Avadel Pharmaceuticals PLC (AVDL) 2018 Q1 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Avadel Pharmaceuticals First Quarter 2018 Earnings Conference Call.

(Operator Instructions) As a reminder, this conference may be recorded.

I would now like to turn the conference over to our host of today's call, Ms. Lauren Stival.

You may begin.

Good morning.

This is Lauren Stival, and I want to welcome you all to Avadel Pharmaceuticals' First Quarter 2018 Earnings Conference Call.

Before we begin, I will start with some cautionary statements.

The following presentation regarding Avadel Pharmaceuticals plc includes a number of matters that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward-looking statements.

These risks include risks that products in development stage may not achieve scientific milestones or objectives or meet stringent regulatory requirements, uncertainties regarding market acceptance of products and the impact of competitive products and pricing.

These and other risks are described more fully in Avadel's public filings under the Exchange Act, including the Form 10-K for the year ended December 31, 2017, which was filed on March 16, 2018.

Except as required by law, Avadel undertakes no obligation to update or revise any forward-looking statements contained in this presentation to reflect new information, future events or otherwise.

We will be using a slide presentation for today's call, which can be accessed on the Investors section of our website or via our webcast.

After prepared remarks, we will be opening the call to a question-and-answer period.

On the call today, we have Michael Anderson, our Chief Executive Officer; Mike Kanan, our Chief Financial Officer; and Greg Davis, our Chief Operating Officer.

At this time, it's my pleasure to turn the call over to Mike Anderson.

Mike?

Thank you, Lauren, and good morning, ladies and gentlemen.

As always, we thank you for joining us today as we discuss our first quarter 2018 financial results.

The first quarter of 2018 has turned out to be a very productive time for the company as we've achieved orphan drug designation for our once-nightly sodium oxybate FT218.

Continued to ramp up the FT218 study, divested our pediatric products, prepared for the launch of NOCTIVA, which is now shipping into the trade and executed and oversold convertible offering, putting us into a position to ensure we continue to invest in our strategic growth catalyst.

We're proud of our organization and what we've been able to accomplish not only over the last quarter, but really over the last few years, as we have substantially transformed the old Flamel to the new Avadel.

We've assembled a team of passionate, highly-qualified and experienced professionals, who are aligned around our critical business and growth priorities.

And we are all working with one goal in mind, that being to execute our plans, thus ensuring we can succeed in everything that we do.

In many ways, this past quarter continues to form the foundation on which we are building the company moving forward.

Q1 is a microcosm of 2018, a quarter, a year, where we are investing in our future and will be measured by our ability to execute and deliver.

Let's not forget, we have 2 big shots on goal with NOCTIVA and FT218, supported by a market-leading, cash-flowing hospital franchise, and are well positioned both financially and from an infrastructure standpoint to leverage and build around our focus and emerging expertise in both sleep and urology.

Starting with FT218.

We, obviously, disappointed investors with our announcement earlier this year that we wouldn't be in a position to file the NDA in 2018.

Unfortunately, we did seem to leave investors believing the study was either barely progressing or not progressing at all, which I can emphatically state is not the case.

Today, we continue to recruit and enroll patients in the REST-ON study for FT218.

As we previously described, our recruitment rates have increased substantially, and we continue to make good progress.

Within the past several weeks, we have seen nearly a 30% improvement in our enrollment trends.

What's more, we are advancing the initiation of our new Australian sites where sodium oxybate is not easily accessible.

This is important as we do expect Australia to provide an additional boost in enrollment.

Also, we are opening additional sites in the U.S., Canada and the U.K. We already have or will have Avadel employees working closely in those sites, supplementing the efforts of the CRAs and the clinical coordinators, working on patient identification and ensuring best practices are being implemented.

Our effort from this point forward continues to be focused on patient enrollment.

As mentioned on our last call, within the second half of 2018, we expect to be able to provide clear and unchanging guidance as to when we estimate the last patient in, might occur.

From that point forward, you can reasonably project a potential submission date of our NDA.

