Neurocrine Biosciences Inc (NBIX) 2013 Q4 法說會逐字稿

Good day everyone and welcome to today's Neurocrine Biosciences reports fourth quarter and year-end 2013 results. At this time, all participants are in a listen-only mode. Later you will have the opportunity to ask questions during the Q&A session. (Operator Instructions) Please note this call is being recorded and I will be standing by should you need any assistance.

It is now my pleasure to turn the conference over to Kevin Gorman. Please go ahead, sir.

Thank you and thank you everyone for joining us this afternoon for our earnings call. I'm joined here as usual with Tim Coughlin, our CFO and Chris O'Brien, our Chief Medical Officer.

Before I get started, Jane, could you please read our Safe Harbor statement?

Sure. Good afternoon. I want to remind you of Neurocrine's Safe Harbor caution. 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 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. Kevin?

Thank you, Jane. Before I turn it over to Tim to go over the financials for the quarter-end and the year-end and then Chris to give a brief update on the programs, just a couple of words.

Number one is that it has been a very good quarter for us. We've had a chance to discuss extensively with our investor base and all the analysts who cover us the data from the Kinect2 Study which was very successful and we're quite pleased now to be taking that program into late-stage clinical trials following our end of Phase II meeting with the FDA, just a little in the second quarter of this year.

Also we're very pleased that AbbVie continues to move ahead with both the elagolix program, both in endometriosis having both trials started and also the uterine fibroids Phase IIb study going well.

So Chris will talk a little bit more about those, but first Tim could you go over the financials?

Sure. Thanks, Kevin. Good afternoon to everyone. As Kevin mentioned, we made a lot of progress over the last three months, successful Kinect2 Study, we are ramping up now for the end of Phase II meeting with the FDA and we continue to advance compounds closer to the clinic.

From a financial perspective, we met our recently increased year-end cash target and we also met our projected burn from operations. We ended 2013 in a very strong financial position with $147 million in cash, investments and receivables and that yielded [essentially] a net burn of $41 million for the year and we began 2013 with $188 million in the bank.

Our GAAP net loss for 2013 was $46.1 million or a loss of $0.69 per share and that compared to net income of $5 million or $0.08 per fully diluted share in 2012. Our net loss for the last quarter of 2013 was $10.6 million, $0.16 loss per share, and that compares to a net income of $9.5 million or $0.14 of income per share in the fourth quarter of 2012. When comparing both the quarterly and the annual results for the same period in 2012, the major contributing factor in the change in operating results was a reduction in revenue earned on the both the AbbVie and Boehringer Ingelheim collaboration agreements.

Our active participatory efforts under both of these collaborations ended as planned during 2012.

Our revenue for the fourth quarter of 2013 was $700,000 and for the year -- for all of 2013 it was $2.9 million and this is in line with our guidance for the year. Our R&D expenses for the past quarter were $8.9 million. For all of 2013 they were $39.2 million. [It's a] 5% annual increase over 2012 R&D expense levels that was driven primarily by the efforts around the VMAT2 program.

G&A expenses remained relatively consistent at approximately $3.3 million run rate over the past eight quarters. We continue to keep a tight control of our expenses. We ended 2013 with 81 full-time employees, slightly up from the 78 at the end of 2012. We expect to add approximately 10 additional full-time employees primarily on R&D during 2014.

For 2014, our financial guidance is we expect to end the year with $100 million in cash and investments. We expect a GAAP net loss from operations of approximately $56 million to $61 million or $0.82 to $0.90 per share based on 68 million outstanding shares. We anticipate no revenue in 2014. Our expense for the year will approximate $60 million to $64 million, offset by approximately $3.6 million in other income. These budgeted 2014 expenses contemplate the launch of our Phase III program for VMAT2 and tardive dyskinesia and also the pre-clinical and clinical work in the [thread] program.

