Zogenix, Inc. (ZGNX)

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ZGNXhttp://www.nasdaq.com/symbol/zgnxHealth Care2010Major Pharmaceuticals

Latest Zogenix, Inc. (ZGNX) company news

Are Options Traders Betting on a Big Move in Zogenix (ZGNX) Stock?

McCormick (MKC) is likely to gain from the Reckitt Benckiser buyout, CCI program, strong flavor market and product innovation, although headwind from higher raw material cost persists.

Investors in Zogenix, Inc. ZGNX need to pay close attention to the stock based on moves in the options market lately. That is because the Jul 20, 2018 $49.00 Call had some of the highest implied volatility of all equity options today.

What is Implied Volatility?

Implied volatility shows how much movement the market is expecting in the future. Options with high levels of implied volatility suggest that investors in the underlying stocks are expecting a big move in one direction or the other. It could also mean there is an event coming up soon that may cause a big rally or a huge sell-off. However, implied volatility is only one piece of the puzzle when putting together an options trading strategy.

What do the Analysts Think?

Clearly, options traders are pricing in a big move for Zogenix shares, but what is the fundamental picture for the company? Currently, Zogenix is a Zacks Rank #3 (Hold) in the Medical – Drugs industry that ranks in the Top 40% of our Zacks Industry Rank. Over the last 60 days, no analysts have increased their earnings estimates for the current quarter, while three analysts have revised the estimate downward. The net effect has taken our Zacks Consensus Estimate for the current quarter from a loss of 76 cents per share to a loss of 90 cents in that period.

Given the way analysts feel about Zogenix right now, this huge implied volatility could mean there’s a trade developing. Oftentimes, options traders look for options with high levels of implied volatility to sell premium. This is a strategy many seasoned traders use because it captures decay. At expiration, the hope for these traders is that the underlying stock does not move as much as originally expected.

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Free Daily Technical Summary Reports on Endo International and Three Other Healthcare Stocks

Stock Research Monitor: ZGNX, DEPO, and DRRX

LONDON, UK / ACCESSWIRE / June 7, 2018 / If you want a free Stock Review on ENDP sign up now at www.wallstequities.com/registration. Ahead of today's trading session, WallStEquities.com monitors Zogenix Inc. (NASDAQ: ZGNX), Depomed Inc. (NASDAQ: DEPO), DURECT Corp. (NASDAQ: DRRX), and Endo International PLC (NASDAQ: ENDP). These stocks are part of the Healthcare sector, which is the range of companies and non-profit organizations that provide medical services, manufacture medical equipment, and develop pharmaceuticals. All you have to do is sign up today for this free limited time offer by clicking the link below.

www.wallstequities.com/registration

Zogenix

On Wednesday, shares in Emeryville, California headquartered Zogenix Inc. recorded a trading volume of 1.05 million shares, which was above their three months average volume of 489,030 shares. The stock ended at $42.75, rising slightly by 0.47% from the last trading session. The Company's shares have gained 11.33% in the last month and 193.81% over the past year. The stock is trading above its 50-day and 200-day moving averages by 7.18% and 20.38%, respectively. Furthermore, shares of Zogenix, which develops and commercializes therapies for the treatment of central nervous system disorders in the US, have a Relative Strength Index (RSI) of 67.80.

On June 01st, 2018, Zogenix has issued inducement awards to four new, non-executive employees. The inducement awards consist of options to purchase an aggregate of 28,200 shares of the Company's common stock. The options have a ten-year term and an exercise price equal to $42.50, the fair market value of the common stock on the date of grant. Get the full research report on ZGNX for free by clicking below at:

www.wallstequities.com/registration/?symbol=ZGNX

Depomed

Newark, California headquartered Depomed Inc.'s stock finished yesterday's session 1.10% higher at $6.42 with a total trading volume of 458,288 shares. The Company's shares have gained 4.73% in the last month. The stock is trading below its 50-day moving average by 3.85%. Furthermore, shares of Depomed, which engages in the development, sale, and licensing of products for pain and other central nervous system conditions in the US, have an RSI of 45.79.

On June 05th, 2018, Depomed announced that it has appointed Phillip B. Donenberg as CFO and Senior Vice President, effective July 16th, 2018. Mr. Donenberg will succeed August J. Moretti, who has served as CFO since January 2012. Mr. Moretti will remain CFO through the transition until July 16th, 2018, at which time he intends to seek another position in the San Francisco, California area. The free technical report on DEPO can be accessed at:

www.wallstequities.com/registration/?symbol=DEPO

DURECT

At the close of trading on Wednesday, shares in Cupertino, California headquartered DURECT Corp. saw a slight decline of 0.48%, ending the day at $2.06. The stock recorded a trading volume of 665,435 shares. The Company's shares have advanced 15.08% in the last month, 18.39% in the previous three months, and 70.25% over the past year. The stock is trading 35.10% above its 200-day moving average. Moreover, shares of DURECT, which researches and develops medicines based on its epigenetic regulator and drug delivery programs, have an RSI of 53.58.

