DURECT Corp (DRRX) 2004 Q4 法說會逐字稿

Hello and welcome to the Fourth Quarter Earnings Call for DURECT Corp.

We are ready to begin, so please go ahead.

Hello, everyone, and good afternoon.

This is Schond Greenway, Head of IR and Strategic Planning of DURECT Corporation and on behalf of everyone at the Company we would like to welcome you to our fourth quarter and year-end 2005 financial results conference call.

Today I have with me Jim Brown our CEO, Tom Schreck our CFO, Felix Theeuwes our Chairman and CSO, and Jian Li our Controller.

The order of the call will be as follows.

Tom Schreck will review DURECT’s fourth quarter and FY04 financial results.

Next the call will be turned over to Jim Brown to discuss the highlights of the quarter and the full year in greater detail.

Afterwards we will open up the call for a Q&A session.

Before I turn the call over to Tom, I would like to remind you of our Safe Harbor Statement.

During the course of this call, we may make forward-looking statements regarding DURECT’s products in development, expected product benefits, our development plans, future clinical trials, or projected financial results.

These forward-looking statements involve risks and uncertainties that can cause actual results to differ materially from those in such forward-looking statements.

Further information regarding these and other risks are included in our annual report on Form 10-K, under the heading “Factors That May Affect Future Results”.

I will now turn the call over to Tom Schreck, CFO of DURECT.

Tom?

Thanks, Schond.

Good afternoon, everyone, and thanks for joining our fourth quarter and FY04 earnings conference call.

I’m going to briefly review the financials before asking Jim Brown, our President and CEO, to review the highlights for 2004 in greater detail.

* Our net loss for the three months ended December 31, 2004 was $7.0 million or $0.13 per share, compared to a net loss of $5.3 million or $0.10 per share for the same period in 2003.

* Our results for the three months ended December 31, 2004 included non-cash charges for the amortization of intangible assets and stock-based compensation of $329,000 compared to $373,000 for the same period in 2003.

* Cash used in operating activities was $6.8 million for the three months ended December 31, 2004, compared to $6.1 million for the same period in 2003.

* Our net loss for the year ended December 31, 2004 was $27.6 million or $0.54 per share, compared to a net loss of $22.7 million or $0.45 per share for the same period in 2003.

* Our results for the year ended December 31, 2004 included non-cash charges for the amortization of intangible assets and stock-based compensation of $1.5 million, compared to $1.2 million for the same period in 2003.

* Cash used in operating activities was $22.2 million for the year ended December 31, 2004, compared to $19.3 million for the same period in 2003.

* Total revenues were $4.0 million and $13.9 million for the three months and the year ended December 31, 2004 respectively, compared to $3.1 million and $11.8 million for the same periods in 2003.

The increase in total revenues was primarily attributable to higher collaborative research and development and milestone revenue recognized from our agreements with various strategic partners as we continued to make progress on the collaboration programs.

* Research and development (R&D) expenses were $6.2 million and $24.2 million for the three months and the year ended December 31, 2004 respectively, compared to $4.7 million and $20.9 million for the same periods in 2003.

The increases were primarily attributable to the higher development costs related to our SABER-based post-operative pain depot, TRANSDUR-based transdermal patch, CHRONOGESIC and other partnered products under development.

* We initiated clinical trials for both the SABER-based post-operative pain depot product candidate and the TRANSDUR-based transdermal patch product candidate in the fourth quarter of 2004.

* Selling, general and administrative (SG&A) expenses were $2.9 million and $9.7 million for the three months and the year ended December 31, 2004 respectively, compared to $1.9 million and $8.5 million for the same periods in 2003.

The increases were primarily attributable to direct internal and external expenses, to comply with the Sarbanes-Oxley Act Section 404, approximately $700,000 for fiscal year 2004, and higher employee related costs.

* Interest income was $317,000 and $1.2 million for the three months and the year ended December 31, 2004 respectively, compared to $309,000 and $1.0 million for the same periods in 2003.

The increase in interest income was primarily the result of higher yields in our cash and investments.

* Interest expense was $1.2 million and $4.5 million for the three months and the year ended December 31, 2004 respectively, compared with $1.1 million and $2.5 million for the same periods in 2003.

Which was primarily the result of the interest expense on the $60 million convertible notes we issued in June and July of 2003.

* At December 31, 2004, we had cash and investments of $61.8 million, including $2.8 million in restricted investments, compared with total cash and investments of $85.2 million at December 31, 2003.

