Acorda Therapeutics Inc (ACOR) 2011 Q4 法說會逐字稿

Thank you for holding, and welcome to Acorda Therapeutics fourth quarter and full year 2011 financial results conference call. At this time all participants are in 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. I would now like to turn the presentation over to your host for today's call, Jeff Macdonald, Senior Director of 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, third-party payors including governmental 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, or from our other research and development programs including any acquired or in-licensed programs,the occurrence of adverse safety events with our products, delays in obtaining or failure to obtain regulatory approval of or to successfully market Ampyra outside of the United States, and our dependence on our collaboration partner, Biogen Idec, in connection there within.

Competition including the impact of generic competition on Zanaflex capsules revenue, 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, and the ability to obtain additional financing to support Acorda Therapeutics operations.

These and other risks are described in greater details in Acorda Therapeutics filings with the SEC. 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 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 events developments occurring after the date of this presentation. I will now turn the call over to our CEO, Ron Cohen.

Thanks, Jeff. Good morning everyone. On today's call we will recap our 2011 accomplishments and provide updates on both Ampyra and Zanaflex. We will also outline our strategy for growth, which focuses on the Ampyra franchise and building value through disciplined investment in our pipeline. As you saw in the press release this morning, we have an agreement to acquire Neuronex, Inc., and I will provide some additional color on that deal later in the call. We will also review the financials for the fourth quarter and full year, and provide 2012 guidance, and then we will open the call for your questions.

In 2011, Ampyra net sales totaled $210.5 million in the United States, with approximately 19,000 new patients trying Ampyra therapy. Two key milestones with the allowance of two patents that extend our exclusivity in the US to 2027, and the conditional approval of Fampyra in Europe, which was granted after we and our partner Biogen Idec appealed an earlier negative CHMP decision. We also made significant progress in developing our pipeline. We initiated a Phase 2 clinical trial of Ampyra in adults with cerebral palsy, we also generated exciting data on functional improvement using a preclinical model of chronic stroke, and we also acquired AC-105 from Medtronic, and will begin a clinical trial for acute spinal cord injury this year.

Moving to Ampyra. Net sales for the fourth quarter were $57.2 million and $210.5 million for the full year. We showed quarter-over-quarter growth throughout the year approximately 30% of all eligible MS patients have now tried Ampyra since launch, and we think this is excellent for the first 20 months of availability. Moving forward, we also see a great opportunity to reach a large percentage of patients who have not yet tried Ampyra. To drive continued growth of Ampyra in 2012, we are placing an emphasis on increasing patient awareness.

At mid-year consumer awareness of Ampyra was around 30%, and this provides a substantial opportunity for growth. We believe that our investments will pay dividends given the high long-term value of those patients who are responsive to therapy. Our sales force has done an excellent job educating neurologists about Ampyra. There is approximately 100% awareness now among high-decile MS specialists, and among neurologists overall awareness is over 90%.

Our professional outreach will remain focused on highlighting data that supports the use of Ampyra in earlier stage patients. We received positive feedback on the reimbursement specialist program that we initiated last year. This provides assistance to physicians offices in navigating managed care challenges, and based on the success of that program we are expanding that in 2012.

Turning to Zanaflex. Combined fourth quarter net revenue of Zanaflex capsules and Tablets was $11.8 million and full year net revenue was $45.8 million. In the third quarter of 2011, the US District Court ruled against Acorda in our patent litigation suit against ANDA filer Apotex. The Company is appealing the Court's decision. On February 3 of 2012 the FDA approved Apotex' ANDA and in February 6th Acorda launched an authorized generic version of Zanaflex capsules with our partner Watson Pharmaceuticals, coincident with the launch of Apotex' generic.

As a reminder, the Zanaflex business allowed us to establish Acorda as a commercial enterprise, and prepared the Company for the subsequent launch of Ampyra. The business succeeded well beyond its original intent. The authorized generic will now enable us to retain a portion of the revenues from Zanaflex that we otherwise would have lost. Royalties from the authorized generics are included in our 2012 guidance, which I will review with you later in the call.