On May 09th, 2018, DURECT (DRRX) announced that it has entered into an amendment to the development and commercialization agreement with Sandoz AG, a division of Novartis, regarding POSIMIR® (SABER®-bupivacaine) in the US. Pursuant to the amended agreement, DRRX is now eligible for up to $30 million n milestone payments based on NDA approval, and remains eligible for up to an additional $230 million in sales-based milestones. Sign up for free on Wall St. Equities and claim the latest report on DRRX at:

www.wallstequities.com/registration/?symbol=DRRX

Endo International

Dublin, Ireland headquartered Endo International PLC's shares ended the day 19.05% higher at $7.75. A total volume of 17.71 million shares was traded, which was above their three months average volume of 4.75 million shares. The stock has gained 37.90% in the last month and 7.19% over the previous three months. The Company's shares are trading 32.03% above their 50-day moving average and 8.52% above their 200-day moving average. Additionally, shares of Endo International, which manufactures and sells generic and branded pharmaceuticals in the US, Canada, and internationally, have an RSI of 81.27. See the free research coverage on ENDP at:

www.wallstequities.com/registration/?symbol=ENDP

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Zogenix Reports Granting of Inducement Awards Under Nasdaq Listing Rule 5635(c)(4)

EMERYVILLE, Calif., June 01, 2018 (GLOBE NEWSWIRE) -- Zogenix, Inc. (ZGNX), a pharmaceutical company developing therapies for the treatment of rare central nervous system (CNS) disorders, today announced that it has issued inducement awards to four new non-executive employees. 

The awards were made on June 1, 2018 under Zogenix’s Employment Inducement Equity Incentive Award Plan, which provides for the granting of equity awards to new employees of Zogenix as an inducement to join the company.  The inducement awards consist of options to purchase an aggregate of 28,200 shares of Zogenix common stock.  The options have a ten-year term and an exercise price equal to $42.50, the fair market value of Zogenix common stock on the date of grant.  The options vest over a four-year period, with 25% of the options vesting on the first anniversary of each employee’s respective start date and the remainder vesting in equal monthly installments over the three years thereafter. The awards were approved by the independent compensation committee of Zogenix’s board of directors and were granted as an inducement material to the new employees entering into employment with Zogenix in accordance with Nasdaq Marketplace Rule 5635(c)(4).

About Zogenix
Zogenix (ZGNX) is focused on developing therapies for patients with rare central nervous system (CNS) conditions that have limited or no treatment options but face a critical need. For more information, visit www.zogenix.com.

CONTACT:
Investors: Andrew McDonald
Founding Partner, LifeSci Advisors LLC
646-597-6987 | [email protected]

Media: Rachel Lipsitz
Public Relations, INC Research/inVentivHealth
858-449-9575 | [email protected]

This Cannabis-Based Drug Is On the Verge of Making History

Every time we turn around, the marijuana industry seems to be making history. Earlier this year, Cronos Group became the very first over-the-counter-listed pot stock to uplist to a more reputable exchange -- the Nasdaq. In January, Vermont became the ninth state to OK the use of recreational marijuana, but it did so entirely through the legislative process, becoming the very first state to do so.

Next month, Canada could become the first developed country in the world to legalize adult-use cannabis. This latter expectation seems to be all but certain, with legal sales expected to commence in August or September.

But it's not just the traditional recreational weed industry that's making history in 2018. One cannabinoid-derived drug, to borrow and modify a phrase from Star Trek, appears set to boldly go where no cannabinoid-based drug has gone before: the pharmacy shelf.

View photos
Cannabis leaves next to vials and other biotech equipment.

Image source: GW Pharmaceuticals.

A cannabis-derived drug is very close to making history

GW Pharmaceuticals' (NASDAQ: GWPH) lead drug Epidiolex is currently under review by the U.S. Food and Drug Administration (FDA) as a treatment for two rare types of childhood-onset epilepsy -- Dravet syndrome and Lennox-Gastaut syndrome. Epidiolex utilizes the popular cannabinoid known as cannabidiol (CBD), which is often revered for its medical benefits. Unlike tetrahydrocannabinol (THC), which is the component of the cannabis plant that gets you "high," CBD does no such thing, making it a potentially attractive option for drug developers and regulators to consider.

To date, the FDA never has approved a cannabinoid-based drug. Though the drug regulatory agency has given the green light to synthetic forms of THC, no cannabinoid-based medications have ever been granted access to pharmacy shelves with the approval of the FDA.

In one pivotal-stage study for Dravet syndrome patients, GW Pharmaceuticals' lead drug demonstrated a 39% reduction in seizure frequency relative to baseline, which was three times better than the 13% reduction achieved from the placebo. There are no FDA-approved treatments for Dravet syndrome, which could allow Epidiolex to become something really special for the 1 person in every 40,000 people who suffer from it in the United States.

