Nektar Therapeutics (NKTR) 2013 Q2 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Nektar Therapeutics second-quarter 2013 financial results conference call. At this time, all participants are in a listen-only mode. Later, we'll conduct a question-and-answer session, and instructions will follow at that time.

(Operator Instructions)

I will now turn the call over to your host, Jennifer Ruddock, Vice President, Investor Relations. Please go ahead.

Thank you, Stephanie.

Good afternoon, and thank you to everyone for joining us today. With us are Howard Robin, our President and CEO; John Nicholson, our Chief Financial Officer; Dr. Robert Medve, our Chief Medical Officer; and Dr. Steve Doberstein, our Chief Scientific Officer.

On this call, we expect make forward-looking statements regarding our business, including, but not limited to, clinical development plans, the timing of future clinical results and regulatory filings, the economic potential of our collaboration partnership, the therapeutic and market potential of our drug candidates and those of our partners, our financial guidance for 2013, which includes potential milestone payments, and certain other statements regarding the future our Business. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes that are difficult to predict and many of which are outside of our control.

Import risks and uncertainties are set forth in our quarterly report on form 10-Q filed on May 9, 2013. We undertake no obligation to update any forward-looking statement whether as a result of new information, future developments, or otherwise. A webcast of this call will be available for replay on the Investor Relations page at the Nektar website.

And with that, I would like to now hand the call over to Howard Robin. Howard?

Thank you, Jennifer.

Thanks to everyone for joining us this afternoon. Nektar has made important strides in the advancement of both our wholly-owned and partnered product pipeline this year, and I will spend time reviewing these today. As you know, we have five highly valuable programs spanning multiple therapeutic areas that are in or have completed Phase III clinical testing. Four of these Phase III product candidates are being developed by our pharmaceutical partners, AstraZeneca, Baxter, and Bayer.

I'd like to start with an update on naloxegol partnered with AstraZeneca. We're pleased to confirm today that AstraZeneca will file both the MAA and NDA for naloxegol in September. As you know, AstraZeneca and Nektar have previously reported excellent efficacy and safety data from the KODIAC program, which includes two pivotal efficacy studies, a 12-week extension study, and a one-year, long-term safety study for naloxegol.

Naloxegol 25-milligram dose met it's primary endpoint and all of its secondary endpoints in the two efficacy studies. The comprehensive, well-controlled 52-week safety study of naloxegol was the first and only long-term comparative study completed in OIC to prospectively measure potential symptoms of opioid withdrawal over one year of dosing and to externally adjudicate for major adverse cardiovascular events, or MACE.

In this study, called KODIAC-08, there were no reports of opioid withdrawal attributable to naloxegol over 52 weeks of therapy. Importantly, there was no imbalance in MACE events in the study. The study was randomized two to one, and as I told you on our last call, there were two cardiovascular events in the naloxegol arm out of 534 patients, and two cardiovascular events in the usual care arm out of 270 patients. More than 50% of the patients entering into the long-term safety study were considered to be at moderate to high baseline cardiovascular risk based upon the presence of one or more pre-existing risk factors, such as prior history of heart disease, high blood pressure, high cholesterol, obesity, diabetes, and smoking.

Today, we signed an amendment to our contract with AstraZeneca to finalize the regulatory filing strategy for naloxegol. The amendment is a creative solution that is the result of collaboration between two companies committed to driving the naloxegol program forward to commercialization. I am pleased with this revised agreement because it gives naloxegol the best opportunity to be well positioned in advance of the advisory committee meeting being planned by the FDA, and the filings will start the regulatory review clocks in both the US and the EU.

This amendment includes some regulatory risk sharing by Nektar, but has significant upside economics for us as well. In this amendment, Nektar will still receive milestone payments totaling $95 million. $70 million upon acceptance of the US filing and $25 million upon acceptance of the EU filing. As I just stated, Nektar has agreed to assume some of the regulatory risk of the NDA filing in the US to account for the evolving regulatory landscape from mu-opioid antagonists. However, we also have the potential for an additional significant milestone payment, as well.