As we've stated many times before, FT218 shows real potential and, we believe, will add real value to these narcolepsy patients, who are seeking a substantially improved treatment option from the twice-nightly formulation, which based on our initial research, is quite high.

While we work on completing enrollment for the Phase III REST-ON study, we continue to work behind the scenes on the myriad of current and future planned studies that will support both our product as well as our patent and regulatory strategies.

Another large potentially significant catalyst is the launch of NOCTIVA.

So let me review some of the key highlights during the first quarter as we are just now launching the product.

In January, we launched our nocturia condition education campaign with over 20,000 sales calls and over 600,000 print and digital engagement impressions, reaching over 90% of our target audience through our What's Keeping You Up At Night campaign, both highlighting the significant health impact, consequences and costs of nocturia as a condition for both health care professionals and patients, respectively.

We entered into exclusive partnerships with the leading clinical and scientific educational platforms in urology and adjacent specialist, who treat nocturia as a condition.

And of course, with a focus on NOCTIVA as the solution.

We secured a unique therapeutic category for NOCTIVA with 3 major pricing compendiums, First Databank, Medi-Span and Gold Standard, which indicated there is no therapeutic equivalent for NOCTIVA.

This has been one of the key factors to our above-average market access environment within the first 60 days of launch.

We began shipping to the trade in March, approximately 4 weeks ahead of schedule, as we finalized our two-pronged distribution and patient access strategy or commercial patients in retail and Part D patients via our NOCTIVA Care Plus program, respectively.

We executed a narrow package insert or PI only launch during the first 3 weeks of April, whereby we have seen such shipping to the trade, approximately 150 prescriptions captured in retail by IMS, which, as you may know, is now known as IQVIA and over 250 prescription referrals into our NOCTIVA Care Plus program.

During these first few weeks, we have seen a myriad of coverage scenarios and positive indicators of coverage.

And currently, through third-party analysis and customer insights, we estimate that approximately 100 million patients are covered and have access to NOCTIVA.

When comparing to an analogous more recent OAB product launch or even a more recent retail specialty focused launch with the similar patient demographic, our data would tell us that we are outperforming these comps from an access perspective within the first 60 days of the launch.

Of these 100 million patients, over 20 million of the patients are in a preferred brand position with Aetna and the VA.

The VA, providing care to over 9 million veterans and most in our target demographic, very recently instituted a coverage policy decision on NOCTIVA, which is quite robust and have specifically documented that there is no substitutable product for NOCTIVA.

The other approximately 80 million patients, who have access to NOCTIVA as a non-preferred brand, come from nearly all major payers, either by policy such as Cigna, Anthem, and HCSC or by benefit design such as United Healthcare, ESI and CVS Caremark.

Over the past few weeks, we have seen both Part D and commercial prescriptions get covered with an out-of-pocket for as little as $8 to as high as nearly our list price.

Clearly, benefit design, deductible status and payer coverage are all important when assessing our market access situation for NOCTIVA.

This is something we will continue to monitor as our patient pool gets more robust.

Right now, we're focused on in investing and creating a positive access experience, while we navigate the payer waters, which we expect to become clear over the next 3 to 6 months.

We have contract offers submitted with nearly all of the top plans, have had or have planned clinical presentations with all of the top plans and currently have a number of pending P&T reviews.

We are pleased with the access to these important customers we've been granted, the receptivity to our product profile and our approach to pricing.

We will provide any meaningful updates on this key driver as progress continues to be made and as appropriate.

While we continue to pursue favorable contracting and preferred brand status, we have planned a bridge with our patient access programs designed to have patients pay no more than $40.

These are fully operational, being leveraged for patient acquisition, and we will continue to monitor its overall impact.

Finally, as of May 1, we trained and deployed our sales teams as we officially launched our branded campaign that will also have full exposure through digital and print channels.

As with most launches, it will take several quarters to fully gauge the impact in uptake.

However, we remain very bullish on NOCTIVA and its potential to both impact millions of patients who are waking up too many times a night to urinate and to create substantial value for our shareholders.

Moving to our hospital franchise.