Turning to our pipeline. We have now developed a strong pipeline both for expanding the use of Ampyra into other indications, and for several other compounds that are either in or poised to enter into clinical trials. Here you see a snapshot of our pipeline. We are planning to initiate a Phase 2 study of AC-105 in acute spinal cord injury later this year, and to begin a Phase 1 study of our M-22 antibody for remyelination in MS, pending filing of our IND this year as well. We also expect a readout of data from our GGF-2 Phase 1 study in heart failure. These programs are exciting, and we will provide in depth reviews on them at our upcoming Investor Day on March 29, which will provide more information in the coming days or weeks.

For today's call I am going to focus on our Ampyra clinical programs. At the end of 2011 we initiated a proof of concept study of Ampyra in adults with cerebral palsy, and later this year we will begin a proof of concept study in chronic stroke. These are both conditions with very limited therapeutic options, and no medications indicated to improve mobility or motor function.

We are also supporting investigator initiated studies looking at the use of Ampyra in treating a range of MS symptoms, such as visual impairment for example, as well as other neurological conditions including transverse myelitis and Parkinson's disease. While we are focusing the majority of R&D resources on the CP and chronic stroke programs, any signals that we see in the investigator initiated studies will help to guide future development of Ampyra.

Some background on CP. There are about 400,000 adults with cerebral palsy in the United States, or roughly equivalent to the size of the number of people with MS. Currently available medications provide symptomatic relief, primarily by relaxing spastic muscles. However, they do not improve neurological function, they don't improve motor function or walking. Based on the pathophysiology of the disease and Ampyra's mechanism of action, we believe Ampyra may have therapeutic potential in this condition.

Regarding stroke. There are approximately 7 million stroke survivors in the United States who live with long-term functional deficits. This is called chronic stroke, and there are approximately 800,000 new cases of stroke each year. There is no drug therapy that improves function for people living with chronic stroke. Earlier this month, Acorda presented data at the International Stroke Conference showing that dalfampridine was effective in improving both hind limb and forelimb sensory motor function in a preclinical model of chronic stroke. Based on these data we are encouraged, and expect to begin a proof of concept clinical trial later this year.

Now as I mentioned earlier we were pleased to announce this morning an agreement to acquire Neuronex, Inc. Neuronex is a privately held company developing a proprietary nasal spray formulation of Diazepam, for the management of seizure in certain epilepsy patients. Neuronex is preparing a 505-B2 type NDA, that will provide pharmacokinetic data with the nasal spray, and will reference older investigations on efficacy and safety for DIASTAT AcuDial, which is a Diazepam formulation that is administered rectally.

This acquisition fits within our strategy to bring in a near term commercial opportunity in neurology which leverages the Company's experience in developing neurological products, as well as leveraging our existing commercial infrastructure. We made an up front payment of $2 million to Neuronex, and also paid $500,000 of the up to $1.2 million in research funding to prepare for the pre-NDA meeting.

Following Neuronex' and our attendance at the pre-NDA meeting with the FDA and our review of the minutes of that meeting, we can at our option complete the acquisition of Neuronex with a payment of $6.8 million. If we complete the acquisition Acorda would assume responsibility for regulatory development and commercialization activities and costs. We expect these costs will not exceed $8 million in 2012, and if we spend toward the higher end of that figure that will reflect our confidence in the progress of the regulatory process.

The structure of the deal enables us to make staged investments in the product through its development and regulatory review phases, with the majority of milestone payments to follow approval. Please note that since the deal was closed just yesterday, we are still reviewing how expenses related to it may be classified in our financials.

I will turn the call over to Dave now, who will review the financials.

Thanks, Ron. For the fourth quarter ended December 31, 2011, the Company reported non-GAAP net income of $18.2 million, or $0.45 per diluted EPS compared to non-GAAP net income for the same quarter from 2010 of $8.9 million, or $0.23 per basic and diluted EPS. Full year 2011 non-GAAP net income was $45.1 million, or $1.13 for diluted EPS compared to $6 million, or $0.16 per diluted EPS for the full year 2010.

