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Investor Presentation(NASDAQ: PTX)
The following presentation includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. You should be aware that our actual results could differ materially from those contained in the forward looking statements, which are based on management’s current expectations and are subject to a number of risks and uncertainties, including, but not limited to, our failure to successfully commercialize our product candidates; costs and delays in the development and/or FDA approval of our product candidates, including as a result of the need to conduct additional studies, or the failure to obtain such approval of our products or product candidates; changes in regulatory standards or the regulatory environment with any of our product candidates; our inability to maintain or enter into, and the risks resulting from our dependence upon, collaboration or contractual arrangements necessary for the development, manufacture, commercialization, marketing, sales and distribution of any products, including our inability to protect our patents or proprietary rights and obtain necessary rights to third party patents and intellectual property to operate our business; our inability to operate our business without infringing the patents and proprietary rights of others; general economic conditions; the failure of any products to gain market acceptance; our inability to obtain any additional required financing; technological changes; changes in industry practice; and one-time events. More detailed information about the Company and the risk factors that may affect the realization of forward-looking statements is set forth in the Company’s filings with the Securities and Exchange Commission. Such documents may be read free of charge on the company’s web site, www.pernixtx.com, or the SEC’s web site at www.sec.gov. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.
Pernix™ is a registered trademark of Pernix Therapeutics, LLC. Other trademarks referenced herein are the property of their respective owners. ©2010 Pernix Therapeutics Holdings, Inc.
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Safe Harbor Statement
Swift, Nimble, Agile Specialty Pharma Company
Completed acquisition of Somaxon in March 2013
Completed Cypress and Hawthorn Acquisition in December 2012
Highly-effective sales force that is able to adapt quickly to launch and promote existing and new products
Growth Drivers:
Generics: Macoven/Cypress
Branded: Pernix/Hawthorn
Silenor re-launch
Launch of Dr. Cocoa
Successful track record of acquisitions, in-licensing and co-promotions, which have broadened and diversified product portfolio
Continued expansion of branded and generic product lines
Acquired contract manufacturer Great Southern Labs
Investment Highlights
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Positioned for Long-Term Growth
($ in millions)
4Revenue CAGR 2007-2012
$14.8
$20.7
$27.9
$33.2
$60.6 $61.3
$0.0
$10.0
$20.0
$30.0
$40.0
$50.0
$60.0
$70.0
2007 2008 2009 2010 2011 2012
Expanded Product Portfolio with Recent Aquisitions
Branded Products Indication
Bronchitis, ear and throat infections
Topical treatment of head lice
Treatment of H. pylori infection and duodenal ulcer disease
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Broad line of generic products
Generic Products
Treatment of cough and nasal congestion
Treatment of insomnia
OTC Products
OTC chocolate flavored cough and cold productDr. Cocoa
Various generic products
CedaxGenericsNatroba
Cough& ColdOmeclamox-Pak
Contract Manufacturing
Cough & ColdCedax
GenericsNatroba
Growing and Diversifying Revenues
2010
2011
2012
CedaxGenericsNatroba
Cough and Cold
Branded Products:Pernix/Hawthorn
Re-launch Silenor
Generics:Macoven/Cypress
Launch Dr. Cocoa
Launch New Generic and Branded Products
Cedax, Zutripro, Spinosadand Omeclamox Pak
Contract Manufacturing
2013
Branded Products: Pernix
Generics: Macoven
Cedax, Spinosad and Omeclamox Pak
Contract Manufacturing
Cough & Cold
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Dr. Cocoa
SILENOR ® Insomnia
Pernix Product Pipeline: Branded, Generic, OTC
PTX-007Upper Respiratory (Pediatric)
PTX-HA2Dermatology
PTX-HA5Renal Disease
Compound / Indication Pre-Clinical Phase 1 Phase 2 Phase 3 File Launch
OTC PIPELINE
GENERIC PIPELINE
12 ANDAs filed with the FDA: ANDA and NDA approved Feb. 2013
BRANDED PRESCRIPTION PIPELINE
Expected launch second half 2013
Expected launch 2016
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Combined Pernix/Hawthorn sales force of approximately 125 reps
Unique hiring process
Unlimited commission payout with modest base pay
Approximately 13 calls per day per sales rep
Focus on highly-populated states and high-prescribing physicians
Demonstrated ability to execute new product launches
Flexibility to change sales force focus rapidly
Performance-Driven Sales Force
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29
141
422
517
684645
944
1079
1196
10071060
1249
94143 156
194 196
270299
342383
338 352407
4786 94
118
190
412388 376
451 467500 478
Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Week 8 Week 9 Week 10 Week 11 Week 12
Natroba Sklice Spinosad
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Pernix vs. Sanofi in the Head Lice Market
55 Natroba
Reps
300 SkliceReps
Pernix outperformed Sanofi in the first 12 weeks of product launch
Growth Through Horizontal Integration
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Branded RxPernix/Hawthorn
Generic RxMacoven/Cypress
OTCOTC MonographCough-related IP
AntibioticsCough & Cold
GastroenterologyLice ProductsDermatology
OphthalmologyPain
VitaminsInsomnia
AntibioticsCough & ColdDermatology
GastroenterologyPain
VitaminsLice Products
Ophthalmology
Cough and ColdDermatology
GastroenterologyVitamins
Lice ProductsOphthalmology
PainInsomnia
Acquire and Grow Grow with Generic Co-Pay Build/Maintain Brand
Build a brand with an effective sale force and transition to OTC
Repackage OTC Products with Rx products to offer added benefits
Strategic Plan for Future Growth
Grow branded sales of Pernix/Hawthorn and generic sales of Macoven/CypressLaunch Dr. Cocoa andVituz, re-launch Silenor
Launch pediatric dermatology product
Continue to expand into newmarkets and leverage coreexpertise.
