Jazz Pharmaceuticals PLC (JAZZ) 2009 Q2 法說會逐字稿

Good day, ladies and gentlemen and welcome to the Second Quarter 2009 Jazz Pharmaceuticals Incorporated Earnings Conference Call. My name is Tony and I'll be your operator for today. At this time, all participants are in listen-only mode. We will conduct a question-and-answer session towards the end of this conference. (Operator Instructions).

I would now like to hand the call over to Mr. Willie Quinn, Executive Director of Corporate Development of Jazz Pharmaceuticals. Please proceed, sir.

Thank you, Tony. Good afternoon, everyone. Welcome to our Second Quarter 2009 Financial Results Conference Call. Joining me on today's call are Bruce Cozadd, Chairman and CEO, Bob Myers, President, and Dr. Diane Guinta, Vice President of Clinical Research and Development.

We are very pleased with the recent performance of our Company and we have a lot of ground to cover today. Bob will start today's call by providing an update on the significant progress in our commercial activities, including the strong performance of Xyrem. Diane will discuss the promising results from JZP-6, our ongoing Phase III Program to develop sodium oxybate for the treatment of fibromyalgia. Bruce will discuss our financial results and current financial position and conclude with financial guidance for the rest of 2009. Following our prepared comments, we will open up the call to q-and-a.

Our second quarter financial results were disclosed in a press release issued earlier today. Our Form 10-Q for the quarter ended June 30th, 2009 will be filed this week. We will also soon file a Form S-1 registration statement with the SEC covering the shares we issued in early July, and the shares issuable upon exercise of the warrants issued in that transaction to funds affiliated with Longitude Capital, in connection with their $7 million investment in the Company. These documents will be available on our corporate website.

Remarks that we may make today on this call about future expectations, plans and prospects for Jazz Pharmaceuticals constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and our actual results may differ.

I'd now like to turn over the call to our President, Bob Myers, for a commercial update.

Thank you, Willie. I'll start this afternoon with an update on the progress of our two commercial products, Xyrem and Luvox CR. In the second quarter, once again, we had a record breaking quarter for Xyrem. Xyrem net sales for the second quarter were $22.4 million, which was an increase of 26% compared to the first quarter of 2009.

In the second quarter, our sales team set quarterly records in terms of the number of Xyrem prescriptions filled, the number of Xyrem bottles shipped to patients, and correspondingly, Xyrem sales. During the quarter, we shipped more than 51,000 Xyrem bottles to patients in the United States. This was an all time record number of Xyrem bottles shipped in a quarter and represents more than a 6% increase over the first quarter of 2009.

During the second quarter, our Xyrem sales results included approximately $1 million of international Xyrem net sales, resulting from our Xyrem shipments to our ex-US partners, those partners being UCB Pharma and Valeant. In addition to continued increased in Xyrem volumes and Xyrem prescriptions in the second quarter, our Xyrem sales results also reflect the impact of a price increase of 27%, which was effective on May 15th.

Also in the second quarter, as part of our Company's ongoing commitment to patients, we implemented a new co-pay assistance program which provides eligible patients with reduction to their monthly Xyrem co-pay of up to $150 per month. In addition, we continue to have our separate and important patient assistance program for our Xyrem patients. Under this program, our Company provides Xyrem at no cost to patients with financial needs.

For new Xyrem patients, we also have our voucher program which provides these patients with their first month of Xyrem therapy at no cost. In combination with other important patient support platforms, including programs such as our dedicated nursing hotline at our centralized pharmacy, with experienced nursing staff available to counsel patients on how to effectively and safely take their Xyrem medication, these substantial patient assisted efforts reflect the significant and growing commitment at Jazz Pharmaceuticals to take meaningful steps to help narcolepsy patients improve their lives with appropriate Xyrem treatment.

