program, can you give us some sense as to how complicated the analysis of the data is once you complete the studies and whether or not the interpretation of Lanza scores, for example, how significant that is to hitting the endpoints on the trial?

John Plachetka

Well, let me weigh in a little bit and then I will turn it over to Marty for more elaboration if you need it. But this study, the Phase III program for PN has nothing in its endpoints for Lanza. The primary endpoints in the two Phase III pivotal trials are the hard endpoint of 3 millimeter width depth ulcers. Gastric ulcers predominately I think is the primary and then duodenal ulcers is the secondary endpoint. The analysis is pretty straightforward. We've done it for PN 200 and I do urge you to go to the ddw.org Web site to take a look at the data that is presented there on our PN 200 program. It will give you a very good indicator of what sort of analysis is going to take place for the two pivotal trials. But, the timing and the complexity isn't in punching the button and running the final analysis. It's in getting all the patients data in. How many sites are we at, Marty?

Marshall Reese

120 or 130 sites.

John Plachetka

120 sites, and really it is QA-ing all the data. And we have collected a fair amount of what I would consider to be auxiliary marketing information clinical data in these programs that centers on tolerability, it centers on symptomatology associated with the drug, and it is not just collecting one simple piece of information, although that is the primary, but there is a lot of other data that is being collected. It is very much like with Treximet, the primary endpoint to our pain relief in most studies, but you end up collecting data for the entire 24 hour period just to be certain that you can make statements about sustained response. So, in our circumstance, we've got a lot of patients, there's a lot of data points. It is really the time for QA-ing and locking the database that is going to take some additional time.

Ken Trbovich – RBC Capital Markets

Okay. And I guess maybe just a point of clarification, when visualizing the ulcer, do they have to take an image that is then stored and can be reviewed and reevaluated by the agency directly, or is the measurement that is taken by the investigator essentially relied upon without any sort of visual evidence that would be rechecked or be subject to being reevaluated by the agency?

Marshall Reese

That's a good question. They are photographed, digitally recorded.

Ken Trbovich – RBC Capital Markets

Okay.

Marshall Reese

And you can go back and redo those. Anyone can redo those.

John Plachetka

However, let me just say that in my experience, the delta between the active and the placebo is so large, this isn't going to be a question. When we used to do the Zantac trials, we were working on 10 or 15 or 20 point difference between active and controlled, and we are seeing that same measure of difference here in our PN 200 study. It is not going to be close if it holds up that same way. We have no expectation that they are going to take a look at the primary data and second-guess the endoscopist who was blinded to the treatment at the time that he made his call.

Ken Trbovich – RBC Capital Markets

Okay. Thanks for the clarification. Appreciate it.

John Plachetka

Sure.

Operator

Your next question is from the line of Larry Neibor with Baird.

Larry Neibor – Robert W. Baird

Good morning.

John Plachetka

Hi Larry.

Larry Neibor – Robert W. Baird

Could you just give us some idea of the metrics on the royalty you will be collecting on Treximet as in percentage and any escalation in that percentage over time?

John Plachetka

Yes, what we've been giving guidance to is a mid-single digit royalty rate until we hit a certain sales threshold or until the beginning of 2010, at which point we go into a high teens royalty rate. Our contract with GSK prohibits us from telling you exactly what that number is, but the estimates that we've seen on the royalty rates are pretty close, they're in the ballpark. But I do think it is important to emphasize that starting in 2010, which is not that far away, high teens from dollar one is going to produce a lot of revenue for POZEN with no offsetting expense.

Larry Neibor – Robert W. Baird

Right. Has Treximet been listed in the Orange Book?

John Plachetka

That's a process. We've submitted information. I don't think the government has printed it yet.

Marshall Reese

It hasn't been printed.

John Plachetka

But the information has already been submitted.

Larry Neibor – Robert W. Baird

Okay. And can you remind me of what your regulatory exclusivity is on the product?

