Medicines Co. (NASDAQ:MDCO) Q3 2010 Earnings Call October 27, 2010 8:30 AM ET
Michael Mitchell - IR
Clive Meanwell - Chairman & CEO
Glenn Sblendorio - EVP & CFO
Cory Kasimov - JPMorgan
Matt Duffy - BDR Research
Jason Kantor - RBC Capital Market
Mike Schmitz - Leerink Swann
Good day ladies and gentlemen and welcome to the Third Quarter The Medicine Earnings Conference Call. My name is Katie and I’ll be your coordinator for today. At the time, all participants will be in a listen only mode. We will be conducting a question and answer session towards the end of the conference. (Operator Instructions)
I'd like to now hand the call over to your host for today Mr. Michael Mitchell. Mr. Mitchell, over to your please.
Thanks Katie and good morning everyone. Thank you for joining to us to review the Medicine’s company third quarter 2010 financial result. I'd like to remind you that this call will contain forward looking statements about The Medicine Company that are not surely historical and all the statements that are not purely historical maybe deemed to be forward looking statements which involve a number of risk and uncertainties. Without limiting the foregoing, the words “believes”, “anticipates”, “plans”, “expects”, “estimates” and similar expressions are intended to identify forward-looking statements.
Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are identified in the company's SEC filings, including on Form 10-Q filed with SEC on August 9, 2010. Copies of our SEC filings can be obtained from the SEC or by visiting the investor relation section of our website, I’d also like to note that during the call we may refer to non-GAAP measures which excludes cost associated with Targanta acquisition last year, stock-based compensation expense and non-cash income tax.
Please refer to the non-GAAP reconciliation table in our press release, before I turn it over to Clive. I’d like to apologize that we started the call a bit late and the press release went out a little later than usual. This morning NASDAQ briefly suspended the trading in our stock due to the fact that our EPS results exceeded expectation so we apologize for any inconvenience caused by that. So with that I will turn in over to Clive.
Thanks very much, Michael, and good morning to everybody. Our vision is to become leaders in the acute and intensive care medicine world wide, we can claim leadership when we deliver innovative products that save lives, reduce mobility, lower health system cost and lead in market share in leading hospital this is a serious business.
With Angiomax we’ve achieved that leadership in cardiac catheterization laboratories in United States and we are steadily expanding that business to deliver similar health and economic benefits to the 2650 leading hospitals in 25 countries world wide. We are also working on six other clinical stage products or compound that we believe have the potential to achieve, similar phase now comes to save their health care system money and lead segment market share just as Angiomax has already done.
We continue to search for other compounds or products that we can add to our portfolio, via self discovery or technology licensing program as an organization we are focused on delivering very high levels of productivity in terms of knowledge in that field. And high growth rate financial performance that delivers value to shareholders. It’s a good time for shareholders and investors to take another careful look at investing in our firm. In the third quarter, we moved through a strategic crossroads that we and many of you had been watching very closely. Now that Angiomax intellectual property challenges with the US government behind us we can refocus our commitment and resources 100% to developing medical solutions, improve outcomes of patients with life threatening conditions admitted to acute and intensive care units in hospitals.
We believe that our quest for leadership in acute and intensive care medicines can create significant value for shareholders first because this is an attractive global market segment concentrated growing quickly, high in potential value but short of authentic pharmaceutical innovation. Global demand for better more effective efficient care for patients with ischemic heart disease including heart attacks and for those with strokes in serious hospital infection will continue to increase.
Second, because we have proven our ability to deliver valuable innovation into the competitive US market place with Angiomax. We believe that product will continue to grow in the US and that we will steadily build worldwide presence. Third, on top of this core business and portfolio of one approved and five development stage products and compounds uniquely address the needs and opportunities of this highly expert markets. And we believe we have the skills, knowledge and resources to identify, understand and meet those needs.
