Full Press Release Details
Transcript of Conference Call
The Female Health Company
The Female Health Company
and Aspen Park Pharmaceuticals to Discuss Proposed Merger
April 13, 2016 at 11:00 a.m. Eastern
CORPORATE PARTICIPANTS
O.B. Parrish - Chief Executive Officer, The Female Health Company
Kevin Gilbert - Consultant, The Female Health Company
Mitch Steiner - Chief Executive Officer, President, Aspen Park Pharmaceuticals
Good day, ladies and gentlemen, and welcome to
The Female Health Company s and Aspen Park Pharmaceuticals Investor Conference call. All participants will be in listen-only mode. Should you need assistance today, please signal a conference specialist by pressing the star key followed by
After today s presentation, there will be an opportunity to ask questions. Please note this event is being recorded.
The statements made on this conference call that are not historical in nature are forward-looking statements, including those regarding the proposed merger
transaction between FHC and Aspen Park, and the integration of our two businesses. Such forward-looking statements reflect our current assessment of the risks and uncertainties related to the transaction and our businesses.
Our actual results and future developments could differ materially from the results or developments in such forward-looking statements. Factors that may cause
actual results or developments to differ materially include such things as the risk that the proposed transaction may not be completed in a timely manner or at all; risks that the proposed transaction could disrupt current plans and operations;
costs, fees and expenses related to the proposed transaction; risks related to the development of APP s product portfolio; risks relating to the ability of the combined company to obtain sufficient financing on acceptable terms when needed to
fund development and company operations; the risk that even if it is completed we may not realize the expected benefits from the transaction, and other risks detailed in FHC s press releases, shareholder communications and Securities and
Exchange Commission filings.
I would now like to turn the conference over to Mr. O.B. Parrish. Please go ahead.
Thank you. Good morning, and welcome to The
Female Health Company and Aspen Park Pharmaceuticals Investor conference call. The purpose of this call is to discuss and answer questions regarding the proposed merger of The Female Health Company and Aspen Park Pharmaceuticals.
Mitch Steiner, the President and CEO of Aspen Park Pharmaceuticals, and who will be the President and CEO of the merged company is with me in Chicago.
I would like to note that we have filed with the SEC and posted on our website an investor deck which provides significant information related to the merger.
This morning, first, I will explain why I and the rest of FHC s board believe the merger is an excellent investor opportunity. Then Mitch will review
his plans for the new company, and the remarkable products and other investor value opportunities that will exist as a result of the merger, and then we ll take questions.
FHC has had a solid track record in developing and marketing a first of its kind product, securing FDA approval and WHO clearance; distribution in 144
countries, ten years of profitability, and currently no debt. However, there are significant risks and opportunity limitations for the company to simply continue as it is.
The Female Health Company
April 13, 2016 at 11:00 a.m. Eastern
First is the obvious risk of being a single product company. The need for diversification is important in light
of increased competition; second, the volatility of our business, which we ve experienced, and dependence on public funding. This is the opportunity limitation of having an excellent public company healthcare platform, but using it for only one
As a result, FHC committed to diversify its business. We have analyzed more than 100 potential opportunities. None of the companies we analyzed
presented the opportunities provided by Aspen Park.
I believe the benefits of the proposed merger are five-fold. First, it results in a high potential,
multiple product portfolio. Second, it provides proprietary product positions, many of which are subject to the potentially less risky, less costly and more expedited 505(b)(2) FDA regulatory pathway, which Mitch Steiner will explain in more detail.
Third, it provides near-term revenue cash flow potential. Fourth, it may complement and enhance FC2 s market opportunity. And fifth, due to the multiple product portfolio, it will capitalize on FHC s public healthcare company status and as
a result, provide the potential for a significant increase in investor opportunity.
The FHC board approved the merger after the completion of a
scientific, intellectual property, legal and financial due diligence process.
From a personal perspective, my support of the merger is based on two
things. First, my support is based on extensive personal pharmaceutical industry experience. For those who may not know, at Pfizer, I was division VP for pharmaceutical marketing of the United States. Later, I managed two United States
pharmaceutical divisions, and then I was executive president of Pfizer s International division where I was responsible for multiple businesses in certain countries and all pharmaceutical marketing outside of the United States. Later, at G.D.
Searle, I was president of the Global Pharmaceutical Group, involving more than 7,000 people in 44 countries, and 25 manufacturing facilities in 15 countries.
The second thing is based on my perspective, as a significant shareholder, and within this context, I support the merger for three reasons. First, the merger
provides a remarkable opportunity to mitigate the risk associated with being a one product company; second, the considerable upside potential of the relatively low risk products in development; third, it comes with an experience management team,
specifically with Mitch Steiner who can lead the company for the long-term.
I should note that the board and I have met and spent a significant amount of
time with Aspen Park cofounders, Dr. Mitch Steiner and Dr. Harry Fisch. I believe that they have the scientific, financial and business experience to advance this high potential portfolio of products to market approval quickly. I firmly
believe the merger will create a strong growing company, and it ll benefit all shareholders. I urge all Female Health Company shareholders to vote in favor of this merger.
Now, I ll turn it over to Mitch Steiner. Mitch.
Thank you, O.B.. What we are proposing is a transformational merger that will result in a leading men s and women s healthcare
company. The new company will be positioned for success by having revenue and positive cash flow, as well as a suite of pharmaceutical product candidates in consumer health products. This will allow us to maximize the opportunity for both near-term
and long-term growth and value for our combined shareholders.
