Covidien agreed to support the launch of Pennsaid in the U.S. by committing to a predetermined level of
sales representation during the first three years of launch and to specified levels of promotional spending
both prior to and subsequent to product launch.
As at September 30, 2010, there were 38,740,901 options outstanding of which 33,137,301 were vested
and 1,312,600 PSUs issued and outstanding of which none were earned or vested.
Pennsaid is approved for sale and has been marketed under license and distribution agreements for many years in Canada and several European countries. In Greece, Pennsaid receives government reimbursement; however, during the first half of 2010 the National Organization for Medicines in Greece (NOMG) published a proposed list of drugs for which it will no longer provide reimbursement and Pennsaid was included on this list. It is not yet known when this list will become effective. The Company’s distributor has filed an appeal with the NOMG contesting the removal of Pennsaid from the reimbursement list.
Pipeline Expansion and Early Stage Drug Development
Nuvo is actively seeking to expand its pipeline by acquiring or in-licensing clinical stage pain assets to
provide a more balanced portfolio of products under development, and a new series of inflection points for
prospective and current investors.
In addition to this activity, the Company conducts its own research aimed at developing topical medications
for a variety of pain conditions including acute and chronic pain of inflammatory, nociceptive and
neuropathic origin. All of these pain medications will be designed to treat pain locally while limiting
systemic exposure to the active drug thereby, reducing the potential for negative side effects, adverse
events and potential drug-drug interactions. The drug product candidates under development are at
various stages of formulation and preclinical development. The Company expects these candidates to
move to the next phase of development in 2011 and to file an Investigational New Drug application (IND)
with the FDA for its lead preclinical candidate in 2011.
Key Developments
During the third quarter and prior to the release of the third quarter results:
?? The Company completed enrolment of its Phase 2 allergic rhinitis clinical trial evaluating the
safety and efficacy of WF10 as a treatment for severe allergic rhinitis;
?? The Company received its first royalty payment in the amount of $1.2 million from Covidien
relating to the U.S. sales of Pennsaid; and,
?? The Company’s U.S. Licensee Covidien began recruiting participants for its Phase 2 clinical
study of Pennsaid Gel, a follow-on product to Pennsaid with two times per day dosing and
anticipated patent protection.
In addition, during the first half of the year, the Company:
?? Announced that Pennsaid launched in the U.S. market in late April 2010; and,
?? Eliminated the last significant debt obligation from the Company’s balance sheet, the $3.5
million convertible debentures that were due in November 2010, by inducing conversion
through an early redemption call.
