Ligand Pharmaceuticals Inc (LGND) 2012 Q4 法說會逐字稿

Greetings and welcome to the Ligand fourth-quarter earning conference call.

At this time all participant are in a listen-only mode.

A brief question and answer session will follow the following presentation.

(Operator Instructions)

As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Jennifer Capuzelo, Investor Relations for Ligand.

Thank you, Jennifer.

You may now begin.

Thank you.

And welcome to Ligand's fourth-quarter financial results and business update conference call.

Speaking today for Ligand are John Higgins, President and CEO; Matt Foehr, Executive Vice President and COO; and John Sharp, Vice President of Finance and CFO.

As a reminder, today's call will contain forward-looking statements within the meaning of federal securities laws.

These may include but are not limited to statements regarding intent, belief, or current expectations of the Company, its internal and partner programs including Promacta and Kyprolis, and its Management.

These statements involve risks and uncertainties, and actual events or results may differ materially from the projections described in today's press release and this conference call.

Additional information concerning risk factors and other matters concerning Ligand can be found at Ligand's public periodic filings with the Securities and Exchange Commission, which are available at www.SEC.gov.

The information in this conference call related to projections or other forward-looking statements represents the Company's best judgment based on information available and reviewed by the Company as of today, February 13, 2013, and do not necessarily represent the views of GSK, Onyx, or any of our other partners.

Ligand undertakes no obligation to revise or update any statements to reflect events or circumstances after the date of this conference call.

At this time I'd like to turn the conference call over to John Higgins.

John?

Jennifer, thank you.

Thanks for joining our call and welcome.

2012 was a transformational year for Ligand and truly an outstanding one, as well.

We turned profitable and cash flow positive on an operating basis in the fourth quarter.

We had strong business execution and good management of operations, and we enjoyed a remarkable series of highly significant and positive developments for the Company.

Fourth-quarter financial performance was especially strong, and John, our CFO, will go into that in more detail in just a moment.

You'll see in our reported financials, GAAP accounting requires us to record a noncash charge for the estimation of a CVR liability.

Now the amount of the contingent expense has gone up due to the increased positive outlook for particular assets.

But I want to be clear, it has no impact on Ligand directly.

Accordingly, we are helping investors and analysts understand our true operating performance by backing out those numbers.

Now, over the past 12 months, we have evolved from a smaller, lesser known under-followed Company, to a Company that we believe has a true leadership position in the small cap biotech financial markets.

We are on the map.

I've been at Ligand now for six years, and candidly I can tell you I have never been more excited or confident about our prospects in future.

If you're on this call, you most likely already known our story.

While we possess some highly attractive revenue and pipeline assets, what is most compelling about our Company is our business model.

This is a financial growth Company first.

It's built upon a biotech and pharmaceutical programs and it's a Company dedicated to minimizing the risks and costs associated with typical biotech businesses.

Now we held an analysts day in New York in December.

If you have not seen those slides yet or the presentation, I encourage you to study them.

They share our business philosophy and vision for the future.

The core of our message is that a company has not created real value until it has created sustainable cash flow and profits.

We think we're at a point in time where we have a very compelling and unique story.

When we look at our projected income statement, there are five elements that stand out.

First, the business financials are built around a strong and diverse revenue base.

Our main revenue drivers for Ligand over the next few years are Promacta royalties, Kyprolis royalties, Captisol material sales, and deal revenue.

But our revenue growth potential is underscored by the fact that we actually have seven products generating royalties for us today, with a potential for six more royalty-bearing products to be approved in the next three years.

Second, we enjoy high gross margins, nearly 90% gross margins across all of our revenue on an average basis.

Accordingly, for every $1 of revenue, about $0.90 passes through our income statement.

Third, our expenses are low and very well managed.

Now if you exclude noncash expense, we anticipate spending only about $20 million to run our entire Company this year.

I will add we are running a substantive and complex business.

One key to our low cost is we only have 21 employees.

This is a very hard working and a highly productive team.

Now fourth, another standout factor with our financials is we have extremely lucrative tax assets.

They're valuable to Ligand partly because it is a big number.

Nearly $0.75 billion of gross tax assets.

But mostly they're valuable because we are now turning profitable, so expect to use these tax assets immediately.

And fifth, another strength of our financial story is that we have a low base of shares, about 20 million outstanding, which means today for about every $20 million of net income, that translates to $1 in EPS.

Few shares mean as we drive profits there will be attractive profits attributed to each share.

Ligand is in a great place at a great time.

