Acorda Therapeutics Inc (ACOR) 2011 Q3 法說會逐字稿

Welcome to the Acorda Therapeutics third quarter 2011 financial results conference call. At this time all participants are in a listen-only mode. There will be a question-and-answer session to follow. Please be advised that this call is being taped at the Company's request.

And now I would now like to introduce to your host for today, Tierney Saccavino, Senior Vice President for Corporate Communications at Acorda Therapeutics. Please go ahead.

Good morning, everyone, and welcome. With me today are Dr. Ron Cohen, our President and Chief Executive Officer, and David Lawrence, our Chief Financial Officer. Before we begin, let me remind you that this presentation includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts regarding management's expectations, beliefs, goals, plans, or prospects should be considered forward-looking.

These statements are subject to risks and uncertainties that could cause actual results to differ materially, including Acorda Therapeutics' ability to successfully market and sell AMPYRA in the United States and to successfully market ZANAFLEX Capsules; third-party payers, including government agencies, may not reimburse for the use of AMPYRA at acceptable rates, or at all, and may impose restrictive prior authorization requirements that limit or block prescriptions; the risk of unfavorable results from future studies of AMPYRA; the occurrence of adverse safety events with our products; delays in obtaining or failure to obtain regulatory approval of AMPYRA outside the United States and our dependence on our collaboration partner, Biogen Idec, in connection therewith; competition; failure to protect Acorda Therapeutics' intellectual property, to defend against the intellectual property claims of others or to obtain third-party intellectual property licenses needed for the commercialization of our products; the ability to obtain additional financing to support Acorda Therapeutics' operations; and unfavorable results from our research and development programs.

These and other risks are described in greater detail in Acorda Therapeutics' filings with the Securities and Exchange Commission. Acorda Therapeutics may not actually achieve the goals or plans described in its forward-looking statements, and investors should not place undue reliance on these statements. Forward-looking statements made in this presentation are made only as of the date hereof, and Acorda Therapeutics disclaims any intent or obligation to update any forward-looking statements as a result of developments occurring after the date of this presentation.

Before I turn the call over to Ron, I want to provide a brief housekeeping update for the Q&A session. We'll be accepting questions in the order they come in to us. And in the interest of time, we're asking callers to restrict themselves to one question. Thank you, and I'll turn the call over to our CEO, Ron Cohen.

Thanks, Tierney. Good morning, everyone. This morning we reported our third quarter 2011 financial results. On today's call I'll provide you with an update on AMPYRA's performance for the quarter as well as an overview of our plans to continue to grow the AMPYRA business. I'll also cover ZANAFLEX and our pipeline, and Dave will then review the financials for the quarter. After our remarks, we'll open up the call for Q&A.

For the third quarter, net revenue of AMPYRA was $54.7 million. This was a 5.6% increase in net sales over Q2, and this was also a 17% increase from Q1 net sales, which included a 7.5% price increase in March.

Inventory in the channel has remained stable, at two weeks or less. After two quarters of flat sales in Q4 2010 and Q1 2011, we've been pleased to see a resumption of growth over the past two quarters, as we anticipated following the washing out of the pent-up demand at launch.

For the first three quarters of 2011, AMPYRA net sales were $153.3 million. We are reaffirming our AMPYRA full year net sales guidance of $205 million to $230 million. We believe there is substantial room for continued growth of AMPYRA moving forward, as prescribers and patients increasingly understand the full range of patients who can experience real benefit from this drug.

The key drivers of AMPYRA's growth will be high rates of persistence in compliance, broadened prescriber and consumer demand, and strong managed care access. I will review each of these on the following slides.

The persistence and compliance rates for AMPYRA since launch are high. We expect these to be key contributors to the growth of the franchise. Refill rates are strong, with a first refill rate of approximately 70% and a sixth refill rate of approximately 40%. While our data are not yet robust enough to give numbers beyond six months, to date we are seeing a much slower rate of decline in the refill rate after six months.

