Neurocrine Biosciences Inc (NBIX) 2010 Q1 法說會逐字稿

Good morning everyone, and welcome to today's program. At this time all participants are in a listen-only mode. Later you will have the opportunity to ask questions during the question and answer session. (Operator Instructions). Please note today's call will be recorded. I will be standing by if you should need any assistance.

It's now my pleasure to turn the conference over to Kevin Gorman.

Thank you very much, and good morning everyone. Thank you for joining us this morning.

As usual I am joined here with Tim Coughlin, our CFO; and Chris O'Brien, our Chief Medical Officer.

Before we get started, I'd like Jane Sorenson, in charge of investor relations, to read our Safe Harbor statement. Jane?

Good morning. 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 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 report 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 website 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 Jane. So what we are going to do this morning is, Tim will take you through our financials, and then Chris will give you an update on our programs.

Just to start out, I hope everyone had a chance to see our press release last night on the first-quarter results. As you can see, from both a financial standpoint and from our clinical development standpoint, all of -- all our programs are right on track. The numbers are as we have even guidance for at the beginning of the year. So I look forward to your questions as soon as Tim and Chris are done speaking. Tim, do you want to start?

Good afternoon -- or morning to everyone, I should say.

We released our financial results yesterday after market close. We met our targeted burn from operations for the quarter of less than $12 million, as well as our budgeted revenue and expense items.

Our loss for the quarter was $8.6 million or $0.19 per share. This compares to a loss of $19.7 million or $0.51 per share for the first quarter of last year.

The reduction in net loss is primarily due to a restructuring program implemented in the second quarter of last year coupled with strong cost control measures across all functions within the company. This was slightly offset by an increase in external clinical development costs.

Research and development costs as well as general and administrative costs were in line with our expectations for the first quarter and significantly lower than the prior year, primarily due to lower personnel-related costs and across-the-board reductions in non-clinical related expenses.

We continue to invest in our elagolix program, in particular the 901 Daisy study. The study recently completed the eight week placebo-controlled portion of the trial, and we are actively preparing for the end of Phase II meeting.

We are advancing our VMAT2 program in movement disorders, which recently commenced its second Phase I trial in Canada. Additionally we have been industrious in moving our other programs forward through joint ventures with academic or other researchers at little or no cost to Neurocrine.

Chris O'Brien, our Chief Medical Officer, will speak to our clinical programs in greater detail later in the call.

Our early March we completed a public offering of approximately 10.5 (technical difficulty) million shares of common stock, yielding gross proceeds of approximately $23 million. This offering was very successful with a significant number of the new shares being placed with blue-chip, long focused mutual funds.

For 2010 we reiterate that our operations burn will be approximately $40 million to $45 million, exclusive of any partnering agreements. This burn includes all the activities related to our elagolix and VMAT2 programs as well as our base research programs.

Our operations burns for the second quarter will drop to approximately $11 million, and additionally we plan to file our 10-Q with the SEC this morning.

Thank you for your attention, and with that I'll turn it back over to Kevin.

Thanks Tim. So Chris, do you want to give an update on each of the programs (technical difficulty)

Certainly. As you know, we have continued to focus all of our attention and resources on the elagolix program. And as Tim mentioned, the 901 Daisy PETAL study has moved along nicely. This is that trial that we began screening patients last September. We completed randomization in February, and we just recently had the last of the women enrolled in this study complete her week eight visit, which is the primary placebo/elagolix comparison point. The data is now being gathered by our field monitors, and the electronic data transfers are underway.

We are still blinded to the data, but once the QA/QC process is done, we will be able to take a topline look at the treatment group output, and we will report as soon as we have that available the results of the trial.

You may recall that the 901 trial is designed to do two things for us. One is to confirm the utility of the modified wording for the non-menstrual pelvic pain scale that we worked out with the FDA. And the second is to give us an appreciation of the effect size for elagolix versus placebo on non-menstrual pain so that we can properly set up for our Phase III trial.

