Nektar Therapeutics (NKTR) 2005 Q2 法說會逐字稿

Good afternoon ladies and gentlemen and welcome to the Nektar conference call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session. Please note that this conference is being recorded.

I would now like to turn the call over to Mr. Ajit Gill, Chief Executive Officer of Nektar Therapeutics. Sir, you may begin.

Thank you, Operator, and welcome everybody to Nektar Therapeutics’ conference call and webcast to review our performance of the second quarter of 2005.

I'm Ajit Gill, President and CEO of Nektar. Joining me today are our CFO, Ajay Bansal, our Vice President of Corporate Development, Chris Searcy and our Executive Chairman, Rob Chess.

Please note that the following presentation contains forward-looking statements that reflect our current views as to the Company's business strategies, future products, product and technology developments, funding collaboration agreements, arrangements, clinical trials, manufacturing scale up, meetings with the FDA's advisory committee and other future events and operations relating to the Company.

These forward-looking statements involve uncertainties and other risks that are detailed in Nektar's reports and other filings with the SEC including our Annual Report on Form 10-K as amended for the year ended December 31, 2004 and our quarterly report on 10-Q for the quarter ended March 31, 2005. Actual events could differ materially from these forward-looking statements.

I would like to remind you that the Web broadcast of this conference call will be available for replay through August 18, 2005, on the Investor Relations page at Nektar's Web site at www.nektar.com.

In the event that any non-GAAP financial measure is discussed on this conference call that is not described in our earnings release, related information will be made available on the Investor Relations page at our Web site as soon as practical after the conclusion of this conference call.

We saw significant progress with both Exubera and several of our late stage partnered products in the first half of 2005. First Exubera, an important product for Nektar and for the diabetes world, made progress towards commercialization.

In March, Pfizer and Sanofi-Aventis announced that the Exubera NDA was accepted for filing by the FDA. In June, the two companies presented encouraging results from three, two-year studies at the 65th Annual Scientific Sessions of the American Diabetes Association.

And in July, the FDA set the date of September 8, 2005, for the advisory committee meeting to discuss the NDA for Exubera.

In addition to Exubera, our partners have made progress with several late stage products that use our technology, including the release of new clinical data for Roche's CERA for renal anemia, and UCB’s Cimzia for Crohn's disease.

On the call today, first Ajay will provide our financial overview, then Chris will follow with a decision of Exubera and our other partnered products. I'll conclude and then we'll turn the call over to you for your questions. Now Ajay will discuss our financial performance.

Thank you, Ajit, and welcome to all of you on the call.

I would like to take you briefly through our second quarter financial results and then I'll review our guidance for full-year 2005. First, let us review revenue for the second quarter.

For the second quarter 2005 we reported revenue of 28.6 million which was approximately the same as revenue for the second quarter of last year. Second quarter 2005 revenue included contract research revenue of 19.6 million, product and royalty revenue of 5.5 million, and Exubera commercialization readiness revenue of 3.5 million.

Contract research revenue consists of reimbursed research and development expenses and amortization of upfront signing and milestone payments received from our collaborative partners. Our second quarter 2005 contract research revenue of 19.6 million was approximately 2.5 million lower than the contract research revenue for the second quarter of 2004.

Our product sales and royalties are almost entirely comprised of sales and royalties from our PEG business. Our second quarter 2005 product sales and royalties of 5.5 million were approximately 1 million lower than the product sales and royalties for the second quarter of 2004.

Our second quarter 2005 product gross margins were approximately 1% compared to negative gross margins in the second quarter of 2004. Low gross margins in the second quarter of 2005 are primarily because of lower than anticipated production volume.

As we have discussed with you previously, we continue to expect quarter-to-quarter lumpiness in our product sales and gross margins.

Our second quarter Exubera commercialization readiness revenue was 3.5 million. This revenue represents reimbursement by Pfizer, also an agreed upon operating cost related to our Exubera drug powder manufacturing facility in preparation for commercial production.

Let us now turn to our loss from operations.

Our second quarter 2005 loss from operations of 26.5 million is approximately 5.5 million higher than our loss from operations in the second quarter of 2004. This increased loss stems largely from $2 million increase in expenses for development of proprietary products and an increase in G&A expenses of approximately 2 million.

Let us now turn to our net loss.

We reported a net loss of 26.9 million, or $0.32 per share for the second quarter of this year compared to a net loss in the second quarter of 2004 of 22.2 million, or $0.27 per share. We ended the quarter with approximately 378 million of cash, cash equivalents and short term investments.

