Ligand Pharmaceuticals Inc (LGND) 2017 Q2 法說會逐字稿

Good afternoon, and welcome to the Ligand Second Quarter 2017 Earnings Release Conference call.

My name is Megan, and I will be facilitating the audience portion of today's interactive broadcast.

(Operator Instructions)

At this time, I would like to turn this call over to Todd Pettingill, the Director of Corporate Development and Investor Relations.

Welcome to Ligand's Second Quarter of 2017 Financial Results and Business Update Conference Call.

Speaking today for Ligand are John Higgins, CEO; Matt Foehr, President and COO; and Matt Korenberg, 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 and its management regarding its internal and partner programs.

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

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

The information of this conference call related to projections or other forward-looking statements represent the company's best judgment based on information available today and reviewed by the company as of today, August 7, 2017, and do not necessarily represent the views of any other party.

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'll turn the call over to John Higgins.

Thank you, good afternoon, and welcome to our call.

The second quarter of 2017 was very strong operationally and financially, and we are enjoying good momentum in all elements of our business.

Our partners have reported numerous positive developments recently.

We entered into 3 new deals in the second quarter, and we are raising our financial outlook for full year revenue and earnings, given the momentum we see from the business at this time.

First, I want to comment on the revenue performance of our 3 main royalty assets: Promacta, Kyprolis and EVOMELA.

All 3 products had excellent sales in the second quarter.

Novartis reported $210 million for second quarter revenue of Promacta.

That is the largest dollar increase over the prior quarter ever for the product, gapping up $35 million from the first quarter 2017 sales of $175 million.

Now compared to 1 year ago, Promacta revenues were up $52 million over Q2 2016.

Novartis is doing an excellent job managing the global, clinical and commercial progress, and we are more confident than ever the product is on track to exceed $1 billion in annual sales in the future.

In addition to strong sales performance, Novartis reported that Promacta was approved in Canada for the treatment of pediatric chronic ITP, and Novartis announced the publication of a study conducted by the National Institute of Health, demonstrating that 58% of patients with treatment-naïve severe aplastic anemia achieved complete response at 6 months when treated with the product.

The data are published in the latest issue of the New England Journal of Medicine.

Another product we earn the royalties on is Amgen's Kyprolis, which incorporates Captisol.

Kyprolis continues to perform well commercially, and Amgen posted the highest quarterly sales ever with the product as well as the largest dollar increase over the prior quarter.

Amgen reported $211 million in Q2 Kyprolis sales, up significantly over Q2 2016 sales of $172 million.

We also earned royalty on ONO's sales for Kyprolis in Japan.

And ONO announced last week, they recorded approximately $10.8 million in Q2 sales for Kyprolis.

So combined, Kyprolis' worldwide Q2 sales that we earned royalties on were approximately $222 million.

About a month ago, Amgen announced positive results from the final analysis of the Phase III ASPIRE trial with Kyprolis.

And following that, Amgen commented about that trial outcome on their earnings call, saying that, "In each case, Kyprolis reduced the risk of death by 21% and improved survival by approximately 8 months.

A very meaningful clinical results that reinforces the role for Kyprolis in driving deep and durable responses." And Amgen said, the completed studies underscore their confidence in this molecule as the new standard of care for these patients.

They went on to say they have already submitted the ENDEAVOR overall survival data to regulators for inclusion in the product label, and that they are preparing the ASPIRE data for submission as well.

Amgen also commented on the recent earnings call that their Phase III study, in combination with DARZALEX in relapse or refractory multiple myeloma, began enrolling patients in the second quarter.

Another product we earn royalties from is EVOMELA.

It's a significant royalty rate of 20%, the highest rate of all of our royalty-bearing products.

Spectrum Pharmaceuticals is our partner for this drug, and they announced Q2 sales last week of $10.1 million.

The product has been on the market for about a year, and this is the highest quarterly revenue ever.

On their Q2 call last week, Spectrum executives commented that they estimate EVOMELA to have an approximate 50% market share, and that it is increasing its share despite growing competition in the market.

Spectrum believes this shows that the market is recognizing the benefits to caregivers and patients.

