DURECT Corp (DRRX) 2008 Q1 法說會逐字稿

Hi, this is Kathy, and we will be starting the meeting.

This is the first quarter meeting of DURECT Corporation.

This conference is set up in question-and-answer.

You will be muted for the duration of the call.

(OPERATOR INSTRUCTIONS) Thank you.

This is Matt Hogan, Chief Financial Officer of DURECT.

This call will begin with a brief review of our financial results, and then Jim Brown, our President and CEO, will provide an update on our business.

We will then open up the call for a Q&A session.

Before beginning, I'd 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 SEC filings, including our 10- K under the heading "Risk Factors." Let me now turn to our financials.

Total revenue was $6.4 million in the first quarter of 2008, as compared to $5.7 million in the first quarter of 2007.

Revenue from our R & D collaborations was $4.3 million in the first quarter of 2008, as compared to $3.5 million in the first quarter of 2007, which is an increase of about $800,000 or 23%.

Revenue from this source will always fluctuate from quarter-to-quarter, depending on the state of development under the various programs and our role in those programs.

Product revenue from the sale of ALZET pumps and LACTEL Polymers decreased by about $100,000 from $2.3 million in the first quarter of 2007 to $2.2 million in the first quarter 2008.

Our gross margin on these products was 62% in both quarters.

R & D expense was $9.6 million in the first quarter 2008, as compared to $10.4 million in the first quarter 2007.

These figures included stock-based compensation of $1.6 million in the first quarter 2008, and $1.2 million in the first quarter 2007.

In looking at our comparative R & D expense, please note that the Q1 2007 figure included a $1 million payment we made to Voyager as part of amending our agreement with them relating to Memryte.

Absent that, and the change in stock-based compensation, our R & D spending was about the same in both quarters.

Selling general and administrative expenses were $3.9 million in the first quarter 2008, as compared to $3.5 million in Q1 2007, an increase of about $341,000.

These figures contain $775,000 of stock-based compensation in the first quarter 2008 and $668,000 of stock-based compensation in the first quarter last year.

Excluding the stock-based compensation expense, the rest of the increase was largely due to higher patent expenses.

Our net loss for the first quarter 2008 was $7.8 million, compared to a net loss of $8.8 million for the same period in 2007.

And at March 31, 2008, we had cash and investments of $53.4 million compared with cash and investments $62 million at the end of the year.

These figures both included $1 million in restricted investments.

Thanks, again, for joining our call.

I'll turn it over to Jim to discuss non- financial matters in greater detail.

Thank you, Matt, and hello, everyone.

This first quarter was one of quiet but steady progress on our various programs here at DURECT.

Remoxy is moving to its filing in the future act we - - launch in of course will be ready.

Now that Remoxy is moving toward its NDA filing in the near future and we started manufacturing the key components so that launch inventories will be ready.

Now that Remoxy is close to filing, we are able to shift resources onto other products in our King/PTI collaboration.

With POSIDUR, we continued activities on a number of fronts while we worked toward concluding our dialogue with the FDA regarding the Phase III program.

Endo continues with the TRANSDUR-Sufentanil program and we welcomed their recent senior management additions.

With ELADUR, we've been conducting manufacturing scale-up and processing to secure the Phase II and Phase III supplies, and are refining our clinical and regulatory strategy.

In research, we are encouraged on several fronts, particularly with respect to several feasibility programs with third parties which have recently demonstrated technical success.

And on the business development front, we've been actively engaged with respect to ELADUR, TRANSDUR-Sufentanil ex-U.S., POSIDUR in Japan and other programs we've yet to publicly disclose.

Over the next 12 to 18 months, we expect to see our first NDA potentially approved, a number of development programs move into Phase III, additional research programs advancing into product development, and we're also positioned to potentially achieve a variety of business development deals with a number of programs.

I will now review our lead programs in a little more detail.

Starting with Remoxy, Remoxy is based on our ORADUR gel-cap technology which provides a twice daily dosage form of oxycodone in a more difficult to abuse formulation.