We expect an increase in non-cash share-based compensation from $6.8 million in 2013 to $10.8 million in 2014. This $4 million increase in share-based compensation expense is driven entirely by an increase in the Black-Scholes valuation of recently granted options of restricted stock units. This is due to the higher strike price per options restricted stock units based on the grant date valuation of January 16 of this year. But the share-based compensation expense also represents the majority of the difference between our expected GAAP results and our anticipated cash burn. So that concludes the prepared remarks on the financial results. We're in a strong financial position. We have retained our financial discipline in the 2014 budget. Our 10-K should be on file with the SEC shortly. Now we are happy to entertain any questions related to the financials during the Q&A. So I'd turn it back over to Kevin.

Thanks, Tim. So as Tim outlined here, there are no surprises in the financials. The year went exactly as we had outlined it, albeit with a bit more cash in the bank when we ended last year.

So, Chris, would you like to give an update on R&D?

Thank you, Kevin and thank you for the participants on the call. As Kevin mentioned, it's been a good quarter not just with the Kinect2 results, but across the board with our programs. With respect to elagolix and AbbVie, as Kevin mentioned there are two ongoing Phase III trials in endometriosis. The first trial of course is primarily a US trial, North American trial. And the second study is a study covering many ex-US countries. The details are outlined in the press release that we issued earlier this afternoon. We are very pleased with the work that AbbVie is putting into the endometriosis and uterine fibroid program and are very pleased not just in the running of the clinical trials, but the support of work with respect to health outcomes and health economics and all the ultimately necessary ingredients to get this product successfully launched.

With respect to the VMAT2 program, of course the Kinect2 results were the catalysts that were necessary for us to understand that we had addressed all those key points that Company needs to have in hand when they go into an end of Phase II meeting. So we have a good understanding of who the patients that are appropriate subjects should be for Phase III trial. We have a good understanding of the study design characteristics. And as you recall, we had a steady learning curve as we worked our way through Phase II development in tardive dyskinesia. No one has successfully registered any drug for the treatment of tardive dyskinesia. So we had no track record or pathway that had been carefully laid out before us, and we had to sort out a lot of the issues surrounding our registration path for tardive dyskinesia. And I think we've been successful in understanding how one mitigates a placebo, affect magnitude in clinical trials, how do recruit and find appropriate subjects for these trials and most importantly for us, how to assess dyskinesia in the context of a clinical trial. No one had been successful in using any kind of validated end point or scale for the assessment of dyskinesia and the scale that we have, the AIMS scale that was validated and developed back in the 1970s and initially used as a safety scale. So great progress made there and I am very excited as we prepare the package of material that will go into the division of psychiatric products at the FDA for end of Phase II discussion. And just to give you a little bit of clarity on what happens there.

So, the Kinect and Kinect2 study are -- there are some post-completion activities around those two studies that are ongoing now while we close out and cleanup and finalize all the data and the analysis. At the same time we take the pooled PK and PD data that is AIMS score changes and exposure information and we're working closely with our outside PK-PD modeling consultants, some ex FDA gurus in this area. We take this information and take our PK-PD model to help with our data driven decision on which doses we put into the protocol, the Phase III protocol.

So we take this set of clinical data, we take some additional Phase I data that we have now in hand from our (inaudible) special population study from our drug-drug interaction study and additional Phase I work. And we take some additional preclinical data that has come out of our group here at Neurocrine. And that becomes the package of information that we submit to the FDA in the second quarter and they grant us a meeting date. 60 days after the meeting request is a general timeline that they are working with.

So sometime later in Q2, we look forward to sitting down face to face with the FDA and look forward to showing some of the subject videos that have been participants in the Kinect and Kinect2 trial and we presented them our proposed Phase III protocol. Based on that meeting, we see consensus on the aspects of the Phase III program and what is necessary to get to an NDA.