The portfolio news flow over the next months and years will be exciting. Fourth, because we are building an increasingly efficient and productive commercial organization able to influence positive health and economic changes in the hospital segments where we choose to compete. Looking ahead, we don’t need major expansion of our SG&A expenditures to serve these attractive global markets with multiple products. To reach 80% of the market we need to reach just 2650 hospitals and about 600 hospital systems in 25 countries. And finally because our program of execution is expected to drive revenue growth and even after royalty payments partners robust investments in R&D to the tune of 20% of revenue, we aim for attractive rates of growth in cash flow and profits for the foreseeable future.
We believe that the appreciation value of The Medicines Company during the second half of 2010 reflects the view that prospects the appropriate and fair intellectual property protection for Angiomax in the US have improved significantly. We believe for example, the exclusivity will remain in place for at least 2015 now and we will continue to do in just as rigorously our additional Angiomax pattern which runs to 2028.
With effective execution of our growth strategy we believe that we can create significant further value for customers, partners and shareholders. We expect to review the details of our five year growth plan with investors over the coming months. And now that the focus is back on our core business, we look forward to improving for you, the visibility of our portfolio and our business outlook.
Our third quarter operating and financial results constitute another solid plank in that platform for growth. Surely, Glen will describe details of our results for the third quarter and year-to-date 2010 compared with 2009. As he will show third quarter growth was driven by increases in market volume of sales of Angiomax worldwide against the headwind of market size and pricing pressures together with our disciplined execution and cost management. For example, over the last six months US commercial organizations has been completely and effectively redesigned.
We removed four layers of commercial management in 2010. We rebound education of front line professionals. We shifted accountability for business results close to the front line. We impart our frontline teams to gauge and support customers at many levels with renewed commitment to providing solutions to the care and the economic challenges of today’s world in the hospital. As a result productivity, we have measured as Angiomax net sales for front line professional doubled in the third quarter 2010 compared to the third quarter 2009.
I believe we now have one of the most competent effective engaged and productive hospital teams in our industry and I want to thank them today for their remarkable progress.
We continue to see growth in Europe and remain humble about the challenges but determine to give European patients who can give us a better option in the [complex]. We are far from satisfied with the current level of Angiomax use in European hospitals but we were once again encouraged by the year-on-year growth of about 38% during the soft summer months in Europe. Just like our early experience in the Unites States however, growth in product uptake doesn’t come easily in Europe which has progressively timed public expenditures including pharmaceuticals in the last two years. But we believe that data on Angiox in high risk PCI patients are compelling. Furthermore, we have the necessary product label information and a Class 1 recommendation for Angiox in heart attack patients undergoing PCI from the European Society of Cardiology.
We have continued to see military focus, determination and efficient deployment of resources. We do expect a steady rate of commercial growth for the years to come.
Let me turn now to our development portfolio where we have three Phase 3 compounds and two others in early stages of clinical development. Redeveloping Cangrelor, a Phase 3 injectable P2Y12 platelet inhibitors for patients undergoing PCI, those awaiting major surgery while on Clopidogrel and for those with acute coronary syndromes.
We are pleased to announce today that we have started the Phase 3 trial for Champion Phoenix. In fact, in the opening days of the study, we already have involved more than 20 patients. Professor Bob Harrington and Professor Deepak Bhatt are once again the company-principle investigators. We’re working with the 200 top performing sides from those which participated in prior trials at Cangrelor. Phoenix trial is designed based on the detailed information we gained from those studies. Specifically, Phoenix will use the AHA/ACC universal MI definition which improves ascertainment of [non-key way] heart attack events associated with PCI in patients who had enzymatic evidence of cardiac ischemia at the time of entering to the study.
In previous trials, we’ve enabled to ascertain such events accurately. The Phoenix will involve patients who have not received P2Y trial inhibitor prior to randomization including those with stabile angina undergoing elective PCI and [ACS] patients. We will add ASC defined stem thrombosis to the primary end point. We’ve analyzed in debt the results patients with these characteristics in the previous Champion trials achieved. They showed a highly statistically significant 45% relative risk reduction in clinical ischemic complications after PCI.