Now, moving next to Luvox CR. Our sales and marketing efforts to educate psychiatrists on the appropriate use of Luvox CR to treat OCD patients and SAD patients are having a positive impact. Reported IMS of weekly prescriptions of Luvox CR continue to grow. We are now seeing consistent total prescriptions of Luvox CR in excess of 2,000 prescriptions per week. For the second quarter of 2009, reported net sales of Luvox CR on a sell-through accounting basis were $4.1 million. This amount represents an increase of 14% over the first quarter of 2009.

We believe our strong performance in the prescription growth and sales growth of Xyrem and Luvox CR is attributable to the tremendous efforts of our team of specialty sales consultants in combination with our talented home office commercial team. Our sales force of 110 specialty sales consultants is successfully reaching our appropriate physician audience, resulting in prescription growth in our approved indications for Xyrem and for Luvox CR.

We are also seeking to leverage our commercial expertise with new promotion opportunities for third party's products. Ideally, a new co-promoted product for our sales force would dovetail with our current sales call patterns to our core target physician audience of sleep specialists, neurologists and psychiatrists.

To wrap up my comments today, we are very pleased with our record sales this quarter of both Xyrem and Luvox CR, which totaled $26.5 million in the second quarter. Looking forward, we continue to be optimistic about the future growth of our products.

Today, we are providing guidance for net sales of Xyrem for full year 2009 in the range of $85 million to $90 million, in guidance for net sales of Luvox CR in the range of $15 million to $18 million for the same time period. This guidance, therefore, brings total net sales for Xyrem and Luvox CR in the range of $100 million to $108 million for 2009. This range represents growth of approximately 70% to 80% compared to net sales of these products in 2008.

I'll now turn the call over to Dr. Diane Guinta, our Vice President of Clinical Research and Development to provide you with an update on our recent positive news on our JZP-6 program in fibromyalgia.

Thank you, Bob. JZP-6 is our late-stage development program evaluating sodium oxybate for the treatment of fibromyalgia. We have now completed two Phase III trials and one Phase II trial, all of which were successful trials. On this call, I would like to review the status of our JZP-6 program and briefly discuss some of our top line results. All the date must be reviewed by the FDA and EU regulatory authorities to determine the overall risks and benefits for the product use in fibromyalgia.

Fibromyalgia is a very complex condition, characterized by a number of symptoms, including pain, disrupted sleep, fatigue and stiffness. For this reason, our clinical development program was designed to gather data on numerous secondary endpoints, in addition to the primary endpoint measured by the pain visual analog scale, or VAS. Today, I will discuss some of those endpoints at a high level. We will present more detailed about the trial results, including secondary endpoints, at medical meetings over the next several months and in professional journals.

I'll start by describing the endpoints I'm going to discuss today, which include the pain VAS, the FIQ, the fatigue VAS, the PGIC and the Jenkins Sleep Scale. The pain VAS is a simple visual analog scale that assesses pain on a 100 millimeter line ranging from no pain to worst pain imaginable. The fibromyalgia impact questionnaire, or FIQ, is a 100 point questionnaire that measures physical functioning and ability to perform daily tasks.

The fatigue VAS is a visual analog scale for fatigue, similar to the pain VAS. The PGIC is the Patient Global Impression of Change, a seven-point scale ranging from very much worse to very much better. Finally, the Jenkins Sleep Scale is a 20-point questionnaire that measures sleep problems, such as trouble falling asleep and trouble staying asleep.

All of the data I will discuss today uses the Baseline Observation Carry-Forward or BOCF statistical technique. This approach, which is a conservative technique, imputes missing data for patients who drop out during the trial by assigning their baseline data to their missing visits. BOCF is the technique currently preferred by the FDA review division responsible for approving drugs for the treatment of fibromyalgia.

For our Phase III trials, the primary endpoint measures change in pain from baseline using the pain VAS. It was selected because the US and European regulatory agencies have indicated this as a meaningful -- clinically meaningful endpoint for fibromyalgia.

In addition to the pain outcome measure, the European regulatory agencies have requested data on improvement in physical function and ability to perform daily tasks as measured by the FIQ as a co-primary endpoint. I will focus my comments today on the results of the two Phase III trials, which are characterized by clinically meaningful and statistically significant results, and which echo the positive results of our earlier, smaller Phase II trial.

