The Situation

Following intellectual property litigation with a negative outcome and the introduction of a new president/CEO, a pharmaceutical company introduced a new business model featuring an orphan drug it acquired via a merger. The primary endpoint in its Phase 3 trial in Europe and Canada was non-inferiority (+/- 5%) versus a commercial product with a less-favorable dosing regimen. Wall Street expectations were that non-inferiority would be demonstrated with numerical superiority; whereas actual results showed non-inferiority with numerical inferiority. The company also had a drug in a Phase 2 trial in the U.S. and Canada that addresses a potentially larger market.

Solution

• Held investor conference call with news announcement of Phase 3 results.
• Clearly and consistently stated “met primary endpoint” and “showed comparability to the 2x/day gold standard therapy,” with maximum transparency to results given publication strategy.
• Contacted all analysts, Top 10 holders, best prospects post-call for feedback and to reiterate messaging.
• Informed clinicians to put results in context of ~50% patient non-compliance and need for drug rotation.

 Results

• Attracted ~415 conference call participants and featuring 4 clinicians.
• Received favorable traction with analysts whose reports stressed “met primary endpoint,” and demonstrated their focus was on Phase 2 results expected later in the year.
• Generated favorable trade media coverage, including “successful” in one headline.
• Raised $71.8 million (gross) @ $10.40/share, including full overallotment exercise.
• Recovered stock price to ~$12 following news of the fund raise, subsequently ~$20.