Ironwood Pharmaceuticals Inc (IRWD) 2012 Q4 法說會逐字稿

Good day, ladies and gentlemen. And welcome to the Ironwood Pharmaceuticals fourth-quarter 2012 investor update conference call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will be given at that time.

(Operator Instructions)

As a reminder, today's conference call is being recorded. I'd now like to turn the conference over to your host, Ms. Meredith Kaya, Associate Director Investor Relations. Please go ahead.

Good morning, and thank you for joining us for our fourth-quarter 2012 investor update. Joining me for today's call are Peter Hecht, our Chief Executive Officer, and Tom McCourt, our Chief Commercial Officer. We also have Michael Higgins, our Chief Operating Officer, Mark Currie, our Chief Scientific Officer, and Jim DeTore, our Vice President of Finance available for the question-and-answer portion of the call. By now you should have a copy of our press release, which crossed the wire earlier this morning. If you need a copy of the press release, you can go to our website, www.ironwoodpharma.com, to find an electronic copy.

Some of the information discussed in today's call is based on information as of today, Tuesday, January 15, 2013, and contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from those set forth in such statements. We do not undertake any obligation to update any forward-looking statements made during this call, or contained in the accompanying slides, as a result of new information, future events or otherwise. For a discussion of these risks and uncertainties, you should review the forward-looking statements disclosure in our press release and on the current slides with the heading Safe Harbor statement. As well as the risks under the heading Risk Factors in our quarterly report on Form 10-Q for quarter ended September 30, 2012, and any of our future SEC filings.

I would now like to turn the call over to Peter.

Thank you, Meredith. And many thanks to everyone on the call for joining us this morning. The past several months have been an important period of time for us here at Ironwood, as we achieved several critical milestones. And transitioned into a discovery, development and commercial organization. Before we get into the core of today's call, I want to take a moment to acknowledge and thank all of the people who have been critical in getting us to this rare inflection point. And whom we hope will continue to play an integral role in our future. First, I want to thank our employee-owners who bring tremendous passion, enthusiasm and dedication to our shop every day. We've really grown as a Company this past year. Both in number of employees as well as in capabilities, knowledge and talent.

The most striking addition has been the experience and highly skilled sales force that is now out educating physicians about LINZESS in close collaboration with our Forest sales colleagues. I had the great pleasure of actively participating in the sales training sessions over the past few months. And I'm continually impressed by the capabilities this team brings to LINZESS and to our collaboration with Forest. And also by how quickly they've become part of the fabric of our team and strengthened our culture. In addition to our sales capability, we added many other wonderful and talented teammates who have pioneered a number of whole new functional capabilities.

I also want to thank our other owners, many of whom have been with us since our founding back in 1998, and continue to support our growth and development. Our board members, themselves all substantial shareholders, who have provided strategic guidance and expertise as we navigate this transition into becoming a commercial organization with a marketed product. And our partners, whose collaboration inspires us daily to grow and improve. And, importantly, the doctors and patients we aim to serve.

As I look back on the accomplishment we have made over the past year or so, I would first like to turn to our work with linaclotide. Linaclotide is a very important asset for us. Ironwood scientists have pioneered a whole new area of pharmacology here. And we have patent protection on linaclotide until 2026. We continue to work hard to maximize the benefit this important pharmacology may provide to patients around the world.

In the US, we were thrilled to receive approval of LINZESS in late August for adults with IBS-C and CIC, with a very strong label. Together with our partner, Forest, we began to educate physicians and patients about LINZESS on December 17. You'll hear a lot more about the LINZESS launch in a moment from Tom. But before I turn it over to him, I'd like to highlight some other recent important accomplishments.

We've continued to make progress in bringing linaclotide to patients worldwide. In late November, the European commission granted marketing authorization for Constella in the EU for the symptomatic treatment of moderate to severe IBS-C in adults. Constella is the only product approved in the EU for this indication. And it is described in the European label as a GCC agonist with visceral analgesic and secretory activities. Our partner, Almirall, expects to begin to roll out the initial launches of Constella on a country-by-country basis in the first half of 2013.

Our Japanese partner, Astellas, continues to advance linaclotide in the Phase II clinical trial in more than 500 adult Japanese patients with IBS-C. We also formed a strategic partnership with AstraZeneca late last year to co-develop and co-commercialize linaclotide in China. We continue to explore partnerships in additional territories to enable access to linaclotide more broadly to patients around the world.

