Acorda Therapeutics Inc (ACOR) 2014 Q1 法說會逐字稿

Welcome to the Acorda Therapeutics third quarter 2014 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 introduce your host for today's call, Jeff McDonald, Senior Director of Corporate Communications at Acorda Therapeutics. Please go ahead.

Thank you and good morning everyone, and welcome. With me today are Ron Cohen, our President and Chief Executive Officer, and Mike Rogers, our Chief Financial Officer.

Before we begin let me remind you 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 our ability to successfully market and sell Ampyra in the US, third party payers, including governmental agencies, may not reimburse for the use of Ampyra or other products at acceptable rates or at all and may impose restrictive prior authorization requirements that limit or block.

The risk of unfavorable results from future studies of Ampyra or from our other research and development programs, including Plumiaz, our trade name for diazepam nasal spray, or any other acquired or end-licensed programs, we may not be able to complete development of, obtain regulatory approval for, or successfully market diazepam nasal spray or other products under development, recurrence of -- adverse safety events with our products, delays in obtaining or failure to obtain regulatory approval of, or successfully market Ampyra outside of US and are dependent on our collaboration partner Biogen Idec in connection therewith, competition including the impact of generic competition on Zanaflex capsules revenue, failure to protect our intellectual property, defending against the intellectual property claims of others, or to protect our intellectual property, or to obtain third-party intellectual property licenses needed for commercialization of our products, failure to comply with regulatory requirements could result in adverse actions by regulatory agencies, and the ability to obtain additional financing to support operations. These and other risks are described in greater detail in Acorda Therapeutics filings with the SEC.

Acorda may not actually achieve the goals and plans described in these 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 disclaims any intent or obligation to update any forward-looking statements as a result of developments occurring after the date of this presentation.

On a housekeeping note, during Q&A we would ask participants who limit themselves to one question and one follow up. Now I will turn the call over to our CEO, Dr. Ron Cohen.

Thanks Jeff. Good morning everyone. On today's call I'll provide an update on Ampyra and our product development programs, and Mike will then review the Q1 financials with you, and after that we'll open the call for your questions.

Starting with Ampyra, for the first quarter, sales were $72.5 million. As we previously stated, first quarter sales for this product historically have been lower than subsequent quarters due to inventory build in the fourth quarter and the temporary effects of people changing insurance plans, entering the Medicare donut hole at the beginning of the year. This was taken into account in our guidance for the year. April sales have been strong as expected, and we're reiterating our 2014 net sales guidance of $328 million to $335 million.

We were pleased that another Ampyra patent issued in the first quarter, giving us a total of five Orange Book-listed patents that extend up to 2027. We have not yet received notice of an ANDA filing on Ampyra, but we do expect that it could happen at any time. We will vigorously defend our intellectual property around the product.

Moving to the pipeline, last week we announced that we received a complete response letter from FDA on our Plumiaz NDA. Our thesis about the value of this product and the market need remain intact. We are requesting a meeting with FDA so we can implement the work needed to refile the NDA as soon as possible. Based on our initial assessment of the information requested by FDA, we expect to do additional clinical work. We're still planning on pursuing 505(b)(2) pathway using Diastat as the reference drug. Once we have resubmitted the review period will be six months.

Turning to dalfampridine and post-stroke walking deficits, last month we reported that an in vitro study of QD-dalfampridine, or the once a day formulation, found dose dumping in the presence of alcohol. We're going to perform a study in healthy volunteers to examine the in vivo effects of alcohol on the formulation, and we expect the results of that study in the third quarter. We expect to initiate the Phase 3 post stroke study by the end of the year.

We're planning to pursue HIV-related neuropathy as the first indication for NP-1998, which is the liquid formulation of capsaicin as a second-generation product following on the Qutenza patch. We will be meeting with the FDA to discuss the Phase 3 program, and we're also exploring the potential for additional indications, including painful diabetic neuropathy.

