Acorda Therapeutics Inc (ACOR) 2014 Q2 法說會逐字稿

Welcome to the Acorda Therapeutics Second 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. Now, I would like to introduce you to the host for today's call, Tierney Saccavino, Senior Vice President 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 Mike Rogers, 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 our ability to successfully market and sell AMPYRA in the US; third-party payers, including government agencies, may not reimburse for the use of AMPYRA or our other products at acceptable rates or at all, and may impose restrictive prior authorization requirements that block or limit prescriptions, 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 in-licensed programs; we may not be able to complete development of, obtain regulatory approval for, or successfully market diazepam nasal spray or any other products under development; the occurrence of adverse safety events with our products; delays in obtaining or failure to obtain regulatory approval of or to successfully market Fampyra outside of the US and our dependence on our collaboration partner Biogen Idec in connection therewith; competition, including the impact of generic competition on Zanaflex capsules revenues; failure to protect our intellectual property or defend against the intellectual property claims of others, or to obtain third-party intellectual property licenses needed for the commercialization of our products. Failure to comply with regulatory requirements could result in adverse action by regulatory agencies and the ability to obtain additional financing to support our operations.

These and other risks are described in greater detail in Acorda Therapeutics' filings with the Securities & Exchange Commission. Acorda 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 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 like to ask participants to limit themselves to one question and one follow-up. And now I'll turn the call over to our CEO, Ron Cohen.

Thanks, Tierney. Good morning, everyone. On today's call I will provide an update on AMPYRA and our product development programs. Mike is then going to review the second quarter financials. We'll close with a discussion of our corporate growth strategy, and then we'll open the call for your questions.

Turning first to AMPYRA. For the second quarter net sales were $87.4 million. As in previous years, sales increased from the first to the second quarter as seasonal issues in the first quarter resolved. This was taken into account in our guidance for the year and we are reiterating our 2014 net sales guidance of $328 million to $335 million. As expected, we received notice of a number of ANDA filings on AMPYRA. By way of reminder, we have five Orange Book patents around this product that extend into 2027, and we are vigorously going to defend our intellectual property.

We filed patent infringement lawsuits against the ANDA filers, triggering a 30-month stay that is effective until July 2017. The 30-month stay starts from January 22, 2015, which is the end of our NCE exclusivity period. The FDA is prevented from approving an ANDA filing until July 2017, at the earliest, barring earlier court action on our patents.

Moving to the pipeline -- I'm just going to backtrack for a second and mention that inventory levels were stable in the quarter and were not material with respect to the results for AMPYRA. Moving to the pipeline, we expect to begin a Phase 3 clinical trial by the end of the year studying the use of dalfampridine, which is the active ingredient in AMPYRA, twice daily to improve walking in people who have experienced a stroke in the past. This formulation was used in our proof-of-concept study for which we announced positive results last year. We are working on a new once-daily or QD formulation which, depending on when we complete development, could potentially be introduced into the Phase 3 program later.

We are working with FDA to finalize the requirements for refiling the PLUMIAZ NDA, and we are preparing to begin the clinical work that will be necessary for the resubmission. PLUMIAZ has the potential to address an important unmet medical need for people with cluster seizures who urgently require new outpatient treatment options.

We are on track to initiate a Phase 3 study of NP-1998, an HIV-related neuropathy, by the end of the year. We are also continuing to explore the potential for additional indications, including painful diabetic neuropathy. NP-1998 is a potential paradigm shift in the treatment of neuropathic pain, both as a standalone therapy and as an adjunct to existing oral therapies.

We have completed enrollment in the second part of the rHIgM22 trial for remyelination in MS. This is a cohort of 21 MS patients who are receiving either placebo or a single administration one of one the two highest doses that were used in the first part of the trial. We are following the participants for six months to evaluate safety and tolerability, and also exploratory efficacy measures. Experts in the field consider remyelination to represent the next significant advance in MS therapy, and Acorda is at the forefront of development in this area. We expect the study to read out early in 2015.

We are also continuing to enroll our Phase 1b trial of GGF2 in chronic heart failure. We expect data in the second half of 2015. GGF2 represents a novel approach to treating chronic heart failure. Rather than compensating for reduced heart function, as current therapies do, GGF2 is believed actually to improve the function of heart muscle cells. We are excited about the potential of this program, particularly in light of the results of the previous 1a study, which showed dose-dependent improvements in cardiac ejection fraction. I'll turn the call over now to Mike for a review of the quarterly financials.