As of September 2011, average duration of therapy was 10 months compared to five months in January. We expect the average duration of therapy will continue to increase over time. Our daycon, or daily average consumption data, shows that patients are taking an average 1.8 out of two prescribed pills per day. This is an extraordinarily high compliance rate for a symptomatic treatment of 90%.

And what are the factors contributing to these compliance and persistency rates? First, we implemented a high-touch specialty pharmacy distribution system for AMPYRA. In this system, each patient is contacted by their specialty pharmacy every month to remind them about their refills. Patients who don't refill receive a call from a specialty pharmacy customer service professional to discuss any questions or information that they may need.

Second, our sales force has done an excellent job educating physicians and patients about the importance of appropriate dosing.

And finally, when AMPYRA works for patients, they know it. They experience the benefit of improved walking, and they stay on the drug as prescribed in order to keep the benefit.

As reflected in these metrics, the long-term value of each patient on AMPYRA is high. We have an established base of highly persistent and compliant patients, and we're adding new patients at a faster rate than discontinuations. Therefore, as we continue to bring in new patients to therapy, we expect the brand to grow significantly over time.

We have been building our second driver, broadened physician and consumer demand, through several programs that we initiated in the second and third quarters of 2011. These have included increasing emphasis on data showing the full range of walking disabled MS patients who can potentially benefit from AMPYRA, also rebranding of AMPYRA to increase awareness and demand among consumers, and significantly increased outreach in the form of speaker programs, targeted advertising, both in print and online, and our First Step free trial program.

We've been educating prescribers since May of 2011 regarding the impact of AMPYRA, even in earlier stages of walking disability. The data here show that even earlier-stage patients record improvements in activities related to walking on the 12-item MS walking scale.

More recently, as of late September, we introduced videos of patients before and after AMPYRA therapy across a range of baseline walking disability and a range of responses. We have found that these videos help both prescribers and MS patients to better visualize the clinical impact of increases in walking speed. These videos are being used daily by our sales team in physicians' offices as well as in meetings with payers to illustrate the clinical benefits of AMPYRA. The response to date has been extremely positive. Due to time considerations, we're not able to play the videos on this call, but for those of you who are interested, we expect them to be posted on the AMPYRA.com website in the near future.

In addition to our initiatives with healthcare providers, we see a significant opportunity for us to increase demand among patients. A Harris Poll fielded in June showed that 40% of people with MS don't speak to their physician about their walking difficulty. This represents a substantial opportunity for us to increase trials of AMPYRA by motivating consumers to speak to their physician specifically about their walking issues and AMPYRA.

Our research has also shown that as of midyear, awareness of AMPYRA among MS patients was approximately 30%. This represents a large opportunity to increase awareness and demand among appropriate patients.

In September, we introduced a new branding campaign for AMPYRA. We believe the branding of AMPYRA as The Walking Pill, represented on this slide, will help people with MS and their care partners have a very clear and direct conversation with their physician about their walking issues and the potential role of AMPYRA in addressing them. This campaign is now the cornerstone of all of our consumer promotion.

Market research is encouraging with regard to prescriber behavior and attitudes toward AMPYRA. A syndicated study by BioTrends Research was conducted in the third quarter involving over 200 MS physicians and a review of over 1,000 actual charts of patients being treated with disease-modifying therapies. This research showed the patient currently on AMPYRA in these practices, after accounting for prior dropouts, was approximately 7.6%. This is an increase of about 80% over a similar survey conducted in the third quarter of 2010.

Most importantly, these physicians reported that about 18% of the patient charts represented AMPYRA-naive patients who were appropriate for an AMPYRA trial. In other words, the physicians identified as eligible for AMPYRA more than twice the percent of patients in their practices who are currently taking AMPYRA. Moving forward with continued execution of our sales and marketing campaigns to educate prescribers regarding appropriate patient profiles for an AMPYRA trial, we believe there's potential to increase these estimates even more.

