OSI Pharmaceuticals, Inc. Q2 2009 Earnings Call Transcript

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2009-07-22 22:13:31.0

Tags: OSI Pharmaceuticals Inc., Marketing, J.P. Morgan Chase & Co., Call Transcript, Asco Plc., Earnings, Morgan Stanley, Analysis, Accrual, Terry, Gabriel Leung Interim Analysis, Sales Strategy, Operational Accounting, Sales Force Management, Sales, Finance, Seeking Alpha

Question-and-Answer Session

Operator

(Operator instruction.) We’ll go first to Jeff Quinn with JP Morgan.

Terry Bivens – JP Morgan

Hi guys, this is Terry in for Jeff Today. Just a question – I’m wondering where are you – if you can, can you update us on where enrollment is in the Eur-tech study? And also can you discuss how many events are needed to trigger an interim analysis and when you think that this could come?

Gabriel Leung

Interim analysis is likely to be reached during the 2nd half of next year and with final analysis – it will be in 2011. Actually, I don’t have the latest accrual update. The last update at around Asco time, placed us kind of on-track towards the accrual goals of achieving those timelines.

Terri Bivens – JP Morgan

Thank you.

Operator

Next we’ll hear from Steve Howe at Morgan Stanley.

Steve Howe – Morgan Stanley

At the World Lung Congress are you going to be able to give us information around outcomes or especially overall survival, with important sub-groups? And then, what do you think is an acceptable degradation of the hazard ratio in the mutant population to still drive the type of uptick that you’re hoping to see in earlier stage – with EGF receptor patients.

Gabriel Leung

Steve, we will have some sub-group data at the World Lung Conference. We may not have all of the sub-group data available in which case, we’ll supplement those data at the Asco study later in September. As to the threshold for hazard ratio, you know, that would be a speculation that would be difficult to make.

Steve Howe – Morgan Stanley

And then if you think about moving to 2010 and hope for label and maintenance, is there any scale that needs to be added to your commercial infrastructure, either on marketing spend or on sales force to exploit this opportunity, given some of the more complicated dynamics, potentially of the mutation diagnosis? Or, should we think about the 99% or whatever the number is, gross margins falling through to the operating margins of any incremental sales?

Gabriel Leung

Obviously any time you launch a new medication, there will be some incremental increase in marketing expenses. We don’t expect a significant change in the sales infrastructure, per se. so there might be some small incremental costs at launch time. But, that’s not something that will be significantly different than the Zurich benchmarks.

 

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