Exhibit 99.1
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GIVEN IMAGING
Moderator: Mark Gilreath
05-18-05/12:30 p.m. CT
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GIVEN IMAGING
Capsule Endoscopy Highlights at Digestive Disease Week 2005
Operator: Good day and welcome, ladies and gentlemen, to this Given Imaging
conference call. At this time, I'd like to inform you that today's call is
being recorded, and that all participants are in a listen-only mode.
Before we begin, I'd like to read the following, regarding forward-looking
statements.
During the course of this conference call, participants may make
projections or other forward-looking statements, including the results of
clinical trials and future uses of the PillCam Endoscope. We wish to
caution you that such statements reflect expectations, and that actual
events or outcomes may differ materially.
You are kindly referred to the risk factors and cautionary language
contained in the documents that the company files with the Securities and
Exchange Commission, including the company's annual report on form 20-F,
filed March 25, 2005.
The company undertakes no obligations to update any projections or
forward-looking statements in the future. At the request of the company, we
will open the conference for questions and answers after the presentation.
I'll now turn the conference over to Mark Gilreath, Corporate Vice
President of Marketing Strategies.
Mark Gilreath: Thanks, Lori. Good afternoon. We're excited to be here today at
the Digestive Disease Week meeting in Chicago. As you know, this is the
largest GI meeting each year, with approximately 16,000 attendees.
GIVEN IMAGING
Moderator: Mark Gilreath
05-18-05/12:30 p.m. CT
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For the next hour, we will review the highlights of the meeting related to
capsule endoscopy with our special guests, Dr. Blair Lewis, Professor of
Medicine at the Mt. Sinai School of Medicine in New York; and Dr. Ian
Gralnek, Associate Professor of Medicine and Director of the UCLA Center
for the Study of Digestive Healthcare Quality and Outcomes, and Chair of
the ASGE research committee. Following the call, our physician guests will
be pleased to take your questions.
So let's jump into it. Dr. Lewis, why don't you get us started reviewing
the highlights?
Blair Lewis: Well, the areas that really intrigued me were really in the fields
of GI bleeding, and then the use of capsule for the diagnosis of
small-bowel tumors. You know, I think that everybody really realizes now
that capsule endoscopy is the method to diagnose obscure gastrointestinal
bleeding.
It is the state-of-the-art method to look at the small intestine for
bleeding sites, vascular lesions, as well as ulcerations in the small
intestine. And actually, most of the abstracts didn't detail the yield of
capsule endoscopy in obscure bleeding, but rather started to look at
cost-effectiveness numbers in that regard.
And the papers - there were several papers that actually looked at doing
decision tree analysis on the published data. And then now there are over
250 published articles on capsule endoscopy. And so those are the point of
meta-analyses now, as well this decision tree analysis. And the decision
tree analysis typically breaks evaluation of obscure GI bleeding patients
into four different options.
I mean, patients could just have push enteroscopy alone. They could have
enteroscopy, and if that was negative, capsule endoscopy. Or they could
have capsule endoscopy alone, or they could have capsule endoscopy followed
by push enteroscopy if the capsule was negative. And through decision tree
analysis, it was shown that capsule alone was the lowest cost effectiveness
ratio available, and that the cost for bleeding source detected was $2,700.
GIVEN IMAGING
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Now $2,700 may seem like a lot to your listeners but, actually, the average
cost, presently, prior to capsule endoscopy for the evaluation of these
patients, was over $33,000 per patient without a diagnosis being made. So
it's clear that capsule endoscopy is going to prove to be cost effective,
once outcome starts to come, but certainly in the decision tree analysis
it's very, very promising.
And the other area within this idea of cost effectiveness is the utility of
negative studies. I think that most physicians really think about yield,
and identifying GI bleeding, and subsequent management. And there's
certainly a lot of data about how capsule can guide subsequent management.
But people tend to forget about how important a negative study is.
And actually there were two papers that sort of addressed this I found
absolutely intriguing. One was just looking at a group of patients who had
had - 88 patients who had negative studies. They were followed up a year
later. And it was determined how many further tests they had after they had
had their negative capsule exam. Were the capsules negative?
And indeed, they had dramatic decreases where patients, you know - the
number of patients that had repeat upper endoscopy or colonoscopy in the
subsequent year was only two to three percent. So that clearly, once the
capsule has excluded some of the big worries - and we're going to talk
about small bowel tumors in a second, which is a big worry [inaudible] the
patients don't actually require further testing.
And at the same time, another group looked at the same similar data showing
that if you actually used capsule earlier in the algorithm, right after
negative colonoscopy and upper endoscopy with a negative study, you can
actually decrease resource utilization dramatically.
GIVEN IMAGING
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And that came from a Canadian group where they're very concerned about cost
utilization. So clearly capsule in bleeding is the number-three test that
should be used early. And it can save significant amounts of money in
patient management.
Ian Gralnek: Blair, this is Ian Gralnek. I'm going to jump in, because I saw
those studies too, and I agree with that, that one, there is increasing
recognition. And I think that that was demonstrated here with a number of
abstracts that were submitted looking at wireless capsule endoscopy across
the entire spectrum of GI, but within GI bleeding, that this is now being
more and more recognized that this is the next test after the negative EGD
and colonoscopy, and that people are realizing it and starting to evaluate
the impact on resource utilization.
In other words, there's two issues. One, making the diagnosis earlier is
therefore going to save downstream costs. They're not having repeat
endoscopies. They're not having repeat colonoscopies, or push
enteroscopies; small bowel enteroclysis-type studies. And I think that is
exceedingly important.
Blair Lewis: Yes. And at the same time, there was more data here that talked
about the yield of capsule endoscopy for the diagnosis of small bowel
tumors. You know, we have realized that capsule identifies a significant
number of patients who have small bowel tumors, much to the surprise of
many of the physicians involved in using capsule.
