Bausch Health Companies Inc (BHC) 2005 Q2 法說會逐字稿

I would like to welcome everyone to the Valeant pharmaceuticals conference call.

[OPERATOR INSTRUCTIONS]

At this time for opening remarks and introductions I would like to turn the call over to Mr. Jeff Misakian, Vice President of Investor Relations. Please go ahead, sir.

Thank you. Good morning and welcome to Valeant's second 2005 quarter earnings call. Joining us on the call are Timothy C. Tyson, President and Chief Executive Officer; Bary G. Bailey, Executive Vice President and Chief Financial Officer; Kim D. Lamon, M.D., Ph.D., President, R&D and Chief Scientific Officer. Wes Wheeler, President, North America and Global Commercial Development; Chuck Bramlage, President, Europe; Peter Blott, Group Financial Controller; and Phil Loberg, Treasurer are also here and available to answer questions during the Q&A session.

Before we begin I would like to call your attention to the fact that this presentation may contain forward-looking statements that are based on management's current expectations and involve risks and uncertainties, including, but not limited to, risks and uncertainties relating to projections of future sales, royalty income, operating income, returns on invested assets, and clinical development, regulatory approval processes, competition from generic products, marketplace acceptance of the Company's products, success of the Company's strategic repositioning initiatives, and the ability of management to execute them, cost cutting measures, success of the Company's strategic plan and the ability to achieve financial targets and cost reduction goals, the Company's ability to retain key employees, reduce costs, general economic factors, and business and capital market conditions, general industry trends, changes in tax law requirements and government regulation, adverse events that would require clinical trials to be prematurely terminated, clinical results that indicate continuing clinical and commercial pursuit of clinical candidates is not advisable, and the fact that Phase II clinical trials are not always indicative of those seen in Phase III clinical trials, and other risks detailed from time to time in Valeant's SEC filings. These factors as well as those described in Valeant's SEC filings are among the factors that could cause actual results to differ materially from the expectations described in the forward-looking statements.

Certain figures discussed in today's presentation will be based on adjusted or non-GAAP information. A reconciliation of GAAP to non-GAAP results can be found in the tables to the Company's press release issued earlier today and on Valeant's website at www.valeant.com.

Now I'd like to turn the call over to Mr. Tyson. Tim?

Thank you, Jeff, and good morning, everyone. We're very pleased to report excellent second quarter 2005 results that reflect continued growth in our specialty pharmaceuticals business, significant progress from our pipeline, and execution of our strategic initiatives. This morning, we reported income from continuing operations on an adjusted basis of $7.6 million or $0.08 per diluted share, reflecting double-digit growth in product sales, higher ribavirin royalties and improving business metrics. This strong performance is the result of continued focus on growing our top line while carefully controlling expenses. In brief, we are executing as we have said we would.

Product sales grew 22% in the second quarter compared to the same period last year. This increase was driven by two primary factors. First, the addition of products acquired in the acquisition of Xcel Pharmaceuticals, and second, the continued growth in our base business. As you know, acquisitions have been a key part of our strategy, and we are pleased that the Xcel transaction has added so immediately and so successfully to our growth. I will talk more about Xcel in a moment when I review the results for North America.

Global brand sales growth of 25% was led by Efudex and Kinerase in the second quarter. Efudex sales were 79% higher due to continued U.S. demand, increased sales and newly launched territories and effective lifecycle management. Kinerase sales were up 40% in the second quarter and are accelerating. We have seen a significant trend break following our new marketing campaign, which as you know, features actress Courtney Cox, and we have had an excellent success with Sephora, our new retail partner. We expect continued success as we continue to launch new line extensions for Kinerase.

Mestinon sales continued to grow on a global basis in the second quarter particularly in Europe. Mestinon continues to hold 30% of the U.S. market share despite sales decline due to generic competition.