Let us now turn to our guidance for 2005.

Our guidance is unchanged from the guidance provided at our 2004 year-end conference call in March. We are anticipating that total 2005 revenue will be between 120 to 130 million.

This revenue guidance is comprised of contract research revenue of 75 to 80 million, product sales and royalty revenue of 30 to 35 million, and 10 to 15 million in commercialization readiness revenue from Pfizer. This revenue guidance does not include any revenue from potential commercialization of Exubera devices or Exubera drug powder to Pfizer.

Let us now turn to our net loss guidance. We anticipate a net loss of between 115 to 125 million.

Let us now look at our guidance for cash, cash equivalents and short-term investments. In the absence of any financing activities we expect to end the year with more than 270 million in cash, cash equivalents and short-term investments.

With regard to profitability, as we have said for several quarters, our target is to achieve profitability four quarters after the launch of Exubera in both the U.S. and the majority markets in Europe including France, Germany, Italy, Spain and the U.K. This profitability guidance does not take into account the impact of stock option expensing.

I'll now turn the call over to Chris Searcy who will discuss Exubera and our other partnered programs.

Thanks, Ajay.

Let's look first at Exubera as it's been widely in the news lately. First, a key announcement for Exubera and for Nektar for that matter, occurred last month when the FDA announced the date of September 8, 2005, for the advisory committee meeting to discuss the new drug application for Exubera.

I'd like to take a moment to review the role of the advisory committee meeting. The advisory committee's role is to offer the FDA the very best advice possible on related questions posed by the agency on a product.

In general, a committee is utilized when the FDA requests advice or recommendations from the committee on a specific matter in order to obtain an independent review and consideration of the matter, and not when FDA is merely seeking the comments of all interested persons or persons who have a specific interest in the matter.

It is important to understand that the committee’s function is to give advice. However, the agency's not bound to follow that advice.

The FDA advisory committees lend credibility to the FDA decision making processes by having public decisions of controversial topics by the world's experts, the agency staff and the agency stakeholders both from industry and consumers. Every meeting also serves to keep the consumers abreast of the latest developments in the industry as well as affords them the opportunity to comment in open public hearing sessions.

We are looking forward to the advisory committee meeting in the U.S. and the next steps in Europe which we expect to be the CHMP advisory decision.

I'd like to spend a couple of minutes on our other partnered products.

First, on July 26, 2005, UCB Pharma announced encouraging preliminary results from two Phase III trials for Cimzia, formerly CDP 870 for the treatment of Crohn's disease. The trials involved 1,330 patients and compared Cimzia to placebo over a 26-week period.

UCB said that Cimzia was well-tolerated and met its primary ends points and they expect the full data will be published at various gastroenterology conferences later this year. Nektar supplies its PEGylation technology for Cimzia.

UCB also said it plans to file Cimzia for Crohn's disease in the U.S. and Europe in the next six to nine months. Cimzia is also in Phase III trials for rheumatoid arthritis.

UCB also announced news on CDP 791, an antiangenic therapy which is under development for non-small cell lung cancer and also uses Nektar PEGylation therapy. The CDP 791 completed Phase I in June, and UCB Pharma said that Phase II trials are expected to start in the next few weeks.

Next, Roche announced new Phase II data in June from a year-long study of CERA, Roche's Continuous Erythropoletin Receptor Activator to treat chronic renal anemia. This product also uses Nektar PEGylation technology.

The data demonstrated at CERA provided sustained and stable control of hemoglobin levels in dialysis patients with anemia when administered at dosing intervals up to four weeks. Roche has indicated that CERA current is in Phase III of its development and as recently as June, said that they aimed to file it worldwide with health authorities in 2006.

Before I turn the call back to Ajit, I want to briefly discuss our pipeline of partnered products.

We are changing the pipeline chart to include projects that are being actively pursued by our partners. Therefore, we are removing several Phase I products in our partnered pipelines, either because of inactivity or because they are on hold with our partners.

We are removing PEG-AXOKINE from the pipeline as there's been little news from Regeneron on the product, and we are not informed whether this product is being actively developed.

Second, two of our partners, Serono and InterMune have indicated they're seeking partners for their PEGylated products in Phase I. PEGylated interferon beta 1a and PEGylated Infergen respectively.