Oxycodone is widely used by patients suffering from chronic pain.

Approximately 1.7 million patients in the U.S.

use extended release oxycodone each year, and sales of OxyContin, extended release oxycodone product were almost $1.6 billion in 2007.

Potential for future market growth should be driven by three factors we're tracking here.

Number one, an aging population, increased focus by the healthcare community on treating pain, and finally an improved capacity to put into place deterrence features that may mitigate physicians concern regarding abuse of narcotics.

While OxyContin and other opioids are effective pain relievers abuse and misuse of these medicines represents a major area of concern for the healthcare community, for the physicians and pharmacists, as well as the patients and society in general.

Data shows that 5.2 million Americans use prescription pain relievers for non-medical use in 2006, many of them children.

In fact, 4.3% of high school seniors have abused long-acting oxycodone.

This problem is well understood by Congress and the FDA.

DURECT's ORADUR technology is our response to this national problem.

When a product such as Remoxy, which is formulated in our ORADUR technology, is crushed the long-acting matrix is preserved, preventing a rapid release of the active drug.

This formulation is also resistant to common methods of abuse such as injection, snorting, thermal extraction, freeze fracture, crushing, grinding burning and rapid dissolution in a variety of liquid insolvents.

In December, it was announced that the pivotal Phase III clinical trial for Remoxy successfully met its primary end point of statistical significance of 0.01, that was prospectively defined by the FDA during the special protocol assessment process.

In addition, the study achieves statistical significance with regard to secondary end point, such as quality of analgesia and global assessment.

Both had P values of less than 0.01.

No drug related safety issues were noted in the study.

Our partner, Pain Therapeutics, has stated that they expect to file the NDA for Remoxy in the second quarter of this year.

Given that we've gotten here at DURECT several questions on the topic, I'd briefly comment here with regard to the FDA panel meeting this past Monday regarding Purdue's more difficult to abuse formulation of OxyContin.

The panel members clearly recognized again the general need for more difficult to abuse opioids.

In advance of this meeting, we were looking forward to discussion because the FDA panel was going to address two important issues.

First, what were the standards that would be applied with regard to abuse resistant products, and secondarily what would be the appropriate type of information that should appear on the label of such a product.

The reality is that other than reconfirming the need for abuse deterrence that came through loud and clear, the discussion that took place at the panel was tied to the specific data presented by Purdue, and, therefore, you can't generalize from Purdue's circumstances to ours.

Rather than opining on Purdue's FDA panel discussion, we would encourage investors to get a copy of the transcript of the panel discussion, read it or listen to it, and form your own judgment.

There have also been several articles posted on the meeting such as the one that was in yesterday's Wall Street Journal.

We are confident about the breadth of our ORADUR technology, as well as the depth of our partner's work in conducting the clinical program for Remoxy and look forward to the filing of the NDA in the near future.

King Pharmaceuticals, we will be the commercialization partner for Remoxy, and DURECT will receive royalty on King sales that start at 6% and step up at increments of approximately $100,000 to the point that they achieve a peak of 11.5%, around $1 billion, plus the manufacturing mark-up on selected key excipients that we will supply.

During the first quarter, we began to manufacture commercial lots of these key excipients for Remoxy in order to meet the production schedule of King Pharmaceutical.

We anticipate being able to meet the forecast sent to us by King as they plan their launch quantities.

We are hopeful that given the product features of an abuse deterrent form of oxycodone and a true twice a day formulation, King's roughly 700-person salesforce will be successful with the launch of Remoxy.

Over the last year or so, we and our partners have had our heads down concentrating on getting Remoxy over the goal line.

We can now shift resources onto the development of Products 2, 3 and 4 in this collaboration, and based on the development of Remoxy and the validation of our ORADUR technology, we are optimistic about the development prospects for these additional products.

Pain Therapeutics has stated that they expect to file an IND for a new abuse resistant opioid under our collaboration in 2008.

I would now like to shift my discussion over to POSIDUR.

