Acorda Therapeutics Inc (ACOR) 2015 Q3 法說會逐字稿

Welcome to the Acorda Therapeutics 2013 third-quarter update.

(Operator Instructions)

Please be advised, this call is being taped at the Company's request. Now, I would like to introduce your host for today's call, Felicia Vonella, Senior Director of Investor Relations at Acorda. Please go ahead.

Good morning, everyone. 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 estimates 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. For more information on these and other risks, please refer to our filings with the SEC.

With me today are Dr. Ron Cohen, our President and Chief Executive Officer; and Mike Rogers, our Chief Financial Officer. For our Q&A session, we are also pleased to have with us Rick Batycky, our Chief Technology Officer. I will now turn the call over to Ron.

Thanks, bye Felicia. Ampyra results were once again very strong, due to continued outstanding performance by our commercial and medical teams, ensuring that patients and their healthcare providers were educated about the potential benefits of Ampyra. Our sales were $117 million in the third quarter, a 21% increase over the third quarter of last year. Given the growth of Ampyra in the first three quarters of this year, we are raising 2015 net revenue guidance to $420 million to $430 million.

In August, the Patent Trials and Appeal Board, P.T.A. B. or PTAB, denied the Inter Partes Review, or IPR petitions, against two of our patents. The filing party has requested reconsideration by the PTAB. And, in September, that party also filed new IPR petitions challenging four of our five Ampyra Orange Book listed patents, including the same two that were subject to the original IPRs.

The Company is opposing the new IPR petitions. If any are allowed to proceed, the Company will oppose the full proceeding. The Court's response is due in December 2015. And, the PTABs deadline for deciding whether or not to institute the petitions is March 2016.

We also entered into settlement agreements with two of our ANDA filers, Actavis and Sun. We are continuing to pursue our litigation against the remaining eight ANDA filers. A Markman hearing has been scheduled for March 2016, and the trial for September 2016. The expiration date for the Company's latest expiring Ampyra Orange Book patent is in 2027.

Ampyra continued to grow robustly in the third quarter. This allowed us to continue our investment in an exciting, late-stage pipeline, while remaining cash flow positive. Our top priority is the successful development of our clinical pipeline, which addresses significant unmet medical needs. We are in the strong position of having three late stage clinical programs, CVT-301 for Parkinson's Disease, PLUMIAZ for seizure clusters and Dalfampridine for Post-Stroke Walking Deficits. We are also advancing three additional clinical programs, rHIgM22 for remyelination in MS, CVT-427 for relief of acute migraine and cimaglermin alfa for heart failure.

Turning to the late stage pipeline. CVT-301 is one of our most advanced programs. It is our highest priority. This is an inhalable form of L-dopa. It's intended to treat the re-emergence of symptoms that afflicts many people with Parkinson's. These episodes are also referred to as OFF episodes.

The commercial opportunity is substantial. We estimate about 350,000 patients in the US alone may be appropriate for treatment. And, we do have worldwide rights. If approved, we project that US peak sales would be greater than $500 million.

Our second late-stage program, PLUMIAZ, is a nasal spray formulation of diazepam. It is being developed as a treatment for increased bouts of seizure activity. These are also called seizure clusters. If approved, we project peak US net sales of more than $200 million.

And, the third program is Dalfampridine and Post-Stroke Walking Deficits. There is no approved medical therapy to address this significant need in people who have had strokes, and have ongoing walking deficits, due to those previous strokes. There are approximately 3 million stroke survivors in the US who also have ongoing walking deficits.

Importantly as well, we've made good progress in our collaborations to develop a once daily formulation of Dalfampridine. We now have three different formulations that appear promising, based on in vitro testing. All three of these we expect to move in to Phase 1 clinical testing, meaning PK studies, before the end of the year.

With regard to our earlier-stage clinical pipeline, we have selected zolmitriptan as the active ingredient for CBT-427, an inhaled triptan in development for relief of acute migraine. This uses the same ARCUS inhaled-powder technology as our CBT-301 program. And, the Phase 1 study for CBT-427 is expected to begin before the end of this year.

