Neurocrine Biosciences Inc (NBIX) 2007 Q3 法說會逐字稿

Welcome to today's teleconference.

(OPERATOR INSTRUCTIONS)

I will now turn the call over to Mr. Gary Lyons. Mr. Lyons, you may now begin.

Thank you. Thank everyone for joining us for Neurocrine's third quarter earnings call. Joining me in San Diego is Kevin Gorman, Chief Operating Officer; Tim Coughlin, VP, Chief Financial Officer; Chris O'Brien, Chief Medical Officer; and, Claudia Woodruff, Public Relations.

The outline of the call today is we will review financials, including today's announcement of the sale-leaseback on our facility. I will do an update on our partnership, also, announced today, with Dainippon Sumitomo. We will cover indiplon preparation and commercialization rights, a pipeline update by Chris O'Brien, and then we'll turn things over for Q-and-A.

So before we begin, let me ask Claudia to run through our Safe Harbor statement.

Good afternoon. I want to remind you of Neurocrine's safe harbor cautions. Certain statements made in the course of this conference call that state the company's or the management's intentions, hopes, beliefs, expectations or predictions of the future are forward-looking statements, which are subject to risks and uncertainties. Information concerning factors that could cause actual results to differ materially from those contained in or implied by the forward-looking statements is contained in the company's SEC filings, including, but not limited to the company's annual reports on Form 10-K and quarterly reports on Form 10-Q. Copies of these filings may be obtained by visiting the investor relations page on the company's Web site at www.neurocrine.com.

Any forward-looking statements are made only as of today's date and we undertake no obligation to update these forward-looking statements to reflect subsequent events or circumstances.

Thank you. Once again, well done, Claudia. Now, let me turn this over to Tim to review financials.

Thank you, Gary. Neurocrine reports a loss of $27.2 million or $0.72 per share for the third quarter of 2007. This compares to a loss of $39.1 million or $1.03 per share for the third quarter of 2006. Our 2007 year-to-date loss is $79.3 million or $2.09 a share. This compares to a loss of $92.5 million or $2.46 per share for the first three quarters of 2006.

Overall revenues decreased on both the year-to-date and quarter-to-date basis from 2006 to 2007 due to the cancellation of our collaboration agreement with Pfizer. However, this decrease in revenues has been fully offset by a corresponding decrease in operating expenses for the same periods due to our 2006 severance program, coupled with broad expense management efforts during 2007.

Third quarter research and development expenses increased by 5% from the previous quarter due primarily to successful patient enrollment in our GnRH Phase 2 DEXA scan trial. We expect this clinical trial to complete enrollment by the end of this year. We expect R&D costs to increase in the fourth quarter as we incur costs for our indiplon Phase 3B program and continue to advance the balance of our pipeline.

Sales, general and administrative expenses have risen steadily throughout 2007 as we continue to expand our pre-commercialization activities for indiplon, working with our ad agency on messaging and communication strategies, ongoing market studies for indiplon and other pre-commercialization activities. We expect SG&A costs to increase in the fourth quarter.

Included in our quarterly expenses are non-cash expenditures. These include FAS-123(R) expenses of $2.6 million and depreciation of $2.2 million for the quarter. Our year-to-date FAS-123(R) expense is $7.8 million and year-to-date depreciation is $7.2 million.

We expect to end 2007 with a net loss of approximately $110 million to $115 million. Given our December 12 PDUFA date and related events, we will not be providing any financial guidance at this time for fiscal 2008.

Our cash balance at the end of the third quarter is approximately $125 million, but we have recently entered into two transactions that will supplement our cash position. The first is a sale-leaseback transaction, where we have agreed to sell our campus for $108 million and lease it back for a term of 10 years. Upon the closing of escrow, we will net approximately $60 million from this transaction after debt retirement and other costs.

We expect this transaction to close in the November-December timeframe. As part of the leaseback agreement, we have incorporated a purchase option that we can exercise to buy that current buildings during the fifth year of the lease.

The second transaction is a licensing of the Japanese market for indiplon to DSP. Gary will discuss the details of this transaction. However, the upfront licensing payment of $20 million is due by the end of this month.

These two transactions will bring Neurocrine approximately $80 million in cash and, accordingly, we are revising our year-end cash projection to the $160 million to $165 million range.

Finally, we are going to put up a financing shelf tomorrow. The last time we went to the market was in September 2003 and we have no plans to do any financing at this point. This shelf is being put into place because our company does not currently have well known, seasoned issues or WKSI status with the SEC.