The Phoenix trial is a double blind parallel group randomized study comparing Cangrelor to placenta growth, given the 23 institutional practice. We assume a controlled move ischemic event rate at 48 hours of 5.1% and a 24.5% relative production in ischemic events. These assumptions are listed directly from prior studies. For 90% power, the required sample is estimated at 10900 patients. The protocol foresees a possible sample size re-estimation after interim analysis in which case the trial may recruit up to 15,000 patients. Oritavancin, our injectable antibiotic for gram-positive hospital infections including MRSA is about to begin Phase 3 trials as well. We are working through a special protocol assessment with the FDA for testing of the compound and acute bacterial skin and skin structure infections. We are close to conclusion and expect initially two identical clinical trials called solo one and solo two, which are planned to involve 2000 patient in total starting this quarter.
The trials will test our hypothesis that Oritavancin has potential to cure gram-positive infections including MRSA with a single dose of drugs. If this is proven in Phase 3 trials the follow-up should have clinical and economic advantages for hospitals. Our earlier stage programs include MDCO-216 and MDCO-2010, MDCO-216 is the naturally occurring variants Apolipoprotein A-1 found in human HDL particles that transport cholesterol from the tissues particularly Arteries to the lever, as shown in the nearly a proof-of-concept clinical trial when given intravenously to ACF patients, MDCO-216 has the potential to cause rapid regression of risky atherosclerosis. This implies potential from MDCO-216 do be a disease modifying agent for ACS patient our development program is on track we are now producing drug product for development studies and we plan to start a key preclinical toxicology study next week, we are preparing for chemical trials in 2011.
MDCO-2010 is a serine protease inhibitor its mechanical action as a plasma kallikrein inhibitor makes it similar to Tramodol but its molecular structure and metabolism may confer safety advantages. We completed the Phase 1 study in healthy volunteers in Switzerland. We recently gained approval from Swiss medics, the Swiss authorities to begin enrolling patients in a cabbage surgery trial starting before the end of this year.
Finally a word on Cleviprex, our second FDA approved product. Cleviprex is yet back in US distribution following our voluntary recall for the market in the first quarter. Our supplier has not remitted quality issues in that plant. Our customers are patiently awaiting its return but understand that we will not release products until it meets our quality standard and any other issues in that supply of manufacturing plant are result to the satisfaction of the FDA.
In summary, we work in an exciting market segment which is great promise for patient’s caregivers and I would say investors. During the third quarter, we made progress in that quest to deliver high value products since the global acute and intensive care hospital marketplace. We further increased the use of Angiox and Angiomax worldwide and we see that continuing for the foreseeable future.
We move forward our portfolio of six compounds in acute and intensive care medicine beyond Angiomax and we continue to see the operation of financial benefits of our streamlined organization that is doing more with less. We expect such performance to continue.
And I will now hand over to Glenn to review in a little more depth the financial results. Thanks Glenn.
Thank you Clive, good morning everyone. Net revenues for the third quarter were at 105.7 million compared to 98.8 million in the third quarter of 2009 and increased to 7 million or 7%.
In the US, Angiomax sales increased to 100.2 million compared to 92.2 million, an increase of $8 million. This was driven by strong box sales of Angiomax averaging approximately 1400 per week. This was up significantly from the third quarter of 2009 where box sales were approximately 1240 boxes per week, a volume increase of approximately 14%. For the first nine months, we have sold approximately 54,900 boxes on a GAAP basis compared to approximately 51,600 for the same period last year, an increase of 6.4% year-over-year.
