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Article Excerpt
UNIDENTIFIED PARTICIPANT: Good morning and welcome to Cowen and Company's 29th Annual Healthcare Conference. Today with us, Noven Pharmaceuticals and from the Company, Peter Brandt, President and CEO. It is my pleasure to introduce Peter.
PETER BRANDT, PRESIDENT, CEO, NOVEN PHARMACEUTICALS INCORPORATED: Thank you very much and thank you for joining us this morning. I've now had the pleasure of being Noven for approximately ten months and in that ten months, we have taken a deep dive into each one of our three business units with the objective being to identify very definitively exactly what the opportunities are we have in front of us in each of these business units and very importantly, to grapple with the challenges that we have, take them head on in each one of our three business units. So when you look across Noven, the three business units are the following. We have our joint venture in women's health with Novartis. That's Novogyne.
We have Noven Therapeutics. That is the sales and marketing commercialization arm that came on board through the acquisition of JDS Pharmaceuticals consummated in 2007, August of 2007, and we have Noven Transdermals, which is the heart and soul of the patch business at Noven. That is the home of our dot matrix transdermal delivery system technology and from that we develop compounds that can work their way through a patch through the skin and develop those products such that we can either commercialize them ourselves in Noven Therapeutics or partner them out, as we have done with Vivelle-Dot and the joint venture with Novogyne. And each one of these business units, as I mentioned, we will look at both the opportunities we have in front in us and, very importantly, for the spirit of the transplant open conversation, what challenges we face and more importantly to that, what we are doing about those challenges.
Now one of the bigger challenges we faced as a company was instilling truly an analytically-based sense of business discipline in every single that we do. So in other words, looking at every single penny we spend at Noven and making sure it is focused on the critical drivers of our business and is spent in as efficient and as effective way as possible. In addition to that, the need to instill a sense of urgency in everything that we do. Tomorrow isn't good enough if it can be done today. Now a big step in achieving both that business discipline and sense of urgency throughout the entire company has been the influx of senior management talent over the recent few months.
So what you see here in addition to myself are five additional key people from throughout the pharmaceutical industry. These individuals not only bring a wealth of experience, but also a very successful set of track records in terms of successful execution on strategies or tactics as part of the strategy. So not just good thinkers, but people that actually get that business discipline and that sense of urgency that we are now instilling throughout all of Noven.
So taking each one of our business units one at a time, and again, as I promised, looking at the opportunities we have in front of us but also very openly talking about the challenges we face. Noven Transdermals, the key challenge, if you will, of the two that we see down at the bottom, one of the products that have come through our pipeline and that we have partnered with Shyer is Daytrana and we are currently having peel force or manufacturing issues associated with it.
We will talk more about that. In addition to that, the Noven pipeline has not been as productive as anybody in Noven would like it to be. What are we doing to change that as we go forward? Now, the heart and soul of Noven Transdermals is our dot matrix technology, which is the backbone of five FDA-approved patches that have come out of Noven, notably Vivelle-Dot, which again, we partnered with Novartis and Novogyne, and Daytrana, which we partnered with Shyer on.
Now to talk about the technology in and of itself and why that's a valuable piece of -- valuable asset. Well, the product throughput that we can achieve through the dot matrix technology exceeds that by far of any of the other patches that are on the marketplace. Here you see the permeation rates for the estrogen therapy market, the other patches that are on the marketplace there. And for all of Vivelle-Dot, the permeation rate is close to if not exceeding double that achieved by any of the other patches on the marketplace.
Now, this isn't just a technological advantage that is nice to talk about. It has translated into commercial value as well. If you look at the history of the estrogen transdermal and topical market, so not the orals, but the patches, the creams, the gels and the sprays in terms of estrogen therapy, the history would tell you that if you look at the first generation, the red line, those were the reservoir type of patches that came out, a little bit messy. They had their heyday. They fell off quickly when better patches, the second generation, came out.
Now this yellow line is a summation of five different patches out there, so that adds market share for five different products into one number that is depicted in that yellow line. The green line is Vivelle-Dot, so that is one product and you see the curve as well as the UN market share in this segment of the market, 57%. Now you also see down here in the recent past, there have been a number of again, the creams, the gels and the sprays that have been introduced in this marketplace that really haven't made much of an inroad, again because the therapeutic benefits that dot matrix puts in the place of Vivelle-Dot.
Now I made a point that we want to make on a [slide] like this, although Vivelle-Dot has been on the marketplace now for a number of years, that is not a market share curve that depicts maturation. So we don't believe that this product is near the point of -- on its growth cycle or life cycle where it is flattening out. You see continued push in terms of the market share.
Now the product throughput that I have talked about that is inherent in the dot matrix technology, it isn't simply because of estrogen or estra-dial. This is simply the way we have technologically advanced transdermal delivery systems. So in other words, this slide takes a look at all the different therapeutic areas in which there is a patch or a transdermal delivery system on the market today. And it looks at the permeation rates achieved by those products in that marketplace. And the highest by far you see is with our Daytrana patch with methylphenidate. So it is not compound-specific that we can...
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