Acorda Therapeutics Inc (ACOR) 2016 Q1 法說會逐字稿

Welcome to the Acorda Therapeutics first-quarter update. At this time, all participants are in a listen-only mode. There will be a question-and-answer session to follow. Please be advised that this call is being taped at the Company's request. Now I would like to introduce your host for today's call Felicia Vonella, Executive 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 than statements of historical fact 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 Ron Cohen, our CEO, and Mike Rogers, our CFO. I will now pass the call over to Ron.

Good morning everyone. Thanks Felicia. We will dive right in with AMPYRA revenues. AMPYRA revenues for the first quarter of 2016 were $109.6 million. That was up 19% from the first quarter of 2015. And it also represents the 12th consecutive quarter of double-digit year-over-year growth for AMPYRA which we launched in 2010. AMPYRA results continue to be strong with terrific performance from our commercial teams, ensuring that patients and their healthcare providers are educated about AMPYRA.

We are defending our patents vigorously. Regarding the ANDA litigation, we had a Markman hearing in March and we are preparing for the trial which is scheduled for September. We also won a federal circuit appeal, allowing our patent litigation against Mylan to continue in Delaware District Court. This was an important ruling in our favor and our in-house legal and external counsel teams did a superb job to ensure that outcome.

Mylan has petitioned the Federal Circuit for a re-hearing en banc, that is with the full (technical difficulty).

On the IPR front, the PTAB instituted four IPRs that were filed by a hedge fund and we are preparing to litigate the case with a decision due by March of 2017.

Moving to our late stage pipeline, following the close of the Biotie deal, we will be in the strong position of having four late stage clinical programs -- CVT-301 and tizanidine for Parkinson's disease, Plumiaz for seizure clusters, and dalfampridine for post-stroke walking difficulty. All of these are targeting substantial clinical needs.

We expect data from Plumiaz later this year, and the last patient out of the CVT-301 study or efficacy study by the end of the year. If successful, we plan to file NDAs for both in 2017. We project that these two therapies alone could generate combined peak sales of over $700 million.

Earlier this month, data from the CVT-301 Phase IIb clinical trial were selected for the American Academy of Neurology Invited Science Session, and that showcases cutting-edge research. These data were also published in the peer-reviewed journal Movement Disorders. The data showed that people with Parkinson's disease experiencing off periods who were treated with CVT-301 had significantly greater improvements in motor function than those treated with placebo.

With regard to our tender offer for the shares of Biotie, we have exceeded the 90% minimum for the tendered shares. We expect to close the deal fully in the second half 2016, at which point we will provide more color around the toz and SYN120 programs.

Moving to dalfampridine for post-stroke walking difficulty, we have exceeded the 50% target enrollment in the Phase III BID trial, and we've made the decision to stop that trial and analyze the data. We previously discussed that this would be a potential alternative to the interim futility analysis, and we've made the decision based on the progress with the QD formulation of dalfampridine. We expect to have data by the fourth quarter of this year. If the multi-dose PK and scale up manufacturing work on the QD formulation are positive, we would plan to move forward with two concurrent pivotal Phase III trials in mid-2017.

This is a snapshot of the combined pipeline with the closing of the Biotie deal. Post that transaction, we will have a robust, very well-balanced pipeline of eight clinical stage products, four in Phase III, two in Phase II, and two in Phase I.

In the first quarter of 2016, we also completed the Phase I study of CVT-427 for the acute treatment of migraine. That was actually a PK study in healthy normals, or normal volunteers. This is an inhaled zolmitriptan in development for relief of migraine. It's using the same ARCUS technology as our CVT-301 program. There were no dose-limiting toxicities, and the PK profile met our specifications.

Any of you who has migraines or knows people with migraines knows how intensely painful they are. When people get them, they want relief as soon as possible. The triptans are the gold standard therapy but currently they require an injection to achieve the most rapid plasma levels, and therefore rapid effect. We believe that CVT-427, if successfully developed, would address a significant need, and we are now planning the next stages of the clinical program.