So we will continue to lift them but only as a footnote to our pipeline until a partner is found.

Third, UCB said last week that CDP 484 for rheumatoid arthritis is on hold after Phase I studies failed to meet the criteria to proceed. As a result, we will drop this product from our pipeline until we receive further news from UCB.

By the end of 2006 assuming no drop-offs or delay in current programs, our late-stage partner pipeline could include at least two additional products using Nektar technology that are filed for approval. UCB Cimzia for two different indications, and Roche's CERA for renal anemia.

By the end of this year our expectations for partner programs based on partners communication include Chiron’s inhaled Tobramycin will be in pivotal trials for treatment of pseudomonas infections in patients with cystic fibrosis, and Eyetech's Macugen will be in Phase III trials for diabetes and macular edema, and UCBs CDP 791 will be in Phase II treatment for non-small cell lung cancer.

I'll now turn the call over to Ajit who will summarize and then we will open the call for questions. Ajit?

Thanks, Chris.

As we move Exubera toward commercialization, we are also in the process of transitioning the Company toward becoming more product focused. As part of this effort of becoming more product focused we announced last week that we have created a new Diabetes Group and appointed Ajay Bansal as the general manager.

As general manager of the Diabetes Group, Ajay will drive decision making and strategy development in the organization for initiatives related to diabetes, which is clearly of interest to us. Given his 18 years of experience in the biopharma industry, Ajay is well qualified for this position although it does mean that we will need to recruit a new CFO. Until we find his replacement Ajay will continue to serve as CFO.

In summary, we have just concluded a very successful six months and the next six months could be even more eventful. First, we are looking forward to the advisory committee meeting in September for Exubera.

Understanding the uncertainty involved in this stage of the process we remain optimistic as we look forward to moving Exubera toward commercialization in the U.S. Likewise, we are hopeful of hearing news on the Exubera filing in the EU in the coming months as we await the opinion from the CHMP.

Next, in addition to Exubera, our partner's products are also advancing through the clinic and continue to validate the value of our pulmonary and PEGylated technology to make medicines better.

Third, we look forward to sharing with you some of the details of our strategy and our proprietary products pipeline at our investor day on September 29th in New York.

At this time we'd be happy now to take your questions. Operator, would you please poll for questions?

[Caller instructions] Our first question comes from Rich Silver from Lehman Brothers. Please go ahead.

A couple of questions. First of all, would you care to give us a little bit of maybe a preview of what we can expect at your September meeting in New York? And secondly, the status of spray gel in the U.S. Thanks.

Thanks, Rich, for asking the first question. Let me ask Chris Searcy to respond.

Yeah, Rich, in terms of the meeting in the fall, we intend to give a comprehensive view of where we are taking the Company in terms of strategy and sort of big picture. And so we'll try to do a better job of setting the table in terms of where we're going sort of in the medium-term.

We'll also talk about Exubera and really focus on some of the unmet needs for Exubera as well as some of the science that Nektar has brought to the table to enable Exubera.

And lastly, we're going to introduce our proprietary products program and we will likely talk about two of our most advanced programs in that, in proprietary products and we'll go into some detail in terms of what we believe the unmet medical need is, what our solution is, and why we think these are good products. And then finally, Ajay's going to wrap up a sort of financial road map of where we're going and how we expect to grow the Company and how we expect to hit profitability.

In response to your second question which is the status of spray gel in the U.S., our latest understanding is that still is in a pivotal trial.

Okay. Just one follow-up on the September meeting. In the event that the advisory panel is unfavorable, would you be in a position at the end of September to be able to talk about any potential change in the strategy or where you would go, assuming, again, there was some increased uncertainty on the regulatory status of Exubera?

Yeah, I'll take a crack at it, then Ajit may, you may also want to answer but just in terms of that, Rich, I think that depending on, in the event that it was not positive and we certainly aren't planning for that, but in the event that that happened, it in part would be, depend on how specific Pfizer was terms of communicating reasons behind that. But that's a pretty short time period. But obviously we could, we would have to take a hard look at that. But whether we could do it sort of in that time frame is not real clear because we don't know sort of, it's the unknown of what could come out of that meeting.

Yeah, I think ultimately it's going to sort of depend on sort of the degree and anything that happens whether the outcome is positive or less than positive in terms of future next steps, clearly we would have to discuss those with our partners and ultimately sort of the decision on many of those things will be in Pfizer's hands and so we'd really need to engage in a discussion with them. And this is really regardless of whether the outcomes are positive or negative, we'd need to have sort of that discussion.