POSIDUR has the opportunity to be a first-in-class therapy, that is the first injectable product available to surgeons that is designed to control pain at the site of surgery for two to three days.

We specifically designed POSIDUR to cover pain for two to three days based on a focus group meeting with surgeons.

Their feedback to us was that two to three days was the critical time period for surgical pain for the types of surgery we envisioned covering.

And, in fact, they wouldn't want substantially longer pain coverage for fear of masking some medical issues that the presence of pain would flag.

In our Phase IIb hernia trial, POSIDUR demonstrated a 30% improvement in pain control versus placebo over the first three days after surgery.

This improvement in post-operative pain control was achieved even though the placebo group took over three times more narcotics than our POSIDUR (inaudible) group.

This threefold increase in medication taken by the placebo group was seen on days 1, day 2 and as well on day 3 post-surgically.

Why does this matter?

It matters because narcotic side effects such as constipation, sleepiness, nausea, dizziness have a huge impact on patient care, as well as the length in hospital stays and drive up healthcare costs.

Additionally, any time we can reduce narcotic use in our healthcare system, we are lowering the potential for misuse of the drugs.

We believe POSIDUR will be a first-in-class therapy because it works to control pain locally at the site of the surgical wound, in contrast to post-operative pain medications available today such as systemic narcotics which control pain by inhibiting transmission of the pain signal within the central nervous system.

With regard to safety, in our overall Phase II program with POSIDUR over 450 patients were tested and approximately 300 patients were dosed with the active POSIDUR.

We saw comparable safety profiles in the patient groups as compared to the placebo groups and the drug administration appeared to be well tolerated.

The only side effect differences that were noted was a reduction in those side effects commonly observed with opioid medications in the POSIDUR treatment groups, as would be expected when you compare those to placebo because our POSIDUR group took approximately three times less narcotics.

Where is the program clinically?

While we've held the end of Phase II meeting with the FDA and are in dialogue with the FDA regarding the Phase III program.

When these discussions are complete, we will be in a position to describe the execution of the Phase III program and get it underway.

As we wait for definition of the Phase III program, we have continued to move the program forward in other ways.

These include increasing exposure to the program within the scientific and medical community.

We presented a poster of our Phase IIb hernia data at the Hernia Society meeting in Scottsdale, Arizona on March 15 of this year.

As preparation for the Phase III program, we held an investigators meeting during the Arthroscopy Association of North America 2008 annual meeting in Washington on April 25.

And we will hold a presentation of our Phase IIb hernia study study at the Royal Australian College of Surgeons meeting in Hong Kong on May 13.

This is one of the largest meetings attended by surgeons across the Asia/Pacific region and covers a wide range of surgery types .

Using independent consultants, we've conducted a survey among providers and insurance payors to explore the coverage and pricing for POSIDUR.

This survey was based on the most recent clinical data that give us a great deal of information that will assist us in our development program for POSIDUR.

It was also very encouraging in terms of the pricing that we can be able to expect and to command for this product in the marketplace.

As a reminder, Nycomed became our partner for this program in the fourth quarter of 2006.

Nycomed is a privately held specialty pharmaceutical company that has grown to become the 25th largest pharmaceutical company in the world.

They have a strong presence throughout Europe, Russia, the former commonwealth of independent states and other selected territories where we license them to commercialization rights to POSIDUR.

They have a major hospital-based sales force with access to the surgical suite, and pain management is one of their core therapeutic areas.

They sell several products in the surgical suite for control of hemostasis and multiple pain management programs including transdermal fentanyl and NSAIDs .

As part of this deal, Nycomed will assign a dedicated sales force to promote POSIDUR in their territories.

Nycomed paid us $14 million up front, an additional $8 million on our first milestone, and we have the potential for $180 million in milestones to come with this program.

Nycomed will commercialize the product in Europe and other defined territories paying us royalties on their sales that start at 15% and peak at 40% and these are numbers that are achievable within the EU.

Nycomed also pays one half of the development costs of the program in Europe and the United States.