We are also continuing to enroll our second Phase I study of the remyelinating antibody rHIgM22 in people with multiple sclerosis who are experiencing an acute relapse. In addition to assessing safety and tolerability during a relapse, the study includes exploratory efficacy measures such as time to walk, magnetization transfer ratio, imaging of the lesions, myelination and various biomarkers.

And with that, I will turn the mic over to Mike Rogers for the finances.

Thanks Ron. Good morning everyone. I want to take a couple of minutes to walk you through some of the financial highlights of the quarter.

AMPYRA net revenue for the first quarter of 2016 was $109.6 million, a 19% increase over the $92.4 million we recorded for the same quarter in 2015. As Ron noted, this is the 12th consecutive quarter of double-digit growth versus the prior year for AMPYRA.

Overall revenue from ZANAFLEX for the first quarter of 2016 was $1.2 million, including our own sales as well as product sales to Actavis and royalties received on Actavis sales of generic tizanidine.

FAMPYRA royalty revenue from sales outside of the United States was $2.5 million for the first quarter of 2016.

Moving to the expense side, research and development expense for the quarter was $44.6 million, including $2.1 million in share-based compensation. That's up from $30.6 million, including $1.8 million in share-based compensation in last year's first quarter. The increase in expense was primarily attributable to development costs from our late stage clinical pipeline, specifically CVT-301, Plumiaz and dalfampridine.

SG&A expense for the quarter, excluding $7.2 million in transaction costs incurred in Q1 related to the Biotie acquisition, was $51.8 million, including $6 million in share-based compensation, up from $48.8 million, including $5.3 million in share-based compensation in last year's first quarter.

On the tax line, for the first quarter of 2016, our effective tax rate was 95%, which translates to a tax benefit of $9.7 million for the quarter. However, cash taxes paid for the first quarter of 2016 were $200,000.

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 of year-end 2015, we had available federal NOL carry-forwards of approximately $195 million. And for this reason, we do not currently pay substantial US federal income taxes. We adjust for non-cash taxes in our non-GAAP presentation.

Turning to the balance sheet, I'd like to note a few items. Our financial position remains strong. On March 31, our cash and cash equivalents balance was approximately $431.4 million, and this figure includes the net proceeds of the $75 million private placement of equity that we completed in January of this year.

Also in January, we signed a commitment letter with JPMorgan for an asset-based credit facility of up to $60 million. We are in the final stages of negotiating the loan documents and we expect to complete that documentation in the near term. The asset base facility will be a line of credit based on our receivables inventory and machinery and equipment that we can draw on at our discretion subject to customary condition.

Finally, in addition to the financings that I just described, Biotie had cash on hand of approximately $90 million on December 31, 2015. In April, the Company paid approximately $352.4 million for equity interest in Biotie, representing approximately 93.8% of all shares and votes in Biotie on a fully diluted basis as defined in our combination agreement, and after we purchase or redeem the remaining active equity interest, we believe that our cash position will remain sufficient to fund our operating plan.

Finally, an update on guidance. Now that we've completed the initial closing of the Biotie acquisition, we expect to be able to confirm our operating model for Biotie, and we will update guidance on R&D and SG&A costs by the time of the closing.

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

Thanks Mike. So, in closing, our priorities for 2016 are, first, advancing our pipeline, also continuing to grow AMPYRA, bringing it to appropriate patients who can benefit from it, as well as vigorously defending our intellectual property, closing the Biotie deal in the second half of this year and continuing to look for ways to build value by identifying assets that leverage our competencies in the CNS space. Specifically, we are continuing to look for in-market products that can leverage the capabilities of our commercial organization.

I will now pass the call over to the operator and open the mic for your questions.

(Operator Instructions). Paul Matteis, Leerink Partners.

This is Jeffrey Lin on for Paul Matteis. Thank you for taking my questions. I actually have two. So could you probably give us a little bit of color around the Phase III program for -- I can't say it, dalfampridine. What would the two Phase III concurrent trials look like? What kind of patients would you recruit in and what is the expected cost? And I'll ask my follow-up second question after that.

