Shire to Acquire NPS Pharma Conference call Transcript
`
`Date: January 11, 2015
`Time: 6:00 p.m. GMT/1:00 .pm. EST/10:00 a.m. PST
`
`Speakers:
`
`Flemming Ornskov, MD, MPH
`CEO, Shire plc
`
`Francois Nader, MD, MBA
`CEO, NPS Pharmaceuticals, Inc.
`
`Company Participants
`
`(cid:120) Flemming Ornskov, Shire
`(cid:120) Francois Nader, NPS Pharma
`Jeff Poulton, Shire
`(cid:120)
`(cid:120) Philip Vickers, Shire
`(cid:120) Roger Adsett, Shire
`(cid:120) Mark Enyedy, Shire
`
`QA Participants
`
`(cid:120) Peter Verdult, Citi
`(cid:120) David Steinberg, Jefferies
`(cid:120) Nicolas Guyon-Gellin, Morgan Stanley
`(cid:120) Mark Clark, Deutsche Banks
`(cid:120) Ken Cacciatore, Cowen
`Jason Gerberry, Leerink Partners
`(cid:120)
`James Gordon, JP Morgan
`(cid:120)
`(cid:120) Keyur Parekh, Goldman Sachs
`
`CFAD Exhibit 1058
`CFAD v. NPS
`IPR2015-01093
`
`

`
`Presentation
`
`Flemming Ornskov
`
`Thank you very much. Good morning / Good afternoon everyone.
`We are delighted to have this opportunity to speak to you today to announce Shire’s
`acquisition of NPS Pharma.
`At the outset I would like to remind everyone that we will make forward-looking statements on
`the call today, either in our prepared remarks or in the associated question and answer
`session. These statements are based on current expectations or beliefs and are subject to
`certain risks and uncertainties that may cause actual results to differ materially. Certain of
`such risks and uncertainties are described in, and we suggest listeners review, today’s press
`release and Shire’s and NPS Pharmaceutical’s respective quarterly and annual filings with the
`SEC. We also urge you to read both the tender offer statement that will be filed by Shire with
`the SEC and the Solicitation/Recommendation Statement that will be filed by NPS
`Pharmaceuticals with the SEC when they become available because they will contain
`important information, including the terms and conditions of the tender offer.
`(cid:374)
`So please turn to slide 3. Today we are recognized as a leader in the treatment of
`rare diseases, and we are focused on expanding our leadership.
`The acquisition of NPS Pharma represents yet another significant step in this direction.
`NPS Pharma provides Shire two key products that will allow us to further expand our rare
`disease portfolio.
`NPS Pharma’s innovative GI and endocrine medicines will benefit from our GI and rare
`disease expertise and infrastructure. We will deliver NPS Pharma’s products to even more
`patients globally and accelerate their growth.
`From a financial point of view, the transaction will enhance Shire’s short and long term growth
`profile. Later in the presentation we will provide you the key financial details of the acquisition.
`(cid:374)
`Please let’s now turn to slide 4. NPS Pharma is a company focused on developing
`and commercializing innovative first-in or best-in-class therapies for rare diseases.
`NPS Pharma’s acquisition of Allelix Pharmaceuticals in 1999 included the assets key to the
`company’s current success – that is investigational medicines for the treatment of short bowel
`syndrome and hypoparathyroidism. These assets led to the development of GATTEX® and
`NATPARA®, or REVESTIVE® and NATPAR® per their brand names in the US and rest of
`world respectively. We will talk more about these medicines later today.
`(cid:374)
`Please now turn to slide 5. As you know, it is an exciting time to be part of Shire:
`We have a diversified and durable in-line portfolio that has delivered 6 straight quarters of
`double-digit product sales growth through the third quarter of 2014; and we expect these
`products and their pipeline extensions to deliver product sales of $7 billion by 2020.
`We also have a balanced pipeline across various stages of development with multiple
`upcoming milestones (e.g., BED, Lifitegrast, ROP,) that we expect will support long-term
`growth and deliver $3 billion by 2020.
`Finally NPS Pharma’s contribution will provide Shire with an additional upside potential
`beyond our 2020 goals. This is true also for the already closed Lumena and Fibrotech
`acquisitions.