We believe we have good visibility on the business over the next couple of years, and as a sign of our success and growth, we are now looking to invest and add even more assets to the Company that can help us continue to drive our growth after the next 10 years.

I'll now turn it over to John, our CFO, to review some highlights.

Thanks, John.

I will begin by discussing a few of the highlights from our earnings release, and then also cover a few other topics related to the financial health of our business.

As you saw from our press release, revenues for the fourth quarter were $13.6 million, up from $12.9 million last year, and slightly better than our expectations, as we reported full-year revenues of $31.4 million compared to our guidance of $30 million to $31 million.

Royalty revenues were higher on continued strong growth of Promacta.

Material sales and license and milestone revenues were down slightly compared to last year due to timing of shipments and milestone events.

On the expense side, our combined R&D and G&A expenses for the quarter were $6.8 million.

Our combined R&D and G&A expenses for the year were slightly higher than expected, primarily due to costs associated with tax planning.

Total combined expenses for 2012 were $26.9 million, and that includes $6.8 million of noncash expenses.

As John mentioned, this quarter we presented our results using non-GAAP financial measures.

Specifically, by excluding the effects of the change in our contingent value rights that we mark to market each quarter.

Due to the unpredictability and noncash nature of this item, we feel that providing these adjusted financial results is more closely aligned with the way we monitor our business, so on an adjusted basis, our fourth-quarter net income of $3.9 million or $0.19 per share.

For the full year on an adjusted basis, we reported net income of $1.1 million, or $0.06 per share.

Taking a look at our financial guidance for 2013, for the full year we expect revenues to be between $41 million and $44 million.

We expect combined R&D and G&A expenses of approximately $27 million, including about $7 million of noncash expenses.

And we expect costs of goods sold for the year to be between 40% and 45% of material sales.

With this outlook, we project a range for earnings per share of $0.35 to $0.39 per share.

On the cash side, we finished the year strong with $15.1 million of cash, cash equivalents, and restricted investments, up significantly from $8.4 million at the end of the third quarter.

During the fourth quarter, we enjoyed strong financial performance that generated positive cash flow.

In addition, we received equity in a publicly traded company, and we sold approximately 150,000 shares through our ATM program for net proceeds of $2.9 million.

With our outlook for 2013, we expect our operations will generate significant cash flows, which will be used to pay down our debt that begins amortizing next month.

And finally, with respect to taxes, as I mentioned at our analyst day in December, we have spent the past six months working with our tax advisors to complete tax studies related to our net operating losses and our R&D tax credits.

As a result of those studies, we estimate that we now have approximately $0.75 billion in gross tax assets.

Due to the nature of these assets, we believe that our effective cash tax rate for the next six to eight years will be in the range of 2%.

For book purposes as I have mentioned before, it is a little more complicated.

We would expect to record about $0.5 million in tax expense for the next year or so.

Then assuming we remain profitable over the next few years, we will release our valuation allowance against our tax assets.

And at that point, record a very large tax benefit, which as of today would be several hundred million dollars.

Subsequent to that, our book tax expense is expected to be at the statutory rates or about 38% of pretax income.

Again, while we continue to only pay about 2% in cash taxes.

With that, I will turn the call over to Matt.

Thanks, John.

The quality and value of our portfolio fully funded partnerships increases as drugs progress through the development process.

And we see clear evidence that our Shots on Goal model is really working and creating significant value.

Just to highlight some of them now, our partners at Pfizer announced in Q4 that the FDA accepted for review the NDA for Bazedoxifene with conjugated estrogens.

This is a potential new medicine for non-hysterectomized women for the treatment of moderate to severe vasomotor symptoms in vulva and vaginal atrophy associated with menopause, as well as the prevention of postmenopausal osteoporosis.

Pfizer's PDUFA date for this asset is October 3 of this year, so it's less than eight months away.

The Medicines Company continues to progress MDCO-157, the Captisol-enabled intravenous Clopidogrel, and reported at the JPMorgan Health Care Conference that they are targeting launches in the US, Europe, and Middle East in 2015.

And Lundbeck also reported at JPMorgan that they plan to submit their NDA for Captisol-enabled IV carbamazepine later this year.

Our partners at Rib-X received significant funding late in 2012 and are now well poised to initiate a Phase III trial of delafloxacin in the first half of this year.

And while our partners continue to make progress and add value to Ligand's partnered portfolio, our team here at Ligand continues to advance our internal R&D programs that we feel can fuel future partnering activities.