The 901 study has been going well, we have an excellent group of investigators, we've learned how to do recruitment trials -- recruitment for these trials quite well, and we had a tremendous response for women who are interested in well-tolerated oral therapy for endometriosis.

To date we randomized 137 women in the trial, you've seen us present or talk about the baseline characteristics from the blinded data that we have from the screening period, so we are very happy that we appear to have avoided the floor effect associated with the previous non-menstrual pelvic pain scale.

I will mention that scale was the one that the FDA gave to us, it's not one that we chose. And that's the one that gave us some problems with the non-menstrual pelvic pain. We went back to the FDA, renegotiated or reworked wording of the scale, and that's what we are confirming, utility of the modified wording scale in the 902 trial.

So that's going well. We've had very few discontinuations in the trial and no surprising safety signals so far, and we look forward very much to presenting the topline data at the end of May, as we have promised.

The rest of the elagolix efforts are intensely focused on integrating the safety and efficacy data that we have to date so that we have a very robust end of Phase II package to put in front of the division of reproductive and urologic products at the FDA.

To remind you, this includes 18 studies, nearly 1,000 -- or over 1,000 subjects total have been in this program, and we will have a robust safety and efficacy package to put in front of the agency.

Our plan -- once we have the 901 data in hand, we will then integrate that information into the end of Phase II data package, and then we formally will request an end of Phase II meeting from the FDA. That request will go in, a few weeks after we've gotten the 901 data, so let's say late June, and that's a 75-day -- sorry -- a 60-day clock for that type of meeting. So that would mean that at the FDA's discretion, sometime between mid August and early September they will hopefully grant us a meeting date, at which time we can review our data package and ask if the division indeed concurs that we can move forward into a Phase III program.

At the same time, in parallel with the end of Phase II meeting request and data submission package, we will submit the proposed protocol for the Phase III studies in the form of a special protocol assessment. And that will be reviewed, and most of the time an SPA takes two turns of the crank, if you will. The timing of the review and a response overlaps with the end of Phase II, so while we don't have exact dates on that -- again, it depends on the FDA -- we should end up with a response around the same time that we have completed the end of Phase II meeting, which puts us in a good position to be able to initiate Phase III trials toward the end of the year, given that we have our partnership in place.

As Kevin has said before, we want to be ready to start, but we will not be starting the Phase III trial without that partnership agreement in place.

So that program is moving along very nicely. We understand a lot about this molecule, we have worked through some changes from the FDA as we started our Phase II programs with a monthly recall scale, the same scales that were used to approve all the other endometriosis drugs. We were then asked to use a daily scale with the FDA wording that they gave us, ran into a very nice result with dysmenorrhea but a hiccup on non-menstrual pain. We think we've fixed that problem, we are confirming that with the 901 data -- that is our expectation that we will confirm that with the 901 data, and that will put us in a good position to request the end of Phase II meeting this summer.

So that's the elagolix program, moving along nicely.

Just as additional comment on that, the rest of the program, the CMC and the preclinical aspects, are in good shape. My colleagues in preclinical are well into the two-year carcinogenicity study, and that is moving ahead without any surprises at this point. So that will obviously be folded into the end of Phase II data package, all the preclinical work to date, when we meet with the FDA.

So that's elagolix. Our other programs -- obviously as Tim and Kevin mentioned, we have our Urocortin 2 program, and our colleagues at the cardio endocrine group in Christchurch, New Zealand are running the Unicorn trial, which is a Phase II study looking at acute decompensated heart failure, specifically comparing standard of care to standard of care plus Urocortin. And they are about a third of the way through randomizing the planned sample size, and so far the feedback has been the study is going well, no safety problems. And we are looking forward to seeing how that moves along.

Obviously this is a trial run by the academic group, not by Neurocrine, and it's a single center. So it's difficult at this point to give actually a target date on when we will see data from that trial. It is contingent upon the emergency room there in Christchurch, New Zealand.