In our first 14 weeks Phase III trial in 548 fibromyalgia patients, the primary endpoint was the proportion of patients who achieved at least 30% reduction in pain from baseline to the 14 week endpoint based on the pain VAS. At the 4.5 gram per night dose, 46.2% of patients achieved at least a 30% reduction in their pain VAS scores, with a P-value of less than 0.001. At the 6 gram per night does, 39.3% of patients achieved at least a 30% reduction in their pain VAS scores, which a P-value equal to 0.015. In contrast, only 27.3% of patients receiving placebo reported a reduction in pain VAS of at least 30%.

In our second 14 week Phase III trial, we used the same endpoint. This trial differed from the first trial in having patients from seven European countries. A total of 573 patients were randomized to one of the three treatment arms. At both the 4.5 gram per night, and 6 gram per night doses, 35% of patients achieved at least a 30% reduction in their pain VAS scores and the P values were less than or equal to 0.001. In contrast, only 20% of patients receiving placebo reported a reduction in pain VAS of at least 30%.

Next, I'd like to review the results we've seen for some of the secondary endpoints in the Phase III trials. I'll start with the proportion of patients showing at least a 30% improvement on the FIQ. The second Phase III study showed a highly statistically significant difference from placebo with P-values of less than 0.001 for both doses. The first Phase III study showed significance for the 4.5 gram dose, but just missed significance with a P-value of 0.062 at the 6 gram dose.

Next, I'd like to talk about fatigue as measured by the fatigue VAS. Both studies have shown a statistically significant difference from placebo for both doses. In the most recent Phase III study, the fatigue VAS mean change was significant at both dose levels with P-values of less than 0.008.

The third secondary endpoint I will discuss is the PGIC, a standard self-reported tool that measures the change in a patient's overall status. Once again, both studies have shown a statistically significant difference from placebo for both doses. In the most recent Phase III study, the proportion of patients who are very much better or much better was significant at both dose levels with P-values of less than 0.005.

Finally, I'd like to briefly mention the Jenkins Sleep Scale. In the first Phase III study, patients taking sodium oxybate 4.5 grams per night and 6 grams per night, showed significant improvement in sleep patterns compared to placebo as measured by the Jenkins Sleep Scale with a P-value of less than 0.001 for both doses. Both doses in the Phase III trial also demonstrated a highly statistically significant improvement in sleep patterns.

These secondary endpoints are not required to obtain FDA approval in the US, but they may provide important information about the efficacy of sodium oxybate in the treatment of fibromyalgia. We are currently conducting an open label safety and efficacy continuation study for patients who have completed either of the Phase III trials to gather additional data on safety and maintenance of effect. This study is up to 40 weeks in duration, during which all patients will receive sodium oxybate for up to 38 weeks, and is ongoing.

Throughout our trials, adverse events were similar to those seen in previous experience with sodium oxybate. In the Phase III efficacy trials I have just described, the most common adverse events reported with incidences greater than or equal to 5%, and at least twice the rate of placebo in either trial, were headache, nausea, dizziness, vomiting, insomnia, diarrhea, anxiety, somnolence, fatigue, muscle spasms, peripheral edema and sinusitis. Most adverse events reported in the trials were mild to moderate in severity.

We wish to thank our investigators for conducting such high quality trials and I'd like to recognize the extraordinary efforts of our project team in conducting these clinical trials. The regulatory authorities have not yet reviewed these data, and we do not have an indication for the use indications with fibromyalgia. We expect to submit a new drug application to the US Food and Drug Administration by the end of 2009.

I will now turn the call over to our Chairman and CEO, Bruce Cozadd, who will discuss our financial results.

Thanks, Diane. Good afternoon, everyone, and thanks again for joining us. 2009 has already proven to be a transformational year at Jazz Pharmaceuticals. Our mission continues to be to help patients by developing and commercializing valuable pharmaceutical products. We have full commercial capabilities, including 110 sales territories covering the United States, and our R&D organization is staffed to support our ongoing JZP-6 activities and partnering activities for our other development programs.

