****Unofficial transcript****
LeRoux Jooste, Senior Vice President and General Manager
Pharmaceuticals, will present at the RBC Capital Markets’ Global
Healthcare Conference on Wednesday February 26, 2014. Hosted by
Randall Stanicky, RBC financial analyst.
RBC: Please give an idea of some early feedback into the Otrexup launch.
LeRoux: We are delighted with the progress, we look at leading indicators
of success and right now what I see are reps smiling and calling me with
positives about their experiences. Having done many launches and the
first leading indicator for me is a rep complaining or wanting more
information, more material or just telling you why they just can't reach their
target.
Right now with less than a month in - by the end of the week we should
have called on all of our target Rheumatologists, so we are getting out
there despite the weather to call on the Rheumatologists. We have made
tremendous progress on coverage - I've yet to hear of a product that has
equal coverage within a month after launch. We now have 62% coverage in
commercial plans of which 32% are auto (__?___). Most of the coverage is
on a Tier 3. 9% of commercial plans right now are not covered, which I
think is a low percentage and 28% are covered but not yet listed. So this
means they are still going through the process, who the formulary is, of
which Tier they’ll put it in but as prescriptions come in, they’ll process and
decide what to do, where to put Otrexup in. So early indicators for us are
very positive, getting good feedback from doctors with good feedback from
the plan and they understand the value proposition.
Clearly, the two big ones on the managed care side, United and they have a
policy to not get a new branded product on for the first six months, but
we’ve had discussions with them and they do get the value proposition and
we look forward to April when we can be successful with them. We’ve
taken them through a cost offset model and they understand the value. And
then Kaiser would be the next big one where we hope to have meaningful
discussions with them and it looks positive. So I would say all in all, less
than a month into the launch – looking good. Doesn’t mean we can’t tweak
things. We kicked off what we call our “plan do check at progress” where
we monitor and look at requests to follow up with interviews with
physicians to understand where we might improve the process, to ease
access so for instance, we’ll add more impetus and effort behind the
insurance verification process. We’ve now made available a service where
patients, doctors, nurses have a 1-800 number they can call to get the
information on the specific plans for insurance purposes. Just examples,
as we are continuously looking at things, TQM approach, for making sure
we are covering all the bases.
RBC: That’s great, that tells us this is the First approved subcutaneous
methotrexate (mtx), so as you think about, how do we think about the label
and the overall value proposition?
LeRoux: Well, this is a tremendous opportunity for us, because mtx is the
anchor drug for Rheumatoid Arthritis, the go to DMARD (disease modifying
anti-rheumatoid drug) of choice and all mtx has been the go to DMARD of
choice for the past 20 years or so and it will remain the go to DMARD. The
opportunity here is to move from oral mtx to SQ (subcutaneous) mtx -
through Otrexup - before you need to consider other options which could
include the more expensive biologics. So that’s were the value
propositions comes in. So for the Rheumatologists and the patients, they
can expand and enhance the benefits that their getting from go to first
choice DMARD’s – to keep the patient in low disease control. Now if for
some reason mtx, SQ mtx or Otrexup, after 3 months, 6 months, or 3 years
begins to show lack or inadequate response, then they can go to the other
options that they would normally consider earlier on. It’s at that point that
they still can have access to a biologic – in that sense we are not
competing with biologics. We are creating space in the middle that
enhances and expands the treatment with mtx.
RBC: And from a patient perspective, how is this priced and how do we
think about the co-pay. I know you mentioned Tier 3 but do you have a copay
strategy?
LeRoux: Absolutely, so right now we knew that most of the plans we’ve
got currently that have coverage, have put this in a tier 3 with a co-pay
between $40 and $70. The patients out of pocket would be, if it wasn’t for
the co-pay assistance we provide, $40 to $70. We make available to
patients a co-pay assistance card that automatically includes 12 refills that
then can be reactivated a year later when we would buy down up to $50.
So if your co-pay is $50, we’ll buy down $40 and you’ll pay $10. If your copay
is $70, we’ll buy down $50 and you’ll pay $20. If your co-pay is $30,
we’ll pay $20 and you’ll pay $10. So most patients will have a co-pay of
$10.
RBC: LeRoux, I think you’ve launched close to 30 products….
LeRoux: I wouldn’t say 30 products, I’ve been involved in 30 launches
with the most relevant launch I’ve been involved with personally, I headed
up the commercial collaboration between Wyeth and Immunex and
launched Enbrel.