With that, I'll turn it back over to Gary.

Thank you, Tim. Let me comment on the collaboration announced today with Dainippon Sumitomo for the territory of Japan. As disclosed in our press release and subsequent 8-K filings, you'll note that the deal calls for a $20 upfront payment, payable or due upon signing, which has obviously occurred.

Also, a $10 million milestone tied to FDA approval on or around December 12. So total upfront consideration of $30, with an additional just over $100 million in subsequent development and commercialization milestones, netting the value of this deal in excess of $130 million.

And when we look at other deals that have been done by other biotech companies for products and technologies specifically in the field of Japan, this ranks at the very top of those.

I think of most importance to us is that we're very pleased to have a partner such as DSP, which presently ranks as the number seven pharma company in Japan and has specific expertise in the field of CNS and we think, with their track record, focus and attention on this product, that they will give it the attention it needs to make this a commercial reality as soon as viable and possible.

So our collaboration begins. We'll begin with development effort discussions with them and be able to give further guidance on what we can expect as the next activities rolling out in Japan.

So we're very pleased with that transaction and, as Tim said, the guidance for a catalyst have been that we would complete a deal in Asia by the end of October, which we did, that we would do a sale-leaseback or comparable financing related to our facility which would net at least $55 million, in this case, $60 million, and that would be sufficient to replenish our cash burn for this year, and that objective, I'm pleased to say, has been met.

There are also very important milestones that I'm sure we'll field questions on related to the status of the North American indiplon deal, GnRH partnership and, of course, our all infamous December 12 FDA PDUFA action date. But those remain, we think, the important catalysts that would make this one hell of a year for Neurocrine.

So with that, let me turn this over to Kevin for an indiplon update.

Thank you, Gary. Suffice it to say that the company is on track with all of our pre-commercialization and marketing activities.

On the marketing side, we have made great progress in our materials for professional marketing and, in addition, our consumer education campaign materials are being produced. These we are hoping to get to [DD Mack] by the end of the year. We're working, also, with our PR firm, WeissComm, with press kits and being ready on the day of launch. We also have a complete e-marketing campaign that has been set up in addition to go to DD Mack.

On the medical affairs side, we've been working with several hundred key opinion leaders across the country, both nationally and regionally. We are sponsoring continuing education, continuing medical education seminars, and, also, we've been represented at a number of congresses, most recently the World Congress in Australia, and, coming up, the USI Congress and the PRIMED conferences later on this year.

We have submitted a number of journal articles and we're very pleased to announce that our seminal middle of the night study, which we've referred to as the 209 study, is going to be published this December in the Journal of Sleep.

Turning to other activities for pre-commercialization, the FDA completed all of the manufacturing audits of the third-party manufacturers that we used in the initial submission that we had had. All of our API validation and [MOTS] have taken place. All commercial material for launch is completed and it has been released.

The drug product validation manufacturing is right on track and that's to be completed by the end of this year. Packaging will take place at the beginning of next year, most likely in January. So we are ready for launch towards the middle of next year in all activities.

And partnership, we are continuing to make progress in partnering and our goal, as you know, was to have a partner on board by year end and we continue to move towards that goal.

With that, let me turn this over to our Chief Medical Officer, Chris O'Brien, who will focus on GnRH and CRF programs.

Thanks very much, Gary. We're obviously very excited about the indiplon activity, as Kevin mentioned, the medical affairs group.

In addition, we have the Phase 3B trial that's currently underway. Enrollment is going well and we expect to complete this first 3D study by the end of the year. This is a trial which is going to help us understand how patients with insomnia suffer, the kinds of symptoms and problems that they have, and the unique way that a drug such a indiplon potentially could benefit them.

And furthermore, because of our interest in the impact of effective treatment of insomnia on next day function, we are exploring a variety of assays, that is, measurement tools looking at next day function that we can take into additional studies post-approval. So the 3D program is moving well.

We're also very pleased about the GnRH non-peptide antagonist program. As I think most people are aware, we are currently in the midst of a Phase 2B trial designed to assess the impact of treatment on bone mineral density. So this is six months of active treatment, followed by additional long-term safety follow-up visits. It's quite remarkable. We've had more than 8,000 women call our call center with interest in this study.

We've randomized nearly 200 of the projected 240 subjects and are on track for the first visit of the last subject to be enrolled by the end of the year. This would then allow us to get top line study results after their six-month treatment period in mid 2008 and then, of course, we'll continue with some additional safety visits after that. But the DEXA data will be in hand then.