That's Urocortin. Oh, the other aspect of Urocortin that we mention in our press release, one of the things we are interested in doing with this infused peptide is understanding all of its attributes so that we can take advantage of potentially positioning Urocortin in subsets of heart failure patients that might have regulatory pathways that are a little more clear and expedited, if you will, than simply acute decompensated heart failure.

And to that end we've entered into a collaboration with a research group in Scotland that is setting up a series of very small Phase I and Phase II studies in healthy volunteers and heart failure patients, doing some highly specialized clinical pharmacology and translational medicine type studies to better understand the specific effects of Urocortin 2 on arterial vessels, on nitric oxide activity, on perfusion attributes in different vascular beds, etc. So this will be information that we will use as we pull the -- all the clinical data and ultimately find a partner for Urocortin 2.

The GSK partnership with our CRF1 antagonist is moving along as previously discussed. As you know, GSK has set up and implemented and is near completion of a Phase II major depressive disorder trial conducted in the United States. And this program is on track to complete the treatment period, approximately 150 subjects with major depression, this summer, and contingent upon their ability to close out the trial and then provide us with the results sometime later this year, we will then be able to report whether 679, the Neurocrine CRF1 antagonist, has had an impact on subjects with moderate to severe depression. So that trial is on track per GSK, and we look forward to sharing those results with you later this year.

We continue to work with our outside consultants on our -- on Indiplon to see if there is a path forward with the neurology division at the FDA. And as we learn more about this, we obviously will share, but we are working hard behind the scenes to see if there are some things -- ways of addressing the concerns that the FDA had raised about our sedative hypnotic drug at the time of the second approvable letter.

And then as the VMAT2 program, as Tim and Kevin have mentioned, we are very excited about that program. As I think some of you know, my background as a neurologist in general and specifically in movement disorders has been to find some therapies that meet some unmet needs, and one of those I am very interested in is tardive dyskinesia, the hyperkinetic involuntary movements that occur after people have been exposed to dopamine antagonists, antipsychotic drugs, and in some cases antiemetic drugs, drugs such as metoclopramide -- or Reglan.

And there are no approved therapies for this. We have had some discussions with people about whether this might be an orphan disease drug, and that remains to be determined. Some years ago several drugs have applied for and received orphan status for tardive dyskinesia.

The good news and the bad news for companies and for patients, unfortunately, is that the incidence and prevalence of tardive dyskinesia has increased considerably over the last years, and it's quite possible that the prevalence of tardive dyskinesia has now exceeded the cut-off or the threshold for orphan disease status. But this is something that -- we will continue to review the epidemiology, talk to our consultants. And sometime as we are in the discussions with the FDA around the IND filing, that's when we will have a clearer determination of whether orphan status is available for something like our 98854 compound that we have taken into clinic.

So the good news, we -- as you know, we had a single ascending dose trial that give us a pretty clear go signal with a PK profile and the safety profile that we were looking for. We then met with Health Canada, got approval to proceed with a repeated dose trial, that is currently underway in Canada. And we have dosed our second dosing period in that trial. That's going along nicely. We will use the data ultimately when we complete the repeated dose portion of that study in the summer to assess whether we have a go signal to remove then -- to move then into a proof of concept trial, which we would like to begin toward the end of the year. So that program is going along very nicely, and we look forward to updating you with progress as we complete the repeated dose trial later, sometime in the summer.

So with that, I guess one final note. Our basic research and discovery group, as Kevin mentioned, is continuing to be active despite our rather small numbers here and Neurocrine. We have about five targets at any given time that we are working on in CNS and endocrine diseases, and the group has taken advantage of our automated laboratory resources and are currently hard at work screening and advancing leads against several targets. Some very interesting stuff.

We hope that some of these make it to the point where we can begin some IND-enabling tox studies in the near future. My goal is to be able to get output from some of these discovery efforts into the clinic next year. And so we'll keep you apprised of that status as news comes out.