* We expect total cash burn for the fiscal year 2005 to be in the range of $26.0 million to $28.0 million, which includes interest payment of $3.8 million for the convertible notes.

* We expect our net loss will range from $30 million to $32.0 million or $0.58 to $0.62 per share for the fiscal year 2005.

Our estimates include anticipated non-cash charges for the amortization of intangible assets and stock-based compensation.

* We expect our net loss for the first quarter of 2005 will range from $9.0 million to $10 million or $0.17 or $0.19 per share.

I will now turn the call over to Jim Brown, our President and CEO, to discuss the activities of the quarter and for FY04 in greater detail.

Thank you, Tom and good afternoon, everyone.

The fourth quarter 2004 was a strong quarter for DURECT.

We hit on all the major milestones we established over a year ago for this quarter --

* First, with regard to SABER-bupivacaine, we started our Phase II program. * Next, with regard to our DURIN-based Alzheimer’s disease product, we started the Phase I PK trial. * And finally, with regard to ORADUR-Remoxy program, we initiated Phase III.

All of these three milestones represent products that utilize different technology platforms.

In fact, we currently have four development programs in the clinic utilizing four different proprietary drug delivery platforms.

These are --

1.

Transdermal patch TRANSUR technology 2.

Our ORADUR gelcap technology 3.

Our SABER injectable 4.

As well as our bioerodible DURIN technology.

Today we will provide an update on the objectives for our development programs, including CHRONOGESIC, our TTS sufentanil program, SABER-bupivacaine, Remoxy, and the DURIN Leuprolide product for the treatment of Alzheimer’s Disease.

With regard to CHRONOGESIC, we continue to work to direct the premature shutdown issue for CHRONOGESIC, in order to bring this product to the marketplace.

Our experience with CHRONOGESIC has provided us with a tremendous pharmaceutical and clinical knowledge about sufentanil.

To date, we’ve dosed approximately 100 patients with CHRONOGESIC and we’ve seen a 2:1 patient preference for sufentanil over the preexisting opioid medications these patients are on.

We’ve seen trials demonstrate statistically significant reductions in side effects such as GI cramping and constipation and these trials were not powered to be able to determine this information.

We’ve seen better pain management and as much as a 2:1 improvement in pain control.

What we’ve been able to do is leverage this information on sufentanil that we have been developing in the clinic and also in our nonclinical and pharmacology work over the past number of years.

And combine this together with the direct management teams experience here in developing transdermal products, to develop our own transdermal patch program here.

We have a team here that’s been working on transdermal products for nearly 25 years.

They were associated early on with the nicotine patches, all the way up through the development of the Duragesic patch, which last year for J&J had sales of $2.1 billion.

But here at DURECT, we’re developing a differentiated transdermal opioid product with patient-friendly attributes.

These attributes include things like --

* A reduced size, up to one-fifth the size of the existing pain patches. * The potential for reduced irritation and skin sensitization * Longer duration * Now looking for a one-week product with the potential for greater efficacy and possibly reduced side effects and potentially greater safety margin.

We did market research surrounding our transdermal sufentanil patch and what the physicians told us is they liked the opportunity around our product better than the existing therapies that are out there today.

First off, they like the 7-day duration.

They like the increased quality of life that brought, the potential for greater compliance, and convenience to their patients.

They simply like the opportunity of sufentanil being another drug for rotation.

Unfortunately, these chronic pain patients are condemned to be on pain medication for the rest of their lives.

So to be able to have a drug, another drug in a patch form that they can offer to their patients was a significant opportunity.

Of course they liked the smaller size.

If one would imagine the smaller-framed patient having to find 10 different sites on their body for drug rotation, the site rotation with these larger patches in a given month’s timeframe, because you typically can’t go down on the same site again.

With regard to our system, one could find 4 sites on the forearm that would be able to deliver therapy for a month.

So they ended up giving our product an opportunity of 8.4 out of 10 versus the Duragesic patch and even maybe more importantly, 7 out of 10 versus the generic fentanyl patches.

With regard to the current status of this program, in October of 2004 we initiated the Phase I clinical studies.

The objectives here were to determine the safety and tolerability of the patch as well as to evaluate the pharmacokinetics of sufentanil following administration.

Our program goal was to complete the Phase I studies in the first half of this year, 2005.

Earlier today we announced that we had completed to dosing of the PK study, approximately one quarter ahead of schedule.