We initiated our 60-patient multicenter pivotal trial for Captisol-enabled IV Melphalan in December, and the trial has ramped up very nicely according to our expectations, and we plan to complete this trial this year.

Conditioning treatment with high doses of Melphalan plays an enduring and central role in stem cell transplantation for multiple myeloma.

And we believe Captisol-enabled Melphalan could have distinct advantages over the currently available form.

It's also worth mentioning briefly that additional data from our previously successful Phase II trial is being presented at a poster session this evening at the Bone Marrow Transplant Tandem meeting in Salt Lake City.

And the investigator-sponsored work being presented tonight suggests that our Captisol-enabled Melphalan may induce higher remission rates in multiple myeloma patients undergoing auto stemcell transplant.

As we've discussed previously, this is a very special asset for which we can see a path forward to market it ourselves.

That said, we're in active dialogue with multiple [Stack Pharma] oncology players who have expressed interest in partnering now that the pivotal trial is advancing, and we're obviously evaluating that interest and a partnering option.

Switching programs now, we also continue to work on our potent orally bioavailable small molecule glucagon receptor antagonist for the treatment of Type 2 Diabetes.

What we call LGD-6972.

We announced positive preclinical data last year at the American Diabetes Association meeting, and our team is now focusing effort on getting an IND submitted later this year.

Glucagon receptors antagonists are clinically validated in a new class of molecules, and we believe our molecule may have significant advantages in potency and other attributes as compared to other glucagon antagonists.

Because of this we see 6972 as one of our most promising unpartnered assets here at Ligand.

With that I'll turn the call back over to John Higgins.

Super, thank you, Matt.

So that is an overview of some of the highlights the last quarter or so.

We'd like to turn it to the operator to open the lines up for questions.

(Operator Instructions)

Joe Pantginis, ROTH Capital Partners.

Couple things I just want to follow up on, if you could maybe dive down a little bit more.

First, one of the programs you didn't mention, I was just wondering if we could get some information on Merck's BACE program in Alzheimer's Disease.

Have you been able to confirm whether you'd receive a royalty on this program, and can you update us on the status of this program?

Yes, thanks, Joe.

This is Matt.

Yes, this is a program we have not talked about a lot previously but certainly does warrant discussion now.

At our analysts day in December we disclosed for the first time that we are entitled to royalties on Merck's lead BACE compound, that is in Phase II-III trials for Alzheimer's Disease.

This is something that really was not prominently on the radar previously for those that follow the Ligand story.

We're not actively involved in the development, but obviously are following Merck's progress real closely.

Just a couple weeks ago in their Q4 earnings call, they highlighted the program again.

And they've been talking about it a lot.

They said they're excited about it.

They're calling it a potentially transformative candidate in their pipeline.

So -- and we agree with them.

We're excited about it, as well.

Obviously Alzheimer's is a huge global market, and having a great partner like Merck putting such significant resource behind the program is important and exciting to see.

In terms of the program's status, last year -- early last year, Merck presented clinical data showing that the lead BACE inhibitor can lower CSF A beta levels in people by over 90%.

I believe it was 92%, without having untoward effects.

And for those that might not follow the science in the space, the amyloid hypothesis is really a leading approach for disease modification in Alzheimer's Disease.

So with that finding that they presented last year, it gave them the confidence to kick off the Phase II-III outcomes trial in Alzheimer's, that's in progress now.

They've talked a little bit about the general design of the trial, and they've begun enrolling an initial cohort of patients in mild to moderate Alzheimer's Disease.

And they'll look at that for a set period of time, look at safety issues, and then if the safety issues look clear -- they're expecting a read on that late in the year this year -- they've designed it in such a way that they can move seamlessly into a Phase III trial portion in the mild to moderate population.

They're also -- we understand looking at a prodromal population, or basically the patients at the earlier stages with mild cognitive impairment that have a higher propensity to progress to Alzheimer's in a short period of time.

They're going to look at that data later on this year.

We're obviously cheering them on.

Very excited about the program and excited to have that as part of our royalty-bearing portfolio.

That's great.

Very helpful, thanks, Matt.

And then just out of curiosity, did you disclose -- and forgive me if I don't remember -- in December what the -- a range of what the royalty rate would be?

No, we have not.

Okay.

Understood.

Then maybe just a followup question for John.

John, obviously the Ligand business model over the last few years has been clear with regard to how you bring assets in.

You also alluded to that earlier on the call about adding assets to the Company and that potential.