Total operating expenses including share-based compensation expense for the quarter ended December 31, 2011 were $59.6 million, compared to $62.7 million for the same quarter in 2010. This decrease in operating expense is primarily due to lower fourth quarter sales and marketing costs in 2011 versus 2010, which was the launch year of the Ampyra brand,offset by an increase in cost of sales related to the increase in Ampyra sales, and increases in R&D costs including the development of the Company's pipeline products.

In the fourth 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 $295.9 million. This is an increase in cash and investments of $55.9 million over our cash and investments balance from the end of 2010.

I will now turn the call back over to Ron.

Thanks, Dave. So 2012 will be a year of strategic disciplined investment for Acorda. We are going to invest both in Ampyra's continued commercial growth, and on clinical programs that can expand the Ampyra franchise. Persistence rates for Ampyra are high. Patients who respond tend to remain on therapy, so there is a high value to every new patient that we add.

It will be important for us to increase patient awareness and continue to increase patient awareness about Ampyra's potential to improve their walking ability, and therefore we believe that focusing our investments this year on consumer awareness will benefit the long-term value of the brand.

In R&D, we are waiting weighting our spend toward studies that have the potential to expand Ampyra's indications, both within MS and in other neurological conditions. In particular our current proof of concept study of Ampyra in cerebral palsy and the study that we are planning to begin in chronic stroke this year, both represent large underserved markets with tremendous unmet medical needs.

We are designing all of our development programs with outcomes that will enable us to make efficient go/no go decisions, and to focus our spending on those programs that have the best likelihood of success. As we have been discussing with you on business development activities, we have been targeting commercial or near commercial stage opportunities in neurology, and we have now brought in a low-cost/high-opportunity product in Diazepam nasal spray.

In 2012, we project Ampyra US net sales of between $255 million and $275 million. This is inclusive of the net impact of the 15 price increase that we took effective in January. We anticipate approximately two-thirds of the price increase will drop to our bottom line. We also expect combined Fampyra ex-US royalties and Zanaflex revenue of at least $25 million. This includes revenue from the sale of the branded Zanaflex capsules and tablets, as well as royalties from Watson on the recently-launched generic version of Zanaflex capsules.

With regard to expenses and cash flow, note that our guidance does not take into account the potential expenditures related to Diazepam nasal spray, and also is exclusive of noncash compensation payments. We project SG&A spending to be between $145 million and $160 million, and R&D spending between $50 million and $60 million. We also expect to be cash flow positive for the year. In closing, we achieved significant milestones for the Company in 2011, and we are poised to build significant value in 2012 and beyond, through disciplined investment in Ampyra and an increasingly robust pipeline.

Thanks very much. And we will now turn the call back to the Operator for your questions.

(Operator Instructions). Our first question will come from the line of Michael Yee with RBC Capital Markets. Please proceed.

Hey, thanks for the question. Hi, Ron. A question on the Neuronex deal and a question on Ampyra. On the Neuronex deal can you just give a little more color on your thoughts about the revenue opportunity here for you. Is this a Zanaflex-like type of opportunity? Is that how we should think about it in terms of real revenues?

Yes, it -- Go ahead. I am sorry, did you want to fen initial the other part of the question?

The other question was just can you talk a little bit more on Ampyra specifically your DTC campaign I am thinking about this as one of the drivers I assume for growing the franchise. Maybe give more color on what regions this is going to be in, et cetera, et cetera.