Launch end-stage renal disease product and dermatology product.
Launch OTC Silenor
Near-Term Medium-Term Long-Term
Leverage combined sales forces; Grow generics; and Launch first OTC product
Advance low risk product development pipeline;Launch generic ANDAs; and branded products
Launch generic ANDAs and branded products and low-risk development programs: OTC Silenor
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Key Objectives for 2013
Integrate Cypress and Hawthorn and Capitalize on Synergies
Initiate the Phase III clinical trial of our pediatric product in mid-2013
Launch Dr. Cocoa for the 2013-2014 cough & cold season
Begin development of Silenor as an OTC product
Launch Vituz and generic products
Work toward IND filings in the areas of end stage renal disease and dermatology
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Dr. Cocoa: OTC Product Launch
An OTC chocolate flavored cough and cold product
Dr. Cocoa launch is expected for the 2013-2014 cough and cold season
Product line includes daytime, nighttime cough, cold and fever formulations
Market research has validated Dr. Cocoa’s flavor and packaging
Received positive feedback and strong interest from retailers
Won Best New Product at the cough, cold, analgesics, and allergy ECRM Conference
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Dr. Cocoa Product Line
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Dr. Cocoa Packaging
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Product Portfolio
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Omeclamox Launched July 2012
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Omeclamox – Triple therapy that combines omeprazole, clarithromycin and amoxicillin
Omeprazole is one of the most widely-prescribed products for gastroesophageal reflux disease (GERD)
10-day course of therapy to treat H. pylori with duodenal ulcer disease
Shorter duration of therapy compared to the top brand competitor and lower cost to the patient
Gastroenterology sales force launched the product in July 2012
Key Growth Driver – Cedax
CEDAX is a third generation oral cephalosporin indicated for the treatment of mild-to-moderate acute bacterial exacerbations of chronic bronchitis, and also middle ear infection due to haemophilusinfluenza or streptococcus pyogenes
Acquired the CEDAX product line from Shionogi in the H1:2010
Successful launch of 180mg suspension in January 2011
IP protection through 2014
Converting sales from government payers to commercial payers
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Effectiveness of CEDAX
76%
52%
41%36%
28%
22%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Cedax Suprax Amoxicillin Cefzil Ceclor Ceftin
Middle Ear Fluid (MEF) Penetration 1‐3
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Source: 1) Craig, WA, Andes D. Pharmokinetics and pharmacodynamics of antibiotics in otitis media. Pediatr Infect Dis J. 1996; 15(3): 255-259.2) Physicians’ Desk Reference. Montvale, NJ: Thomson Medical Economics Company, Inc. 2003. Available at http://www.pdr.net3) Scaglione F, Demartinit G, Dugnani S, Arcidiacono, MM Pintucci JP, Frashchini. Interpretations of middle ear fluid concentrations of antibiotics: comparison between ceftibuten, cefixime and azithromcin; F. Br J clin Pharmacol. 1999; 47:267-271
■ Natroba (spinosad), branded prescription treatment for head lice
■ Exclusive co-promotion agreement with ParaPro
■ Launched in August 2011 for the lice season with adequate product supply by ParaPro
■ IP protection through 2021■ Natural non-neurotoxic pediculocide (no black
box warning)■ No nit combing required and typically only one
application.■ Significantly more effective in eliminating head
lice than permethrin 1% (Nix) in two Phase III studies
Natroba: Best in Class
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Q4 2010 – Completed acquisition of Macoven Pharmaceuticals, a generic business platform for Pernix
Strengthened generic platform with Cypress acquisition in Q4 2012
Launched more than 25 generic products in 2011 and 2012
Launched several generic products outside of cough and cold market
Launched Spinosad (generic Natroba) in August 2012
For the full year of 2012, Macoven was approximately 36% of the Company’s total net sales
Macoven Pharmaceuticals
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In December 2012, Pernix acquired Hawthorn/Cypress for $102 million
Significantly increases and broadens Pernix’s branded and generic product portfolio