As for other revenue this past quarter, we posted a strong quarter for Captisol sales, up over the preceding quarter and the same period last year due to the timing of clinical and commercial orders.

And milestone in contract revenue also was substantial during Q2, driven in part by OmniAb-related revenue and a milestone for a new product approval last quarter.

Now in regards to the new product approval.

On June 19, our partners at Melinta Therapeutics announced the approval of Baxdela, resulting in $1.5 million payment to Ligand.

Baxdela uses our Captisol technology in its IV formulation and represents a new option for the treatment of acute bacterial skin and skin structure infections, also known as ABSSSI, including hospital-treated skin infection.

Approximately 3 million people are hospitalized each year in the U.S. alone with ABSSSI, and they can prevent significant treatment challenges because of underlying medical condition, which also makes optimal antibiotic selection difficult.

Antibiotic resistance obviously continues to be a growing health concern globally, driving a need for more tools to fight it.

So we are pleased, at many levels, to see Baxdela approval.

Subsequent to the approval, our partners at Melinta announced completion of a $90 million financing to fund commercial activities as well as to fund Baxdela's expansion into further indications.

Finally, a comment about our OmniAb antibody discovery technology.

We've been delighted to see the pace with which OmniAb partners are progressing, which leads you not only as a testament to the value of the OmniAb technology and what it brings to those that license it from us, but also the sign of the commitment by our partners to the projects themselves.

And more broadly, as a representation of the importance of antibodies to the industry overall in addressing some of the most important and urgent unmet medical needs in areas like cancer, inflammation and infectious diseases.

With that, I'll turn the call over to Matt Foehr for -- to provide more portfolio updates.

Thanks, John.

I'll start with a brief review of some recent developments with our partner programs, and I'll touch on licensing activities for our 2 primary technology platforms: Captisol and OmniAb.

I'll also review the upcoming events for our Phase II glucagon receptor antagonist, or GRA program.

Our partners at Eli Lilly recently highlighted Captisol-enabled prexasertib as a priority internal development program at Lilly.

This is a new program designation that Lilly has given to a small group of assets where they are now focusing what they describe as "the vast majority of their internal R&D dollars." By focusing on assets like prexasertib, Lilly has indicated that they are betting more aggressively on their portfolio assets that have what they call the highest foundational potential.

As background, prexasertib is a potent small molecule inhibitor of checkpoint kinase-1.

Check 1 has emerged as an interesting target in cancers with DNA repair defects.

Prexasertib is described as a first-in-class agent.

As Lilly has reported, clinical responses in monotherapy settings in both platinum-sensitive and platinum-resistant ovarian cancer.

In addition to monotherapy use in ovarian cancer, Lilly indicates that they see possibilities for prexasertib in other tumors as well, and I note that ClinicalTrials.gov currently lists 8 actively recruiting clinical studies for prexasertib in a variety of cancer settings.

Prexasertib is an asset we've previously highlighted in our partner pipeline.

First, as a Next 12 asset back in 2015 and then again, as a Big 6 asset earlier this year.

It's part of a Captisol technology platform license agreement that we did with Lilly back in 2011.

Lilly has also been recently highlighting the Captisol-enabled merestinib program, which is a multi-kinase inhibitor currently in registrational Phase II study in biliary tract cancer.

It's also part of the platform Captisol license agreement with Lilly from 2011.

Lilly recently indicated that if merestinib's current registrational Phase II trial meets its primary endpoint, it would then be classified as a priority internal development program like prexasertib.

SAGE Therapeutics announced last week that they recently completed enrollment in the Phase III status trial of brexanolone.

The status trial is the first-ever global, randomized, double-blind, placebo-controlled trial in super refractory status epilecticus, or SRSE.

SAGE announced last week that it continues to expect to report top line results from the status trial in the third quarter of 2017 following completion of all study follow-up periods and data analysis.

We look forward to these and other mid- and late-stage Captisol-enabled clinical program readouts that are expected in the coming months.

Turning now to our OmniAb technology platform.