And there's a pooled data analysis that's going to be published in
"Endoscopy" later this year, that you know, reports a yield of 7.9 percent.
And there's German experience, French experience, Swedish experience, as
well as the U.S. experience showing incidences of between - or yields
between six and nine percent of patients having small bowel tumors.
And at this meeting at DDW, there was additional data that came from
Australia, 6.3 percent; Spain, 6.5 percent; and the Corey data, which is
the reporting tool that's sponsored by the ASGE as a master database. And
they reported incidents of 6.5 percent.
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So clearly you know, the number needed to treat in dealing with these
patients who have obscure GI bleeding is somewhere in the order of
one-to-twelve to one-to-fifteen patients that you actually will examine
with capsule endoscopy are going to have a tumor of the small intestine.
And furthermore, the bulk of these - you know, 60 percent or more - are
actually going to be neoplastic. That means they're either going to be
malignant or they're going to be pre-malignant. And data has already shown
that earlier diagnosis of these pre-malignant and malignant lesions save
lives.
I mean, we were able to show that mortality here in New York, using
endoscopic data, that we could take a disease that had a five-year, ten
percent, five-year survival, was increased to 70 percent through the early
detection, through the use of these types of techniques. So those were the
things that really intrigued me at this meeting, Mark.
Mark Gilreath: Yes, it's really tremendous data. I'd like to turn it over now to
Dr. Gralnek, and ask you to share your highlights as well.
Ian Gralnek: Thanks, Mark. There were a number of things, also, that intrigued
me as well. Specifically, the first thing I wanted to talk about was Celiac
disease. Celiac disease, for those of you who don't really know what that
is, is much more of a common problem than we thought just a few years ago.
It has a prevalence in the population of about one percent, meaning that
about one in every 100 people walking around has celiac disease. Now
patients - persons can present, actually, in a number of ways, but they can
present typically with - they can have diarrhea. They can have abdominal
discomfort or bloating. They can even have symptoms of failing to thrive
and having anemia.
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And generally, the gold standard has been, to diagnose celiac disease, we
need to do an upper endoscopy. We need to be able to take a biopsy, get a
piece of tissue from the small bowel and look at that under the microscope
to look that the small bowel is atrophied. And that's why they're - it's a
malabsorption. They're not absorbing well.
And what's really been interesting here, and what struck me, is that now
capsule endoscopy is being used to evaluate now the entire small bowel
because there is the possibility in some patients that you're not going to
pick up celiac disease and these changes within reach of the endoscope.
Some of these patients may have patchy disease.
In other words, it may be located in different areas along the entire
length of the small bowel, again farther down the road than a standard
endoscope can reach. And there was a paper from Europe that actually looked
at the role of capsule endoscopy in detecting this atrophied small bowel,
and comparing it, actually, to conventional endoscopic methods with
biopsies.
And the preliminary data showed that capsule appears to be equivalent with
the biopsies in the ability to detect atrophy of the small bowel in terms
of how the small bowel appears on capsule endoscopy. So I found that
exceedingly interesting. And Blair, I was wondering if you had any comments
about that as well?
Blair Lewis: It's funny, because as you talk to the different audiences and
physicians from around the world, there's a realization of celiac disease.
In Europe, they're very familiar with it and they realize it's a patchy
disease. And the Americans, only through capsule, are starting to realize
the exact same thing.
And everybody, when they talked about - well it really didn't make a
difference what they're talking about - everybody talked about the ICCE
consensus statement that had come out. And they turned to the consensus
statement, which makes it very clear as to the indications for capsule
endoscopy in the setting of suspected or known celiac disease.
GIVEN IMAGING
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And there were, you know, three indications that were listed. One was for
patients who are unwilling or unable to undergo endoscopic exams. And
Americans sort of thought, "Well who's that?" And in Europe, when they talk
about dealing with children who have malabsorption, endoscopy requires
anesthesia, intubation.
It becomes a very large procedure, and it can be that way here in the U.S.
as well. So capsule endoscopy is a very intriguing way to save that type of
procedure in children; and so in Europe, capsule endoscopy for celiac
disease, there's going to be very much used for that. The second indication
was in patients that you described, Ian - people who have positive
serology.
So there's a blood test that says that they suspect that there's celiac
disease ongoing, but the endoscopic biopsy was negative. And thereby, by
using capsule you realize that, because of this patchy nature of the
disease, that the endoscopic biopsy actually missed it. And so doctors tend
to rely on the pathology. They would actually under-diagnosed this illness
because of the patchy nature of the disease.
And the third indication, according to the consensus conference, are in
patients with known celiac disease who have developed warning symptoms,
where we are concerned that they've developed a malignancy. And those
warnings symptoms would be fever, weight loss, abdominal pain, obstruction
and the like.
Ian Gralnek: Yes, that also is very interesting, because at least at this
point, I don't think we're very attuned, or not nearly as attuned as the
Europeans are to this - American gastroenterologists. And that we - this
allows us to do further evaluations that we weren't able to do, more
sensitive evaluations, using capsule in those patients with known celiac
who do develop these types of warning or alarm-type symptoms.
And the other goal is to, once we have diagnosed patients with celiac
disease, we put them on therapy, a gluten-free diet, and then to monitor,
actually, their progress, especially ones who have a patchy disease where
we're not able to see further down the
GIVEN IMAGING
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small bowel. We will be able to monitor how well they're doing, how they
are responding to their gluten-free diet. Is their small bowel mucosa
actually coming back?
The other area that I'll briefly talk about is in Crohn's disease. And
probably the most important paper that I saw - very interesting - was a
pilot study. It was also European. It looked at 11 patients who had Crohn's
disease. They had undergone surgery for their Crohn's disease.