Let me walk you through the highlights of the amendment. Details are in the 8-K that we filed today. Nektar will receive $25 million EU milestone upon acceptance of the EU filing. And Nektar will receive our $70-million US milestone upon acceptance of the US filing. If the FDA requires a pre-approval cardiovascular safety study for naloxegol, and AstraZeneca decides not to do this study and terminates the agreement in the US but moves forward with launching the product in Europe, the $70-million US milestone payment that we received from AstraZeneca will be converted into a long-term loan, which will be paid back from 50% of the future royalties on naloxegol in Europe and the rest of the world. In this event, all US rights on naloxegol would be returned to Nektar.

If the FDA requires a pre-approval cardiovascular safety study for naloxegol, and AstraZeneca decides not to do this study and terminates the entire agreement, the $70-million US milestone payment will be converted into long-term loan, which will be paid back to AstraZeneca as follows, $10 million in 2015, $10 million in 2016, $20 million in 2017, and $30 million in 2018. In this event, all global rights to naloxegol would be returned to Nektar.

However, if the FDA does not require a pre-approval cardiovascular safety study for naloxegol, Nektar will receive an additional $35-million milestone payment from AstraZeneca. If the FDA requires a post-approval cardiovascular safety study as a condition to approval of the naloxegol NDA, then Nektar agrees to cost share with 2 percentage points of our US royalty, up to a maximum of $35 million. I want to point out that regardless of pre-approval cardiovascular study requirements, Nektar keeps it's $25-million EU filing milestone.

And lastly, if AstraZeneca terminates the agreement for any reason other than an FDA required pre-approval cardiovascular safety study, Nektar keeps its $95-million milestone payments as well as the additional $35-million milestone payment, for a total of $130 million. We're very pleased that we were able to reach this agreement with AstraZeneca, which advances the naloxegol program to filing.

As you know, we've been building a significant pain portfolio at Nektar, and I'd like to start with an update on NKTR-181. During Q2, we completed human abuse liability studies for opioid molecule NKTR-181. The results were truly remarkable and we are pleased by the extremely positive response that the NKTR-181 data garnered from both the medical and regulatory community at the College of Drug Dependent's meeting in June. This positive attention stems from their great sense of urgency to make sure patients have access to opioid analgesia without risk of abuse and addiction associated with current therapies.

Prescription drug abuse, and specifically opioid addiction and misuse, is a serious public health issue, and one that has a high priority for the FDA. A recent CDC report issued in June highlighted how urgent this issue is becoming. Deaths as a result of opioid overdoses jumped dramatically over the last decade. Among women, overdose deaths spiked fivefold, and among men, deaths spiked almost fourfold.

We know that drug abusers place a high value on the rapid onset of effect, the euphoric rush associated with currently marketed prescription opioids, such as Oxycodone or Oxymorphone. This rush arises directly from the rapid rate of entry of these molecules into the brain. The pharmaceutical industry has tried to address this issue by reformulating existing opioids. The major limitation of this approach is that these formulations still contain the rapid acting opioid that the abusers want. As a result, abusers are highly motivated to manipulate the formulations to extract the active ingredient that will get them high.

NKTR-181's properties are not dependent on a formulation. The properties we've observed in the clinic are intrinsic to the molecular structure of NKTR-181. No amount of chemical or physical manipulation of this molecule by our scientists has been able to convert NKTR-181 into a molecule that enters the brain rapidly.

To highlight this, in fact, the impressive results of the house study were generated with NKTR-181 administered as an oral solution, the most rapid release of an active pharmaceutical ingredient. Our house study enrolled 42 non-dependent recreational drug abusers who rated the likability of NKTR-181 versus the standard comparator in these trials, Oxycodone, a heavily-abused opioid drug.