It's premature to speculate on what the design of the Phase IIIs would be. We have to look at the data first, because that's going to determine a lot of the answers to your question in terms of the size, in terms of primary outcome, in terms of what kind of groups we're going to go after and so on. We really can't comment except that broadly and maybe obviously this would be, again, people post-stroke, at least six months post-stroke, who have walking difficulties. But beyond that, there's really no way to say, even as basic as the doses. So in the current study, we have been studying two different dose groups versus placebo, 7.5 milligrams BID and 10 milligrams BID.

Just as an example, we could look at the data and decide, you know what? We don't need to do two groups next time. Maybe we only need to do one. So there are a number of questions like that that will be clarified once we see the data, and then we can come out and have a more detailed discussion with you.

Okay. And then in terms of the -- I believe you mentioned that the interim data would be released fourth quarter this year. If the stroke data does not show any benefit, would you consider repurposing the QD formulation for multiple sclerosis?

Again, I don't want to speculate on that right now. As of now, we are focusing on the stroke program.

Okay. Thank you very much.

Mark Schoenebaum, Evercore ISI.

Hey Ron. How are you? I've a couple of questions. The most important one, and my inbox is flooded, there's a picture of you on Facebook totally bald. And I'm just wondering if that's an accurate picture, because if so, it would mark a big change in the industry.

As you know, mark, we don't speculate on consortial matters publicly. I will say that my inbox is getting pretty flooded itself, and what I now realize is that I am about to have stiff competition on the right, if you will, from the likes of Jeremy 11.

I was just going to say, I think you have Jeremy 11 envy.

Yes. Who now wants his moment in the sun, in the very shiny reflective sun, if you know what I mean. So what is your next question?

Okay. Thanks Ron. I appreciate it. I was just wondering. In addition to being CEO of a major biotech company, I know you're very involved in bio, you're very interested in policy. And you really are the go-to spokesperson probably, at least on the biotech side, for a lot of these issues. And obviously probably the biggest issue that has caused a lot of sell-off in biotech has been this question about the sustainability of drug pricing, especially specialty drugs. I'd love to hear you riff on that either from a -- with your Acorda hat on or with your bio hat on.

And then specifically on Acorda, can you remind us what exactly that endpoint is in the post-stroke trial please? I know it's a responder analysis, but what exactly is it if you've revealed that? And if you have and I just missed it, I'm sorry. And finally the Selincro royalties, you're still going to monetize them? And if so, what timeline? Thanks a lot Ron.

Thanks Mark. Let me -- maybe I'll answer those in reverse order, because I think that's simpler. So, on Selincro, it's early days. We haven't completely closed the deal yet, although it's going to close because we are over the 90% threshold. So, we are in a little bit of a limbo state where we are limited in what we can discuss since technically on some levels we don't own the company yet.

So as we said in the beginning, we would be very interested in exploring ways of getting the most value out of all the assets obviously, but in terms of Selincro, it's not in our sweet spot. But that's something that, if we can monetize it, we would be interested in exploring that. So maybe I'll leave it at that.

On the outcome for stroke, it is based on -- the primary outcome is based on the two-minute walk. And there's a 20% threshold on that, so it's essentially the percent of people in each cohort who achieve a 20% or greater improvement in the two-minute walk distance. And I don't remember if that's -- if we are translating that into speed or just keeping it as distance. I'll have to check on that. Sure.

And then on the broader question, obviously we don't have time on a call like this to really go into it. I will say --

I've got all morning blocked off.

Call me. So I will say you're correct. Bio and pharma are deeply engaged now in, number one, combating a lot of the misinformation that is circulating out there in the media and elsewhere about our industry, about the value of our drugs and so on.

At the same time, I think it's fair to say that we are in an era where, increasingly, and perhaps fairly, society is demanding that we as drug developers demonstrate not only the efficacy and safety of our products, but the value of our products. And that's, in my view, that's going to be a long process because a lot of the metrics for demonstrating that are nascent or even nonexistent, depending on what condition you are looking at, what drug class you're looking at, what patient group you're looking at and so forth. So all of that has to be developed.