View photos
A female doctor high-fiving a child sitting on her mother's lap.

Image source: Getty Images.

Epidiolex continues to build its resume

This past week, GW Pharmaceuticals' Epidiolex continued to add to its impressive resume after data was published in the prestigious New England Journal of Medicine that highlighted the results from one of its phase 3 trials involving Lennox-Gastaut syndrome (LGS) patients. An estimated 14,000 to 18,500 patients suffer from LGS in the U.S. 

The study involved 225 LGS patients, of which 76 were assigned to the higher-dose Epidiolex arm, 73 were assigned to the lower-dose Epidiolex arm, and 76 to the placebo group. During a four-week baseline period, 85 drop seizures -- a type of seizure LGS patients experience that results in the sudden loss of muscle strength -- were recorded. However, following a 14-week treatment period, drop-seizure frequency declined by 17.2% in the placebo group, 37.2% in the low-dose Epidiolex arm, and an impressive 41.9% in the high-dose Epidiolex arm. It's another clear feather in the cap for Epidiolex. 

Speaking of feathers in its cap, GW Pharmaceuticals also recently announced late last month that the FDA's advisory panel had recommended Epidiolex for approval by a unanimous vote. While the FDA isn't obligated to follow the advice of its advisory panel, it does more often than not. Should Epidiolex get the green light from the FDA on or before its June 27, 2018 PDUFA decision date, it will make history.

View photos
A businessman holding a card that reads, FDA Approved.

Image source: Getty Images.

Ironically, shareholders may not benefit... but the medical industry might

Should Epidiolex be approved, sales of the drug, according to Cowen Group, could reach as high as $1.3 billion annually. This assumes organic growth within Dravet syndrome and LGS, as well as the potential for label expansion into infantile spasms and tuberous sclerosis. 

But what's interesting about Epidiolex is that its first-to-market advantage may not hold up for too long. You see, Zogenix (NASDAQ: ZGNX) also is developing a treatment for Dravet syndrome, known as ZX008, that it plans to test on LGS patients soon. In phase 3 Dravet syndrome trials, Zogenix's lead drug wound up demonstrating a 72.4% reduction in convulsive seizure frequency over the 14-week treatment period relative to baseline. This more than quadrupled the 17.4% reduction in convulsive seizure frequency seen in placebo patients.

Though Zogenix's and GW Pharmaceuticals' therapies haven't gone head-to-head in clinical trials, making their results not comparable on an apples-to-apples basis, it nonetheless could be difficult for physicians to overlook a convulsive seizure frequency reduction rate in excess of 70% in Dravet syndrome for ZX008. In short, this may not be as big a win for GW Pharmaceuticals' investors as you might think.

The legacy of Epidiolex might best be told in what it could do for CBD's scheduling at the federal level. If the FDA greenlights Epidiolex and effectively stands behind the idea that it provides medical benefits, GW Pharmaceuticals' lead drug could be responsible for reforming and rescheduling/descheduling cannabidiol at the federal level. Such a move would open access of this cannabinoid to medical patients in all 50 states.

Needless to say, 2018 is set to be a year of big changes for the marijuana industry.

More From The Motley Fool

Sean Williams has no position in any of the stocks mentioned. The Motley Fool recommends Nasdaq. The Motley Fool has a disclosure policy.

Edited Transcript of ZGNX earnings conference call or presentation 9-May-18 8:30pm GMT

Q1 2018 Zogenix Inc Earnings Call

SAN DIEGO May 15, 2018 (Thomson StreetEvents) -- Edited Transcript of Zogenix Inc earnings conference call or presentation Wednesday, May 9, 2018 at 8:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Brian Ritchie

LifeSci Advisors, LLC - MD

* Gail M. Farfel

Zogenix, Inc. - Executive VP & Chief Development Officer

* Michael P. Smith

Zogenix, Inc. - Executive VP, CFO, Treasurer & Secretary

* Stephen J. Farr

Zogenix, Inc. - Co-Founder, CEO, President & Director

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Conference Call Participants

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* Annabel Eva Samimy

Stifel, Nicolaus & Company, Incorporated, Research Division - MD

* David A. Sherman

LifeSci Advisors, LLC - Analyst

* Gerard R. Smith

Leerink Partners LLC, Research Division - Associate

* Jason Nicholas Butler

JMP Securities LLC, Research Division - MD and Senior Research Analyst

* Myles Minter

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Presentation

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Operator [1]

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Good day, and welcome to the Zogenix First Quarter 2018 Financial Results Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Brian Ritchie of LifeSci Advisors. Please go ahead.