The primary endpoint for this study was drug liking, which we measured using a bipolar visual analog scale. We also looked at the subject's response to feeling high and sleepiness. As I said before, the results from this study were extremely compelling. NKTR-181 scored similar to placebo among drug abusers for likability and feeling high. At all doses tested, NKTR-181 achieved lower drug-liking scores and reduced feeling-high scores as compared to Oxycodone, with high statistical significance.

In the critical period shortly after drug administration, Oxycodone performed as expected with high scores for both liking and feeling high. In contrast, NKTR-181 had low scores for both liking and feeling high throughout the entire observation period. The house study also evaluated subject's sleepiness, and all doses of NKTR-181 scored statistically lower on sleepiness when compared to Oxycodone. Importantly, all of the doses tested in the house study were doses that demonstrated analgesia in our Phase I testing, and these are the doses being studied in our Phase II efficacy study.

We expect to report data this summer from our Phase II study of NKTR-181 in patients with osteoarthritis of the knee. The primary endpoint of the study is based on the reduction in pain score at the end of the randomization period, with each patient's own baseline score prior to randomization as compared to placebo. We will also be assessing multiple secondary endpoints and analyzing CNS-mediated side effects in order to establish a differentiated profile for NKTR-181 in the treatment of chronic pain. If we're successful, NKTR-181 could become the therapy of choice in the $12-billion global market for chronic pain. We are tremendously excited about the house study data and look forward to sharing the topline data from the Phase II efficacy study soon.

While NKTR-181 is positioned to target patients with chronic pain, we're also developing NKTR-192 to treat acute pain. The US opioid market for acute pain alone accounts for over 100 million prescriptions annually and represents another significant market opportunity for Nektar. NKTR-192 has a distinct molecular structure from NKTR-181 that gives it a shorter half-life, making it ideal for the treatment of acute pain conditions, such as postoperative pain, kidney stones, muscle pain. Like NKTR-181, NKTR-192 is also designed to have reduced abuse liability and fewer CNS-mediated side effects.

In June, we reported positive results from our second Phase I study of NKTR-192. This study evaluated single ascending doses of NKTR-192 and measured both PK and PD endpoints. NKTR-192 had achieved the target short-acting PK profile and also elicited a clear analgesic response in the cold pressor test over the four-hour period. In September, we will start a multiple ascending dose study of NKTR-192 in healthy volunteers. This study will allow us to better assess the analgesic doses of 192 to prepare for Phase II studies in patients early in 2014.

With NKTR-181 and NKTR-192 in our pipeline, we can address both the chronic and acute pain markets. We are extremely excited about the advancement of these important new pain molecules, and we look forward to sharing more on them as they advance through the clinic.

Our Research and Development Team is evaluating new potential clinical candidates in the area of pain. Our next clinical candidate that is poised to enter the clinic early next year is NKTR-171, a new sodium channel blocker for the treatment neuropathic pain. Neuropathic pain is a serious and debilitating condition associated with a wide range of conditions. Current therapies today are not effective in treating this pain, including the most prescribed gabapentin molecules. We estimate the market for neuropathic pain to be upwards of $2.5 billion, and the patient population and market size is growing.

Sodium channel blockers were originally developed as a antiseizure medicines but also work exceptionally well in neuropathic pain; however, because they are CNS drugs, they come with a whole host of CNS side effects, including significant sedation and risk of seizures. Sodium channel blockers have great potential to treat neuropathic pain if you could limit their CNS exposure. NKTR-171 is a new sodium channel blocker that is designed to selectively restrict the molecule to the periphery, and thereby, avoid the severe CNS side effects that make standard sodium channel blockers impractical for most patients.

We're in the process of completing our IND-enabling studies for NKTR-171 in order to file an IND application before the end of this year. In addition to NKTR-171, we have identified a number of additional candidates in the area of pain that are in pre-clinical research. We will share more on these research programs at our R&D Day on October 8 in New York.