`These are examples of how our GI and rare disease expertise and significant cash generation
`create opportunities for us to become the industry’s go-to-partner and continue to exceed our
`financial expectations.
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`The NPS Pharma acquisition is well aligned with our strategy, we will reinforce our GI core
`business, grow NPS Pharma’s portfolio through commercial excellence and our GI and rare
`disease expertise.
`(cid:374)
`Please now turn to slide 6. As you have heard from us before, we see a huge
`opportunity in the rare disease space, and we are thoughtfully focusing our organization in
`this manner, from our BD efforts to our pipeline, in order to realize this opportunity.
`I like to think of it as a triangle with our Rare Diseases business unit at the center, supported
`by the strength of our specialty business units. Through this combination we get the best of
`two worlds – the future long-term growth and opportunities of Rare Diseases by adding two
`innovative products, GATTEX and NATPARA, -- and the benefits from the commercial
`excellence of our GI and internal medicine business unit.
`(cid:374)
`Now, please turn to slide 7. For those who are not familiar with the disease, SBS is a
`rare GI condition resulting from a significant resection of the small intestine, which prevents
`the body from absorbing enough nutrients, fluids and electrolytes to sustain life, leading to
`serious life-threatening complications.
`GATTEX is the first and only analog of so called GLP-2, glucagon-like peptide-2, that, by
`stimulating intestinal lining growth, is proven to increase absorption by the remaining bowel
`and decrease or eliminate the need for parenteral support. It will significantly improve the lives
`of patients that are currently on parenteral support.
`We will bring GATTEX to even more patients in the U.S. and we will significantly and
`effectively leverage our footprint and expertise to introduce GATTEX, under the brand name
`REVESTIVE, around the globe.
`(cid:374)
`Please turn to slide 8. NATPARA is a product in registration in the U.S. and EU, and
`it represents a significant improvement vs. current treatment options for hypoparathyroidism
`(HPT).
`HPT is a condition where the parathyroid glands fail to produce sufficient levels of parathyroid
`hormone, resulting in low calcium levels that can lead to severe health problems.
`Today the only treatment available is high-dose oral calcium and Vitamin D, which comes with
`very high pill burden (up to 20 pills per day), it also comes with high urinary calcium excretion
`and related risk of kidney failure in the long term.
`NATPARA is the first recombinant 84-amino acid PTH that has shown clinically meaningful
`efficacy in maintaining serum calcium in target levels and decreasing significantly the need for
`calcium and vitamin D supplements.
`(cid:374)
`Now, please turn to slide 9. These are two exciting, promising products that we are
`confident we can bring value to.
`We bring first and foremost our rare disease and GI expertise: these are some of the areas
`where we are among the very best-in-class, thanks to our #2 rated GI sales force in the U.S.
`and our market leading position in rare diseases.
`We also bring the scale and quality of our commercial infrastructure: our international footprint
`has the people and the skills to bring these products to more patients outside of the US.
`Finally, we will reach more patients more effectively through our best in class patient services
`capabilities.
`(cid:374)
`Now kindly turn to slide 10. The integration will create value through 5 key value
`drivers, all of which are closely related to the capabilities Shire brings to the acquisition:
`– Extend rare disease model to GI franchise, by pairing innovative products with best-in-
`class patient services and support
`– Accelerate the growth of GATTEX in the U.S. by leveraging Shire’s #2 ranked GI
`sales force and rare disease commercial expertise
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`– Efficiently launch REVESTIVE outside the U.S. through Shire’s extensive international
`commercial infrastructure
`– Maximize value of NATPARA if approved through Shire’s proven development and
`launch capabilities
`– Realize cost synergies by integrating NPS Pharma into Shire’s organization,
`leveraging previous experience with similar acquisitions
`Our experience with Virophama integrating Cinryze into our portfolio and subsequently
`accelerating its growth while quickly capturing cost synergies makes us confident that we can
`achieve these objectives. We believe our team is ready to efficiently and successfully
`integrate the NPS portfolio, and we look forward to planning the integration.
`We believe the two companies have highly complementary business models that will make it
`easy for employees to work together. While redundancies will exist, the transaction is clearly
`focused on growth, and we believe both parties bring key talent but also capabilities.