So at that point I'll turn it back to Kevin and look forward to your questions.

We've -- just to add one more, a bit under what Chris has said, the elagolix program and all the programs are moving along right on schedule, just as we had been talking with most of you about for the past several months.

The -- we've had continuing discussions with the FDA, it's been a very communicative division with us. They are well aware of our timelines and expect the end of Phase II request and the SPA coming down.

So the only piece that's left in place is, as Chris said, at the end of this month getting the 901 data in -- or the end -- I'm sorry -- of May -- I'm getting a bit ahead of myself -- the end of May and getting the 901 data in and getting that to the agency.

Again, we are leveraging our relationships with researchers both in the United States and throughout the world on several of our programs in order to make our resources go even farther. And we've got a good discovery platform here at Neurocrine that's been very productive. Every single compound that we have -- small molecule compound that we have in the clinic right now either alone or with our partners was discovered and developed here at Neurocrine. So we count on our discovery platform in the future to give us more compounds.

So the only final thing I'll say before we open it up for questions is I was very pleased with the fund-raising that we did earlier this quarter. It wasn't just the cash to bring into the company to put us in a real good position to get through all of that elagolix program as far as we're going to take it and be in a good position to complete our negotiations with a partner, but it was the intent to bring in additional, high quality, long investors, as Tim had mentioned, and we were quite successful with that. I think the market has responded well to our fundraising efforts.

So we are positioned well right now. We continue to be a multifaceted company with programs that are late stage all the way through early discovery. We are well financed at this point, and I think we are poised for some real great success here, and a lot of data is going to be coming down throughout this year, starting with the 901 data, leading through with the CRF data, additional VMAT2 data. So we are looking forward to the rest of this year.

Now with that, I'd like to open it up to questions.

(Operator Instructions). Brian Abrahams, Oppenheimer.

This is a [Brian Tojahara] in for Brian Abrahams. But I guess my first question, on elagolix, is what percent of patients would you say have continued on into the open label extension?

So just to clarify the term open label extension, this is actually a six-month trial. The latter four months are open label, but it's not an extension. So the -- we randomized 137 women in this trial, and we've had less than 10% discontinue so far during the study. I won't know what the exact final number is at the week-24 visit until the study is done. But the drug is very well-tolerated.

Great. What are your expectations for potentially reporting the full data (inaudible - microphone inaccessible) later this year? Would this be at a medical conference? Or would you just press release the data?

We will probably press release it. As you know, for most of the medical conferences the deadline for getting an abstract in is often six months before the meeting. And because this conference -- this trial will not finish up until late Q3, I think the best way of informing our investors is through a press release.

Great. Thank you so much for taking my questions.

Craig Gordon, Cowen & Co.

In terms of the partnership talks, I know you guys obviously aren't going to say a whole lot, just curious to kind of get your general feeling as to how they are going and if you think that all your timelines are still tracking okay.

Yes, the talks are with multiple parties, they are going well. As you can imagine, four weeks out from important data point, that's what ourselves and our partners are looking at. We anticipate and have prepared everything for -- to bring in the partners when that data is in so that they can come back in. The partners only need to refresh themselves just on the 901 results and data set, and so that will all be available to them, and we will move forward from there.

So assuming you guys can get the Phase III started by year end or perhaps worst case early Q1, what are your timelines in terms of when you think you can complete enrollment and have all the data to satisfy an MDA filing?

So the general expectation for conducting two efficacy trials and an additional one-year safety trial is about two years. So pick your time point, if that's late 2010 to late 2012, that would be about right.

Yes. And just to add on to that, of course this is all contingent on meeting with the FDA and getting good concurrence on the look of the Phase III program, and then it's also going to ultimately be up to our partner in addition and what their expectations are going to be and what they may bring to the table.