We also have two other Phase 2 trials that we anticipate starting shortly. We have a Phase 2 randomized placebo controlled double blind trial looking at the recently selected commercial formulation tablet in two doses against placebo and this trial preparation activities are well underway, with an investigators meeting scheduled for January and study enrollment to start around the same time.

We have, in addition, a Phase 2 trial, randomized placebo controlled trial comparing two doses of our study drug with Leuprolide Depot, that is, a Leupron injector, and placebo. Leupron here is an active comparator and this trial will be conducted in central Europe and we are well on our way, working with our CRO and lining up investigators.

For both of these trials, we're going to utilize clinical endpoints for the assessment of pelvic pain associated with endometriosis that we've worked out with the reproductive products division of the FDA. Our recent conference calls have been very beneficial. They have given us guidance on exactly what they would like and they've given us some techniques. We're using a modification to the [Ribroglo and Berman] scale, or the BMD scale, which we've incorporated into the study design.

We also will be using, as I've mentioned, the recently selected commercial formulation tablet. Our bridging study, which we've completed recently, looking at the tablets we've used to date, as well as the new formulation, have been completed and will allow us then to take the totality of this Phase 2 data into the FDA for our end of Phase 2 meeting and it's at that point we hope to secure agreement as to the path forward for pivotal trials.

Maybe I'll pause there and ask Kevin to maybe make a couple comments on the progress we've made for potential partners on the GnRH co-development.

As we had discussed in previous conference calls, we've also made it a goal of ours to have a partner for the GnRH program by year end and we have engaged several partners and, again, making good progress towards that goal to date.

Also, of course, in the pipeline is a substantial program that is the collaboration with GlaxoSmithKline and Neurocrine regarding the CRF-R1 receptor antagonist. As people are aware, there are two compounds that are in clinical trials. The first compound, 876008, has recently completed the proof of concept study, assessing treatment in social anxiety disorder, and GSK has provided us guidance that they expect to announce top line results by end of year. In addition, GSK is carrying out an IBS, irritable bowel syndrome trial, with the results expected at some point early in 2008.

Finally, with the CRF program, compound 561679 for potential use in depression and anxiety disorders has recently completed a Phase 1 multi-dose trial and it would be ready for Phase 2 clinical studies at GSK's discretion.

Lastly, I'll just comment on the Urocortin-2 program for congestive heart failure. As I mentioned in the last call, we are currently evaluating several new formulations of this peptide infusion to allow us to complete a pre-clinical program prior to advancing additional Phase 2 clinical trials in patients with heart failure.

What we have here is a need to give very high doses of the study drug to small animals and to get adequate exposure, we need to us very high concentrations. As this is a peptide, it's been somewhat of a challenge to get the concentrations to stay in solution to give adequate exposure and we're working through these technical issues at this time. For humans, this is not an issue, since we get such excellent exposure to study drug with low doses and low concentrations.

So I think I'll pause there and turn it back to Gary.

Thank you, guys. We're now prepared to open this up for questions.

(OPERATOR INSTRUCTIONS)

We'll take our first question from the line of David Woodburn of Thinkequity Partners. Go ahead, please.

Thanks, and congrats on the Japan agreement. I guess, first of all, on the indiplon partnering discussions in the U.S., does it look like the terms will be at least similar to the old Pfizer terms in terms of either royalties, sales force allowances or milestone payments?

I think it would be premature to be talking about terms on deals at this point in time, but suffice it to say that if you looked at this Japan deal, this was a very nice deal. It puts a real good valuation on the product, I think, worldwide.

And I guess if I could ask, as a follow-on, are there any near-term milestone payments that could be realized from the CRF program with Glaxo? And then, I guess, related to that, could you remind us how various milestones might show up on the P&L, say, in the next months?

The next big meaningful milestones from GSK on there would be the beginning of Phase 3 with these compounds. So that won't be showing up over the next six months.

However, we're working with GSK right now, as Chris had said. The backup compound has completed its Phase 1s and we're working with them on potentially starting the Phase 2s with that compound. But that's completely up to Glaxo and as far as timing for whether that would start.

The nearest term milestone would be, as Gary mentioned, the $10 million milestone from DSP should the FDA action be positive on December 12.

And then are you going to fully realize that in the quarter or is it something that gets amortized?