Thanks, Ron, and good morning, everyone. AMPYRA net revenue for the second quarter of 2014 was $87.4 million, compared to $77.8 million for the same quarter in 2013. As Ron mentioned, we are reiterating our guidance for AMPYRA net sales of $328 million to $335 million.

Overall revenue from Zanaflex for the second quarter of 2014 was $4.4 million, including our own sales, as well as product sales to Actavis and royalties received on Actavis's sales of generic tizanidine. AMPYRA royalty revenue from sales outside of the United States was $2.8 million for the second quarter of 2014, compared to $2.2 million for the same quarter in 2013.

Moving to the expense side. Total operating expenses for the quarter ended June 30, 2014 were $86.2 million, including $7.6 million in share-based compensation expense. This compares to $78.3 million, including $6.5 million in share-based compensation expense for the same quarter in 2013. We are reiterating our 2014 R&D expense guidance of $60 million to $70 million, and our SG&A expense guidance of $180 million to $190 million.

A note on the tax line. We recorded $6 million of tax expense for the quarter ended June 30, 2014, an effective tax rate of 56%. However, cash taxes for the quarter ended June 30, 2014 were $754,000. 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. As a reminder, we had available federal NOL carry-forwards of approximately $174 million as of December 31, 2013, which are available to offset future taxable income. For this reason, we do not currently pay substantial US federal income taxes and we adjust for noncash taxes in our non-GAAP presentation in our press release.

On the balance sheet, our financial position strengthened during the quarter after completing a successful public offering of $345 million of principal notes, amount of our convertible senior notes, including the exercise of the underwriters over allotment option. The notes mature in 2021 and bear interest at 1.75%. The notes are callable under certain circumstances after the third year. As a result, we ended the second quarter with cash, cash equivalents and investments totaling $727.7 million.

I would like to cover one other item as it relates to the notes. For those of you who have built models for the Company, we are calculating interest expense under the effective interest method as is most common. As many of you know, for a convertible instrument you have to value the conversion feature embedded in the notes and accrete that value over the life of the notes, and that shows up as interest expense along with the coupon payment. Therefore, while our cash interest on the notes each quarter will be approximately $1.5 million, we will report interest expense on the notes each quarter of between $3.6 million and $4 million. The quarterly interest expense on the notes for each of the last two quarters of 2014 will be $3.6 million. And we will adjust for the noncash portion of the interest expense in our non-GAAP presentation in our press releases. With that, I will now turn the call back over to Ron.

Thanks, Mike. There are three key pillars on which we are growing the value of the Company. First, we are continuing to grow AMPYRA in multiple sclerosis. This gives us a strong base business, and AMPYRA is the only medication that is indicated to improve walking in people with MS. More than 90,000 patients in the US who have MS have already tried AMPYRA, and we expect to see continued modest organic growth in prescription coupled with price increases.

Second, we are advancing our clinical pipeline, as you see here. At the beginning of 2012, we had one product at clinical stage. Today 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 medical needs. We believe that this portfolio has the potential to deliver substantial shareholder value.

The third pillar is acquisition of new assets. We are focusing primarily on later stage and in-market assets that leverage our superb neurology development and specialty commercial capabilities. We have also further enhanced our capabilities through recent high-level additions to our business development team and last month's convertible debt financing, which makes us more competitive in these efforts. We believe that this combination of asset acquisitions and pipeline development will provide an excellent balance of near, intermediate and long-term value accretion. I will now turn the call over to the operator for question-and-answers. Operator?

(Operator Instructions) The first question comes from David Amsellem of Piper Jaffray. Please go ahead.

Hi, guys. This is Traver Davis on for David. Thanks for taking the questions. I was just hoping that you could elaborate a little further on the focus on the M&A front. Obviously, with the capital you've raised you have some more drive power to execute on M&A. Now, you mentioned being more focused on bringing in commercial assets or near commercial assets. Given what would be argued as a couple setbacks recently in the pipeline, would you also be intent on looking at later stage pipeline assets or even on earlier stage? Thanks.