Bloxiverz, Akovaz and Vazculep continue to provide us with high-margin sales that once again, once again exceeded the Street's expectations with $33.3 million in revenue.

There are many, who had written these products off long ago, but we continue to generate leading market share positions and significant cash to fund our more strategic initiatives.

While these generified products are a bit more difficult to model and have seen some decline, they have nevertheless provided us with the opportunity to fund our clinical work, acquire NOCTIVA and raise capital.

As you know, we are currently working on developing a fourth sterile product, injectable product, that we estimate will be somewhere in the range of $30 million to $40 million in revenue per year.

We previously discussed that we uncovered some safety issues that we feel the FDA will find meaningful and are still working for our development plan.

At this point, we've been able to substantially improve the product's profile compared to the unapproved diversion and have shared our preliminary findings with the FDA.

Our next steps in the development process are to complete validation and stability testing, for which we are very confident based on the extra work that will demonstrate an improved safety profile.

Given the extra work to be done, we now anticipate filing our NDA around the end of the year, as we have previously shared.

Given the approval time at FDA, we still expect this to be a 2020 revenue opportunity.

We are evaluating all potential regulatory, legal and commercial options that we may have, based upon the improvements we've identified, and intend to present our full case to the appropriate authorities, including the FDA.

In February, we netted about $138 million from an oversubscribed convertible debt offering, which will ensure our liquidity as we invest in our most important growth catalyst, the launch of NOCTIVA and the enrollment of our REST-ON clinical study.

Furthermore, we are well positioned to seek out accretive and strategically aligned opportunities that can leverage the infrastructure that we have at our building.

Now lastly, before I turn the call over to Mike Kanan, our CFO, I'll quickly mention something a little bit out of the ordinary.

We've received a number of recent inquiries from investors about a small Phase I study that was done a number of years ago using our extended-release subcutaneous Medusa technology with IL-2.

While small, our Medusa XL showed a stable PK and PD profile with the stable duration of action of around 96 hours.

It's no surprise given the recent interest in IL-2 programs that we've received inquiries and while we cannot say at this point if there is a path forward here, we will be considering it.

Given the number of questions that we received, I wanted to mention on today's call, but certainly, don't want to lead anyone to believe that we're entering the clinic or that a partnership is imminent.

Now with that, I'm going to turn the call over to Mike Kanan to review our quarter's financial results before I wrap up with some final comments and our Q&A session.

Mike?

Thanks, Mike, and good morning to everybody.

As you have seen in this morning's release, our first quarter revenues from our hospital products were strong and exceeded our expectations.

First quarter revenue was $33.3 million, which was above the Street estimates.

As Mike discussed, our launch of NOCTIVA is underway across the U.S. and as part of the initial stocking of wholesalers, we recorded slightly less than $1 million in revenues.

This is ahead of where we thought we would be and we are very pleased with our launch progress to date.

As we announced in February, we completed the disposition of our pediatrics products to Cerecor.

This aligns with our strategic focus and ensured our resources are deployed to our growth catalyst.

Also, some of you may know, during the quarter, we settled all of the warrants we issued as part of the Eclat acquisition.

We received $2.9 million in cash and issued about 603,000 shares.

Recall, those warrants totaled previously 3.3 million shares.

Our bottom line results in the first quarter included about $14 million in NOCTIVA launch spending and is in line with our expectations.

R&D spending in the quarter was almost $10 million, most of which was spent on our sodium oxybate trial.

The spending also is in line with our expectations as we continue to initiate new clinical sites and recruiting initiatives.

Although our operating cash flow was negative in the first quarter, cash flow generated from our hospital sterile injectable business, and you heard Mike say, continues to be positive and is an excellent source of cash which we expect will continue for the foreseeable future.

These products carry gross margins in excess of 85% and carry very little sales and marketing costs or other overhead.

So they are very profitable for us.

As a result, this business continues to play a significant role in our enterprise strategy.

Coming off the heels of our successful and oversubscribed $144 million convertible debt offering, our cash balance was nearly $200 million at March 31.