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Brian Ritchie, LifeSci Advisors, LLC - MD [2]

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Thank you, operator, and thank you all for joining us this afternoon. With me on today's call are Chief Executive Officer Dr. Stephen Farr and Chief Financial Officer Mike Smith. In addition, Dr. Gail Farfel, Zogenix's Chief Development Officer, will also be available during the Q&A session.

This afternoon, Zogenix issued a news release announcing financial results and providing a business update for the first quarter ended March 31, 2018. Please note that certain information discussed on the call today is covered under the safe harbor provision of the Private Securities Litigation Reform Act. We caution listeners that during this call Zogenix management will be making forward-looking statements. Actual results could differ materially from those stated or implied by these forward-looking statements due to risks and uncertainties associated with the company's business. These forward-looking statements are qualified by the cautionary statements contained in Zogenix's news releases and SEC filings, including in the annual report on Form 10-K and subsequent filings. This conference call also contains time-sensitive information that is accurate only as of the date of this live broadcast, May 9, 2018. Zogenix undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call. Now I'd like to turn the call over to Steve.

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Stephen J. Farr, Zogenix, Inc. - Co-Founder, CEO, President & Director [3]

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Thank you, Brian, and good afternoon to everyone who's joining us on today's call. I'm pleased to be speaking to you today as we advance towards multiple key catalysts for our late-stage lead program ZX008 for the treatment of uncontrolled seizures in Dravet syndrome, including results from our second Phase III trial and planned regulatory submissions seeking approvals in the United States and in Europe.

As we previously noted, early in the first quarter we enrolled and randomized the final patient in Study 1504, our second planned Phase III pivotal trial. This is a double-blind, randomized, 2-arm trial designed to enroll approximately 40 patients per treatment group being conducted in the United States, Europe and Canada in Dravet patients who are on a stiripentol-based background treatment regimen of antiepileptic drugs. We are pleased to note that Study 1504 includes a total of 87 randomized patients in the efficacy cohort, and the last patient is scheduled to complete the study at the end of May. Accordingly, we anticipate announcing top line results from the second Phase III study in Dravet syndrome at the end of June or in early July. As you may recall, based on the positive results obtained in our first Phase III trial, Study 1, the FDA granted breakthrough therapy designation for ZX008 in Dravet syndrome in the first quarter. We recently conducted a type B meeting with the FDA to discuss the clinical development program and planned NDA content for ZX008 in Dravet syndrome. The key outcomes from this face-to-face meeting were reaffirmation of Study 1 and Study 1504 as the clinical basis for the NDA submission and concurrence with the FDA that the anticipated 6-month and 12-month exposures to ZX008 in the Dravet program at the time of NDA submission are likely to be sufficient to support the filing. The time line for a rolling NDA submission was also agreed upon. With this latest feedback from FDA and assuming a positive result in the 1504 trial, we are very excited to be on a clear path to completing the full NDA submission in the fourth quarter of this year.

In addition, we are on track to submit an MAA in Europe by year-end and have initiated the process of presubmission meetings with several national authorities and the EMA.

Now let me turn to some additional updates regarding ZX008 in Dravet syndrome. At the recent American Academy of Neurology, or AAN, Annual Meeting held in Los Angeles, we were pleased to present additional data from Study 1, highlighted in 2 poster presentations. The first presentation demonstrated that ZX008 was highly effective in controlling convulsive seizures in patients who had previously failed stiripentol therapy. We were interested in understanding whether a history of prior treatment failure with stiripentol predicts treatment resistance to ZX008, given that Study 1504 specifically enrolls patients whose seizures are uncontrolled on the stiripentol regimen. A total of 58 patients in Study 1, that's around 50% of the total cohort, were defined as having previously failed stiripentol therapy prior to study entry for reasons primarily due to efficacy and/or tolerability. In this post hoc analysis, patients taking ZX008 at 0.8 milligrams per kilogram per day achieved a 60.8% greater reduction in mean monthly convulsive seizures compared to placebo at a p-value of 0.002.

Additionally, in the 0.8 group, 72.7% of patients achieved a 50% or greater reduction in mean monthly convulsive seizures from baseline, and 50% of patients achieved an equal or greater than 75% reduction compared with 12.6% and 6.3%, respectively, in the placebo group. The differences between active and placebo groups were statistically significant. Across these and other efficacy measures, the results from the subset analysis of patients who had previously failed stiripentol were comparable to the full Study 1 population.