And then the outcome of that meeting, the FDA has time to respond with additional comments and minutes, we incorporate that into a final program and then we can go out and start working with the institutional review boards and all the aspects for Phase III. We are currently in the process of identifying and qualifying additional clinical trial sites to help us with our Phase III program and developing educational materials for recruitment initiatives et cetera.

So a lot of work in the background going on for the next few months with the goal of course of having the Phase III trial start in the second half of the year.

And last going on, as Kevin mentioned we are pulling together all our preclinical data, juvenile toxicology studies and other work with the goal of meeting with the FDA so that at some point mid-year, either late summer or later in Q3, we will be able to open the -- a separate and unique [IND] specifically for Tourette's syndrome which would then enable us to begin a Phase II trial in the target population that is the pediatric population with Tourette's syndrome.

So that work is going on in parallel to the tardive dyskinesia work and the group is busy and as Kevin mentioned -- I think as Tim we are in a process of recruiting a few additional people to help us execute these plans in a timely fashion. We're very excited, high energy environment right now around the VMAT2 program and we're looking forward to keeping you updated as things move along with the FDA.

I think I will probably stop there and turn it back to Kevin and look forward to any questions.

Okay. Great. So right now why don't we turn it over to questions from all of you?

(Operator Instructions) Robyn Karnauskas, Deutsche Bank.

Great, thanks. This is [Alevia] for Robyn. First of all congrats on all the VMAT success during the quarter [as often]. So three questions, one just curious about your plans for communication of any further data on Kinect1, what's the latest kind of on the elagolix timing from AbbVie. And then I just wanted to check on things. You said no revenues in 2014, does that include that you will get no milestone on the elagolix in 2014 [for which you're modeling some] in 2015 associated with the Phase III? Thanks.

So, Alevia this is Tim. We'll start with the last question first and that is do we expect milestones in 2015, I wouldn't mind anything in 2014.

And this is Kevin. As far as the question on AbbVie there has been -- guidance has remained the same. Both for the endometriosis program and the uterine fibroids program. Recently AbbVie said from the podium that the first end of trail is going to be reading out in the second half of this year.

And with respect to the (inaudible) we are continuing to do some additional analysis with the Kinect1 data and I've submitted some abstracts and things to the International Congress of Movement Disorders. If we have in a timely fashion some additional data for that meeting that would be great. It's not a critical path element to our program going forward. We would use some additional data to help with our PK-PD modeling, but we don't see that as a material event. And I don't think you'll see any public release. I think ultimately when we have these manuscripts that they get out as general articles and that's such a long time line but ultimately that should be all in that context.

So when is the Congress Movement Disorder?

There is this meeting by the Movement Disorder Society in June in Stockholm, Sweden, June 8 to 12.

Great, awesome. Thanks guys. Congrats.

Thank you.

Phil Nadeau, Cowen & Company.

Thanks for taking my questions. In the prepared remarks, you mentioned that you've [snailed] on the patient population to move the VMAT into Phase III. I think last time we talked you hadn't yet done the subgroup analysis to look at how the VMAT have performed in the different underlying etiologies that had caused the diseases that were then treated to give rise to tetrabenazine. Have you done the analysis? How did tetrabenazine perform in a different underlying diseases?

So firstly, we don't -- we are not studying tetrabenazine.

I mean, sorry, not tetrabenazine, the VMAT.

So, yes, Phil thank you for that. We have done those sub-analysis we have discussed and indeed, when you look at the patient, the 60% of the subjects in Kinect2 who had underlying schizophrenia or schizoaffective disorder, they had a statistically significant and robust separation of active from placebo on the AIMS at scale and on the CGI done by the investigator psychiatrist. Likewise, the 40% of the subjects who had mood disorder including bipolar disorder, they had a statistically significant and robust separation of active from placebo on the AIMS, the CGI and interestingly also on the PGIC.

