Analyst Conference Summary
Non-GAAP numbers: EPS $1.12, net income $1.22 billion. Stock option expense was $0.02 per share and other items were related to restructuring and acquisitions.
Capital expenditures were reduced to $170 million from $325 million year-earlier. Cash and marketable securities were $8.6 billion, offset by debts of $11.2 billion.
R&D costs declined in Q1, but expect to spend the same total in 2008 as in 2007. SG&A went up after a restructuring because the Wyeth profit share is in SG&A. Again, less the Wyeth payments, 2008 total should be same as 2007 total.
Believes Arenesp sequential decline is misleading because of inventory buildup and other issues in Q4 2007 and reversing drawdown in Q1. ESA questions still unresolved, but more data became available in March. Epogen also had inventory issues, but labeling changes were made in January. Patient growth in 2008 believed to be offset by decline in dosage given.
Arenesp weekly sales? 4% decline in q1, April has been consistent with Q1 so far.
Biosimilar competition? Believe Arenesp is a premium product. When prices go lower, we respond to maintain the current premium. So a 9% drop in price with maintenance of market share in Germany.
Phase III prostate cancer SRE study is be enlarged in order to get the study done sooner, not because we expect the data to be week.
Gross margin upward driver? Decrease in volume on Arenesp.
Given first quarter sales trends, we don't see how you can hit your 2008 EPS range? Enbrel demand is not going down, confident in 14% increase over year. Sensipar, Neulasta, and Neupogen will drive us to guidance. Arenesp expected to be affected by new label, but that will take some time. We have experience projecting sales and let revenues lead expenses. But we appreciate a one-quarter snapshot may not make this obvious.
Denosumab safety concerns? Looking at totality of data, over 18,000 patients, there is no concern with infections. The infections that were ruled out were of types that physicians were confident were not due to denosumab. Same with malignancy.
Is more aggressive pricing possible? Typically in Europe you are not allowed to have price increases. We see no reason to increase U.S. prices except for inflation.
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Copyright 2007 William P. Meyers