Now, I d like to take the opportunity to share with you our blueprint for growth by
introducing you to Aspen Park Pharmaceuticals, describe our broad strategy for development and commercialization of our combined product portfolio, and report our combined financials and how the resulting positive cash flow supports this growth
The Female Health Company
April 13, 2016 at 11:00 a.m. Eastern
First the team. The combined company will have a seasoned management team with expertise in pharmaceutical
product development and commercialization and public company experience. Dan Haines is the Chief Financial Officer and is a CPA with experiences from both private and public companies, including E&Y, OPKO Health and Lennar Corporation.
Dr. Harry Fisch is the Chief Corporation officer and a board certified urologist, professor of urology and reproductive medicine at Cornell, cofounder and
chairman of Aspen Park Pharmaceuticals and Millennium Sciences.
We have individuals with deep pharmaceutical experience who are expected to join the team
at closing for the positions of Chief Medical Officer, Vice President of Clinical Development, Vice President of Drug Manufacturing, and Vice President of Regulatory. The team responsible for the marketing and manufacturing of FC2 will remain in
As for my own background, I m a board certified urologist that was trained at Johns Hopkins Hospital. I was professor and chairman of urology
at the University of Tennessee, cofounder and CEO of public company GTx from 1997 to 2014. GTx is a speculative biotech company that focused on early research and discovery, and long-term clinical development that by nature is capital intensive.
We produced several new drug candidates out of our discovery efforts. We did market and sell Fareston, the drug to treat women s metastatic breast
cancer from 2005 to 2012. I retired from GTx two years ago, and I have not been a part of nor have I had input in their current strategy and situation.
Following that, I served of president of urology for OPKO Health from 2014 to 2016, a public company founded by Dr. Phillip Frost, who is chairman and
CEO. Dr. Frost is a successful serial entrepreneur who is responsible for building shareholder value in numerous public companies, including Key Pharmaceuticals, Ivax and now OPKO Health. I worked closely with Dr. Frost to successfully
launch and commercialize the 4Kscore test for prostate cancer, a product which in my opinion has a billion dollar potential. OPKO Health is a company that I would characterize as one that focuses on less risky, deep value, opportunistic, late-stage
development and near-term products for large markets.
As the same time, I cofounded Aspen Park Pharmaceuticals along with Dr. Fisch. I am the CEO and
President. Aspen Park Pharmaceuticals also focuses on less risky, deep value, opportunistic late-stage development, near-term products for large markets.
As with The Female Health Company, we all recognize the serious challenge of a single product company, and the advantages of mitigating these risks with a
portfolio of current near- and long-term product opportunities. FC2 is mostly a global product that relies on a few large public sector customers. There s growing international competition and pricing pressures for FC2.
In the United States, there could be an opportunity for growth. FC2 is the only FDA approved female condom and is reimbursable by health insurance.
Furthermore, with the unfortunate appearance of Zika virus, FC2 could be uniquely positioned to prevent the sexual transmission of Zika virus to pregnant woman where the virus has been associated with birth defects like microcephaly. However, this
opportunity alone will not be enough to position The Female Health Company against the threat of increasing competition or potential loss of revenue in a volatile public sector-based market for a single product asset.
The Female Health Company
April 13, 2016 at 11:00 a.m. Eastern
Instead, we need to be positioned in the near- and long-term for growth, and to be able to counteract these
potential threats. Therefore, the proposed merger with Aspen Park Pharmaceuticals is not only timely, but it s also necessary.
Pharmaceuticals will continue to focus on the development and commercialization of pharmaceutical and consumer health products for men s and women s healthcare. For men, product and product candidates are in the areas of benign prostatic
hyperplasia, male infertility, amelioration of side effects of hormonal prostate cancer therapies, gout, sexual dysfunction and prostate cancer. For women, product candidates are for sexual health, advanced breast and ovarian cancers.
The new combined company is not a biotech company, but rather a men s and women s healthcare company, which will consist of mostly near-term, low
risk pharmaceuticals, and consumer health products, which diversify and complement The Female Health Company s single asset, FC2.
will explain these products in great detail. So, I will not go through each product. But instead, I would like to make some general comments.
drugs: Although we have many pharmaceutical assets backed by a solid patent portfolio, we do not plan to develop them all at once. There has been some confusion that we will require $110 million to develop the entire portfolio of products over the
next five years, and most of this spend would be in year four and five. This is true if all programs were developed at once, which is not the plan.
Instead, we plan to prioritize, stagger, and maintain flexibility to start, delay or stop activities. Initially, we will focus on three low cost, near-term and
high reward programs that would qualify for an abbreviated 505(b)(2) NDA. The pathway was created by the Hatch-Waxman Amendment of 1984 with 505(b)(2) referring to the section of the Federal Food, Drug and Cosmetic Act. The provisions of 505(b)(2)
were created in part to help avoid the unnecessary duplication of studies already performed on previously approved reference or listed drugs.
gives the FDA express permission to rely on data not developed by the NDA applicant. A 505(b)(2) NDA contains full safety and effectiveness reports, but allows at least some of the information required for NDA approval, such as safety and efficacy
information on the active ingredient, to come from studies not conducted by or for the applicant. This can result in a much less expensive and much faster route to approval compared with a traditional regulatory development path while creating new
differentiated product with potentially tremendous commercial value.
The most near-term 505(b)(2) program that we have is for Tamsulosin DRS, which is a
new formulation for the most popular medicine for enlargement of the prostate, also known as BPH, currently marked under the name Flomax . Aspen Park Pharmaceuticals new formation is a
powder form of the drug that will target nursing home elderly men and elderly men in the community that have difficulty swallowing tablets and capsules. Flomax capsules should not be chewed
or opened as is stated in the FDA package insert because when crushed, chewed or opened, it cannot be absorbed into the bloodstream from the stomach.