Now, let's talk about our programs in oncology. We recently announced that we successfully completed enrollment in the Phase 3 BEACON clinical trial of etirinotecan pegol, NKTR-102, in women with metastatic breast cancer. NKTR-102 is the first long-acting topoisomerase I inhibitor designed to concentrate in tumor tissue and provide substantial tumor suppression throughout the entire chemotherapy cycle. We achieved our target enrollment of 840 patients for BEACON five months ahead of schedule, which I think speaks volumes for the high level of enthusiasm among clinicians for the potential of NKTR-102.

As the first and only topo I inhibitor being developed in breast cancer, etirinotecan pegol offers a much-needed distinct mechanism of action. The need for new therapeutic options for women with metastatic breast cancer is acute, particularly among patients with HER2-negative disease. After patients progress, following anthracycline, taxane, and Capecitabine therapy, currently available therapies for these women share a common underlying mechanism of microtubule inhibition or disruption. As a result, drug resistance and overlapping side effects are huge challenges that will eventually negatively impact most, if not all, patient outcomes. This is why the investigators participating in our study are so excited about the potential for a new mechanism in this setting.

The BEACON study is comparing NKTR-102 to a single agent of physician's choice with a primary endpoint of overall survival. We have an interim analysis plan for early next year, and we anticipate topline survival data by the end of 2014. NKTR-102 is also the subject of two ongoing investigator-sponsored studies at Stanford University and at University of Pennsylvania.

At Stanford, NKTR-102 is being evaluated as a single-agent therapy in a study run by Dr. Larry Recht and Dr. Seema Nagpal in patients with Avastin-resistant gliomas. High-grade gliomas are the most common and most aggressive primary brain tumors, and patients with these high-grade gliomas are in desperate need of new treatment options. Enrollment of the 20 patients in this study was completed during Q2. The primary endpoint for the study is six week PFS, and we expect to report topline PFS data in the fourth quarter.

At the University of Pennsylvania Abramson Cancer Center, Doctors Langer and Aggarwal are conducting a Phase II study of etirinotecan pegol in metastatic and recurrent non-small cell lung cancer. In ovarian cancer, we will meet with the FDA this year to discuss the potential regulatory path forward for NKTR-102 in ovarian cancer. Our Phase II data for NKTR-102 demonstrated clear activity in platinum resistant and refractory ovarian cancer; however, I'd like to remind you that this was a single-arm study, and we believe there's little chance of an accelerated approval.

Our next oncology candidate, NKTR-214, is a novel immunostimulatory therapy in pre-clinical testing. NKTR-214 is designed to selectively activate tumor-killing T cells through the IL-2 pathway without activating inhibitory T cells. Activating the IL-2 pathway has been shown to be curative in renal cancer and melanoma, but the only available IL-2 therapy, Proleukin, has been significantly limited by safety and tolerability concerns related to its frequent and high dosing. At modest doses, NKTR-214 demonstrated dramatic inhibition of tumor growth with significantly less toxicity as compared to Proleukin. We will have new data to share for NKTR-214 at our R&D Day in October.

Our other partner programs with Baxter and Bayer are also making excellent progress. BAX 855 with Baxter is in Phase III development, with enrolment expected to be complete by the end of 2013. BAX 855 is designed as a longer-acting Advate, the gold standard in treating hemophilia A. Sales of Advate are over $2 billion globally today. The Phase III prolongate study is enrolling more than 100 patients with hemophilia A and will assess BAX 855 for prophylaxis and on-demand treatment. Baxter is planning a BLA filing in 2014 with a planned launch in 2015. Under our agreement, Nektar will receive milestone payments, as well significant royalties on net sales of BAX 855 upon commercialization.