Total revenues for the second quarter were $37.3 million. This included a significant non-cash item, a $10 million milestone payment from UCB, which was received in 2008 and recognized as revenue this quarter when the final patient completed the second Phase III trial for JZP-6. Net product sales for the quarter were $26.5 million, an increase of 24% over the first quarter net product sales of $21.3 million, and represent a 79% increase over second quarter 2008 net product sales. Our gross margin for the quarter was 90%, in line with our first quarter 2009 gross margin of 91%.

As Bob detailed earlier in the call, our growth and revenues was lead primarily by the continued growth of Xyrem in prescriptions as well as in net sales. Operating expenses in the quarter of $29.2 million were less than 50% of second quarter 2008 expenses, reflecting the results of our ongoing efforts to control costs.

Research and development expenses for the quarter were $11.2 million, which is slightly lower than R&D expenses in the first quarter of 2009, but represents a 49% reduction compared to the second quarter of 2008. Selling, general and administrative expenses for the quarter were $13.7 million, which is also slightly lower than the first quarter SG&A expenses, and represents a 60% reduction compared to SG&A expenses for the second quarter of 2008.

I'd like to highlight our cash flow for the quarter. We used only $1 million net cash in our operating activities for the second quarter of 2009. We ended the quarter with $15.8 million in unrestricted cash and cash equivalents. As we've earlier disclosed in July 2009, we paid all our accrued interest on the senior secured notes as of June 30th, 2009 for a total of $14.6 million and also raised $7 million in a private placement.

We believe we've cured all material defaults under the agreement governing the notes and that the lenders do not have the right to accelerate repayment of the senior secured notes, and that we will be able to comply with the agreement on an ongoing basis. We believe we have sufficient cash to operate the business and meet all of our obligations.

Looking forward, today we are giving full year 2009 guidance of $112 million to $122 million for total revenues, which includes the net sales guidance Bob mentioned of $85 million to $90 million for Xyrem and $15 million to $18 million for Luvox CR. We expect our gross margin for the second half of the year to be in the same range as we've seen for the first and second quarters of 2009. Contract revenues and net royalties are expected to be between $12 million and $14 million for the year.

We believe SG&A expenses will remain at about $14 million per quarter for the remaining quarters of the year, while R&D spending may decrease slightly for total R&D expenses for the year of $35 million to $45 million. Our EBITDA, or earnings before interest, tax, depreciation and amortization, is expected to be positive for the full year 2009. GAAP net income is not expected to be positive for the full year 2009. To summarize our financial situation, we're excited about the long term prospects of the Company in light of our growing revenues and tightly controlled expenses.

Let me conclude by emphasizing a few points. First of all, when you annualize our second quarter results, Jazz Pharmaceuticals is at a run rate for net product sales well in access of $100 million and growing. Second, we continue to see gross margins in excess of 90% and should have positive EBITDA for the year. Finally, our JZP-6 program has produced robust and positive data from two Phase III studies and a smaller Phase II study, and we plan to submit an NDA for JZP-6 by the end of this year.

That will conclude our management team update on the second quarter. Thanks for your attention, and let me now turn the call back over to the operator to begin the q-and-a portion of our call.

(Operator Instructions)

And your first question comes from the line of Gary Nachman of Leerink Swann. Please proceed.

Hi, good afternoon. First question, are you guys having any partnership discussions on JZP-6 for fibro, or do you plan on just taking that forward yourselves?

So, Gary, this is Bob Myers. I would remind you, first of all, that we do have an existing relationship with UCB Pharma for the fibromyalgia program in Europe and in a number of countries outside of North America. As far as the United States, we're currently looking at the market and how it's evolving, and watching the launch of Savella in the United States and how it's progressing.

Our current plan is that we will launch JZP-6 ourselves to the specialty market. That's an audience that we feel that we can handle ourselves with a very targeted sales force, and we're currently evaluating the opportunity to bring on a partner for the primary care audience. And those are discussions that we'll have underway between now and launch.