`(cid:374)
`Please now turn to slide 11. Here we have a summary of the transaction details:
`We will acquire all the outstanding shares of NPS Pharma at $46.00 per share in cash, that
`represents a 51% premium to NPS Pharma's unaffected share price of $30.47 on December
`16, 2014; or approximately a total consideration of $5.2 billion
`We expect the acquisition to enhance revenue growth from 2015 onward and accretive to
`earnings from 2016 onward
`We will fund the acquisition using cash on hand, our existing $2.1 billion committed bank
`facility, and a newly arranged $850 million short term bank facility. This transaction is not
`subject to any financing contingency
`Closing is expected in Q1 of 2015.
`We expect synergies of approximately 25-35% of the Street’s consensus forecast of NPS
`Pharma’s standalone future operating cost base from 2017 onward, which will be realized
`beginning in 2016 and growing substantially thereafter.
`Now I’d like to turn the call over to Francois, before I do, I’d like to acknowledge the great
`business he and the team at NPS have built. There’s no one better positioned to tell you
`about the important medicines that NPS makes that helps transform the lives of patients and
`all of us at Shire share that same passion for helping patients.
`Francois, thanks for joining us today. I’ll turn it over to you for a few remarks.
`
`Francois Nader
`
`(cid:374) Thank you, Flemming.
`As you said, Shire shares NPS Pharma’s passion for developing solutions for rare diseases
`and I am confident that our combination will accelerate NPS Pharma's vision of creating a
`world where every person living with a rare disease has a therapy.
`Since we turned around NPS early 2008, we have been pursuing two objectives: first bring
`Gattex/Revestive and Natpara to patients and second build value for our shareholders. I am
`happy to report that we have accomplished these two objectives:
`– We have created significant value for patients with rare diseases by: Delivering
`Gattex/Revestive to patients with Short Bowel Syndrome; and Advancing Natpara in
`Hypoparathyroidism, which has an FDA PDUFA of January 24 and in addition we
`have Initiated the clinical development of NPSP795 for patients with Autosomal
`Dominant Hypocalcemia.
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`– Second, we have created significant value for our shareholders. Since March 2008,
`our stock price has increased from less than four dollars per share to our announced
`deal price of $46 dollars per share and our market cap has increased from less than
`$180 million to over $5 billion.
`I am confident that by bringing our two companies together, we will be creating significant
`value for patients. By leveraging our joint resources, that Flemming eluded to we will ensure
`that GATTEX/REVESTIVE and NATPARA, if approved, continue to transform the lives of
`patients with Short Bowel Syndrome and Hypoparathyroidism worldwide, and that NPSP795
`continues to advance for patients with Autosomal Dominant Hypocalcemia.
`I would like to take this opportunity to thank our board of director, our executive team and all
`NPS Pharma employees for their outstanding contributions and steadfast commitment to our
`company and, more importantly, to the patients we serve.
`
`Flemming Ornskov
`
`(cid:374) Thank you, Francois, as summary let’s turn to slide 13. The acquisition of NPS Pharma
`represents a further step in building a leading Biotech. Our infrastructure will accelerate
`the growth of NPS Pharma’s products and reach even more patients globally. With that
`we now, start our Q&A session and with me today to help answer your questions are:
`– Jeff Poulton, Interim Chief Financial Officer
`– Mark Enyedy, Head of Corporate Development and Interim General Counsel
`– Roger Adsett, Senior Vice President, GI Business Unit Leader
`– Phil Vickers, who’s our Head of R&D
`
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`Operator: Thank you. Ladies and gentlemen, if you wish to ask a question, please press
`01 on your telephone keypad. If you wish to withdraw your question, you may do so by
`pressing 02 to cancel. There will be a brief pause whilst questions are being registered.
`
`And your first question comes from the line of Peter Verdult from Citi. Please go ahead.
`Your line is now open.
`
`Peter Verdult: Yeah, good evening. Flemming, Francois, thanks for the call. Just a few,
`I’ll be very quick. Just ahead of the PDUFA date, are there any contingencies that we
`need to be aware of if the regulatory environment doesn’t play out as you expect? That’s
`the – question number one. Number two, for you, Flemming. Look, you’re not going to
`show your full hand, but can you give us some sense when you think to – about Gattex,
`Natpara, the peak sales range that you’re thinking about those assets. Thirdly, just a brief
`insight please on the royalties, and 795 for those who aren’t covering NPS on a daily
`basis; will that royalty line give us some shape in terms of profile, in terms of duration or
`durability and growth rate? And then on 795, where we are in the pipeline upcoming
`[inaudible]? And then very quickly to round off, just on the funding of the deal, you got
`your – you’ve still got your cash and you’ve got your credit facility. What is the cost of
`debt on your credit facility? Thanks.