For the first nine months of 2010, sales in hospitals were pull through with essentially the same as our GAAP sales keeping inventory in the channel unchanged. In prior calls, we discussed the company’s participation in 340B drug pricing program which offers qualifying customers which include disproportionate share hospitals or DSH institutions, substantially reduced pricing for those undergoing PCI on an outpatient basis. To-date approximately 320 accounts have purchased Angiomax through the 340B program during the first nine months of 2010.
Consequently, we have seen increases in our growth to net to 16% for the third quarter. This is primarily due to the 340B pricing to these qualified institutions. We expect overtime that the gross to net will come down as purchasing patterns like qualifying hospitals better align with actual procedures perform which we estimate to be on average between 18% and 20%. For the fourth quarter, we expect to see slight improvement in the gross to net percentage. Outside the US sales were $5.5 million for the third quarter 2010.
It was the same for the third quarter of 2009. However, we have seen strong growth in the UK, Spain, Switzerland, France, Scandinavia and Italy which showed an increase of sales in Europe along of approximately $1.1 million to $4 million for the quarter or 38% increase over last year. Sales outside the Europe 1.5 million which were down compared to 2009, now this was due to the timing of a quarter end order by our Canadian distributor. For the first nine months of 2010, net revenues was 318 million compared to 302.2 million for the same period in 2009 which represents a 4% increase in the US and a 29% increase internationally.
R&D spent for the third quarter totaled $16.7 million compared to $22.5 million in the third quarter of 2009, a decline of approximately 5.8% excluding a one time R&D license payment for Argatroban that was made in 2009.
R&D spending was essentially the same for the third quarter of 2009 and 2010. As Clive mentioned we have a broad portfolio of acute care hospital products which include two approved products, Angiomax and Cleviprex in the US and Angiox in Europe. Three products in Phase 3 testing, a Phase 1 product in ApoA-I Milano, referred to as MDCO-316 which is ready for clinical stage development.
During the quarter, R&D spending focused on all 7 of these products and included the commencement of the Phase 3 champion phoenix program with the enrollment of the first patient during the quarter. For a re-advance in perpetuity work including discussions with the FDA and SPA work with our CRO, sights and sight selection was ongoing with the expectation to begin enrollment of patients in several trial in the fourth quarter.
Argatroban in Phase 3 testing had limited spend during the quarter and is under review by the FDA. During the third quarter we completed our Phase 1A clinical trial, MDCO-216 our surgical blood most product and healthy volunteer and efforts have began to enroll patients in a clinical trial in cardiac patients which aims to look at different doses and there safety and effect outcome. MDCO-216 APA, ApoA-I Milano is currently preparing for clinical testing and work on manufacturing of clinical loss has begun. Pre-clinical work on new compound both in Leipsic and Montréal progressed with the development of potential backup compounds for MDCO-2010 and work on the re-advance and proceed to fusilli continues. R&D spending for Angiomax focused on life cycle and our ongoing trials for Angiox in Europe. I should mention that we do expect R&D spend to increase in the fourth quarter with the start of two Phase 3 programs and a possible clinical milestone related to MDCO-201 which is our surgical blood loss product. SG&A spend for the third quarter 2010 was 35.8 million compared to 47.4 million in the third quarter 2009, a decrease of 11.6 million.
This decrease is inline with our plans to reduce annual SG&A by $14.5 to 16.5 million. We are actually a track slightly ahead of that target. And I should note that head count has been reduced by over 150 positions since the beginning of the year. Our tax expenses largely for cash taxes that which is paid to various states here, cash taxes recording in the third quarter was approximately 1.1 million and approximately 200,000 in third quarter of 2009. Third quarter net income was $21.2 million or $0.40 per share compared to a loss of $3.2 million or $0.06 per share in the third quarter of 2009.