We're pleased to be resuming enrollment in our Phase 1B trial of GGF 2 in chronic heart failure. You'll recall we suspended enrollment pending further assessment of some preclinical toxicology data. Those data proved to be inconsequential. We're excited about the potential of this program, particularly in light of the results of the previous Phase 1A study, which showed dose dependent improvements in injection faction in people with Class 2 and Class 3 chronic heart failure. We expect data from the current trial in 2015.

Our rHIgM22 remyelinating program is also progressing well. We completed the dose ranging stage of our Phase 1 trial in people with MS with no serious or limiting adverse events even in the highest dose cohort. In the second stage of the trial, we're enrolling a cohort of 21 MS patients in three groups of seven who will receive either placebo or a single administration of one of the highest two doses used in the first part of the trial. Enrollment of this cohort is almost complete. We're going to follow the participants for six months. We'll evaluate safety and tolerability, and exploratory efficacy measures. We expect the data to read out in early 2015. Due to the high level of interest in this area of MS therapeutic development, we are cosponsoring an all-day symposium in demyelination and remyelination with Biogen at the New York Academy of Sciences on June 26.

I'll now turn the call over to Mike, who will review the quarterly financials. Mike.

Okay. Thanks, Ron, good morning everyone.

Ampyra net revenue for the first quarter of 2014 was $72.5 million, compared to $62.3 million for the same quarter in 2013. As Ron mentioned, April sales were strong as expected, and we are reiterating our guidance for Ampyra net sales of $328 million to $335 million. Overall revenue from Zanaflex for the first quarter of 2013 was $3.1 million, including our own sales as well as product sales to Actavis, and royalties received in Actavis's sales of generic tizanidine.

Ampyra royalty revenue from sales outside of the United States is $2.4 million for the first quarter of 2014, compared to $2.9 million for the same quarter in 2013. However, 2013 included a favorable adjustment of $1 million from the establishment of pricing in Germany, so the apples to apples comparison is $2.4 million this quarter versus $1.9 million in the year ago quarter.

Moving to the expense side, total operating expenses for the quarter ended March 31, 2014, were $77.1 million, including $5.8 million in share-based compensation expense, compared to $74.4 million including $4.9 million in share-based compensation expense for the same quarter in 2013. We are evaluating the impact of recent events on both research and development and selling, general, and administrative expenses for 2014, and we will provide an update on our next earnings call if there are any changes to guidance.

I want to make a comment regarding the tax line. As you may have noticed our effective tax rate for the quarter was quite high at 80%. And as we have said in the past our effective tax rate for book purposes is expected to show some variability. There are a number of factors that can cause significant differences between the effective tax rate shown in our financials and our actual cash tax position. Some of you have asked for further clarification, so starting this quarter, we've revised the non-GAAP disclosure in our press release to exclude noncash taxes. Cash taxes for the quarter ended March 31, 2014, were $460,000 compared to $731,000 for the same quarter in 2013.

Finally, a note on the balance sheet, our financial position remains strong as of the end of the first quarter with cash, cash equivalents, and investments totaling $372.2 million and negligible debt.

With that, I'll turn the call back over to Ron.

Thanks, Mike. Over the past month, two of our programs have had timing setbacks. These events underscore the need for a diversified portfolio and balance sheet strength, and we have both. Despite the setbacks, our portfolio remains intact and is as promising as it was a month ago. In addition to the continued growth of Ampyra sales, we have six products at various stages of clinical development, three of which are in Phase 3 or later, and all of which target important unmet patient needs.

On the business development front, we intend to use our financial strength to acquire additional assets that can drive growth. While we remain open to earlier stage neurology products with innovative science and significant unmet medical needs, our goal is to build a balanced portfolio capable of delivering substantial value long term as well as near-term value accretion.

With that, we will open the call up to your questions. Operator?

(Operator Instructions). Please stand by for your first question, which comes from the line of Michael Yee from RBC Capital Markets.

Hey guys, hey Ron.

Hey, Mike.

Quick question on the rHIgM22 data. Congrats on finishing the first portion. And the second portion, you gave some of the design of the and study. Can you walk through some of the exploratory efficacy end points there and how much effect you can legitimately see after just one dose. Maybe you could help gauge our expectations there.

Yes.

