Monday, November 24, 2008

Omrix Q3

Robert Taub
Thank you, Asaf. As Asaf mentioned, this quarter was another record quarter for biosurgery product sales – $9.5 million. Evicel is continuing to be a strong performer. The number of total accounts continues to increase steadily, and in quarter three, end user sales by our partner, Ethicon, once again included a very significant amount of repeat business. By year-end, we believe that total sales of Evicel will be approximately the same as our competitor.
Additionally, as mentioned in a recent press release, we announced that the EMEA approved Evicel in Europe. Evicel is now licensed for marketing in 27 plus three countries – the 27 countries of the European Union plus another three in Europe, and Ethicon will begin to sell Evicel on a country-by-country basis as Quixil is gradually phased out.
Next, Evithrom, our human-based thrombin standalone product continues to experience moderate dollar sales growth in this market. In quarter three, the total number of accounts purchasing Evithrom, however, increased by 50%, with new customers comprising 52%. As you're probably aware, however, there is currently fierce price competition in the thrombin standalone market, and as we have predicted, the market is moving toward thrombin enhanced hemostats, and we are currently developing two such products.
I would now like to update you on our Fibrin Pad. As you may recall, we have two trials, one in the U.S. in mild-to-moderate bleeding and a second one in Israel in severe bleeding.
With respect to the U.S. trial, we completed enrollment of the 90 patients needed to conduct interim analysis. We were pleased to report that the analysis showed superiority of the Fibrin Pad over Surgicel. Having demonstrated superiority, we are now able to continue with open-label enrollment. The trial will continue to enroll patients only to the Fibrin Pad arm, and according to the study design, we are required to treat at least 100 total patients for safety, which means another additional 40 patients with the Fibrin Pad.
Shortly after we announced that we had achieved superiority we were informed that the U.S. Phase II study had been suspended after a patient had experienced postoperative bleeding. This patient was not among the first 90 enrolled, but part of the subsequent 40 already. Many of you have asked why the trial was suspended if rebleeding is an expected event in surgery and in this protocol. The reason is simple. The protocol is written so that if there is a case of postoperative bleeding the trial must be suspended and an investigation must be conducted. Therefore, the decision to suspend the trial was an administrative one.
A Data Safety Monitoring Board, or DSMB, conducts the investigation and then provides a recommendation on how the trial is to proceed or if it is to be modified or even discontinued. We have now reported that the DSMB concluded their investigation and recommended that the clinical trial resume without any modifications, which it did.
I want to clarify that the DSMB's role is not to determine the relationship between the adverse event and the product. We, however, conducted a thorough product investigation and concluded that there is no issue with the clinical material.
I would still like to emphasize that a trial continuation with no modification is the absolute best case outcome. Therefore, we remain on target to complete enrollment of the 130 patients by the end of '08 or early '09. Although we still expect to be within the window of prior timeline guidance, due to the two-week investigation we are now more comfortable with an early '09 time frame. Once we complete the two-month follow-up and finish analyzing the data, we expect to file the BLA with the FDA in the first half of '09 and then assuming a standard 10-month review, we expect the approval in the first half of 2010.
Now, regarding the severe bleeding indication, I am pleased to inform you that we now have the approval from the British MHRA on behalf of the European Union to conduct a study in soft tissue severe bleeding.
I draw your attention to the fact that the indication and protocol are quite similar to the mild-to-moderate study which is ongoing in the United States. This EU severe bleeding study will be a pivotal study leading to an indication for the use of the Fibrin Pad in severe bleeding in soft tissue surgery. This kind of bleeding is different from the target bleeding in the exploratory Phase II study which we started some time ago in Israel.
Indeed, the Israeli study was purposefully designed to be the most challenging as it addresses the control of severe bleeding when the product is applied directly onto the resected solid organ, such as a kidney, a prostate, a liver or highly vascularized organs, and these organs are not soft tissues.
As you know, we reported a postoperative bleeding event in the Israeli trial. We are conducting an investigation, and pending the conclusion of the investigation of the rebleeding case we have decided to discontinue enrollment of additional patients in that Israeli trial and are focusing on initiating the European trial. But you should understand that the clinical development plan of the Fibrin Pad is proceeding well with a mild-to-moderate study in the United States and a severe bleeding study which will be initiated in Europe in the first half of '09.
Let me give you some details on the European study design. As I mentioned, it is a pivotal clinical study evaluating the safety and efficacy of our Fibrin Pad in soft tissue severe bleeding in abdominal, pelvic, retroperitoneal and noncardiac thoracic surgery. The study is a randomized multicenter clinical study evaluating the superiority of Fibrin Pad versus the standard treatment in controlling challenging severe bleeding in soft tissue for which standard methods of achieving hemostasis are ineffective or impractical.
Alright. Now, moving on to our passive immunotherapy business. Immunotherapy product and byproduct sales amounted to $10.1 million in the third quarter of 2008. And regarding our Phase III clinical trial in the United States for IVIG, the trial is proceeding according to expectations, and we are on track to file the BLA in the third quarter of 2009.
Erik Schneider – UBS
Okay. Great. Evithrom in the U.S., you previously said that it was – had higher sales than Zymo's Recothrom. Both are now in IMS. What is it – what's different about that channel that the IMS data show Evithrom with smaller dollars, but you're confident that they're actually larger?
Robert Taub
No, we don't know what ZymoGenetics sales are other than what we read in a press release from analysts or from their own public statement, so all I can say is that we definitely are way ahead of ZymoGenetics in terms of sales.
Erik Schneider – UBS
Okay. And what we've heard from them is that they're having trouble selling the product and in fact they're seeing pricing pressure in that market, particularly, with hospitals focused on saving money where they can. Have you seen anything like that with either Evithrom or that could be affecting Evicel going forward?
Robert Taub
No, I think that I mentioned in my script that there is a fierce price competition in the thrombin area, and I think ZymoGenetics itself is triggering that. So yes, there's tremendous competition in pricing currently ongoing, but we haven't seen anything in Evicel or in the (inaudible) area. So I don't think it's an overall statement here that has to be made about the Zymo stats in the United States, but rather a very specific thrombin related situation with Kings, ZymoGenetics, Ethicon and Omrix.
Source - seekingalpha

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