We retained all commercialization rights for the U.S., Canada and Asia, and since POSIDUR will involve a surgical suite sale, we think it provides an unique opportunity to cover the U.S.

market with a specialized salesforce of 100 to 150 sales reps, and we believe this provide DURECT with the launching pad to become a specialty pharmaceutical Company.

Now I want to turn our attention to ELADUR.

ELADUR is a transdermal patch containing bupivacaine which is designed to provide up to three days of pain relief versus the leading the existing market leading patch which is indicated for 12 hours of wear.

ELADUR is very thin and has an elegant design for superior wearability.

In fact, our patch can be worn during exercise or shower after exercise.

In December, we reported positive results from ELADUR with a 60-patient Phase IIa clinical trial in patients suffering from Post Trapatic Neuralgia.

We showed improved pain control versus placebo during the three continuous days of treatment.

In addition, ELADUR appeared well tolerate overall and patients treated with ELADUR and placebo exhibited similar safety profiles.

We will be presenting selective results from this trial in a poster at the American Pain Society annual meeting, in fact, it will be on May 8, tomorrow.

You will be able to access this poster shortly after on our Web site.

As a reminder, we own full rights to this product.

We received considerable interest from a number of companies about partnering this product, driven no doubt by the commercial success of Lidoderm, which generated about $700 million in sales in 2007 and which grew at 17% in the first quarter of this year.

Given that this product will require a larger sales force to fully exploit it is likely we will partner this program.

In addition to the business development, the recent activities for this program have been conducting surrounding the manufacturing and scale-up and processing in order to secure Phase II and Phase III supplies.

We also have been refining our clinical and regulatory strategy for the next stages of the development of this program.

Lastly, I'll address the TRANSDUR-Sufentanil program.

Here, our Sufentanil patch contains and targets the chronic pain users.

The market for J&J Sufentanil patch, Duragesic, was approximately $1.2 billion in 2007.

Our TRANSDUR-Sufentanil patch seeks to provide seven days of pain relief versus the existing sufentanil patches that deliver medication for three days.

Our seven-day duration should enhance patient compliance and convenience as well as entailing a lower manufacturing cost over a comparable treatment cycle.

Exists sufentanil patches such as Duragesic are about the size of a dollar bill folded in half, which means that during a month the patient has to find 10 rather large spots on their body to rotate the patches around.

In contrast, our patch is approximately one-fifth the size of Duragesic, about the size of a postage stamp, and during a month only four such small sites will be required.

Our partner for the U.S.

and Canada is Endo Pharmaceuticals and their success with Lidoderm has demonstrated their ability to sell patches used to treat pain.

Now that we have provided the technology transfer to 3M our role here at DURECT is largely a supportive one to Endo for process optimization and continuing to provide technical expertise to their clinical studies and CMC support.

Endo Pharmaceuticals in continuing to conduct Phase II studies with TRANSDUR-Sufentanil which is designed to evaluate the conversion of patients from oral opioids over to the TRANSDUR-Sufentanil patch.

Recent management changes at Endo have reinvigorated this TRANSDUR-Sufentanil patch program and we look forward to this program moving into Phase III.

Over the next 12 to 18 months we look forward to continued progress for our programs here at DURECT.

direct.

With POSIDUR, we look forward to finalization of the Phase III program and commencing these studies.

We look forward to defining the U.S.

commercialization strategy and to the potential for a business development deal in Asia.

For Remoxy and the other abuse resistant opioids we look forward to the potential approval of the Remoxy NDA and the filing of an IND for an additional abuse resistant opioid.

For the sufentanil patch, this execution of the Phase II studies by Endo and the potential initiation of the Phase III program, as well as further communications on the clinical development plan by Endo, and finally potential for ex-U.S.

deals on this product.

For ELADUR, it's a continuation of the clinical development program building on the positive data from our Phase IIa study as well as the potential for a business development deal.

On the financial front, we look forward to the elimination of the remainder of our convertible notes in June.