`
`Flemming Ornskov: Sorry, I didn’t catch that. What was the last part?
`
`Peter Verdult: What is the cost of debt – the cost of debt on the credit facility? Okay.
`
`Flemming Ornskov: Okay. So, thanks very much. Comprehensive, so maybe I can take
`the easy questions and I’ll pass on the more difficult ones to my colleagues. So, yes, of
`course, we know that there is an upcoming PDUFA date for Natpara. The deal does not
`have anything which is a material event, so if that should lead to a non-approval or other
`actions, then we still have to go ahead with the deal.
`
`We of course looked very carefully at Natpara and I think there’s three comments I want to
`make. One, maybe as a physician, you first look at the clinical efficacy and I think they’re
`absolutely clear. Number two is we of course have done the diligence and Francois and
`his team has been incredibly transparent, we have looked at all the relevant regulatory
`documentation. There’s no guarantees in life, but we feel as confident as we can. And
`number three is I think any deal that always happens in a transition time when a company
`is preparing for a launch, I think it’s better that we get in early on to work closely with the
`NPS team to prepare. Once the deal has been consummated, which we hope will be by
`the end of this quarter, then when we can prepare and execute on the launch. I think
`that’s key for patients as well.
`
`In terms of the Gattex and Natpara peak potentials, I’m sure if you’re following you know
`what the guidance is from the company. Its early days; we have done our modelling when
`we did the deal. We’re very confident these are great products, but right now I’m not able
`to go out and put a forecast there. And I hope it will not happen, but in any transition from
`one company to another sometimes things, you know, slow a little bit down, and I think we
`saw that also with ViroPharma but eventually, we picked up. So let’s just get into the
`situation and then we’ll comment what we see the potential is.
`
`And 795 and the funding, do you want to comment on that Jeff?
`
`Jeff Poulton: Yeah, I’ll take the royalty question first. The royalty will come to an end at
`the end of 2018 at primarily [inaudible]. I think there was also a question on the cost of
`financing. Both the revolving credit facility as well as the additional short-term bank facility
`have interest rate about 1.5%.
`
`Peter Verdult: Thanks a lot.
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`Flemming Ornskov: Francois, I imagine you would support the statement that – without
`giving any further details that you are also confident that the Natpara situation is moving
`along with the FDA as expected?
`
`Francois Nader: That’s correct. Actually, as everyone knows, we have a PDUFA date of
`24th January and I’m confident that Natpara will be approved. No one can 100%
`guarantee what the FDA will do, but we have had had numerous interactions with the FDA
`and I would say so far, so good.
`
`And for 795 which was a question that was asked, we are currently running a proof of
`concepts study and we hope to release some top line results towards the end of the first
`quarter, early second quarter.
`
`Flemming Ornskov: Okay.
`
`Peter Verdult: Thank you.
`
`Flemming Ornskov: Does that answer your questions?
`
`Peter Verdult: Yeah, thank you very much. Thank you.
`
`Flemming Ornskov: Okay? Thanks very much. Okay.
`
`Operator: And the next question comes from the line of David Steinberg in Jefferies.
`Please go ahead. Your line is now open.
`
`David Steinberg: Thanks very much. I have a couple of questions. First, I know
`Flemming in the past you noted that when you look at acquisitions of rare disease
`companies, one of your prime considerations besides the asset is the tax rate implications
`for Shire. I was just curious: is NPS one of these companies where over time you believe
`that this will likely lower your tax rate?
`
`Secondly, you mentioned you’ll be able to exploit your global infrastructure. What sort of
`revenues, in excess of what NPS could do alone, do you think that Shire could generate
`over time? And finally, I know you referenced ViroPharma as a model and one of the
`things you showed recently was the revenue synergies. What sort of revenue – besides
`the cost synergies, any thoughts on revenue synergies going forward with NPS? Thanks.