RBC: How would you characterize the response so far? Are you
focusing, I believe, on 2500 reps…sorry 2500 docs….lets talk about your
targeting strategy and how you’re thinking of your greater reach. (6:26)
LeRoux: There’s about 4000 Rheumatologists in the US, maybe a little
more than that. 2500 or so of them are responsible for 80% of the mtx
scripts – these are the busy Rheumatologists that we will go in and see. So
we are actually, with 25 reps, we are quite adequately able to call on all
2500 Rheumatologists. We can certainly look at the decile filing by the
Rheumatologists. If the doctors are using mtx, we are going to be in there
and access their usage. And a good example of why we are doing this is,
there are some Rheumatologists who initiate some prescriptions using mtx
but then move on very quickly to a biologic. That doesn’t mean they’re not
a good potential physician/Rheumatologist for Otrexup, it just means that
they haven’t really had the opportunity to benefit from all mtx because of
their tolerability and plateau effect of when you get to 15 mg – the gut has
limitations. You can prescribe 20mg of oral mtx but you’ll only absorb
15mg. There are some physicians, especially younger physicians, who
graduated in the last decade or so that didn’t get much education in school
on mtx, maybe an hour at most and most of their education has been
through biologic companies. They’re 9 biologic companies with 1000’s of
sales reps – so there’s an opportunity for us to go in with a good product
that can provide good clinical outcomes for the physician and we find they
are very receptive to that. (8:09)
RBC: Is there a training aspect needed for Otrexup – in terms of using the
device?
LeRoux: Oh, the device is really simple. I mean, I could use it with one
hand. It’s good to remember Rheumatologist patients all ready have some
disability in their hand function and their grip strength is quite low. It’s a 3-
step process: simply remove the cap…for training I could show
you……..it’s really a simple process.
We have a device we make available at the doctors office so that the doctor
can show patients and the nurses can actually train patients on how to use
this device – and remove the cap, remove the safety and then you can
either on the belly or the thigh, with a light gentle pressure, count for 3
secs and your are done. (9:05). There’s nothing easier than that. It’s
actually easier than swallowing a pill or handful of pills because when
you’re taking oral mtx @ 2 ½ mg tablets and you’re on a 20 mg dose, your
swallowing 8 tablets and they don’t task that good either.
RBC: How do you think about the market opportunity, I think on a recent
call you talked about 10k patients being roughly 50 million in market
opportunity – how big can this product be?
LeRoux: We’ve said it’s $200 million plus – I’m going to talk about peak
sales, the unmet need. You know, you have about 4 million scripts for mtx
in the US written for RA. Currently, less than 5% of those are written for
parenteral mtx. You look at other countries, like Germany, Holland, Canada
– 30, 40, 50% of patients are on SQ mtx for obvious reasons.
RBC: About the rollout, still early in the launch (“very early” LeRoux
interjects) – how are you thinking about the roll out that we’ll watch and
think about the sales ramp for the rest of the year?
LeRoux: That’s a great question and one that analysts in particular need
to understand. This is not an acute crisis type of event – this is not like
somebody that has bronchitis and needs and antibody script now or
migraine and needs the prescription right now. These are patients that
have been sick for years and in many instances have all been on oral mtx.
The currently would see the Rheumatologist on average of once every 3
months, sometimes once every 4 or 5 months unless something happens
like a flare up or something, but most of the business is going to come
from that routine, every 3 months or so – the patient comes in, see’s the
Rheumatologist, they do their ‘Brooklyn act’, “how ya du’en” – “I’m a little
stiff and tender in the morning”, maybe some other joints acting up and as
the disease progresses there should be a treatment – then the dialogue
begins between the patient and the Rheumatologist because this is a life
long disease and every patient is looked at individually, then the
Rheumatologist and patients will start talking about something else, about
looking at adding something else for you. Maybe it’s adding a steroid and
then see you next month and see if that helped. But gradually, and even
with the biologics, its about a 2 – 6 week process for the doctor and the
patient to agree on a treatment and a treatment goal and what the options
are.
(11:42) Now Otrexup is going to get into the dialogue at that point. In some
cases, they’ll write the prescription right there and then if they know
insurance verification and they are comfortable that this patient is ready to
move on and these are the scripts you’ve seen in the first two weeks.
That’s not an immediate ramp up, so what happens is in most cases, this
dialogue as I said takes between 2 – 6 weeks and they’ll say, okay lets think
about this, get the insurance verification, think about what I told you, come
back in 2 weeks time and we’ll train you and put you on Otrexup.