Our second AAN poster presentation focused on the potential for ZX008 to help control or reduce all seizure types prevalent in Dravet syndrome, not just major convulsive seizures. In the full Study 1 population, the median percent reduction in total seizure frequency were 13.1% in the placebo group, 70.1% in the 0.8 group and 34.3% in the 0.2 group. Both active doses were significantly separated from placebo. In addition to the 2 poster presentations, Dr. Kelly Knupp of the Children's Hospital of Colorado presented new encouraging preliminary quality-of-life and cognitive function data from Study 1. The data were presented at the meeting as part of a broader session entitled Neurology Year in Review: Emerging Therapies Plenary Session. As noted in Dr. Knupp's podium presentation, patients treated with ZX008 experienced significant improvement on select measures of quality of life and executive function compared to those on placebo. We are encouraged to see initial significant positive signals on some of the measures of physicality, cognition and quality of life in a short-term 14-week treatment study, reflecting real gains by these children with Dravet syndrome. Typically, improvements such as these would not be expected to reach significance until after a longer period of time. Please note, these data are now included within our current corporate presentation, which is posted on our website.

As a reminder, patients enrolled in our core Dravet syndrome clinical studies who are eligible to continue treatment with ZX008 may roll over into our open-label extension trial, Study 1503. We continue to see very robust participation in the open-label extension trial. As of the end of April, over 270 patients have entered the open-label extension trial, with approximately 90% of these patients remaining in the study today. Of note, more than 60% of these patients have now been in open-label treatment for at least 6 months, and over 50 patients have exceeded 1 year. While cardiac safety monitoring continues for all patients in the open-label extension study via periodic echocardiography and formal review by a data safety monitoring committee, no cardiac safety concerns have arisen to date in the clinical study program, and there have been no cases of valvulopathy or pulmonary hypertension in any patient.

I'd now like to provide you an update on our second target indication for ZX008, Lennox-Gastaut Syndrome, or LGS, which has a patient population approximately 3 to 4x larger than the current population of patients with Dravet syndrome. Our ongoing Phase III multicenter global trial, Study 1601, is a double-blind, placebo-controlled, 3-arm study to assess the safety, tolerability and efficacy of ZX008 in pediatric and adult patients up to age 35 with LGS when added to a patient's current antiepileptic therapy. The study is targeting a total of 225 randomized patients. As at the end of April, we had 16 sites in the United States and Canada open to recruit patients into Study 1601. We are continuing to open other sites in North America and to submit ethics committee submissions for approvals in several European countries. We have been pleased with the initial enrollment of patients for this global Phase III study in our second indication.

With that said, to reiterate what I said on our last call, 2018 will be a year of enrollment for Study 1601. As such, we do not anticipate top line data from this study before 2019. In summary, we are very pleased to have carried our strong momentum from 2017 over into the first quarter of this year. The FDA's breakthrough therapy designation granted to ZX008 in Dravet syndrome and our subsequent successful rotary interaction has placed us in a strong position to execute on our key remaining milestones in 2018. We are, first, looking forward to reporting top line data from our second Phase III study, Study 1504, shortly. Pending a successful outcome in Study 1504, we intend to file for regulatory approvals for ZX008 in Dravet syndrome in the U.S. and Europe in the fourth quarter of this year. With that, I will now turn the call over to Mike for his review of the financials. Mike?

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Michael P. Smith, Zogenix, Inc. - Executive VP, CFO, Treasurer & Secretary [4]

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Thank you, Steve. I'll now review our financial results for the 3 months ending March 31, 2018, as compared to the corresponding period in 2017. Start with a reminder: Due to the wind down of Sumavel DosePro manufacturing operations in September of 2017, we currently are not involved in the production or sales of any commercial product at this time. And as such, the company recorded no revenue for the 3 months ending March 31, 2018. This compares with total revenue of $2.7 million in the first quarter ended March 31, 2017. Research and development expenses for the first quarter ended March 31, 2018, totaled $23 million; and that's up from $13.3 million in the first quarter ended March 31 in the prior year, as we continue to enroll patients and expand the scope of our Phase III studies and programs for ZX0008 in both the U.S. and Europe in Dravet syndrome and LGS.

Selling, general and administration expenses for the first quarter ending March 31, 2018, totaled $8.1 million compared with $6.6 million in the first quarter ending March 31, 2017.

In this quarter, we reported a total net loss of the first quarter ending March 31, 2018, of $30.2 million or $0.87 per share compared with a total net loss of $21.3 million or $0.86 per share in the first quarter ended in the prior year. As of March 31, 2018, the company had cash and cash equivalents of $272 million. And this compares to a December 31, 2017, cash balance of $294 million.

As we end the first quarter of this year, we feel very good about -- to be in a strong operating and financial position as we head towards multiple key development and regulatory milestones over the remainder of the year. To date, ZX008 has demonstrated compelling efficacy data in Dravet syndrome, and we are very much looking forward to the availability of further Phase III top line data from Study 1504 very soon. We are also pleased to be seeing a nice pace of early enrollment of patients in our second ZX008 Phase III program in LGS, which is an indication significantly larger than Dravet syndrome. With that, I'll now turn the call over to the operator to begin the Q&A session. Operator, would you please provide the instructions?

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Questions and Answers

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Operator [1]

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(Operator Instructions) First go to Annabel Samimy with Stifel.