In the second quarter, our partner Bayer initiated dosing of first patients in the Phase III Inhale program for Amikacin Inhale, which is being developed to treat Gram-negative bacterial pneumonias in ventilated patients. The Phase III program will include up to 300 sites internationally and will enroll an estimated 1,200 patients. The two Phase III studies in the Inhale program are being conducted under an SPA with the FDA, with the primary endpoint of clinical test of cure. Both of these Phase III trials are expected to be complete in the first half of 2015.

Our other Phase III program with Bayer is for Cipro Inhale, which is being evaluated for non-cystic fibrosis bronchiectasis, or NCFB. Known as the RESPIRE trial, this Phase III study will evaluate whether inhaled Cipro can prolong the time to bronchiectasis over 48 weeks. This Phase III trial is also expected to complete in 2015.

Before I hand the call over to John, I want to invite everybody to our R&D Day, which will be held in New York on October 8. We look forward to sharing a more in-depth look into many of our programs.

With that, I'll turn the job call over to John for a discussion on our financials.

Thank you Howard, and good afternoon, everyone.

I will start with reiterating our financial guidance for 2013, which remains unchanged from our 2012 year-end call. For 2013, we expect our cash used in operations, including capital expenditures, to be between $95 million and $105 million. We expect to end 2013 with approximately $200 million in cash and investments. Revenue for 2013 is expected to be between $200 million and $210 million. As Howard just discussed, for naloxegol, we expect to receive $70 million upon acceptance of the US filing and $25 million upon acceptance of the EU filing.

2013 revenue guidance also includes $20 million of non-cash royalty revenue from UCB's Cimzia and Roche's Mircera. Our R&D expense guidance is still between $200 million and $220 million, which includes approximately $17 million of non-cash items such as stock-based compensation and depreciation expense. 2013 G&A is still anticipated to be between $42 million to $44 million, which includes $10 million of non-cash items.

Total revenue in Q2 of 2013 was $33.9 million, versus $23.7 million in the second quarter 2012. Total revenue was $56.9 million in the first half of 2013, compared to $41.6 million in the first half of 2012. The increase in revenue for the first quarter and the first half of 2013 are due primarily to recognition of a $10-million milestone achieved upon the start of the Amikacin Phase III clinical trial. For the first half of 2013, product sales also increased by $5.5 million compared to the first six months of 2012.

Total operating cost and expenses in the second quarter 2013 was $66.5 million, versus $50.7 million in the same quarter a year ago. For the first half of 2013, total operating cost and expenses were $134.6 million, compared to $106.6 million in the first half of 2012. The increase is primarily driven by higher R&D expense for clinical development.

For Q2 2013, our research and development expenses were $52.2 million, as compared to $33.2 million in the second quarter of 2012. R&D expense for the first half of 2013 was $97.8 million, compared to $68.3 million in the first half of 2012. 2013 R&D expense included expenses related to our ongoing NKTR-102 BEACON Phase III study, device production and development for Amikacin Inhale, the ongoing Phase II efficacy study, and the completed human abuse liability study for NKTR-181, preparation for th Phase III study of NKTR-181 and the continuing Phase 1 NKTR-192 studies.

Research and development expenses included $4.3 million of non-cash stock-based compensation and depreciation expense in Q2 of 2013. G&A expense was $9.2 million in Q2 of 2013, compared to $10.3 million in the second quarter 2012 and $21.1 million (sic - see press release - "$20.1 million") in the first half of 2013 compared to $20.7 million in the first half of 2012. There were approximately $2.5 million in non-cash items included within G&A in the second quarter 2013.

Interest expense is quarter was $4.7 million, related to the senior secured notes issued in 2012, and non-cash interest expense related to the monetization of UCB's Cimzia and Roche Mircera royalties was $5.5 million. Cash and investments at of June 30, 2013 was $226.9 million, as compared to $261.2 million at of March 31, 2012.

With that, I will now open the call to questions. Operator?

(Operator Instructions)

Our first question comes from Cory Kasimov with JPMorgan. Your line is open.