`
`Flemming Ornskov: Thanks very much, David. So I know there are three questions and
`I’ll try and answer them, and if any of my colleagues want to chime in, please do so.
`
`So, you know, in terms of rare disease assets and tax rates, we don’t expect that this deal
`will materially change our guidance we’ve given on tax. As you know, we are a company
`that are always in the best interests of the patients we serve, and in terms of having
`enough to put into R&D. We always look to be an efficient and also tax-wise company,
`and we will certainly look at if there are any optimisation situations. A quick, initial look
`looks like this will not dramatically change our tax rate.
`
`In terms of what we specifically will do globally in terms of what we can exceed the
`standalone opportunity for NPS in terms of international sales, that’s a bit early. I think
`what is the advantage here is that NPS would have to significantly expand its global
`infrastructure. We already have that, so we have significant cost opportunities in the
`sense of versus what it would have cost NPS, and so I look at it as very good.
`
`And what was the last one? That was whether the revenue synergies – whether we can
`see that there was any great revenue synergy. Well, the situation with ViroPharma was
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`pretty unique because we had a prevention and a treatment within the same category. I
`think here it’s more, in my opinion, initially a player making sure that the transition from
`NPS to us is smooth, both on Gattex to continue I think a very successful launch and also
`to make sure that we roll out in more countries. If I’m correctly informed, Gattex are
`Revestive as now in Germany and in Sweden, and is expanding into other countries, and
`of course we will try to work with NPS and accelerate that.
`
`And as to Natpara, I think we’ll build off the relevant network and also support on the
`pricing side, which of course also will be a challenge. I don't know; Jeff, do you want to
`comment on anything else that you –?
`
`Jeff Poulton: Yeah, I mean I think that you summarised nicely the situation from a
`revenue standpoint. It is a slightly different situation in ViroPharma, so I’d say – ask for a
`little bit of patience on that. We’ll share more when we’re able to.
`
`David Steinberg: Okay, thanks then.
`
`Flemming Ornskov: Francois, you want to say something about the rollout on the –?
`
`Francois Nader: I think you covered it.
`
`Flemming Ornskov: Okay, fine.
`
`Francois Nader: Thank you.
`
`Flemming Ornskov: Okay. David, did I answer your questions?
`
`David Steinberg: You did, thank you.
`
`Flemming Ornskov: Okay. Thank you.
`
`Operator: The next question comes from the line of Nicolas Galinguire[?] from Morgan
`Stanley. Please go ahead. Your line is now open.
`
`Nicolas Galinguire: Yeah, hi and good evening. Three questions from me please. The
`first one is a financial one. Could you be a bit more specific about the earnings accretion
`that you are expecting from ‘16 onwards? And shall are we expect the deal to be dilutive
`to ‘15 earnings?
`
`The second one is with regards to the timing of the deal. Acquiring a company just a few
`days before a very binary event could be perceived as a risky situation. How do you
`reconcile that? And why didn’t you decide to hedge your position with, for example,
`[inaudible]?
`
`And the last question is a product question. Could you remind of us of the IP of both
`drugs in US and ex-US territories, as well as your plans for Natpara in ex-US
`geographies? Thank you very much.
`
`Flemming Ornskov: So, I noted three questions and maybe I will give – after I’ve
`answered the first two things –to Jeff to talk about the earnings [inaudible]. Yeah, I truly
`understand. That’s a relevant and good question. You know, you do a deal relatively
`before that another company is having its PDUFA date.
`That went into our
`considerations.
`I can now repeat that we looked at all the data. It’s [inaudible] situation
`including the regulatory correspondence. Francois and his clinical regulatory team was
`incredible in terms of their transparency. Number two is we feel that the clinical data, in
`our assessment of this situation, we’re very confident in this situation. And number three
`
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`is that deals are negotiated situations. This was a situation where, in order for us to get
`this over the finish line, that’s the risk we had to take on.
`
`I think if you look at history, companies that have taken what I would say calculated risks
`based on serious analysis of the situation, whether its [inaudible] are often very good
`deals. So, I think that sometimes baked cakes are not the best. This is an almost-baked
`cake and it gives us an opportunity to get in early. So, I feel very confident about that.
`
`Do you want to say something about earnings in passing?