With multiple OmniAb-derived antibodies now in the clinic and a number of other partners quickly approaching the clinic, we continue to be very pleased with the progress being made and with the reports we received from our partners about the high-quality antibodies that have been discovered with our OmniAb technology.

J&J Janssen recently highlighted and disclosed OmniAb-derived JNJ-64007957.

It's an anti-BCMA and CD3 biospecific antibody being developed by J&J for multiple myeloma.

BCMA, which stands for B-cell maturation antigen, is a tumor necrosis factor superfamily member that's highly expressed on the surface of myeloma cells.

JNJ-7957 binds BCMA on the plasma cell as well as CD3 on T-cells, and has shown potent activity in multiple myeloma models.

The Phase I study began recruiting patients in June, and data is expected late next year according to postings on ClinicalTrials.gov.

Additionally, we're pleased that C-Stone, Gloria Pharmaceuticals, HanAll Biopharma and Activo all have antibody programs discovered with OmniAb that are in or are approaching the clinic or are being broadly highlighted by our partners with data at scientific conferences.

Servicing our partners and alliances is an important part of what we do at Ligand.

And our team also continues to innovate with the OmniAb technology as we recently launched additional versions of OmniRat, OmniMouse and OmniFlic with extended genetic diversity.

These next-generation animals allow our partners to interrogate an even broader antibody diversity to isolate the best therapeutic leads.

Through the first 6 months of 2017, our vendors have fulfilled requests for nearly the same number of OmniAb animals to Ligand partners as they did in the full year of 2016.

We see this as a clear indication of increased use by our partners, use that should continue to feed the pipeline of OmniAb-related antibodies approaching or entering the clinic.

We continue to create new, fully-funded shots on goal via our licensing efforts, driven largely by our Captisol and OmniAb technologies.

We recently entered into new Captisol agreements with Amgen for AMG 330, with Marinus for an IV formulation of ganaxolone and with interventional analgesics for a currently undisclosed compound.

We also entered into new OmniAb platform license agreements with Surface Oncology and xCella Biosciences.

As part of those agreements, we're eligible to receive annual access payments, milestone payments and royalties on future sales of antibodies discovered using our platform.

I'll also mention one other partner program.

Viking Therapeutics announced a few weeks ago that they completed enrollment of a Phase II study of VK5211 in patients recovering from hip fracture.

VK5211 is Viking's lead program for muscle and bone disorders, and it's an orally available, nonsteroidal selective androgen receptor modulator, or SARM, that's designed to selectively stimulate muscle and bone formulation with reduced activity in peripheral tissue such as skin and prostate.

We look forward to the Phase II data report from Viking in the fourth quarter of this year.

And I'll conclude with a brief remark about our glucagon receptor antagonist, or GRA program, also known as LGD-6972.

Our team remains on track to have top line data from our Phase II trial of LGD-6972 in patients with type II diabetes in September.

Also, we will be presenting clinical data from an earlier crossover study comparing bioavailability of a Captisol formulation of LGD-6972 to an oral solution formulation at the European Association for the Study of Diabetes, or EASD meeting, September 11 through the 15 in Lisbon.

And with that, I'll turn the call over to Matt Korenberg to discuss the financials.

Thanks, Matt.

I'll start my remarks with some financial highlights from our earnings release issued earlier today.

Total revenues for the second quarter of 2017 were $28 million, which is up from $19.5 million a year ago.

Royalty revenue increased 46% to $14.2 million from $9.8 million a year ago, and this increase primarily reflects higher Promacta and Kyprolis royalties and the addition of the EVOMELA royalty.

For both Promacta and Kyprolis, the higher underlying revenue leads to more royalty derived from our higher royalty tiers earlier in the year.

Captisol material sales for Q2 were $5.6 million versus the $3.9 million last year, and license fees and milestones for Q2 were $8.2 million versus $5.9 million last year.

Our corporate gross margin was over 96% this quarter, which is in line with our guidance for gross margin to be in the mid-90s for the year.

For the balance of 2017, we expect material sales to represent a larger portion of the revenue mix.

And as a result, we see corporate gross margin lower than the first half of the year, although still in line with our guidance.