And so what this is telling us is that, that exploratory measure, the Patient Global Impression of Change, that tells us the bipolar and mood disorder patients seem to have relatively good insight into their condition and clearly distinguish between active from placebo with respect to PGIC. Whereas the schizophrenia and schizoaffective disorder sub population in Kinect2 looked very much like the sub population in the Kinect study -- but the sub population in the Kinect1 study they were all schizophrenia and schizoaffective and they all generally felt better.

They were not as good at discriminating active from placebo. And that's exactly what the literature tells us that schizophrenic patients with tardive dyskinesia tend to have limited insight into their dyskinesia whereas what we've seen now, and I don't think anybody has ever published before, is that the bipolar subjects seem to distinguish that quite clearly. So very nice statistical and clinically significant separation of the subgroups on the AIMS and the CGI and it's interesting observation on the exploratory endpoint.

So is it fair to say that the effect of VMAT was the same in both groups (inaudible) different was the ability of the patients to appreciate their disorder was greater in the mood patients than the schizoaffective patients?

Yes, I would say yes with two tweaks on that. One is that the schizophrenia and schizoaffective disorder patients they felt better and so they did feel that they had improved, but they didn't separate as much a placebo group felt better also whereas the bipolar group clearly if they were on placebo, they did not feel better.

Now the other point just to make is that numerically the mood disorder patients actually had numerically a slightly greater improvement than the schizophrenia patients, but statistically they were both highly statistically significantly different. And the numbers start getting small, so I am not reading too much into that, but it was an interesting at least observation.

Okay, so for Phase III will you include both disorder patients?

Yes.

Okay. And then my second question is actually [is a] follow-up to the last one on AbbVie timelines. Have they disclosed what their data disclosure strategy is going to be for the uterine fibroids data the Phase IIb uterine fibroids?

No, they haven't told us how they would be disclosing that data.

Okay. Do you -- and you may have just answered this same question, but we never saw the Phase II data, do you expect them to release the Phase IIb data at all or is it possible that they just move out to Phase III without releasing the Phase IIb data?

That would be a good question for them actually. Phase IIa data, I wouldn't expect to see that data anytime sooner or maybe ever. So that was just an exploratory Phase IIa study. The Phase IIb data, they do have a publication planning group that's going, that takes all the data that's being generated there at AbbVie, but we're not privy to their timelines for when they will be publishing these clinical trials.

Okay. And then my last question is that there has been a good amount of discussion of [deteriorated] tetrabenazine that's in development initially for Huntington's disease but there's also some expectation that it's going to move into tardive dyskinesia. I was wondering if you would care to compare and contrast your VMAT inhibitor with the deteriorated tetrabenazine.

Yes, I think that it would be premature for us to be talking about their compound outside of Huntington's chorea which is where most of their work has been focused in doing a 505(b)2 on that. I would say though that our compound has a number of advantages over tetrabenazine, so whether it deteriorated or undeteriorated. So why don't we wait for their programs to mature if they do and then we can talk about it in the future.

Fair enough. Thanks for taking my questions.

Ian Somaiya, Nomura securities.

Thank you. And let me add to the congratulations. It's been a great start to the year. I wanted to ask about the Phase III trial design. Is the plan to do one study with both patient populations at this point or do -- are you need to do multiple trials. And Kevin maybe you can just speak to the duration of treatment (inaudible).

Thanks Ian. So while my fantasy is that I can do one pivotal and one safety study, the reality is I will probably end up with two relatively modest size 12-week pivotal trials and then we'll have open label extension through those. And in parallel, we'll probably have an additional modestly sized open label safety trial for 12 months. So two pivotals, 150 to 200 subjects each, 12 weeks in duration, placebo controlled and then one open label just a simple safety trial for 12 months so that at the end we will have an NDA with a safety database of close to 1,000 subjects and we will exceed the ICH requirements for having more than 100 subjects with 12 months of continuous treatment.

And what are the regulatory requirements in Europe?

So we have not engaged the EMA in discussions of drug development and registration for tardive dyskinesia in Europe. That is not something that's part of our current plan. That is something that potentially an ex-US partner will take on and we will leave that discussion with the EMA up to them.