Yes, thanks for the question. The pipeline is still intact, so we still have six clinical stage assets. We did have a couple of setbacks, but they were -- what I would put under the heading of timing setbacks. They have not materially changed the complexion of the pipeline. It's still the same six products and we are moving them forward. And, as you heard, we've got lined up Phase 3 trials starting this year, both for the dalfampridine in post-drug walking deficits, and also the NP-1998 in HIV neuropathy. So, we have a lot to work with in the pipeline already. Now, that said, if we come across a later stage pipeline type asset that is right in our sweet spot that we have a lot of conviction in and we think is going to be very valuable, we would not ignore that. We would certainly consider bringing something like that in.

The primary focus is looking for in-market and closer to in-market assets, because we think that creates the best balance with the current profile of the Company. But, again, if we were to find a later, mid to later clinical stage asset, where we had a lot of conviction and we thought it was a terrific buy for the Company, we would consider that as well.

Gotcha, that's helpful. And then also with the focus on neurology, so, is there any other therapeutic classes that maybe outside of the umbrella of neurology that you think could fit in well with a neurology franchise side-by-side? Thanks.

Yes. So, there are areas that we would consider, if you will, adjacencies to what we do now. It has really driven -- our calculus is going to be driven primarily in that regard by our commercial capabilities. And if you look at what we built out, we now have really an elite commercial team, a sales force that is not only great at selling a neurology, or neurology specialty products, but has fungible experience for many different kinds of specialty pharma sales. So, we are leveraging that, and if we were to find an asset that wasn't quite neurology but fit beautifully into our experience and capability on the specialty pharma side, we would certainly consider that.

All right. Thanks, guys.

Your next question comes from the line of Michael Yee of RBC Capital Markets.

Following on that question, you had a great appearance on CNBC but didn't get to the question I wanted to know, which was do you personally think that Acorda has the competitive tax structure to look at all these assets, because presumably good assets are being looked at by a lot of people with more competitive tax structure. So, does Acorda fit into that and can they be competitive in that environment? And the second question is, just to follow on real quick on the stroke study which is starting up, I didn't hear whether or not the FDA had bought into the different endpoints that you had wanted to look at, timed 25 for walk, etc., and presumably you have to run a second study, correct? All those things still apply?

Right. So, thanks for the two questions in one. Very artfully done. Thank you, Mike. So, on the first question on the tax status, I'll observe that had they actually asked that question on national TV, I might not have responded directly. It is the case that there are obviously some other companies that are tax advantaged relative to us and other companies like us that don't have a similar tax domicile when you're going out there. Now, having said that, we believe strongly that what we need to be doing is looking for great assets at a very solid price, a very good and competitive price, and that that's the primary focus. The tax status play, or the inversion play, as people are calling it, that has to be secondary, because it can't be the tail wagging the dog.

So, our first priority is looking for great assets globally, and if one of those great assets happens to have a potential for some, you know, a tax inversion, we're not going to ignore that. We are clearly going to pursue that if everything else is right. But it's not going to be the other way around. We're not specifically looking for a tax play and then hoping we get an asset along with it. It's quite the opposite. So, that's number one.

Number two, when we are going out there, what we're finding is that, yes, in certain cases we are probably disadvantaged if we're competing against companies that have a more favorable tax status and therefore they can afford, frankly, to pay more when they do their calculations on assets. That doesn't make it by any stretch impossible to get assets, right? Because, first of all, not in every case, we're not competing against those companies and, number two, there are other factors that come into whether you win a competition like that or not. So, I'll leave it at that.

With respect to the post-stroke trial, we have had extensive communications with FDA and we believe that we have come to agreement with respect to the outcome measures that we are using in the trial. And we will be using walking measures. We'll actually have more than one in the trial.

Okay. And the second study will be (inaudible)?

We believe so, and we're still doing the adaptive design, where the first study will have an interim look, and based on that interim look, that will inform how we proceed with that study and when we would start the second Phase 3.

Okay, thanks.

Your next question comes from the line of Mark Schoenebaum of ISI. Please proceed.

Hey, Ron. Congratulations on just an awesome quarter, just incredible. I mean, it's amazing what you're doing with AMPYRA. Anyway, hey, thanks a lot for taking the question, I appreciate it. I will be quick. Some of my questions were actually already asked, but I had just one question. There was a recent remyelination meeting that occurred in New York City. Salim from my team was there, but I'd love just to hear your perspective on what additional new information was released there both for your own product and maybe for competitive products you think might impact your competitive positioning?

