Coherus Oncology Inc (CHRS) 2014 Q4 法說會逐字稿

Good day, ladies and gentlemen, and welcome to Coherus BioSciences' fourth-quarter and year-end 2014 financial results conference call. (Operator Instructions) As a reminder, this conference call is being recorded.

At this time I would like to hand the conference over to Susanna Chau, Associate Director of Investor Relations. Ma'am, you may begin.

Good afternoon. My name is Susanna Chau, and it is my pleasure to welcome you to the Coherus BioSciences fourth-quarter and year-end 2014 financial results conference call. Joining me this afternoon are Denny Lanfear, President and Chief Executive Officer; Jean Viret, Chief Financial Officer; and Barbara Finck, Chief Medical Officer.

At the close of the market today, we issued a press release highlighting Coherus' fourth-quarter and year-end 2014 performance. This release is posted in the Investors section of our website, investors.coherus.com.

This conference call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. This includes statements about the Company's current operating plans, financial guidance, objectives and intentions with respect to future operations and products. As such, they are subject to the risks and uncertainties that we discuss in detail in our documents filed with the SEC, specifically Coherus' annual report on Form 10-K for the fiscal year ended December 31, 2014, and any applicable amendments which identify important risk factors that could cause actual results to differ materially from those contained in the forward-looking statements.

Coherus has a policy to not comment on financial performance or guidance during the quarter unless it is done through an appropriate public disclosure. Coherus retains its policy and practice to not update financial performance or guidance during the quarter unless required by law.

On today's call, Jean will provide financial highlights for the quarter and year ended December 31, 2014. Denny will then provide business highlights, followed by Barbara who will present a clinical update before we open the call to your questions. Denny will close the call with a few concluding remarks.

With that, I would like to turn the call over to Jean.

Thanks, Susanna. I will now review financial highlights for 2014 fourth quarter and fiscal year. Revenue for the fourth-quarter 2014 totaled $6.5 million as compared to $1.2 million in the fourth quarter of 2013. Revenue for the year ended December 31, 2014 totaled $31.1 million as compared to $2.8 million from the same period in 2013. The increases over the same periods in 2013 were both due to the recognition of Baxter collaboration revenue.

Research and development expenses for the fourth quarter 2014 were $26.9 million compared with $9.2 million for the same period in 2013. Increases in R&D expenses for the quarter were mainly attributable to an increase in program costs associated with the advancement of Coherus' late-stage clinical product candidates, CHS-0214 and CHS-1701, as well as increased personnel expenses.

R&D expenses for the year ended December 31, 2014 were $78.2 million compared with $31.3 million for the same period in 2013. Increases in R&D expenses for the year were mainly attributable to an increase in program costs associated with advancements of Coherus' late-stage clinical product candidates, CHS-0214, CHS-1420 and CHS-1701, as well as increased personnel expenses.

General and administrative expenses for the fourth quarter 2014 were $6.2 million compared to $2.5 million for the same period in 2013. G&A expenses for the year ended December 31, 2014 were $17.6 million compared with $7.5 million for the same period in 2013. Increases in G&A expenses over the same period in 2013 were mainly attributable to increased employee-related expenses and increased legal and accounting services in preparation for becoming a public company.

Net loss attributable to Coherus for the fourth-quarter 2014 was $29.1 million or $1.47 per share, compared to $14.6 million or $3.68 per share for the same period in 2013. For the year ended December 31, 2014, net loss attributable to Coherus was $87.1 million or $10.64 per share, compared to $53.6 million or $16.10 per share for the same period in 2013.

I would like to highlight that in 2014, we received $70.3 million in milestone payments under our collaboration agreement with Baxter on our CHS-0214 etanercept biosimilar candidate. As a result of receiving these milestone payments and the completion of our IPO in the fourth quarter of 2014, which raised $80.2 million net, we ended the year in a strong cash position.

Cash and cash equivalents totaled $150.4 million as of December 31, 2014, compared to $100.9 million as of September 30, 2014, and $39.6 million as of December 31, 2013.