The performance of our sales force has been a key factor driving these metrics. In an independent quantitative market research survey of physicians in the third quarter, Acorda representatives ranked among the highest in the MS category in overall message quality. This included believability, uniqueness, relevance to practice, and newness of information. Additionally, Acorda representatives ranked highest in the MS category for presentation of clinically oriented information about appropriate patient types.

Most importantly, 32% of physicians indicated that these sales interactions will significantly influence their prescribing of AMPYRA. This was the highest score in the entire MS category.

With regard to our third key driver, quantitative market research in Q3 showed a strong managed care access profile for AMPYRA. 21% of physicians rated managed care access for AMPYRA as high or extremely high, 61% rated it average, and only 18% rated it low or very low.

This year we deployed a field force of six reimbursement professionals, and we have enhanced capabilities at our AMPYRA Patient Support Services hub to provide even greater assistance to physicians' offices in completing managed care requirements. The response from physician offices has been extremely positive.

In summary, we have made substantial progress toward establishing AMPYRA as a new standard of care for MS patients with walking impairment and a franchise that is positioned to grow substantially.

Regarding ex-US, this quarter we received a $25 million payment from Biogen. As a reminder, the next expected milestone is a $15 million payment due when ex-US net sales reach $100 million over four consecutive quarters. AMPYRA is now available in Germany, the UK, and Australia, and regulatory filings in other markets around the world are pending.

Moving on to ZANAFLEX, combined net revenue of ZANAFLEX capsules and tablets in the third quarter was $10.7 million, and total shipments were $14.1 million. During the quarter, the US District Court ruled against Acorda in our patent litigation suit against ANDA filer Apotex. The Company is appealing the Court's decision. We don't know when the FDA may approve a generic version of ZANAFLEX capsules or when it might be commercially available. However, once a generic is launched, we anticipate a very rapid erosion in market share.

Turning to our pipeline, we've made important progress in developing a pipeline that can potentially deliver significant value. We're exploring AMPYRA in a number of other potential indications, both in MS and other neurological diseases. Our life cycle management program includes investigator-initiated studies evaluating AMPYRA's ability to improve a variety of MS-related functional deficits, including optic neuritis, cognition, upper extremity function, and balance.

These studies are also exploring the use of AMPYRA in other neurological conditions such as transverse myelitis, Parkinson's disease, episodic ataxia, and spinal cord injury. Data from these studies should begin coming in starting in the second half of 2012. Beginning next year, we're planning to initiate our own MS studies as well to assess AMPYRA's impact on endurance, upper extremity function, and visual function.

We're also initiating two proof-of-concept clinical trials outside MS to assess improvement of neurological function in cerebral palsy and post-stroke. These should give us a relatively quick and cost-effective way to determine if larger studies are appropriate. Poor central myelination is a signal feature of cerebral palsy. Because AMPYRA improves conduction in demyelinated nerve segments, this is a natural disease state to explore in clinical trials. There are an estimated 400,000 adults in the US with CP.

We're particularly excited about new data indicating that AMPYRA improves neurological function following stroke in preclinical models. Demyelination has been implicated as a component of the permanent damage to brain tissue following ischemic stroke. 6.5 million people in the US have survived a stroke, most of these with permanent neurological disability. These preclinical data, which have been submitted for presentation at an upcoming scientific meeting, show that sensory motor function was improved in a dose-dependent fashion, even several weeks after a stroke.

AC105, which we licensed from Medtronic in May, is an important addition to our pipeline. We believe it has tremendous potential to address the 11,000 new spinal cord injury events that occur each year in the US and the 70,000 traumatic brain injuries that result in permanent damage. We are planning to begin a Phase 2 trial in acute spinal cord injury in the second half of '012.

Our GGF1 Phase 1 heart failure trial is ongoing, and we expect to have a readout from the trial in the first half of next year. We're also exploring a number of other potential indications for this compound in preclinical studies, including peripheral nerve damage, spinal cord injury, and stroke.

rHIgM22, our remyelinating antibody being developed with Mayo Clinic, is in the latter stages of preclinical development. Our R&D team is currently working on an assay to detect human plasma levels. Once that assay is completed, we plan to file our IND for human trials in MS.