On the expense side.

Our cash, R&D and G&A expenses were $6.7 million this quarter.

For GAAP, the combined R&D and G&A total was $11.4 million.

For the balance of the year, we expect these amounts to be relatively consistent, with approximately $11 million in combined GAAP expense per quarter and a little over $6 million per quarter in combined cash expenses.

This gets you to the full year cash expenses of $28 million to $30 million as we signaled at the start of the year.

Turning to cash flow, our cash flow from operations for the quarter was $10.4 million.

And assuming our updated guidance for revenue, we're on track for full year EBITDA to exceed $100 million for the first time in our company's history.

Our cash flow and EBITDA are driven by our continued robust royalty, milestone and Captisol revenue paired with our low-cost operating structure.

We also continue to pay less than 1% in cash taxes, but for both GAAP and adjusted income purposes, we show a fully taxed net income.

For the quarter, we reported adjusted net income of $14.9 million or $0.67 per diluted share.

We had GAAP net income of $6.1 million or $0.26 per diluted share.

And on the balance sheet, we ended the quarter with just over $172 million of cash and investments.

Now turning to guidance.

We're updating our total revenue guidance to be at least $133 million.

Broken down, we assume about $87 million of royalties, about $23 million of material sales and at least $23 million of milestone and license fees.

For the second half of the year, we saw some of our Q3 expected sales shift into Q2.

And as a result, we'd expect the Q3 and Q4 breakdown to be further weighted to Q4.

For royalties, our guidance incorporates lower CorMatrix royalties than estimated at the start of the year as a result of our marketing partner's choice to exercise a royalty buy down in exchange for $10 million to be paid to Ligand.

The buy down was exercised in connection with CorMatrix's sale of its commercial assets to Aziyo, and $5 million was paid at closing and an additional $5 million will be paid later in the year.

Captisol continues to be on track towards our original estimate of $23 million for the year.

And with respect to the milestone upside, we currently see about $9 million of potential upside for the balance of the year.

The remaining upside milestone events are principally tied to clinical trial progress.

And as a result, the timing is uncertain.

We do expect that most of these events will happen, but our best estimate of timing now puts them in late Q4 of this year or in the first half of 2018.

Adjusted earnings per diluted share at $133 million revenue level is projected to be at least $2.93.

Finally, as a reminder, our adjusted diluted EPS guidance excludes stock-based compensation expense, noncash debt-related costs, changes in contingent liabilities, transaction-related purchase pricing amortization, pro rata net losses of Viking Therapeutics as well as the fair value adjustments to our holdings and their common stock in the convertible note receivable and warrants, mark-to-market adjustments for amounts owed to licensors, the excess convert shares covered by the bond hedge and certain onetime nonrecurring items.

With that, I'll turn the call back over to the operator, and open it up for questions.

(Operator Instructions) Your first question comes from Drew Jones.

Good performance in licensing revenues.

It sounds like you guys are very pleased with the OmniAb momentum.

I think at the start of the year, you guys had got it towards maybe 4 programs hitting clinical.

Can you give us an update on where we are?

And maybe how many are on the cusp of hitting clinical?

Sure.

I think the guidance we gave originally, I think, was 3 programs that would hit the clinic on the OmniAb side.

We obviously saw the Janssen program hit the clinic this year and generate a milestone.

Matt's mentioned a few of the others that are either in or approaching the clinic, and so I think we're on track there for that.

Yes, and I'll just add a little more color from a technical perspective, Drew.

As Matt said, very much on track.

The Janssen program is in the Phase I now.

It started in June.

But in addition to that, we see partners that are either in the clinic or very quickly approaching the clinic based on the reports we're getting, and we'll continue to see news flow coming out of those.

But C-Stone, Gloria, HanAll, Activo, all of which are highlighting named OmniAb programs publicly.

So very much on track there.

We continue to be pleased with the progress of the partners, the commitment they're showing, the investment around antibodies that are being discovered with OmniAb and just the quality of those antibodies from the data they're sharing with us and presenting.

Great.

And then really nice sequential uptick for Captisol.