As some of you may have seen it, we filed a Form S-1 after the close of market today to raise $100 million. Now I would like to hand it over to Denny to review our business highlights for the 2014 fourth quarter and year.

Thank you, Jean, and thank you all for joining us today to hear a little bit more about Coherus. Some of our investors have been with us for a while, so I hope you can understand I am just going to encapsulate a little bit on the company's strategy. And I'm going to emphasize also the progress that we have made on the pipeline since our last call and over the last quarter or so.

Further, I am going to talk a little bit about the upcoming pipeline, how we have begun to focus there. And I'm going to then turn it over to Barb who is going to walk through some of the clinical developments on each of the products, the pegfilgrastim product, which I think has had some very good news, and then on 1420, our HUMIRA biosimilar, and 0214, our etanercept biosimilar.

Let me first say that you are all probably familiar that as a pure play company in the biosimilar space, Coherus is prosecuting the development of a number of products. Three we have announced so far: pegfilgrastim, HUMIRA biosimilar and the etanercept biosimilar.

There is other 30 products, though, that present themselves as opportunities that are over $1 billion and coming off patent in 2020. And as we have moved forward now in the phase 3 products that we have before us, we have now started to focus a little bit more on the pipeline.

In terms of our current milestones, though, as you know, our 0214 etanercept biosimilar is currently in phase 3. We expect to file the MAA in mid-2016. That asset is partnered with Baxter and Daiichi Sankyo, as you know.

Our HUMIRA biosimilar, 1420, is again moving right along. We provided guidance where we are going to start the Phase 3 on that sometime late in the first half of 2015, and we are proceeding well with that.

And then 1701 -- and as you know, we have just announced that we have come to concurrence with FDA on the BLA enabling program for that asset. I think that particular asset is interesting in terms of the development program, which does not include a Phase 3 efficacy study in patients as has typically been the case with most biosimilar products.

In terms of Coherus' overall strategy, I think that it is probably useful to recap how we have constructed the platform with the Company as a means for going after the biosimilar opportunity. The bedrock of that platform, of course, is the analytics.

You are all familiar with how we have put a disproportionate investment there with our products. We have a number of folks down in our labs in Camarillo. We put about 25% of our headcount there, and we recently had an expansion down in Camarillo to accommodate our increased headcount.

Analytics really are the first thing that the regulators look at, and our proprietary analytics we think are very, very important as far as our mission.

The second part of our platform involves our process science and our cell biology. This is the business of getting the molecular tuning on each of these products correct. It is something that allows you really to hit the pharmacokinetic and pharmacodynamic parameters of these products, and it is a key part of the value proposition of Coherus. This aspect of the Company too has seen substantial increase in headcount and investment in 2014, and we will do so in 2015.

One other area, of course, that is a lot of interest to all biosimilar players, and that is the role of scientific expertise that has impacted intellectual property development. As you know, we have a very strong scientific advisory board as I have stated in other forums. They spend a lot of time looking at the process and IP issues surrounding our products, and I think it is one area where Coherus clearly differentiates itself from some of the other market participants.

Then lastly, the platforms comprised of our clinical and regulatory expertise, clarified requirements, mitigating the regulatory risk. As you know, we have had a number of meetings globally with various regulatory authorities on all three of our products. Particularly, we have been busy harmonizing requirements across EMA to the US with HUMIRA, and Barb will talk about that a little more in a moment. But this effort also has borne fruit, again, in the 1701 pegfilgrastim dimension, and allowed us to be able to move to our targeted BLA in Q4 of 2015.

Let me say a little bit about our commercial developments that we are up to here in 2015, as one of our goals. Coherus, of course, is a commercially focused organization. Our plans and investments in 2015 arc comprised primarily of three separate areas. First of all, the launch readiness for 1701, our pegfilgrastim product, which is the near-term opportunity. The second one is the refinement of understanding for the CHS-1420 opportunity, the HUMIRA biosimilar based on payer insights derived from direct payer engagement, which I will talk about subsequently. And then finally, there is the advancement of our early-stage pipeline.