Okay, and if you target the specialty market, I'm assuming you could do it with the current sales force, that you wouldn't need to add additional reps for that?

We're certainly covering the neurologists, sleep specialists and psychiatrists at this time. As you probably know, the fibromyalgia market does include some other groups of physicians who are important for writing prescriptions for fibromyalgia, but those are relatively targeted and relatively few numbers of doctors. Thinking about rheumatologists and pain doctors, you know that a large rheumatology sales force may be 50 to 100 people. We're looking at a very small expansion of our sales force to something that we could handle currently with our 110 with an expansion of that team.

Okay, and what types of restrictions are you anticipating for this indication above and beyond what you currently have for Xyrem, and have you thought about a REMS program and what the FDA may look for on that front?

So, we have not had discussions with the FDA. Obviously, at this point we've not submitted the NDA. We do feel that REMS for Xyrem has been very effective and we've seen really no instances of the things that the FDA was concerned about. So, I think that's something that we'll have dialogue with the FDA as we get closer to approval.

Okay, then maybe this for Bruce. The 2009 revenue guidance of $112 million to $122 million, I'm assuming that includes the $10 million UCB payment, the non-cash payment?

Yes, it does, both the total revenue number as well as the contract revenue and royalty guidance I gave you.

Okay, and are you expecting to achieve GAAP net income profitability next year the way your modeling things out right now?

That's a tempting question to answer, Gary, but I'm going to say we're not giving 2010 guidance at the moment.

Okay, and then, last question. I mean, you took a huge price increase on Xyrem, 27%. What sort of pushback do you get if at all on that kind of price increase and how much more pricing flexibility do you have with that product? Thanks.

That's a great question, Gary, and in terms of what we've seen from the marketplace, we have seen very limited response to price increase. The centralized pharmacy and the Company has received individual phone calls from patients or physicians, but it has been rather quiet I'll tell you. Our sales -- our managed care team, our health systems team has done a very nice job working with managed care to get favorable reimbursement status for Xyrem.

And the vast majority of our patients have a fixed monthly co-pay, so the amount of money that a patient pays out of pocket each month does not change with the price increase. I didn't mention our co-pay assistance program, so for those very small percentages of patients who are affected, we have put in place a program to help those patients financially.

Okay, thank you.

Thank you.

And your next question comes from the line of Richard Silver of Barclays Capital. Please proceed.

Good afternoon. Just on back on Xyrem, the new co-pay assisted program that you mentioned, so if I heard correctly, the vast majority of patients do have that benefit?

So just for clarity, Rich, what I said the vast majority of patients have a fixed co-pay, so their co-pay does not change as price increases. So, over 90% of our patients have a fixed co-pay. We have a small percentage of patients, it varies month to month, 3% or 4%, who have what is known as co-insurance, so they pay a percentage of the cost of the medication.

With this new program we put in place, most of those patients actually saw a decrease in their co-pay going forward. And we do have a very small percentage of patients who are cash-pay, are self-insured, and those patients do have the full benefit of a $150 deduction in their co-pay each month.

Okay, and then on the R&D guidance, it looks like the second half would see an increase from the first half, and just maybe you can elaborate on what additional expenses there would be in the second half that wouldn't be seen in the first?

Yes, so Rich, if I said that, I misspoke. The guidance for the full year is for $35 million to $45 million. We reported expenses for each of the first and second quarter slightly above $11 million per quarter. So, if we kept spending at the same rate, we'd end up at the upper end of the $35 million to $45 million range. If expenses come down somewhat, which is what we're projecting given where we are in our JZP-6 program, having completed both of our pivotal Phase III trials, then we would expect to come in lower in that $35 million to $45 million range.

Okay, and then a question on the primary endpoint for the JZP-6 Phase IIIs, can you explain perhaps why the 42.6% rate seen in the first study versus, and I know that was at the 4 gram dose, the 39.3% at the higher dose, and then the 35% rate seen in the second Phase III, which I know you didn't break out the two doses, what would have accounted for that difference between the two studies?

