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Penwest Pharmaceuticals Q3 2007 Earnings Call Transcript

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2007-11-02 13:54:48.0

Tags: Penwest Pharmaceuticals Co.

Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from the line of Jeff Goater with Cowen & Company.

Jeff Goater - Cowen & Company

Thanks for taking the questions. Ben, just on the Otsuka arrangement in terms of the revenues that you guys booked during the quarter, is that about the magnitude that we can expect moving forward or could that change on a quarterly basis?

Ben Palleiko

Yes, so what we basically booked for revenues, actually, in the quarter is mostly reimbursed R&D costs, with a small portion of the up fronts, which is going to be amortized over a period. So what you'll probably see for some period of time going forward is numbers not a lot bigger than that, but then as we start to recognize milestones, there will be some lumpiness in there as some of those come into play.

Jeff Goater - Cowen & Company

And then, Jennifer, Endo has repeatedly mentioned lifecycle management strategies related to Opana on its conference calls over the last few quarters. And I guess two general questions. One is, could you just remind us what types, general types of Oxymorphone formulations your agreement with Endo covers? Is it just extended-release formulations with TIMERx or all extended-release formulations?

And then maybe just a general discussion -- what types of kind of follow-on formulations would make sense, not looking specifically what they might be developing, but just from a broader perspective, is combinations, abuse-deterrent formulations, things of that nature?

Jennifer Good

Sure, Jeff. So our contract essentially covers oral extended release, in any form, so whether it's TIMERx or a different technology. If it's Oxymorphone and it's going to be oral extended release, we're going to participate in that.

With regards to what would make sense, you hit on two of them, I think, that make sense. You know, there's obviously different ways to deliver Oxymorphone. I'm not going to get into it too much, because obviously we sort of know where Endo is heading with this. So I don't want people to read too much into whatever I say around this area. But, I mean, it's somewhat obvious, sort of the options to play here.

Jeff Goater - Cowen & Company

Okay. And then just lastly, any update on the EU partnership discussions around Opana ER?

Jennifer Good

Yes. So I know I'm going to sound like a broken record, but Endo has narrowed the field to the parties that they feel made the cut on the term sheets. They are exchanging contract negotiations, and there's a sense of urgency, I think, on both of our parts to try and get this in somebody's hands by roughly year-end.

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