We are well capitalized to complete the full launch of NOCTIVA, complete our FT218 trial and consider selective additional strategic business development opportunities.

And as a note of interest, we, like many other companies, adopted the new revenue recognition accounting rules in the first quarter.

The adoption of the new standard did not have a material effect on the overall timing or amount of revenue we recognized in Q1 when compared to our prior revenue recognition policies.

Now let's talk more specifically on how we performed in the first quarter.

Revenue from the quarter, as I said, was $33.3 million, down slightly from Q4 level and down from $52.5 million in the Q1 of last year.

Akovaz and Bloxiverz revenues declined from Q4 and Q1 of last year, primarily as a result of lower volumes and pricing declines due to new competition.

This decline, however, was somewhat offset by higher unit volumes in Vazculep due to the timing of 2017 year-end shipment and growth in certain accounts.

Although revenue from our hospital sterile injectable business has declined over last year, as I said, they are still very important to us.

We will continue to look for unapproved market drugs or other previously-approved products that can win in the marketplace and provide good cash flow at a reasonable cost of development and a high profitability of approval.

Cost of goods sold was about 20% of product sales in Q1, up from about 12% in Q4 and 7% in Q1 of 2017.

The increase in cost as a percentage of product sales was due to a few things, including about $2 million of the inventory write-offs, costs incurred for certain expedited freight and lower product pricing.

Including these one-time issues, gross margin would have been about 85%.

Keep in mind that the 28% royalty on NOCTIVA net sales will be recorded in COGS, not in revenues.

Research and development expenses during the fourth -- first quarter totaled about $10 million, relatively unchanged from Q4, but almost up -- but up almost 40% from the first quarter of last year.

The year-over-year increased as a result of higher spending on our REST-ON clinical trial, including new patient enrollment initiatives, cost associated with initiation and opening of additional clinical sites and increased spending associated with the testing and scale of contract manufacturing services for FT218.

SG&A was about $25 million in the first quarter, up slightly from Q4, but up almost $13 million from last year's first quarter.

This increase, as expected, was primarily due to about $12 million in costs incurred during this quarter associated with the launch of NOCTIVA.

Also included in SG&A in Q1 is about $3 million of pediatric product sales and marketing costs.

As a result of the divestiture, these costs will not continue for the balance of the year.

Included in our non-GAAP results are about $6.6 million in related party contingent consideration royalty payments and a new cost of $963,000 associated with our convertible debt.

This is the cash interest expense we have accrued on our exchangeable notes.

Most of these royalties are related to the 20% gross profit royalty we owe as part of our acquisition of Eclat.

On a non-GAAP basis, Q1 diluted loss per share was $0.34, which includes about $0.31 of NOCTIVA spending.

As a result of these losses, we recorded a tax benefit of 14% or approximately $2.1 million.

We believe that a large portion of the future NOCTIVA spend will be eligible to offset our U.S. taxable income attributable to our hospital products.

As a result, this may eliminate or substantially reduce our U.S. cash taxes in 2018 and create a tax benefit.

We also expect U.S. tax reform recently passed will help us achieve a more reasonable income tax rate in the future.

Let's move onto the next slide, which covers our GAAP results.

The primary differences between our non-GAAP and our GAAP income statements relates to how we treat expenses associated with acquisition-related contingent consideration, amortization of the NOCTIVA intangibles and interest expense on our newly-commissioned exchangeable notes.

Please refer to the appendix to today's slide presentation for a reconciliation of our non-GAAP results to our GAAP results.

As we said in the past, the largest GAAP to non-GAAP difference is related to our contingent consideration.

During the first quarter of 2018, we slightly increased our contingent consideration liability for GAAP purposes, and accordingly, recorded a charge of about $3 million due to slightly changing market conditions in our 3 hospital products.

Additionally, we have differences between our cash interest expense and our GAAP interest expense associated with our exchangeable notes.

Some of you may know, for GAAP purposes, we have to bifurcate the notes between the debt component and the equity component.

For GAAP purposes, we record interest expense on the debt component at an interest rate commensurate without specific credit profile and tenure or the term debt.