And then generally the problem is - first of all there are a number of
patients with Crohn's disease who end up, at one time or another, having to
undergo surgery. Probably, estimates are 25 percent to 35 percent,
somewhere in that range over the course of their disease.
And the problem is that many of these patients will have recurrence of
their disease, oftentimes at the site or the margins of where they've had
their small bowel or even part of their colon taken out. And this was a
study that actually looked at the role of capsule endoscopy in monitoring
these patients for evaluating actually, for recurrence of their Crohn's
disease.
And they compared this to standard colonoscopy. And what was interesting is
that they again found that recurrence was visualized in only one of the 10
patients with colonoscopies. But six additional recurrences were visualized
just by the capsule endoscopy.
So it appears that it was more sensitive than standard colonoscopy in
detecting recurrence of Crohn's disease in these post-operative-type
patients. So these are preliminary results. It was a pilot study. And I
think we need more data, but this I find is very, very promising.
Blair, what were your thoughts about that?
GIVEN IMAGING
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Blair Lewis: Yes, no absolutely I think that - just to go back to the consensus
statement, the consensus statement even says that capsule is the best way
of looking at mucosal abnormalities than any other method. And even - just
off the topic of DDW, but I was at the Society of Gastrointestinal
Radiologist meeting earlier this year, and even they actually had to admit
that radiology cannot hold a candle to capsule endoscopy in the diagnosis
of ulcers of the small intestine. So I'm not surprised by the data, and
it's just a delight to actually see.
Ian Gralnek: Yes, there was one other one I wanted to briefly also talk about
with Crohn's disease. It relates somewhat to what you were talking about
with obscure GI bleeding. This is a problem that we can see with Crohn's
disease patients. They can develop anemia.
They can have occult or difficult to detect bleeding, microscopic-type
bleeding. And there was a study that actually looked at the value of
capsule endoscopy in evaluating these obscure GI bleeders, specifically
Crohn's disease patients with obscure GI bleeding. And what was important
is that it appeared that capsule endoscopy was able to detect more of these
patients.
And actually, more importantly in terms of management of the patient, it
actually appears to have looked at - or appears to have influenced or
impacted upon the clinical management of about 50 percent of these
patients. So in other words, it gave us important information about what
was going on, and actually influenced medical decisions that were made in
the care of these patients.
Mark Gilreath: And Dr. Lewis, also you mentioned 250 papers that have been
published and reviewed in the meta-analysis or pooled analysis. And it
seems there's been a lot of discussion about these papers in the last
four-and-a-half years. And now, since March, the discussion really has
turned to the ICCE consensus. You referenced that a couple of times. Can
you speak to how that was used here at DDW?
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Blair Lewis: I think it was in everybody's slides. I mean, everybody turned to
the consensus as sort of the foundation from which to build on. And both
the lecturers who referenced the consensus, as well as the attendees who
actually picked up copies of the consensus at the meeting, I got comments
on how much they loved it because the consensus not only gives guidelines
for subsequent management, but it actually also lists the articles that
were used by the working groups to develop that consensus.
So people can actually go back and actually reconstruct, you know, where
the thinking came about. And for example in Crohn's disease, there's always
talk, you know, that we're going to use capsule endoscopy in suspected
Crohn's disease.
But then people sort of say, "Well what is suspected Crohn's disease? Does
it have a definition?" Well the consensus group, the working group,
actually wrote a statement, you know, actually detailing that suspected
Crohn's disease are patients with two of the following criteria. And they
listed what the criteria are.
Those turned out to be abdominal pain, or diarrhea; iron deficiency anemia;
elevated blood inflammatory measurements like SED rate or CRP; low serum
protein levels, as well as extra intestinal manifestations; a family
history of inflammatory bowel disease; and then abnormal serologies for
inflammatory bowel disease as well. And just by having those guidelines in
print, when people go back into practice and they are utilizing capsule
endoscopy, it gives them a foundation on which to build.
Mark Gilreath: Dr. Gralnek, any other thoughts on the consensus?
Ian Gralnek: No. I mean I was also there. And again I think that it has sort of
- this is a big word - but transcended in a way that's very important. It's
important for investigators. It's important for clinical
gastroenterologists who are in community practice, as a reference tool. And
it is very important, because it is - it's sort of a stage to what goes on
here at DDW with the 16,000, 17,000 gastroenterologists and support people
who are here.
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Mark Gilreath: And I think it creates an important baseline for future meetings
to build upon.
Blair Lewis: You know, Mark, the - outside of the meetings and the academics and
the posters and the rest - you know, as we all walk around and we meet
friends and colleagues from around the globe, there's no question that
capsule endoscopy is mainstream. I don't know if your audience sort of
still thinks that it's somehow it still experimental or it's being
developed still.
I mean you got FDA clearance four years ago in August of 2001, but this is
mainstream GI now. And matter of fact, I talked to three different program
directors who are going to put capsule training into their training
programs for their beginning fellows, so that during fellowship training,
when they're learning upper endoscopy and colonoscopy, they're going to
learn capsule right alongside.
And in addition, the ASGE is going to run a fellows training course this
summer for incoming fellows. They're actually bringing all 400 fellows
nationwide into five different meetings, 80 fellows each group. And part of
this intensive sort of boot camp learning about endoscopy is going to
include capsule endoscopy as well, so capsule is mainstream.
Ian Gralnek: Yes. No, I agree with that. In fact I'm going to be directing one
of those five symposia for the first-year fellows. And it is one of the
standard lectures that are now captured within teaching the first-year
fellows. This is very important. It is now a part of routine training.
Mark Gilreath: And it clearly changed the way GI practice works. One thing I did
want to ask you is that neither one of you highlighted anything related to
the PillCam ESO, about the esophageal application. I'd like to see if you
had any comments on this?