With regard to our SABER-bupivacaine product, here we’re utilizing our SABER control-release injectable depot technology to develop a longer-acting local anesthetic to control pain post-surgically.

Surgeons today, during most surgeries, will provide bupivacaine, a relative of novocaine, to numb a wound in a saline-delivered form and it numbs the wound for somewhere in the 4 to 6 hour range.

What we’re looking for out of our SABER-bupivacaine product is to get 2 to 3 days or more of pain control around that wound.

We estimate that there are more than 25 million surgical procedures performed annually in the United States for which this product could be utilized.

We continue to have significant interest from physicians and potential partners with regard to this product.

The physicians indicated that this product concept would represent a significant innovation over the currently available postoperative pain therapy.

We believe that this product could potentially reduce hospital stays, reduce the amount of traditional postsurgical pain medications needed by patients, as well as reduce the side effects associated for these opioid medications.

To date we have completed our Phase I PK work with regard to this product and we have demonstrated 2 to 3 days to as long actually 4 to 7 days of delivery of Bupivacaine from our SABER technology.

So what we’re demonstrating now is that we can get the pharmacokinetics.

We can get the durations we’re looking for.

The next question is can we get the pharmacodynamics?

Can we get the efficacy that we’re looking for?

And to this end we’re actually looking towards an I-Flow external pump to give us some guidance in this direction.

What I-Flow has is a pump they call the ON-Q pump that is an external pump that runs a couple catheters in and around the wound.

And they infuse in the same drug we’re using here, bupivacaine, in this case with saline, and infusing and bathing that wound for 2 to 3 days.

They have sales approximately of $50 million for this product, even though it does have some shortcomings with regard to longer durations because of the potential for infection and challenges of showering and those kinds of things.

But they still have some nice sales with the product.

On top of that, they have demonstrated in 40 clinical trials some great advantages to the product.

First off, they’ve shown earlier release from hospitals, anywhere from 1 to 3 days earlier.

And secondarily they’ve shown a reduction in the amount of narcotics needed post surgically, anywhere from a 30 to 70% reduction in the opioids.

Well, we’re able to take the same amount of bupivacaine that they can deliver over days and put it into a single injection and on the strength of that we went into our Phase II program initiated last October.

By doing such, we’ve met our established corporate goal to initiate this program in the fourth quarter of 2004, the Phase II program.

This Phase II study is for the treatment of pain following repair of inguinal hernia.

There will be up to three different cohorts totaling up to a potential of 90 patients in this trial.

The primary endpoints include pharmacokinetic evaluation of plasma bupivacaine levels, the time to first supplemental analgesics, analysis of the summary of total pain intensity, as well as a total pain relief analysis.

We announced earlier tody the completion of dosing of cohort one, which involves 6 patients at the lowest dose in this trial and we’re currently enrolling in a cohort two, which obviously uses higher doses.

And now I want to move on to our ORADUR technology.

In December of 2004, DURECT and our partner Pain Therapeutics announced the initiation of Phase III clinical studies in the United States for Remoxy, meeting the established goal to initiate the Phase III program in fourth quarter 2004.

Remoxy is a proprietary abuse-resistant version of a sustained-release oxycodone based on our ORADUR technology.

Remoxy incorporates several abuse deterrent properties, with the convenience of twice a day dosing and patient-friendly easy to swallow gelcap technology.

It uses oxycodone, the active drug ingredient in Oxycontin, which is an opioid painkiller that had sales that exceed $1.9 billion last year.

The current Phase III study design for Remoxy, according to Pain Therapeutics, is a randomized, double-blinded, placebo-controlled, multicenter study.

This study will be used to confirm the safety and efficacy in patients with chronic pain.

The plan is to enroll approximately 200 patients at over 20 U.S. centers, with moderate-to-severe osteoarthritic pain.

After a 1-week titration period, the patients will receive Remoxy or a matching placebo for at least 4 weeks.

The dose used in the study will be 20 mg of oxycodone twice daily, for a total of 40 mg per day and the primary endpoint will be analgesic efficacy.

In January of 2005, Pain Therapeutics reported plans to initiate a second Phase III study for Remoxy in the second half of 2005.

We plan to support the Phase III clinical studies as well as the CMC program throughout 2005 for the Remoxy program.

We are also currently performing some feasibility work with other companies, as well as for ourselves internally, utilizing the abuse deterrent properties and the convenience of our ORADUR gelcap technology.

With regard to our DURIN-based Alzheimer’s Disease product, here we’re developing an Alzheimer’s Disease treatment utilizing our DURIN drug delivery platform.