But for the non-GAAP purposes, we will report interest expense using the 4.5% coupon, which came with the converter.

The difference between the GAAP and non-GAAP interest was not all that material in Q1 given that the notes were only outstanding for a portion of Q1, but it will be more material in future quarters.

Our GAAP net loss for the first quarter was $12.2 million or $0.32 per share compared to net income of $25.9 million or $0.61 per diluted share in the same period last year.

Moving on to our cash flow summary.

We ended the quarter at $198 million in cash and marketable securities.

That's up from $94.1 million at December 31.

In February, as you know, we completed our exchangeable notes offering and received net proceeds after expense of about $138 million.

Simultaneously, with the notes offering, we repurchased $18 million of our shares.

And recently, we announced another modest $7 million share buyback.

This brings our total board-authorized share buyback program to $50 million.

Over the last 12 months, we have reduced our outstanding share count by approximately 12% as a result of these programs.

And finally, we are reiterating our 2018 guidance.

Our revenue guidance is unchanged at $105 million to $125 million, and our guidance for NOCTIVA revenue remains at $10 million to $20 million.

R&D spending also remains unchanged at $40 million to $50 million.

And our outlook for SG&A continues to be $80 million to $90 million.

Included in our outlook is about $50 million to $55 million in NOCTIVA spend, that's also unchanged.

Because of our anticipated losses in 2018, our effective tax rate is expected to be a benefit and will range from 0% to 10%.

With that, I'll turn the call back over to Mike to conclude our prepared remarks.

Thank you, Mike, and thank you, again, for joining us today.

Our company has executed a strong quarter.

We're going to continue to strive to continue executing our near- and long-term growth strategies in our mission to become a leader in the specialty pharma business.

And with that, we'll turn the remaining time over to any questions that may -- that people who would like to ask.

(Operator Instructions) And our first question comes from Francois Brisebois of Laidlaw.

Sorry I missed the first couple of minutes of the call, so if this was already talked about.

But I was just wondering, so that the launch is going on -- the commercial launch since yesterday, a little early.

Is there anything that you guys are planning around AUA that's coming mid-time this month?

Yes.

Frank, this is Greg.

We will be at AUA with a fairly robust presence.

There will be -- there's a nocturia CME program.

We have a large product theater.

We will have a late breaker publication of data on Sunday and a number of other events surrounding some of our advisers and our key opinion leaders.

So, yes.

Okay, but the full launch has officially taken off?

Yes.

They are out today with a full campaign as of, really yesterday.

Excellent.

And then, this is probably more for Mike Kanan.

I was just wondering, your tax reform has clearly been -- a little complicated for this company for a little while or just taxes in general.

How do you think the reforms could help in the future, you mention that?

Yes.

So the tax reform lowered the corporate tax rate to 21%.

And as you know, the significant portion of our profitability is in our hospital business.

And that was previously taxed at the old corporate tax rate of 35%.

So all of this tax reform has helped us with respect to the hospital business that we have.

So that should be helpful to us as we move forward.

Additionally, as you know, NOCTIVA is in the U.S. as well.

That's currently generating losses, so we will be able to offset -- even at a 21% tax rate, we'll be able to offset much, if not all of the hospital business profitability with the NOCTIVA spend.

So from a cash tax standpoint, we don't expect to pay any cash taxes or very little cash taxes in 2018.

And we should be able in 2019 -- be able to carryback potentially and grab a refund of any -- well, we'll have to carry forward losses that can be rolled forward to 2019.

So we're pleased with what our tax reform act has done for us as they had most companies in the -- who have significant U.S. operations are.

Got you.

And then, can you guys give any more color on the early preferred brand wins.

And what contribute to it?

And the effect down the road of this?

And how this, kind of, came early here?

Yes, Frank, Greg again.

To me -- to us, it's really a reflection of the work that was done really early part of this calendar year at the end of last year, as first and foremost is establishing NOCTIVA in its own therapeutic category.

In particular, in these compendiums where both payers and pharmacies go to determine what would be your competitive basket so to speak.