In summary, the pipeline is robust and is poised to deliver significant value.

I'll now turn the call over to Dave for a review of the quarter's financials.

Thanks, Ron. For the third quarter ended September 30, 2011, the Company reported non-GAAP net income of $16.2 million, or $0.40 for diluted EPS compared to non-GAAP net income for the same quarter in 2010 of $17.2 million, or $0.67 for basic and diluted EPS.

Net revenue for the quarter was $65.4 million, comprising $54.7 million of AMPYRA sales and $10.7 million in ZANAFLEX capsules and tablet sales. Total operating expenses, including share-based compensation expense, for the quarter ended September 30, 2011, were $72.4 million compared to $50.4 million for the same quarter in 2010. This increase in operating expense is primarily due to the cost of sales related to the increase in AMPYRA sales, $14.1 million in ZANAFLEX accounting adjustments included in the cost of sales related to the Apotex patent trial court decision, and increases in R&D costs, including the development of the Company's pipeline products. SG&A expenses increased primarily due to AMPYRA educational and regulatory activities and other expenses related to the ZANAFLEX capsules patent infringement litigation.

In the third quarter of 2011, the Company was cash flow positive and closed the quarter in a strong financial position, with cash, cash equivalents, and short-term investments of $268.8 million.

Operator, we'd now like to open up the call for Q&A.

(Operator Instructions.) Michael Yee, RBC Capital Markets.

A question on scrips versus reported revenue. A lot of folks are looking at third-party scrip databases. They were up about 1% quarter over quarter, but your revenue grew 5.6%. Is there any discrepancy there? What you typically commented on scrip trends versus, say, IMS, what you're seeing versus what a third party has seen. Is there a discrepancy there on, was it gross to net was the difference? Or maybe you could help describe the difference. Thanks.

Yes, Michael. As we discussed on the last call, moving forward, we're providing net revenue and yearly net guidance, and we're not providing TRX or NRX commentary with respect to these third parties.

Since the launch, IMS generally has tracked directional trends on TRXs accurately in most, but not all, quarters. And because we don't have complete insight into how they and other third parties arrive at their numbers, we just can't speculate further.

What I can tell you is that with respect to our revenue quarter over quarter and RXs, we are tracking internally, and our inventory levels have not changed. So the channel inventory is two weeks or less, and that has been rock-stable throughout.

Was there a gross to net change at all?

No, there was not.

Okay, thanks.

Geoff Meacham, JPMorgan.

So for AMPYRA, when you just focus on the neurologists who were, say, lower to your prescribers as of now, what types of demand metrics do you think that -- what do you have today, and what do you think, going forward, you'll be able to provide for the new marketing campaign as a measurement of its efficacy, let's say?

I'm sorry, Geoff. I'm not sure I quite understood you. You were talking about the lower?

Lower-tier prescribers for the lagging adopters of AMPYRA, and what --

The campaign is not necessarily targeted specifically at the lower-tier doctors. In fact, if anything, it's probably weighted the other way, as you would expect. What I was trying to convey is that the campaign is geared at the same doctors where we've been going after all along, because we've had excellent penetration.

We've penetrated into the high 90% of our (technical difficulty) at this point. So what we're going after is to continue to educate those same prescribers who have usually written a prescription, or more than a prescription, already for AMPYRA, but who have a particular view of who that should be. And typically, that view is it's someone with a cane or a walker or crutches or some obvious walking impairment.

What we've been educating with the data, with the videos, and the other tools we talked about on the call, to expand their understanding of the full range of patients in their practice that could be eligible. So in that regard, when we talk about metrics and how we're looking at it, we look at things like the market research I cited in which an independent third party went out and did chart reviews of over 1,000 charts at MS neurologists' offices.