Then one final question, if I may. The VMAT2 program, assuming you guys are able to begin a dose ascending Phase II trial, do you think that completing that and having that all teed up to go would be -- is that still on track for like a mid next year event?

Yes. So we -- we clarified that we wouldn't have an ascending dose, it would be a proof concept study in patients with tardive dyskinesia, a typical Phase IIa study. And we would probably have results summer of 2011.

Great. Well, congratulations on all your progress, thank you.

Jon Lecroy, Hapoalim.

Could you give us any update on guidance for the year, and with the new raise you did, how long you expect that cash position to last?

We ended the quarter with -- using round numbers -- about $70 million in cash, $40 million to $45 million for the year, so we had $12 million -- again using round numbers -- first quarter burn from operations. Second quarter is going to be at around $11 million. And then kind of trailing down from there. So we get down to a base burn in the neighborhood of $8 million to $9 million of base operations given our current building situation. So you can do the math from there to figure out how long we have, but the runway is over 18 months at this point.

Okay. And any line item guidance for the income statement?

Line item guidance, I think if you look at the G&A line, that line is going to remain pretty static during the period, so in the $3 million range. And you're going to have a fluctuation in the R&D line as the costs from the elagolix programs start to wane because we are not going to be initiating Phase III.

Great, thanks.

Stephen Willey, Thomas Weisel.

Just one quick question here on -- can you just comment on maybe how the visibility into the end of Phase II meeting and the SPA requests are -- is driving the pace of the partnership discussions?

Sure. I think that in all of the discussions with all the partners that we have had, obviously you map out what our expectation is and what the partner's expectation is for what a Phase III program is going to look like, which is -- and each of us checking the boxes for all the things that the agency is going to be looking for in an end of Phase II meeting. So I think we have good alignment with the partners that we are in discussions with on that.

If you're asking will a partner need to -- want to be at that end of Phase II meeting? I think certainly in several cases that is true. In some cases it may not be true, maybe a partner may want -- one or more may want to wait until that end of Phase II meeting to make sure that the alignment that appears to be the case with ourselves and the agency is actually firmly in place at an end of Phase II meeting. But that is not the case with all the parties involved.

You don't necessarily feel that the results of that meeting and the granting of and SPA will preclude anything on the BD front around elagolix (multiple speakers)

No, I don't think that is necessary. However, we are fully prepared that if that's -- if that turns out to be the case, that we are in a good financial shape and we have everything in place that that can easily be done here.

Thanks for taking the question.

Jason Napodano, Zacks Investment Research.

Just a question for Chris on VMAT2. If tardive dyskinesia doesn't look like an orphan indication, are any of the other potential indications for the drug orphan, like Huntington's or Tourette's?

The answer is yes on -- you could certainly apply for orphan status for Huntington's chorea, although it's not clear whether that would be the best use of the VMAT2 program. In some ways the orphan status is -- can be a good thing in that it may slightly improve the facility of communications with the division that you're interacting with at the FDA, and it also may allow you to have a slightly smaller data package, slightly fewer trials, for example, or fewer subjects in the trials. And ultimately of course there are some beneficial aspects if you needed exclusivity protection, for example, if you had weak IP on your module. In this case this is in NCE from our labs that weak IP shouldn't be a restrictive -- won't be restrictive factor.

So going after tardive dyskinesia is a much bigger population, it's greater -- if it's greater than 200,000 patients in the US, then potentially it's a more attractive market opportunity as well.

We saw with the recent orphan status with Xenazine that there were some challenges for getting that drug approved, that the division -- the neurology division at the FDA clearly had certain objections to approving that drug for chorea associated with Huntington's disease, and it required an advisory committee to kind of get that over the line. So it's not a slam-dunk there. There are arguments to be made other ways.

With Tourette's syndrome, that's an interesting opportunity. The only drug approved for the treatment of tics currently has a significant set of limitations due to safety profile. And there is an unmet need. Our compound 98854 could certainly be appropriate for tic disorders associated with Tourette's syndrome, but as Tourette's is primarily a disorder of adolescence, ages eight to 21, there are some special requirements in terms of pediatric drug development that would make it a more extended development process with additional safety hurdles to clear.