Okay, and just one last question on the Tourette's program. You mentioned moving into a Phase II study this year. Can you just be a little bit more specific on the timing of that Phase II trial and would it support moving into Phase III trial next year or you need to run other trails?

No, fair enough. So nobody has ever done any drug development for pediatric Tourett's syndrome with a VMAT2 inhibitor ever before. And -- I mean the small open label kind of things that have been done by individual physicians, but for our purposes with our compound, we would open the IND, as I say sometime kind of Q3-ish and sometime in the fall, we would look to start a Phase II, probably a Phase IIa dose response type study where you'd have the rough draft that I am working on now is a multiple ascending dose, two weeks treatment at a time at each dose in the target population. And the goal here is to have a study that's not powered to show efficacy, it's not a true hypothesis testing trial. It's a dose ranging study to look for the first time at what the doses are that might be appropriate in kids down to [as] six years of age. And it's that data that we would use to go into what I would -- a plan on being a single Phase IIb trial prior to going into Phase III.

Okay. And just, Kevin, one for you, just from a business development standpoint, when do you I guess engage the sort of the -- on the partnership front in earnest? I am sure you are getting a lot of calls but did you see the threats data before signing a deal?

So, Ian, we have had a number of calls and we have a number of conversations ongoing now with a wide variety of partners all centered around ex-US. And so, we are not in a hurry to complete a partnership here. As I have said before, we want to get our Phase III program kicked off and have that moving along before we turn our attention to then doing technology transfer with a partner and being able to work with them to get the programs kicked off in their territory. So my guidance to you is to not expect the deal this year out of us in this space. There is not a -- it's not a priority for us to do a partnership and it actually would do a disservice for all our efforts both in tardive dyskinesia and in Tourette's this year if we were to do a partnership.

Okay, thank you so much.

Thomas Wei, Jefferies.

Thanks. So I had a couple of questions just on, first the reanalysis of the Kinect1 data using the changes that you made to the AIMS endpoint in Kinect2. Can you just remind us what the timing of that re-analysis and how we should set our expectations around that? Do you think it's reasonable for us to expect that 50 milligram dose to actually becomes statistically significant now at week six?

Thanks, Thomas. So a couple of points. You may be aware and forgive me if my recall is not precise on this, after we saw the initial Kinect1 results, the top line week six result, we did have the opportunity to go back and do a blinded central radio -- video scoring of the Kinect1 data at week six. And we haven't obviously published that or talked about it in a widespread way. But internally we saw a very nice separation of 50 milligrams from placebo at week six P value less than 0.5 using the same, just a simple comparison of all those subjects on 50 milligrams, we had a weak six AIMS score available compared to the placebo subjects at week six with an AIMS score and that separation was very nice.

Now that was done with a single rater doing a sequential scoring. That is the baseline scores of a lot of subjects' videos and then the week six scores of all the subject videos. What I think you're referring to is, if we take the methodology that was applied to the Kinect2 study after our Scientific Advisory Board input, we will re-score Kinect1 looking at randomized sequence that is the baseline in week six visit videos will be mixed up in a random fashion, and de-identify and we will use two movement disorder neurologists who will generate a consensus score for all the body regions and those results we will incorporate into our PK-PD modeling which we will take to our FDA end of Phase II meeting.

So as I mentioned earlier, I expect to have those later this spring. I don't anticipate it being material or gate keeping. But we will use that information, if it's internal data set, if you will. Ultimately I expect that data will be part of whatever manuscripts we prepare for our journal submissions and it may even make it in time for the NBS meetings in June. But we will see how the timing works out. For me, it's not a -- it's an ad hoc [post talk], I don't want to oversell it.

And then, a question on the Phase III trials. Presumably, this 12-month safety study that you're running is not placebo controlled and --

Correct.