Over the next few years we intend to explore development opportunities to strengthen the clinical profile of linaclotide within its indicated population. As well as to broaden the label in additional patient populations and indications. As you know, we initiated a Phase IIIb clinical study last July to further evaluate and characterize the effects of linaclotide on bloating in patients with CIC. That study is ongoing and we expect data in the second half of 2013.

Additionally, as we continue to pioneer our understanding of GCC agonists, and linaclotide's demonstrated ability to relieve abdominal pain in adults with IBS-C, we expect to explore its use in other indications where abdominal pain is a significant burden. Such as opioid-induced constipation, other forms of IBS, and functional dyspepsia. We are also considering potential linaclotide-based combinations, such as linaclotide combined with PPI or linaclotide combined with opiates.

And beyond linaclotide, our pipeline continues to progress. Last fall, we advanced our second GCC agonist, IW-9179, into a Phase II clinical trial designed to evaluate the efficacy of the drug in patients with functional dyspepsia. Functional dyspepsia is a chronic addition of the upper GI. And is estimated to affect more than 35 million adults in the US alone. Few approved therapies exist to help relieve the hallmark symptoms of FD which include upper GI pain, fullness, early satiety, and bloating. We expect data from our Phase II clinical trial in the second half of 2013.

We also recently advanced IW-2143 into a Phase I clinical trial. IW-2143 is an anti-anxiety program which we in-licensed from Bionomics in early 2012.

Turning to a few brief comments on our financials, we ended 2012 with $168 million in cash and cash equivalents. And we used approximately $70 million of cash for operations for the full year. As you know, earlier this month we completed a debt offering which brought in an additional $175 million in cash through the issuance of notes with an 11% interest rate. We continue to be disciplined in how we prioritize our resources and prudently invest in our business, striving to be careful stewards of our shareholders' capital.

To sum up, I'm humbled by the incredible accomplishments our team has delivered on over the past several months. Our progress to date allows us to continue making strides in our efforts to help develop differentiated medicines that improve patients' lives. And to generate outstanding returns for our shareholders. If we do these things well, and remain focused on our objectives, we hope to continue to attract and motivate a remarkably talented group of people who will work together to keep building an exciting, important, and valuable business over time.

With that, I'd like to turn the call over to Tom to discuss the LINZESS launch.

Thanks, Peter. As we introduce LINZESS to the US adult IBS-C and chronic constipation communities with our commercial partner Forest, we continue to ground ourselves on the objective that every adult faced with IBS and chronic constipation who can benefit from LINZESS will have access to it. We are pleased so far with our execution on launch. And are very encouraged by the feedback our sales force is getting from physicians. But we are only into the launch in the few weeks and we still have a lot of work to do.

As we shared with you before, we feel that it's critical to concentrate our efforts on a few key areas that will drive the growth of LINZESS over time. First, we must work with physicians so they recognize the full value of LINZESS. Second, we must engage appropriate patients who can immediately benefit from LINZESS. And, third, we must work to secure access in affordable co-pays for the millions of adult IBS-C and CSC patients.

First, beginning with physicians, as I mentioned earlier, we have seen encouraged success with our sales professionals, and the progress they're making in communicating the benefits of LINZESS to both gastroenterologists and primary care physicians. Together with our partner Forest, we have over 1,400 sales specialists who are now educating over 80,000 physicians about LINZESS. What we're hearing from them based on [adult] feedback is that they've been getting extended time with these physicians. And more importantly, engaging in robust discussions about the patients in need and the evidence defining the clinical profile of LINZESS.

To enable physicians to critically evaluate LINZESS, we have mobilized an early experience program. And are in the process of distributing approximately 300,000 early use kits to the busiest 30,000 gastroenterologists and primary care physicians. The early experience kits include a 30-day sample, as well as patient education materials in both IBS and chronic constipation. Providing both physicians and patients the opportunity to experience, observe and evaluate the clinical performance of LINZESS. In addition, we'll be supplying all physicians with four-day samples of LINZESS.

We're also launching a large-scale educational program. We plan to host over 10,000 speaker programs in the next 12 months to educate physicians on IBS-C and chronic constipation, as well as the appropriate use of LINZESS. Very soon, in addition to LINZESS, Ironwood clinical sales specialists will begin promoting Nexium as a second physician call, which will strengthen the overall value our sales force will bring to the medical community. As you recall, this co-promote of Nexium in the US was part of a collaboration we formed with AstraZeneca last fall. Nexium is the world's leading prescription GI product. And there are currently as many as five million to seven million adult GERD patients who are actively seeking care and treated for GERD who also suffer from either IBS-C or chronic constipation.