In terms of our first priority, the development of 1701 and its launch strategy, in accordance with the recent announcement that we had finalized the plans for the BLA enabling program pursuant to feedback from FDA, 1701 now represents a commercial opportunity for product launches in 2016.

So launch readiness work now entails a thorough evaluation of the commercial opportunities for 1701 and the strategic options and the financial requirements required to commercialize this asset.

We are in the process of conducting a detailed assessment of the febrile neutropenia market, including the market research on the GCSF customers, the segmentation, the buying process, the product and value service drivers, as well as the competitive landscape, so we can estimate price elasticity of demand and inform our pricing strategy.

This particular research will identify market segments most attractive to Coherus, and a little later this year you will hear about the plan and the issues and the assumptions in those segments and how we plan to go forward.

One key thing here I think is the relative influence of different parties in the buying process, such as the GPOs and physicians and their particular requirements in terms of adopting a biosimilar. Of course, we are spending a lot of time on that.

In terms of our strategic options also, we are going to be evaluating the product distribution in the trade channel as well as the delivery and the hub service requirements for the patient support. It is important to know of about 70% of the pegfilgrastim in the United States flows through only two or three GPOs.

So what this means is that the decision-making in this process is fairly concentrated, and what this implies is the relatively small commercial footprint for us.

We intend to design a sales capability and commercial operations capability that will be required, and the options to establish a model for building some of this capability ourselves or partnering or contracting. As I indicated a little earlier, you will hear more about this in Q3, Q4 from us.

Now, the second area I think which is quite important to us on the commercial side is the continued outreach and direct engagement of the managed care organizations, the pharmacy benefit managers, which significantly informs the commercial plans. I think as we had previously described to you, we believe the payers have played a very important integral role in driving the adoption of biosimilars. And so collaborative relationships with these entities is a key success factor for us.

So far, I can tell you that we have met with contracting entities that will represent over 100 million covered lives in the United States. So I think we are making excellent progress going forward on this.

Our work in this regard is intended to establish a strong relationship with the payers and to inform both our 1701 and 1420 price and access strategies, understanding their detail requirements for the selection of biosimilars and their associated benefit plan assumptions.

It will also inform the composition of our product portfolio, as well as identify opportunities for the collaboration and cooperation of mutual benefit between us. This work began in Q4 2014, and is now going forward.

PBMs in particular are very important players for the biosimilar landscape. They administer more than 210 million lives in America, with health coverage provided primarily through Fortune 500 employers, health insurance plans, labor unions and Medicare Part D. Recently, Coherus was selected by Express Scripts who is America's largest PBM to appear with Pfizer and Amgen on a panel discussion of biosimilars at last week's PCMA business forum in Orlando, Florida.

The Pharmaceutical Care Management Association is the national association representing America's pharmacy benefits managers. This forum attracts the highest number of PBMs and specialty pharma senior execs and decision makers of any industry conference of its type in the US. So this panel, which was facilitated by ESI, discussed specific issues and the opportunities and the development of registration of biosimilars.

That audience had a lot of interest in, for example, what it takes to develop a biosimilar, how we saw the patent dance moving forward, and pricing and a number of other issues. There is very strong interest, I think, with the PBMs and biosimilars so far. As you know, they have experienced significant cost increases due overall to biologics, but I think the PBMs are probably the most key players in terms of biosimilar adoption.

Now the third area of focus that our commercial team is moving forward with is our pipeline and our candidate selections. We had previously talked about the $100 billion in biologics that will lose patent protection in 2020, and we've also talked to you about how we employ the very rigorous framework for evaluating the commercial attractiveness of pipelines in that universe.

Our framework identifies candidates that we believe will compete with relatively large, stable originator segments. So these stakeholders have to be receptive to biosimilar substitution. And further, we have to have favorable biosimilar competitive intensity so we can compete and win.

Finally, we have to have commercial economics based on a small specialty commercial footprint and call points and other considerations. So this is one of the key commercial filters that we pass our biosimilar product candidates through.

It requires a mix for each product of primary and secondary source market research and analysis, and is intended really to complement the technical feasibility part of the evaluation as we saw. And I think you have heard me talk before about how we looked at everything from initial cloning to process issues, the clinical issues, whether or not you can get the clinical trials done, all of the way to partnering as we look at these.