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Annabel Eva Samimy, Stifel, Nicolaus & Company, Incorporated, Research Division - MD [2]

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I want to ask you about the Study 1 data that was at AAN, the stiripentol refractory patients. So their variance was comparable -- I mean the variance in terms of the reduction in seizure was comparable to placebo as the overall population, but admittedly it's a little bit higher, maybe not statistically significance, but it is a little bit higher both on the reduction as well as on the response rate. So can you surmise why that might be the case? Were they a little bit more severe or they just more responsive? Can you just -- do you have any kind of theories as to why they might be getting a slightly better response? And -- or is it just random? And then the second question I have is can you just remind us how a patient who might present with trace regurgitation or anything of that nature, how they would be addressed in real-world practice? And is -- are you implementing any kind of protocols in terms of allowing the physicians to modify their treatment in the open-label study as they would maybe in real-world practice? Can you just help us understand that aspect of the study?

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Stephen J. Farr, Zogenix, Inc. - Co-Founder, CEO, President & Director [3]

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Thanks, Annabel. Appreciate your questions. I'll take the first one and ask for Gail to address the question you had a fracture regurg. I think the numbers although they look a little bit higher, I think, in reality because the N is a relatively small, particularly with regard to the subset, we should just regard these results as comparable. I don't think we can say, one, that it's more -- it's better than results in the overall Study 1 population. So I think comparable is the right word to use here. And Gail.

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Annabel Eva Samimy, Stifel, Nicolaus & Company, Incorporated, Research Division - MD [4]

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Okay, so is it fair to say there's absolutely 0 effect on -- that stiripentol has 0 effect on these patients in terms of their response?

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Stephen J. Farr, Zogenix, Inc. - Co-Founder, CEO, President & Director [5]

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I think we would agree with that, yes. In terms of their response. Yes.

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Annabel Eva Samimy, Stifel, Nicolaus & Company, Incorporated, Research Division - MD [6]

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Okay. Great. And then the other question, please?

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Gail M. Farfel, Zogenix, Inc. - Executive VP & Chief Development Officer [7]

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So Annabel, it's Gail. So to address the second part of your question about trace regurgitation. In clinical practice, if a physician or echocardiography were to identify trace regurgitation in a normal screening, no steps would be taken. There would be no medical follow-up. This is consistent with the American Society of Echocardiography guidelines as well as consistent with KLL advice and discussions with other cardiologists, pediatric and adult. In our trial, I remind you that it's a flexible-dose trial, 1503. So within the range of 0.2 mg per kg per day and 0.8 mg per kg per day, physicians are able to titrate to optimal efficacy and safety or safety and tolerability. The maximum is reduced to 0.5 mg per kg per day for patients on stiripentol, as a reminder. With regard to managing patients in the trial who have been identified to have trace regurgitation on the mitral or aortic valve, we do have a tiered system of review. The first review is a private company that monitors essentially all echoes conducted for the study. If there is a finding anything other than absent, that goes to a review for the independent Pediatric Cardiology Advisory Board. And then if severe, it can go on to an adjudication by the independent data and safety monitoring board, which is a risk-benefit analysis. To date, no child in the study who has had a finding of anything other than absent has had the DSMB return a verdict other than continue in the study, no changes. So in other words, within the study as a whole, there has never been a cardiac result that has resulted in the data and safety monitoring board instructing that anyone change a dose or discontinue or take any action.

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Operator [8]

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Next question comes from Gerard Smith with Leerink.

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Gerard R. Smith, Leerink Partners LLC, Research Division - Associate [9]

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So my first question is are there any specific requirements regarding the patient exposure in the open-label extension or the NDA filing by the end of the year? And if so, when would the necessary patient exposure or data accrue from this to be sufficient for the filing? And then the second is about commercialization outside of the U.S. Could you just talk a little bit about what sort of resources or investment you guys think is needed to target the number of pediatric neurology centers there? And what your strategy is?

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Stephen J. Farr, Zogenix, Inc. - Co-Founder, CEO, President & Director [10]

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Thanks for your questions. I'll ask Gail to address your first question, and I'll take the second one.

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Gail M. Farfel, Zogenix, Inc. - Executive VP & Chief Development Officer [11]

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I'm sorry. I was listening to the second one. Can you repeat the first question?

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Gerard R. Smith, Leerink Partners LLC, Research Division - Associate [12]

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The first question was about...

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Gail M. Farfel, Zogenix, Inc. - Executive VP & Chief Development Officer [13]

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(inaudible) the safety database. Yes.

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Gerard R. Smith, Leerink Partners LLC, Research Division - Associate [14]

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If there is any specific requirement from the FDA for the patient exposure in the open label?

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Gail M. Farfel, Zogenix, Inc. - Executive VP & Chief Development Officer [15]

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Correct. In our discussions with FDA, they were very comfortable with the size of the safety database that we will have, so patients going through 1503, by the time of our planned submission in fourth quarter of the year. So no additional requirements or changes besides conducting the program as it is ongoing were requested.