Our message out there, by the way, is fundamentally that this is not a drug industry problem per se. This is a healthcare system problem. And therefore, to come up with solutions that make sense for everybody and don't stifle innovation in the meantime, which everyone knows we need for diseases like Alzheimer's and all the cancers and everything else that's afflicting people, that in order to do that, you need all of the stakeholders to come to the table in good faith and hammer out how this is all going to be done. And that means the payor community, the drug community, the hospitals, the healthcare professionals, government entities, and so forth. So we are in the early days of engineering all that because, right now, the key job is to lower the volume on the finger-pointing that's going on.

Now, having said that, if you've been sort of coned down on what does that mean for us as an industry, I think it does mean that any of us who is out there innovating and developing new drugs needs to think through very carefully from the get-go, from the time you just are getting into your clinical programs, Phase I, Phase II, how are you going to bake in demonstration of the value of your product as another metric in addition to safety and efficacy, which is what we've all been brought up living on? This is how you get our drugs approved to market.

The value proposition is a serious one. I don't believe it's going to go away. I think it's actually going to intensify. I don't think it's doom and gloom. I don't think that we are going to have serious problems getting paid for innovation in this country. But the flipside is we're going to have a responsibility for demonstrating why we deserve to get paid for it. And I think it's actually not a hard story to tell. We as an industry haven't done a very good job of telling it, and we are getting better, we're going to have to get even better.

Thanks for indulging me, Ron, I appreciate it. And also congrats on a great operational quarter. Take care.

Phil Nadeau, Cowen & Company.

Thanks for taking my question. First, a question on AMPYRA sales trends. It doesn't seem like AMPYRA was hit by the normal seasonality we've seen in prior years. I'm just curious whether you could give us some quantification of the various factors in that seasonality. For example, was there destocking or was it just the typical insurance disruptions?

Yes, the same as always. We didn't see anything new here, Phil. It came in pretty much exactly as we expected. And you can see, nevertheless, it was a 19% first-quarter over first-quarter growth from last year. So we think primarily these things are driven some by inventory stocking, although we have gotten better at -- in our agreements with the pharmacies. We've gotten better about controlling that. There is still some. There's no question about that. And then primarily it's the shift in insurance coverage that you see at the end of the year, and that then lead into the first quarter where there is disruption because people have switched plans and there are different requirements for the drugs, and sometimes there's an interruption, and it takes a few months to get everyone back on track in their new plan. So we are seeing the same thing we've seen before.

So for Q2, would it be safe to then begin growing off of kind of the Q4 2015 run rate? There's no residual inventory issues or anything else that should impact Q2?

I think you're safest working off Q2 of 2015, because the seasonality seems to go quarter by quarter in a reasonably reliable way.

Got it. Okay. That's helpful. And then second, just on the AMPYRA lawsuits, you mentioned that the Mylan trial is staying in Delaware. Just maybe give us some information as to why that's important. What advantage is there in Delaware?

You know what? I can't comment too much on it because these are legal issues, and I just want to be careful that I am not inadvertently stepping somewhere I shouldn't on the legal front.

Fundamentally, for the patent holder, if we can litigate in one jurisdiction, that just makes it more straightforward because if you've got six or eight or 10 or however many ANDA filers you're litigating against, having to prosecute in multiple jurisdictions is -- it's a negative. It's much more costly. You're dealing with different judges, different jurisdictions. So it way over-complicates the burden on the patent holder in order to prosecute or defend one's intellectual property. So having them all in one place is a benefit just from a logistical point of view.

The case, as I understand it, has national ramifications because it goes to bigger issues than just the quota and our dalfampridine litigation. It goes into jurisdictional issues across the board for the entire industry anytime there is ANDA litigation, and actually I'm told even beyond the industry with respect to jurisdictional concerns. So I believe that the legal community is expecting that this could go up as high as possible in the legal system because of the importance of the issues.