So what this work has resulted in for Coherus now is an early-stage pipeline of several product candidates that we will talk a little bit more about in Q3 or Q4 as we proceed with them and we have some developments that go forward.

Now, I think the second thing that has happened of big interest in the past three months are the legal developments. In terms of the external events which could impact the industry, I just wanted to share some thoughts about the legal decisions that have just been handed down. for example. in the Amgen/Sandoz litigation.

So last week in a very important court decision that we believe is clearly a positive for the biosimilars, the Federal District Court in California ruled against Amgen's interpretation of the so-called patent dance, and in so doing refused Amgen's request to [enjoin] the launch of Zarxio, which was Sandoz's biosimilar of Neupogen.

So one of the pivotal issues in this case which we have been watching quite closely was whether or not the patent dance is mandatory or whether is an optional, and whether it is linked to the regulatory process or whether it is not. Of course, Sandoz argued for optionality and in so doing, as you know, they refused to initiate the patent dance which would have required them of course to disclose their entire BLA dossier to Amgen.

Amgen took the opposite stance, of course, and Amgen maintained that it was part and parcel of the biosimilar legislation and a requirement. We believe what could be the most significant ruling in this case is the court sided with Sandoz, thereby holding that the patent dance mechanism was, in fact, optional and not mandatory.

So if this decision stands, we believe it will give biosimilar applicants considerable flexibility to decide on a case-by-case basis whether or not to exchange in the patent dance or not.

Of course, treating the patent dance is optional, and choosing not to follow it, it doesn't really eliminate the risk that originators may resort to IP litigation or any other efforts to block biosimilar launches. However, I think it is fair to say the court's ruling in our view gives biosimilars an important leg up here, and a far greater measure of strategic flexibility in deciding how to address the IP risks, and when and if it becomes necessary to do so.

Ultimately, I think if this decision survives appeal, we see it as very positive for the industry and we believe it will make it harder for originators to delay biosimilar launches.

Now another important ruling in this case was the interpretation of the 180-day notice provision in the act. Thereby, the court ruled this notice could be given at the time of the BLA application. So Amgen was arguing that one had to actually become approved and then there would be an additional 180-day extension on the market exclusivity.

So we, of course, believe that the court resolved this issue correctly. Amgen's interpretation was struck down, and what this means is you will be able to start that clock when you file the BLA. Keep in mind, Amgen is probably going to appeal these certainly, but certainly we think this is a very positive development for us.

Then lastly, just in terms of IP generally as I have spoken in several conferences to you, I think that the intellectual property issues are very, very important to keep in the focus for any biosimilar company. And for Coherus it is very central to our mission to focus on manufacturing and delivering the highest quality biosimilars in such a fashion as not to be impacted by these IP rights of third parties. And as I indicated, it is one of the core parts of our platform and it is something that we focus a lot on.

A good example of this, of course, is our originator formulation patents relating to protein stabilization. I think you all know it is very hard to stabilize a protein, and long-term storage is particularly tricky in terms of stability. Yet there is a number of unexpired originator patents directly impacting, for example, Enbrel and HUMIRA. And if these patents stand as valid and enforceable, they would comprise significant barriers to entry for all biosimilar players, and certainly players that lack the technological expertise to create their own IP around these areas.

So as you know, as you heard me say before, Coherus took early note of these patent filings and fashioned a strategy around creation of its own IP to differentiate its formulation technologies and allow us to make sure we get on the market.

As I have said, I think it is one of the key factors that sets Coherus apart, this technical virtuosity, that of its management team and its SAB to be able to navigate the complex landscape of IP around biosimilars and facilitate these unencumbered launches.

So with that, I am going to move into the 1701 conversation. I have Dr. Barbara Finck, our Chief Medical Officer, who is standing by here who will talk a little bit about that. Just as I've talked a little bit about CHS-1701, pegfilgrastim, I make a few points. First of all, I think that our success in moving forward with FDA without a classical Phase 3 exemplifies our regulatory and our clinical proficiency as we have talked about before.