Net income for the first nine months was $46.1 million or $0.87 per share compared to a net loss of 2.7 million or $0.05 per share in 2009. Just to refer to non GAAP in the third quarter net income was 22.8 or $0.43 per share compared to non-GAAP net income of 5.1 million or $0.10 per share in the third quarter 2009. non-GAAP net income for the 9 months was 53.6 million or $1.02 per share compared to non-GAAP net income of 20.9 million or $0.40 per share for the same period in 2009. non-GAAP net income, it excludes the transaction charges related to the Targanta acquisition which was in 2009 stock based compensation and non cash income taxes finally a couple of comments about our balance sheet remained strong we finished the quarter with 227 million in cash incidentally this is an increase of approximately 51 million since the begin of the year and we expect a continued cash flow in the fourth quarter. I would like to now turn the call back to Michael for Q&A
Thanks glen and if our operator Katie can open up the lines for Q&A.
(Operators Instructions) your first question comes from the line Cory Kasimov from JP Morgan. Please proceed.
Cory Kasimov - JPMorgan
Hey good morning guys thanks for taking the question first on R&D I know you’ve outlined and R&D target at 20% of total revenue but can you provide the rough cost of the Phase 3 programs for Cangrelor and Oritavancin.
Yes we probably could do that the morning I think Its easier for us to do it for kind of extra trials because we have so much experience there, historically trials like Acuity and Horizons replaced to, we are running fully loaded between 6.5 and $7000 preparation so although there might be some slight inflationary pressures on those numbers but that wouldn’t be a bad ratio to be working off from modeling purposes. And obviously the recruitment for trial of about 11,000 patients is in the two to two and a half years, if that’s helpful. We are little less experienced of course with anti-infective trials and as it just outlined we are setting off on recruiting around 2,000 patients of solo one and solo two. The preparation cost there is significantly higher and Glenn I guess if I we put out a number in the 12, $15,000 patient range is that --?
It’s probably slightly high. I think Cory and allow us to refine this because there is still some discussions as I mentioned with the FDA entitled numbers. But overall the trial is probably somewhere between 55 and 65 million. We could come back to you as we refine the numbers and tell you that’s a little bit more. I doubt it’s going to be less but still working through some of the numbers. But at least for modeling purposes I would like to give that number.
Cory Kasimov - JPMorgan
Okay and that’s very helpful.
Just one other thing, some times when we put out these numbers we don’t always include all the internal cost as we figure out teams and what’s going to be in source than out source. So there could be some fluidity in that, we demand the number. And over time we will try to tighten that up for you.
Cory Kasimov - JPMorgan
Okay, great. That’s very helpful. And then with regards to Angiomax, when we look at this sequentially what are some of the factors that are impacting it here? I mean you referred the pricing pressures and also the market size itself, is seasonality also an issue and then can you just quantify the impact of healthcare reform that you have this quarter?
Yes, all of the above but not the last bit. And I don’t really know the answer but starting with the market, it remains tight. Possibly year-on-year a slight decrease in market size may be 2%, may be 3% in total volume. We know that others in the [stent] world have experienced similar estimates I think Boston Scientific suggest it was a 4% squeeze on total market volume. So, it certainly isn’t helping let’s put that way. Pricing-wise I think Glen has outlined it in some details, the pressures we have since we adopted this 340B pricing program and I think he outlined that pretty clearly. Please ask if you want further insight.
So those are the two strong headwinds. But again that I think the 12% volume increase and also being able to increase our revenue this much I think is a very credible performance. Otherwise third point you made very slow season and we have always found third quarter to be flat sometimes a bit down on second quarter, its been a pattern we have seen for the last six or seven years with these product actually.
So those three factors, now as far as healthcare reform is concerned, I think what healthcare reform is doing and it may be pressuring the volumes a bit. As it is forcing a number of things. It’s forcing people to go the outpatient procedures whenever they can which isn’t entirely bad for us because Angiomax is a very helpful drug for the outpatient procedure for stable angina patient. But I think it does mean that we don’t expect to see continued major growth in the stable angina segment going forward.