And second question is on the patent, are you -- maybe you can give a little more detail on that? I mean what specifically are we talking about here, and would you expect that the ANDA therefore to be delayed since you may have to recertify against that patent as well?

Okay. So on the rHIgM22, Mike, thanks for the opportunity to help set expectations on that. So the best news which we can point to is that so far, we've had no safety issues. And of course, you never know that with a new biologic until you try. So that was very good news. The recruitment is actually ahead of schedule, so we're almost done with the second cohort.

Now, all that said, it's very important that people realize it's a single dose. It is true that in the animal studies, a single dose was sufficient to see evidence of remyelination and some functional benefits. But it's not at all clear that that would be true in the human situation. And, obviously, the main purpose of the Phase 1 is to get safety and tolerability and dosing to a certain degree so that we can do a proper Phase 2 with multiple dosing and follow-up.

Now, having said all that, given the animal data, we (inaudible) of the Phase 1, giving the cohorts one of the two top tolerated doses, which turned out to be the two highest doses that we gave, doing baseline assessments, and then following them out. So we'll be doing a variety of measures, using MRIs to look at for physical or imaging evidence of remyelination.

We have some biomarkers that I won't go into right now specifically what they are, but there's some interesting biomarkers that our R&D team has come up with in collaboration with experts in the field that we'll be looking to as well for evidence of remyelination. And then we'll be looking at some functional outcome measures as well just to see if we have any evidence at all of potential increased function.

So again, everyone needs to realize it's a small cohort. It's seven patients placebo and then seven in each of the two dosing groups. It's a single dose, and having said that, we're positioning it so that potentially we could pick up signs of some activity, biological activity, even now at this stage of the program.

Now, with respect to -- yes. With respect to the patent -- with respect to the patent, our strategy has been to file on all appropriate inventions. Now, obviously, we're quite pleased that a fifth Orange Book patent has been listed and the Orange Book. It's very difficult to speculate what the ANDA filers will do with that in terms of how they certify and what they certify against. So we have to really wait and see. I don't believe that it changes the fundamental clock of the ANDA process. It depends on how they decide to go. I mean the key point is we have five patents, and we're going to defend them vigorously.

Thanks.

I should also mention that there are additional patents filed, so --

Thank you. Your next question comes from the line of Mark Schoenebaum from ISI Group.

Ron, this is Salim in for Mark.

Hey, Salim.

I have two questions for you. One, Ampyra in stroke. Can you just give us your thoughts on how you're thinking about using a BID formulation versus a once a day formulation? And it's my understanding that the preferred study was not to generate any more data in BID post-stroke. And then for diazepam -- is approval in 2015 a possibility? Just thinking about here if you could still be first-to-market versus Pfizer's product? Thank you.

So in terms of stroke, we -- it's always good, I think, to have contingencies. Our first preference is, obviously, that the in vivo alcohol test comes out okay and that we can proceed on that basis. But if it doesn't, we've done the calculations, and we don't believe it that the considerations in doing a BID in the trial in terms of IP and so forth, we don't believe that that outweighs the need to get the trial going as quickly as possible. And the strategy in that case -- we have -- we actually have a strategy in terms of how we would go about that with a BID. I'm not prepared to talk about it right now. But there is a strategy about how to separate that somewhat from the existing product. And then our plan would be to reformulate if we have to on the QD, so that we get alcohol resistance, and then put that into the program later, for example, potentially in the second Phase 3 trial.

Okay, great. And diazepam?

Yes. So at this point, it's -- I can't speculate at all on timing. The immediate imperative is to get in front of the FDA and actually meet with them, go over the items in the letter, and get agreement on our plan going forward. And once we have that, we can come out and talk in more detail about all that.

Okay.

As of right now, based on what we've seen, we feel the program is still very viable. We can't speculate on what Pfizer is doing or anyone else. We have to pursue our program.

Got it. Thank you so much.

Your next question comes from the line of Yaron Werber from Citi. Go ahead.

This is Kumar Raja in here for Yaron. So for the Plumiaz, do you guys need to do more PK studies? Or is it studies with clinical endpoints? And do you guys need to do any studies in kids? And also like how much of SG&A have you included for Plumiaz this year? Thanks.