There are actually two components to that milestone. The payment, David, for that is delayed into Q1. So we would be recognizing that in Q1. As you're aware, this agreement just got finalized. So right now, the accounting we're going through with Ernst & Young, our auditors, but the $20 million upfront is going to be amortized over this development period. So that will not come in as a one-time hit. The $10 million, right now, we believe is going to come in as a milestone and be recognized in Q1.

Great. Thank you.

Thank you. We'll take our next question from the line of Thomas Wei of Piper Jaffray. Go ahead, please.

Thanks very much. I was wondering about this Phase 3B middle of the night dosing study. This seems to be the angle that you're pursuing for indiplon. Can you give us a little bit more detail on the trial design and when exactly you would have data and how it's different from the Phase 2 study that you had run previously?

Sure. A couple of good questions. Firstly, the Phase 3B study is an exploratory study to allow us to understand the tools that are used to assess next day functioning. This is a phrase that has been used in pharma and in the clinical arena for some time without much precision. You often hear next day function describing actually a simple visual analog scale for sleepiness or alertness in the morning, and, clearly, the literature says that this is inadequate.

So we've taken a variety of tools that have been used for next day function, measured at various time points during the day, for example, with a PDA, and we're trying all of these scales out in this exploratory study where we assess the impact of middle of the night dosing, see which scales move, which ones might be useful tools in the larger post-approval trials, and we should be able to get a sense of that early, with readout early in 2008.

And should we think of this whole next day residual sedation argument as -- is that what you see as the biggest barrier for developing this market?

No, I don't. With a drug like indiplon, its short half-life, we have just an overwhelming amount of data that clearly supports that next day impairment due to drug effect is minimal to none, even with middle of the night dosing. So that's a unique aspect, I think, that indiplon can bring to the table. The next day impairment, that's an attribute associated with long half-life drugs.

Sure. I wasn't so much arguing about indiplon's profile, but I meant more in terms of when you do your market research on the middle of the night market, what is right now, from a physician or a patient standpoint, what do you perceive as the challenges in developing that market?

I think the biggest issue is, from the patient stand, is the issue of control, freedom to treat their symptoms when needed, whether it's trouble falling asleep at the beginning of the night or trouble falling asleep during the middle of the night. And right now the way the drugs are prescribed, you take it at the beginning of the night, even if you're not sure whether you're going to need it or not, and so that seems to be a barrier that we can overcome.

And as we've talked about in prior calls, Kevin has mentioned kind of the changing sleep epidemiology research, we realize that patients are really suffering in ways that are somewhat different than kind of the dogma that's been in place over the last five or ten years. They have frequent awakenings during the night, with trouble getting back to sleep, but they're unpredictable, they're not every night, and patient actually would prefer not to take a prophylactic dose every night.

All of this assumes, of course, that your agent is both safe and effective and our market research shows that existing products suffer from lack of efficacy, whether it be onset or maintenance, whether it's early or middle of the night. So having a product that delivers reliable efficacy with minimal safety issues and reliable next day lack of sedation we think is a very different profile. And I should remind you, Thomas, the 209 study that we published in Sleep was a Phase 3 study.

Yes. I'm sorry, I misspoke about that. And then just lastly, as we think through pricing, and I'm sure you've done a lot of work on this, and if we're so close to approval here, how do you -- how should we think about the various questions that get raised, like if you're really going after middle of the night and pure end usage for patients. Does that mean that the per pill cost of therapy is probably going to look a lot higher than even the branded insomnia agents on the market? How do you deal with the fact that people are going to end up taking your drug even less than they would probably a typical insomnia agent?

Well, no, I wouldn't look at it as having a higher per pill cost at all, Thomas. I think from a managed market standpoint, this is a very attractive opportunity, because it is a drug that would be, if approved, given in an as you need it type of situation.

However, if you do look at the current usage of the sedative hypnotics that are out there, patients put themselves on holidays from the drugs. They clearly have an apprehension about continuing to take the drug every night. And so when you look at actual usage, the patients do take themselves off the drugs quite a bit. So I wouldn't see that there would be any incremental cost on a per pill or even on a per patient basis.

And in our open label trials, when patients have the discretion to take drug when they want or even in the 209 Phase 3 study, consumption averaged between 17 and 22 days per month.

Thank you. That's very helpful.

Thank you. We'll take our next question from the line of Ajim Tamboli of Lehman Brothers. Go ahead, please.

Good afternoon. Congrats on the deal today. Just to, I guess, get some more detail on it and in terms of the royalty rate, can you give any guidance there?