Discussing both LINZESS and Nexium with physicians will only continue to enhance the dialogue with physicians and enable them to identify many appropriate adult IBS-C and chronic constipation patients for LINZESS. And reinforce the confidence in Nexium as the category leader.

In regard to our efforts to engage patients, we have launched a robust digital platform to connect with patients. More than 70% of adult GI sufferers are seeking help online. And our objective is to reach adult IBS-C and chronic constipation patients, encouraging them to effectively describe their symptoms and share previous treatment experience with their physicians. Therefore, we're making a targeted investment in the digital channel, as well as a number of other points of contact where we know patients will be and where they can be engaged with our contact. We have spent the last 12 to 18 months understanding where these patients are going, how they're communicating, and what they're looking for. We expect to have a significant presence throughout all these channels, maximizing our reach to these patients.

In addition to our branded website, LINZESS.com, where we aim to drive further engagement with LINZESS information and support, we have also activated a search engine optimization effort to aid patients to access information on LINZESS. There are over 60 million IBS-C and chronic constipation category searches conducted each year by patients. And now LINZESS will engage adult patients seeking help online. By securing appropriate IBS-C and chronic constipation search terms related to systems, conditions and treatment, we believe we can drive this connection.

We have also initiated a strategic outreach program to introduce LINZESS to over 2 million adult IBS-C and chronic constipation patients who have previously requested information about their condition. And lastly, we continue our efforts designed to ensure broad access to LINZESS for patients. LINZESS is currently available in over 44,000 pharmacies around the country. Our partner Forest's account management team have already engaged key payers to initiate formulary valuation processes. And the reviews for LINZESS are well underway. So far, we have seen the majority of the managed care providers initially placing LINZESS under a tier 3 coverage with either limited or no restrictions until the evaluations are completed. And so far we're very encouraged by the early discussions and signals we're getting from payers.

Our objective is to gain broad tier 2 coverage of LINZESS through the review process over time. But in the interim we and Forest are implementing an automated co-pay assistance program that will be in effect as of February 1. This program provides a convenient seamless way for most patients to get LINZESS with a maximum co-pay of $35. Which is similar to what they would pay under tier 2 coverage. This program flows through over 40,000 pharmacies, covering over 90% of the commercial patients.

Over the past several months we've been talking to you about the key characteristics of primary care products and primary care launches including the large patient population, broad prescriber base and the payer model. It's critical that we fully engage each of these areas, and invest appropriately to ensure we maximize our opportunity with LINZESS in the US. As such, and consistent with this type of primary care launch, we would expect the total investment in sales and marketing for LINZESS to be in the range of $250 million to $300 million in 2013. So, as you can see, we've made considerable progress in executing our launch plan. And we are quite encouraged thus far with the progress of LINZESS.

With that I'll now turn it over to the operator for the Q&A.

(Operator Instructions)

Mario Corso, Mizuho USA.

Maybe just in terms of the launch, can you talk a little bit about the $250 million to $300 million in expenses for 2013? Is that a combined number that we're going to see in the joint-venture type P&L? I'm trying to figure out how we should best think about that number, and how it relates to Ironwood's P&L on the Company's own SG&A line.

And then, secondarily, I'm wondering the best way to think about any kind of European revenue contribution for this year as well. Thanks very much.

Mario, hi. It's Michael. Let me take the $250 million to $300 million first. What we've attempted to do there is to clarify for you guys the broad investment specifically in LINZESS for sales and marketing. So, the way we've discussed it with folks in the past is we've given you basically parameters for the sales investment, parameters for the non-sales commercial investment. And we simply wanted to clarify for folks.

But you're right in your interpretation. That's the combined investment, the total investment for LINZESS, that will be made by Ironwood and Forest together. We are responsible for 50% of that. And it will show up -- depending on the utilization of our different assets, it will show up over the course of the year in different line items. So, for instance, our sales -- it will be incorporated in our sales line, and our sales and marketing line, and then there will be some collaboration expense components to that.

But I think the most important thing to recognize is that we're accountable for 50% of that. And we wanted to give you a range based upon other predicates in the space for this type of investment. We just wanted people to understand it in a little more granularity.