What was the second part of your second question, Kumar?

How much of SG&A have you included for Plumiaz this year?

SG&A, I see. I don't know the answer to your SG&A question. Mike?

We are not -- I -- we haven't broken out specifically program by program spend, Kumar. So I can't give you that. However, we are clearly looking at that now to see if we need to revise guidance. But it may take us a bit and it's all relative to, again, our conversations with FDA.

Right. And then with regard to your first question on the nature of the clinical work. Again, we have to meet with FDA and get that specified so we can give you more detail. But I will tell you that we are continuing to pursue this as a 505(b)(2), meaning that we would expect clinical work to reference the -- or to compare to the reference product, which is Diastat rectal gel.

Okay. Thank you.

Your next question comes from the line of Geoff Meacham from JPMorgan.

Good morning, guys. Thanks for taking the question.

Hey, Geoff.

Geoff.

So just a question on the stroke opportunity. So just curious, is BID dosing as -- is that going to change? Would that alter at all? Doesn't sound like it was -- does it alter at all your market assumptions with respect to post-stroke? And then, any reason to think from a chemical perspective, that Ampyra using the polymer would be different in this alcohol dose-dumping phenomenon versus other drugs that have used the same polymer?

Yes. So the BID does not at all alter our market assumptions. So I think I'll just leave it at that. We still think it's a very large and highly attractive market opportunity just the same as if we were using the QD. The -- there's no good way to answer your second question because we don't know. There's not a whole lot of data out there with respect to the same formulation with a different API and how does it behave. I don't -- we are not able to find any information on that. As I said, there are a couple of other formulations, one of which is actually on the market, that show -- with the same polymers that are in this QD, that did show pretty much the exact same alcohol dumping features in vitro and did not show any in vivo, and that's great. But your question is well-taken, it's a different API. So does that affect the results? And we're not going to know until we do the study. We are on a fast-track to get the study done and it should be done in the third quarter. So we'll know then.

And the follow-up is, is there a level that is accepted by FDA with respect to the alcohol effects? I know you love to speculate about what the FDA could and could not do.

Yes, yes. So I'm not going to speculate on that. The reality is, we'll get the results and then if they are not perfectly clean, but they're mostly clean, we'll discuss it with the agency and discuss how to handle it.

Okay.

So there is room for discussion at that point. It's not like it's a black and white. The preference is that you don't see any dumping, but if you see a little bit out, quite a distance in time, that still seems like we would give you a margin of safety, that's something that can be discussed in terms of potentially, for example, handling it with labeling.

Okay. Thanks again, thanks.

Your next question comes from Joel Sendek from Stifel. Go ahead.

I'm going to ask two questions, a kind of follow-up from previous questions, including what you just said about the Ampyra and handling what you've learned with labeling. Do you mean that you would, for example, restrict patients who drink? Or would restrict alcohol consumption while you're on-drug? Is that, for example, one of the ways to handle that?

You know, again, it's speculation. I don't want to put words, certainly, in the FDA's mouth until, such time as we have to deal with it and talk to them about it and come to agreement. I'll point to -- there is yet another drug that does not use our formulation, but there is another drug on the market that use a different formulation that had the same issue with a dump in vitro, did not dump in vivo, and the label has an advisory to people not to drink with the drug, right? Or not to drink around the time that they're taking the drug. So I'm not sure at this point how that would be handled. First, we have to see the results and then we'll know what we're dealing with.

And then, on rHIgM22, you mentioned that it was tolerated the best at the highest dose. So I'm just curious --

No. If I said that, that was a misstatement. The -- what I said -- what I meant to convey is that even at the highest doses, it was well-tolerated. So there were no SAEs in the entire study. There were five different escalating dose cohorts, there were no SAEs, and there were no limiting AEs of any kind. So I meant to convey is that as a result, we are comfortable using the top two doses in the extended cohort.

I understand. Okay. All right. And then, I mean, is it possible to go even higher or are you pretty much comfortable with those --

We don't feel it's necessary to go higher until proven otherwise because the doses were selected based on the animal data, and the doses we're using now are higher than what was needed to show efficacy in the animals.