John Plachetka

Well, as a non-new chemical entity under Waxman, it is going to be three years minimum. But also that statement is tempered by the reality that patents that are valid are going to block generics from entering the marketplace and we think that our patents are going to be published here pretty soon in the Orange Book, and that will give everybody an indication of what they are going to have to do to overcome those, which we have great confidence in our proprietary position.

Larry Neibor – Robert W. Baird

Great, thank you.

John Plachetka

Sure.

Operator

Your next question is from the line of Michael Tong with Wachovia Capital Markets.

Michael Tong – Wachovia Securities

Just a quick follow-up on the last question, so John, if I heard your comment correctly, you do expect to have Orange Book listed patents for Treximet.

John Plachetka

Absolutely.

Michael Tong – Wachovia Securities

Okay. And then on the PN 400 program, you talked about completing enrollment of the pivotal studies. Any update on the enrollment for the high-risk patients?

John Plachetka

That is an interesting subject. We are in discussions with our partner and the agency about the conduct of this trial. This is not on a pivotal path, as you know. This was something that they asked us to include to help them make some assessments as to possibly changing the label. As you know, the NSAID associated label prohibits the use of NSAIDs in anybody who has an active ulcer or who has a history of major complications. This has made enrollment very difficult for us from just a practical standpoint. So, we've had our preliminary discussion with the agency about what we are going to do in this trial. I think we will fill you in a little bit later about that, but it looks like we are on schedule for our NDA. This trial may or may not be included in it. If it is not included in the NDA, the labeling will be the same as all other NSAIDs, which I think it should be anyway quite frankly, and we will have more to say about that I think later in the summer.

Michael Tong – Wachovia Securities

So if I just follow up on that point, if the high risk trial is not included in the NDA package, (inaudible) of a safer NSAID claim is pretty much out of the equation?

John Plachetka

No, I don't think so. I think that it is without a doubt that our label will show we produce far lower ulcers than naproxen. That by definition is a safer NSAID. The other, the high-risk patients are individuals who probably shouldn't take any anti-platelet therapy or any NSAID or pro-ulcerogenic, no matter how effective it is. If you can't 100% protect people, and no therapy will, they still have a risk of a major bleed. And I think to put a little bit more color to this, the patients going into that trial had already had a major problem. Is that not right, Marty?

Marshall Reese

Yes.

John Plachetka

So there is a great hesitancy to put people in this trial, which the agency acknowledged. We knew that on the way in and we talked to them about this. We said we would give it a try, we have. It doesn't look like either the control agent nor our product is something that people want to take a risk with in these individuals. And I think that that is going to be reflected as a similar type label to other NSAIDs with respect to that high-risk population. But, it won't detract at all from the concept of PN, which is a far less ulcerogenic product for arthritis than any other NSAID that is out there.

Michael Tong – Wachovia Securities

Great, thanks, and congratulations on the Treximet approval.

John Plachetka

You bet, thanks much.

Operator

Your next question is from the line of Angela Larson with SIG.

Angela Larson – Susquehanna Financial Group

Give us a little color on do you book the royalty as you give sales to Glaxo or as Glaxo records the revenue?

Bill Hodges

We book the royalty based on net sales of Glaxo's revenue. So, they will provide us with what their net sales are, and from that, we will calculate the royalty and we will book the revenue in the period that they make the sale.

Angela Larson – Susquehanna Financial Group

Okay, so going along with that, does that mean we shouldn't be looking for a bolus in second quarter associated with inventory, but looking more for it to steadily increase as we see the prescriptions grow?

Bill Hodges

Well, I mean, it depends on whether they have a bolus of net sales to stock the pharmacies or how quickly it is moving out, but I think you would expect a load-in. And again how quickly that is pulled through, you may see a higher number if it is not pulled through as quickly as again GSK would like. I mean, they don't want to have a big bolus of inventory sitting there not moving. So, I think their goal is to stock the pharmacies at what is going to move through. So we will have to wait and see, but it is on their net sales. So if they sell it to the wholesalers and record sales, then we will get paid royalties on that.