Rich, this is Rob. Probably the other thing of course to keep in mind and it's all speculative is that advisory committees are advisory and that the FDA often but does not always follow them. So it's difficult one, to obviously speculate on what the results of the meeting will be and then also how the FDA would handle the results of that.

Right. Of course. Okay. Thank you.

Our next question, Howard Basiski from BN Capital. Please go ahead.

Assuming the meeting is positive how long is it typical to receive results from that meeting?

Chris?

Yeah, the advisory committee meeting typically takes place some period of tome and it can vary from a quarter to longer than that before you would hear sort of a decision from the agency, and thus far we're not aware that a PDUFA date has actually been scheduled for this product.

Just to remind you, too, that Pfizer said this is the most complicated product that they've ever filed and so the only point I'm making there is that the time line on this after the advisory committee is sort of unknown at this point. But one to two quarters is typical for other products, this one maybe longer just because it's more complicated but we don't have any insight into that time line.

I see. And then what would be the next step after that?

Well, I think the next step is you would hear back at the PDUFA date, the agency’s feedback on the dossier, whether it's approved, approvable or not approvable and the specifics behind that.

And then a separate question regarding your cash burn. Currently you have about 380 million of cash and you're saying that you're going to end the year with 270. That's a significant increase in the cash burn for the second half of the year. Is that being driven by the proprietary program?

What we mentioned, Howard, was that we expect to end with more than $270 million in cash. So our cash burn for the second half of the year you should, you can take a look at our net loss guidance for the entire year and net loss that we had for the six months and making some adjustment for other things that caused higher cash usage and net loss you should be able come up with a reasonable number for our cash usage for the second half.

Okay. Thank you.

Once again, if there are any questions, press star then one on your touch-tone phone.

Operator, are there any other questions?

Our next question comes from David Steinberg from Deutsche Bank. Please go ahead.

Yes, thanks, good afternoon. Rich asked about a preview regarding your analyst day and I was wondering if you could preview a little bit if you would, if you could, the lineup that's going to present on behalf of Pfizer and Nektar at the FDA meeting? Is there anyone from Nektar presenting and who from Pfizer might be speaking on behalf of the product?

I'll give a quick response and then, Chris, you can add to it. At this point I think, sort of like on many other questions before, David, who actually presents will be determined by Pfizer, the other sponsor for this filing, and so the decisions on who will present and so on will really be up to them. And so at this point we really don't have much more than that to say to that. Chris, did you want to add anything?

No, I think that's, David, the standing members you can read on the Web site and they can add up to ten additional members whether they be from other advisory committees or other consultants and they can be voting or non-voting in terms of the makeup of a committee.

So, all we know is who the standing members are because that's in the public document, we don't know who else they might add to that. It's sort of ironic that the industry member on the current endocrine metabolism committee, which is a non-voting position, is actually a Pfizer person.

So our expectation is that he would recuse himself from this particular discussion and probably be replaced by somebody else representing industry.

On your manufacturing capabilities, let's just assume optimistic scenario you have a favorable panel and relatively quick approval. Have you already scaled up, are you ready to go, have you built up any inventories, let's say your PDUFA day is in October and you get outright approval, could you produce product?

In terms of the first part, we've sort of touched on that several times in the past. We've scaled up the processes from a manufacturing standpoint. In terms of sort of being ready to, for commercial operations, that is sort of another thing we've been working on for a fair period of time.

As far as sort of when we actually start manufacturing and shipping commercial supplies and so on, ultimately that's going to be determined by Pfizer who will be, who will sort of make the ultimate determinations of sort of what the launch plans are, how and where they will launch this product. And so in terms of sort of any details or any additional information regarding product launch and stuff like that, that will really, it will have to be Pfizer that will have to address those questions.

But I think in summary I think it's fair to say I think we are ready to support commercial operation.

Okay. Thanks, Ajit.

Our next question comes from Rich Silver from Lehman Brothers. Please go ahead.

Yeah, Chris, could you just either repeat what you said or expand upon what you said regarding the PDUFA?

Our understanding was that the NDA was filed at the end of December and therefore the PDUFA date should be in October or December, depending upon whether it's a 10 or 12-month review.

You seem to suggest it's a little, perhaps a little looser than that and you mentioned the words that Pfizer used, which was complicated, less of a sort of standard type of product in terms of review. Can you just again clarify or maybe repeat what you said?