Got it. And then just quickly on SG&A. Mike, you mentioned you're considering revising the guidance. I'm assuming since Plumiaz is delayed that, that would -- you're considering guiding to a lower total spend number? Would that be a safe assumption? Or could it go higher too as you think to update your guidance, as far as higher, meaning higher spend?

Yes. Joel, it's -- we're going to spend some time looking at it. At first blush, I'm not sure that it's -- it will be a significant difference, but we're going to evaluate it. We have Plumiaz, obviously, the response came from FDA. But in fact, in our guidance and in our budget, we didn't have the product launching right away. We had it very late in the year. So we would have just continued our pre-market spend until late in the year where our actual launch cost began. So therefore, we are may be looking at a situation where pre-market costs will still be incurred maybe at a lower level through the remainder of the year. There won't quite be that bull list of launch costs at the end of the year. So there may be some impact, but it's not kind of a full-blown launch cost for six months out of the year that we are able to pull out of the SG&A. So I don't want to over-emphasize it, but we're evaluating it right now. Obviously, this is very current.

Thanks.

Sure.

Thank you. Your next question comes from Marko Kozul from Leerink Partners.

Hey guys, good morning, and thanks for taking my questions.

Good morning, Marko.

Good morning. I have a few on rHIgM22. I was hoping you could remind us how you measure remyelination with imaging? And then looking forward to future trials, do you plan to combine rHIgM22 with a disease-modifying therapy? And if so, could you describe some of your current thinking around potential options or choices? Thanks.

So the question about the imaging, I'm necessarily going to give you a superficial answer because it's not my field of expertise. But I can tell you that we'll be using diffusion tensor imaging, which measures essentially the direction of the water droplets in the myelin sheath and gives you a handle on myelination, or how thick the myelin sheath is. There are some other techniques, imaging techniques, and biomarkers that are being used in combination with imaging techniques that I don't have enough information to go into. That's something that you might want to talk to our R&D folks about.

With respect to combining the M22 with DMTs, the assumption is that if this works and you're able to stimulate remyelination in these patients, that the best path forward would be for everyone to get both a DMT, so that they are reducing continued attacks on the system, and then rHIgM22, so that they're actually repairing damage that's already been done. With respect to which agent you would use, at this point it's purely speculative. Obviously, you'd want to use the most potent and effective agents you can. But it really is purely speculative. Right now, we are allowing all comers, in this trial so the patients presumably are taking a range of different DMTs. As we proceed with the program, we will be looking at those issues and looking to see whether any particular DMTs seem to be a better idea than others.

But at this point, it's early to be talking about it. The first order of business is to show that we've got the biological remyelinating activity in the human trials. And then if we have that, we've -- high-quality problem to have, as they say is, we'll be looking at some of these finer points, which are still important, but we'll be looking at those on a go-forward basis.

Thank you. Next question comes from the line of Phil Nadeau from Cowen & Co. Go ahead.

Good morning. Thank you for taking my questions.

First on Ampyra. You mentioned that there was de-stocking and the insurance issues there, typically the first quarter. Do you have any quantification for the impact of those issues on revenue this year?

Can you help me clarify that a bit more, Phil, in terms of what do you mean quantification on revenue for this year, other than the fact that we reiterated?

No, sorry, for Q1. So what was the impact of de-stocking on Q1, if you have that figure? Or what was inventory levels during Q4? And where do they stand today?

Okay. Well, I can comment on the inventory. So inventories are normal. They normalized somewhere in the middle of the first quarter or early in the first quarter. So they are at their usual approximately two weeks of inventory. So that is not a material factor at this point. The patterns that we saw were really entirely expected from previous years. You see that we had about a 14% decline in the first quarter versus the fourth quarter, but a 16% increase over the first quarter of 2013.

So when you look at it, you take into account the path that we took the same price increase last year as we did this year. So it's apples-to-apples. We're really right on target, including a bit more growth since last year. And April, as I mentioned, was quite strong. So as expected also, it's the same pattern that we've seen and we're comfortable reiterating guidance because it's coming through exactly as we expected.