Our top ten products now represent 41% of our sales compared to 26% in 2002. Our regions continue to perform well in the second quarter. North America led our regional performance with a 71% increase in sales, primarily due to sales of Xcel products and growth from many of our promoted products. Since 2002, North American sales have more than doubled. The region now represents 33% of our sales, up from 19% in 2002, and more impressively, represents 41% of our specialty pharmaceutical operating income.

The success of the Xcel acquisition is an excellent example of the execution of our business development strategy. We integrated the entire Xcel organization within the first quarter and have been able to accelerate the growth of Xcel products, particularly Diastat and Migranal. Our 104 territory neurology sales force is fully trained and redeployed and has grown Diastat prescriptions at 11% on a moving annual total basis. As a result, Diastat sales in the second quarter were $14.3 million. Prescriptions of Migranal, an important migraine product, grew 7% on a moving annual total basis. More importantly, we were able to accelerate the launch of the new Migranal nasal sprayer. We launched the new sprayer in June two weeks earlier than planned and the feedback has been very encouraging. Migranal is on track to be on our list of top ten products.

In terms of the North American base business, our promoted products performed very well in the second quarter. In addition to the strong performance seen from Efudex and Kinerase in the United States, Cesamet continues to exceed expectations in Canada with prescription growth of 90% year-over-year. Cesamet is now our largest brand in Canada and we are looking forward to a U.S. launch later this year.

There have been some notable sales success stories in Europe including Dermatix, Mestinon, and Bisocard, which is a beta blocker we are promoting in central Europe. But government reimbursement and pricing actions in the larger markets have constrained overall growth. We have, therefore, put additional emphasis on cost management and reallocated our resources to promoted products. These successful measures have yielded revenue growth of 3% and an increase in operating income of 23% on a non-GAAP basis.

The Tasmar launch is going well in Germany and in the United Kingdom and we are awaiting reimbursement in other European markets.

Latin America posted sales growth of 13% and a small improvement in operating income in the second quarter. Sales of Bedoyecta, our Vitamin B complex product, grew 97% in the quarter as a result of our successful direct to consumer campaign which has had very impressive results. The AAA region grew 9% in sales and 32% in operating income due to sales of regional products such as Nyal and Reptilase.

We have also made good progress in our manufacturing improvement plan. We recently finalized the sale of our manufacturing sites in Argentina and Mexico and expect to announce the disposition of others before the year is over. We remain on track to reduce the number of manufacturing sites to four by the end of 2006.

In summary, our specialty pharmaceuticals business is strong and getting stronger. We are growing sales ahead of industry averages and increasing profitability through control of expenses and improvements in all of our metrics. We are just as excited about the progress of our pipeline and all of our clinical development programs are on or ahead of schedule. With four late-stage development projects, we feel fortunate as a specialty pharmaceutical company to have such a promising portfolio.

Recently, we announced excellent interim results from our pradefovir Phase II trial. At 24 weeks, pradefovir demonstrated a significant decline in HBV DNA compared to hepsera at 10 mg. , 20 mg. , and 30 mg. with no incidence of nephrotoxicity. The 30 mg. pradefovir arm registered more than a 5 log drop in HBV DNA similar to other HBV drugs, including those recently launched. We will present more detailed interim data at AASLD in November and will meet with the FDA in the near future to discuss further development of pradefovir.

Just last week, we announced the initiation of Phase III trials for retigabine, along with additional information on a key Phase II study. We expect to begin enrollment in the third and fourth quarters in the 800 patient Phase III studies in major market around the world and that the results of these studies will be available in the second half of 2007. We would expect to launch this drug in 2008. We believe retigabine has significant market potential due to its unique mechanism of action as a potassium channel opener, combined with being a potentiator of GABA, which we believe is a significant step forward in the treatment of epilepsy. We are working on further formulations and considering new indications such as neuropathic pain. We estimate that peak sales could be in excess of $500 million for epilepsy alone.