Sure, Rich. I think just starting out in general on PDUFA dates, the 10-month target for filing is really that a target and if you go back and read some of the documents on PDUFA date, they have a target of reviewing 90% of the filings within 10 months. So they actually, the agency actually has some wiggle room on the 10-month date.

I don't know anything specific, or we don't no anything specific on Exubera whether it's October or any other date because Pfizer and Sanofi-Aventis have not released that. But the 10-month date is not carved in stone in terms of the target date, number one.

And number two, it's not infrequently the agency and the sponsor will have a discussion and actually change PDUFA dates based on responses to questions or other things, so the 10-month date, I think in absence of any other information is probably the most logical one and I know people have speculated the end of October based on the end of December filing. But again, we don't know that.

That 10-month is not carved in stone and also, not infrequently you'll see PDUFA dates being pushed out based on discussions between the agency and the sponsor.

Again remind me, I'm fully aware that PDUFA dates get extended, we've seen that several times in the last couple of years with some companies in the spec pharma space, but what about 10 versus 12 months, again coming back to sort of a firm date where, here's the date and even if they push it out but at least here's a date.

I don't know anything specific about Exubera, Rich. I know that I've seen in print somebody putting out January 1, but I don't know that that came from any, we haven't seen that source confirmed nor do we think Pfizer Sanofi-Aventis have said anything in terms of the PDUFA date.

So they've never shared that with you.

No.

Okay. All right. Thanks.

Our next question comes from Stanley Grossman from Redmond Capital. Please go ahead.

Thanks for taking my question. Do you have a progressive royalty arrangement with, say, Pfizer, with the various stages of development of Exubera?

And when you say royalty, progressive royalty, and tied to stages of development, did you mean milestone?

Milestone payments, yes.

Yes. In general all of our arrangements will generally include some milestone payments during the development phase, like I think most of theses types of deals they are tied to achievement of significant milestones and generally, though not necessarily in every instance, they tend to be more back-end loaded.

Can you give us any color on the royalty arrangement that you have now with Pfizer?

In terms of the royalties and milestones, we've never disclosed any one of the arrangements from any specific contract for a variety of reasons. But on the preliminary side what we have said is that our total revenues post commercialization which includes royalties and revenue we will get from supplying the product which is manufacturing the product, will be in the range of 10 to 20% of our partner’s revenue.

Oh good. And can I ask one more question?

Certainly.

Oh, just about, was there an expectation of a European regulatory review of Exubera in July?

Well, the European review has been underway. As you might recall, the filing was accepted in Europe in March of last year.

Right.

And Pfizer, other than, I mean they made some general comments at their last conference call they made some additional comments about how that is proceeding.

But beyond that neither Pfizer nor Sanofi-Aventis I think have ever set any dates in terms of this when a hearing is going to take place or not take place. They've never disclosed any specific dates per se as to when any regulatory milestones might be achieved.

Right. Thank you.

Our next question comes from Andrew Forman from WR Hambrecht. Please go ahead.

Good evening, everyone. Could you just comment about a structure of the panel meeting as you see it when it involves the input from different agencies such as device, respiratory/pulmonary, and the endocrinology and metabolic division?

One, would the panel members be actual representatives from those different divisions of FDA and then to what extent would there be, on the agenda, representation from other organizations such as the ADA or actual diabetics? Just, how could it be, based on your understanding of this disease and other similar possible approval processes, not necessarily what this one would be?

Chris?

It's a good question to think about it. As you said we don't have any specific knowledge, certainly with the Exubera product.

I think whether or not they bring in other, in a pulmonary product like, I guess like Exubera is, whether they bring in outside experts outside of endocrine metabolism I think we've said that there'll be additional consults from, potentially from device and respiratory just because of the nature of the product. Whether they end up on the advisory committee or not, that would be pure speculation.

I think the way to, one way to think about that is, whether or not those are sort of pivotal questions in the review, and given that efficacy and safety is usually what advisory committees talk about, I think it could or could not be, [inaudible], it's hard to say. I think because it is a diabetes and an insulin product, I would expect there could be potential interest from a number of outside groups including some of the people that you just mentioned.

And then also, as you know, we haven't talked about it on this call, but there is an opportunity for the public to actually request to present at the advisory committee and, again, no insight on that, but for a product such as this there could be a number of people speaking on behalf of the public at a meeting like this. But at this point it's purely speculation and don't have a lot of insight and we look forward to sort of seeing how this shapes up as the meeting becomes closer.