We are currently enrolling our Phase 1 single-ascending dose study of rHIgM22 in people with MS who are experiencing an acute relapse. In addition to safety and tolerability assessment during an acute relapse, the study includes exploratory efficacy measures such as timed walk, magnetisation transfer ratio imaging of lesion myelination in the brain and, also, various biomarkers. The cimaglermin alfa Phase 1b clinical trial remains on clinical hold as a result of new case that met the criteria of Hy's law for hepatotoxicity, which we previously announced.

Recall that we saw one Hy's law case in the previous Phase 1 study, as well. And in both Hy's law cases, the abnormal liver values returned to normal within several days. The 23 patients who were dosed in the current trial are completing their follow-up. And, results of that study are expected by the end of the year, including six minute walk and cardiac ejection fraction data.

We have ongoing analyses and non-clinical studies that are investigating the biological basis for the liver effect. And, we plan to review these and other data from the cimaglermin studies with the FDA.

With that, let me turn the call over to Mike who will review for you our financial performance for the quarter.

Thanks, Ron. And good morning, everyone. I want to take a couple minutes to walk you through some of the financial highlights of the quarter. We had another strong quarter, not only for Ampyra sales, but also for our overall financial performance. Despite the significant investment we're making in our late-stage programs, we remain cash-flow positive and in a very strong financial position.

Ampyra net revenue for the third quarter of 2015 was $117 million, a 21.4% increase compared to third quarter 2014 revenue of $96.4 million. We've revised our guidance for Ampyra sales to $420 million to $430 million, up from $410 million to $420 million.

Revenue from ZANAFLEX for the third quarter of 2015 was $26 million, including our own sales as well as product sales to Actavis, and royalties received on Actavis' sales of generic tizanidine. Net revenue for ZANAFLEX for the quarter ended September 30 of 2015 includes the impact of a one-time net adjustment of $22.2 million, representing the cumulative impact of the Company's conversion from the sell-through to the sell-in method of revenue recognition.

Under the sell-in method of revenue recognition, which is the traditional revenue recognition model, revenue is recognized when the product is shipped to the distributor. Whereas under the sell-through, or deferred method, revenue is recognized when the product is prescribed to the patient. Going forward, ZANAFLEX revenue will be recognized under the sell-in method of revenue recognition.

As an additional note, inventory levels at the wholesalers remain stable, between one and two months on hand. And finally, in our non-GAAP presentation of the financials, we've adjusted out the cumulative impact of the change. Fampyra royalty revenue from sales outside the United States was $2.5 million for the third quarter of 2015.

Moving on to the expense side. Total operating expenses for the third quarter of 2015 were $122.5 million, including $8.9 million in share-based compensation expense, compared to $85.1 million, including $7.3 million in share-based compensation expense for the same quarter in 2014. The increase in operating expense this year, over last year, is primarily related to increased R&D costs to support our ongoing clinical development. As well as, the addition of costs associated with our facility and operations in Massachusetts, acquired in the Civitas transaction in the fourth quarter last year. We are reiterating our R&D guidance of $140 million to $150 million, and our SG&A guidance of $180 million to $190 million. As a reminder, guidance ranges exclude share-based compensation.

On the tax line, for the third quarter of 2015, we recorded a net tax provision of $17.8 million. However, cash taxes for the quarter were $829,000. There are a number of factors that can cause significant differences between the effective tax rates shown in our financials, and our actual cash tax position.

As a reminder, we had available federal NOL carryforwards of approximately $215 million as of December 31, 2014, 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 non-cash taxes in our non-GAAP presentation.

Finally, a note on the balance sheet. Our financial position remains strong. At the end of the third quarter, our cash, cash equivalents and investment balance was approximately $323.4 million. And, we expect to be cash flow positive for the year.

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

Thanks, Mike. So, in summary, this was another terrific quarter for Ampyra, which has allowed us to remain cash-flow positive while still investing in an exciting pipeline. Our top priority is the successful development of our clinical pipeline. And, we expect several data milestones in 2016 for our most advanced programs, led by CVT-301 for OFF episodes in Parkinson's Disease. We continue to be active on the business development front, looking for opportunities that leverage our deep neurology development expertise. And also, one of the best specialty commercial organizations in the industry.

I'll now turn the call over to the operator for your questions and our answers.

Thank you.

(Operator Instructions)

Our first question comes from Mark Schoenebaum with Evercore ISI.