That was an important outcome for us, which we achieved, and Mike covered that highlights a little earlier on the call.

So that was the first one.

And then, secondly, in the recent wins with the likes of Aetna and VA, and now other government like TRICARE and what not, what you see is strong clinical presentations, high receptivity to the product profile and a decision to provide coverage nearly immediately.

So in these cases, we've been very pleased with the outcome of those wins early on.

And generally, I would describe the nature of that receptivity has been consistent in a number of our meetings.

And as we've really focused a lot on Part D and we would expect to see more decisions, more formal decisions like these recent ones coming down over the next, let's call it, 3-plus months.

Excellent.

And then just lastly, hereon, in terms of the REST-ON trial.

So an update.

You said more of a definitive guidance update in the second half '18 on last patient enrolled.

But you mention there is more trial sites, 30% growth in recruiting?

You guys given any color on the number of sites?

How do you ensure, again, just to remind us that there is no added variability between -- as you add more sites to the trial?

This is Mike, Frank.

Obviously, the protocol that's being utilized for the clinical study is the same, irrespective of site.

And we do a great deal of due diligence, as so does our CRO, in selecting these sites and making sure that the site is prepared both from a resource perspective and a process perspective to be able to do that.

We will provide you with an update in the second half.

Our Australian sites, which we've talked a little bit about, over the past couple of months, where sodium oxybate is not readily available to patients.

We've already done a lot of work with those sites.

We have very high expectations that there will be an enhanced number of patients in those sites for just that reason.

And that, of course, is the result of the requirement that patients be sodium oxybate naive.

And -- but also at the same time, we have seen a pickup, a significant pickup, as we said, 30% enrollment increase in our U.S., Canadian, European sites within the last several weeks.

And so we feel real good about the progress, but again, we have, on 2 occasions, as you know, we've set dates out there and been unable to meet them.

And we're not going to set another date out there until we can set one with the full assurance it will never be moved again.

Okay.

And then, so the number of sites, you're not giving any exact color on that?

Yes, I don't know the exact number today that we actually have enrolling.

But we've already talked earlier about increasing to somewhere in the neighborhood of between 60 and 70 clinical sites.

And our next question comes from Jason Butler of JMP Securities.

It's Roy for Jason.

I had a few additional questions on REST-ON.

I just wondered if you describe in a bit more detail the 30% improvement in enrollment trends.

Does that mean that 30% more patients are being added month-over-month or is this some other measure?

How much of that is due to the new sites?

And can you tell us broadly where enrollment stands now, is it above or below 50%, say?

We can't -- we are not in a position to be able to offer you any further guidance on where the enrollment sits.

But the 30% is for sites in enrollment into the study on an existing sites basis.

So we have yet to -- and we haven't and won't at least at this point, point you to where exactly we sit in the enrollment process.

Unfortunately, I think that when we fail to do that, and as we are doing again and as we did it earlier, we've left people with the impression that the study is nowhere and actually nothing, again, could be farther from the truth.

We've had good enrollment trends.

They picked up in the beginning of the year, not quite to the extent at that point, but we thought they should and had expected.

But we have seen marked improvements since then.

And we'll feel a little bit better about giving you that kind of information sometime, hopefully, in early second half.

Okay, great.

And then I had a question on the Cipla generic for Vazculep that was approved.

Was that expected and do you have any expectations for the impact on Vazculep from that?

Yes.

We've always modeled the appearance of new entries into all of those markets actually.

We've seen new entries into both Akovaz and Bloxiverz at the tail end of the year.

We've been for the last -- since we had Vazculep approved, we've shared the 1 mL space with another vendor.

And we've always expected an additional competitor in the other 2 vial sizes, and we'll address that accordingly.

We have business that we have reliably supplied for a lot of years.

It will certainly have an impact, but it won't be as if our business goes away.

Okay, great.

And then, I guess, on Akovaz, you guys are reiterating guidance for $10 million to $20 million.

Just generally, does a 1Q number and what you've seen in April give you comfort in that guidance?

Do you think there is a greater risk that you -- that appears conservative now?

No, I think right now, it's too early to tell.