How is that going to be split over the last 2 quarters to get to the $23 million guide for the year?

And also, can you give us a little feel for clinical versus commercial split?

Sure.

I'll go first.

Just overall, big picture for the balance of the year.

If you just do the math from the $133 million guidance to the -- from what we've reported so far, you'll see that there's about $75 million to $76 million of revenue left for the rest of the year.

And then just doing math, if you break down the royalties that everybody can calculate based off of the Q2 partner revenue, you'll see that royalty is going to be more heavily -- or more evenly split between Q2 and Q3.

Overall, we see about a 1/3, 2/3 ratio as we've guided in the past to the different quarters.

But if, overall, about 1/3 is going to come -- of revenue is going to come in -- of the balance of the revenue is going to come in Q3 and more than 1/3 is going to come on royalties, you can kind of back in, do some math and we'll give you the milestone in Captisol revenue.

We'll say it's a little heavier weighted in Q4 than Q3.

Yes.

And Andrew, just in terms of buying patterns on the commercial side.

Generally, we have seen that Q4 is a larger quarter for commercial buys just given the cycles, and especially for some of our larger partners in terms of when they buy Captisol.

And your next question comes from Scott Henry.

A couple of questions.

First one, and I don't know if you're going to have a lot of color on this, but I thought I'd ask how you think about it.

EVOMELA has been a little choppy, great quarter in the second quarter, great quarter in the fourth quarter.

Q1 was down a little bit.

I mean, are there chunky buying patterns here?

Obviously, things are going well with the market share increase.

I'm just trying to get a sense of how representative 2Q is.

Yes.

Well, Scott, good question.

First, generally speaking, we're really pleased with what Spectrum is doing.

Yes, many of our investors know Spectrum.

They're a specialty oncology company.

And the product, even at the time of license 3 years ago, we knew it was a good fit with their clinical focus.

But clearly, we think they've done a very expert job placing the product commercially.

So just generally wanted to give that overview.

You're right about the quarterly trends.

We only have 5 quarters.

You have the first quarter a little more than a year ago with one month's sales.

So we don't have a lot of history so far.

What we do know from what Spectrum has commented publicly that in the fourth quarter, they had 1 or 2 specialty channels that were new customers, and they did sell into the channel an extra -- they estimated $2 million to $3 million.

So that may have increased Q4 revenues by that amount and then could've pulled a little bit out of what would've been the Q1 sales.

So I think as they're signing up new customers, signing new contracts, they're really driving the commercial channels.

But having said as much, their market share growth is impressive.

In the first 6 months, they reported 30% to 35% share, and now they believe they are commanding about half of the market share in just a year's time.

So we don't give projections by product.

We make estimates based on sell side and other analysts that cover the product.

We haven't heard projections specifically for the product from Spectrum this year.

But on balance, the trends look good and the market share gains, particularly, are very impressive.

Okay, great.

And when I look at your royalty-generating products, they've all done very well in this quarter.

And I guess, the question is, the $87 million guidance hasn't really changed, do you feel really good about that number now?

Do you feel better about it now than you did a quarter ago?

Or just trying to get a sense of how much of the strength you expected versus whether it's been a surprise or not.

Yes.

Well, a good perspective in terms of the timing and how all 3 of the products have come in really very strong.

The Q2 revenues for each one was impressive.

And as investors know, this year, we are still booking royalties on a 1-quarter lag.

So what were Q2 revenues for the underlying product, we book as our royalty in the third quarter.

What is interesting is, last quarter, we had one of our partners, CorMatrix, exercised a royalty buy down.

They had a predefined right to buy down a royalty.

It required a $10 million payment.

We received $5 million.

We'll get another $5 million at year-end.

But by buying that royalty rate down, our royalties for that specific product will be potentially $1 million to $3 million lower.

Of course, it's all set by this very large upfront milestone we got.

So what's interesting is just by circumstance, that corporate financing and restructuring happened last quarter, we are doing very well on royalties, and we're making up revenue in milestone and contract payments with CorMatrix.

That's part of the reason why we're able to raise guidance.