Does that make sense? Let me pause there.

Yes. Thank you.

If I can editorialize just for a second, Mario. I think partly what we're trying to do here -- over the past maybe five or six quarters, we've taken the time to educate on the various components of primary care launches. Because some folks haven't seen a primary care launch like this in a while. We thought it was useful during that period of time to break out the various components. Both to remind people about all the pieces that go into a primary care launch, and to describe the individual investment elements that are required to execute on it. And at this point, we're really just aggregating those various components of the investment into a single number to simplify for folks. I think at this point, folks who have been following our story understand all these pieces in pretty gory detail. So, we thought it would be helpful to simplify. It's more that than anything else.

Great. Thank you.

And, Mario, the second part of your question again, if you could repeat it? Is there another element? Or are you good?

European contribution in 2013.

I think it's premature. I think our expectations from Europe for this year are -- we're going to keep them on the conservative side. The launch -- we do expect initial launches to happen for -- I'm sorry -- Almirall has not given the specific breakout and exact timing of those. But we do expect launches on a territory-by-territory basis to start happening this year. And obviously there are milestones associated with that.

And, most importantly from a long-term perspective, we will start to see some of our royalties coming in from there. But we would expect that that's going to roll out over the course of the year. And it will be -- we're in it for the long term in Europe, but we expect that to start this year. But no specific guidance on how exact timing and magnitude of impact this year.

Geoff Meacham, JPMorgan.

This is Anupam Rama in for Geoff Meacham. Just a quick question on reimbursement. Can you expand a little bit on what goes on in the negotiation process as you're trying to move from tier 3 to tier 2? And how long, generally speaking, that takes to make that move.

Thanks for the question. Tom, can you take that one on?

Sure, absolutely. Thanks a lot for the question. I think there's obviously -- the core is really laying out the value proposition for the payer pace on the clinical profile and the price. And certainly we feel very good about the clinical profile of LINZESS based on what we got out of the label and the overall performance of the drug.

And I think we priced the drug initially to really maximize the value proposition. Certainly as we go forward in the evaluation process with the payer, obviously there will be ongoing discussions on what the net price will look like, which we haven't given any specific guidance on overall. But I think we -- and we would expect -- there's going to be a group that will come out over the first three months making a decision. There will be another wave probably at six months. And then the last groups will generally make a decision within the first 12 months. And certainly it's our goal to get the majority of patients into tier 2 before the end of the year with either limited or no restrictions.

Does that help?

Yes. Great. Thanks for taking our question.

I think the other comment I'd make is we've had some really positive initial conversations with a couple of the big payers. And I think we're going to hear something here quite quickly. So, we're extremely encouraged.

Awesome. Thanks.

Irina Rivkind, Cantor Fitzgerald.

Just a couple questions following up on the coverage questions. Can you tell us what percent of LINZESS patients are covered by Medicare-Medicaid? And are these patients eligible to participate in your co-pay buydown program? I'll start there.

I think they are not eligible. First of all, no Medicare-Medicaid patient would be eligible for the co-pay buydown. As far as what we currently estimate, our Medicaid-Medicare, we haven't given a lot of guidance. But I think we've consistently said that it's probably 20% or less, based on what we've seen with other analogues including Zelnorm and Amitiza.

Okay. And then just the second question is, Forest reported $19.2 million in LINZESS sales. And I just wanted to understand how much of that was stocking. And also if you would expect sales to take a dip slightly in the next quarter as wholesalers work down the inventory. And also if that $25 million guidance that Forest provided earlier is still realistic. Or are you expecting to do better? Thanks.

Irina, it's Michael. I'd refer you back to Forest specifically for comments about the guidance that they've provided for what will be the remaining portion of their fiscal year. But I'd comment, again, we don't provide the additional granularity. I think you heard in Tom's comments we are enthusiastic about the initial launch. But you know that the accounting methodology for Forest is that they score revenue on an ex-factory basis. So, yes, there is stocking in that number, but we haven't broken out the details below that. And, again, I'd refer you back to Forest on the details for the accounting practices there. But it is on an ex-factory basis, so absolutely there is stocking in there.

Okay. Thank you.

Matthew Harrison, UBS.

Two things. First, you helped us out thinking about sales and marketing in 2013 for the collaboration. Anything you can do to help us think about either directionality or order of magnitude of R&D spend for the collaboration?