DURECT has an advanced pipeline consisting of four products in Phase II or Phase III and a rich early stage pipeline.

These later stage products address large market opportunities primarily in the underserved pain management field.

Each of these products has differentiating features that may provide meaningful improvements over existing therapies.

We have products that are advancing in the various stages of development moving from Phase II to Phase III and from Phase III to NDA prep and filing.

We have collaborations in place with Nycomed, Endo Pharmaceuticals, King, Pain Therapeutics that provide considerable development funding and solid economics upon commercialization, yet we've maintained a pathway to becoming a specialty pharmaceutical company that commercializes selected products in North America.

We've been able to do all this while spending less than a total of $38 million of DURECT's cash for 2005, 2006, and 2007 combined.

I want to thank you now for your support and we look forward to sharing our progress reports with you in the future.

We'll now take any

Operator, I presume you are on, if you could open up for questions?

There's no questions at this time

All right, let's wait one minute and see if anybody wants to ask a question.

Otherwise they can call us later.

Ken Trbovich with RBC Capital.

I'll unmute him now.

Okay.

Good afternoon, guys, can you hear me?

Sure.

Quick question.

At the panel meeting on Monday the issues that came out had to do with variability of the dose that can be extracted under different conditions for the Purdue formulation.

Do you happen to know if Pain Therapeutics has conducted similar studies and whether or not there is similar variability for their formulation?

You know, we shouldn't speak to - - we'll let the Remoxy product be defined and determined after the NDA has been filed as things go forward.

Actually, some of the discussion was certainly more than just the part that you talked about, the variability.

The only thing you can probably glean from what we've shown right now is we've shown some PK data from subjects who been given Remoxy prepared in different ways versus OxyContin.

You can look at that, that's in our corporate presentation.

You'll see there a difference as far as the amount of drug that can be extracted, as well I think we've shown some pictures of freeze fractured systems and things like that that Purdue didn't address at all.

So the distinction would be that yours is actually in vitro data as opposed to some extrapolation that the panel and the agency were left to make on the Purdue formulation?

I think that actually in vivo would have been the right - -

In vivo, sorry.

So just with regard to the Sufentanil program, you mentioned that management change at Endo has reinvigorated the program.

Could you give us a sense -- I know you can't speak specifically to where things are at, but can you give us a sense of how the management changes in your view have been reinvigorated?

What is it that gives you that confidence?

I think we are just pleased to see that, we know Dave Holveck and his reputation, we know him from his time at J&J, he is a person that makes a difference wherever he goes, and is driven to accomplishment.

He started to bring in his own team around him, a new head of R&D, and I know the day-to-day team on the Endo side is quite pleased with what's going on, as out team is here.

So I think we are feeling a groundswell of continued force moving this thing forward.

Okay.

And just a final question around the commercial strategy for POSIDUR in the U.S.

Have you completely ruled out seeking a partner, if at some point that becomes an option or is this clearly a strategy that you are still saying you would commercialize, or it is your intent to commercialize at this point?

With regard to the U.S.

strategy on the product, it's a wonderful opportunity, our recent research that I was alluding to shows some very strong numbers, potential for this product is quite large.

All that being said, if the right opportunity presented itself, I think we have to run our business as we have to run our business.

So we intend to commercialize this product ourselves, but we will always do everything in balance, and I'll not rule out the possibility that we may end up with a co-promotional circumstance or something at some point in time.

Okay, terrific.

Appreciate it.

Caroline Stewart has a question.

Go ahead, Caroline.

Hi.

Good afternoon.

Just two quick follow-up questions.

You know, the panel members on Monday seemed to be quite negative and they seemed to be particularly cautious on the language and what abuse resistant would actually mean.

How do you feel on that topic?

Is that something that you would expect in the label initially or something that you think would have to have some more outcome-type data?

I mean, it, if the panel, the panel was pretty clear they wanted to see more than Purdue offered.

I think, with regard to Remoxy product, I think that has to be defined as it is reviewed.