And if so, how do you end up addressing the inevitable agency questions that are going to emerge around depression and suicidality?

Sure. Fair enough. So we will have that discussion at the end of Phase II meeting. So, what I tell you now is based on what I think and obviously, what the FDA thinks is important. And so the end of Phase II meeting, we'll seek concurrence on the Phase III plan.

Having said that, for most drugs in development for psychiatric and neurologic disease for chronic use when 12-week studies are the norm in a placebo-controlled context and then you have often the open-label extension or safety-type trials out to longer periods of time, such as 12 months; and you take the totality of the data and the FDA makes their interpretation based on the totality of the data and that's pretty much the standard.

I guess the question is more without an actual control arm, if you have patients who end up having suicidal ideation, are you saying that you're going to use the standard metrics, the Columbia scale, (multiple speakers) but how do you even judge what is an acceptable rate or not an acceptable rate? Is it all based off of the patients prior their baseline scores, then you have to fall within a certain range?

So, it's generally not held to a statistical standard of something that you have to pre-specify and meet, the agency generally considers that in a review matter which is basically them telling you, I'm making a benefit risk determination based on the totality of the data at hand; into that assessment, they include several things. So, for example, there is a historical data set about the prevalence and incidence of suicidal ideation and depression in patients with schizophrenia and bipolar disorders. So, there is literature about that. We know what that is.

Secondly, we know for the subjects that enroll in our trials what's the background rate of suicidal ideation and depression is. So for example, in Kinect 2, more than 40% of the subjects, if I remember the number precisely, have a history of suicidal ideation even before coming into the trial. And we don't see a signal that that changes during our study, and so the agency will obviously look at that very closely and evaluate it in that context.

And then, of course, we do have the placebo-controlled trials, we have two Phase III studies 12 weeks in duration with few hundred subjects, you will be able to look at different frequencies of suicidal ideation and depression in those two groups and make an assessment. So that's what the agency has to go in.

Great, thanks.

Charles Duncan, Piper Jaffray.

Thanks, guys, for taking my questions and congratulations on the recent data. So, most of my questions have been answered, but I'm wondering if you could. I'm not sure if I missed this, the timing of the Phase III, you talked about the start and then thank you very much for the sizing of it, general sizing, but would you anticipate that to ramp up by the end of 2015?

No, in general, for these three-month trials with a few hundred patients, you're looking at about an 18-month process. I say about, because no one has ever recruited this many tardive dyskinesia patients for a registration trial, so I can't give you any kind of precision on that estimate. What we have said publicly in our documents is that we anticipate NDA filing in 2016. So, that's the working foundation from where we stand today and obviously, as we move along, we'll get greater precision.

And then, what are your plans around communicating kind of the results at the end of Phase II? I imagine, you await till -- or end of Phase II meeting with the FDA, I imagine you await to get the minutes, but will you come out and help us understand what the final protocol design is?

Well, absolutely, you are correct. Oftentimes, the FDA tends to include little nuggets in their official minutes 30 days later and it's not always exactly 30 days. So in general, companies are reluctant to speak out before they have something official in hand. The surest information you'll have of course is when we post the Phase III trial design information on clinicaltrials.gov and that's done before any patient is actually randomized. So you'll see that at the beginning of the study as the worst-case scenario.

And then, regarding the Tourette syndrome program, again, I'm not sure if I missed it, but you mentioned moving into clinical studies the end of the year. Are there any experiments that you're doing, if you will, in the preclinical setting or are they more Gantt chart type things, whereby you need to just complete the work? Are there any key questions or hurdles to moving into clinical?

No. The main one that stands between us and opening an IND for Tourette syndrome is completing the preclinical, juvenile toxicology project. So the in-life phase of that is done, but the post-study work done by the outside toxicology contract research organizations, that takes months; and so getting those final reports reviewed, audited, signed off, and then the package assembled and then the meeting request for the FDA for a pre-IND meeting, that's what's going on right now. And then, once that's done, then, we get the IND package assembled and submitted as I said, sometime Q3-ish depending on the timing of the FDA and we would start that Phase II study in the fall.