And we're pleased with the work that's occurred during the first 3 months to get us to this point and the early progress, and we'll certainly have more to talk about in the coming quarters for sure, in that regard.

I think you have to recognize that the scripts that we've seen today, the initial scripts that were done with this cutdown launch of just the PI and that sort of thing.

So really you haven't even seen the impact of a full-fledged launch.

It, obviously, just started this week.

So we feel good about the response that we've gotten, and we'll have to make sure that plays out.

But you should rest assured that as of now we are counting prescriptions.

And our last question comes from John Boris of SunTrust.

Congrats on the results, and especially the level of detail you provided here.

Just back to the guidance of $105 million to $125 million, just your assumptions around -- your assumptions, I guess, around that guidance.

Obviously, you've given $10 million to $20 million on NOCTIVA, but just your thoughts around any other pushes and pulls that you expect since you've maintained the guidance here and haven't raised guidance here going forward?

John, we hate to ask you this, we were having some difficulty hearing your question.

I'm sorry.

Would you mind asking it again?

Sure.

On the $105 million to $125 million guide on the sales, can you possibly just discuss the pushes and pulls of that, meaning the variables it will cause you to raise or the variables that will cause you to go below the lower end of your range?

Second question on NOCTIVA awareness, Greg, is obviously very important, especially, from your high decile physicians.

Do you have any early preliminary information about the percent of physicians that have a good awareness of the asset?

It might be too early to have intent to prescribe, but just any thoughts around that.

And then, on the fourth injectable asset, can you mention how many competitors there are for that asset in the market?

And what the safety features are?

And then, I have one last follow-up on IL-2.

So let me take the first one, if I may, John.

Then I'll turn it over to Greg for the remainder of them.

And with respect to pushes and pulls on the guidance that we've given, I think, are pretty much historic pushes and pulls.

It depends upon, obviously, any dramatic changes in that injectable business and specifically as it relates to a new competitor coming in with strengths of Vazculep as to what happens to the price.

As you know, in this business, you're always in a better position to be able to defend your share then you are to gather it from somebody else.

So we'll have to just see how aggressive they are.

And we don't -- we won't know that till they actually get into the market with it or when that will be.

So I think that -- I think people who -- I think supply chain issues, which people may from time-to-time have.

If those come into play, that can also serve us -- serve to help us to some degree.

We've seen a slowing, I think, recently in the uptake of sugammadex, but expansion of the overall neostigmine market a little bit.

How much more does that play, so there are a lot of pushes and pulls there.

And then, with respect to NOCTIVA, a push and pull would -- is clearly whether or not we get out of the blocks like we think we will, whether we're faster than that or whether it's a slower pickup.

So all of those things are typically today the pushes and pulls that will impact that guidance.

So -- but for right now, we're very comfortable as Mike said with where we are.

Now Greg can take on the rest of the questions, if that works.

Yes.

John, so -- thanks for your question.

Regarding kind of where we are from an awareness standpoint, I would say that we've done our baseline aware -- ATU work a little while ago.

So it certainly was prior to, I would characterize, launch.

And we'll obviously seek what's that over the coming quarters, and there'll be something we'll report on.

But certainly, appreciate the need for awareness in moving physicians along, if you will, but prescribing continuum from awareness to trial to dabbler to adopter so on and so forth.

So it's something we'll be able to report on in the coming quarters from that standpoint.

Regarding number four, what we said, we haven't described historically what the safety advantage is other than that we've clearly have identified one.

And now we have shared those findings with the FDA, that new information that we provided today.

Regarding competition, in the marketplace, over the number of years, I would say that it's moved a little bit.

There has been some parties that have been in and out to the supply challenges or whatever it may be.

So I would say that it's been a bit inconsistent in terms of the number of competitors.

But from a molecule standpoint, fairly stable.

Can you quantify the number of molecules in the market from different competitors?

No, not right now.

Okay.

On NOCTIVA, on awareness, where was it, and where is it and where are you looking to take it?

Well, the awareness baseline we did initially was much more around nocturia as a condition, and how they're -- what they're using today since we haven't launched yet.