Significant progress has been made with our ongoing collaboration with Voyager Pharmaceuticals, our partner in this program.

In December of 2004, an IND was accepted by the FDA for the DURIN Leuprolide product.

Voyager initiated a Phase I PK study on the DURIN product, meeting an established goal to initiate this study in the fourth quarter 2004.

The current status for this program is that in January of 2005 we announced completion of patient enrollment in a Phase I PK study.

This study involves 50 subjects.

As well, Voyager and DURECT announced the completion of dosing in a 1-year study of the active agent in women with Alzheimer’s Disease.

Voyager are currently analyzing the data from these trials.

There is an additional 1-year study ongoing in men with Alzheimer’s Disease, with an interim analysis to be completed in 2005.

In closing, I want to reiterate, first off, that here at DURECT we have an experienced management team.

As one stops for a moment and considers what does that mean, what does it mean if you’ve got experience as a management team, I think two things pop to mind.

First is the capacity to set plans and the next is the capacity to execute on those plans.

I think one need look no further than our pipeline and the strength of that than to understand the experience that we’ve got here directing what we’re doing.

We made an active decision over 3 years ago to diversify our pipeline to expand the Company beyond simply just our CHRONOGESIC program.

And I think the strength of these programs, which have been developed quietly over the last few years to the point now where they’re entering Phase II, getting Phase II done and entering Phase III, is a very important place for us to be.

We’re very fortunate to have such a strong pipeline, with 4 products currently in the clinic and these 4 products are based on 4 different drug delivery technologies -- our oral gelcaps, controlled-release injectable, transdermal patch, and our bioerodible implant.

As far as advancing this pipeline in 2005, well we’ve got one product in Phase III and we look forward to Phase II data from three additional programs.

The anticipated development milestones for 2005 are as follows --

* With regard to the transdermal sufentanil program, we plan to initiate Phase II studies in the first half of 2005 and complete these Phase II studies in the second half of 2005.

* With regard to CHRONOGESIC, we continue to work on a system design to resume clinical studies.

* With regard to SABER-bupivacaine, we plan to complete the ongoing Phase II trial and announce results in the second half of 2005.

* Regarding Remoxy, we’ll support the ongoing Phase III clinical program conducted by Pain Therapeutics, including the initiation of a second Phase III clinical trial planned by PTI in the second half of this year.

* With regard to our DURIN-based Alzheimer’s Disease product with our partner Voyager Pharmaceuticals, now that we’ve completed enrollment in the Phase I trial we look forward to completing the ongoing Phase I PK trial with the DURIN-based product.

* As well, we look forward to completing the data and having the completion of the data analysis for the 1-year Phase II study with the active agent in Alzheimer’s Disease in women with Alzheimer’s Disease.

As well, we look forward to the completion of the analysis of the ongoing Phase II study with the active agent in men with Alzheimer’s Disease.

* And based on these studies, Voyager hopes to begin the Phase III pivotal programs in the second half of this year.

All four of the products in the clinical have great market potential.

Remoxy is tracking behind Oxycontin sales of $1.9 billion.

The SABER-bupivacaine product is meant to have a significantly large impact on the healthcare system, greater than $1.0 billion.

Sufentanil patch is tracking behind the Duragesic sales with sales of 2004 of over $2.1 billion.

And with regard to the Voyager Alzheimer’s Disease product, well Alzheimer’s is a $100 billion impact on the healthcare system.

So to have an effective therapy in that arena would be not only a great thing for the patients but obviously a very successful product.

Finally, DURECT has a solid financial foundation, with two programs that are currently in the clinic, which are fully paid for by our partners, with a strong profit return for DURECT.

As well, we have strong interest from potential commercialization partners with regard to the other two programs that are in the clinic.

However, we plan to partner only one of these programs in 2005 and keep the commercialization rights to the other to help transition DURECT into a fully integrated, specialty pharmaceutical company.

We’d now like to answer any of the questions you might have.

Kate Winkler with Merriman Curhan Ford & Co.

Hello all.

I just wanted to ask a couple of follow-up question, in particular related to the press releases this morning.

I wanted to know whether you could give us any more info as to what your observations were in the Phase I with the sufentanil patch and/or what the dosing was and what the strategy is in terms of the Phase II SABER-bupivacaine study.

And finally, what implications this has in terms of timelines for initiation of the Phase II for the sufentanil patch.

Okay.