And then, secondly, how should we interpret Rx trends over the first few months of the launch, given how heavily that you're sampling? Thanks.

Michael?

Yes. I'll take the R&D spend, and we can decide who to cover the trends. On the R&D spend, Matthew, at this stage we do expect to continue to invest both in our pipeline, as well as in the continued investment in linaclotide globally, and specifically LINZESS in the US. But at this moment, particularly with LINZESS in the US, the team's working out the specifics of the lifecycle management plan. So, we don't have exact guidance on that, but you should anticipate we're going to continue to invest in furthering the opportunity for LINZESS. So, yes, we will continue to invest in that area, but we don't have any specific guidance at this time. The team's working through the plans.

With regard to pipeline spend, we've talked about that in the past, and we do expect to continue to invest in the pipeline at a level similar to what we've done in the past. We'll be talking about progress in the pipeline late this year, and give you a little more detail on that. But we do expect to continue that investment.

I'll cover all that by saying we also -- you should be aware that as we're talking about whether it's R&D or the other expenditures, we obviously -- the way we run the business is to invest on the basis of the opportunity. And we'll be constantly evaluating how the progress is moving forward with LINZESS in the US and Constella in Europe, and making determinations about the magnitude of our investments. But at this stage we are pretty comfortable with that sales and marketing number. And as we get more comfort and more granularity for you guys, we will provide a little more guidance for you in the future, or guidelines in the future. But at this stage that's what we're comfortable with.

And, Matthew, it's Peter. On the question of following scripts, we've been trying to encourage folks for some time that for a launch like this you're really not going to get a good read for at least six to nine months. And that's for a number of reasons. As you heard from Tom this morning, we have 300,000 30-day count early experience kits that have gone out through our sales in Forest to 30,000 physicians. And that is going to have a big impact on early script trends. Also, we're sampling with 4-count samples to now the 85,000 physicians we are calling on together with Forest.

So, to back up just one step, if you think about the profile of our drug, and believe that the clinical trial data that we developed during the development phase reflects the attributes of the product, we have a drug that we think offers rapid and sustained benefit on really bothersome symptoms to millions of people. And as long as they continue to take the drug, they see the continued benefit in their symptoms. And when they stop, their symptoms come back.

And with a product with a profile like that, we've tried to do everything we can with respect to the early days of the launch to maximize the opportunity for patients and physicians to experience the drug, and to minimize any barriers. So, whether that's with respect to these early experience kits or with respect to the way we price the drug, or this early electronic co-pay system, we're trying to make it as easy as possible for patients and physicians to assess the benefit that they might receive from the drug. With all that in mind, some of the early work that we're doing is going to mask, I think, the ability to see how many patients are using and benefiting from the drug until maybe that six- to nine-month window.

The other key element -- and Tom's been educating on this for some time -- is going to have to do with how well and effectively linaclotide and LINZESS transitions what's been an episodic market to a chronic benefit for patients. And in order to see that, you've really got to see refills and patients coming back to stay on their drug. And that's really going to be out probably in the 9- to 12-month window. I think that's a really important variable to watch. And one we won't be able to get a good read on early.

Okay. Thanks. And just maybe as a quick follow-up, can you maybe compare the sampling that you're doing versus what, say, was done with Zelnorm?

Tom, can you take that?

Sure. Thanks for the question. It's reasonably comparable. We're quite a bit heavier on the early experience kits, primarily because we're launching into two indications. With Zelnorm they only had IBS-C, in women only with IBS-C under the [age of 65]. So, we're launching into a much bigger market than Zelnorm did. So, we felt that this level of early experience kits, as well as sampling, was appropriate.

Does that help?

Yes. Thanks very much.

Dave Friedman, Morgan Stanley.

Hi, thanks for taking the questions. Just two quick ones. One is, can you maybe just discuss your gross-to-net assumptions, and the type of rebating you're needing to do and how that will evolve over time? And then the second question is, just for -- if you can maybe just broadly, for a launch and marketing of this type of drug over time, would you expect over time to keep incrementally adding reps and incrementally increasing marketing spend? Or is this something where, as the drug becomes more mature, you wouldn't necessarily need to be investing at the same level or a higher level? Thanks.

Michael, can you take the first part, and then we'll turn it over to Tom?