And it's not clear -- the epidemiology of Tourette's is something that's in flux. And it's quite possible that the numbers that have been used in the past for Tourette's, i.e., 130,000 people in the US, in fact may be a gross underestimate. So that may face some of the same hurdles as tardive dyskinesia.

So I am not wed to needing to have an orphan drug, we see that TD is a clear opportunity, and if we end up with a kind of safety and PK profile that we think we will get from this highly selective molecule, then we have a good opportunity no matter what to bring this forward.

I would just say that going into our decision making, because we think about this a lot, starting as we advance a compound through preclinical development, there are three things that went into the -- our thought process here is that there's little if anything being developed in tardive dyskinesia right now. That's one from the competitive landscape. Number two is it is a growing and severe problem. And we would like to be able to address markets like that and patient need like that. And number three, when looking directly at your question for orphan or non-orphan indications, one of the biggest things that orphan does for you, in my estimation, has to do with protection of your compound. And we don't need that. We have an NCE here, and we think we will end up with a very strong patent position in that.

So that's kind of the thinking that went into our choosing TD as the initial indication.

Thank you, I appreciate that color. As far as CRF1, the trial that Emery and Mount Sinai are doing, why would that take several years to complete? Is that a long enroll?

In contrast to the major depressive disorder trial, which is a well-run, efficient, multi-center trial that GSK obviously has considerable expertise in executing, these other trials that you've read about or we have talked about are typical investigator initiated, academic, one- or two-site trials that have none of the bells and whistles through recruitment and none of the urgency for a completion that an industry-run trial would have. And so it's subject to all those limitations for recruitment, and the inclusion/exclusion criteria are such that it's a limited population that you're addressing.

Yes. In addition, the GSK and particularly their neurology set has had a long-standing relationship with Emory University, and the CRF trials and the program that they have with them is just one compound among several in different mechanisms through a big program project grant that they have there.

It would seem like if GSK was truly interested in that indication, they could speed it along. But that's not the case?

I think that what it is is that GSK, like many pharma and like even ourselves, leveraged their resources with both institutions that they have great and long-standing relationships with in order to utilize a new mechanism to explore it in different areas, while they put all of their efforts and focus on major depressive disorder and [general, like] the anxiety disorder.

Thank you very much.

(Operator Instructions). Larry Smith, DLS Research.

Chris, in 702 and in 703 the FDA imposed upon you to scale for measuring non-menstrual pelvic pain which lasts -- the range to really detect changes given that some women probably had little or no pain on several days. Could you give us an insight into how you changed the FDA suggested scale to the scale that you're using in Daisy PETAL? And also you've indicated I think that you looked at blinded data from the screening period in Daisy PETAL that suggested that your scale did have more dynamic range. Could you give an insight into what you did and what the screening period result indicated the new non-pelvic -- or non-menstrual pelvic pain (technical difficulty) scale might do for you?

Thanks for the question. So the main change with these scales had to do with the descriptors or the scores. All of these daily scales have looked at a version -- a modification to the old B&B scale where you look at none, mild, moderate or severe. But the issue is, what are the descriptors that support each of those severity levels?

And what we found in our extensive focus group research and cognitive debriefing efforts is that women with endometriosis have intense dysmenorrhea that is consistent and moderate or severe and disabling on menstrual days. What varies among women with endometriosis, even women with severe endometriosis, is the frequency, intensity and impact of nonmenstrual pain. So we find that it's extremely variable, and women with endometriosis will tell you that nonmenstrual pelvic pain is intermittent, rarely severe, and almost never disabling, because they have to go to work, they have to raise their families, etc.