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Stephen J. Farr, Zogenix, Inc. - Co-Founder, CEO, President & Director [16]

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This is Steve, I just jumped back in to address your second question about ex-U. S. commercialization. Want to make the point that we do know there is an unmet need for this type of drug in Dravet syndrome in both Europe and other parts of the world. We do -- we are interested in exploring the opportunity to self-commercialize in Europe. We have a small team there. We are looking at the strategy with respect to Europe right now. And in addition, we are interested in looking for partnerships outside of Europe, in particular, at Asia Pacific. We are currently embarked upon a process to identify a partner for that particular region.

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Operator [17]

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Next question comes from Jason Butler with JMP Securities.

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Jason Nicholas Butler, JMP Securities LLC, Research Division - MD and Senior Research Analyst [18]

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Just 1 follow-up on the AAN presentation. Can you just clarify how you view this subpopulation of stiripentol failures relative to the population you're enrolling in 1504? And I guess what I'm trying to get at is are there any -- obviously, they are inadequately controlled in 1504 on stiripentol, but are there any partial responders or -- again, just how do the 2 populations compare and contrast?

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Stephen J. Farr, Zogenix, Inc. - Co-Founder, CEO, President & Director [19]

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Jason, really the only difference that we see is in patients in Study 1 who were part of the subset analysis had already been identified as stiripentol nonresponders or failures that actually were drawn from that drug either prior to our study or actually before our study in order to get into the trial, whereas the patients in Study 1504 are still uncontrolled, but they're currently taking the stiripentol regimen. So they haven't withdrawn from stiripentol therapy. But they're still uncontrolled, and they meet all the inclusion criteria that we've put in place, which are really the same for both trials. So we don't think there's any a priori reason to suggest that the patient population in terms of seizure frequency, types of seizures will be any different in Study 1504 compared to what they were in Study 1. I'm not sure, Gail, if there's anything you'd like to add to that? Or does that address the question for you?

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Gail M. Farfel, Zogenix, Inc. - Executive VP & Chief Development Officer [20]

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No. I think that's appropriate. The mechanism of action of stiripentol is primarily GABAergic, and that is a mechanism shared with other drugs. So this is further evidence for us support that having stiripentol onboard in 1504 shouldn't be a factor in how patients who have ZX008 added are responding to our drug.

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Jason Nicholas Butler, JMP Securities LLC, Research Division - MD and Senior Research Analyst [21]

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Great. And then in terms of the rolling NDA, can you maybe give some color about how quickly you can initiate the rolling NDA process after you get the results from 1504? And specifically, are there any gating items remaining in the CMC or the preclinical sections for the NDA?

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Stephen J. Farr, Zogenix, Inc. - Co-Founder, CEO, President & Director [22]

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No, we're in very good shape with respect to both the CMC sections and the nonclinical sections on modules of the NDA. So they're certainly not on the critical path or any items on the critical path. Our NDA is gated by the availability of the clinical study report from 1504 as well as our efforts to integrate all the data into an appropriate form in the NDA. So really, clinical is on the critical path for the NDA submission. Everything else should be ready before that time. In fact, it's our intent to submit the nonclinical section fairly shortly and then to follow that up at some point during the summer -- late summer with CMC.

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Jason Nicholas Butler, JMP Securities LLC, Research Division - MD and Senior Research Analyst [23]

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And sorry, if I could just squeeze in 1 more. Do you plan on requesting a clinical pre-NDA meeting with FDA as well as the meeting you've already had?

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Stephen J. Farr, Zogenix, Inc. - Co-Founder, CEO, President & Director [24]

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Yes. We got great feedback from FDA around the NDA content and also the clinical trials we're currently conducting. But it would be very sensible for us to have that pre-NDA meeting as we prepare for the final NDA submission, yes.

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Operator [25]

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Next question comes from Difei Yang with Mizuho Securities.

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Unidentified Analyst, [26]

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This is [Alex] on for Difei. Just on a quick clarification question on the type B meeting with the FDA. When you talk about the ZX008 exposures, are we talking about number of treated patients there? Or is there an element of safety, efficacy? Just if you could clarify that word for me.

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Gail M. Farfel, Zogenix, Inc. - Executive VP & Chief Development Officer [27]

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So we are talking about the number of patients on ZX008 and the total time that they have been taking ZX008 during the program.

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Unidentified Analyst, [28]

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Okay. Great. And then just a quick follow-up. I wanted to just ask about some of the super responders in DS, those patients with 90%, 95% in seizure reductions. Can you share any insights at that point on maybe what differentiates these patients from some that have less -- lower response rates?