`
`Jeff Poulton: Yeah, I will. One – Nicolas, we’re not going to give 2015 guidance today.
`We’ll do that on our year-end earnings call in February. I’ll tell you that the dilutive impact
`in ’15 is pretty mild. Again, we’ll follow-up with more specifics on the year-end call. And
`then it does turn accretive in ’16 and beyond, but we’re not going to share that level of
`detail today.
`
`Flemming Ornskov: And then finally you asked about peak sales potential. We’re not
`going to give that on Natpara in either US or Natpara internationally. I think the company,
`NPS, has given its comments before in terms of how they feel, but let’s see the label and
`let’s see how it progresses with IMA. Then we’ll be more confident.
`
`Nicolas Galinguire: Sorry, if I may, I was talking about the IP, the patent of the drugs and
`not the peak sales. Sorry.
`
`Flemming Ornskov: Ah, the IP – okay, sorry, I misunderstood that. Okay, with the
`patent, Francois is in a much better position to answer that than I am. Sorry.
`
`Francois Nader: So, for the IP, the IP in the US goes until April of 2020, and the
`paediatric would add another six months. So, this will take us in terms of exclusivity to
`2020 – this is Gattex. Now, when we look at ex-US we have an orphan disease
`exclusivity that will take us until August of 2022, and the paediatric extension will be give
`us until 2024. Natpara is slightly different because Natpara was filed as a DLA, and the –
`assuming an approval this month this will give us another 12 years of exclusivity, so it will
`take us until January 2024. And again, if we add the paediatric indication, this will extend
`it by another six months. And it depends when Natpara will be approved in Europe, but
`then again in Europe you add ten years of exclusivity for the primary indication and then
`you add two years for the paediatric indication. The idea is – some of you might recall we
`have filed the Natpara MAA in November, so you do the math.
`
`Flemming Ornskov: So, Phil, one question we’ve had – Phil Vickers, our head of R&D –
`we had the question several times Phil, so maybe they’ll want to hear it from you as well
`that you’ve done all the diligence work and all the regulatory filings and everything like that
`with your team.
`
`Phil Vickers: Yeah, thanks, Flemming. The – yeah, the clinical and regulatory teams
`have reviewed all of the regulatory documentation. We feel very confident in the benefit
`that Natpara will provide to patients. We feel very confident based on the in-depth
`analysis of all of the regulatory correspondence that there will be an approval, and we’ve
`really enjoyed working with the NPS Pharma R&D team, who have been incredibly
`transparent about everything. So of course, as Francois said, there’s no guarantees on
`anything, but we are very positive indeed. I think that there are a tremendous number of
`benefits from us engaging early and preparing for what we anticipate being an approval
`and a very successful launch shortly thereafter. So yeah, we’re very confident.
`
`Flemming Ornskov: Okay, does that answer the questions okay?
`
`Nicolas Galinguire: Yeah, perfectly yeah. Thank you.
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`Flemming Ornskov: Okay, thanks very much, Nicolas. Thanks.
`
`Operator: The next question comes from Mark Clark at Deutsche Bank. Please go
`ahead.
`
`Mark Clark: Yes, hi gentlemen, just a few quick questions. Firstly, if I take what appears
`to be – from Reuters anyway – the opex street consensus of just roughly about 400 million
`in 2017, take the street consensus sales and use the 1.5% blended financing cost, then it
`simply drops down to – just into a double-digit accretion situation in 2017. Whilst you can’t
`– you’ve said you won’t comment on accretion, does my maths sound stupid, to put it
`bluntly?
`
`The second question: for those of us who are not –
`
`Flemming Ornskov: Mark, you don’t expect that we would ever say that even if we
`thought that. We don’t think that, but we would never say that. You know that, of course.
`
`Mark Clark: Okay. Well, are there – is there any – or let me put it another way: is there
`anything in my logic that’s incorrect?
`
`It is
`Second question is – relates to the pipeline products for a form of hypocalcemia.
`described as ultra-rare. It’s – you know, as is often the case with these ultra-rare
`disorders, it’s something that most of us have never heard of. Could you give us some
`indication of, you know, the sort of patient numbers and any kind of timelines on
`development? You know, I see it’s only in Phase 2A but – you know, so presumably it is
`several years from commercialisation, but if you could just flesh that out a little bit?