We had heard here in Washington that there was going to be a pretty large coalition of representing interest of the diabetes community that had already requested, which is, again, as you said on the Web site, and we're just wondering to what extent is there some wiggle room in terms of having that input in the actual panel meeting or is it more of a cut and dry, just the science and the data?

I think that's really driven by who they, who the head of the committee decides to put on the committee. And I think that's how that's determined, Andrew. I don't know that there's any, I don't know whether I can add any more than that.

Will we actually know who's on the committee before September 8?

You know, our understanding is that that will be made public but it will be pretty close to the meeting.

It will be before, okay. That's great to know. Thank you.

Once again, if there are any questions, press star then one on your touch-tone phone. Our next question comes from Rich Silver from Lehman Brothers. Please go ahead.

Yeah, at the risk of beating a dead horse, which I think I've already done on the PDUFA, just want to understand, is it ever possible that a company files an NDA and there actually is no PDUFA set when they file? Or are we, just talking about the PDUFA is set and then of course it could be extended?

Our understanding, Rich, and when we've sort of asked our consultants about this is that you do get a PDUFA date when you get a response to the acceptance of the filing. So our belief is that there is a PDUFA date, it's just not public.

And is this something that you would ask Pfizer if they'd share or do you feel that that's just something that you don't even want to ask them, or it's just not important enough to you?

Well, obviously anything related to Exubera is important to us.

Sorry.

It's really, we take our lead from them.

I know that. I know that.

And so, you know, sure, it's something we would like to know and, but at this point there is no, they have not said anything on it and so--

You're not going to push them?

Yeah, I mean, there's a whole variety of things, the PDUFA date being sort of one where in many cases, Rich, we would like to know more and it's ultimately sort of Pfizer's decision and sort of at their discretion they will share some certain things and not other things. It hasn't gotten in the way of what we think is a very productive relationship.

We sort of learn to work with this and so while we would like to learn more it hasn't sort of been a huge deal in terms of the actual working relationship.

I appreciate the long history of you sticking to the policy and it certainly has done a lot for you to do so, but I just was wondering, that's all.

Absolutely. In a whole variety of cases we'd love to know more.

Our next question comes from Andrew Forman from WR Hambrecht. Please go ahead.

Just following Richs' point further, Ajit, if you got approval tomorrow or you got approval at the end of October or at the end of December, how much time do you really need to provide launch quantities to ship to market given that you've been kind of on the runway taxiing for the last three years, anyway, does it really matter because it seems to me that as a management team you really need to know that information.

Yeah, in reality to sort of give you a complete answer, you need to know what are launch quantities. If you're asking for x-number of units or pre-ex there's a material difference between how long it would take one to get ready.

We've sort of got an organization in place and we've got contract manufacturers in place and everything, and so if we were to get approval I think we are sort of ready to start commercial operation. If Pfizer gave us orders above some level, we would clearly have to add some capacity, and in reality it would be more labor than anything else.

So it's hard to answer that question without knowing how steep of a ramp you're looking for and sort of what the initial order quantity is.

But the point is operationally --

Yeah, operationally we are sort of ready to start doing that on a relatively short notice.

But you have a forecast, no doubt in your office, which you probably would have liked to implement a couple of years ago, but is it fair to say that that number's not going to change, you know what it is whether it happens in the next two months or three to six months, the launch quantity's been set. Is that fair to say?

I mean, I can't answer that question. I think forecasts, by their very nature, tend to change over time as you learn more people just tend to update their forecasts.

And so I think the appropriate response is, I think we are ready to start manufacturing commercial supplies on relatively short notice and that beyond that, how much we do and so on will really be dependant on Pfizer, on the timing and nature of Pfizer and Sanofi-Aventis' launch plans.

Just to remind us, that the pre-approval inspection, the PAI that would have had to happen at year end that's been done sometime ago. Is that right?

We've actually never disclosed whether a PAI has been done or not.

That's Pfizer's job, okay. All right. Thank you.

Gentlemen, we have no further questions at this time.

Okay. Thank you, Operator.

In closing, let me just reiterate that we are pleased with the progress being made by Exubera and our other partnered products, and we'll see you all on September 29 at our investor day in New York City at which point we'll share a lot more about our proprietary products with all of you. Thank you very much for attending this call.

Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.