We are planning for a U.S. launch of Zelapar, an important new product with a unique delivery mechanism for Parkinson's disease. We have received a PDUFA date from the FDA and expect approval this year. Last month, following our first Viramidine advisory board meeting in Tokyo, we announced the start of our clinical development plans in Japan. We signed Dr. Masao Omata from the University of Tokyo as our principal physician for the bridging studies. Viramidine has significant potential in Japan, which represents the second largest single market in the world of hepatitis C.

Meanwhile, we will await the results of VISERI and II trials which are proceeding on schedule. As always we will have a significant presence at AASLD this fall and expect to announce the results of VISERI in the first half of 2006.

There recently has been some discussion about our Viramidine Phase II data. Attempts have been made by a number of people in the market to draw Phase III conclusions from our Phase II data and to compare our U.S. Phase II study to older Phase III trials without consideration for their differences. We continue to be confident in our investment in Viramidine Phase III trials and in the potential this drug has in the treatment regimen for hepatitis C. We believe that the strength of our Phase II dose ranging study enabled our global Phase III trials to enroll in record time. Although limited to the United States, where cure rates are historically lower than other regions of the world, the Phase II study continued to show that Viramidine demonstrates a significantly lower incidence of anemia and statistically comparable efficacy to ribavirin. The purpose of the Phase II study was to determine if the drug had activity, if the safety data seen in animal studies would also be seen in humans and what dose should be used in Phase III. All of these objectives were successfully completed. As with any drug, Viramidine's success will be determined by the outcome of the Phase III pivotal trials, which are ongoing. We remain very confident in the drug's potential, based on all of the preclinical and clinical data that we have seen to date and based on our interactions with the FDA and the arduous drug development and approval process, as well as our on-going consultations with the medical and scientific communities. More information can be found on our website where we have included a bibliography of published study results. We look forward to presenting results from the first of our Phase III trials in the first half of 2006.

Now we'll turn the call over to Bary Bailey for a review of our second quarter financial results. Bary?

Thank you, Tim. And thank you everyone again for joining us on the call today.

As you can tell from Tim's discussion we are very happy with our second quarter results with income from continuing operations, adjusted for non-GAAP items, at $0.08 per diluted share. This is substantially ahead of Street expectations. The improvement reflects a solid product sales performance that Tim discussed, as well as better than expected ribavirin royalties and continued successful steps toward achievement of our metric milestones.

Product sales increased $33.2 million, or 22%, in the second quarter, compared to the same period last year. Sales in the second quarter from products acquired in the Xcel transaction contributed $24.3 million of this increase. On a same-store basis, sales were up 6% over the same quarter last year. We continue to expect sales growth in the base business in 2005 to be on par with the industry average growth rate of 5% to 10%, excluding acquisitions.

The impact of foreign currency positively impacted product sales by $8 million in the second quarter, although the impact on operating income of $2.4 million was considerably smaller. In addition, the operating income effect was more than offset in the second quarter by translation and exchange losses recorded in other income from U.S. dollars that are held in markets where the dollar is not the functional currency.

Royalties in 2005 were 6% ahead of the same period last year and reflect increased sales of ribavirin in Japan following Schering's launch of combination therapy in that market. Growth in Japan has continued to be strong this year, but much was likely driven by patient warehousing and may not be sustainable. In addition, it remains difficult for us to predict Schering's performance in this market. We remain comfortable with our estimate is $60 million to $70 million dollars in royalty revenue for the year, excluding sales in Japan.

Solid progress was made in the second quarter toward achieving our business metric goal. Gross margin was 71% in the second quarter compared to 69% in the same period last year. Gross margin was influenced by a number of factors, including an overall favorable mix of higher margin products. Gross margins in North America improved on product sales, but this was offset by a greater allocation of costs associated with our manufacturing operations in Puerto Rico. As we've said before, there are many moving pieces impacting the gross margin, including our manufacturing improvement plan. We remain comfortable with our previous expectations for gross margin of 68% to 70% in 2005.