Angela Larson – Susquehanna Financial Group

Okay. And then last, is there any minimal marketing responsibility on Treximet? Do they have to do a certain amount of calls or a certain amount of effort, or is the product in their hands with no minimal stick?

John Plachetka

Well, there are some things in the contract that we have that we are not going to talk about. We are confident Glaxo is going to be able to sell this product very, very effectively.

Angela Larson – Susquehanna Financial Group

Okay, great. Thank you.

Operator

Your next question is from the line of Jason Napodano with Zacks Investment.

Jason Napodano – Zacks Equity Research

Thanks for taking the questions.

John Plachetka

Sure, Jason.

Jason Napodano – Zacks Equity Research

I think most of my questions have been answered, but I wanted to get an idea on Glaxo's efforts. I think in the past that they've said once Treximet is approved that they would transition all of their Imitrex sales force over to Treximet, essentially stop selling Imitrex. Is that still the case?

John Plachetka

Well, I think it is really instructive to go back and listen to GSK's conference call that's still queued up on their Web site. Their earnings call is in late April. JP Garnier said that Treximet represents a no-brainer. Any patient with migraines should be on Treximet. My recollection is he never mentioned Imitrex by name in that conference call. Chris Viehbacher was specifically asked about the effort that they were going to put in place to sell Treximet and he said I think something like, "We are coming out with all guns blazing." So I think the effort is clearly going to be a great effort from the market leader, and they have a great incentive to move this through very quickly. I think they are prepared for the challenge. From the conversations we've had with them, every indication is that they are going to make Treximet their prime focus going forward.

Jason Napodano – Zacks Equity Research

Okay, good stuff. Thank you.

John Plachetka

Yes.

Operator

(Operator instructions) Your next question is from the line of Buck Phillips with Vector.

Buck Phillips – Vector Fund Management

Good morning everyone and thanks for the call this morning. John and Bill, I do want to circle back very quickly I think to the first question you received on this call, and that was with regard to your royalty guidance and your expectations of revenues and what that was based on. She asked specifically whether or not that was consistent with Glaxo's guidance or expectations, and you said you had conversations with Glaxo, so you knew what their number was. Can I ask you again, is it consistent with Glaxo's expectations?

John Plachetka

Let me answer that, Bill. Glaxo has a policy that they don't give out expectations on future sales of their products. If I answered your question specifically, I would be essentially violating that rule, so I'm not going to be able to do that. But Bill and I have had conversations with them and we are giving you our best guidance based on those conversations.

Buck Phillips – Vector Fund Management

Okay. Maybe one other way to think about this is for a firm like Glaxo to do a market launch with full guns blazing into a market that is $2 billion a year, it seems to me that a $100 million revenue number doesn't pay them for their effort, so that doesn't seem like a consistent number. Any thoughts on that? That doesn't seem like a number that they'd get paid on. I can't see them taking the effort if that is all they are going to get out of it.

John Plachetka

Well, that might be exactly true.

Buck Phillips – Vector Fund Management

Okay.

John Plachetka

Which would tell you that it might be a different number.

Buck Phillips – Vector Fund Management

Right.

John Plachetka

I'm not trying to the coy or mislead people. We are very close to seeing what actually sells. We are trying our best to give you a number that is consistent with good business practices on our part, and being a good partner with GSK and giving you the expectations that you expect. As I said in our prepared remarks, the average analyst estimate is well under $100 million. I think our signal to you guys is that is way too low.

Buck Phillips – Vector Fund Management

I appreciate that, John, and I do understand your inability to fully comment given Glaxo's position here. Can I ask, when do you expect to start seeing IMS scrips on this, when do you guys expect to see those?

John Plachetka

Well, I think we are going to see them next week.

Buck Phillips – Vector Fund Management

And last question on PN, if we take a conservative timeline that assumes that the last patient was enrolled today, six months out that means the trial is completed, and Marty you can help me here, probably November, the week of November 8, 9, 10, something like that.