Ian Gralnek: Blair, I'll let you go first.
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Blair Lewis: Well, thank you. Actually there were really no abstracts at this
meeting to speak of. But everybody is talking about the presentations that
were given at the ICCE. There's a multi-center trial that is ongoing. And
Glen Eisen from OHSU in Oregon reported on his ongoing trial in using
Capsule ESO for esophageal varices.
And actually he - I had talked to him. He had submitted, as a late-breaking
abstract to DDW, but they only take four abstracts and they didn't take
his, so - because his numbers were only, you know, the first 32 patients.
But clearly, the use of capsule for esophageal varices is remarkably
promising.
You know, in their 32 patients, they actually had a sensitivity of 100
percent and a specificity of nearly 90 percent in being able to see these
veins in the esophagus. And so I guess I should back up for your audience a
little bit and just say that there are 10 million Americans right now who
suffer from cirrhosis. And cirrhosis - a significant amount of mortality
associated with cirrhosis comes from people who end up bleeding from these
dilated veins behind their scarred liver.
And there are both American and international guidelines that recommend
endoscopic screening of these people so that the people who have these
dilated veins can be treated both endoscopically as well as with certain
types of medications. And those treatments, those preventative therapies,
have been shown to improve survival in these patients.
But at the same time, this group of patients, because of their liver
disease, a little bit harder to sedate. The exams are a little bit more
difficult. And certainly it is a huge endoscopic burden on the GI community
to do all these endoscopies. So, for example, I was talking to the medical
head of liver transplant at Mt. Sinai, where I am.
And he is just so enthused about starting to do Capsule ESO for these
patients, because it's a way of him providing the care that he really wants
to give, help save lives in a very efficient way, and in a way that will be
much more acceptable by patients. So that's the hot thing for ESO right
now.
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Ian Gralnek: Yes, I mean the American Association for the Study of Liver
Disease recommends, as part of their guidelines, to be screening these
patients with cirrhosis to identify the patients with varices so they can
be treated. And actually guidelines from the United Kingdom also recommend
this as well.
Not only is it going to be, I think, really a very promising tool for
screening and identifying these patients with varices and then allowing
them to be treated, it's going to allow then down the road - these patients
need to be re-screened afterwards, and followed up.
So they'd have to undergo ongoing surveillance to make sure that the
varices are not coming back. So it's going to have an ongoing role in these
patients. It's not even going to be just a one-time use to identify. There
will be a role in the future as well. So I agree with Blair. I think the
technology and utilization of this patient population is very, very
promising.
Mark Gilreath: Good. Well, I think that, with that review, we should probably
turn it back over to Lori here and take questions from the audience at this
point.
Operator: Thank you. Today's question and answer session will be conducted
electronically. If you would like to ask a question, please do so by
pressing the star key followed by the digit one on your touch-tone
telephone. If you're using a speakerphone, please make sure your mute
function is turned off to allow your signal to reach our equipment. We'll
proceed in the order that you signal us, and we'll take as many questions
as time permits. Once again, please press star one to ask a question. We'll
pause for just a moment to give everyone an opportunity to signal.
And we'll go first to Amit Hazan.
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Amit Hazan: Hi. Good afternoon, guys. Just a couple quick questions - and I
think you touched on this, but maybe I thought you could give us a little
more detailed answer. How is Crohn's diagnosed today exactly? And maybe you
could just talk about how you think CE will fit into that diagnosis
specifically, and maybe just touch on the lack of being able to do a
biopsy. Is that an issue or is that something that can be overcome?
Blair Lewis: Can I answer that?
Ian Gralnek: Yes go ahead.
Blair Lewis: Back in 1982 there was a national - I'm saying the word consensus a
heck of a lot I think - but there was a consensus statement that came up
from the AGA talking about the evaluation of Crohn's disease. And it was
clear back in 1980 that the onset of symptoms till when a small bowel
series would actually show changes of ileitis, the average lag time was
three years.
So that means that there are all these patients who have symptoms,
typically are thought to have an irritable bowel syndrome, and really have
Crohn's disease. And then they go on. And finally a long enough time goes
along that these ulcerations that are occurring within the mucosa of the
small intestine, that it is felt that at least the transmural inflammation,
thickening of the small intestine, and finally you can put these things up
on the small bowel series.
And so the promise of capsule endoscopy means that the earlier diagnosis,
and then the earlier intervention with medications. Now the earlier
diagnosis, there's no question about. Even in the very small numbers that
are out there because the studies from Eliakim and Fireman and the rest -
they clearly show that you can make this diagnosis while small bowel series
are still negative.
There's no question about that. Whether or not that's going to translate
into better outcomes down the line, because you start medication and
directed therapy earlier in
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those patients, we don't know yet. And as far as the biopsy piece goes, you
know, since 1932 when Burrill Crohn first described Crohn's disease, biopsy
had nothing to do with it.
It was a radiographic diagnosis, string [inaudible], dilation structuring
within the small intestine. It was radiographic. So gastroenterologists are
very comfortable making the diagnosis on radiographic grounds without
biopsy. So I don't think biopsy is an issue.
Ian Gralnek: I agree. I don't think biopsy is completely necessary either. It's
symptoms. It's radiographic findings. It's - biopsy is not absolutely
necessary.
Mark Gilreath: And you may add too that the issue of the scoring system which is
in development.
Blair Lewis: Well, OK. I believe there is a scoring index that has been written
to sort of address some of these concerns. It's clear that, from a
pharmaceutical trial - there was a Pfizer trial that has been published -
utilizing capsule to look at the effect of NSAID damage in the small
intestine that normal, healthy volunteers can have single, small little
erosions in the small intestine.