Selling expenses were 34% of sales in the second quarter of 2005 on par with that seen in the 2004 second quarter, adjusted for non-GAAP items. As we said in the past, the rate of spend in this area tends to be greater in the first half of the year than in the latter half. We expect to end the year within our previously communicated range of 30% to 32%.

General and administrative expenses were 14% of sales in the second quarter, compared to an adjusted 16% in the same period last year. We continue to hold the line on overhead costs but fluctuation in G&A can occur due to the timing of certain costs. We continue to expect G&A to be in the range of 14% to 16% for 2005.

Research and development expenses were 15% of sales in the second quarter compared to 14% in the same period last year. R&D expenses will include more activity for pradefovir and retigabine in the latter half of the year and we remain comfortable with our estimate of 16% to 18% of sales for 2005.

Our cash position decreased by $104 million in the first half of the year, to $357 million at the end of June, primarily due to our acquisition of Xcel which used $292 million in cash partially offset by $189 million in net proceeds from our equity offering earlier this year. Additional information about cash flow is included in the tables attached to the press release.

On an adjusted basis, EBITDA for the first six months of 2005 was $80.7 million compared to $65 million in the same period last year. We expect adjusted EBITDA to be in excess of $150 million this year.

Now I will turn the call back to Tim for closing remarks. Tim?

Thank you, Bary.

Our results continue to display steady and consistent progress in our core business. We continue to deliver results in accordance with our strategic plan. The combination of strong top-line performance with continued progress toward achieving our business metric goals has delivered excellent bottom line improvement. Our strategic initiatives remain on track and we continue to aggressively pursue our clinical development program. We are confident about the remainder of 2005 and the future. We look forward to continuing our dialogue in the weeks and months ahead. Thank you for your continued support of Valeant.

And now we will take your questions. Operator, please can we have our first question?

Your first question is from Gregg Gilbert with Merrill Lynch.

I have a few, but I'll get back in line. Starting with Bary, can you talk Xcel sales in a little more granularity versus the year-ago period in terms of how scripts and price grew and any inventory differences and related to that, what depressed North American gross margins sequentially versus Q1? I thought Xcel should have pushed that in an upward direction. Thanks.

Gregg, what was that last part?

Can you explain what moved North American gross margin down from low 80s to high 70s in the first quarter to second quarter?

Okay. Gregg, relative to the gross margin, let me talk about that first. As we've said in the past, and we saw it in the third quarter of last year as well, where margins went up more than I think the trend had been, and we cautioned against taking that and pushing that forward because of the variability that occurs in any individual quarter. We're seeing some of that occur here.

We also have our strategic master plan relative to the global manufacturing initiatives where we are moving products out of some manufacturing facilities into those that we expect to keep, and as you recall, Puerto Rico is one of those we expect to retain as one of our four manufacturing sites. That involves some additional costs that we allocate out to those markets that is born by each of the regions as those products are moved, and that effort is ongoing. We don't expect that to be a continuing issue, but we've said that through 2006 you will see some of that and declining in the latter part of 2006.

So I think that's really what we're seeing other than just product mix going on. And as I mentioned, the product sales were actually higher -- I mean, product gross margin was actually higher on those products outside of those allocation items.

Gregg, I'm going to ask Wes to address your questions on the Xcel products and progress of those.

Gregg, three points there. First of all, the price increase was taken by Xcel prior to the close of the transaction. It was is a nominal price increase, nothing spectacular, pretty much on or below the industry average for the price increase. Secondly, the growth of the brand is about 11% in terms of TRX scripts over last year, same quarter, doing very, very well. And third, we're just doing really well with the brand with the sales force out there. It's going very well.

Reduction of trade inventories? We've done nothing with the trade inventory levels. They're pretty much as they were when we closed the deal.