Then, also, in terms of the regulatory process in Japan, what can we anticipate and how do you view the commercial opportunity there, as well?

The Japanese market is a very different market from the U.S. market. There's a number of competitors there. It's a highly fragmented market by the benzodiazepines. It looks a lot like the U.S. market did about 12-15 years ago. So having said that, going to the non-benzos, as the market has been going, I think it's going to be a good marketplace for indiplon over there. The royalty situation that we have with deal in Japan is similar, if not better than the royalty situation that we had with Pfizer in Japan for the product over there.

And what was the second part of your question?

I guess the regulatory --

The regulatory environment. [Kosha Road], that's where you really are at an advantage with a company such as DSP. They really have a very good relationship and understanding of the regulatory environment over there and they are now going to be meeting with the regulatory agencies in order to map out what is the study that they're going to need to do over there to gain approval.

We do have a open IND equivalent over there. We've run a Phase 1 study at this point. So you could imagine that, at a minimum, they need to do their dose ranging studies there and then through their negotiations, they will determine what kind, if any, of a Phase 3 program they would need to conduct.

Okay. And then with your guidance for conclusion of discussions on indiplon commercialization, I guess, a partnership by year end, I guess is it safe to say you want to launch the drug next year with a partner or is that something you're willing to do on your won if not completed by end of the year?

No. We would certainly prefer to launch this drug with a partner by mid year and, again, our goal, as we stated, is to have a U.S. partner on board by end of year.

I think it's also safe to assume the partners we have -- or safe to say that the partners we've discussed with thus far have been very impressed with the market readiness and preparation of the marketing group and there are no stones unturned from managed care and pricing to brand development positioning, medical education, distribution.

Everything is in the works, but I think, as I've said in earlier calls, as you get close to the launch, the scale of those things need to improve. So a partner is not going to have to step in and re-create, but rather add extra muscle and horsepower to what's already been done.

And then with regards to a GnRH collaboration, it sounds like that actually could come before, I guess, bone data the middle of next year. So I guess what are the rate limiting steps there? Is that not data or, I guess, is more discussion ongoing?

Best partner, best terms, but adequate interest, we feel comfortable. Again, our goal is to conclude a deal by year end, but on the value that we place on the compound. So we're active with many parties right now.

Thanks for taking the questions.

Thank you. We'll take our next question from the line of Ian Somaiya of the Thomas Weisel Partners. Go ahead, please.

Thanks for taking my question and congratulations on, I guess, both the deals today. On the GnRH program, it seems like partners or potential partners are through clinical diligence. I'm just curious what type of feedback they provided in terms of the data you've generated to date.

And I guess secondly, what would they like to do prior to potentially starting Phase 3 studies? Are there clinical trials that they would like to explore, settings, patient types, anything of that sort?

Since this involves multiple partners with different agendas, concerns development, expertise, Chris will generalize.

Yes, thanks. Thanks for the reminder. So the good news is when you engage potential partners in diligence, you get to shake out any warts, and so we've actually learned quite a bit from these discussions. I'm happy to say that the responses have all been very favorable. Neurocrine is a small company, but the quality of the data, the quality of the program has all been received favorably.

We've had some discussions about which additional studies would be of potential benefit before an end of Phase 2 or during Phase 3 and they're all the kinds of studies that normally you talk about. When do you do your QTC study? When do you do your additional drug-drug interaction studies? When do you start exploring other potential indications in women's health and in men's health?

And so those are the kinds of discussions that we've had, but in terms of the 603 study, the six-month trial that's currently ongoing, the two other Phase 2 studies that I've discussed, we've had good support and comments for those.

I don't think there have been partners who have added beyond that list. Had some feedback on different design issues or whatever for those, but I think, from a Phase 2 standpoint, view those as being adequate for end of Phase 2 meeting. But as Chris said, perhaps other additional, which wouldn't be rate limiting, Phase 1 studies, like drug interaction, whatever.

And all of the parties that we talk to, of course, they have expertise in women's health and they all recognize that this issue we've just addressed with the FDA, namely, the endpoints and the modified B&B, was a very important milestone, which any company going after endometriosis is going to have to deal with.

Is this deal going to be limited just to the U.S. or is it going to be a U.S.-Europe deal?

Could be worldwide.

Could be worldwide, okay. And given the cash, I guess, that you've built or been able to salvage this quarter, should we expect the deal to focus more on downstream royalties from the drug, sales of the drug or is it focused just to beef up the balance sheet further?