It's actually Matt Lowe in for Cory today. Just about the Phase II data for 181 which is coming up, is it still fair to assume that you are hoping to see a more than 30% reduction in the baseline pain scores? And can you be any more specific with the timing of when we might see that data? Thank you.

From a timing point of view, we've said that we'll have that data available this summer. And I'll let Rob talk about the technical aspects of the trial.

The endpoint of the trial is built around where the patient's baseline is when they complete titration to where they wind up at the end of the randomization period, so that's where the primary is. And then there's several ways you can look at reduction of pain score here, but we're anticipating that we'll have that before the end of the summer, and the overall reduction will certainly be clinically meaningful. Of course, it's an ongoing trial, so we can't comment with any degree of specificity on that, but that's our expectation.

Okay. Thank you.

Our next question comes from Bert Hazlett with ROTH Capital. Your line is open.

Thanks for taking the question. Could you provide maybe a little more, Howard, a little bit more context behind the renegotiation of the amendment to naloxegol? And then, did you approach them, or did they approach you to effect this? And then secondly, could you remind us of the royalty rates for naloxegol and whether or not those were altered materially at all with this amendment? Thanks.

Okay. Look, I think both companies came together to try to find a regulatory path forward. I think in this regulatory environment, relative to mu-opioid antagonists, there are many different regulatory approaches one could take. We want to make sure, of course, that we file -- the drug is filed as rapidly as possible, and we want to make sure that it has the best possible chance for being staged properly at the planned AdCom meeting that is being proposed by the FDA. So, I think the agreement that we worked out with AstraZeneca allows for both of those objectives to be accomplished.

Regarding the royalty, I can't give you the exact number. I've said our royalty rate is in excess of 20%, and it's the only impact of this royalty -- the only impact that this royalty has via this agreement is that if there are any post-approval, post-approval clinical study requirements on naloxegol, we said we would share some of the cost of that with AstraZeneca, maximum $35 million. That's after the drug is now, of course, on the market. We would share some of the cost of that maximum $35 million, and we would share that by a 2% royalty reduction until that number is captured. So with a royalty rate that's in excess of 20%, I didn't think that was going to have to much of a negative impact on Nektar, so I was perfectly willing to do that.

Thanks for the color. Appreciate it.

Our next question comes from Jonathan Aschoff with Brean Capital. Your line is open.

Thank you. Did you talk about the approval milestones? Are they still there? I fell off the call for a couple of minutes. Maybe you did or did not. I don't know.

The sales milestones are untouched by this agreement. Sales milestones or approval milestones?

I'm sorry, I meant the approval milestones.

Okay. Well, that is also untouched by this. So the approval milestones of $100 million US and $40 million EU are not affected by this, as well as the -- how much was it -- $275 million in sales milestones are untouched by this.

Excellent. And can you give us any more details on the KODIAC-08 SAEs], particularly the MACE or any death-type of number? Or does this still have to await a formal presentation by Astra?

I'll let Rob comment on that.

Astra will be presenting the full results of the KODIAC-08 trial at a meeting in 2013. I don't have anymore specifics than that, but they will be reporting on that.

Okay great. Thank you very much.

(Operator Instructions)

Our next question comes from Steve Byrne with Bank of America. Your line is open.

I was wondering if the house study will enable your label for 181 to be differentiated from, say, the abuse-resistant specification that is an Oxycontin?

Rob, you want to comment?

Sure. As you're aware, and in the guidance, there's multiple levels of differentiation that are permitted by the current draft guidance document. Needless to say, we're very active in discussions around the content of that document and the implications. The experience to date has been almost exclusively with formulation-based approaches to abuse deterrents. 181, as you are well aware, is a different case, presents a different set of circumstances.

The Howell data that we've generated is really, truly compelling. I've done a lot of Howell studies. I've not seen anything like this, particularly noting that it is the analgesic range of the drug. I think one of the best descriptions I have heard from the site about the subjects, they were literally bored by 181. They reported their participation in the trial as being boring, and trust me, that is a really outstanding outcome from a trial like this.

