Zymogenetics Q3 highlights

Bruce Carter CEO (ZGEN)
Thank you, Doug. I’ll update you now on RECOTHROM sales. Net sales for the third quarter were $1.8 million versus $1.4 million in the second quarter, a 27% increase. If we discount the wholesale pipeline filling in quarter two, the quarter-on-quarter increase in sales is nearly fourfold. Nevertheless, sales are still low and our focus is and must be to grow sales as quickly as possible.
Year-to-date through September, 177 P&T committees have made a decision about RECOTHROM. Fifty-nine have made RECOTHROM the sole thrombin on the formulary. Fifty-two have added RECOTHROM to the formulary and thus have more than one thrombin product. So 63% of committees have had a positive outcome. Sixty-six committees had declined to add RECOTHROM up to the end of September, which is approximately 37%.
We have now been on the market for most of this year. What have we learned that will help us convince customers to buy our product? We have learned that there is a limited awareness of and ability to properly diagnose bovine-immune mediated coagulopathies from surgeons, nurses, and pharmacists. So we must focus on making customers aware of the occurrence and consequences of bovine-immune mediated coagulopathies.
Second, we have to highlight the advantages of our Recombinant product, RECOTHROM. Third, we’ve been listening to the pharmacists concerns about their budgets and we’ve responded to their concerns with a new pricing strategy.
What are we doing to educate the market with respect to bovine-immune coagulopathies? Well, we recently sponsored a webinar in which surgeons discussed recent cases that they had experienced this year where they had to deal with this issue. The webinar’s educational objective was to create an awareness of the clinical presentation of coagulopathies and to demonstrate the overall impact and consequences to patients and to the hospital’s use of resources. It highlighted three cases from this year showing that this is a current problem.
We’re also convening a consensus panel of expert hematologists, surgeons and pharmacists and this consensus panel will evaluate the scientific evidence and other information available in the area of post-operative bleeding, identifying gaps in the scientific literature and education of health care professionals and we’ll recommend actions to close these gaps.
What are we doing to demonstrate some of the advantages of our product? We will present data from our Phase IIIb trial at the American Society of Hematology in December. This was a 200 patient study using RECOTHROM in patients undergoing repeat spinal or vascular surgery and thus patients having a high likelihood of prior exposure to bovine thrombin and as such, an increased risk of having pre-existing antibodies to bovine thrombin.
The primary objective of this study was to demonstrate that RECOTHROM can be given safely to patients with pre-existing antibodies to bovine thrombin and I would remind you again that the back box falling on bovine thrombin says “patients with antibodies to bovine thrombin preparations should not be re-exposed to these products.”
The third way to influence purchases is of course price and most of the declines that we had through the end of the fourth quarter are related to pricing. We’ve listened to our customers concerns and responded at the beginning of October, with an enhanced discounting program that allows conversion to RECOTHROM while at the same time being budget neutral to these hospitals.
Our new pricing has only been in place since the beginning of October, but we are beginning to see its effect. We have seen hospitals where we had been approved for an addition to the formulary switching to full conversion, but we are very pleased to see hospitals which had previously declined RECOTHROM converting fully to RECOTHROM on the formulary.
We believe that fourth quarter net sales will be in the region of $3 million, a 60% increase on the third quarter and thus 2008 sales will be in the region of $7 million.
We are facing challenges with a long hospital sales cycle and pricing concerns; however, we believe that the Recombinant protein is better than a protein from human or cow blood.
We believe RECOTHROM is best in class with a strong label and product profile and we believe that with our new pricing strategy, we are seeing increased traction in the marketplace. The process has taken longer than we had projected, but we believe RECOTHROM will be the market leader in the coming years.........
Source: seekingalpha