And yet to the practicing gastroenterologist out in the community, if they
see one small erosion, you don't want them calling those patients as having
Crohn's disease. So to formalize, there is an index of inflammatory changes
in the small intestine that has been devised.
It's going to be tested, optimized for a scoring scale, and then hopefully
validated, all within the next year, I would hope, that will allow the
practicing gastroenterologist to simply, quickly score the ulcers or the
mucosal breaks that he sees in the small intestine and then be able to be
on very firm ground by saying that this patient - you know, this is not
incidental findings. And this is not - you know, this is a healthy person,
and this is somebody who has inflammatory damage of the small intestine.
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Amit Hazan: OK, perfect, and then just one other question from me. It's
encouraging to see a lot of these studies. I'm just curious. Some of them
have a relatively small patient population. Is that an issue at all, kind
of, for maybe if we look at larger acceptance by your peers? And then also
just more generally - what you - just curious what you guys might think
will drive larger acceptance by your peers for both Crohn's and celiac for
that matter?
Ian Gralnek: Amit, I think that, you know, this is just indicative that you
have abstracts that are being submitted. The small numbers - generally
these are studies that are ongoing, so these numbers are going to increase
as you see more and more of these presentations being done here at DDW, at
the American College of Gastroenterology, at the ICCE.
That leads to growing acceptance among the GI community in the utilization
of capsule endoscopy across this whole wide spectrum of GI diseases and
entities, as well as the consensus statements that have come out of the
ICCE and the dissemination of that.
And as Dr. Lewis, or as Blair has mentioned, the - over and over again,
throughout Digestive Disease Week this week, reference to the ICCE,
reference to the consensus statements, and use of capsule endoscopy for
celiac disease for Crohn's disease, for obscure GI bleeding.
Blair Lewis: Yes I would just say that, just because the patient study numbers
are small doesn't make them not real. That's number one. You know, about to
be published, probably in the fall, is a meta-analysis that was done by the
Mayo Scottsdale group. And I was talking to Jonathan Leighton. I was
actually a reviewer on the paper.
And there they looked at all the literature, small studies, big studies.
And they did a formal meta-analysis showing that capsule was, you know,
certainly better than push enteroscopy in identifying causes of bleeding,
small bowel series, angiography and the rest.
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And he's in the midst of doing the meta-analysis on all the various studies
in Crohn's disease as well. And he said those results are virtually
identical. So just because the study size is small, doesn't really mean
anything. It's just - everybody's trying to get into the "academicing".
And then if I take off my academic hat, and I put on my practice hat - and
you're talking about utilization and the rest, I would answer that by
saying I think actually the consensus statements are a tremendous help to
guys out in the community, because they can now go to third-party payers
and say "Listen, this patient has this and this, and on very firm ground to
have capsule endoscopy be done in this patient who has this suspected
Crohn's disease. And I think that's the thing that's going to - those are
the types of things that really help spur utilization.
Amit Hazan: Perfect. Thanks very much.
Operator: We'll go next to Lee Brown with Merrill Lynch.
Lee Brown: Hi. Good afternoon and thank you for the call.
Mark Gilreath: Hi, Lee.
Lee Brown: Just a quick question on utilization of the Capsule ESO with regard
to esophageal varices. It does have a significant mortality rate. It is
kind of a wide ballpark between 40 to 50 - I'm sorry 40 to 70 percent with
the first event.
And so I'm wondering what your thoughts are on uptake of the ESO given the
benefit, compared to traditional upper endoscopy, EGD, given that that's
often eschewed for the potential risk of rupturing already delicate
esophageal varices. And also, combined with that, why you think, ex the
promotion reorder rates for this have been so immaterial, or insignificant
given the benefit as mentioned in the 32-patient study?
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Mark Gilreath: Well thanks, Lee. I don't think we'll comment today on reorder
rates or that sort of thing. But regarding the clinical issue, I would turn
that to the physicians to respond.
Ian Gralnek: Yes, I mean I was going to say that the percentage that you were
quoting in terms of mortality is associated with once these patients bleed
from their varices. So that's a marker of de-compensation of their chronic
liver disease, their underlying liver disease.
That is why the American Association for the Study of Liver Disease
guidelines from out of Europe recommend that, in patients who have chronic
liver disease who have not had any evidence of variceal bleeding, we should
be screening these patients to identify those patients with varices so we
can actually prophylactically treat them endoscopically or in combination
with medications to try and prevent that first bleed, to try and decrease
that mortality. OK?
So that's why I think that this technology is very promising, because one,
it's fast. There's no use of sedation. It saves on office time. And these
patients are oftentimes very difficult to sedate. They do have a chronic
significant underlying disease, and oftentimes other co-morbidities, so you
don't want to necessarily give them sedation and subject them to a more
prolonged upper endoscopy to try to identify these varices.
Blair Lewis: There's no question that the liver community, that the hepatology
community is very enthusiastic about the use of ESO for varices. I mean
they are really over their heads, very pleased with this technology.
Ian Gralnek: Let me just add one more point, Blair, is that - is the other
thing is that you know, this is new and I think that we are going to see,
soon, reimbursement coming for this. And once that takes place, I think
you're going to see a significant uptake in the utilization of this.
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Lee Brown: Great. And you know just - I concur with your thoughts put forth,
but my question being, in total reimbursements put forth, is in place; I
guess I just want your thoughts given the benefits, what do you think the
uptake will be from your fellow clinicians? Are they willing to go ahead
and utilize this without reimbursement?
Mark Gilreath: Dr. Lewis, maybe you have some visibility to that.
Blair Lewis: Well I would just say that, you know, I'm doing ESO. And I do it on
a case-by-case basis, through people's insurance companies. And if you - in
the explanatory letter to the third-party payer, and you say that the
patient is either intolerant or unable to undergo upper endoscopy - or even
personally refuses upper endoscopy for whatever that reason is, third-party
payers are still willing, on a case-by-case basis, to cover this.