Our focus needs to be on the high risk patients, the stem-E patients, the high risk ACS patients where the Acuity and Horizons data are so compelling and frankly where the economic value proposition of the hospital is the highest. And indeed where we may occasionally get 2 or three vials of drug used per patient which has the (inaudible) as well.
So I think the stable segment is going to be pretty tight going forward the outpatient segment which we play in will I think continue to preferentially track patients because we have both issues from healthcare reform but overall I think the market is going to be flat, slightly down and we are going to have to kick and crawl our way to every piece of growth we can. Glen what were your thoughts.
Just to give a little bit more data on that and Clive was absolutely right. It’s about a 4% declined based on SDI data through July so procedures are down and I think as recently you hear the same number from Boston Scientific not surprising. But again I think from a volume standpoint, I just want to go through some numbers I talked about in the third quarter and yes third quarter we always see a little bit of a slowdown but it was about when you averaged around 1400 boxes per week this year compared with 1240 last year so we have made some in rose on a volume and then on an overall basis and again I always quote GAAP numbers and as we mentioned inventory in the channel overtime equals out on a GAAP basis for the year 54,900 so far compared to  so on a 9 month basis 6.4% up.
Now I also want to point out the verse on the (Inaudible) may not be familiar with that bulk size, is that 10 vials of drug so 549,000 vials and if we use what we have generally seen to be about a 1.19 average vial utilization to patients that means we are treating close to we treated already close to half a million patients in this country this year which I think is something we are very proud of.
Your next question comes from the line of (inaudible) from Citi. Please proceed.
Can you talk a little bit about the commercial opportunity for both Cangrelor and oritavancin by the time their approved? And perhaps if you could touch a little bit about on the eye piece that is for both of these compounds and whether or not you think that the opportunity justifies the investment?
That’s a long question. It would avail on our answer if I didn’t comprehensively but let me touch on the key points and certainly as I mentioned in my remarks, it’s our intention to spend a lot more time getting into kinds of details with shareholder base in sell side the teams over the coming week or month now that we can focus once again on our core business. So first of all, the Cangrelor market, this is obviously a place that we’re very, very familiar with. We got the acute management of PCI, ACS and bridging for patients who need to P2Y 12 inhibition as very underserved.
In spite of outstanding results from (inaudible) and Ticagrelor Brilinta which hopefully will soon get approved in the US that just been approved in Europe. In spite of that wonderful result, most of the value comes in the chronic dosing setting of ACS patient or a PCI patient and we would expect those drugs to continue making inroads where are the possible into the clopidrogrel market although obviously mitigating somewhat by the genericization of (Inaudible).
Now whether we fit into that? So as we’re concerned, none of these drugs solve the acute problem which is to get P2Y trial inhibitor on to the platelet rapidly and reliably. As you know, the pharmacology of Cangrelor is very impressive in that regard but also in clinically to get the drug of the receptor and get the platelet working again if you needed I think both the speed of onset and offset remains again, and certitude of that remains again I think that the key driving, reason why would they feel very excited about cangrelor. As far the commercialization strategy is concerned obviously its early days to make comments on that since we haven’t got the results of the Phase 3 trail and I think we should wait to see how good those results are before we prognosticate. But I think the high unmet medical need here in the acute setting in high risk patients who anneal by mouth or high risk patients who just simply cannot reliably absorb all agents which is a lot of patients actually and also cause those patients in whom the anatomy needs to be done before some of them commit to P2Y trials blocker treatment. So that’s just kind of way we are thinking of it. Oritavancin’s different obviously that we believe there are some understated value to this drug clearly it’s a controversial compound since its been through some ups and down. We believe that microbiology of drug particularly now that’s understood MIC values were originally underestimated now we know that if you account for sticking to glass that its MIC spectrum is as good and frankly better than almost anything out there. I think that’s very exciting. I think the fact that it has four modes of action on bacterial killing which promises to make a difficult drug to develop resistance too I think its very important and then of course, the really key economic differentiator here is a drug that could potentially cure a serious gram positive infection including MRSA with a single administration of drug. I cannot imagine that not being valuable for hospitals if it gets approved, will it be a blockbuster drug, I don’t think that’s what we have ever claimed? Will it be the dominant product in the marketplace, that all depends on the results. But I think you will have a worthy place in the hospital marketplace because obviously economy benefits from top of those clinical and the microbiological advantages that we may potentially divulge out. So yes is the answer, we absolutely think these two products are worth investing in and we absolutely believe we can create a lot of value from them.