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Gail M. Farfel, Zogenix, Inc. - Executive VP & Chief Development Officer [29]

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That's a very good question. We haven't yet discussed any factors that are driving response. We anticipate that we will be discussing those aspects of the treatment successes at a future medical meeting.

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Operator [30]

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(Operator Instructions) We next move to Tim Lugo with William Blair.

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Myles Minter, [31]

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Myles Minter on for Tim. My first one revolves around the 10% dropout rate in your long-term safety study. Can you provide more color as to the reasons for that? Was that just a loss to follow-up? Or was it something a little bit more serious? And did you discuss that at your FDA breakthrough meeting? And the -- is the FDA happy with the frequency at which you're doing ECGs and getting the DSMB reviews? And I've got a follow-up after that.

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Stephen J. Farr, Zogenix, Inc. - Co-Founder, CEO, President & Director [32]

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Myles, this is Steve. I want to make a point that approximate 10% discontinuation rate is remarkably low in these open-label studies. So it's really of no concern there whatsoever. In fact, we are absolutely delighted with the fact that people are remaining on therapy, and we're building up a very strong safety database as a consequence of that. So really no issues there for us. Just to remind you, we have over 50 patients now who are -- have been on therapy for at least a year. In fact, some of the early entrants in our trial are almost closing in on their full second year in open-label extension. So really no concerns from our perspective with respect to discontinuations in open label.

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Myles Minter, [33]

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(inaudible).

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Stephen J. Farr, Zogenix, Inc. - Co-Founder, CEO, President & Director [34]

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And your second question. Could you just remind me again of your second question?

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Myles Minter, [35]

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Yes. Just the frequency at which you're doing the ECGs and the data safety monitoring review boards, how many data points are we going to get out of that safety data?

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Stephen J. Farr, Zogenix, Inc. - Co-Founder, CEO, President & Director [36]

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Well, I can start. We are obviously doing fairly frequent echoes, both in the core trials and randomized controlled trials and then in open label. Specifically, in open label, we are monitoring echoes every 3 months. So if you look at our entire program now, we've conducted over 1,700 echoes in just under -- well, approximately 300 patients. So we're building up a very robust data set, and we'll continue to do that as we progress towards the NDA submission.

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Myles Minter, [37]

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Beautiful. That sounds great. And if I can sneak in a last one. Just in your 1504 study, I understand patients are taking concurrent stiripentol even though they're not well controlled on it. How many patients you enrolled actually withdrawed from stiripentol altogether during the trial? Did you exclude them from the efficacy cohort? And is that why we see 87 patients instead of 130? Can you provide color on that?

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Stephen J. Farr, Zogenix, Inc. - Co-Founder, CEO, President & Director [38]

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I'll ask Gail to provide that color for you.

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Gail M. Farfel, Zogenix, Inc. - Executive VP & Chief Development Officer [39]

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So as a reminder, 1504 has 2 treatment arms, placebo and active ZX008, with 40 patients planned per arm. So the total plan for that study was 80. And with a bit of a rush towards the end, we randomized 87. So we're not short of 120, we actually have exceeded our goal of 80 patients that were to be randomized by randomizing 87. Patients in the study were not permitted to discontinue stiripentol. That was part of the required background medication.

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Operator [40]

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Next question comes from David Sherman with LifeSci Capital (sic) [Advisors].

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David A. Sherman, LifeSci Advisors, LLC - Analyst [41]

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Just 1 question from me. I was just wondering if there was any more color or detail on the planned drug interaction study with CBD, either in terms of design or timing. And then is the expectation that when that's ultimately done that, that would make it into the label?

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Stephen J. Farr, Zogenix, Inc. - Co-Founder, CEO, President & Director [42]

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Yes. We -- yes, we are in the midst of conducting a drug/drug interaction trial between CBD and ZX008. It's a very classical DDI trial design. So that will be ongoing. And as we look at it today, we expect that trial to be completed in readiness for the NDA submission. So it would be good to have the data there in our label. It's not essential, but it would be nice to have it in our original NDA.

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Operator [43]

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And ladies and gentlemen, that does conclude our question-and-answer session. I'd like to turn the conference back over to Dr. Stephen Farr, President and CEO. Please go ahead, sir.

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Stephen J. Farr, Zogenix, Inc. - Co-Founder, CEO, President & Director [44]

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Well, thank you. Obviously, our late-stage program continues to advance as planned and now in 2 indications, Dravet as well as LGS, and we still remain very excited about its potential. Pleased about the outcomes from our recent meeting with the FDA and now look forward to the availability of top line data from Study 1504 coming up shortly. And as we said on the call, following this we intend to submit applications for approvals in the United States and Europe in the fourth quarter. We look forward to keeping everyone updated on our progress throughout 2018. And thanks, again, for joining us today. Enjoy the rest of your day.

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Operator [45]

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Thank you, ladies and gentlemen. That does conclude today's conference. We thank you for your participation. You may now disconnect.

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