Okay. That's helpful. And then one last question on CVT-301. It sounds like you're still on track to file in the first quarter of 2017. Can you give us some sense of the milestones and data releases from here to there? Will we get just one data release around the completion of the Phase III trials, or will you (multiple speakers)

I don't know yet. So all we are saying now is that we are projecting last patient out of CVT-301 by the end of the year. And as we get closer, we will get more clarity I think on all that and in terms of the data that would be released and how we're going to do it.

Okay. That's helpful. Thanks for taking my questions.

Michael Yee, RBC Capital Markets.

Hey Ron. Good morning. Two (technical difficulty) questions. With regards to business development, you've been doing a lot of that over the past two years and it's been great. You've been diversifying away from AMPYRA. So I wanted to understand. Obviously, I know you're finishing up with Biotie, but from a balance sheet capacity aspect, can you just broadly speak to whether you are pretty much good and done with any sort of any future (technical difficulty) for a while you are pretty set given the balance sheet where the balance sheet is?

And then secondly, related to that, I know that there is a lot of IP questions over the nearer and longer-term and we will figure that all out. At if it goes your way, that's great. It's pretty self-explanatory. And if it doesn't go your way, what is the earliest that a generic could launch if the 2026 (technical difficulty) are there other patents there around if those (technical difficulty) are there other protection things? Can you remind us of where those other ones are? Thanks.

Okay. So first of all, on the diversification and the business development, thank you for noticing. It's been a quite deliberate strategy over the last couple of years to ensure that we had a diversified portfolio regardless of what happens on the AMPYRA front. And I will emphasize that we are absolutely putting a lot of resources into defending the IP on AMPYRA.

But in terms of the balance sheet and where we go from here, I think it's safe to say that we are not emphasizing more late stage development opportunities right now. Hopefully there will come a time for that again, but right now, that's from two perspectives. One and maybe the most important is we are full up for our size organization, because it's not enough to just bring these assets in. You have to service them. You have to be able to develop them efficiently and effectively, and we are at capacity for doing that. We would have to grow a fair amount again in order to accept more of those late stage opportunities. We might get some early-stage for the pipeline, but the late stage I think for now it's safe to say we are not looking. Unless we were going to swap something out, we are really not looking.

Now, as I said earlier, we would still be very interested in commercial stage assets because we do have -- until we get approvals on some of the late stage pipeline that we have now, we do have extra capacity in the sales force and in particular --

But do you have balance sheet capacity?

So the point is that, for a late stage development deal, in addition to not having the internal capacity, I think we would be stretched on the balance sheet front. But for a commercial stage asset, there's much more flexibility in how -- as you know -- in how you can finance that because now you have a cash flow generating asset. So that's something that we feel we still could do because we have a number of different options available that would not be available for let's say a development stage deal. Does that answer your question?

Yes. So do you think you can bring commercial stuff to further diversify, or do we need to discuss off-line?

Yes, if we can find it. It is challenging to find commercial stage assets, but we are looking and in particular -- and for anyone who is listening on the call who might have one, particularly for neurology assets, or even certain specialty pharma assets, it would be interesting.

Now, with respect to the IP, we have -- to remind everyone, we actually have five patents in the Orange book that will cover dalfampridine or AMPYRA in MS. One of them expires in mid-2018. That one is part of ANDA litigation. It is not currently part of the IPR litigation. The other four patents expire variously between 2025 and 2027. Those are both in court and in the ANDA litigation. So, you've got a lot of mixing and matching here.

But maybe to simplify it, if the court does not -- if the court upholds the 2018 patent, even if the IPR did not uphold those other four patents, then we would still have protection until mid-2018. Also, we would appeal the IPR decision, and that appeal would take probably a year or maybe a little more. So either way, you're winding up somewhere around mid-2018. To get to anything earlier, you would have to assume not only that the IPR invalidated all of the patents, but that the court invalidated the 2018 patent and that everyone -- or the people wanted to launch at risk while we were appealing the decisions. So, that just gives you a sense of the level of probability or not. And then of course, if any of the four IPR patents, if any of the key claims is upheld in the IPR and in court, then we would still half to run (technical difficulty) into somewhere between 2025, 2027.