Hi, guys, it is [Salim] in for Mark. Thanks for all the color again, super helpful.

I'm on the phone, too. But, Salim demands to ask the question.

A couple questions on CBT-301. Ron, can you give us an update on the enrollment, how the enrollment is going for the Phase 3 trial for 301? And, when we should expect data? And then, ex US, what your plans, again ex US, for CBT-301, especially in light of valuations coming down? I don't know if you have a few on ex-US valuations, if you could opine on that?

Thanks, we never comment on enrollment in any trial. That's historical, and we just don't. What we have said is that, previously, our guidance has been that we were aiming to file an NDA by the end of next year, on CBT.

What we have been saying, and I think we said in the third quarter call as well, pretty consistently, is that we inherited that target when we bought Civitas. That was the target that was originally published in their S1. Once we had a chance to analyze the entire program, our conclusion was that was a significant stretch goal, so that we are advising people it's achievable. But, it's something that could, potentially, slip into 2017. That is something we have said and are continuing to say. The ex-US valuation, could you clarify for me what you are asking me there, about valuation?

You've mentioned in the past, that you are interested in BD ex US. And, it's sort of coupled with your plans of taking CBD-301 and doing it yourself. You're selling it yourself, ex US, or partnering. That sort of thing. If you can just tell us, what are your views of valuations right now, ex US?

Are you talking about valuations of potential targets?

Targets, yes.

It's very difficult to opine on that as a general matter. As you pointed out, just globally in the industry, valuations have come down lately. It's no surprise. Our focus is on looking for the right opportunity, and something that has strong industrial logic. We think we have a fair amount of capacity on our balance sheet, in terms of our overall capacity for funding to do a significant deal, if the deal makes sense. And, if the value is there. We are really focused on that.

With respect to taking 301 and any other products to Europe, we are still deeply interested in that, and looking at options for how we would service products in Europe. Obviously, that's going to require commercial infrastructure. And, we either build it or buy it, or some combination of the two. And, we are assessing what it is that we could buy, potentially, that could help accelerate that. But, that's all I can say at this point, that it remains one of the points of great interest in our business development activities. And, if something material emerges, you will be among the first to know.

Okay, great. Thank you.

Thank you. Our next question comes from Cory Kasimov with JPMorgan. Your line is now open, please go ahead.

Good morning, this is [Morgan] on for Cory. I had a couple questions on the IP side for Ampyra. How would you characterize the strength of the new IPR filings, compared to the first two? And then, with the two ANDA settlements out in 2027, is that a trend we should expect from the rest of them? Thanks.

Okay, Corey. Which of those questions did you least expect me to be able to answer? I can't answer either one. That calls for speculation on the patents that I just can't provide in a public forum.

I can tell you that I am pleased with the work that our legal team has been doing. Obviously, I'm pleased with the fact that we've had the two settlements. And, there is no way I can comment on the relative merits of a given IPR, versus any other IPR. That's something -- that's the PTABs job. No matter what part of this we're talking about whether, whether it is the ANDA filers or the IPR, we're going to continue to defend our patents vigorously. I think you see that our legal team has been hard at work doing just that.

Okay, thanks.

Our next question comes from Paul Matteis with Leerink Partners. Your line is now open, please go ahead.

Too bad, Ron, he just took all my questions. No, I'm just kidding. On Ampyra once daily, can you talk a little bit about the structure of these studies, and what you are evaluating? I know the hurdles to the last product, I guess a setback was encountered. I think in a multidose PK study, where there was dumping in the presence of alcohol. So, can you talk about the various parameters you are evaluating, and the different boxes you need to check in that study?

Actually, Paul, I believe the issue in the last one was discovered in in vitro testing. So, what we saw was that it dumped. That formulation dumped quickly when exposed to alcohol. And, that was the killer. With ultimately discovered that it also had food affects that were not favorable. But, the initial killer was the alcohol affect. The three formulations we have now have already passed all of the in vitro testing, including the alcohol dissolution testing. So, that's already more encouraging than what we had before.

What we're doing now is PK in humans, to ensure that the PK characteristics, the absorption and the C-mack there under the curve and all the other things we look at in PK, that they are consistent with the QD formulation that we want. And, with the characteristics we want in terms of what kind of plasma levels you get, for how long and so forth. We model those effects based on the various in vitro tests that are done. The modeling is usually pretty good. But, you don't know for sure until you actually put it in a human being.