But royalties so far haven't taken a dent at all because of the strong performance by these other products.

So we feel good about the royalty.

We feel very good about these underlying 3 royalty assets.

But really, we'd want to see another quarter through 2017 before we revisit the royalty numbers for 2017.

Okay, great.

And then on the pipeline or I guess, soon-to-be launched product, what is the timing around the Baxdela launch?

How should we think about that?

And will that be a lag as well?

Just to confirm that.

Yes.

Scott, this Matt Foehr.

Just -- they haven't given specifics on exactly when they'll launch.

Generally speaking, we expect it'll be some time in the next couple of months here.

That is usually what it takes to -- they've been building up -- they build up their commercial organization and contracting, getting ready for launch, et cetera.

So we're keeping our eye out for that, but we generally expect it in the next couple of months.

Yes.

And yes, we will book that on a 1-quarter lag.

To the extent they generate any sales in Q3, we'll book it in Q4.

But if they generate sales in Q4, it will be a 2018 event.

And your next question comes from the line of Matt Hewitt.

Just one for me.

On the 4 new licensing deals, how many of those were Q2 versus Q3 as far as initial payments are concerned?

So in Q2, we did a new -- so in May, we did a new Captisol license agreement with AnalgesiX -- Interventional AnalgesiX.

Also in May, we did a deal with xCella Bio for OmniAb; and then in June, Surface Oncology.

More recently, July, which is a Q3, we did the AMG 330 deal with Amgen, which is also a Captisol deal for AMG 330, which is an anti-CD3 biospecific antibody that they're developing for acute myeloid leukemia.

Your next question comes from Larry Solow.

Just a few follow-ups.

Most of my questions have been answered, but I can probably follow up on questions on a bunch.

Just on the guidance, so just to clarify, it looks like from the last time you guys updated it, you've essentially tweaked revenue up $1 million, and EPS up $0.03, right?

That's right.

We have $1 million on the revenue side, $0.03 aftertax.

Right.

And you had said that the royalties would be a little bit less than 87 because of CorMatrix, and it looks like now they've -- you're reaffirming that 87 number.

So you've sort of filled in that blank, so perhaps that's the $1 million, although you're not actually saying that, but you can relate that.

Okay.

On -- just on OmniAb and the OMT, obviously, great progress there.

I know when you acquired it, you had expected I think $12 million in revenue this year.

You haven't really broken out guidance on that in a while.

But are we still close to that number?

Or is it fair to assume that we're above that?

Yes.

Good questions, Larry, and I think, generally, your sense of the guidance is right.

We -- overall, in OmniAb.

On the OmniAb, specifically, the best way -- we haven't given specific numbers, but the best way that we've guided investors and analysts to focus on is from the milestone charts that we showed earlier on in the year at the Analyst Day and otherwise that show that we had about $6 million to $7 million of annual license access fees or annual fees that we said was majority of that was all OmniAb-related.

And then on top of that, we've said that we get milestones when they go into the clinic.

And so we announced the Janssen milestone earlier this year for $1 million.

As we see a couple of these others go into the clinic, we may realize milestones from those as well.

And so a long winded way of saying yes, we are still on track for roughly those numbers.

It might be a little bit more, it might be a little bit less.

But generally speaking, we're right on track there.

Okay.

And then on EVOMELA, just -- I don't know how much you can comment.

But the $10 million, the Q2 number, I guess, maybe that was growing.

So I don't know if that itself equates just 50% share.

But does that suggest that the market's only $80 million, $90 million?

And not maybe -- I thought it would be -- I thought it was more like $120 million or something.

Yes, the market side is really a factor of pricing.

And at the time of launch where pricing was, I think Spectrum and others and we had quoted numbers between $100 million and $130 million.

And I think they used the word approximate, so -- but if it were exactly, then yes.

Of course, your calculations are right.

And at this price and at that share, it's about a $100 million market.

Okay.

And then just lastly on the LGD-6972.

Is it -- on what form -- I just want to figure, is that just going to come out in the press release?

And then I guess, you'll have full data at some future conference?

Or is that actually going to be at EASD as well?