Lee Brown: OK.
Blair Lewis: So I don't know if that helps you at all. But it is true that
third-party payers are willing to do it on a case-by-case basis. In the
long run, it's actually cheaper for them. So once you get to a medical
director and you lay it out for them, I really haven't had a problem.
Lee Brown: OK. Thank you very much. That's all I have.
Operator: We'll go next to David Rothschild with Rothschild Technology Partners.
David Rothschild: Hi. I have a question on Crohn's in general; just the case
management of it after it's been diagnosed, for both doctors. I hear
different things. There was a sense at ICCE that you know, you could use
the capsule to manage the treatment to take people off the medication, and
you know, just let them live their lives.
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But then I spoke to a couple of doctors who said, "Oh, I'd never use a
capsule to manage my patients, because I just keep them on the medication
for life." And so it seems to me that there's differing standards depending
upon which doctors you talk to.
And I'm curious just what your opinion is. Do you think that the capsule
makes sense? Well first of all, does it make sense to try to take patients
off of the medication? And/or does it make sense to treat them for life,
and it doesn't make sense to use the capsule to manage the treatment of the
disease?
Blair Lewis: Ian, do you mind if I go?
Ian Gralnek: No, go ahead.
Blair Lewis: I think - you know, this is a real change in medicine. And since
'32 and when Burrill Crohn first described this, people have been impressed
that there's a disconnect between symptoms and identifiable disease. OK? So
what I mean is that people can have bad symptoms.
And yet you do a colonoscopy, it doesn't look so bad, or you do a small
bowel series, it doesn't look so bad. And people couldn't really understand
that disconnect. The Europeans actually, much different from the Americans,
have said for a long time that these people must have mucosal disease,
you're just not seeing it.
And they actually were the ones that sort of came up with the Crohn's
disease activity index for colonoscopy, and actually validated it and did
show some correlation, although it wasn't great correlation because they
couldn't do anything in the small intestine for people who had ileocolitis.
It certainly works for the colon alone, but for the bulk of patients, 75
percent who have small bowel involvement, they're - just looking at the
colon didn't really help them.
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So when you talk to physicians who, "Oh I keep medications on for life,"
that's because they don't really have a good handle of what's going on
inside. And they have this - they treat by symptoms. They don't really have
- they don't have a firm grasp of the ongoing pathology in the patient.
And I think that - I don't think the data is really in yet - but people are
starting to realize that, now that we're able to look, we can actually use
capsule data to actually manage the patient. The first paper, you know, has
just come out, or was reported where people can look at effects of
medication using capsule endoscopy, and show healing.
And then that may guide subsequent management. We're just at the beginning
of that. And I would expect in the next several years, that suddenly we're
actually going to get rid of this disconnect notion in America that the
Europeans have gotten rid of a long time ago.
David Rothschild: So in your view, Dr. Lewis and - you kind of feel that you
would prefer not to be on Remicade for the rest of your life, if you could
avoid it?
Blair Lewis: Personally, if it were me, yes I think that would be true.
David Rothschild: Right, right. Well I mean because I just had a couple of
doctors say that, "Oh, it's much worse to have a secondary recurrence of
the disease than it is actually to keep the patient on the medication." And
that was their ostensible reason. OK.
Blair Lewis: I don't know that I know that. I don't think, actually, that we
know the true long, long, long-term effects of quarterly Remicade
injections, which is what you're talking about. People go, you know,
quarterly to have their Remicade. I'm not so sure we know that answer.
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David Rothschild: Right. So in your view basically, it would make sense to use
the capsule to manage the treatment of a disease like Crohn's, assuming
strictures weren't a problem, right?
Blair Lewis: Right. And if we can - I mean again that day is not in, but it
certainly could easily be. You know, it's in the realm of thinking. That's
where people's heads are now. I mean, now they've already sort of accepted
the idea of the suspected Crohn's disease and using capsules to make the
diagnosis early and definitively. Now the question is, why are you going to
use it? The consensus statement suggests that yes; this is going to be a
great use for capsule endoscopy. Is there data behind it yet, scientific
data? Not yet.
Ian Gralnek: Let me actually make one other point that sort of gets at this
disconnect, and let's think of it in another way. Because I think there may
be some differences between management strategies or styles of
gastroenterologists and let's say rheumatologists in use of chronic
medications or chronic biologic medications.
I think that rheumatologists are very used to keeping their patients with
rheumatoid arthritis on chronic medications, or even chronic biologic
agents. And the question is, why is that? Well the reason is they can
actually follow disease progression.
They follow disease progression because of their radiographic studies and
x-rays. They see progression of the degeneration. We have not until now,
with capsule endoscopy, been able to actually look at disease, mucosal
disease progression or resolution with our management strategies.
Barium studies have been insensitive to be able to tell us that
information, and we did not have the endoscopic means to fully evaluate the
small bowel. So I think that we are going to see sort of a shift, or a
paradigm-type shift in how we are managing these patients, Crohn's disease
patients, with now this new-found ability to actually image the small bowel
and help guide our management.
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David Rothschild: So in your opinion then, if you were to have a capsule
endoscopy of the small bowel, and it didn't show any mucosal damage, or
showed no cases of any lesions or maybe - then you would consider that an
inactive case of Crohn's? Is that how you would view it then?
Ian Gralnek: I would say that treatment is working, but you need to consider,
maybe, continuing your ongoing treatment to maintain them in remission.
David Rothschild: OK.
Blair Lewis: You know it also brings up the point about the negative study. And
there are patients out there who are felt that maybe they do have symptoms
that are referable to Crohn's disease. And yet if the capsule study is
normal, you know that they can't have mucosal disease that are causing
their symptoms.