Your next question is from Rich Watson with William Blair & Company.

Hi. Thanks for taking the question. Just was wondering if you would be willing to give a little more color on, you know, the -- what you anticipate in terms of the nature of your discussions with the FDA on pradefovir, then maybe also could you give us a little bit of color as to the Viramidine trials in Japan and what kind of timing we should be looking at on that program? Thanks.

Thanks, Rich. On pradefovir, obviously we're going to go and review the results with the FDA to determine how and when we can move into Phase III, see if the results provide significant information to allow us to move into Phase III early or not and to develop Phase III protocol.

I'm going to ask Kim to answer anything else that he feels on pradefovir and address the Japanese trial.

We're certainly planning on meeting with them in the near future and we'll do exactly what we did, frankly, with Viramidine, is talk about Phase III and the design of the studies, et cetera. In addition to that, and just as important, is to outline really the entire NDA, so that we know early on what we need to do to have a complete NDA. So if it's possible to accelerate the start of Phase III after those discussions, we certainly intend to do so. Viramidine Japan, we've, as you heard, have recently had a scientific advisory board. We're working on the design of the studies and would hope to begin those by the end of the year.

Thanks for your question.

Your next question is from Deb Knobelman with Piper Jaffray.

Congrats on the quarter. Just a couple of questions. I guess mostly for Kim. Would you consider doing an SPA for pradefovir?

I'm going to let Kim answer that.

An SPA is generally used when the end points are unclear. I don't believe we'll do so. We'll -- when we meet with them we'll talk about that. The antiviral division has been very, very interactive with us and been very specific about the kinds of things they wanted in the protocol, so I think it would be unlikely that we would do that because I think we'll have a very clear view of what we need to.I think we'll get a very clear signal when we meet with them in the short term.

Great. My second question is on retigabine. Two parts, I guess. Remind me in terms of the structure of the Phase III trial, what are the prior meds that the patients will be allowed on, and how many, and are they going to stay consistent throughout the trial? Et cetera. Also, given that the data for retigabine in Phase II shows similar median seizure rates with Gabitril, which is already out there. What gives you guys comfort that retigabine could be much bigger than Gabitril?

Regarding the response rate, the results of the 205 study, the Phase II study, was a study done on top of patients already receiving at least one, two, or three other AEDs. So the improvement seen is really on top of background therapy. It was a very strong study, strong statistical significance, I think a real solid signal for what we intend to see in Phase III.

Deb, on the -- what gives us confidence about our expectations or perception of this drug's potential in the marketplace compared to the other GABA potentiators, it's the novel mechanism of action and the fact that you know these patients are not well controlled and take multiple medicines, and this novel mechanism of action, the potassium channel opener, gives us some confidence about the ability for this drug to have a new novel opportunity to affect the treatment, as well as it also has a mechanism of action that's well known and is effective. So it's the combination of having a dual mechanism of action and the stability of having the capability of addressing a part of the market that's already addressed. All in one drug.

Deb, regarding your first question on the Phase III, as I said, the design is fairly straightforward this is going to be treatment on top of patients who are breaking through who are already on one, two, or three other AEDs. There's a base-line period of eight weeks. They have to have at least four seizures per month during that period to enter. The endpoints are very clear. So there's a baseline period, there's a titration period, there's a maintenance period, then there's a down-titration period, then patient are given the option to roll over into a long-term study. End points are very clear. They're different between the U.S. and the EMEA, but we know what they are, and we've included those in the protocol.

Thanks for your question.

Your next question is from Michael Tong with Wachovia Securities.

Thanks. Actually, this is a follow-up to Greg's earlier question. Based on your answer to his question on the Xcel prescription trend, is this any reason why we should not expect the quarterly revenue run rate to be approximately what you did in the second quarter? And as far as North American operating margin is concerned, it's down considerably from previous quarters. Is that all in cost allocation from Puerto Rico, or is there something else that should be looking out for?