And then maybe for Mike, a little bit nitpicky back on the tax stuff. It looks like -- we were just looking at prior press releases. Mike, it looks like you guys have restated EPS in the last year or so. You're now adding back the noncash tax charges, which seems very reasonable in your non-GAAP. I just want to make sure that we're seeing that right, that there has been a restatement of prior periods? And related to that, can you estimate for us what your cash tax rate, your underlying cash tax rate would be once the NOLs are gone? Like, if you didn't have NOLs today, roughly, what would your underlying cash tax rate be? Thank you.

Let me let Mike go first and then I'll get back.

And I just have a follow-up.

All right, Mark. On the very last point, we're not able to talk about that right now. I mean, I look and say once the NOLs are gone you have to start just by looking at our statutory rate, which is 35% federal tax rate and somewhere in the range of 6% on the States, and I think that's a reasonable way to look at it. We'll do everything obviously that we can to take the most efficient tax strategy moving forward. But it's largely we'll be dependent, say, when the NOLs are gone what our P&L looks like at that point, because there are differences between book and tax but I just can't speculate on that right now.

We did not restate earnings. We are showing a non-GAAP presentation in our financials, and that's the only real change that you're seeing, is that you are looking at a GAAP statement followed by a non-GAAP statement, which we think better shows what the core operations of our business are. So, you see adjustments for stuff like noncash interest expense, noncash taxes in the share-based comp to give everybody a little better (inaudible).

Well, in today's press release, for example, the 1Q12 EPS non-GAAP is reported as $0.34, but if I look in a prior press release, an older press release, it was $0.27. This is a press release from August 1, 2013, so maybe we can talk offline about that, $0.25. The $0.25 has morphed into $0.34 for a prior period.

We didn't show non-GAAP back at that point. Yes, I'll be happy to talk --

Okay, yes, offline. Thank you so much, I appreciate it. Got it. Thanks, guys.

Mark, do you want me to touch on the M22 question?

Oh, yes, yes, I would like that very much, after I just reiterate what an awesome AMPYRA quarter this was.

I know, and we thank you. So, M22, the New York Academy of Sciences held an entire day symposium and they called in many, if not most of the major academic experts in the field. Acorda also had one slot to present M22. Biogen had a slot to present their Anti-LINGO. Fundamentally, it was the most comprehensive summary and detailed summary of the state of the field of remyelination. I believe the consensus that came out of that conference was that the experts believed that remyelination is in fact the next therapeutic frontier in MS treatment. Obviously, Biogen and Acorda are at the forefront of that with -- we have our M22, they have their Anti-LINGO.

In terms of the M22, we provided some details on the overall structure of the current Phase 1 trial, a review of the animal and in vitro data that had preceded it, and that's pretty much it. So, I don't think there was anything fundamentally new, but the value in it was having it all concentrated in one place, so that all the information could be presented and evaluated at one time.

Great. Thanks so much.

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

Good morning, Ron. Thanks for taking the question. Just a couple on the -- I know a lot of questions have been asked on the deal front, and I know it's also hard to say specifically, but is there a structure that you would rule out, like, say, a co-promote or an acquisition of a company outright including a pipeline and a product?

At this point we would not rule out anything. You have to be a bit opportunistic as you go out there, and any opportunity that we see we need to evaluate on its own merits and how we think it enhances the value of Acorda. So, I would not rule out any specific structure at this point.

I gotcha. Okay, and then I know you mentioned being able to incorporate QD dosing in the post-stroke study. It doesn't sound like a bridging study, though. Is this something that you have agreed upon with the FDA to be able to have a second wave of the Phase 3 design for post-stroke?

Yes. I mean, with regard to the QD and how we would introduce that later, we have not yet discussed that with FDA specifically. First we want to have the QD formulation in hand and ready to go, but we believe that it would require some sort of a bridging study just to show the essential equivalence between the QD and the BID formulation.

Gotcha, okay. Thanks.

I should add that if we have it in time for the second Phase 3 trial, we may not need a bridging study. That Phase 3 trial in and of itself would stand for that information.