The awareness on nocturia is quite high in our target audience.

And clearly, we'll want to -- we'll ultimately strive to get 100% awareness.

In our current audience, we think that is obviously achievable.

Okay.

And then, just moving very quickly on the IL-2 Medusa XL, if you contrast -- I guess, what are you thinking about doing with this asset?

And how does it compare in contrast to Nektar's asset?

Any advantages that it may have?

And then, again, if you look at the value or market cap of Nektar at $14 billion.

The majority of it is because of that IL-2 assets.

So you have a nice little diamond in the rough here.

Can you just, maybe, articulate differences between the two and what you're planning on doing with this developing it internally, outlicensing it or other options?

That's a great question, John.

And I think, frankly, a lot of detail, it would be -- we would be premature to address.

As we mentioned, we're still dusting off.

It's kind of ironic, isn't it, that over all these years, the company had Medusa that people who came into the company always commented, independent experts, what a great phenomenal technology this is and yet we were really never able to make it work with anything.

There could be a number of different reasons for that.

And then, to have made the decision to kind of look at the best team in technology or whatever the case, and now to see that potentially, there may be an application for, is exciting to us.

At this point in time, it is so early that we -- I can't define for you, what our plans are.

I think our first plans are to make sure, or to determine whether or not we think there is an application not unlike the Nektar product.

The principal differences, as you know, are that this is a subcu administration versus an IV.

What difference does that have if any, we think is still yet to be determined.

But we are looking at the product.

We're looking at the work that's been done.

We have analysis going on now.

And we'll try to provide you with some updates as soon as we possibly can.

The reason we brought it up today was simply because we've had, out of the blue, in our view, a number of people express an interest in it and it caused us to go back and look at it.

But that review is ongoing and as soon as it's complete, we'll try to provide you a little more color.

That's about the best I can do today though.

I don't want to lead you to believe that we're starting in the clinic or in the Phase III, we're not at that point yet.

And your next question is coming from -- a follow-up from Francois Brisebois.

Just a quick follow-up.

This was probably touched on.

But obviously, it's very early here in the launch.

But what are -- what is most challenging, do you think is, in terms of awareness?

Is it the recognition of nocturia as a disease of its own or just to really understand that this isn't the old desmopressin with hyponatremia issues?

And then, I guess, how much desmopressin is used off-label at the moment?

Yes, Frank, I would answer your first question as yes.

It's both.

And I'll describe.

And I think regarding nocturia, establishing it as a condition on its own and establishing it as a condition where botherness, the bothersomeness of the condition begins at 2 awakenings or more and that's really patient centric is where we need to ultimately get to, to really fully capitalize on the entire market potential.

Like it's really easy to understand the bothersomeness, if it's 4, 5, 6 awakenings at night, right.

And so moving that and establishing the challenge, the issues, the bothersomeness and the impact on quality of life at as low as 2 and 3 voids per night, it is important as well.

And that data exists to support that.

Regarding desmopressin, establishing the first -- when first seeing our product profile without any other context, it's easy to immediately characterize it comparably to older formulations of desmopressin.

That's easily addressed because, obviously, we're very different in that regard.

But that is important and it's not so important because they write a lot of desmopressin, right.

Because they -- every doctor will be different, but different reports will tell you it's anywhere from 5%, maybe 5% to 8% of the patient population.

At times, and get a form -- some formulation of desmopressin.

It's not because they write a lot of desmopressin for these patients, but differentiating it from -- it goes beyond that.

It goes beyond to make sure, that we position ourselves for a broader patient population than just that 5% to 8%, right.

So it's twofold in that regard.

So it's both from that standpoint.

And I'm showing no further questions at this time.

I would now like to turn the call back over to management for closing remarks.

Once again, we appreciate very much your spending the time with us this morning, and we'll look forward to future updates on our progress throughout the second quarter and the year beyond that.

We appreciate it.

We thank you and hope you have a great day.

And ladies and gentlemen, this concludes today's conference.

Thank you for your participation, and have a wonderful day.