And one of the things we liked most about what we saw in those data was that the physicians had a certain number of people on AMPYRA, which was 80% higher than it was a year earlier. And then when they looked at the actual charts, they assessed that 18% of them or more were candidates for AMPYRA who hadn't yet tried AMPYRA. And that number was significantly more than the patients they had already put on AMPYRA.

So what that tells us is that we are making inroads in increasing the physicians' understanding of, "Hey, I've got significantly more patients who could benefit from this drug in my office."

Yaron Werber, Citi.

(Inaudible)

Sorry, I didn't catch that, Yaron.

Okay, can you hear me okay?

Yes, we can now.

Okay, great, thank you. So I just had a question on when you look ahead, how are you thinking overall about -- you've given us SG&A guidance over the rest of the year. But how are you thinking about the SG&A run rate into Q4 to be at your, to make your guidance? It looks like if you're going to be keeping it sort of flattish or so, you're going to be at the higher end of that guidance. Is that a fair way to look at it?

Hey, Yaron, it's Dave. I think to narrow our guidance between what we've said is difficult. We expect to hit our guidance -- in the middle? We expect to be within that range. I can't pinpoint it any closer than that.

By middle, what we mean is within the range?

Within the range, right.

David Amsellem, Piper Jaffray.

This is a question on the spend. With the market expansion studies you're getting underway in AC105, how should we think about the trajectory of the R&D spend next year? And then the same question on SG&A. With all the promotional initiatives and patient support and outreach for AMPYRA, how should we think about the trajectory of sales and marketing spend going into 2012? Thanks.

Dave, we'll be giving guidance for 2012 in the first quarter. What I can tell you now is that historically, we've always struck a reasonable balance, I think, between revenue and expenses, and we expect to continue to do that. Note that all of the planned studies in 2012 are relatively small proof-of-concept or Phase 2 studies, so I guess you can factor that in. And these have potential to generate significant value for the Company at relatively low cost, given that they're proof-of-concept and Phase 2.

Mark Schoenebaum, ISI Group.

Hey, Ron, I want to ask you a question. I don't know if you'll answer, but if you don't answer it, maybe I can ask you a second one. Is there any way you could possibly give us the number of new patients that you guys added in 3Q versus 2Q?

No, I can't, and since you can only ask one question, you just used up your last wish. No, but go ahead. You can have another one.

Okay. Well, my next one is just really easy.

Let me just -- maybe I can give you a little bit more than that. New patient adds within the third quarter were relatively flat and somewhat lower than earlier in the year, so I can tell you that. I think there are two key factors to focus on here. One is that we are continuing to add patients at a higher rate than those that are discontinuing. And second, that due to the high persistence rates, the patients that we add stay on the drug for a long time. So as a result, total prescriptions have been growing since the first quarter, and we expect that they will continue to grow as we continue to feed in new patients.

I think that was an answer, so I'll get back in the queue. Thanks a lot, Ron.

Phil Nadeau, Cowen and Company.

Ron, on the figure that you cited, 18% of impaired eligible patients have yet to start the drug versus the 7% who have, did your market research give you any reasons that those 18% have yet to try the drug? Were there any identifiable impediments that you think you could remove that could bring those patients to therapy more quickly?

A couple of things there, Phil. First of all, before I actually answer the question, let me just level-set the information that we gave. First of all, this was an independent survey, or syndicated survey, of 1,000 patient charts at about 200 MS doctors' offices. So with respect to the quantitative numbers, 7.6% and 18%, you've got to take those with a certain grain of salt in terms of are those the exact representative numbers for the entire population?

What we're looking for here, more than anything, is trends, not necessarily a specific number that says, "Oh, X% are on drug versus not," because the survey's just not representative enough to say that with respect to the absolute number. But the trends are robust, and you can derive trends from them. So that's one.