Hi, this is Diane Guinta. It's typical in studies of this nature that the placebo rate and the response rate vary, and the factors that go into that are -- could be simply based on the fact that there are different sites. What I would say about the rates that we've reported is that they are within the range of what has been seen across all the fibromyalgia studies that have been done for the other approved products. So, there's nothing particularly unusual about these results.

Okay, and then in the contract revenue and royalty guidance for the year, are you expecting any other payments in the second half of note?

No, Rich, so we have the $10 million payment we recognized in the second quarter. If you back that out, I think you'll see a level of net royalties and contract revenue that's fairly consistent to quarter to quarter, and we'd expect to see that again in the third and fourth quarter, perhaps allowing for some growth of royalties as UCB's ex-US sales of Xyrem for narcolepsy continue to increase.

Okay, and then on Xyrem, I know that historically the inventory levels of the trade have been relatively low. Any fluctuation of note first quarter to second quarter?

Hey, Rich, it's Bob again. So, just to remind you, given the fact that we have a centralized pharmacy, this product's a little bit different. We don't have inventory that builds up on wholesalers. Product is shipped directly from our centralized pharmacy to patients. So, there's really no fluctuation first quarter to second quarter at all.

So, what you're seeing reflected in our booked revenues, Rich, is actually shipments that correspond to prescriptions being filled, so there is no impact of changing levels in the distribution chain.

Okay, and then, I know you're not likely to give any guidance beyond '09, but anything you can tell us about milestones, even qualitatively, beyond '09?

No. I think the way to think about the Company financially right now is we've got a nicely growing top line with a high gross margin, so increases in sales definitely do flow through to operating income with an expense line that is relatively constant at this point. But for the potential decreases in R&D as we move through the heaviest spend portion of this JZP-6 program. So, I think you should see growth in revenues, and growth in a bottom line performance for a series of quarters now.

Other milestones for us are certainly the submission of a NDA for JZP-6 at the end of this year. And then, as we move through the regulatory process on JZP-6, obviously, we'll start getting closer to the time when we're going to make decisions about spending in conjunction with any commercial expansion and launch of that product. But that, at this point, is probably a little too early to comment on.

And when does the JZP-6 open label study conclude?

So, why don't we turn that over to Janne Wissel, our Chief Regulatory Officer?

I would expect that study to conclude in the first quarter of 2010.

Okay, and then also, just back to the question and the answer on the sales force expansion. Did I hear correctly that you have no plans to expand, and that basically any expansion would be using a partner for a different target physician audience?

Rich, this is Bob again. What I'd like to say is that we're going to evaluate the expansion of our sales force to cover the specialty audience. And that may involve an increase in our sales force, but it'll be a fairly small increase, the size of the sales force. The more major market, in terms of sales force for primary care, we'll look to find and try to evaluate whether a partnership makes sense for that market, but we're not going to do that ourselves.

Okay, and there's just one more on the debt holders and whether they had agreed that all the material defaults have been cured, as you believe?

So, Rich, that's our position. We frankly haven't asked the lenders whether they agree with that position and we laid out our thoughts in the 8-K we filed back at the time of the repayments. There was little language in our press release and our script today and I'm sure there'll be more in our 10-Q when we file it.

But I think we saw two primary issues to clear up under our note agreement, one I highlighted most specifically in today's call, which was achievement of repayment of all of the past due interest including at default rates where appropriate. And the second, which we didn't go into in detail here, was achievement of $100 million net sales and royalties run rate based on most recent quarterly results, which allowed us to not have to keep a large restricted cash balance, which is a provision of our note agreement. So, those were the two things that we felt we needed to clear up, and both of those were accomplished in early July.

And then, okay, this is the last question. Just on publication presentation of the data, can you give us some sense of what are the possible meetings that you could be presenting, and whether you actually expect the data to be published or just submitted for publication this year?