Just wondering if you can add any more color to that about what you might be looking for, and that you are actively looking at things now as a potential because you certainly have your hand full now, as well.

Joe, thanks.

We -- as a little bit of a record, the last four years we've acquired -- or made five acquisitions, and we continue to turn over the stones in the field so to speak for other opportunities.

Unlike specialty pharma companies or more small cap commercial companies, we don't have to make acquisitions.

We don't have to buy revenue to keep growing.

We're focusing on buying technologies or partnered programs.

And we're finding opportunities in small bio cap -- small biotech companies that may have disappointing data recently.

They're looking at fundraising requirements, or frankly, still have a very, very long time before they can have any financial returns for their investors.

So those are the things we're looking for -- technologies, fully-funded partnered programs that are embedded into these biotech companies.

We're very disciplined.

I'll say we don't make promises about deal-making.

We're very disciplined about structure and value.

But frankly, we do see opportunities out there.

It's not just what good deal might be for Ligand, but an opportunity for a target company to really combine or merge into the Ligand business model.

To leverage our rolodecks, our business experience, and our overall model.

We are committed to it, but again, we don't have to do acquisitions, and we're being very selective and disciplined in the type of deals we're going to pursue.

Great.

Thanks a lot, guys.

Gene Mack, Brean Capital.

John, I was wondering -- understanding that you're sort of on the outside looking in in term of Promacta, a little bit in terms of development and label expansion and so forth.

Wondering if you could just remind us what your I guess nearer-term expectations would be for some new data from Promacta in some of the cancer indications where it's being looked at.

Do you have any -- again, understanding that you're sort of a bit on the outside looking in on this, too, like the rest of us.

But can you just give us a sense of what your expectations might be for this year's ASCO Conference if there might be anything new there.

If not, if you've got no real clear read on that, then maybe just what you might expect would be the next sort of milestones in that development plan.

Thanks.

Yes, Gene, thanks.

I'm going to share this answer with Matt.

I'll make just an introductory or overview remark about Promacta and what it means for Ligand.

It's a very important financial asset, and I'll say -- a strong relationship with GSK.

Then I'll invite Matt to comment more specifically on trial and/or data that might be coming out.

The product for those who are just learning about Ligand, it launched in essentially early 2009.

So you've got a four-year commercial record, but it launched US first and then Europe and now it's rolling out around the world.

It's in 92 countries.

It's approved in 92 countries, approved for ITP.

So that the context I want to give first about the potential of this product is that it is, we think, a very significant potential $1 billion-plus blockbuster revenue product.

And the opportunity, it's a drug that boosts platelets that could be labeled for a whole range of indications.

The opportunity for Ligand and especially with GSK marketing it is first to promote it for ITP, these new markets are being launched and rolled out.

Secondly, we are seeing label expansion.

And as you know, in December, the drug was approved for the use in HCV, thrombocytopenia HCV-related patients.

And we expect a European approval and other territories will be approved later in 2013.

So geographies are rolling out, new indications are rolling out.

And thirdly, we have a tiered royalty.

And in 2012, GSK posted over $200 million in royalties, which means that now over $200 million we are enjoying a third tier of royalties.

So these are just some factors why it -- while it's a young product, it's a growth brand, and it's early days.

Now I'd like to turn it to Matt to talk about the other indications.

And we think the promise, the scientific promise of this molecule and the other markets is very exciting.

Yes, thanks, John.

Gene, thanks for the question.

Obviously GSK's been prolific in their timely publishing of data.

They've got an active and global, real high-quality development team working on the program.

They're running dozens and dozens of trials.

We've seen them publishing data at ASCO, at ASH, at EHA, the European Hematology Association, we expect that to continue this year.

So we expect to see more data coming out at those major meetings.

Probably the data of most interest and attention.

MDS, obviously they're running trials in MDS as well as in AML.

Also we expect to see more data in the chemotherapy-induced thrombocytopenia fields.

There was also some work late last year, an NIH-sponsored study looking at Promacta in aplastic anemia that suggests potential disease modification properties of eltrombopag as well.

So we expect to see more data in those areas scattered among the, probably the ASCO, the ASH, and the EHA meetings.

So probably more to come.

But GSK is putting a lot of resource behind it there.

As I said, they've got a high-quality team working on it.

We're obviously cheering them on.

Great, thanks a lot.

That's very helpful.

Carol Werther, Summer Street Research.

The guidance, does that include any new partnerships?

No, not of any substance.

And generally, that's the way we approach the guidance, is we make projections on royalty revenue assumptions.