Also, the 7.6%, it's important to realize those are patients who were currently on AMPYRA in the survey. So that was after other patients who they had put on drug had dropped out. Nevertheless, the 18% that they cited of patients never on drug who could be on drug is still higher than the combined rate of the 7.6% plus whoever had dropped out previously. So that's very good. We're very encouraged by that, because on a trend basis, it says -- what you can fairly say from the data is that doctors believe that there are more patients in their practices who have never tried AMPYRA than all the patients that so far have tried AMPYRA. So that's great.

With respect to why that is, why they haven't yet put those patients on, the survey did not address that at all. We have other information from the field that helps us put all that together and helps us direct our sales and marketing campaign. And as you would expect, it's a variety of issues.

It has to do in part with patient flow. So patients come into the office, on average, one or two times a year. So if you start messaging the doctors and they begin to get a more comfortable sense of how broadly they can prescribe AMPYRA, it still is going to take them a fair amount of time to start seeing those patients in their practice who now conform to their new understanding, but they don't all come in at once. They may not come in for two months, six months, eight months, nine months from that time. So there's just a mathematical issue, if you will, just working that through.

And then there are the usual things. It's a question of how quickly we're penetrating with the message, how broadly we're penetrating with the message. Over time, we assume that as our sales force is out there and as our marketing campaign is out there, we see that the message is resonating. But we're going to be recruiting more and more physicians to resonate with that message over time. It doesn't all happen the first time you walk into the office.

So, again, it's a number of factors that are all combined in a cohesive sales and marketing program here. And over time, we expect that what we're seeing in the trends here will be reflected in the actual prescriptions.

Josh Schimmer, Leerink Swann.

Ron, can you compare the cerebral palsy indication to MS in terms of pathology and clinical presentation? Maybe elaborate what it is about the condition that should give us confidence that AMPYRA will work in that setting. And just the primary endpoint from MS and its validation there, you mean you can use the same primary endpoint in CP as also their indication?

Yes, Josh, this is a proof-of-concept trial. We don't have a really good cerebral palsy animal model, so this is being done based on logic and pathophysiology. And that's why you do a proof-of-concept, to see if it works.

The reason you would think that you ought to try it is that cerebral palsy, the prime contributor to the total body spasticity that you tend to see, if you will, among other symptoms in cerebral palsy, is a diffuse, pariventricular demyelination or abnormal myelination in the brain that occurs due to anoxia and birth trauma. Now, we have had other studies in other conditions, like spinal cord injury and MS, where we've looked at spasticity. There is no indication for spasticity for the drug; I need to be very clear about that. But there are indications that, when we looked at the Ashworth scores in the MS trials, those did improve.

Now, again, I want to be very clear that this drug is not indicated for treating spasticity. But the data gives some indication that we ought to be looking at spastic-type conditions. And cerebral palsy is the archetype for a spastic condition due to demyelination in the brain. So it makes perfect sense that, because of the mechanism of action of the drug, you would want to look at the effect in cerebral palsy. So that's one. And it should be a relatively brief, small proof-of-concept, and we should get a lot of information out of that as to whether we're seeing something.

We're going to look at several outcome measures, not any one. We'll look at spasticity, we'll look at motor function, we'll look at walking ability and gait. So this study is meant to see whether we're seeing a signal. And if we do see a signal, then we will immediately turn around and do a formal double-blind study to get at whether we can get an indication.

On stroke, the story is perhaps more exciting at this juncture, because we do have good animal models, and the animal data are impressive. They're really quite impressive. And it's important to note, people need to distinguish, because people say, "Oh, my god, stroke, it's been a land mine or a minefield out there."

But those have been acute stroke trials. This is chronic stroke. This is animals who have been given a stroke, have had the brain damage. And then post-stroke, several weeks later, after they've had permanent damage, you then look to see if you have an improvement. So it's really a completely different paradigm, and we should be able to get a signal. If, in fact, in humans it looks like in animals, we should be able to get a signal in a relatively small proof-of-concept trial, and that's what we're going for there.

Jon LeCroy, MKM Partners.