Okay. And then second question is on Plumiaz, just to follow-up on a brief remark you made in the prepared remarks. You did mention Pfizer in the prepared remarks. What's your understanding if Pfizer were to get approved first? Will they be able to get orphan drug and perhaps keep Plumiaz off the market? Or is that not at all an issue here?

Yes. So our understanding is that they have the orphan designation just as we do for cluster seizures or acute repetitive seizures. When one product -- in the circumstance where two different products, same API, but two, let's say, different formulations have the same orphan designation, the one that gets approval first gets the seven years of exclusivity.

Now there are paths through that. So if for example the second entrant can show that there is a patient benefit to that particular formulation, then it is possible to get co-exclusivity, or to get on the market at the same time, or within the exclusivity period of the first product. An example in the MS space of that would have been, Rebif and Avonex, for example.

Now, obviously, we would -- if that were to happen and if Pfizer were to get approval first, we would make a case, strong case, I think, that an intranasal formulation has significant patient benefit over and above an intramuscular needle. That again, at this point, is all speculative and we'll have to wait and see how it plays out.

And if I remember correctly, Rebif was -- they did a head-to-head trial versus Avonex in order to get into market? Do you think that you need that level of information even approve intranasal versus intramuscular?

Yes, at this -- it's completely speculative at this point. It's completely speculative at this point.

Great. Thanks for taking my questions.

The next question comes from John Newman from Canaccord. Go ahead.

Hi guys. Thanks for taking my questions. The first one I have is on -- is another one on Plumiaz. Can you give us any sense as to what type of work you'll have to do? And does this have anything to do with any kind of variance in bio-variability that's been seen in some of these other intranasal formulations?

And the second one is on dalfampridine. It sounds like the rate-limiting step after you get the data is talking with the FDA. Is there any scenario where you get the data, it's extremely clean and you don't need to speak with FDA before going into a Phase 3? Thanks.

So John, on the Plumiaz question, as we noted -- hold on just a second. Yes, on the Plumiaz question, as we noted, the -- we can't comment specifically on what clinical work it will be until we talk to the agency, except to say that we are still pursuing this as a 505(b)(2), meaning that we are comparing it to the Diastat rectal gel as a reference product, so we can say that. But the specifics of the clinical work, we'll have to wait until we talk to the FDA.

In terms of dalfampridine, it is possible that we -- if it's a completely clean in vivo study, it's possible that we would not need to speak to FDA before starting the Phase 3. We'll have to wait and see what the results look like.

Great. Thank you.

Thank you. Your next question comes from Bill Tanner from FBR Capital Markets. Go ahead, Bill.

Thanks for taking the question. Ron, I appreciate the fact that you can't really go into detail about what you might need to do until you meet with the FDA relative to Plumiaz, but is it just generally reasonable to contemplate that the FDA may have had some issues relative to the PK, the comparable PK data? And then if it's not going to be a 505(b)(2), if you can't proceed along that pathway, what's the contemplation there for how you might proceed?

Yes. Well, I guess what I can say to that, Bill, is that the filing was a 505(b)(2) based on comparative studies of PK between the intranasal spray, Plumiaz and the Diastat rectal gel. So the fact that we got a CRL is -- it's reasonable to assume that the FDA wanted more information in that regard. With respect to -- if it's not a 505(b)(2) pathway, our view is that it is a 505(b)(2). So I wouldn't speculate beyond that.

And just as a follow-up, I know that you had mentioned before that if you felt that if you didn't get a first cycle approval, you could potentially still launch the drug in 2014? And I noticed that you did have a disease awareness booth at AAN. So certainly, something happened that was not anticipated, and I'm just wondering if you can comment as to the delta there?

Well, look, any time you file an NDA, you -- the presumption is that you think that it is approvable, right? And that was based on the work that Neuronex had done -- that was the company that had done the work on the product, as well as the pre-NDA meeting that we attended with Neuronex before we completed the acquisition of the product. So the presumption was that it was approvable. We certainly allowed for the possibility that it might -- there might be a major amendment in the process, it might take an extra several months or so because that's the way these things often go.