`
`And the third thing is, you know, not having been an NPS analyst in the past, could
`Francois share what his previously-uttered peak sales were for Gattex and Natpara,
`because I’m not privy to those? It would help me. Thank you.
`
`Flemming Ornskov: So, I think – thanks very much, Mark. I think, you know, almost
`irrespective of what the previous forecasts have been, it’s now, hopefully, going to be a
`new hand. So I think it would be – give us, please, some time to work with NPS and
`ourselves, that we just make sure that we get our kind of our head around what we feel
`comfortable promising there. I think on the – do you want to say anything on the numbers
`about whether this is totally crazy or …
`
`Jeff Poulton: No, I mean, Mark, I think your logic’s fine. I think this is probably one of the
`reasons why we didn’t feel like we needed to give guidance, smart guys like you could
`figure it out. So I think your logic is okay.
`
`Flemming Ornskov: So autosomal dominant hypocalcemia – that sounds complex.
`What’s that all about, Francois?
`
`Francois Nader: The name is complex, that’s why we call it ADH.
`It’s easier on
`everyone. So at 795 it’s a very – it’s an ultra, ultra-rare condition. Some people call it
`[inaudible] now. It’s really a few thousand patients worldwide, and it has to do with the
`dysfunction of the calcium-sensing receptors in the parathyroid glands and the receptor
`misreads the serum calcium level as being too high erroneously, and therefore the
`reaction of the body is to excrete calcium. And these patients are quite unique because
`they have this, if you will, duality of being hypocalcemic whilst being hypercalciuric. So
`there is an experiment excretion of calcium in the – in the kidney, which in turn leads to
`nephrocalcinosis and end-stage renal disease. It’s a situation that affects kids and adults,
`and unfortunately there is no treatment because the logical treatment would be to try to
`
`10
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`

`
`increase the serum calcium, and actually by doing that, through calcium or other means,
`worsens the conditions because now the body actually excretes even more calcium.
`
`And 795 is a very elegant small molecule that has proven in pre-clinical studies to actually
`‘fix’ the receptors and reduce the sensitivity of the receptor, and this is something that we
`are in the process of proving in humans. So this is the first human study with 795, and we
`are looking at a couple of primary and – not primary, but a couple of end points. One is
`whether or not 795 increases the level of PTH, whether it normalises the serum calcium
`and whether it normalises the urine calcium. So these are the three parameters, and it’s a
`proof-of-concept Phase 2. As I said earlier, we expect to have top line results towards the
`end of the first quarter or early second quarter. Very difficult to predict from here where
`will we go or where Shire will go, because it will very much depend on the results of this
`first study.
`
`Jeff Poulton: So I think that, just on the lines that, you know, in addition to the two
`products, you know this is an interesting pipeline for us. As you can imagine, the main
`value of the deal from our perspective was driven by Gattex and Natpara. Natpara, again
`here – you know, also with Natpara, we of course cannot guarantee that this will lead to
`an approval on PDUFA day, but we are optimistic that these are great products that will be
`added to our portfolio eventually.
`
`Flemming Ornskov: So with that, did we answer your questions Mark?
`
`Mark Clark: Well it’s just the question from Francois on what NPS has previously stated
`as peak sales, just so that I can put this into context.
`
`Flemming Ornskov: You saw that I was a little bit of a police person, so I blocked that
`very kindly because – is that okay?
`
`Mark Clark: Fair enough. Right.
`
`Flemming Ornskov: It just shows what a nice person I am, doesn’t it?
`
`Mark Clark: Thank you.
`
`Operator: The next question comes from the line of Ken Cacciatore at Cowen. Please go
`ahead, your line is now open.
`
`Ken Cacciatore: Good afternoon guys, thank you. I just wanted to ask – I understand
`you were saying that you’ve looked at the regulatory correspondence. I just wanted to see
`if I could ask a specific question, is: are you all looking at a label correspondence back
`and forth between the two – between the FDA and NPSP? And then also, maybe you can
`help us in terms of – I know you don’t want to talk too specifically about the potential of
`Natpara, but maybe help us out in segment of the hyperparathyroid patients that are in
`immediate for this drug where orals are inadequate.
`
`And then also, it’s ou