And then, my last question perhaps for Kevin regarding commercial plans in the States, I heard from an earlier question that ex-US partnering could occur after you've kicked off to Phase III, but US plans would be to move forward and perhaps commercialize product yourself?

Yes. Our plans are to commercialize this product in the United States in both tardive dyskinesia and Tourette syndrome. It's a very focused prescriber base, the size of the markets are ideal for a company of a small going to mid-sized biotech company such as ourselves; and we've built a sales force before, we can do it again. We've retained all of that institutional knowledge in-house. So we will slowly and gradually build up our commercial organization in here as the program moves forward.

It makes sense to me and kind of what I thought your plan was, but I just wanted to check that, make sure it hasn't changed.

Yes.

Thanks for taking the questions.

Thanks, Charles.

Thank you. (Operator Instructions) Marko Kozul, Leerink Partners.

Hey, guys. Congrats on your progress this year. I just have a super-quick one maybe for Chris. For elagolix in uterine fibroids, can you comment or share maybe your thoughts for the ongoing Phase IIb trial, potentially serving as one of two pivotal registration trials? Certainly, when we look at the study, it looks like it's sized to the low end of the range in terms of a potential pivotal for that indication. Thanks.

Thanks, Marko. So, it's an interesting and speculative kind of question that in general, that would be unlikely. But when you're dealing with a common non-life-threatening condition, generally, the agency is pretty firm on having two well-controlled pivotal trials that are informed by a Phase II trial. But having said that, elagolix, having been used in so many women with endometriosis, there is a very large safety database, that would be the kind of discussion that AbbVie would have to have with the agency. And that wouldn't happen in -- I don't think until they had an end-of-Phase II meeting when they had all the data from both cohorts of uterine fibroids study in hand. Would depend on the magnitude of the data, how closely the FDA thought that that protocol would mimic what they would require in Phase III, et cetera.

Terrific. Thanks for taking the question.

David Friedman, Morgan Stanley.

Yes, hi and good afternoon. This is Yigal Nochomovitz standing in for David. Thanks for taking the question. Two more on the uterine fibroids program. The first is regarding the Phase IIb ongoing, could you provide some additional perspectives on the secondary endpoints which you feel are most relevant in your assessment by my count, I count about 20 secondaries? And then, secondly, in regard to timing for the Phase III, could you potentially comment on that? Thank you.

Thanks. So for the second question, I can't comment on the timing of the Phase III other than it depends on getting the Phase IIbs done and the Phase II meeting. What AbbVie has said publicly is that they were talking about 2015 as the timing for end of Phase III start. But again, I have no unique insight there, you would have to ask AbbVie on that.

Now, as far as the secondary endpoints, you're exactly correct that there is a long list of exploratory secondary endpoints, very appropriate for a Phase II study as you're trying to determine what are the things that you're going to want to make key secondary endpoints for inclusion into the label of a commercial product. And so, in AbbVie and people at AbbVie who were previously at TAP Pharmaceuticals, they were the ones, pioneers who worked out what are the appropriate endpoints for uterine fibroid drug registration trial. And clearly, for the US, uterine bleeding is the primary endpoint either measured to at a semi-objective measure like an alkaline hematin or one of the other measures, the pictorial representation of a blood loss.

From a secondary point of view, I think the ones that rise to the top would be pain and quality of life measures. You can see, they're also looking at things like uterine size and fibroid size, I don't think those have very much bang for the buck in terms of FDA. Those are interesting things, but you're asking my opinion, I would say that they tend to fall a little bit lower down the list. It's all about blood loss and pain and quality of life. They're also obviously investing a lot of work into looking at things like productivity, the health economic kinds of things that will ultimately be very useful when interacting with the payers.

Thank you very much.