Okay. So Neuronex, it is early to give a lot of specifics on the market. There are about 2 million people with epilepsy-type disease in the United States. Generally speaking DIASTAT Diazepam which currently is rectally administered is indicated for repetitive breakthrough seizures or frequent break throughs for people on stable therapy but have breakthrough therapy. It is an acute treatment for people who have that. That is obviously a subset of the population, and the actual size of the market for the Diazepam nasal spray is very much going to depend on the label that the FDA allows under the 505-B2. So until we get more clarity hopefully through the pre-NDA meeting, it is premature to speculate on the size of the market. Obviously given the cost of the deal and the up front costs and the way we have been able to stage it, it allows for a pretty wide range to get a very nice return on that investment.

With respect to the consumer campaign there are a number of aspects to that, and I don't know that I would classify the whole thing as DTC. I think when people hear DTC they start thinking Super Bowl ads. This is not that. This is a really a broad-based multifaceted program to each consumers in multiple ways and frequently. So for one thing we going to continue to expand on the branding of the walking pill. I was very pleased yesterday, as a matter of fact, I was at another Board meeting at Bio, and I actually talked to a CEO of another company, who came up to me and said oh you are the guys with the walking pill. So that told me that we are starting to get some traction there.

The program is going to make use of every conceivable outlet other than blanket TV commercials. It is going to be targeted specifically at MS patients and their care partners. It will take place online in multiple ways with paid search for example, a number of different websites that we are establishing. It will take place in print advertising. It will take place in speaker programs that are going to be ubiquitous across the country in every single salesperson's territory.

We will have patients talking about success stories with Ampyra. We will have a major presence at MS Walks. Each of the walks that we will attend has thousands of MS patients attending them, so we will have booths there reinforcing our message. So just to give you a sense that this is not a single episode, this is a graduated multi-faceted program that is designed to get as much exposure through as many outlets as possible for the consumer.

Can I just ask one follow-up to the Neuronex deal. Do you know what the sales of DIASTAT rectal were just as a datapoint?

When they were branded at peak it was about $112 million. That is a number of years ago so.

Okay. Thanks.

Our next question will come from the line of Joel Sendek with Stifel Nicolaus. Please proceed.

Thanks a lot. Let's see. I have a bunch of timing questions. I guess the first--

But I don't have a bunch of time.

Well, then do you have a watch on, Ron?

(laughter).

Or a calendar on the wall?

Hit me.

Pretty much all of a sudden you have a pretty full pipeline here, it but seems like a lot of trials are just starting to initiate. I am wondering the only one I have in my notes here that we will have readouts on is the cardiovascular drug. Is there anything I am missing there?

Yes, we expect to have an initial readout on their cerebral palsy proof of concept this year. Just a caveat on that, it is a two-part trial so the first part is a single dose study primarily for safety in between 10 and 20 patients. But we are going to be taking efficacy measures at peak plasma levels. If we something that is great. And we may, because in the past history of the drug when we looked at this in single dose studies for MS for example, we were able to detect a signal, but we may not in which case there is going to be a second phase where we have a steady state dose. They will be getting it twice a day for a week before we measure them.

Certainly for the first part of that study we would expect to have a readout this year, and it will really depend on recruitment to see how much more we get. We are also doing a post-commitment study. It is a fairly large study of I think about 400 patients that we committed to the FDA at approval looking at 5 milligrams versus 10 milligrams twice a day. It is the so-called lower dose study. That is going to complete this year, and we do have some additional nuances in the way we did the inclusion/exclusion criteria, and the outcome measures so we actually may get some additional useable data in that. And then we also have a gate study that is ongoing, looking at other aspects of walking other than speed, and that should read out this year as well.

Okay. So three things, good. And then on Neuronex, I am just curious, typically when you read announcements about companies being acquired you don't see residual milestone payments and royalties outside of the typical CVRs which you have constructed with the pre-NDA meeting. So what is going on there?

I am not sure I understand the question Joel?

In the release it says you will also pay Neuronex milestone payments and royalties based on net sales.

Right.

So is that -- I mean --

I see.

I am trying to figure out the tail?

I see what you are saying. Yes, it is a bit of an unusual structure. That is because the company really is built around just this product, so it is a somewhat virtual company built around a product. There are people involved but after the acquisition in essence we are going to take over the product. We will rely on some consulting from some of the technical people who are involved, but they will not be our employees. And so there is a royalty and milestone structure that is built in as a result.