Yes.

Great question, Larry.

So we would generally expect -- once we have the top line data, we would expect to release the top line data in a press release.

We'll aim to present the data at a scientific conference in the future.

We already know we will not make the late breakers or ability to get a podium presentation at the EASD because we're already past (inaudible) yes.

So it would be in a future meeting.

But we'll announce the data via a press release.

(Operator Instructions) Your next question comes from Esther Rajavelu.

This is Esther Rajavelu for Greg Gilbert.

I wanted to know, on your EPS guidance, does that incorporate the potential start of the Phase III GRA trials in 2017?

Hey, Esther, thanks for the question.

A good question.

What we've said pretty consistently is that once we see the data for the Phase II trial, we'll evaluate the best next steps.

We've been pretty clear though that we aren't planning to start a Phase III trial immediately.

We'll digest the data and consider our partner and alternatives and internal alternatives, et cetera.

And so the guidance, in any event, it wouldn't happen this year if we did start a Phase III trial.

And so it incorporates all the expense-related to GRA for this year.

Yes.

And then just generally, with TRA, Esther, we feel like, with the program, we have a highly-differentiated molecule.

We're excited to see the data.

We'll see the data here in September and announce it when we have it.

And consistent with our motto, we'd generally look to partner the program, of course.

So we're anticipating and looking forward to seeing the data, and we'll share it when we have it.

Got it.

And then have you guys started those partnership discussions?

Or are they -- are you going to wait for the data to start initiating this conversation?

Yes.

Generally, we don't provide details on kind of partnering dialogue.

We get -- I'll just say that the players that are -- the global players that are in diabetes are aware of the program, and I think we've seen the data event as a value-driving event, which is why we invested in the Phase II trial.

So once we have the data, once we're able to present it, we would expect to be progressing with dialogue.

But again, we're always careful to not promise any timelines around deals or anything like that.

Got it, yes.

And then on Melinta, the $90 million financing agreement that you'd mentioned.

I just wanted to confirm that, that has no implications for your relationship with them, for your agreements with them?

No, that has no implications for our relationship with them.

Got it.

Okay.

And then maybe can you just talk -- I know we talked a lot about Captisol.

But can you maybe talk about the changes in the pace of the partnerships relative to last year?

Has that increased or stayed the same?

Where are you in terms of the number of partnerships?

And how fast there?

Yes, great question, Esther.

The inbound interest in Captisol continues to be extremely strong.

Our sampling numbers over prior periods, well over 20%, right?

So we're seeing inbound sample requests continue to grow.

And I think that's, one, really, a representation of recent validation of the technology.

With recent approvals like Melinta's Baxdela, with global expansion by a number of our partners into new countries, where they're racking up additional regulatory approvals in added markets.

All of those things really start to create a lot more momentum around the technology.

And I'll say even -- probably more importantly to a lot of our partners is the continued expansion of our Drug Master File or our safety database.

We continue to add new talk studies to our safety database that our partners get to reference as they move drugs through development.

So we're continuing to see growth in the inbound interest.

We've announced a few deals this year, clinical stage deal with Eisai.

We've referenced the commercial deal with Marinus for IV ganaxolone, also a commercial deal with Interventional AnalgesiX for an undisclosed compound.

So we continue to see inbound interests and later-stage licensing deals and growth in our research deals as well, which are kind of the early stage precursor to downstream commercial deals.

Well, thank you, everyone.

A good turnout by the callers and the questions.

I appreciate that.

There's no other follow-up.

I just want to conclude by commenting, while the year has been good, we've got 5 months left, and we expect to have a very busy and productive fall.

Coming off of Labor Day, we have 3 conferences.

We'll be at the Citi Conference in Boston, September 6 and 7. It's the first time we've had an invitation to that conference, so we're pleased to be there.

Rodman & Renshaw will be in New York City, September 10 and 12.

And then, we're pleased to be at the Stevens Conference also in New York in early November.

So we'll be on the road a fair amount, and we look forward to further updates.

Thank you for your time this afternoon.

And that does conclude today's call.

You may now disconnect your lines.