Yes. On the gross-to-net, we haven't provided granular detail on it, but what we have said is that typical in this space you'd see a range in the 15% to 20% as your estimate for a gross-to-net reduction. So, I think our view is, until we get a little more color on how things play out, it's hard to get any more defined than that. But based upon what we've seen with other products, that range is something that we think is reasonable proxy for the moment.

Tom?

David, this is Tom. As far as the marketing spend and the marketing mix, this is something that we constantly discuss with Forest, and we're collaborating with to basically align on how we're going to inform those decisions moving forward. The good news here is we can make really good data-based decisions with regard to the promotional responsiveness on the physician side. But also the promotional responsiveness on the patient side. So, I think, if it certainly looks like the investment is paying off, or it makes sense to invest more, we'll do that. If it makes sense to reallocate or adjust that investment based on the data that we have in front of us, I think we'll certainly be responsible with the investors' money to make the right decision.

Thank you.

Juan Sanchez, Ladenburg.

A couple of questions. You said that most of the patients go to tier 3. What are the restrictions in the few payers that have restrictions?

Second question is, once most of the patients are in tier 2, the co-payment assistance program is going to still be in place, or you remove that program completely?

Tom, can you take those?

Juan, I didn't quite understand your first question. I got the second one.

You said just a minority of payers have some restrictions to the drug. And what are the restrictions you're seeing?

There's been a few plans where we've seen some [step edits] which require a failure on laxatives. It's basically primarily a check-the-box exercise. It's really the only restriction we've seen thus far. And of course, just to remind everybody that virtually all these patients walking into the physician's office have already tried and failed laxatives. And are certainly not satisfied with the response they've gotten. So, that doesn't seem to be a big burden as far as walking through. But certainly we want as clean of a decision as we can.

And with regard to the automated co-pay assistance program, again, basically the way this works is you set a co-pay and basically cover the difference between what the initial co-pay was set at tier 3 versus $35. So, as we continue the process of contracting and working with the payers to bring that co-pay down to a tier 2 level, it only covers the spread. So, eventually we see this going -- as we work closer and closer with payers, we see this program likely going away over time.

Perfect. One last question, a clinical question actually, on the dyspepsia program. All the secondary efficacy endpoints you're doing, that you measuring the Phase II, are those likely to stay on a potential Phase III? Or the indication is still quite immature, and you need to do a bunch of work for the validation of the endpoints in the future?

Hi, Juan. This is Mark Currie. Thanks for the question. It's an early proof-of-concept study. And at this point, it's more exploratory endpoints, looking at a number of the different symptoms that these patients suffer from. As you're aware, they suffer from early satiety, nausea, upper abdominal pain, fullness, bloating. All those types of symptoms we're exploring, and trying to understand better what effect GC-C agonists -- in this case, 9179 -- that's in the proof of concept, would have on those symptoms.

Perfect. Thank you, guys.

Rachel McMinn, Bank of America.

I just wanted to follow-up on the expense guidance, the $250 million to $300 million. Thanks for giving that. The question is, as you think about beyond 2013, is that a high watermark, where you would expect launch expenses to decline over time? Or is that something that is steady or you build a base from? Thank you.

Rachel, it's Michael. Tom commented a little bit on the general trends, but let me comment on it this way. We think that this is the appropriate number for launch year. We think we've got the right team in place from a sale's perspective, and the investments that we anticipate on the non-sales commercial expenditure. We feel it's right for the launch year.

The mix of those two that we'll see going forward, I think really will be determined by the joint team in terms of, as they analyze the data and determine whether or not we're having an effect in one versus the other. But I think as a placeholder as we go forward, we do anticipate this as a significant launch. And that we do expect we are going to have to make significant investments on an ongoing basis. So, I think it's a reasonable proxy going forward. But I think it's the mix that we will be providing a little more education on as we go forward.

I think we'll be learning ourselves, as Tom alluded to earlier. So, we're going to watch it; we're going to make sure we make the right types of investments. But I think it's a good range to use on a go-forward basis, as well. And we'll adjust that, obviously, as the business dictates. But given our assumptions today, we feel it's a reasonable assumption on a go-forward basis, as well.

And then, have you said, on sampling, how long is typical for the type of sampling that you're doing? Is it like a six-month program, something that would last the entire year, or something you'd pull back over the course of the year? Thanks.

Tom, can you address that, both on the early experience kits and on the ongoing four-count sampling?