Provides pipeline of generic ANDAs and branded NDAs and products in development
Enhances clinical and regulatory expertise
Provides cost savings
Accelerates the execution of our horizontal integration strategy
Pernix and Cypress/Hawthorn are a Strong Combination
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Cypress/Hawthorn Overview
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Well-established generic and specialty branded pharmaceutical company with diverse product portfolio
Cypress develops, markets and distributes generics
Strong product pipeline
Cypress is a key customer of Pernix Manufacturing
Hawthorn Pharmaceuticals is focused on the development and marketing of branded prescription products
Located in Madison, Mississippi and founded in 1993
Key Hawthorn Brand Products
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Zutripro - Hydrocodone/chlorpheniramine/pseudoephedrine (Zutripro)
Rezira - Hydrocodone/pseudoephedrine
Developed in response to FDA action removing all HCD cough/cold DESI products in 2008
Only immediate-release HCD products on the market
Zutripro and Rezira were launched in Fall of 2011
Vituz - Hydrocodone/chlorpheniramine
Received FDA approval in Feb. 2013
Complements Zutripro and Rezira
Cypress/Hawthorn Product Development Expertise
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11 ANDAs approved last three years
Two - 505(b)(2) NDAs approved in 2011 (Zutripro & Rezira)
12 - ANDAs on file
1 - 505(b)(2) NDA on file
Broad pipeline of products at various stages
Cough/cold/respiratory, pain, renal, dietary supplements, fluorides/dental care
Completed acquisition of Somaxon in March 2013
Acquired Somaxon in a stock-for-stock transaction with a total equity value of $25 million (3.7 million shares of PTX)
Silenor is a non-seasonal product that broadens our branded product pipeline
Re-launch of Silenor by combined Hawthorn sales forces in second
quarter 2013.
Pernix Acquired Somaxon
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Silenor for the Treatment of Insomnia
• Branded prescriptive product for the treatment of insomnia characterized by difficulty with sleep maintenance
• Silenor not a controlled substance
• Silenor demonstrated sleep maintenance including the seventh and eight hours into the night
• No meaningful next day residual effects and an overall adverse events profile similar to placebo
• Plan to develop Silenor as OTC product
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Summary
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Acquired Somaxon March 2013
FDA approval of Vituz and mefenamic acid February 2013
Acquired Cypress and Hawthorn December 2012
Launched Spinosad (Generic Natroba) August 2012
Acquired Great Southern Laboratories July 2012
Launch of Omeclamox-pak July 2012
Launch of Natroba August 2011
Launch of Cedax 180mg January 2011
Key Milestones
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Key Objectives for 2013
• Integrate Cypress and Hawthorn and Capitalize on Synergies
• Initiate the Phase III clinical trail of our pediatric product in mid-2013
• Launch Dr. Cocoa for the 2013-2014 cough & cold season
• Begin development of Silenor as an OTC product
• Work toward IND filings in the areas of end stage renal disease and dermatology
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Financial Results
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Continued Revenue Growth in 2012($, in Millions Except
Per Share Data)Years Ended December 31
2012 2011
Net Revenues $61.3 $60.6
Gross Profit 37.9 39.7
SG&A Expense 35.5 22.5
R&D Expense 0.7 0.9
Loss from the operations of JV 0.2 0.8
Depreciation & Amortization 3.2 2.3
Income (loss) from Operations (1.7) 13.1
Adjusted EBITDA 5.9(1) 17.4
Net Income (loss) (1.4) 8.3
Earnings (loss) per Share, diluted $(0.05) $0.34
Weighted Avg. Shares Outstanding, diluted 28.1 24.5
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(1) The Company defines adjusted EBITDA as net income plus income taxes, interest, depreciation and amortization, and further eliminates the impact of non-cash stock compensation expenses and acquisition expenses.
Solid Financial Position
As of December 31, 2012 ($, in millions)
Cash and Cash Equivalents $23.0
Accounts Receivable, net 36.6
Inventory, net 22.0
Working Capital 41.8
Total Assets 251.4
Total Debt 44
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Corporate Headquarters: The Woodlands, TX Distribution Centers in Magnolia, TX & Gonzales, LA
Investor Presentation(NASDAQ: PTX)