Okay. And then my final two timing things, when is that pre-NDA meeting and then on the DTC is that ongoing now or yet to begin?I am not supposed to call it DTC, but the consumer awareness plan. The timing on that?

Right. In terms of the pre-NDA meeting I don't have a specific, it will be this year but I don't have a date yet. And then with respect to the consumer awareness program, that is staged, right. So we are already, we have been rolling out aspects of it, but it is going to gather a lot of steam over the next few quarters, so we will be rolling out more and more pieces of it in sequence over the next few quarters.

Has it started as of now?

Yes.

Okay. Alright. That is it. Thanks, Ron.

And our next question will come from the line of Mark Schoenebaum with ISI. Please proceed.

Hi, Ron. Could you let us know, you alluded to this in the prior question, but could you let us know in general what you will need to see from the CP study to make a go decision? I realize it is going to be the totality of the data, but maybe you could help us out a little bit. And then second of all, just on Ampyra just a housekeeping question, can you let us know what on a quarter-over-quarter basis what volume growth was versus price in the US? Thanks a lot?

Let me tackle the CP first. In CP we are going to be looking at walking measures, gate, walking speed. We will be looking at motor function, particularly in the upper extremity for example, there is an outcome measure called the block and box, which measures, it is kind of a combined motor strength coordination and utility of the upper extremities. So that is what we are going to be looking at in terms of efficacy for CP. Again, it depends on the strength of the signal. We are going to assess how many patients appeared to get a result, whether it looked like a clinically useful result, or whether it looked like any result at all. But those are the dimensions we are going to be looking at. With respect to volume growth, I don't have the figures in front of me. What I can tell you is that last year the only price increase impact occurred between the first and second quarter. We took a 7.5% price increase that was effective on March 1. So basically only January and February of last year would have been at the older price. And quarters two, three and four were all at stable price.

Okay. Great. Thanks a lot.

Our next question will come from the line of Geoff Meacham with JPMorgan. Please proceed.

Hi, guys. Good morning. Thanks for taking the question.

Sure.

A couple on the refill rate, Ron, and then I have a clinical question. You gave the data on the first and sixth refill. What is the typical unit, I am assuming about 30 days of volume, or 30 days of Ampyra and then any general color on longer term trends, say refills beyond the ninth or even the 12th?

I don't have that for you yet. When we are getting out that far, remember the product has not even been on the market for two years yet, and so longer term we need to have a certain number of cohorts that we can follow to make sure that the data are robust. So right now we are just giving the first and sixth refill. And yes, that is normalized to one month, or to 30 days I should say, a 30-day supply.

Got you. Okay. And then for the post-stroke study, maybe give us a general sense in terms of the types of populations you are looking for? I know there is obviously a lot of variability in that population. I know you are not even going to start the study until the end of the year, but kind of what you are thinking about in terms of the patient population here?

So these are going to be people who have had a stroke no less than six months, or no less than six months earlier, so in other words, it could be years earlier but has to be at least six months, so that they are no longer recovering spontaneously, because there is some in the first three months or so after stroke there is some plasticity and some increase. About half of the people with strokes so there is population of 7 million people who have had a prior stroke. About half of them hemiparesis, motor deficits, mobility issues, in particular mobility issues. We are going to be looking specifically at patients who have mobility issues having had a stroke at least six months in the past. I can't tell you yet whether we are going to cone it down further.

For example, it is conceivable that we might think about whether it is a middle cerebral artery occlusion or anterior cerebral artery, whether we would localize it to one particular type of lesion. There are certain reasons why one might do that for initial studies. For example in a middle cerebral artery occlusion the cell bodies, the tracts that are mostly involved in walking and in leg function, tend not to be affected at the neuronal level, but they do tend to be affected at the Axonal level, which is what we are interested in. That is the injury to the axonal tracks, demyelination, and so on. That is being worked out right now. But fundamentally, we will be looking at people with fixed, motor and ambulatory deficits who have had a stroke at least six months in the past.