Yes, sure. First of all, thanks for the question. As far as the early experience kits, we certainly see this as a bolus to get a real robust, meaningful assessment for physicians and patients on the performance of the drug. So, we see the early experience kits coming in and coming out fairly quickly.

As far as ongoing sampling, I think what we do know is the number one driver for certainly physician behavior, as well as patient acceptance, is the observation that people are actively responding to the drug. And certainly every new patient -- many of those patients get started on samples. And certainly when you look at other highly successful, highly symptomatic launch analogues, the sampling strategy is core to the overall strategy of the drug. So, we certainly see ourselves sampling significantly over time as the drug becomes more and more successful.

Okay. Thank you.

Rachel, if I can add just one quick comment. It's Peter. With respect to primary care launches in general, I think we all know that primary care launches haven't been particularly great over the last five or six years, by and large. And there is this not untypical $250 million to $350 million investment in most primary care launches. What I think people sometimes forget is that's about the amount of ongoing expense for a primary care product, whether it is a $400 million product or a $12 billion product. So, the kind of leverage that primary care products can get when they are drugs like Lipitor or Advair or Nexium or Prilosec can be pretty terrific when you really help millions of patients.

Okay, great. Thanks for the color.

Greg Wade, Wedbush.

Thanks for taking my questions. Tom, with respect to your sales force's access to physicians, how are you tracking effectiveness metrics? It's a new era in terms of a salesperson's access to face time with the doctor. I was wondering if you could give us some sense of the percentage of success with both the PCP and specialist sales force -- or specialists.

And then with respect to this early access sample, is there some methodology by which you're capturing the inventory in the sample cabinet for those EAPs? Thanks.

With regard to the performance, obviously we'll be tracking calls versus, obviously, physician prescribing. Which is obviously the obvious promotion response of the promotional effort versus productivity of the prescriber. Which I think is certainly the traditional way in which it's looked at. We're going to be looking at some additional things as well, as we're better educated on how well they respond over time. And certainly the physician level audit data is far more precise than what we had in the past. So, we think we can get a pretty good idea pretty quickly as far as how well the physician is responding to the educational efforts, the sampling efforts, the educational efforts that we're providing to them.

As far as -- Greg, the second question, could you repeat?

Yes. Just with respect to the first, is there an established success threshold in terms of actually getting face time with the physician that you're targeting in those two environments? It is difficult for salespeople in this era to get in front of the doctor in the office. So, I'm curious as to what you think is going to happen and what you're actually seeing in terms of that performance.

And then the second question is with respect to the early experience kits. Is there a formal way in which the inventory of those is being captured on a, say, weekly basis within the sample cabinet where they're being deposited? Thanks.

Let's take the second one first and let's come back to the first question. As far as monitoring the inventory, it's very difficult to do, as you know, to keep track of what's coming and what's going. We can certainly tell you what's being put in there. And obviously the representatives are trying to get into the sample closets and really audit what is the level of inventory in the office. But obviously that varies from office to office. So, we're going to try to minimize that inventory as much as possible. But, again, it really depends on -- can we get access to actually visibly evaluate and observe what that level of inventory looks like?

As far as access to the physician, which is a great question, and this is one of the real powering strengths that we've seen in the past with Forest with regard to their ability to access primary care physicians in a very, very effective way. So, I think, we'll obviously be leaning on their support of primary care. What we're seeing from our sales force thus far is they're being accepted extremely well. We've seen very few turnaways, particularly in the GI community. The GI community seems to be extremely interested in LINZESS. As I mentioned earlier, we're engaging in lengthy discussions. We've already had follow-up requests for samples and early experience kits.

And then we also have Nexium, which will be another value driver for time with the physician. We think it will even additionally broaden our access not only in gastroenterologists, but primary care physicians. So, I think everybody's challenged with the difficulty of seeing busy PCP and GI physicians, but thus far it looks very encouraging. And as long as we continue to bring value in terms of education, and certainly samples and other resources, hopefully we can maintain that level of access with the healthcare professionals.

Thanks, Tom.

And with no further questions at this time, I would like to turn the conference back over to management for any closing remarks.

Thank you, Ellie, for your help this morning. And thanks to all of you for joining us to discuss fourth-quarter and recent highlights. We'll be around here the rest of the day if you have additional questions. You can reach us through Meredith. And that should be available on the press release. Thanks again for joining us. We appreciate it.

Ladies and gentlemen, this does conclude today's conference. You may all disconnect. And have a wonderful day.