We have some insight as to what the orders for Captisol will be for the next few quarters, and then we do take into consideration expected milestones for deals that are already signed.

And we don't count all milestones, but those that we think are fairly high probability.

So that's where we get to the revenue guidance for 2013 of $41 million to $44 million.

If there are new deals -- and I'm not talking small, upfront option or license fees, but new deals of any material size would be beyond that range that we're describing here.

Okay.

And with the IV Melphalan, do you think you'll have the results toplined by the end of the year or might we see the data set?

Carol, we're aiming to complete the trial this year, so obviously we're ramping up now, we see nice enrollment, and so we expect to have the trial complete by the end of the year.

So the data would be early next --

Depending on when we want to publish it, it would either be late this year, or early next year.

Okay.

Then if you would just talk a little about the decision on whether or not to partner it or launch it yourselves.

Sure.

Carol, I know you've done work on this program.

It's a very exciting program.

Matt spent some time in his narrative talking about it.

We have two options, launching it ourselves.

And while we are not a commercial business, we do not today have a sales and marketing infrastructure, we are seriously exploring this because the gross margins are very high.

We believe the -- that the target market, it's about 200 transplant centers, is small enough that we could very ably sell this product with a leaned focused commercial team.

So that is one scenario.

Frankly, we've been considering this ever since we acquired the asset through the CyDex acquisition a couple of years ago.

The alternative course is to license this out to a specialty oncology company.

And I can plainly tell you that this program, some recent scientific announcements, the initiation of our trials, some other data that's coming out, it's garnered a lot of interest by multiple players.

And we're now at a process where we're evaluating various potential deals with a licensee.

We are not committing to the path yet.

We are not predicting timing for a decision or any deal, but we do feel that we've got some very strong options.

And frankly, it's driven by the quality of this asset and the fact that a Company of Ligand's size or certainly any one of these specialty oncology players could very ably sell it.

Okay.

Thank you.

Irina Rivkind, Cantor Fitzgerald.

I just wanted to expand a little bit on the six royalty-bearing products that you expect to gain approval on in the next three years.

I think you maybe mentioned five of them on the call.

But just wanted to make sure that we have visibility on the six.

And then the other question I have is just more around Promacta and HCV.

Maybe you could comment on any color you may have around reimbursement for that indication or how Glaxo is rolling it out for HCV.

Thanks.

Thanks Irina.

The six products in the next three years, I'll list them off.

First is an undisclosed target partnership, it's a partnership with Merck, Captisol-enabled partnership separate from BACE and others we've talked about on this call.

A Merck undisclosed Captisol program.

We have a partnership with Hyspera, also for an undisclosed Captisol program.

The Medicines Company with IV clopidogrel, Lundbeck with IV carbamazepine, Aprela with Pfizer for which the PDUFA data is obviously in October, and Rib-X's delafloxacin IV.

So those are the six.

And the seventh one is Melphalan.

We aren't committing to it as a royalty-bearing product because we have not decided to out-license it.

But certainly within a three-year window, I believe that Melphalan will enter our picture as a revenue-generating asset, whether it's directed product revenue to us or through a royalty relationship.

And then your second question around reimbursement profile for Promacta.

Obviously Promacta enjoys a positive and competitive favorable reimbursement environment.

Currently I think it's important to keep in mind that the diseases that it's treating is a significant unmet medical need, especially in Hep C where these are a subset of patients that really have no treatment options at all.

They won't be able to be treated if it not for Promacta.

So we expect that reimbursement profile to continue.

Obviously GSK manages all of that, but that's our expectation.

If I may just a follow up on the six.

On the two undisclosed targets, should we assume similar types of royalty levels that you have on some of your other products like Kyprolis for those?

Thanks.

Yes.

In general I think that's a fairly safe assumption.

Thank you.

Ed Arce, MLV & Company.

Just a couple follow-ups.

Wondering if you have any more clarity or can discuss any further where things stand perhaps with the approval in the EU for Promacta in HCV.

Yes.

Based on the timing around GSK's announcement when they announced the filing last year, we'd expect sort of second to third quarter-ish timing is sort of the range.

Okay.

And I realize it's prior to Onyx's release themselves, but is there any qualitative discussion that you might be able to share around the latest sales numbers on Kyprolis?

No.

No?

Okay.

Just one last on the contingent value rights.

I appreciate that these are numbers that you really need to back out to get the underlying trend.

Just wondering if you could -- really if you could just remind us how far out these go and until when could we expect to have these on the books.