On the first question, as you know, we don't give forward-looking projections on a product by product basis, but if you look at prescription trends, we expect prescription trends to continue. The implication is on a quarter basis, it fluctuates based on lots of different things from a financial contribution standpoint, but we think that they are stable and we think that we're doing things that will continue to influence growth.

So we're confident about, at least the products that we're focused on, Diastat and Migranal, and with the launch of the new delivery device for Migranal, we're seeing a lot of interest and excitement about the improvement of that product. In Diastat this is treating a condition that we believe provides a relief that's the only one available outside of the hospital setting, and so we have confidence in the capability of both of these. The impact, though, will fluctuate on a quarter-by-quarter basis, financial performance.

Michael, again, following up on the margin, as I mentioned, it's due to the allocations of manufacturing in Puerto Rico. We've identified it as that. That includes items such as new product introductions, the cost of the strategic master plan, and other factors that are part of that manufacturing effort. So, again, I would be -- I would caution on looking at that as any indication of a trend. We see the margin on the products being sold outside of those variables as improving.

I think, again, the most important thing is there's so many fluctuations going inside of our operations with mix change, product change, geographic focus, manufacturing improvement plan, all the things that we're doing, the implications of acquisitions from a total gross margin standpoint. We continue to be confident that achieving the metrics that we have communicated to you for this year and 2008 in a regional focus or a -- an impact on a quarterly basis, I don't think gives you a good sense of what's happening in the business.

Your next question is from Andrew McDonald with Thinkequity.

Hi, guys. Congratulations on the quarter. My question -- I have actually several questions. One is with regards to pradefovir and the competitive landscape with Entecovir introduced Viread now in Phase III and Telbivudine just having concluded a Phase III , do you envision a scenario where would you not advance that product into Phase III based on that? That's my first question.

Second is really with regards to the competitive environment around Diastat. I'm not very familiar with that product, and I read something about it, paragraph four challenge there. Third, --

Yes? Let me answer the two questions that you raised, Andrew. The first, on the competitiveness and whether we would continue the trial on the product pradefovir, it's going to depend obviously on the data, with the data that we have seen the data is better than we expected against the results for adefovir, and it's at the range equal to others that have been recently launched. So we have confidence based on the data, we're obviously going to progress the Phase II trials and see where the Phase II data leads us.

Kim, any additional comment?

Andrew, frankly, we were very, very pleasantly surprised with this, because the showing statistical superiority at three different doses, one, and the viral reduction is really the same as entecovir in Phase II. So to me, at least, the whole landscape of this drug has changed very dramatically going from competing primarily against pepcir to being up in the class of entecovir and Telbivudine.

I'm going to ask Wes Wheeler to give you a little bit of the landscape on Diastat, its positioning competitiveness to address your question on Diastat.

Hi, Andrew. Diastat is kind of a one-of-a-kind product. We've talked in the past about this. It's a rescue medication for epileptic breakthrough procedures and it can be administered by parents at home. It sort of sits in its own market in some respects. It has no competition. It has a patent that's good through 2013. As you mentioned -- or questioned, there is a paragraph four filing against the product from Kali and we are in the middle of vigorously defending that patent and we have lifecycle management programs in place which we have not announced yet. So we're very confident about the product, we're excited about the growth, and we'll continue to sell the product as a number one position in our sales force.

Andrew, I'm not sure, you kind of broke up there. You said you had another third question?

Yeah. It was with regards to Zelapar and talking about the competitiveness of that product with regards to Agilect from Teva.

Zelapar has a novel delivery system using the Zydis formulation. It's a fast-dissolve formulation, and it dissolves in the mouth. Because of that, it has a unique method of getting into the blood system which effects its efficacy, so I'm going to ask Kim and Wes to just give a quick overview of the mechanism of action and the way it works and why we think that the product has a place here in the treatment.