(12:25) So I would say if you’re looking at a ramp up, the 1st 3 – 4 months
patients are going to come in and see their doc, doc looks at the patient to
see where they might benefit from Otrexup. They’re going to get them back
in, in another 4-6 weeks, go through the insurance verification and I would
say – if your really looking at ramp up, maybe in July – when we’ll really
see the scripts come in – yea, we’ll really see scripts come in. We do have
some indication; to me the weekly’s so far, what we are doing is working.
We know we can get the product through the distribution channel and into
the hands of the patient. We know that the insurance verification works.
We now the co-pay works, we know that the training part in the doctors
office works. So that the leading indicators and what we follow up and
understand of what’s working and what isn’t working, what can be
improved – to me, the early indicators from the weekly’s are telling us the
process is working.
Now, as the docs become more and more familiar – again, we’re Antares,
who’s Antares right? So a doc, Rheumatologist that sees Otrexup will be
excited but next week, it’s what was the product again? (13:35) So we
have to get back in there with frequency and regularity and build up a
recognition and awareness of Otrexup.
RBC: Relative to initial expectations and tracking are things in line with
what you would have thought?
LeRoux: (13.42) Absolutely.
RBC: You’ve talked about the LEO partnership, how did that come about?
LeRoux: Well, we’ve had dialogue and discussions with many potential
partners. We ultimately worked with LEO and felt they would be the most
suitable and desirable partner to work with because of their competence
and expertise in psoriasis – their established relationships with
dermatologists. It’s a little different situation in a dermatologists office –
(where actually the label for Otrexup is very favorable for psoriasis) but
dermatologists per se, are not currently using mtx as a go to first choice,
like Rheumatologists, so there’s more of a educational / informational
requirement and so a company that has an established rapport and
credibility with dermatology was important to us. And we also happen to
feel that the chemistry and management team gelled very quickly and like
minded knew and agreed on what needs to get done. So we think the
collaboration is off to a great start and they are launching with their reps
this week.
RBC: Your thoughts on that launch?
LeRoux: I certainly think it’s a tremendous upside opportunity. If we
think about patients with psoriasis in the US, probably about a million or so
have what is called severe psoriasis, defined by the body surface area and
the disability associated with that indication, so the number of patients is
as big as RA patients. But there are currently other options available to
them such as light therapy, topical, etc.., so with a different protocol I see a
significant opportunity.
RBC: How are they ruling that out with respect to their sales force?
LeRoux: So they will have their full derma sales organization to put this
product in first position, post launch and it fits very nicely with their
current portfolio, as does the label, where the label actually recommends
mtx. So that patients can get the response and then potentially they can go
back to the conventional therapy and of which the label actually says is
recommended, which is great.
RBC: With respect to your recent testosterone product, we had a recent
update there. Can you talk about that and the benefits of SQ overall?
(16:19)
LeRoux: The testosterone opportunity is growing tremendously. Scripts
today which are given once monthly or every 2 weeks in a doctor’s office.
It’s a deep tissue injection in the butt and it is a pain in the butt, a 20 gauge
needle and that’s because testosterone is a very viscous oily liquid and if
you were to try to give that subcutaneously through a 20 gauge needle,
first of all you’d have to be one of the strongest men in the world and able
to push down the plunger and expel the oil viscous liquid through a 20
gauge needle and even if you could, it would take about 35-40 seconds to
try to do that. So without a device with a very high powered energy source
behind that – being able to deliver a full does – subcutaneously only takes
less than 6 seconds. So again, same as this device, slightly easier process
– you gently push down, and as you push down, the needle is inserted.
Same as it is with this one. It’s not like other auto injectors, where the
activation of the device fires a needle into you like a dart. While gently
pressing, you don’t realize it because the cuff/needle guard creates sort of
a numbing effect, if you like, stretching the skin and before you know it the
needle is in. Patients would say, “Am I done?” And we have to show them
the red flag has actually gone down and they have injected themselves.
(17:41)
So with the testosterone injection, same thing would be once a week, self
administered at home, discretely, single use disposable device.
RBC: And I guess we’re still looking at the data, what’s the timing of the
pathway, I know we’re still somewhat early but how quickly?
LeRoux: Ah, it’s not that early. I can’t say things we haven’t disclosed
publicly yet but we had a press release a couple of weeks back on the
Phase 2 date which was very positive for us. We will meet with the FDA at
the end of the Ph 2 and we will begin the Ph 3 program and should have
that completed by the end of next year and we hope to file and get a
product on the market by late 2016.