Got it. Thank you.

Tom Shrader, Stifel.

Good morning. It's Tom Shrader. I had a question on dalfampridine for stroke. So you have a six-month cut off on the after-stroke? Do you expect a cut off on the other side, how long ago they could have had a stroke? I guess, along those lines, I'm curious, AMPYRA for MS, how deep is the disease? Is it active? Do you have indications that people use it in secondary progressive MS?

Oh, yes, absolutely. In fact, the label allows for that, because it does not specify any specific type of MS. Our data showed that because, in our clinical trials, we had people with primary progressive, secondary progressive, progressive relapsing, and of course relapsing remitting. In fact, I think it's the only drug that's indicated for any type of MS, at least currently. And in the marketplace, we certainly have indications that people are using it in that way. There are some people who don't qualify for disease modifying drug, but they can still get help from AMPYRA.

So, on stroke, there is no upper limit on the time after stroke. I think, in the clinical trials, we have an upper limit on age, and I forget if it's 75 or 80. I forget what the age cutoff is. Or as a matter of fact, I don't even remember if we kept the age cutoff for the Phase III. We had it in the Phase II.

But bottom line is there is a six -- it needs to be at least six months because you want to make sure that you are not confusing the outcome based on natural healing that occurs in the first six months after a stroke. But then, beyond that, the deficits they have, they are going to have permanently, and there is no upper limit on that.

All right, perfect. That's reassuring. If I could ask a question on the pieces of the current cash position. So you are reporting $430 million in March. You paid out $350 million in April. You could have another $40 million for Biotie. Is that correct? And then you get $90 million in cash, and you have a $60 million facility that's only for manufacturing. Is that the current picture?

Let me go through that one more time. So you got that correct, that at $431 million year-end, we paid $352 million for almost 94%. So that would (multiple speakers). It depends on the exchange rate at the time, although we are largely hedged there. Then you add in -- you have to make an assumption if you want to get to today about Biotie's burn rate, but you can look their financials, but they had around $90 million in cash as of year-end. And then we have the $60 million credit facility that will be made (multiple speakers)

I'm sorry, that credit facility is earmarked for manufacturing only or is that anything?

No, it's receivables, inventory, machinery and equipment form a borrowing base against which we can withdraw. So it's up to $60 million. The borrowing base will be determined when we finalize it, but it's not -- the $60 million is not chosen randomly. That's obviously in the range of what we're talking about here.

Perfect. Thank you very much.

Salveen Richter, Goldman Sachs.

This is Tom on for Salveen. Thanks for taking my call or question. So I just had a question on AMPYRA in stroke. So, you mentioned you're going to stop the Phase III and analyze the data. But can you confirm whether you actually plan to share the results with us or not? And if so, would that be press release or a medical meeting, and what's the timeline for that?

So, for some time, we have been discussing with people, I think it's the better part of a year, we have been discussing publicly the alternative ways we would go about the analysis. One option was an interim blinded interim analysis group futility. And the other option we had discussed was what we in fact are doing now, which is to just stop an unblind and get all the data and use that to inform two parallel Phase IIIs that would be better designed, because they would be based on more information, and also using the QD formulation, which was a key. Given that we now think we are encouraged by what we are seeing in our QD formulation, we've made the decision to go ahead and unblind.

In terms of what we would share, I don't have an answer for you yet. There are various reasons why it may make sense to give very topline and not get into much detail. So -- and that's for the good of the program, not because we don't want to tell you stuff. But for various reasons, it may make sense to give people a sense of what we saw. And obviously, if it's positive and we are moving forward, we will tell people in what way we are moving forward, what the design of the Phase III trial is going to be and so forth. So hopefully you will be able to infer a lot from that. I don't know how much detail we would go into. And again, there are very good reasons why you would not want us to for the good of the product.

Okay. Is there any scenario where we wouldn't get any data or you would just kind of say we've analyzed it, we're going forward with the QD?