Your next question comes from the line of Phil Nadeau of Cowen and Co. Please proceed.

First on AMPYRA, you mentioned that there were no inventory changes during the quarter. So, the $87.4 million you recorded in sales, is that in your opinion vary indicative of end-user demand or are there any rebound effects that we should be (inaudible) --

Well, no, it's not related to inventory, it reflects fundamental demand. Now, just bear in mind that the first quarter typically, and this year as well, has been depressed relative to other quarters because of the seasonal factors at the end of the preceding year, and so on, that we've discussed a number of times on these calls. So, we typically have seen a rebound in sales, if you will, in the second quarter versus the first quarter. All that said, we were very pleased with what we saw this quarter. Demand is clearly strong and we think the market is being responsive to several of the initiatives that the commercial team is putting out there.

Okay. So, if we kind of take the $87.4 million as baseline to what scripts are going to do over the next couple quarters, that's probably how we should model it. There is nothing that we should worry about coming out in Q3 or Q4?

Well, we don't anticipate significant inventory shifts, certainly not next quarter. Typically, there may be some inventory stocking in the fourth quarter, where you get sort of, some additional boost in the fourth quarter as the pharmacies anticipate possibly a price increase in the first quarter. So, we typically see that during the year. And having said that, the best I can tell you is that we reiterate our guidance for the entire year, which is the $328 million to $335 million.

Okay, great. And then my totally unrelated follow-up is on rHIgM22. Can you remind us what type of data you're going to release early next year and in particular what type of efficacy measures and what do you guys hope to see in order to have some sort of proof of concept from rHIgM22 that the mechanism is actually working?

Yes. So, first, obviously we are going to release the safety and tolerability information, which is the primary focus of the trial. Then we do have some exploratory efficacy measures that we've put in. We are looking at some physical measures, like walking measures, visual function measures. We are also looking at biomarkers for remyelination and imaging in MRI for remyelination. So, these are all under the heading of exploratory efficacy measures. And it's important to bear in mind, this is a single dose study. Now, it is true that in the animal models, a single dose -- we were able to detect effects on remyelination with a single dose, but obviously when you get into humans in the clinic, the situation may be different. So, we may or may not see that kind of evidence in this study. Also bearing in mind that we have a grand total of 14 people who are getting the drug in a very variable condition.

So, all of that is by way of saying it's exploratory. If we see something, that's fantastic, because that will really help us develop a design for the following study. If we don't see anything on efficacy but it looks safe and continues to look safe and tolerable, then we'll have to wait for the Phase 2 with a multidose to really nail it down.

Great, that's very helpful. Thank you.

Your next question comes from the line of John Newman of Canaccord Genuity. Please go ahead.

I just had a question on PLUMIAZ. I'm wondering what type of clinical work you will need to do before you resubmit? Are you looking at bioequivalent type work or is there something else? And, also, sort of over the longer term, how do you think about that product commercially, as it seems like there is a little bit of off-label midazolam use. The doctor sometimes will just sort of squirt some of that into the patient's nose. And do you have any sense as to when you might be able to resubmit that? Will that be at the end of this year? Thanks.

Okay. So, on the PLUMIAZ, we are confirming with FDA. We have developed a response or responses to what we believe their needs are for more information in the complete response letter. And we are working on confirming that with them and getting a meeting where we can confirm that. We believe it's still a 505(b)(2) type of filing, meaning that it's based on primarily PK data relative to the reference product, which is the Diastat rectal gel. So, the additional clinical data that is required would be under that heading, that type of data. There was another part to your question and I'm -- oh, commercial, yes.

Yes, our understanding is that absent an approved alternative on the market, that quite a number of people, particularly parents of children with these terrible cluster seizures, they default to, in essence, jerry-rigging a treatment at home, where they get injectable forms of, let's say, midazolam, and they squirt it in the nose, in the cheek, wherever. So, obviously that is not a desirable situation. It is completely uncontrolled, and that is one reason and a very good reason why a product like PLUMIAZ is so very much needed on the market.

Great, thank you very much.

Your next question comes from the line of William Tanner of FBR.

Ron, just a follow-up on that last topic. Just curious, I guess there has been some speculation or some discussion about just the tractability formulating diazepam, and I know you've not gone into any detail about that. So, I guess our assumption, working assumption would be if you're moving forward, that is not something that you view as intractable. And then the comment you just made that you believe this is still a 505(b)(2) development pathway, I'm just curious as to what your level of conviction is to that.