I think those are great questions and unfortunately we can’t give you much more information today on those, Kate.

But we look forward to being able to provide you with that information as we complete the analysis of those data and so those will be coming forth.

And when we initiate the Phase II program for the patch project, then we certainly will announce that and describe what that first study looks like, at that time as well.

Okay and just one quick follow-up.

Do you expect that you might, having already finished dosing of the Phase I, that you might have data next wee at the analyst day?

You know, it’s possible.

Okay.

I mean, it all kind of depends on how the analysis goes and various things that we’re doing.

Sure.

Okay, thank you.

Okay.

Thanks, Kate.

Andrew Forman with Advest Inc.

Yes, thanks for taking the question.

Jim, could you comment on sort of the relative execution risk across the technologies?

Obviously with the set back with CHRONOGESIC last year and this is a technology that, at least in its current form as I understand it, has not been commercialized.

You had commented on the experience in the transdermal area and obviously the combined years of experience from ALZA.

But generally my experience is that the market doesn’t give a lot o credit for a Phase I product.

But I’m wondering to what extent you could articulate the execution risks - or the lack of - relative to other technologies that you have or others for the sufentanil patch Duragesic.

Thanks.

Thanks, Andrew, I appreciate the question and it’s a very good question.

Certainly all of these technologies have different levels of risk associated with the products being developed.

But if one looks at the experience level here within DURECT and what we’ve seen and what we know about sufentanil as an agent, I think it really gives us great optimism as we look forward to this project.

We have certainly, over a number of years now, developed a good understanding of the pharmacology of sufentanil, of the pharmaceutical aspects of the drug, and we’re combining that together with our clinical experience.

Remember we’ve dosed almost 100 patients with this product on a continuous infusion basis.

But I think it would be better to probably turn this call over to Felix, maybe to have him speak directly to that technology question there.

Sure.

I think that if you look, Andrew, about all the different product opportunities, you find risks in various places obviously and some are in the technology and some are in the execution of that and how it impacts on the therapy.

When it comes down to transdermal technology, I mean, that’s basically an area that we know well, where once you have kind of Phase I data you basically have PK data that can predict the [steady-state] (ph) levels.

And manufacturing plans exist where one can actually go and execute on that side.

And that’s basically just working through a path that has been well plowed and the question then is really is it a risk on the side of protecting the opportunity.

And so obviously, with the experience that we have over many years in the sufentanil area, that’s a space that we know very well.

And we feel very comfortable in that space.

When you’re asking me to talk about the risks, obviously these all have to do with forward-looking statements and as so, you have to take these things with a grain of salt.

When it comes to SABER, I mean, one of the big things that we had to do was to get the confidence that this could be an injectable and we have in humans, so that takes off a big piece of the risk right there.

A big piece of the risk was taken out when we saw the kinetics of the system, which gives you the confidence that you really no bursts.

That you have steady-state levels over 3-4 days and given the fact that the pharmacology, the pharmacodynamics, which is the link between kinetics and efficacy, has been very well plowed over by I-Flow, which is kind of plowing the field ahead of us, so to speak.

We follow in those footsteps and then we see us very nicely looking at our information and taking advantage of it.

Of course making that material and the dosage form and the stability and all the stuff that we have on the manufacturing side is absolutely no risk whatsoever.

We feel it’s very stable.

It can be radiation sterilized and it’s just really a wonderful material to work with, from that point of view.

When it comes to the DURIN technology, again it’s based on years of experience of polyglycolic acid and the preparation of systems in that kind of format and that’s a technology which has been well established.

In fact, there’s the zoladex depot with goserelin by AstraZeneca on the market and so we have that science well understood.

The technology is based on solution diffusion and erosion, which is a space that we worked in for years and so we see challenges ahead, but there’s nothing in there that we don’t think we should not -- there’s nothing there that we shouldn’t be able to master.

So, again, from the production of the raw material, which is a polymer, to the structuring of the dosing form and manufacturing, I mean, those are things moving forward that we are very fortunate that one of the more risky things is that there’s a patent there.

In other words, Voyager has been able to get a very strong IP position in the use of that molecule in that space, so that does a lot for it.

And then, coming down to Remoxy, we have shown some of the more important things that we can actually capture that material and PTI has published on this information that, in fact, they can prevent the extraction in a rapid from the dosage form.

The kinetics are there, because the Phase I has been done and so now to say that there’s a link between kinetics and the response to pain, that’s a given and that Oxycontin is out there.