What I can tell you is, based on the in vitro testing, the in vitro modeling, the lack of alcohol sensitivity in vitro, we like all three of these formulations for human testing. The human testing is going to be the acid test as it were, both literally and figuratively if you think about it. But, that's going to tell us whether the in vitro modeling plays out in humans as well.

Okay, got it. Ron, you've talked about the interim stroke analysis as an inflection point for the Company on multiple angles. And, one of them is if you see a signal that looks like it could be replicated in Phase 3, and you have a once-daily formulation you are confident in, maybe you'll change the program and just go with the once daily in the pivotal trials. Can you talk about the potential timing of an analysis? When you are expected to do the stroke interim, when you are expecting to know on the once daily? And, just how you're thinking about all of those moving parts?

I think at this point I would say that, if we have a QD formulation in which we are confident, that it is highly likely that the scenario you just outlined will be the one that we follow. In other words, unblinding the Phase 2, rather than simply doing the interim lab. We'll do the interim look, see what happens. But, then we will probably unblind it, and then do two parallel Phase 3s that will be better designed. Because, they will be based on the data that we've analyzed in the phase 2b, which is more data that we have from the original Phase 2 study.

We expect to do the interim analysis next year, in 2016. I can't narrow it down more than that for you. But, we do expect it next year. By the time we do that interim analysis, we hope that we will have a QD formulation that has passed muster in the human PK studies. And in that case, again, it's highly likely we will unblind and then use the data from that analysis to inform two parallel Phase 3s that will use the QD.

Okay. One more, if you don't mind. Can you talk about what you are seeing with Ampyra? Your updated guidance, kind of like the last updated guidance, seems to assume a next quarter that is actually a contraction, relative to this one. How do you feel about updated guidance? Do you feel like it's conservative? Or, is there a reason to expect 4Q to be less impressive than 3Q?

We've had terrific growth this year, obviously, in Ampyra. I think the team has done a tremendous job making sure more patients who qualify know about it, get access to it and can benefit if they're going to benefit from it. That's been great. I think it's important that people avoid getting caught up in the quarter to quarter game. Because, like anything else in life, there are fluctuations in short term, quarter to quarter. And, even for us, there is a limit to how much you can project on the basis of a few months here or there.

There are seasonal issues. There's all kinds of other random issues that effect it. We tend to look at these things more on at least a year-to-year basis. If you look at that based on our current revised guidance of $420 million to $430 million, let's say, for example, we are at the top of the range. If you take the top of the range, and that is where we wind up at the end of the year, you would see that would represent about 17% year-over-year growth. That's pretty robust from our perspective. Just because there was 21%, or whatever, from one quarter to the next, it's not necessarily a read through to the next quarter.

The other thing to point out, which is very important, is that the fourth quarter a year ago was unusually robust. It was just a blowout quarter. And I have to say that, even we are not 100% sure what it was about the fourth quarter of last year that resulted in that level of outperformance, if you will. We are very leery about holding everyone to that standard, for this coming quarter. Because, for all we know, it really was just a blip, a seasonal variation in the fourth quarter of 2014 that will not repeat itself in the fourth quarter of 2015. Again, if you look at the larger view, which is what does it look like year over year? It looks pretty healthy, given our current guidance.

That's fair. Was there anything unique you saw in third quarter? I think when people were forecasting the quarter based on IMS Scripps, it looks more flattish. Was there anything unique in this quarter? I know you said there's nothing on the inventory side. Maybe on the gross and net reimbursement side, or compliance or any other metrics that you're encouraged by, uniquely?

Paul, there are probably some people on the phone that have been following us since launch. And, they will know better than anyone that the IMS issue has continued to come up over and over. And, our consistent answer on that is that we cannot account for how IMS comes up with its numbers. If you look back historically, relative to the actual numbers that we have, they are highly inconsistent quarter to quarter, and so forth. We can't account for what IMS is doing.