Robert Hazlett, ROTH Capital.

Thanks, a lot of ground has been covered in Q&A. Most of my stuff has been covered. I just want to ask a strategic question. I guess if you see success with elagolix, does that potentially get you to act more aggressively in any way, shape, or form with the VMAT2 program, either with Tourettes or with TD, or does it cause you to think more broadly about the VMAT2 program and its development in terms of potentially considering Europe for yourself or other broader indications down the road? Just a little color strategically in terms of what elagolix success might mean for the other programs?

Yes, it's a good question. Elagolix success obviously this year will be transformational for this Company. But on the aspect of how it will directly affect what we're doing in VMAT, we are putting 100% of the resources that we have that or that we could envision right now into tardive dyskinesia and Tourette syndrome. If there was anything more that we could be doing with our VMAT2 inhibitor at this point, we would be doing it. Access to capital is not a question. Right now, we are putting all of our capital towards TD and TS right now. We have a very even active back-up program within the VMAT2 program that we don't talk about but we have numbers of other molecules and a lot of research going on in order to fully understand the system; I think only the very surface of the VMAT2 system has been scratched biologically at this point in time. There's a lot of understanding that we're developing here and there could be a wealth of other things to do within the VMAT2 system, both with the compound that we currently have in late-stage development and potentially with back-up compounds that we have moving along. I think that that success with elagolix eventually, which we are highly confident of, is going to allow us to move other programs that we haven't currently talked about even more aggressively.

And the assumption is that those would be again more in the VMAT2-related areas and CNS-related indications?

The other programs that we haven't talked about are on neuro endocrinology focus, which is the focus of the Company.

Either neuro or endocrine.

Either neuro or endocrine.

Yes.

Thanks. We're hoping for success on a lot of levels, so we can see those. Thanks.

Yes. Thank you.

Jon LeCroy, MKM Partners.

Thanks. Just a couple of quick follow-ups on elagolix. So timing for the first elagolix Phase III, what month are you expecting that to fully wrap up, so we can --?

I can only go by [clinicaltrials.gov] that AbbVie has there, Jon, and it says the final data collection is in September.

August.

August, I'm sorry, of August of this year and it's going to be completely up to AbbVie then how quickly they then disseminate that data when that ramps up.

And you are assuming they're going to disseminate that and not wait for all of the trials together?

My assumption is that they will disseminate that and that is based on the fact of how they've disseminated their Phase III data with the Hep C program, where they've had numerous Phase III trials and they reported each one out as the data has become available.

Okay. And then, as far as your milestones on Phase III data, what needs to be completed for those?

Our milestones are not based on completion of activities, they're based on the initiation of activities. So we've already been paid our milestones for the initiation of Phase III in endometriosis. So, our milestone stream will pick up again, we anticipate a pickup again in 2015. But we're precluded in talking of specifics what those events will be.

Okay. And then, is the uterine fibroids Phase III start moving into 2015 a slip relative to what you were thinking a few months ago?

No, that's what we had anticipated a few months ago.

Okay, thanks. That's it.

Thank you, Jon.

Thank you. It appears we have no further questions at this time, I'll turn it back to Mr. Gorman.

Well, thank you very much, everyone; and like I think Chris outlined to you, the last several weeks and the next -- the few months here going into Q2, there's going to be a lot of work that we're laying the foundation, that is going to be coming to fruition in the second half of this year in all of our programs that we have and I hope to be talking to you about additional programs in the not-too-distant future that we have going.

At our next earnings call, you can anticipate that we'll probably be talking about the results of our end-of-Phase II meeting at that point in time. So we'll have a little bit by next --

We have the Q2 in -- the earnings call will be in --

Earnings call is in Q3, yes. So it will be -- we'll have some more color for you on the end-of-Phase II meeting at our next earnings call. So, thank you very much and I look forward to talking to you in non-deal road shows and also at the conferences coming up. Take care.