So that, you know, the symptoms are really - are really irritable bowel
instead. So capsule can be used for the negative power of the study. If
anything, you would say in those cases that it definitively made the
diagnosis of IBS because it was normal.
David Rothschild: OK. Well thank you very much.
Mark Gilreath: Thanks, Dave.
Operator: We'll go next to Ed Shenkan with Wells Fargo.
Caroline Corner: Hi. This is actually Caroline Corner calling for Ed Shenkan.
Mark Gilreath: Hi, Caroline.
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Caroline Corner: Hi. I just wanted to say thank you to Drs. Gralnek and Lewis.
It's really helpful to have them sort through this wealth of information
for us and figure out what's important for the practitioners.
And along those lines, I was wondering if there's any future papers, or
what kind of research the doctors are looking for in the future to add
value to their practice, whether it's, you know, related to the ESO Cam,
the small bowel or even the colon camera? And specifically if there's any
specific conditions that they anticipate PillCam is going to be helping out
with next?
Mark Gilreath: Thanks Caroline. Dr. Gralnek?
Ian Gralnek: Yes I can go ahead. I think that we're going to see some more
economic analyses looking at this, budget impact models that are going to
be able to demonstrate the value to large-party payers of instituting this
new technology or intervention in some of these patient populations,
especially the ESO, the PillCam ESO with the varices the chronic liver
disease patients.
I think we're going to end up seeing some more cost-effectiveness analyses.
I think there's areas such as patient satisfaction, which would also be
helpful to show how patients are very satisfied with this type of a
procedure where they're not getting a conscious sedation or anesthesia.
They're not missing their day of work, necessarily. It's a very easy
procedure that's well-received by the patient populations.
Mark Gilreath: And Dr. Lewis, perhaps you can comment on the ...
Blair Lewis: Yes, what I think is you're asking like what research I'd love to
see soon? What people out in the community would love?
Caroline Corner: Yes.
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Blair Lewis: And I actually think that this activity index for the small
intestine is going to be a gigantic thing. If this can be optimized and
then validated for the regular guy in practice who's doing these exams, and
they see something, you know, they'll have solid ground.
And I actually think, you know, from your point of view that that actually
would increase usage, because people will actually know what they're
seeing. They'll feel very firm about it, and they'll really start using it
in patients who have, you know, suspected Crohn's disease. So that's the
next big thing to me, is this activity index.
Caroline Corner: OK, thank you.
Ian Gralnek: You know, one last point Blair - the other interesting thing, I
think coming soon, is going to be the use of a colon capsule, and screening
for colorectal cancer. And I've heard about this, and there's going to be a
clinical trial starting. I'm very excited about that as well, the new
technology. It's needed.
Blair Lewis: No question about that.
Caroline Corner: Thank you.
Operator: And we'll go next to Alli Widman with Citigroup.
Alli Widman: Hi guys. Thanks for taking my question. I just was wondering about
the indications for the ESO capsule of esophageal - for screening for
Barrett's in the esophagus. I remember just back at the ACG, and also at
ICCE, use for that indication was discussed a little bit. I was just
wondering if there are any updates you have on that front and, also, just
how you feel the capsule works for that indication relative to how it works
in varices.
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Blair Lewis: Yes. Actually it's very plain. When you talk to people at this
point, it's well accepted. And the data both from Eliakim and this data
that came from Eisen. And there's also - there's literature that's about to
come out from Lin from - I forgot where Lin's from.
Ian Gralnek: I think he's from Taiwan.
Blair Lewis: No. No it's - who won the Schindler award? It's from Kozarek's
group. Kozarek's group did the study and similar numbers to Eliakim.
Everybody agrees that ESO really sees the esophageal gastric junction.
You know, very quickly people know the technology works. Now the question
you really asked is its utilization. Are people going to use it in place of
upper endoscopy to look at people to screen for Barrett's and for
esophagitis? I think people will. And that's how it's indicated still.
Alli Widman: OK. And you think that there will also be some cost-effectiveness
studies done on that front to try and see if reimbursement makes sense
there?
Blair Lewis: Yes. I mean there have been - Glen Eisen also did a model. You
know, he did a model to look at cost effectiveness that showed that ESO was
actually cheaper than doing the upper endoscopy. And so his
cost-effectiveness model really looked at is it cost effective to screen
the at-risk population? At least by modeling, it does. Right, so ...
Alli Widman: OK. And then also on reimbursement, just wondering if you maybe
could talk about how some of these reimbursement studies - or not
reimbursement, but cost-effectiveness studies that you discussed at the
beginning of the call, just sort of how some of these payers take those
into account in their decision-making process?
Ian Gralnek: Well you know, actually, you know, cost effectiveness, or even
more so potentially budget-impact models, can be very important to
large-party payers. And you can look at
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it in a way that, especially if you have something that's uncommon within a
large population, and you bring in some type of an intervention, whether
it's a diagnostic test, such as capsule endoscopy to diagnose varices, or
whether you'd be giving a pharmacologic agent to treat something else.
What's really good, at least from the payer's perspective is that if it's a
small percentage of their population that's affected, that cost that may be
borne is actually diffused across the entire population within their plan.
So therefore it's a very small cost.
And actually, you can therefore demonstrate, or you plan to try and
demonstrate, that there is decreased resource utilization, fewer downstream
costs with the intervention of, you know, like in this case the diagnostic
test such as capsule endoscopy. I think you're going to say - I think it's
sort of a no-brainer that that is going to be coming. And that's very
important to these payers in terms of putting it into their - or taking up
this technology and utilizing it.
Mark Gilreath: And I think, too, there's already the benchmark in place, the
PillCam Small Bowel - great history there, very similar issues, positive
economic impact. But it takes, you know - it takes time. And that happens
in policies come one after another. And so that would be the expectation
that we'll see moving forward.