We will certainly do our best to give as good a sense as possible of what the topline results were that enable us to go forward hopefully, if they do in fact enable us to go forward, what it was about them that enable us to go forward.

Okay. And then I think you mentioned the timeline for that would be Q4. Am I correct there?

Yes.

Okay. And then just one last follow-up if I can on QD. Is that still due for third quarter? And are we going to actually see data or is it going to be kind of a go or no go as we saw earlier this quarter?

You know what? I don't recall where we talked about third quarter for the QD, so I need to check on that, so I don't want to tell you the wrong thing.

The next steps that are in process now are to get a multi-dose -- and I'm being told that, yes, that's what we've said. Is that right? So we are doing a multi-dose PK study, in other words a steady-state PK study, to confirm what we saw on the single-dose PK, and we are doing a -- we are working on scaling up and making sure we can scale up. So as far as I know, the steady-state PK should be available in the third quarter, yes. And in terms of scale up, I need to check on that and see what the team's time projections are on that.

Okay, great. Thanks again.

Chris Raymond, Raymond James.

Good morning guys. This is Laura [Chico] in for Chris Raymond today. Thanks for taking the questions. I guess following up on the last bunch of questions on the Phase III post-stroke deficits, Ron, I know you guys have given a lot of discussion on the various options, your unblinded versus blinded futility analysis. And you did mention the QD progress as one factor here. But I'm just curious. Were there other factors that influenced your decision to go this route, or maybe if you could elaborate on a little bit what those were?

I would say it's primarily based on the encouragement we have with the QD because, all along, we've been aiming it at the QD. And the more we looked at it, the more we looked at where is the balance between let's say speed and accuracy is you want to make sure it is accurate as possible, and that we have best chance of success, not only in the clinical trial results, but in the commercial part that hopefully comes afterwards with approval. So when we took all of those factors into account, it was not -- it was not a difficult decision. It was very straightforward.

Okay. And then I guess one quick separate follow-up. There was some study data out of AAN on the REBUILD study looking at clemastine remyelination. Just curious if you had any thoughts on learnings from that trial or read-throughs potentially to the rHIgM22 program?

The most encouraging thing to me was the validation of the anti-lingo information that we got, which is that if you have something that looks like it remyelinates in animal models and then you apply it, at the very least you can say you're getting now a reproducible effect in human beings, at least in terms of conduction velocity in the eye in the optic nerve. And that's important. It doesn't tell you nearly everything you want to know, but in terms of proof concept, that you're translating at least some of what you saw in the animals into a measurable improvement in a neurological metric in humans, I find that quite encouraging. Just as proof of concept for the entire class of remyelinating therapy, whether it's clemastine or anti-lingo or rHIgM22.

Now, beyond that, it's really difficult to draw any conclusions, because we still have the issues of determining are we going to get to clinically meaningful human outcomes. So having improved conduction tells you that you've got a biomarker that is indicating some level of remyelination. That's fabulous. Now, the next step and maybe the harder step is to say, well, can we now do trials where we can show patient benefit based on that kind of remyelination? So that remains an open question.

The degree of conduction improvement that was seen with clemastine, again, you have to be very careful because it's two different studies and different criteria and maybe different patient characteristics, but it was -- it appeared to be smaller than what was seen for anti-lingo. And again, you have to be very careful about drawing any conclusions about that. I think the take-home is qualitative, that you saw it at all. Now it's going to be a question of dose responsiveness. Can you get the doses of clemastine up to a point where you are seeing more of an effect? And then for all of us, whether it's anti-lingo, rHIgM22, clemastine, all of us, the next stages are going to be to show do we see clinically meaningful outcomes. And the next data point in that regard I think is likely to come from the anti-lingo study that I guess data are due in the next several months.

Thank you very much, very helpful.

At this time, I'm showing no further questions. I would like to turn the call back over to Mr. Ron Cohen, CEO, for closing remarks.

Thank you everyone for joining us. It was a good quarter, and we are eager to report again in another quarter. So, we will see you all then.

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the program. You may all disconnect. Everyone have a great day.