Cubist Pharma $CBST notes from UBS 9/19/11

• See below for my notes from Cubist Pharma presentation at UBS conference 9/19/11.
• Find more biotech webcasts and notes here and more info on CBST deal with Optimer Pharma $OPTR here.
• We continue to look for other assets to buy - in-license or merger & acquisition - use cash flows from Cubicin to build pipeline and company
• Cubicin and Dificid will allow us to book >$700m revenue in 2011
• Cubicin is approaching $3b cumulative sales since launch. We think annual revenue will exceed $1b before patent expiration if grow at 7% CAGR (most recent quarter was 9% growth consisting of have volume, half price impact)
• Teva agreement for generic launch 12/2017
• Cubicin: vial of drug about $200-250 per day. Generic vancomycin costs $15 per day. Why compelling to use Cubicin? Cost of drug acquisition is just one dimension of healthcare cost, look beyond pharmacy to rest of hospital system. Using cubcin in appropriate patients can save hospitals money. OSU medical center publication (CID journal) - can save around $20k per pt!
• Cubicin has bee used as once daily infusion for 30 minutes - we recently introduced 2 min push infusion from same vial. This is working out better for QOL issues in outpatient setting. But we are also hearing it is being used in the in-patient setting as well
• Cubicin now has 12% share (mostly taken from vancomycin), and we don't need very many more pointts of share to get to $1b
• we let OPTR speak about Dificid sales. They wanted to let marktet know it is going well (referring to this recent press release from Optimer).
• CB 183,315 C difficile CDAD candidate: before the end of this quarter (next 2 weeks) we will make go/nogo decision for phase 3. We own 100% WW rights, no royalties owed. We are planning to build EU commercial force to launch CXA-201, which would be in place in time for CDAD drug. We can make a very interesting return on investment with out very high revenue numbers. We will let you know in next few weeks where we are on that (the answer is yes they will push ahead into phase 3 - no timeline given, see press release)
• 13.5% of Cubicin COGS goes to LLY as royalty, other 9.5% is actually cost to make drug
• $950m cash, $560m debt, this year we will generate $170m cash, and spend $105m capex
• if 315 is a go, we will have 8 phase 3 trials ongoing in 2012/2013
• We are aggressively looking to in-license other products, that is our use for cash...first choice is a marketed product.
• q&a in breakout session