So I anticipate -- and this is all to be negotiated, of course, through the FDA, and you are aware we have fast-track status with 181, but I anticipate that there's plenty of opportunities for us to have differentiation with 181. And not just on abuse liability. I think the profile of the molecule overall is likely to be quite different as we move through development.

And Rob, can you talk on your outlook for any potential scheduling change on hydrocodone? Do you think that that is possible down the road?

I can't comment authoritatively, and anything I would offer to you would be simply my opinion. We know the DEA has asked that that be considered. What patients need, putting it on my physician -- my pain management hat, what patients need is a therapeutic alternative to take away the Schedule III hydrocodone. In the absence of a therapeutic alternative, it would not be in the best interest of the patients. So it's, at the moment, a tough decision. As we go forward in development in some of our pipeline products, including 181, hopefully, we can address that present conundrum with our products.

Okay. And then one more on this, Howard, you referred to 181 as potentially filling that need for an analgesic that didn't have the risk of abuse and addiction. That latter characteristic, lack of addiction, how do you think about that down the road as potentially demonstrating that?

Well, I will let Rob tell you how clinical design for that works as well.

I think there's some confusion around terminology. We use terms like abuse, which is not -- typically a non-medical use. Misused is for patients who are therapeutically indicated to be on the drug, but may not take it as prescribed. And then addiction rises to a different level. In lay discussions, they all get rolled into one.

So addiction is psychological dependence upon a drug. We know the central impact of 181, both in terms of the rate and extent of exposure in the CMS, is quite different and likely to be quite different in that. We are obviously going to look at that in the course of our development program. We have looked at that in some of our pre-clinical work already to date, which is why we believe that 181 is substantially differentiated based upon, not just the immediate high, but potentially on the longer-term effects of the drug.

Thank you.

Our next question comes from Richard Reznick with William Blair. Your line is open.

Hi, guys. This is Rich Reznick in for John Sonnier at William Blair. Quick question. With 181 data around the corner, can you talk about the differences in acute pain and chronic pain, and then 181 and 192, and what kind of potential you might see for read through on the 181 data on how that would play out or how that would affect the 192 program?

Both molecules are entirely different. Two completely different molecules, and they both -- NKTR-181 approaches chronic pain with a longer half-life, and NKTR-192 approaches acute pain with a shorter half-life. They both have a slower rate of entry into the CNS, but so they both reduce the euphoria, the dopamine rush associated with opioids that get into the CNS rapidly.

So they are completely different molecules. It's not -- NKTR-192 is not a slightly different flavor of NKTR-181. Completely different molecules; completely different structures. And the goal was to establish a product that was useful for chronic pain in a long-term pain setting, and the other was, NKTR-192, designed to deal very specifically with that short-acting chronic pain market.

I'll let rob give you a little further insight into that.

Thank you, Howard. And there's a considerable overlap, of course, as well. We know that immediate-release products, the shorter-acting products, are used considerably in chronic pain conditions and repeated dosing as well. And so, there's overlap, and that's appropriate. Not everybody responds to every medication the same way. So, as Howard noted, they're very, very different. At R&D Day, we'll be discussing that in a little bit more detail of how different these molecules actually are. They both appear to be very good analgesics, but some fundamental differences that make them-- set them quite far apart, actually, beyond just the duration of action and the PK profile.

You should not think of NKTR-192 as a short-acting version of NKTR-181. These are two completely different molecules.

Great. Thanks.

And I'm showing no further questions at this time. I will turn the call back over to Howard Robin for closing remarks.

Well, thank you, everyone, for your time today. I look forward to sharing NKTR-181 efficacy data this summer, and I look forward to seeing all of you in New York at our R&D Day and October. Thanks very much. Bye-bye.

Thank you. Ladies and gentlemen, that does concludes today's conference. You may all disconnect, and have a wonderful day.