So for the CyDex contingent value rights, which is the majority of the number, those go through 2016.

There are -- there's really two triggers to them.

One is related to our deal with The Medicines Company in clopidogrel related to specific milestones being met.

And then the other piece is the revenue-sharing piece with CyDex revenue in general.

And so for the most part it's just through 2016.

Right.

Okay.

Thanks.

Nick Farwell, Arbor Group.

Just a couple of quick add-on questions if I may.

John, how do you value and plan -- assuming you do eventually -- to monetize the 620,000 shares of Retrophin, if I'm pronouncing that correctly?

I realize it's a very thin trader, but I'm curious if you have some thoughts on this.

Sure.

So the stock was issued via our partnership and license agreement with Retrophin.

They -- one of the condition was they -- reverse merger, some sort of monetization which they successfully achieved at the end of the last year.

For Ligand, it's a tangible asset.

It is somewhat of an ill-liquid company although a public company.

Frankly we are not concerned or focused on monetizing it in the near term.

We're very proud equity holders.

We're encouraged by Retrophin's development plan for the asset.

And ultimately, this equity could return value to Ligand if we found, let's say an institutional buyer or some other group that wanted a large block of shares.

Retrophin investors or frankly even our investors should not assume that we're going to start to dribble these shares out.

That's not the focus.

This is a business partnership, and we're pleased to have what is not a trivial equity stake in Retrophin.

How do you carry it on the books?

So it will be -- it's actually carried as an investment.

It will be mark to market each quarter based on their trading price.

Okay.

And then, I'm a little -- I apologize, but I'm a little unclear what the embedded tax rate guidance you're providing us, John, for the guidance of $0.35 to $0.39.

Are you assuming sort of a 2% book and reported rate, or a mid-30%s rate?

Yes.

So for the next couple of years, it's -- we're expecting about $0.5 million in tax expense.

Right.

So that would be built into the 2013 guidance.

Got you.

Okay.

Then with respect to Promacta revenues, I realize they lag a quarter.

Can you provide us with what they were in the fourth quarter, that is the December quarter?

I realize that will be reported literally for the Q1 2013.

Right.

Yes.

Yes, the revenues, a real nice revenue growth story, $62 million is what GSK announced a couple of weeks ago.

And that was up from $57 million in Q3.

And Matt might have it handy, but on a percent basis that was up about 70% year-over-year.

Obviously solid quarter-to-quarter growth, but year over year very impressive growth.

Again, significantly the HCV indication, it was approved in early December.

So by the time you actually roll out a launch and then you hit the year end holidays, frankly we don't really expect much of the HCV uptake to even be reflected in the fourth quarter.

But what's exciting for us is that new markets are being added.

There is clearly still growth in the existing territories, new indications are coming out.

And we're hitting these higher royalty tiers.

So it's performing beautifully.

We're really excited about it.

On Melphalan, are there no CVR contingents specific to Melphalan other than aggregate sales, John, for CyDex?

That's correct.

No, none.

Okay.

Then what -- last question is, what is your expectation of a commercialization timeline for the product?

I realize you haven't even determined the distribution model, but in general what would you expect if you get data at the end of this year -- positive data?

Filing first half of 2014.

It is designated orphan indication.

It's an important indication.

The question is approval timeline, whether it's a 6 or 10-month review.

There is a scenario where it could be approved at the end of 2014.

Otherwise it would be the first half of 2015.

And a launch could happen very shortly thereafter.

Right.

Thank you.

Thank you, at this time we have no further questions.

I'd like to turn the call back over to John Higgins for closing comments.

Okay, well thank you.

Appreciate the attendance, and thanks for the interest over the last several months and quarters.

We had great turnout at our analyst day.

I alluded to the increase in visibility for the Company.

A year ago we had three analysts covering us.

Today we have six.

And I think the inquiries from investors and invitations to conferences, it continues going up.

We're excited about that support.

We value our relationship with investors and analysts.

We're going to be on the road a fair amount the next several months starting with the ROTH conference.

The bank graciously offered us a one-hour presentation slot, so we're going to have a very robust presentation.

And I'll be joined by Nishan de Silva, our Head of Corporate Development, and Matt for that.

We'll be at the Deutsche Bank conference in May and then Jefferies in June.

So if you want to meet with us, let us know, and we look forward to reporting the year as we progress.

Thank you.

Thank you.

This does conclude today's teleconference.

You may disconnect your lines at this time.

Thank you for your participation.