I can tell you that our inventory levels are rock stable. We have contracts that ensure that we have control over that. I think at this point, we have no more than two weeks, approximately, of inventory. And, that's been consistent all year long. So, this is not an inventory issue. This is not a channel issue. We have tight control over this, in a specialty pharmacy network. The numbers we are giving you represent the actual prescriptions and sales that we are achieving.

Okay, great. Thank you, Ron. Thanks for all the help. Congrats on the quarter.

Thank you.

Our next question comes from Tom Shrader with Stifel.

Good morning, congratulations on your nice quarter. Given how complex Ampyra's dosing and everything is, do you have hope to move to QD formulation into MS? Do you think you'd need more than just Phase 1 data? Would you need some efficacy data?

Tom, there is no current plan to move the QD into MS. I can't account for what might happen down the road, as we think through things strategically. First things first. First, we need a viable QD formulation. Then we need a good interim analysis, a positive interim analysis on strokes, so we can proceed with the stroke plan. And then, we may turn our attention to whether, strategically, there are other things we can do with the QD. But, right now, we are pleased with the Ampyra franchise, with the BID as is. I can't speculate as to what we'll do in the future on that, nor will I shut any doors. We're going to continue to consider how we could most effectively apply a QD formulation.

Okay, and a similar question on the triptan. Is that a Phase 1 trial? And then, do you think you could go right to Phase 3? Or, would you need -- I think you're going to need phase 2 data to understand efficacy?

An advantage we think we have here is that, as with CBT-301, we are using a compound that is well known, has been used for many, many years. It's well understood. So, this will be a 505b2 type NDA, referencing the reference product, Zolmitriptan. In that case, we believe the burden of clinical trials will be significantly less with respect to efficacy. And, most of the work we're going to be doing will have to do with the PK and the safety, and so forth. We will have to do some efficacy work. But, we think likely that it will not be at the level of a brand new NCE.

Okay. And finally, a little more detail on PLUMIAZ. You are saying 175,000 people potential market, and $200 million in sales. What does that assume about how the drug would be used? Would patients keep it on hand, or would they go get? Would they get it at the hospital? How would it be used?

The way this would be appropriately used is, they would have it on hand. Because, this is for people where you can predict that, at some point, based on their illness and their previous patterns, they're going to have clusters of seizures that need to be arrested. And, they have to have it on hand if they're going to have to have that kind of access, and not have to go to the emergency room and so on. So, this is something that would have to be prescribed. You can think of it in the way that people think of it EpiPen. It is different, but conceptually, you want to have it on hand. You want to have it in your medicine chest, in your glove compartment, in your pocket. Wherever you need it, so at the moment when the event is starting to occur, you are ready. Or at least, you're care partners are ready.

Okay so, in clinical work, it is given essentially immediately?

When you say in clinical work, do you mean in the trials?

In the trials.

Yes. It is given right after someone has had a first or sentinel seizure. The idea here is, it is for seizure clusters where someone is going to have a seizure. And then, based on their history, you know they are highly likely to have another one. And then, maybe another one. And sometimes, maybe another one, all within the 24 hour period. And those are very dangerous. There is a cumulative danger to the person, of having these multiple seizures. Once they have an initial seizure, you immediately want to give them this, to arrest any future seizures that might occur.

Perfect, thanks a lot for the details.

Our next question comes from Michael Yee with RBC Capital Markets. Your line is now open, please go ahead.

Thanks, good morning. Two follow-up questions. One is on the Post-Stroke deficit study. Can you just rewind a little bit and clarify the design of the interim, what triggers that what you are looking for? I think you mentioned Phase 2, but we thought it was classified as a Phase 3. So, maybe just rewind and walk through all of that a bit for us, in terms of the interim.

Secondly, on business development. I know you made some comments about the OUS. Do you have any thoughts around your debt capacity? Would you be able to take on more debt, et cetera? Do you have different debt ratios? How should we think about your capacity there, to also help on deals? Thanks.

With respect to the interim look, I'm not sure exactly what I said about Phase 2 or Phase 3. The current trial is designed as a Phase 3 study. If I said Phase 2, I misspoke. I was trying to refer to the previous trial, which was the original proof of concept study that showed promise for walking in Post-Stroke deficit.