That is helpful. Thanks.

Our next question comes from the line of David Amsellem with Piper Jaffray.

Thanks. Just a couple. On the Neuronex deal the question here is one of your peers, Jazz Pharmaceuticals, had actually shelved their own internasal benzodiazepine for epilepsy, so I am just wondering what you saw in this opportunity where one of your peers differed? Then secondly on the price increases you said that two-thirds dropped to the bottom line. I think one of, Kevin had mentioned that on Copaxone their price increase is about half or less than that dropped to the bottom line. I am wondering what you are seeing there that gives you confidence that so much of that price increase will drop to the bottom line?Thanks.

Let me answer the second question first. I can't comment on what another company's bottom line is, and what they are dropping. Depending on a product, you can have a huge range of net out of a price increase. I mean it really is a huge range. I can't account for that particular product. For us, we are comfortable based on what we know about our discounts and allowances, and our contracting structure that for now at least it should be about two-thirds. Now we will refine that if needed as we go through the year and have experience. But to the best of our calculation now, we think that is about accurate.

And then with regard to Jazz I believe they were developing Clobazam, which is a different benzodiazepine. That is a very early stage product, I have no idea what went into that. I can tell youthere are other, someone mentioned it today, there was a press release that there is a startup company called Neurelis, that in fact just filed an IND for their own internasal diazepam. There are a couple of other groups out there that are actually working on internasal formulations. We think this one may be ahead for various reasons, particularly because of the 505-B2 mechanism and the fact that it is Diazepam, which is already approved in a different delivery system for the same indication.

And given that just one last question if I may, given that DIASTAT AcuDial is available as a generic, and it is primarily used in peds, I know you alluded to the label, the potential label earlier, are you going to pursue a broader label in adults, so you can potentially get around the issue of generic competition, albeit a different formulation? How do you think about that?

The DIASTAT rectal formation is not indicated only in peds. It is used largely in peds because it is rectally administered. As you can imagine that is a mode of delivery that is not well accepted by most consumers. And in fact, even for children it is typically given to children who are extremely disabled, who have 24-hour attendants who can deliver the rectal formulation. We believe that there would be wider use and particularly among adults who have a great need of an easily administered readily-available Diazepam formulation for breakthrough seizures, if it were available intranasally. So that is really the insight here. With regard to the label obviously we will be talking to FDA about the broadest label that we can achieve with the available data.

Alright. Thanks, Ron.

Our next question will come from the line of Phil Nadeau with Cowen and Company. Please proceed.

Good morning. Thanks for taking my questions. First one on Ampyra. The turns in sales during Q4 seem to diverge a little bit from the prescription trends that we are seeing. Were you aware of any inventory changes that could have affected sales?

No, and again for everyone who is following outside prescription trackers like IMS and Wolters Kluwer and so on, just a reminder, we track those closely for much of last year, I think it was in the third quarter that we told people that we could no longer track accurately against those vendors for whatever reason, sometimes they seem to be similar to the data that we have internally, other times they diverge significantly. We can no longer reference those services. Again, sometimes they may be right and sometimes they may be wrong. We just can't provide insight there unfortunately. What we can tell you is that we do track inventories closely, and there was no material change during the fourth quarter. Still average two weeks of hold.

Okay. Great. And then second on the Neuronex deal, the way the deal is structured it seems like there is some risk that you perceive at the pre-NDA meeting given than is where the go/no go decision on the acquisition comes in. Can you talk about the uncertainty is at that meeting?Is it simply around the label that you referenced earlier or are there other potential issues, and can you give us some idea of what you want to see in order to go forward with the meeting, versus what would prevent you from completing the acquisition?