Marshall Reese

Right.

Buck Phillips – Vector Fund Management

And we will need a month or 45 days to lock down that dataset. Should we not expect to see the data from this trial until Q1 of '09?

Marshall Reese

That is a good estimate, exactly.

Buck Phillips – Vector Fund Management

Okay, thank you, guys.

John Plachetka

Okay.

Operator

Your next question is from the line of Bert Hazlett with BMO Capital Markets.

Jim Tumbrink – BMO Capital Markets

Hi, it is Jim Tumbrink here with Bert. I think most of my questions have been answered, but I just wanted to make sure. The timing of potential partnering for PA, that is going to be waiting until after you start seeing Phase III, is that still the thought there? Thanks.

John Plachetka

We're not going to predict a timeline for partnering. What we have said in the past is that we would like to have certain elements in place. One of those is the SPA results, so we aren't there yet, and anything before then would be completely unexpected. Anybody else in the queue, Fran?

Operator, anybody else in the queue?

Operator

You do have a question from the line of Michael Tong with Wachovia Capital Markets.

John Plachetka

Sure.

Michael Tong – Wachovia Securities

A quick follow-up, I think Marty mentioned that you are talking with AZ about additional trials for PN 400. What type of trial should we be thinking about?

John Plachetka

Well, first off, I would recommend that you go to the Clinical Trials Registry, which lists clinical trials conducted by both POZEN and AstraZeneca. You can get a list of the titles there and I think some detail. Do you know the reference for that, Marty? I think it is clinicaltrials.gov.

Marshall Reese

I think that is it, yes.

John Plachetka

That will help, Michael. But in general, just like GSK, they've got a marketing program and a positioning idea of where they want to go and we are doing a number of things to help them flesh out that profile. So, I'm not going to say much more about that because obviously, we have no product to sell at this point in time, and it is a competitive environment. But, these will definitely amplify the benefits of the product and I think will demonstrate its great value for patients.

Michael Tong – Wachovia Securities

Great, thank you.

John Plachetka

Sure.

Fran Barsky

We have another question, operator?

Operator

Your next question is from the line of Eun Yang with Jefferies.

Eun Yang – Jefferies & Co.

Thanks very much. Congratulations on the approval for Treximet.

John Plachetka

Thank you.

Eun Yang – Jefferies & Co.

Just wondering, the fact that Imitrex is going generic towards the end of November, I am sure that GSK probably has talked to you about their strategy. So is there something that you can share with us?

John Plachetka

No, I think that is a question best directed to GSK.

Eun Yang – Jefferies & Co.

Okay, thanks.

Operator

If there are no further questions, we will turn the call back over to Dr. Plachetka for any concluding remarks.

John Plachetka

Well, this is the first call we've had where we actually have an approved product, so it is interesting as I reflect back on the questions, you quickly go from the promise of the delivery into sale, and I'm glad we are running the model that we run. We don't have to build the infrastructure or the commercial infrastructure. It couldn't be in better hands than with GSK, and I think that as time goes on, all of you will be quite pleasantly rewarded for your patience in looking and seeing how they are going to do.

We've got a couple of things coming up in the next month and a half or so. We are going to be attending and presenting at a couple of conferences; Baird in Chicago, Citicorp in New York, UBS in London, Needham and Jefferies which are both in New York, and the Credit Suisse which is – I guess we're going to be in New York over the next couple weeks. So, we don't want to wear anybody out, but we are so happy about where we've been.

In the next week, we are probably going to be even more excited about our position, our pipeline, because we will finally be able to tell you all the good things there are about PN, because it will finally be presented at the Digestive Disease Week, and it is absolutely wonderful information. I think you will be thrilled to take a look at it. So, operator, I think that is all we have to say today. Thanks everybody for participating and listening in.

Operator

Thank you for participating in today's POZEN first quarter 2008 earnings conference. You may now disconnect.

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