But for me here at DURECT, I would be happy just to see the product approved for use in treating chronic pain and let the remainder be defined later.

On the POSIDUR front, are you confident about starting the Phase III trials this year sometime?

We are still looking forward to doing all that.

And as far as being confident, I'm still confident.

I'm waiting for these discussions to conclude, and once they have, we'll be able to communicate where we're at.

One never knows until it's done, right?

Thank you.

We have a question from Dave Windley.

Hi, Dave.

Hi.

Good afternoon.

I apologize if I'm not coming through real well.

I'm across the ocean.

I wondered, it's kind of a different question, but on the TRANSDUR-Sufentanil product, Jim, can you talk about the physical durability of that patch over the wear period?

Sure, I mean, it's probably better to let Felix speak to that since he's been developing patches for 30 years, so, Felix, why don't you take that one?

You may well guess that a large patch is more difficult to keep on the body than a very small one, so from that point of view, the wearability is better.

But if you compare to Duragesic, for example, our system is very integral in the matrix, and with a very thin overlay so compared to the Duragesic patch it's a much more, much thinner system.

The Duragesic system contains a packet of drugs in a gel formulation, and so these systems are more awkward to wear, they are bigger, and they are more prone to fall off.

So I think we have definitely an advantage in that setting.

Thanks.

Yes, yes, Felix, I guess I'm wondering over -- wear that's more than twice as long as Duragesic, I'm asking kind of a non-scientific question here, but practically speaking is it going to become non or unhygienic by the end of the wear period?

No, well, skin typically turns over in about 10 to 15 days, 10 to 14 days, and there's a precedent for this.

You may know (inaudible) which we developed awhile ago, with Alza.

it's a fairly similar system, also small and is worn for seven days.

So this can well be done.

As far as hygiene is concerned, the larger size system we're talking about is about the size of a postage stamp, and the small one is about the size of your little fingernail so we are not talking about covering a lot of skin here.

And Jim, you've alluded to business development activities, and I know you guys won't allow yourselves to be pinned down, but in trying from with, I guess I got two questions here.

One is can you give us any sense of the time lines, shouldn't have even said that word, I know what you are going to say to that, but the sense of urgency around generating some catalyst for the stock.

It's interesting.

Sorry - -

That's one.

And then the second, any insight into the trading activity in the stock in the late day today?

Yes.

I'll let Matt deal with the second one, but catalyst is like asking a basketball manager if they are going, or coach if they are going to do any trading before the trade deadline.

They are going to give you the soft shoe.

But we don't like to talk about our BD activities until they are done, because all you are doing is giving power to those you are going to negotiate with.

When the deals are right and the timing is right, then we will strike the deal.

Just as a remembrance, for Nycomed we worked with them for well over a year before we signed a deal.

Very closely.

We agreed on commercial plans and everything ahead of time.

But as far as catalysts go, there are a lot of nice catalysts driving us forward.

We have an NDA coming up in the not too distant future.

That's amazing.

This is our first NDA, not to be looked aside to.

It's a huge accomplishment and we look forward to making some money off that at some point in time as that product hits the market.

If we look at the, at POSIDUR, at some point, we will hear back from the FDA, complete that and start the Phase III.

As far as ELADUR is concerned, there's a potential for a deal that has a chance to advance in the clinic, it's a transfer some sufentanil advance in the clinic - - new products as we alluded to.

We have these earlier stage programs that are making advances.

We've recently expanded our patent portfolio greatly, we have more than doubled our patent position and drug delivery patents in general.

Great opportunities coming out.

Can you help us to understand what some of those patent opportunities are going to be?

With all due respect, I guess I was talking about new catalysts.

We've been talking about these things for a while.

Yes, yes.

We're to the point where we talked enough about those catalysts, that they are already well expected and if you miss a deadline, it's a negative.

If you make it, it's already expected.

As far as the new patents are concerned, we won't be able to address those until we have new products rolling out in those areas, but we greatly have strength.

And they are in the areas, I can give you some general sense in the areas of transdermal and injectables, so there's a lot of new strength there.

