Trius Therapeutics $TSRX notes from JMP Securities 9/27/11

• Trius Therapeutics $TSRX is not a company I follow with a complete page on BiotechDueDiligence, nor do I own the stock.
• I think it is an interesting company, so I'll share my webcast notes below (and check out @JNapodano on Twitter for the most complete coverage of TSRX)

• We evaluated a number of potential large pharma partners for asia pacific emerging markets deal, and got an excelent one in Bayer
  
• recently completed enrollment in 1st tedezolid phase 3 trial, about to start second trial
• for first time we are talking about gram negative program - we achieved our potency objectives, this project funded by NIAID
• as MRSA grows, we see migration to branded drugs
• lead antibiotic candidate is tedezlolid (new name, formerly known torezolid)
• no approved drug with labeling for all 3 key indications 
• We are matching development plan with market opportunity - started with skin infections 
• in the next couple weeks we will dose the first patient in IV to oral dose stepdown
• Bayer deal also calls for bloodborne bacteremia trial 
• TSRX is first company to initiate phase 3 antibiotic trial under new FDA guidelines - because we captured the newly designated endpoints in phase 2
• phase 2 - lowest dose had best outcomes, but no statistical difference vs higher doses
• phase 2 - no severe drug related AE, no discontinuations due to AE
• new endpoint - don't measure efficacy at end of treatment, instead measure after just 2-3 days - looking for cessation of lesion spread and elimination of fever
• phase 3 enrollment criteria: must have lesion of at least 75 cm2...patients in this category showed same effect in phase 2 vs total population
• new, earlier endpoint - one gets better differentiation, get rid of "self resolution" of infection issue that confounds results and props up all efficacy data
• Phase 3 primary endpoint is non-inferiority of 6 days of tedezolid vs 10 days of linezolid... clinicians would consider an achievement of non-inferiority to be superior because of shorter treatment period and less pill burden
• patent protection (COM) through February 2028, others pending would extend to 2030
• Bayer discussions began 1/2011, they initiated diligence on 15 different anti-infective companies seeking one drug for the Asia-Pacific and emerging markets regions, they went with TSRX (Bayer spends a larger % in that territory vs any other big pharma)
• antibiotics have largest  growth rate in China of all drugs
• 1/2 of $69m potential milestones are pre-commercial.
• Bayer pays 100% costs in China/Japan, and pays 25% of TSRX spend outside of Bayer territory
• biodefense - $60m commited revenue to date
• Gyrase-B program - funded through phase 1 with $28m contract. Currently doing safety testing, lead compound plan to have in clinic next year
• GyrB is same target as quinalones, but targeted to binding domain, we have highly potent and selective lead series
• 6/30 financials don't yet include Bayer cash
• Sufficient cash on hand thru end of 2012
• Topline data early 2012 from first phase 3 trial

Question and Answer session:

Can you talk about the upcoming results? some potential to test for superiority  The primary endpoint of skin study is non-inferiority. The last of 3 secondary outcome measures is superiorty. This is nice to have, but from medical/clinical perspective, not that meaningful. All antibiotics have high success rates of 75+%. Superiority would be more important in lung/bacteremia study (35-50% cure outcomes). Most patients don't die of skin infections, many do die of lung/blood ineections

GAIN act - bill may extend market exclusivity for some antibiotics, including Zyvox ptentially? Is this beneficial to TSRX? we are keeping a close eye on its progress. should it pass, drugs labeled for MRSA get significant patent term extension, would be an additional 5 years market exclusivity for Zyvox, could be beneficial to us. Zyvox is currently scheduled to go off patent in 2015, about a year after we're scheduled to launch. At this point, bill have a relatively low chance of passing - still in committee  needs another sponsor in the Senate. In addition to extension for zyvox and $CBST cubcin, it also gives fast track status for all MRSA NDAs going forward - gives shorter review period.
strategy in pneumonia? We plan to seek SPA for this study. There is going to be comment from FDA on already issued draft guidance in a couple weeks. Right now developing protocol with Bayer (HAP and VAP will be two separate studies)...One needs relatively high mortality rate of 20% to justify 10% non-inferiority margin endpoint, will have superiority secondary endpoint too. We will announce SPA when its ready