So I think that idea is way down the pike and it comes down to executing the nitty-gritty, so to speak, but there’s nothing major in that space that I think should be standing in our way.

And so, again, it comes down to CHRONOGESIC and you know that’s where we started from and CHRONOGESIC is a challenge.

There are various things that work extremely well, but that [valve] is a novelty and a technical challenge.

And fortunately with 5 products in the pipeline and 4 well on the way to the final stages of clinical trials, we can really take a breather here and do this thing once and for all and fix it and then bring it back.

But I think Jim made a very good point that we’ve paid our dues in sufentanil and while we’ve stuck with CHRONOGESIC, we’re really mining that field extensively with the transdermal business, which we feel extremely excited about.

So we feel very good about the portfolio.

Thanks, Felix.

Could I follow-up a question on your sufentanil patch, SURAGESIC?

The market research that you referred to, Jim, the 8.4 versus out of 10 and 7 versus out of 10 on generics, beyond the obvious advantages in terms of duration and size, convenience, they’re pretty satisfied.

Are there conceptual advantages or advantages that pain management specialist physicians that could be characterized on sufentanil alone, in terms of using a different drug?

Or is there any other market research and what data might that be and when might you have it?

Thank you.

Thanks, Andrew, for the question.

I think first I probably should state up front that we haven’t named the product yet, though I do appreciate your enthusiasm for the name that you’d like so much for the project.

But with regard to sufentanil, as an agent, which is what I think that question boils down to, I think we are interested in that.

We certainly have a lot of experience out of the 100 patients or so that we have dosed with CHRONOGESIC where we’ve seen statistically significant reduction in side effects and some of the other advantages.

There are some papers out there denoting some things.

And so I think, over the next few months and over the next year or so, I think you’ll see more and more of that kind of information come to light.

I don’t know, Felix, do you want to add anything to that?

Actually, next we will be in New York and we have invited Professor Palmer from UCSF, who is a specialist in pain business and she has reviewed the literature extensively and she will be speaking to the selection of sufentanil.

And we are hoping that that will look good.

I mean, she has shared some of the information with us, but I think that will shed a lot of light, I think, on the quality of the direct substance itself.

On the other side, I think that the dosage from the value is added.

You know what the issues are with Duragesic today.

As you know well, Andrew, is that these patches tend to fall off.

They are stiff.

They are difficult to maintain and difficult to have deliver drug for the full three days.

So the much smaller system, much more pliable system, something that can last a week and on top of that differentiate with the substance sufentanil, which as were are looking more and more into the pharmacology of this, looks more exciting every day.

So, I think you will have a beautiful package from the technology dosage form point of view, but also one from the pharmacy of the compound.

Thanks a lot.

Okay.

Just one other thing, actually, that Felix reminded me of when he talked about Dr. Pam Palmer speaking next week and that’s just to remind everyone that we will be having DURECT’s first analyst day, actually, next week, February 16th in New York City at the St. Regis.

And it’ll be at 12:00 noon and so I think anyone who has an opportunity to listen to this call, to attend, I welcome to you too.

I think -- are we also going to webcast that?

(inaudible - multiple speakers)

You’ll be able to listen to that online as well.

Thanks.

Mara Goldstein with CIBC World Markets.

Yes, thanks.

I had a question on -- there was a statement regarding some guidance for 2005 and in just looking at that, that assumes -- I guess I’m making the assumption.

It assumes there will be no payment from Endo during 2005.

Is that a correct assumption?

Or at least that’s not what the forecast is right now?

Yes, the forecast that we have right now doesn’t have any payments coming in, any significant payments coming in from Endo or other partnerships.

Should we do a partnership on the patch and/or the injectable product, none of that’s in there.

This is just simply a straightforward (multiple speakers) --

Okay and just a question also on guidance, if you don’t mind.

I guess there is some assumption that you’ll have some heavy-duty clinical expenses in the first half of this year and then the latter part of the second half, depending on how things fall.

Is that an incorrect assumption or should we just kind of straight-line it?

Well, I think there’s actually a greater emphasis because of the initiation of these programs in the first part of the year and therefore we maintain our guidance for the balance of the year.

But obviously there’s been and emphasis in this first quarter, Mara.

Okay.

Thank you.

Again, at this time, we do now have any other questions on the line.

Okay.

So with that, I think we’d like to close up and thank you all for having a chance to listen in today and we look forward to talking to you in the future.

Thanks a lot.

Goodbye.

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