So that was our A case. That was our base case going in. So it is -- we were surprised to get the CRL, no question about it. And having said that, that is part of drug development. It happens all the time, and we are dealing with it. And we've -- as we've said, based on what we've seen, we see a definite path forward, but we need to talk to the FDA to come to an agreement and make sure we fully understand what it is they want this time so that next time we file, we get the approval.

Okay, thanks.

Thank you. Your next question comes from the line of David Amsellem from Piper Jaffray. Go ahead.

Hey guys. This is Traver Davis on for David. I appreciate you taking my questions.

Hi.

A lot of my questions have been answered. So maybe just switch gears to maybe some early -- or latest thoughts, rather -- on Ampyra on post-stroke. So can you just walk us through the type of sales force expansion that you may need to support the product, if commercialized? I guess, particularly relative to the number of reps you have out in the field currently promoting Ampyra and MSA?

Yes. We don't feel that it will be a substantial expansion of the sales force. The sales force is calling on neurologists now. Yes, they are primarily MS-focused neurologists. But many of their call points are actually group practices that include stroke to a high degree. So there's already a fair amount of overlap in the call points. And we've been studying what the call map will look like. For the most part, we believe we can handle the product with the sales force we have now. There may be some expansion, but it's not going to be dramatic.

Okay, that's helpful. Thanks.

Thank you. The next question comes from the line of Ram Selvaraju from Aegis Capital.

Thanks for much for taking my questions. I just have two here. Firstly, can you comment on any trends that your partner Biogen Idec is seeing with the adoption of Fampyra ex-US? And then secondly, could you comment on what your expectations are for 2014 vis-a-vis the pain products that you licensed in from NeurogesX? And what the SG&A spend is likely to be that's associated with those products this year? Thank you.

Great. Thanks, Ram. Well, with respect to uptake ex-US, which is where it's called Fampyra, where Biogen has commercialized it. It's a two-part story. The positive part is that the fundamental patient demand has been tremendous. So there has been very, very a profound uptake of the product on the part of the patients wherever it's been launched. The less positive side is that reimbursement has been a substantially greater challenge ex-US than it has been in the US, so that the level of reimbursement that we are getting, that Biogen is getting, for all those patients who are taking the drug, is significantly lower than it is here. So that's really the long and short of it.

With respect to the expectations for Qutenza and NP-1998, we don't break out the SG&A spend on a product basis. What we can tell you is that we are pursuing -- we are committed now to pursuing a Phase 3 program for NP-1998. We are persuaded that this is potentially a very exciting product, with exciting indications and an exciting market opportunity.

The first order of business was to select an indication for the first Phase 3 trial and the first indication we'd be looking for, for NP-1998, we've now done that, which is HIV-related neuropathy for the reasons that I -- actually, I don't think I stated the reasons earlier, but it's HIV neuropathy. One of the key reasons is that NeurogesX, who developed the Qutenza patch and the NP-1998, had actually done a couple of studies, Phase 3 studies, with the Qutenza patch. One of them hit its primary outcome. The other one trended but did not hit, so they did not get the indication when they applied for it. However, based on our analysis of those data, we believe that it is effective, or could be effective in that indication, and that the problem with the studies was most likely a powering problem. So we are encouraged by that. And that's a good reason to have selected the HIV neuropathy to start.

We also are -- as we pursue that, which means we're going to be meeting with, or asking for a meeting with FDA to nail down what the Phase 3 program looks like for the HIV neuropathy. And while we're doing that, we are exploring other even larger indications. For example, painful diabetic neuropathy. Astellas, who has the rights in Europe and Japan and a few other territories, is actually doing a trial of the Qutenza patch in diabetic neuropathy. Actually, I think they have a couple of studies. They're due to read out this year and that will be helpful to us in determining how we could potentially move forward in diabetic neuropathy as well. But for now, we are going to move forward with a Phase 3 program for NP-1998 in HIV neuropathy, and the next step is to send the package to the FDA and request a meeting, and then go from there.