So the change was simply aligning the descriptors with the nonmenstrual scale with what we found in our focus group, that is, basically removing some of the disability component, if you will. And when we took the results of our focus group and our clinical work into the division at the FDA, showed them the results of our trials -- Kevin has mentioned, we've had multiple, very productive and collegial discussions with this division, and they have complimented Neurocrine on the work that we've done, the fact that we are listening to the patients and listening to what they are telling us. And they've said, this appears to match -- the scale appears to match how women actually experience their symptoms. That has allowed us to go into the 901 study.

Now, one other bit to emphasize. As you pointed out, the nonmenstrual pelvic pain doesn't occur every day. So if you're collecting data on a daily basis for a month and you have -- let's say you have moderate or severe nonmenstrual pain on 10 or 15 days a month and the rest are either none or mild, what's the best way statistically to deal with that?

Historically people have taken these scales and just reported a mean score. And as we've spoken about publicly, the original FDA wording resulted in very low mean values in the 0.8 range. In our modified wording, the refinements that we have currently put into place and that have received favorable FDA response, we are seeing mean scores in the 901 trial on the screening period, or the baseline menstrual cycle, of 1.4. That's quite different, and that gives us something to work with.

But that may not even be the best way to deal with it. And as we've discussed with the FDA, and they have encouraged us, is to look at perhaps an alternative to simply a mean score and a mean change from baseline, but rather do a responder analysis.

So for example, if you have a woman that has approximately half of her days being moderate and severe at the baseline month, then a responder analysis would be, what proportion of the women on elagolix converted from that 50% moderate or severe to a 50% reduction in those days? And that would be the kind of responder analysis that they have asked us to do and that we will do.

So the goal with the 901 study, as we mentioned, is to confirm that the refinements to the scale wording are appropriate and that they perform well and that we choose the statistical method that gives us the biggest effect size that we can then appropriately take into the Phase III trial. So that's what we will be reporting in the end of May.

Chris, it would sound like you might have -- this is just intuitive without any factual basis, but it sounds like you might have to have a fairly large sample size to give them the variability in non-pelvic menstrual pain among women and the variability in the number of days that they may or may not have pain.

Was there -- in your statistical planning was there a way of really getting a good fix on the sample size?

Yes. Exactly. So sample size estimates are based on effect size, an effect size that is contingent upon the actual variability of the change score. And so right now I know what the variability of the baseline score is, and with the new scale it's actually tighter than the old scale. So that's good. And in the end of May we will have the -- we'll know what the variability of the change score is, and that will allow me to calculate sample size.

Now, I know that the effect size for dysmenorrhea is substantial. It has been through all of our Phase II studies, no matter which scale, monthly or daily or which version we use, it's always robust. So from a sample size estimation for dysmenorrhea, you really don't need very many women in a trial, and in that sense we would be -- we would have way more subjects in a pivotal trial that we would need for power on dysmenorrhea.

Now, for nonmenstrual pain we will take the 901 data and be able to use that change and the effect size to calculate what's necessary for Phase III. I expect these Phase III trials to be large trials. And that's simply to meet the ICH guidance on how many subjects we need in our database for efficacy. So let's say we have 500 women in each of the pivotal efficacy trials. That's going to be -- even with a noisy nonmenstrual pain as one of the co-primaries, that should be far and above the number that we would need for a statistical comparison.

Thank you.

At this time there are no further questions in queue. I'd like to turn it back our speakers for any closing remarks.

Thank you very much. I appreciate all the questions this morning. This is a good discussion. Obviously at the end of the month, end of May, we are going to continue this discussion, as Chris I think has laid out in some detail this morning. There is a lot of reasons why we expect this to give us a positive outcome, but it still is a Phase II trial, so we need to get the data in, and we are really looking forward to that and then sharing it with you immediately.

So with that I'm going to close. I would like to remind all of you that we are going to be at the Deutsche Bank conference next week, so if any of you are there, I look forward to getting together with you and continuing our dialogue.

Thank you, and we will be in touch, as always. Bye-bye.