Secondarily, I would point out that our Chief Scientific Officer, Alan Herman, was the author of the seminal scientific paper in 1996, which discussed the structure and function of Neupogen which is the fundamental molecule behind pegfilgrastim. I think clearly that scientific capability has been leveraged to our behalf here forward.

I will let Barb go on now and talk a little bit about the finalization of the plan with FDA and how we would characterize this plan moving forward. Barb.

Thank you, Denny. I will start with 1701, our Coherus-1701 clinical overview. As you know, this is our pegfilgrastim Neulasta biosimilar. And as previously announced, we have reached an understanding with the FDA on the clinical development program that will support filing of a BLA under the 351(k) path in the fourth quarter of this year or the first quarter of next year.

The clinical program consist of two studies. The pivotal PK/PD study is a single dose, two period crossover study in 106 healthy subjects. This study has already been initiated. And under the 351(k) path, this PK/PD study is a pivotal study, and the primary endpoint contains both PK and PD outcomes; for instance, the CMAP, area under the curve zero to T, area under the curve zero to infinity, the ANC count MAP, and the ANC area under the curve.

Now the second study in the BLA enabling clinical program is an immunogenicity study. This study is a parallel group two-dose study comparing both Coherus- 1701 to Neulasta, with respect to antidrug antibody and neutralizing antibody. This design maximizes the chance of seeing an anti-drug antibody response if there is one. And we are in agreement with the FDA that 80 subjects per group is adequate to detect neutralizing antibodies.

However, as neutralizing antibodies have never been reported for either pegfilgrastim or filgrastim, we do not expect to see neutralizing antibodies in this study.

We do not believe we will be required to perform a Phase 3 study in cancer patients. First of all, per the FDA guidance, the termination of biosimilarity is really based on the totality and the quality of the data presented to them. And if the analytical and clinical PK/PD data leave little residual doubt as to the similarity of the molecules, then a Phase 3 study may not be necessary.

Pegfilgrastim fits into this dynamic very well, in that it is much less complex than a monoclonal antibody. It is not glycosylated. It is used in an acute setting rather than a chronic therapy setting, and there is a relatively rapid pharmacodynamic effect such as the increase in the absolute neutrophil count that is the same in patients as it is in healthy subjects. So we think this is the basis by which we will not need to perform a study in cancer patients.

I would like to go on to Coherus-1420 update. This is our adalimumab biosimilar. We have recently reported our decision to conduct a global Phase 3 study in plaque psoriasis. This is a randomized parallel group global study that compares Coherus-1420 to HUMIRA in 500 patients with plaque psoriasis.

The primary endpoint is based on the PASI score, but as we have seen with our etanercept program, the EMA and the FDA have slightly different preferences for how they would like the primary endpoint analyzed. The EMA prefers an early time point such as 12 weeks, and they like assessing the mean PASI, whereas the FDA prefers a later time point, approximately 16 weeks, and assessing of the PASI 75 score.

So with all of our programs as you know, we try to harmonize our clinical studies across all of the regulatory regions, and we will do the same with this Phase 3 study. There is a slight difference -- there probably will be this slight difference in the endpoint analyses depending on the regulatory territories, but we don't think that will be an impediment to filing.

We have done a similar analysis with the etanercept or plan, a similar analysis with the etanercept program across the USA and the EU, and have confirmations from those agencies that that is fine. And we expect to start this study late in the first half of 2015, consistent with the BLA filing in the second half of 2016.

Based on feedback from EMA and FDA, as well as discussions with selected major payers to address their P&T committees' acceptance of biosimilars, we have included in this Phase 3 study a switch from HUMIRA to Coherus-1420 in the second part of the study.

Also, last September we announced that our initial PK/BE study comparing Coherus-1420 to US HUMIRA met bioequivalent endpoints, and we are now planning a second bridging PK study that will compare Phase 3 clinical material to the US and EU HUMIRA. This study is expected to start later in the second half of 2015. And as we compare to both US and EU HUMIRA, it will allow us to have a global submission, both MAA and US FDA.