So just adding a couple of comments, so one on oritavancin as I mentioned we started the strategy with oritavancin let’s get through skin first. But there were other indications that we believe we can develop. As I mentioned we are starting some early stage development in the area of [C Diff]. And one other comment as we do start to talk about numbers the key model here is that we expect to leverage our existing commercial infrastructure. And I think we will give you some cost efficiency ahead of that. So I wanted to mention that. On the IP I think you had also mentioned IP Cangrelor with obviously expansions, extract to an expansions we have to make 2019. And I’ll read events and I will double check this but I believe is 2021.
Your next question comes from the line of Matt Duffy from BDR Research. Please proceed.
Matt Duffy - BDR Research
Morning and thanks for taking my question. I wonder if you could just give us some more color and as you are sort of coming out of the whole Angiomax patent over hang situation, how you are thinking about M&A and end-licensing. If you could just give us a little more color on your though processor how far you feel you might go from cardiovascular and anti-infective as you look at other things and how you can sort of measure to be sure that you are really squeezing as much value out of your cash as you possibly can?
Very disciplined is the answer. I think that some years ago we built a lot of models looking at the breath of this market, the types of opportunities we would be interested in and we settled very clearly in our own minds on the notion of developing the channel that we have now which is the selling to these hospital institutions in the United States, in Europe, in Brazil, in India and potentially in Japan and China and those hospitals need high-end drugs that are better than the ones they have got, that are more economical and more effective and safer and that only by acquiring and developing or inventing drugs that need those help out come any economic attributes would be successful.
So what does that mean, it means yes we will stay very focused in acute cardiovascular events in the hospital obviously most of that drugs focus on that area. Yes, we will stay very focused on looking to the hospital sections but strokes and heart attacks and their upstream and downstream problems will obviously be the focus of the firm. There is plenty of these people to treat. Stroke by the year 2030 and heart attacks by the year 2030 will continue to be the largest killers of humans on the planet. They are growing at least as rapidly about most of the almost any other acute events.
There is growth in Asia, there is growth in America, there is growth in Western Europe and Brazil. So there is plenty to do and I think remaining focus on this area for us definitely looks like the rest of these for growth for the future. So the bottom line is we are going to keep looking at lots of stuffs, we have always looked at lots of stuff but we also have been very selective and disciplined in what we acquire. We are not planning a quote unquote transformative deal. Generally, the only thing they transform is into some kind of disaster.
Your next question comes from the line of Jason Kantor from RBC Capital Market.
Jason Kantor - RBC Capital Market
Could you give us some kind of better idea of how quickly you think R&D is going to ramp, I mean you obviously had very low number this quarter, I mean where should we think about fourth quarter and now that you have some visibility on the Angiomax current situation, can you talk about guidance and what your view is going forward whether you plan to give that or whether you can give us some better idea of where you think you’ll wind up or next year might come out.
I would guess by the second half of next year we will be in the southern ball park of 20% in that revenue.
Jason Kantor - RBC Capital Market
In terms of R&D?