Alli Widman: OK, thank you.
Operator: And once again, that is star one if you would like to ask a question.
We'll go next to Jeff Stevens with Oppenheimer Funds.
Jeff Stevens: Great. Thanks for hosting the call. First on the sporadic patients
- when you do scope them, what's the general incidence of finding varices
that need to be managed?
Ian Gralnek: These are inpatients who have known chronic liver disease? It
partly depends on how severe their underlying liver disease is. And that
can be graded by a number of
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ways, but if they have moderate-severe to severe underlying chronic liver
disease, your chances of finding actual varices that need to be treated can
be of the magnitude of 50, 60, 70 percent.
Blair Lewis: It depends on how advanced it is, right?
Ian Gralnek: Right. In terms of how advanced the chronic liver disease is,
exactly. So in the more severely affected underlying liver disease
patients, patients who have moderate to severe, so what we would call
Child's class B or Child's class C, the prevalence of medium to large size
varices, which require prophylactic treatment is high.
Jeff Stevens: OK, and on a different tack - you know one of the things that you
get back when you talk to physicians, or you do the survey work about
capsule endoscopy is the complaint, if you want to call it that, it's just
- you know, the physician coming to grips with the time it takes to
actually go through an individual patient study. And I know that there is a
learning curve that goes along with it.
But this week at DDW, what's your sense of how are physicians dealing with
this? Do they kind of see this as it's a fact of life having, maybe you
know - it's a lot of data there to review, or that they're just going to
come to grips with it? Or do you see this as a real significant barrier to
uptake and accepting those, you know, very kind of niche patients, or where
it's very clearly indicated?
Mark Gilreath: Thank you. Dr. Lewis, perhaps you can come up with ...
Blair Lewis: Yes. I was going to say that I think number one, they know it's
going to take time. And I don't think it's a barrier any more. It's just
part of what it is. That's number one. Number two, they're actually getting
reimbursed remarkably well for that time.
So usually the barrier that you get from people - when I talk to people and
I go around and you know - there'll be somebody in the crowd goes, "You
know, I don't want to
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spend, you know, to learn this because it doesn't pay." And then you say,
"Well where do you live?"
And you give the area and you can tell them what the reimbursement is. And
they go, "I had no idea." Their eyes like go, "You're kidding me?" I go,
"No, that's what it pays to Medicare". Oh my goodness. So that's number
two, is that reimbursement is not a bad thing.
And then the third thing is that RAPID 3 has changed a lot of people's
minds. I mean you know, in RAPID 3 they put those four images, two seconds
of imaging on one screen, so that you can actually read at a slower rate,
for individual images. But the total rate is now increased because you put
four of them on one screen.
So if each screen changes at seven frames per second, which is really slow
at looking at capsule, you actually have a lot of confidence that you're
actually looking at - you're not going to miss anything. But at the same
time, the combined rate is four times seven - it's 28 frames a second so
that you can actually read a study in a little over a half-an-hour now. So
actually that mosaic is a tremendous aid.
Mark Gilreath: I think that the perception - we've had some physicians that used
RAPID 1, and then RAPID 2, when the reading time was an hour-and-a-half,
and that perception still remains, with some that have not used RAPID 3
yet. Would you say that's fair, or do you think that that's changing.
Blair Lewis: Yes, absolutely absolutely.
Jeff Stevens: When was RAPID 3 launched?
Mark Gilreath: At the end of last year.
Jeff Stevens: Great. Thank you.
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Operator: And we'll take our final question from Denise Steele with Greenville
Capital Management.
Denise Steele: Hi, gentlemen. Thank you. Just one brief question on the
competitive landscape. I'm wondering if you can discuss your thoughts on
whether a competitive product to Given's capsule would enlarge the market,
or whether you feel physicians would have, maybe, a longer lead time in
gaining, let's say, the amount of trust surrounding the product that Given
has been able to build? If you could just discuss some of those issues for
us?
Mark Gilreath: Dr. Gralnek?
Ian Gralnek: You know, I think my first answer is yes. I think it would
increase the market. But you know, number two, we really haven't seen that
other competitive product, at least here at DDW we've not seen that. Blair?
Blair Lewis: Yes, I think everybody came to DDW expecting to see Olympus and
their capsule. And yet they didn't show it, so everybody was sort of
surprised. I think that capsule usage, as I said, it's mainstream. People
are going to start to learn it in training.
I can't imagine capsule usage isn't going to grow, whether or not there's a
competitor or there's not a competitor. And personally, you know, looking
at RAPID 3 and the dedication that Given has shown, I can't believe that
physicians are going to leave that relationship that they've built with
this company, or what the company's built with them. So ...
Denise Steele: OK. So the software in reading time would be a big ...
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Blair Lewis: The software is the key to the whole thing. I mean yes there's the
imager - I shouldn't - you know, everybody talks about the capsule as being
this phenomenal invention, but the software is unbelievable, you know? It's
the software. Anyway ...
Mark Gilreath: Yes, I think just ahead of that one point is, this is the fourth
generation of software. And we've - you know, the company's been in the
market now for four years. And so it's really created a pattern of
advancing software on a regular basis. And we don't expect that to change
in any way.
Denise Steele: OK. Thank you very much.
Operator: And we have no further questions. At this time, I'll turn the
conference back over to Mark Gilreath for any additional or closing
remarks.
Mark Gilreath: Thanks, Lori. I just really want to say that we're really excited
about this week - tremendous attendance at DDW, wonderful highlights from
the clinical papers. And a special thank you to Dr. Gralnek and Dr. Lewis
for joining us today. And thank you for your participation and questions.
Lori?
Operator: And this does conclude today's conference. We thank you for your
participation. You may now disconnect.
END