Now, both of the Phase 3 psoriasis study and the bridging study will support the BLA filing in the second half of 2016, and as pre-study startup activities have begun for the Phase 3 study, we believe we are tracking toward that goal.

Finally, I would like to update you on Coherus-0214. This is our etanercept biosimilar program. It is progressing very well. We have previously reported the design of the RA and the psoriasis Phase 3 study, so I am not going to repeat that here, except to say that the RA study is in 619 patients and that describes the psoriasis study in 496 patients. These studies are enrolling very well and we expect enrollment to be completed by the end of the second quarter this year.

We have also completed a Phase 1 bridging PK study in 50 healthy subjects, which compares Coherus-0214 manufactured in Europe to European Enbrel, and the results are expected by midyear.

These studies support filing an MAA in Europe and an NDA in Japan in mid-2016, and we have previously guided to this timing.

With that, Denny, if there's anything else, I think I will let the operator queue them up for questions.

Thank you, Barb. Let me just make a couple of concluding remarks. So the first I would say that there has been very positive news since our last call over the last quarter. Some of it has been within our control and some has not. Certainly, the legal developments pursuant to the Amgen/Sandoz case are very favorable for all market participants in biosimilars, Coherus included. Specifically around Neupogen and filgrastim and pegfilgrastim by implication, I think this is particularly promising.

I think the second promising aspect of that, of course, now is the clarity around the BLA enabling program, our ability to execute it within our financial projections, and our ability to get that filed at the end of this year as we've pointed out.

Lastly, I think we are making very good progress on the pipeline. It is something that we have focused on a lot, having had the other products up to Phase 3 now. And as I indicated earlier, you will hear a little more about the pipeline from me in Q3, Q4, as we have some other announcements and these things move forward.

We are not going to say too much about them now for strategic and competitive reasons, but you will hear a little bit more about those as time goes on.

In closing, I would say I think that the execution on the team is going well according to plan. We continue to build the Company consistent with the guidance. We look forward to two upcoming conferences. One is going to be Deutsche Bank Healthcare Conference, which is May 6 and 7 in Boston. We will be presenting there. And we will also be presenting at the Jefferies Conference which is June 1 to 4 in New York City. So I hope to see you there.

With that, I think we can go ahead and take questions on various topics as you like.

(Operator Instructions) Ken Cacciatore, Cowen and Company.

Thanks, guys. I just had a couple questions. First on 1701, you articulated the reasons why the FDA is letting you bypass the efficacy studies. I wrote down ability to characterize kind of rapid effect and acute versus chronic. So just wondering now that that is confirmed that that pathway exists, how does that inform your decision as you look at other products to move forward on? That is the first question.

Then second on 1420, just wondering if you feel that there is any commercial reasons why you would want to run an RA Phase 3 study. And also do you think the guidance on 1420 that you have received is similar to what your competitors have received, or do you think every company is going in and getting unique guidance? Thanks, guys.

Thanks for that, Ken. Let me take the 1701 issue first. I think that if you read the guidance from the Agency, they lay out there that they have the flexibility to define with you the clinical requirements as you go forward. I think that in terms of 1701, pegfilgrastim, it is a bit of a unique situation.

First of all, it is a less complex molecule than you typically get with a monoclonal antibody. In terms of the molecular weight of the base molecule, it is much smaller. We use the same PEGylation chemistry as is listed in the patents which are expiring, for example.

And then lastly, I think it is clear that we are experts coming in with this molecule in terms of its structure and its function. The molecule is unique also in that it is not a chronic therapy molecule. So it is not a molecule that you have to go and you have to worry about switching patients or other things like that. By and large, it is used during a course of therapy with oncology and then that's it.

The other interesting thing about this molecule is that it has a pharmacodynamic marker relative to the white blood cells going up. It is the direct indicator of the molecule's efficacy. So unlike, for example, an anti-TNF where you would have to wait weeks or months or some longer period of time to see an effect, you can see an effect with the filgrastim and pegfilgrastim molecules in a relatively short period of time, so you are certain that it is working.