It is designed as a Phase 3 trial, but an adaptive design with an interim look. The interim look will take place at the point where approximately 50% of the patients have been entered in the trial, and randomized and dosed. That will be an external group, a vis-a-vis type group, that will unblind -- the analysis will be blind to us. They will be looking at whether it is reasonable to continue enrolling the study, and under what conditions.

So, really what they're looking at is powering of the study. They could determine, for example, there are really three things they could determine. One is, it looks likely that the study is well-powered to hit its endpoint and, you should continue enrolling as is. A second determination instead might be, well it looks like you could hit your endpoint, but you are underpowered so, you need to add X people to each arm. The third one would be, well it is futile, it looks like no matter what you do, it is unlikely that you will hit your endpoint. In which case, you have to stop and you unblind. Obviously, that's not the one we want to hear.

In either of the first two cases, depending on what is going on with the QD. If we have a viable QD as I said earlier, it is likely in our view, that we would unblind this current study, and do a full analysis. Which would be very valuable in rationally designing two, parallel Phase 3s using the QD. We think, for example, that it is probable, that they would be smaller studies than the one we have now. Because, we will have much more confidence in the powering.

Right now, we are powering it off, I think, an 80 patient study that we did. So, necessarily, we are almost by definition almost overpowered, significantly, in this study. That is the way we're thinking about that trial. Does that answer your question?

Yes, it does. If it is looking good, you will basically start with the QD and redo it again. And, that is helpful. So, it helps the timelines.

Let me just say with respect to the timelines, it probably will add some time. But, not as much as you might think. Because, if we are right and the studies are significantly smaller, and therefore, require less time to recruit, we are going to get back a fair amount of that time on the back and. With respect to our capacity for doing deals, I'm going to turn that over to Mike.

Okay, Michael, on a standalone basis, the answer is yes. We have capacity to do a number of things, including convertible debt, bank debt, working capital revolvers. We could do a number of things on a standalone basis. But, we are not eager to do that without a well-thought-through strategy there, to just add debt for the sake of adding debt.

In the context of an acquisition, which I think is where you were going with this, it is very much asset dependent. What are we acquiring? If it is a cash-flow generating commercial asset, cash-flow generating, there is a lot more flexibility to use leverage to acquire that product. If it's an earlier stage product, there is certainly less flexibility from our standpoint, about how much debt we want to put on the balance sheet for an earlier stage product acquisition.

Okay, thanks.

Our next question comes from the line of Phil Nadeau with Cowen and Company. Your line is now open, please go ahead.

Thanks for taking my question and congratulations on the progress. Ron, historically, one of the growth drivers of Ampyra has been pricing. I know through your work with Bio, you have been down to Washington a bunch. You probably understand the pricing environment, or the thinking on pricing, better than just about anyone. Can you discuss what you found through your work with Bio, on pricing? And, whether that has specifically changed Acorda's views on taking price increases for Ampyra?

Thanks, Phil. Obviously, a much bigger conversation for a different venue on the whole pricing issue. And, we are clearly working on that at Bio, as you point out. Our fundamental view on this is the issue is not cost in a vacuum. The issue is value. So, it is what is the price and what is the value of the service or the product you are providing? In this case, the medication.

From our point of view, we are in a good place. We are proceeding from a position where we are providing significant value to patients for what we are charging for the drug. We also have been leaders in coming up with creative ways of cost sharing for value. The best example of that is our First Step program, which has actually been recognized by some of the bigger third-party payers as being a good faith, creative and reasonable way of establishing value and cost sharing.

Just to remind everyone, under First Step which now is about 75% of all new prescriptions, we give away the drug for free for two months. The reason for that is we know, based on our clinical work, that not everybody responds to the drug effectively. Giving people the drug free for two months, we are paying for it.

Insurance is not paying for it. The government is not paying for it. It's entirely on Acorda, and those people who are not responding get off the drug. Because, two months is plenty of time to establish that. The people who are left are the ones who are responding. In that case, we deserve to be paid for the service and the value we are providing those patients.

We have other programs that we implement in that regard. We collaborate as well as we can, and closely with managed care. Our view is that that's the way to approach this, globally, in the industry. The insurance industry, the third-party payers; and industry, the biopharmaceutical industry; need to work together to come up with reasonable ways of paying for the actual value, which can be quite substantial, of the medications that we are providing.

Okay. So, it sounds to me like Acorda's view on pricing hasn't really changed?