It's a high level of conviction. We have seen absolutely nothing that changes our view on that. With respect to, again, the formulation, I'm not aware that that has ever been an issue for us. From the beginning of the program we think this formulation is very good, very viable. It solubilizes the diazepam very well. It delivers it into the nose very well, so that has never been an issue.

Okay, all right. Thank you.

I should add, that is really the essence of what we think makes the product so interesting, because people have asked, well, why is it that the first time someone had a rescue medication it was in the form of a rectal gel, because obviously that's not what you would choose if you had a choice? And the answer is nobody had a choice because they couldn't formulate drugs like diazepam in a soluble form in a medium that you could use intranasally. So, they had to put it in a gel, which they had to deliver rectally.

One of the most attractive things about this program to us was that the people who formulated it finally figured out a way to solubilize diazepam in a form that could be delivered well in the nose. So, just a little more color on that.

Right. I mean, I think that is sort of at the crux of the discussion is, there is the viewpoint that if nobody has been able to do it, so have you guys really cracked the nut, I guess?

Well, I'll point you to the studies that we've published, which show that we had some healthy volunteer studies, where we compared the Diastat rectal gel to the intranasal and showed virtually identical PK curves.

Got it, okay. Thank you.

Your next question comes from Yaron Werber of Citi. Please proceed.

Hi. This is (inaudible) for Yaron. Thank you for taking my question. Once you refiled for PLUMIAZ, what is the timeline for the decision? And also I had one more question on the QD formulation. So, once you have the QD formulation, do you need to continue to pay royalties to Alkermes?

Yes. So, two different questions, two different products. Once we refile on PLUMIAZ, it is a six-month review cycle for FDA on the refiling of the NDA. And with respect to your question on Alkermes, yes, the answer is that regardless of the formulation, the way the deal was originally struck with Elan many years ago and then assumed by Alkermes when they bought EDT, is that, yes, they are entitled to the royalty even if it's a different formulation.

Okay, thank you.

Your next question comes from Chris Raymond of Baird. Please proceed.

Good morning. This is Laura Chico in for Chris Raymond today. Congratulations on a really nice quarter. I just have, I guess, one question related to rHIgM22. You mentioned the data coming in early 2015 with the single dose trial. I am just wondering, then, what would be the timing to initiate a multi-dose trial after that, and are you considering maybe some potential combination use at some point here?

A combination you say?

I guess with some other MS therapeutic.

Right. So, with regard to the timing of the Phase 2, I don't have that information for you yet. Obviously, we are going to move as quickly as possible once we have the data from this trial. Assuming everything looks good, we will be as prepared as possible to move very quickly into Phase 2, but I don't have an exact schedule for you right now.

With regard to combination, it's our belief and that of, I think a consensus of the experts in the field which came out at the New York Academy Symposium, that for most MS patients, or many MS patients, it makes the most sense for one to add a remyelinating therapy to the existing disease-modifying therapies because that combination just makes intrinsic medical and scientific sense. You've got an ongoing process that continues to damage myelin in the central nervous system, so you need to be taking a disease-modifying drug that will slow down that process and also provide you with a milieu where a remyelinating therapy can actually make the biggest difference, because it's not fighting an ongoing destructive process nearly as much. So, in our clinical trial, for example, we keep -- everyone who is taking a disease-modifying drug, we keep them on that drug, so we add the M22 to that therapy. Does that answer your question?

Yes. Yes, it does. Thank you.

Your next question comes from the line of Yi Chen of Aegis Capital. Please proceed.

Could you give us some more color on the timing of the introduction of once daily AMPYRA formulation in the post-stroke setting?

Yes, I wish I could give you a specific date, but obviously we just had a setback with the QD that we had already developed with a collaborator. We are working with a number of different collaborators now to develop or to reformulate the QD as quickly as possible, but it's not possible right now to project how long that is going to take. Our hope is that we may have it available for the beginning of the second Phase 3 trial, and if not, we will introduce it later, when we have it, but right now I would be speculating.

Thank you.

I believe that is all the questions we have in the queue, so I'm going to conclude the call and thank all of you. Have a great weekend.