Well, I am going to go out and a limb here, Phil, and say that probably every product on earth has some risk going into a pre-NDA meeting. So really it is a reflection of that. A reflexion that the pre-NDA meeting has not taken place yet, and we expect to we able to ask the questions that we want to ask, and get the answers that we need, for example as to whether the FDA feels that the current package is adequate. Whether it would want other studies that would incur other expenses, and change the timeline, and so on. We built the deal in such a way that it was cheap up front. Basically an option for us to get into the FDA, and make a further assessment based on that. Again the whole strategy here, the whole approach, is one of staging the derisking of the product and then paying accordingly, or stopping if we don't like the stage that we are at. And so that is really what you are seeing.

Okay. And for the 505-B2 strategy to be successful, correct me if I am wrong but it is just that you have to have PK that has no higher CMAX than the DIASTAT formulation?

Yes. It is bio equivalence is what you are looking for against DIASTAT.

Okay. And then one last questionon Ampyra and the additional indications. We have done a little bit of work on the transverse myelitis opportunity. And that seems to be intriguing given that condition is characterized as basically multiple sclerosis of the spinal cord. When could we see data from that investigator sponsored study, and can you give us a little bit of an idea of your own thinking on transverse myelitis?

I don't know when we will see data. So we will have to wait until I can get information on that. I agree it is an intriguing opportunity. It is essentially MS of the spinal cord. Because some might disagree with the characterization, but you can think of it that way it is localized lesion in the spinal cord with a strong demylenating component. The fact that it is a single locus, or a very localized area of lesion makes it theoretically very amenable to Ampyra. So there are published reports in the literature indicating the potential for efficacy in transverse myelitis. This study is one that we are going to do or through an investigated initiated study, we will have some more rigorous information on that. I agree it is intriguing. I agree that theoretically it could be very interesting, and we will wait and see the data, but I don't have a timeline for you yet. As soon as I have more visibility into that we will low temperature you all let you all know.

Great. Thanks for taking my questions.

The next question will come from the line of Chris Raymond with Robert Baird.

Hi, Chris.

Hi Ron, thanks for taking the questions. Just intrigued by the cerebral palsy opportunity. And this question might be a little bit cart before the horse. When you think about the market landscape, do you have an estimate for how many patients are actually under the care of a neurologist actively, in terms of adult CP patients?

I don't. I have an overall number of 400,000. Obviously they are not all going to be under the care of a neurologist. However, it is a primary neurology indication. So to the extent that they are treated with CP is tends to be with neurologists. I don't have an exact breakdown for you.

Okay. Then maybe sort of a follow-up on that. There is some literature that shows a little bit higher seizure rate even among adult CP patients. When you kind of talk to your advisors on this,how do they view that? Is that --

Actually that is exactly why we have designed the study we have with a single dose first, so we are, there is a higher rate. There is also a higher rate in MS as you know. So very similar to what we did in MS, we are excluding patients from the trials who have a history of seizure. Obviously since we are working with adults hopefully that really does weed out the vast majority of people who are going to be at risk, because if they haven't had a seizure by then, they are presumably at less risk than other CP patients who have already declared their seizure risk in their first 18 years of life. That is how we are handling it, and then we are doing the single dose study to see if there is an undue sensitivity even among that population. In MS there wasn't. In MS we had a very acceptable result on that front. We will have to see in CP.

And what is the timeframe for the most recent seizure that weeds them out?

Any seizure. So no history of seizure.

Thanks.

Our next question will come from the line of Kumar [Raja] with Citigroup. Please proceed.

Can you tell us what kind of studies do you expect for the nasal Diazepam, and are there any studies ongoing right now?

The studies are primarily pharmacokinetic studies. There is one that has peripherally some efficacy measures, but that is not the main show. It is really bio equivalence studies, and there is I think one study left that is just finishing up.

Okay. Thank you.

I will now turn the call back to Dr. Cohen for closing remarks.

Thank you Operator. This completes today's call, and we wish you a great day. Thanks everyone.

Thank you for your participation in today's conference. This concludes your presentation. You may now disconnect. Good day, everyone.