No.

Great. Second, you mentioned in regards to the guidance, top end of the guidance is about 17% growth, year over year. Can you discuss what you're most recent perception of what is driving that growth is?

It's been pretty consistent since the second half of last year, where we began to see a real inflection point. At that point, we noted that we thought a number of different factors were simultaneously coming to fruition. One of them, actually, was First Step which I just discussed.

I think that program is now about three years old, something like that, three and a half years old. It took us a couple of years to build up a head of steam with it. It's not like we introduced it and then, everyone was using it. We had to educate the prescribers and everyone else about it, and get it implemented. It progressively crept up so that now, it's about 75%. I think at the end of last year it was over 60%.

But, it took until we had a critical mass of First Step patients. Because, what we discovered through our analyses is that people who start out on First Step as a group are stickier. In other words, more of them stay on the drug longer. And, there are various reasons you could speculate as to why that might be, but those are the data. To the extent that you have more people coming onto through First Step, that winds up translating into longer time on drug and increasing the overall TRX, which is really what is driving sales. That was one of the biggest single factors.

Also, we've introduced several different marketing initiatives to get the word out, to get patients educated. The physicians have been educated for a long time. But, getting the patients to know that this is available has taken time, it continues to take time.

By definition, the people who have not yet heard of Ampyra, or not yet really aware of it, are the hardest ones to reach. So, it takes more effort to get to them. And, over time, we have been more and more successful, especially with our digital marketing efforts. We have a very sophisticated digital program that as wound up reaching people that we couldn't reach before. Put it all together and I think, in the last year or year and a half or so, these different threads have come together and have given us a boost.

And then, finally, and probably with some significance, in the last year or two, we've seen some overall expansion in the MS market, due to the entry of the new DMTs. Particularly, the oral ones. And, maybe some more effective ones. So that patients who were on the sidelines, and essentially had given up on therapy, have now come back into the doctor's offices to be treated with the new DMTs. And while they're at it, we get an opportunity to educate them about Ampyra, and get some of them on Ampyra.

I guess the last one to think about is that, with the Medicaid conversions under the ACA, that probably brought some more patients into the overall healthcare system. But again, if you think about it, some of the things I'm talking about are one offs. And, you don't expect to see a repeat, year over year, of those elements. And that, again, goes into the reason why it appears we are being somewhat conservative. But in fact, when you take all these into account, we're looking at year-over-year growth of about 17%. And, we think that is a fine place to be.

Great, and one last question for me on PLUMIAZ. Can you update us on the status of those trials? Have they actually begun enrollment yet, or is that still yet to come?

Yes, those trials are ongoing.

And still complete next year?

Yes.

Thanks for taking my questions.

Our next question comes from the line of Robert LeBoyer with Aegis Capital.

Good morning, everyone, and congratulations on the nice quarter. I had a question on the IPR and the filing for reconsideration. Is that under the same guidelines and protocols as the originals, in terms of time frame and requirements? Or, is that slightly different and subject to different types of requirements? And, would you have an opportunity to submit a response to their request?

The filing for reconsideration is just so people know, to my knowledge, there is no time deadline on that. That is something where the PTAB already rejected the two original IPR filings. Or, in other words, chose not to Institute them, which I think is the way they put it. There is a filing for reconsideration meaning that the filer wants the PTAB to reconsider that decision not to Institute the original.

To my knowledge, there is no set time course the way there is for an original IPR filing. With respect to a patent holder's ability to file a counter, I believe that is upon request of the PTAB only. The second set of IPR filings, the four new IPR filings, those are on the classic time schedule for an IPR filing, which is three months for us to respond. And then, three more months for the PTAB to consider whether or not to Institute.

Okay. Just in terms of the basis for this reconsideration, is there any new information in these filings that wasn't considered in the original petition?

I can't really comment on any specifics in our legal proceedings, Robert. So, I'm sorry about that.

That's all right. Thank you, very much.

There are no further questions in the queue. I would now like to turn the call back to Dr. Cohen for final comments.

Thanks for joining us, everyone. We are, obviously, very pleased with the quarter and look forward to talking to you, again, next quarter.

Ladies and gentlemen this does conclude today's program. You may all disconnect. Everybody have a wonderful day.