RBC: That’s a huge market, what are you thinking about as far as a slice
of that market?
LeRoux: Well, the market is growing. The injectable market is growing
about 40% compounded annual growth rate. The gels are growing
tremendously, I think, don’t quote me on this but I would think that less
than 20% of the potential treatable male population is getting testosterone
treatment. Not that they would ever hit 100% but this market is going to
continue to grow. Some analysts have estimated this is a $5 billion plus
market. So we see again a huge opportunity in this specialty space
starting with urology and endocrinology, where we think this drug fits quite
nicely. The market research that we’ve done really tells us they really
would prefer to use an injectable testosterone but at the time we launch, we
likely would see a generic gel on the market and that has some inherent
issues associated with that. But hey, I’ll be happy with 15% market share
for instance….it’s going to be a huge product anyway.
So we certainly look at this as a specialty opportunity. Our plan would be
to retain the product, as we have done with Otrexup. That doesn’t mean we
wouldn’t consider talking to partners for collaboration of thought, whether
that be for a primary care or however you structure it.
RBC: How do you make that decision, when looking at Otrexup, that was
obviously a big platform endorsing approval, so how do you think about
the go-it alone strategy?
LeRoux: Well, now that we’ve validated the platform and we know that we
have more than just Otrexup and testosterone in the pipeline, we have at
least, which we haven’t disclosed, but behind that are 2 or 3 other products
which will be in the pipeline and when we make the decision on those, we
will announce them.
But this is a 505b2 model where we look at reformulating products. Putting
them in this device that now is validated and one of our selection criteria
would be – it’s not just a reformulation into an easy to use device. If we
can’t add clinical value such in the case of Otrexup where there is added
bioavailability above 15mg. In the case of testosterone, the very reliable
and shall we say efficient testosterone within the therapeutic window of
say 250-300 nanograms, 1100 nanograms without the huge peaks and
troughs that you see with intramuscular injection and somewhat flat and
low levels you see with a gel. There’s a real clinical value add on top of
making it easy to use, self administered by the patient. So for us, that
model has a lot of value, profitability and the return on investment is great.
As we grow and bring in more product into the pipeline, we can afford the
infrastructure to expand and build out and do what we need to do. With
Otrexup, by 2016, we think $200 million. By 2017, at that range, we could if
we needed to, afford a primary care sales organization of 250 reps which
would be more than adequate to reach 50% of the primary care physicians
that write 80% of the business. (21:53)
RBC: It’s a great point, if you think about the platform, obviously your
commercialization of Otrexup, now which is a big opportunity and you also
have a bunch of partnerships, you have platform technology – another one
of those is with TEVA and the Epi-pen. Is there an update you can provide
there? I know there’s an opportunity for you with your partner to get an AB
rated approval, is that still the plan?
LeRoux: Still the plan. Absolutely. Nothing has changed. Based on the
product we’ve already delivered to TEVA, that hasn’t changed.
RBC: And are you involved in discussions with the FDA or TEVA?
LeRoux: I personally am not involved.
RBC: But at this point, Antares still expects an AB ……..
LeRoux: Nothing has changed. I think we’ll have an update on our
quarterly call somewhere in the 2nd week of March.
RBC: We’re getting low on time, but as you think about the rest of the
year and obviously there is a lot going on, Otrexup is going to be ramping
and is something we can watch, testosterone moving forward, what are the
major data points that we should be thinking about relative to the broader
story about Antares?
LeRoux: Well, number one will be Otrexup performance in the 2nd half – a
slow steady buildup and as patients go back and see their Rheumatologist
and make their treatment decisions, 2nd half then we’ll really see some
ramp up and utilization. You want to see that and that’s what I expect and
to add value. Then beyond Otrexup, you have to look at QS-T. We have to
initiate the Ph 3 study. That would be the next big value adding milestone.
Announcements on potential products “M” and other products behind the
pipeline and looking then at partnerships. It’s becoming less, but still very
important for us, but less critical for us to depend on partnerships. TEVA’s
important to us and we want to continue to strengthen that relationship and
work at making that relationship successful for us. So we do whatever we
can to make sure the products in development, pursue the pens, the epipen
and the other products Pen 1 and Pen 2 that we haven’t disclosed yet,
are on track and we expect milestone announcements soon for the rest of
those products as well
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