To me, the catalysts like NDAs, they are never new.

They are always great to have, so I guess as we knock these things off (inaudible).

Matt, if you want to address the - -

I guess on the stock price, I mean, Dave, if I could predict any one day what the stock is going to do, I probably wouldn't be working still.

I don't mean to be flip by that, but I can't thing of any fundamental reason sitting here today why the Company is deemed to be worth $75 million less than it was yesterday.

There's not a fundamental connection that I can see.

So if you are a fundamental investor, and you look at the Company today, for about a $300 million valuation, what do you get?

You get a company with an NDA that's very close to filing, it's going after a big market with some differentiated features, you have three other products that are in Phase II.

All of which are differentiating products and all of which go after big markets, and then some other stuff, and you have got - - we don't want to put a time line on it.

But there can be a catalyst when you least expect it.

You just show up one day at work and we have a BD deal we have announced or some other clinical progress.

I know that's difficult why you have to sit and wait, but we also can't just artificially manufacture when these catalysts will occur.

They don't conveniently fall around when IR conferences are or when earnings meetings are.

In a way, our challenge is put our head down and try to work on these things, and when we can announce them, hopefully it will get rewarded.

Thanks so much.

I appreciate your taking my questions.

I thought I would stir up a little conversation here.

No, I hear you.

Appreciate that.

Ken Trbovich has a question again.

Just a follow-up.

I think my question really is focused around the abstract that we saw for the ELADUR patch.

Is it presented at APS this week, the final data or is it representative of only the initial interim look suggested by the abstract?

It's the data that we have at this point that we are interested in sharing.

As you know, we are in discussions with partners and it may well be depending on who we sign up for and that kind of thing that there's not a lot they want to share beyond this.

So it's what we felt comfortable with at this point in time.

Sure, and I guess I apologize.

The concern that I had, if any, was that the abstract suggested it was an interim analysis of the study as opposed to a complete analysis of all patients, has the study actually completed all patients?

Yes, they have.

I - - I don't know why they defined that.

Maybe there's some final (inaudible) forms that haven't been locked in or something like that.

Okay.

Thank you.

Russell McAllister has a question.

Hey, Russell.

Hi.

Thanks for taking my question.

David asked the first part of it, which was some additional detail on the expanded patent portfolio.

And, Jim, you mentioned broadly transdermal and injectable technology.

Right.

If you could provide any other detail without letting the cat out of the bag there.

Is this going to be in additional pain products, or are we moving into different areas?

Does this strengthen the current drug delivery patent protections around products which already exist or are these new technologies entirely, any additional detail would be useful?

Sure.

It does some strengthening of existing ones.

I'll let Felix address the - - I lost the point I was going to make, but basically, - - go ahead, Felix.

If you look at the patent estate it's a little bit, although not quite equivalent to real estate, and that you can draw a circle some ownership.

And you know what that is in these two spaces is now we have a much bigger circle.

We can be much more freely operating in these spaces, and the probability of success, therefore, goes up drastically as you have a bigger space, but also these are issued patents, so these don't have the uncertainty of an actual workout with the patent office.

I think that's the simplest view.

Any additional detail, Felix, on patent lives, et cetera, if these are already issued patents?

They are issued, and some are still being prosecuted, so I think they will definitely go beyond classical time periods that we typically talk about.

Yes, they go out quite a ways.

I think they are 40 plus families, what, Jean?

Over 49 issued patents, hundreds that are still in process.

It's substantial.

It more than doubles our estate, it allows us to -- we are doing a lot of interesting research in the biotech field, and it really allows us, I think, to start to expand in that arena, Felix.

Don't know if you want to address that?

Are we going to learn at some point where those patents came from?

Which company?

I don't think so.

I think they prefer not to, so - -

Terrific.

I appreciate the additional information.

Thank you.

Sure.

No further questions at this time.

Okay, well, thank you for participating, and we're always open to questions after the fact.

Take care.

Good- bye.

Thank you.