This is Diane Guinta again. So, we will be presenting the results from the first clinical trial at three meetings this fall, the American Academy of Pain Medicine -- I'm sorry, the American Academy of Pain Management, at the American College of Rheumatology Meeting, and at the US Psych Congress. And in addition, we will be publishing the data. We will submit a manuscript.

Okay.

For the second trial, we have plans to present that data, either in late 2009 or at a series of medical meetings in early 2010.

Okay, thanks.

And we have similar plans, of course, to publish the data.

All right. Thank you very much.

(Operator Instructions).

And your next question comes from the line of Corey Davis of Natixis. Please proceed.

Thanks very much. The first question is how much evidence do you think there is to support the mechanism by which Xyrem is going to improve fibromyalgia, and secondly, do you think that's a dumb question because it's not going to matter now that you have clinical data?

I think it's actually an excellent question, and it's a question on which we are working with leaders in the community. As you might imagine, there may be a direct mechanism by which sodium oxybate works in pain that has to do with central pain processing. And there can also be an indirect mechanism that has to do with sleep. But in either case, what we would speculate is just that. It's speculation on the mechanism of action, and what will be included in the label is based on the evidence that we've generated on pain and other endpoints, as agreed to by the regulatory agencies.

Okay, in terms of the data, and now that we've seen probably enough to convince that it's an approvable drug, and maybe have a pretty good idea of what's going to be in the label, in knowing what you know about how Savella and Lyrica and Cymbalta have been successful, or not so successful, how do you envision that docs are going to be able to talk to patients about what fibro can do, either differently than those drugs, or in addition to, in terms that do not get so bogged down in the somewhat complicated endpoints that you used from these studies?

So, Corey, this is Bob just to answer that question. One of the things that you're well aware of that we have three products that are approved so far in the United States, Lyrica and then two SNRIs. The theme that we clear from us is that we're going to come to this with a different angle. We are not an SNRI. We don't come from the Gabapentin or Pregabalin background. And physicians are very much used to treating fibromyalgia patients with a number of agents.

And as we've talked to thought leaders, certainly mood is one angle, but sleep and pain are the other angles, and we think that we'll be a relatively unique agent in terms of hacking the sleep disturbances, which almost every fibromyalgia patient you talk to suffers from to some degree. It varies, obviously, patient by patient. So, we do think that we're going to be a unique agent that we can show, not only reduction in pain as through our clinical trials, but this impact on sleep through some of these secondary endpoints that Diane mentioned. So, we do think we're going to have a unique profile compared to the other agents.

You think those sleep endpoints will end up in the label?

I'd rather not even start down that path, Corey.

Fair enough. And the last question would be what's the revenue point at which Luvox CR becomes profitable, if it's not already?

So this is Bruce, Corey. You and I have chatted about that a couple times. It all depends on what's your measure of profitability is. Are you talking marginal profit? Are you trying to allocate costs equally among products? How are you thinking about it? As we think about that product on a marginal basis, meaning are we better off selling the product or not selling the product? We believe we are better off selling the product.

First of all, we think it is a good product for patients with OCD and SAD. We are seeing increased utilization of the product. We are confident that having a sales force of 110 territories gives us the right reach and frequency to sell our two products currently and as Bob mentioned earlier in the call, perhaps to think about additional ways we could utilize our sales force going forward.

And we, starting toward the end of the fourth quarter last year, very much scaled back our investment in the product to reflect what we thought its prospects were, and feel that we are operating according to that plan in 2009. So, it's not, obviously, the largest driver of revenues or growth to the Company right now, but nor is it a major driver of our costs. And so, looked at in that fashion, we think it's a positive addition to the Company.

Okay. So, in other words, it wouldn't be accretive if you stopped selling it because you could get rid of more expenses than revenues?

Without going into a highly specific calculation, yes, I think that's about correct.

Thanks very much.

With no further questions in the queue, I would now like to turn the call back over to Mr. Willie Quinn for closing remarks. Please proceed.

Thank you for your participation in today's call. We look forward to keeping you updated on our progress. Have a great day.

Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Have a great day.