And then just very one quick strategic follow-up. You mentioned that Acorda is going to look to do additional in-licensing transactions. Can you comment on your overall strategic alignment thoughts with respect to CNS versus PNS disorders, there's -- obviously, with the Qutenza and NP-1998, there's a potential for applicability in the periphery. What are your thoughts regarding PNS versus CNS for Acorda going forward?

So -- thanks for the question, Ron. I'm going to take the opportunity to maybe answer a somewhat broader question and then hone down on your specific question.

Just in terms of business development strategy, because I think this is a key issue that shareholders need to focus on with us, we've spent the last couple of years building out a portfolio that we believe has very good chance of delivering substantial value in the longer term. If you look a couple of years ago, we essentially had one product that was entering clinical development. Now we have six products at various stages of clinical development. And the name of the game in our industry, as we all know, is to diversify risk across a portfolio and create a balanced portfolio, knowing that the risks are that not everything is going to work but that if something works that, that something is going to be a major contributor to value.

So we're very pleased with the portfolio. And the events of recent weeks have shown, really underscored the need for that kind of a strategy, because you do have setbacks and you do have to have several shots on goal. Now having said that, if I look at the balance in the company and the balance in our portfolio, very exciting potential for the longer term in terms of, let's say, rHIgM22, GGF2, AC105. In the more intermediate term, very exciting potential for dalfampridine-QD in post-stroke walking deficits, for Plumiaz in acute repetitive seizures or cluster seizures, and for NP-1998 in neuropathic pain.

So all of that is terrific. But if we're looking at it, honestly, you'd say, we need some more balance on the near-term accretive side of the equation. We have a very potent commercial organization. It's tried and true. It's been doing great work. And it has essentially one substantial product to sell right now, and we need to leverage that by getting more products to sell, more revenue generation. So in our business development, the emphasis clearly is on near-term accretive products to create more of that balance that I'm talking about.

Now if you want to talk CNS versus PNS, we're really agnostic with respect to that. We have a broad neurology expertise within the company. We have tremendous relationships in the neurology community. So whether it's a peripheral nervous system product or a central nervous system product, we feel very comfortable developing either one.

The real issue is how far beyond -- from my perspective, the real issue is how far beyond neurology are we willing to go? And when we've looked at that towards the end of last year and earlier this year, we actually shifted our focus a bit in terms of our business development emphasis, realizing that if we look at near-term accretive products, if we want to have a reasonable chance of bringing any of those in, in the near-term, we need to expand our horizons a bit.

There are interesting neurology opportunities out there. This is not to say that there are not such opportunities, there are. But you're not going to get all the ones you go after. So it helps if you have a broader remit to look at. And when we look at what could we handle in terms of commercialization, our sales and marketing organization, our commercial organization, is very adept at this point at all of the mechanics, all of the details of launching and selling a specialty product. And so we are willing to look beyond neurology, specifically for the near-term accretive opportunities. And we believe that we can do a very good job with those.

Thank you.

Thank you. The next question comes from the line of Chris Raymond from Robert Baird.

Thanks. So Ron, speaking of opportunities beyond neurology, I just noticed that with enrollment of GGF2 sort of back on track, could you maybe help us frame for us expectations for data?

Yes. All we can say right now, Chris, is that it will be 2015. As the trial revs up again and we have a better sense of enrollment, we can come down a little better about when in 2015.

Okay. And then maybe a follow on. You mentioned some June 26 symposium that you're co-sponsoring with Biogen. Can you maybe talk a little bit about what we should expect there? Is there something where we should see any new data? Or is it just --

Yes, yes, I would not, to my knowledge, there would be no new data. I can't speak for Biogen. But I don't think so. We are sponsoring it, it's eminent scientists who are going to be giving presentations on various aspects of the science of the biology of remyelination and demyelination. So it's actually a group of outside experts in the field that are being brought in by the New York Academy of Sciences, and we're just sponsoring that.

Okay. Thanks.

Thank you. I would now like to turn the call over to Dr. Cohen for closing remarks.

Thank you, thank you, and thank you, everyone for joining us. We look forward to talking with you again soon.

Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Thank you.