It was just on the taxes. So as your net income's increasing, the tax rate is going to have an impact on the bottom line. How should we think about that going forward, and how is that impacted by your operating loss carry-forwards?

We've got approximately $275 million in NOLs. The tax you see right now are primarily just AMT and some state taxes that we're reporting.

So is the percent we saw this quarter what we should be thinking about going forward?

That's hard to say right now. I think it's a good benchmark, but to give any more guidance on it, we're not prepared to do so today.

Matt [Macavini], Robert W. Baird.

Can you just provide an update on the two-month pilot program? Specifically, are you seeing an increase in the size of that program? Now that you've had a little more time, are you seeing conversion from those patients to commercial customers? Thanks.

You're talking about the First Step program?

Yes.

So this is one of the tools, among many, that the sales force has to help physicians learn more about who is an appropriate patient for AMPYRA and who would be advantageous to try. So we piloted the program in the early part of the summer. It's actually been ramping up in the last couple of months, so we're now no longer in the pilot phase. We have limited data to this point, but it appears that patients are converting to paying customers at approximately the same rate as the patients who begin with commercial drug and then refill after two months. So we're very pleased with that.

It's very important to realize this is not a traditional sampling program, so this is not a program where we give a box of drug and it sits on the shelf and the doctor can pull it off the shelf and give it to the patient. We really can't do that because, in large part because our REMS requirements require that we track every patient who gets drug. And if you have stuff on the shelf, it's very hard to do that.

So from the physician's point of view, the process actually looks a lot like when they're prescribing commercial drug, because they have to fill out a form and fax it in to our hub. The big difference is that the patient gets the drug right away, with no benefits investigation, and they don't pay anything -- no co-pay, no nothing -- and during that two-month trial period, the patient and the doctor have an opportunity to see whether the drug is actually beneficial and the patient is a responder. And during that time, in the background, we're conducting the benefits investigation and teeing everything up so if the patient does respond and wants to continue, they can convert automatically two months later to commercial drug. So that's how the system is working.

I want to be careful here, because the last time I mentioned this last quarter as a pilot program, what I found was that about 90% of the questions I was getting for the next several weeks was about this program. And that's not where we believe the emphasis should be. It is a tool. We think it is a good tool. But when you throw it in with all the other tools, in terms of branding as The Walking Pill, in terms of the videos, in terms of the data, expanding the view of walking impairment and so on, it's one tool among many that, together, creates a comprehensive campaign and momentum for the brand.

The other thing that everyone should realize is IMS and third parties do not record these free drug on First Step until they convert to commercial. So the numbers you're seeing should not be affected by this program until it actually converts to commercial drug.

Maged Shenouda, Stifel Nicolaus.

In your prepared comments, you indicated that 40% of patients prescribed AMPYRA received a sixth refill. Should we be thinking of this as mirroring the normalized persistency rate for AMPYRA?

What do you mean? Could you just, what do you mean by normalized persistency?

I'm just wondering, of 100 patients who are started, do you expect 40% to be on the product in six months? Is this how you're calculating it internally?

Yes, that's right. So that's right. For every 100 who start, by six months, about 40% are still on the drug. That's how you can interpret that.

Okay, and is there anything unusual about that number? Do you expect that to increase or do you see that as the normalized level going forward?

You actually expect it to decrease over time, because it's just the natural rate of attrition for virtually every drug. However, the rate of decline actually is decreasing. In other words, the biggest declines, or the biggest rates of discontinuation, are seen within the first couple of months, and then it slows down, the next couple of months it slows down. So it continues -- the rate of discontinuation continues to decline. Another way of saying that is the longer patients stay on drug, the longer they tend to stay on drug into the future.

Okay, thank you.

There are no further questions in queue. I would like to hand the call back over to Ron for closing remarks.

Thank you very much, everyone. We appreciate your listening in, and have a great weekend.

Ladies and gentlemen, that concludes the conference. You may now disconnect. Have a wonderful day.