Yeah, one thing that's important to recognize about this product, Zelapar, is that because of its buccal delivery mechanism, it gets right into the bloodstream and delivers about eight times the concentration of selegiline than the traditional selegiline did through the gut. A lot of it gets lost in the gut and because of that it never really hit its promise when it was launched. This product has incredible efficacy data.

Kim?

You answered my part of the question. It's different mechanism of absorption, and the other thing is that it avoids first pass metabolism, so that's what results in a much better blood levels.

Okay. Then is there a time line when you expect to hear back from FDA?

We expect -- we still expect to launch the product by the end of the year.

We have a PDUFA date. For competitive reasons, we haven't communicated the exact date, but again we expect approval and launch this year.

Okay. I'm going to ask, if you have any other questions, Andrew, there are other people in line, maybe you can get back in line. Can we take the next question? Thanks for your questions, Andrew.

[OPERATOR INSTRUCTIONS]

Your next question is from Greg Gilbert with Merrill Lynch.

Hi. I know you warned about potential warehousing effects in Japan, but can you tell what you say end user demand metrics you have as a Company and whether or not you're actually seeing any fall-off, understanding that's not predicting your royalty level?

We -- thanks for the question, Greg. As we've talked before, we get the IMS data, and we look at the IMS data from Japan. The IMS data is indicating some decline in the -- still growing but the growth rate is declining, as we don't get the direct data as Schering does. Schering indicated they believe there may be a warehousing impact. So we believe, based on what we're seeing in the IMS data, and what we've heard from Schering, that there is likely to be a warehousing effect, but some continued use in growth in Japan that will probably be affected short-term by some sort of downturn due to the warehousing effect.

Thank you.

Thank you very much, Greg. We appreciate the question.

Your next question is from Rich Watson with William Blair & Company.

Thanks for taking the follow-up. Just had a question on Tasmar given the way you're building your Parkinson's disease franchise the product after launching in the U.S. is obviously been pretty slow on the up-take and trying to get a little more color of how we should think about that product going forward and, you know, what are some of the challenges you might be facing with that product and also how it's doing in Europe. Thanks.

I'm just going to give a quick overview comment, then Wes and Chuck can add any comments if they have. Tasmar has some good clinical information and data and has, we believe, a very important place in the treatment of this disease. And as you know, if this disease is not well controlled, patients also have some incredible difficulties with this condition. This -- our expectation is to take our time to properly educate physicians about this medicine and didn't expect rapid growth and believe that it's a very good product for the addition of our specialty neurology portfolio. So specifically I'll let -- it is doing well in Germany and the U.K., and I'll let Wes and Chuck make any comments they have.

I'll just add one thing. We talked about this in the past. The drug has very good data. All the KOLs out there and most of the treating physicians believe that. The problem with Tasmar in the U.S., it's been sold here for several years with a fairly restrictive black box warning with liver monitoring requirements. And so because of that we've gone back to the FDA with the safety data that we have, and we have now filed for a label change for the drug which we expect to receive feedback on sometime in the next several months.

In Europe, we're excited about the product, it's, in terms of the -- what it can do for patients, the key opinion leaders there are very supportive. We are going through a traditional launch of a product that's been off the market five, six years. First time this has been done in Europe, and we have good support. However, it's the typical wait until you get reimbursement by market. So we're waiting in southern Europe, Italy, Spain, and France, which is really what we've counted on. We don't have reimbursement yet. In Germany and U.K. its key opinion leader discussions and very important to us is getting heptologists on board, that they can describe this is a safe compound when used correctly. We're doing all the traditional stuff. I think our frustration in Europe is just around reimbursement, which is normal.

Thanks for your question.

Gentlemen, at this time there are no further questions. Do you have any closing remarks?

Thank you very much for your support, and thank you very much for your questions. We look forward to talking with you in the future. Have a great day.

This concludes today's call. Thank you for your participation. At this time you may now disconnect.