So I think those are some of the key issues which would allow one to define the particular clinical program with the regulators that fits the requirements. I think it is important to remember that one size does not fit all. The regulators make their decision on the preponderance of the evidence, all of the data that you present to them, and how that data removes what is called residual doubt, residual uncertainty.

So I think what this highlights is the Company's ability to engage positively with the regulators, discuss the science, and come to an understanding and all agreed to on how to go forward. And in this case, I think we are able to proceed without the Phase 3.

Now secondarily with Barb, I will let Barb answer the questions about RA.

Right. With respect to our regulatory program and our clinical program, we don't have a one-size-fits-all view of the how to go forward. We tailor our clinical regulatory program and strategy to the molecule. So for etanercept which is our lead molecule, we felt it was important to have both a psoriasis and an RA study.

We needed the RA study for Japan because psoriasis is not -- or Enbrel is not approved for psoriasis in Japan. We did attempt to harmonize the psoriasis study across the EU and the US, should we be able to file in the US any time before 2029.

We have a slightly different look -- as you know, we did that program also, both studies, because it was a lead. And rheumatologists and dermatologists don't talk to each other, they don't attend the meetings, and we thought it was very important to educate both of those users of potential biosimilars as the biosimilars came to market or started to be approved.

We feel differently, slightly differently, about the HUMIRA program, and that is that this is a very large program which we think we may be able to carry longer by ourselves without partnering. We may end up partnering, but we would like to carry it as long as we can.

The study is large. All the regulatory agencies have told us we only need a single well-controlled study to support the regulatory filing. However, we have not ruled out -- we have not ruled out smaller studies to attract the attention and the buy-in of other therapeutic areas such as rheumatology or the GI area.

So although we haven't said anything about those yet, we are evaluating that and you will probably hear more about it going forward in the third or fourth quarter.

And what we the third question?

Does that answer your question, Ken?

There was a third question.

Just the third question was, is the guidance do you think similar on 1420 to your competitors, or do you think everyone is going in there and getting unique feedback?

Well, as I said, each program is slightly different and how companies approach it may be different. But we are pretty sure that the agencies are fairly consistent with the guidance they are giving to each company, whether or not a company can build their programs differently based on that guidance, but we think the guidance is very similar.

Thanks so much.

(Operator Instructions) Chris Schott, JPMorgan.

Thanks for the questions. This is actually Wendy Lin on for Chris Schott. Congratulations on all of the updates. I just have a couple of quick questions. I guess first, just given your conversations with regulators and payers and your market research, how do you see the potential TNF launches progressing?

Also, AbbVie recently announced that they have filed a new formulation of HUMIRA. How could that impact your opportunity?

Then just lately there have been several headlines that the FDA plans to discuss and issue guidance on interchangeable biosimilars in the near future. Based on your conversations with the FDA, is this something that we should be expecting in the very near future, and when do you see the possibility of interchangeable biosimilars? Thank you.

I will let Dr. Lisa Bell, our Senior VP of Global Regulatory, field this one. Go ahead, Lisa.

So on the question of interchangeability, we are aware that the Agency is evaluating what their requirements may be for data to support interchangeability. At this time, you are probably aware that they haven't yet issued guidance.

This has been on their docket for some time now, and they are seeking feedback from stakeholders, (inaudible) stakeholders, on what might be required, but they haven't yet come down on a position statement. And this is something that we are watching quite closely and making sure that we understand what the requirements are.

Wendy, and in terms of the revisions to the HUMIRA formulation and device, we, of course, have been aware of these developments for some time. And I think that payers and others and physicians of patients will consider these within the context of the patient experience.

I think it is difficult to speculate on the impact, but I think that it is important that you have a non-stinging formulation which is something that we have. I think it is important to have a very easy-to-use device which, again, is something I believe that we have.

So I think that in terms of these things, we expect to have a formulation and a device which are highly competitive with the second generation of product. We don't see that as a differentiator for the competition. We think that we are certainly as well positioned as anybody, having our sights on that for some time.

Thank you. I am showing no further questions at this time. Ladies and gentlemen, thank you for participating in today's conference. This concludes our program. You may all disconnect, and have a wonderful day.

Thank you.