No. We approach deals in their totality and so we are committed to get the appropriate value on the upfront and, in addition, though, we have a great belief in the product. We want to be able to share significantly in the backside.

Any other formulation changes you think would be necessary prior to running Phase 3s?

No.

Okay. Thank you very much.

Thank you. We'll take our next question from the side of [Richard Cabot] of [Ameritec Financial Group]. Go ahead, please.

Thank you. Looking at today's Japanese deal, which seems to be extremely beneficial for you, and trying to extrapolate out to a worldwide basis, it seems to me that you'd be in as good a position or almost as good a position as you were worldwide with the Pfizer deal. Is that nave on my part?

Well, I don't know if I would say nave on your part. I think that are -- we're getting some feedback here -- but I think that there are various ways that you construct deals. But you are correct in the fact that the deal today I think puts a very good valuation on this and really solidifies the value of this asset.

Okay. And my last question would be given your current valuation in the marketplace and the drugs you have coming on-stream, it would seem to me that you would be an extremely attractive acquisition target for a big pharmaceutical company. I was just wondering why we have not seen someone approach you on that.

Well, because we're not, at this valuation or anywhere near this, open to want to have such discussions. So, one, the key ingredient in all of our partnering discussions have to insist upon standstills prior to going into in-depth diligence. So if a partner were to see more value there than they thought the deal would be worth, then this would preclude them from acquiring a position in the company.

Then you have others who haven't been in the front door, I think, which probably would have no basis on which to make an offer and, if so, it would have to be hostile and meaning they would not have access to any confidential information. So I think that creates adequate barriers at this point.

Thank you very much.

Thank you. We'll take our next question from the line of Eun Yang of Jefferies. Go ahead, please.

Thank you very much. The $20 million milestone, I'm sorry, upfront payment from the Japanese company, you said they're going to be amortized for the development period. Could you give us a little bit more detail on how long that may be?

For the Japanese development period, I believe DSP has to -- go ahead, Kevin.

DSP is going to need to talk to the regulatory agencies and then we're going to have much better guidance on what that development period, which would encompass the regulatory review time in Japan, too, which can be variable.

But the cash is in the bank, earnings flow is, obviously, not that significant.

The second question is on the GnRH antagonist. So you have this commercial formulation tablet going into Phase 2 early next year. But that's for commercialization. So can you actually move the current formulation into Phase 3?

We would not move the formulation that we've used in the Phase 2 trials to date into a Phase 3 trial. It was lacking certain optimal manufacturing characteristics. It was a fine tablet. It just was not one that would be the one we would take forward.

Okay. Thanks.

Thank you. We'll take our next question from the line of Joseph Carroll of IMS Health. Go ahead, please.

Thank you for taking my question. Now, this hasn't been explored, but I wanted to ask. Given your recent cash flux position, are you considering forming your own field force?

Yes. I think in an indiplon deal, what we said, or even GnRH, but let's start with indiplon, that we would like a deal modeled after the Pfizer deal, which included upfront payments, milestones, obviously, the reasonable equitable share of sales in the form of royalties, and the ability for our partner to help fund the creation of the sales force to put us back, in whole or in part, where we were with Pfizer so that we can play an active role in the promotion of indiplon and be in a position to add other end license products to that.

Okay. My question was whether you would go about this solely on your own, but that doesn't seem to be the case.

Hello?

There has been a brief interruption. The speaker's line has been disconnected. He should be dialing back in shortly.

Should I dial back in?

You can go ahead and hold.

Hello. We're back on.

Yes, thank you. This is Joe Carroll here with IMS. My question actually had to do with, yes, I understand the idea of partnership, but I also was considering the idea of whether or not you would consider going it on your own, Neurocrine Biosciences going it on their own with indiplon.

No, that is not what we're planning to do. By having a partner, I think that's the optimal way of doing it, but we do want to be able to participate in that.

Very good. Thank you.

So our information -- since that is the last question, however, if there's anybody else who wants to get in the queue, you can do so now or, based on what we've said, if you have other questions you want to discuss offline, feel free to call us directly.

Is there, moderator, anyone left out there hanging?

Currently, there are no questions.

(OPERATOR INSTRUCTIONS)

There are still currently no questions in the queue.

Very good. Thank everyone for joining us and, again, feel free to follow-up, and look forward to reporting a strong quarter in January.

Thank you. Goodbye.

That concludes today's conference call. You may disconnect at any time.