Yes. It relates to the fourth quarter Jason. here you will see some acceleration obviously if you look at the quarter 16.7 due to lot of stuff going on so I think to say that there wasn’t a lot going but and even enrolling some patients so as I said before we do expect it to accelerate there is a possible and we don’t have to pay it. If we hit the milestone, there is a possible clinical milestone related to MDCO-2010 and just to go back and talk about, we said earlier in the year that if you strip out the one-time milestones from 2009 we spent about 86 million last year in total in R&D. We said it could be flat to slightly down while it will be down even if we paid that milestone compared to last year. So, you’ll see an acceleration but we won’t be flatly down compared to last year.
Jason Kantor - RBC Capital Market
And then on a couple of occasions you guys had mentioned that you do communicating more about your R&D plans and the like in the coming months, do you have some plans for an R&D event or some other way of focusing people’s attention of the pipeline?
And we’re not planning an R&D event. I think that we get mix reviews from that idea from investors both the established investors and new investors or potential investors but we do plan to get on the road and we are planning some non deal related road shows in the fourth quarter here so that we really can get our in front of investors. We will try our very best to provide a comprehensive and in debt overview of our R&D intentions and expectations before Christmas. So we’re now planning those meetings and set ups and will be very happy to meet as many investors as we can in the coming 90 days and beyond.
And we’re also speaking at the Credit Suisse conference up in November.
We recognize Jason and for everybody that it’s been very difficult for us to convey much in dent information about our core R&D business in the last year or two and we’re very much looking forward to being able to do that for the benefit of investors going forward.
Your next question comes from the line of Joseph Schwartz from Leerink Swann. Please proceed.
Mike Schmitz - Leerink Swann
It’s Mike Schmitz for Joe Schwartz. Some of all questions were already answered earlier, can you talk a little bit about the time line for the oritavancin and Cangrelor Phase 3 studies mentioned in interim analysis for the Cangrelor Champion Phoenix trial when can we expect that and sort of what will that entail?
With oritavancin I think we are anxious to get final starting device and crossing your [teeth] with the colleagues at the FDA before we give a detail time line on that, I think if you could respect that too we’ll obviously come out with that as soon as we know the answer. With regards to Cangrelor which is up and running I think we’ve seen historically how long it takes to enroll 10,000 or 11,000 patients the interim analysis would be somewhere around 7000 patients and the upsizing of the trail, would only happen if our estimate of event rate or our estimated effect size was some how not where we wanted to be so it’s a bit speculative right now but I think you’ve got 11,000 patients to recruit its going to be a up to three years of recruitment, and treatment period. And Mike the only comment I’ll make and we’ll no more as we go along, is to leverage the experience we had with Champion, I think I said couple of 100 sites we know these sites quiet well so we’d hope to get some efficiency out of that but we’ll keep you updated as we move along and try find time once we are little better. One of the key things Mike at the beginning of the trial I think is to test the operations of the trial and make sure that randomization efforts and are working that drug delivery and supply and pharmacy procedures are working and of course that the online data capture system are all effective, and we gratified and obviously you would hope so on our experience that first (inaudible) of Champion Phoenix those operational aspect that start inducing to the working and now we should be on the ramp up, the number of sides starting to enroll fairly briskly. So the good news is we are underway and the system seems to work.
Mike Schmitz - Leerink Swann
Okay are we going to see some more data from the BRIDGE study, later this year or has most of that been presenting already?
Actually we haven’t been in any real data from BRIDGE and I think you should expect to start disease out later next year.
Mike Schmitz - Leerink Swann
And it won’t be ready for this year. It’s been a very labor some study, although finding patients who need bridging from Clopidogrel for their surgery is a very common problem. We decided to restrict it to cabbage patients, which is a less frequent problem and enrolling patient has been quite challenging. But we are pretty clear that the idea of bridging oral products for patient who needs a major surgical procedure is rather an important one.
At this time I’m sure we have no further questions. I like to now turn it over to management for closing remarks.
Thanks Katie for helping us this morning and we look forward to seeing everyone in the fourth quarter. Thanks again.
Ladies and gentlemen thank you very much for your participation in today’s conference call. You may now disconnect. Have a wonderful day.
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