Nektar Therapeutics (NKTR) 2015 Q1 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Nektar Therapeutics First Quarter 2015 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. (Operator Instructions) As a reminder, this conference may be recorded. I will now turn the call over to your host, Jennifer Ruddock, Vice President of Investor Relations. Please go ahead.

Thank you, Stephanie. Good afternoon and thank you for joining us. With us today are Howard Robin, our President and CEO, John Nicholson, our Chief Financial Officer, Dr. Ivan Gergel, our Chief Medical Officer and Dr. Steve Doberstein, our Chief Scientific Officer.

On the call today, we expect to make forward-looking statements including the therapeutic and economic potential of our drug pipeline and those drugs being developed or commercialized by our partners, the timing of future clinical trial results and development plans, predictive scientific and medical observations, financial objectives and guidance for future periods and certain other statements regarding the future of our business.

These forward-looking statements are subject to important risks set forth in our Form 10-K for 2014 and the Form 8-K filed on March 17, 2015, both of which are available at sec.gov. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future developments, or otherwise. A webcast of this call will be available on the IR page at Nektar's website. With that, I would like to turn the call over to Howard. Howard?

Thank you, Jennifer and thanks to everyone for joining us today for our First Quarter 2015 Financial Results Call. Over the past seven years, we worked hard to build a late stage and diversified pipeline with significant revenue potential that positions us to move toward the goal of becoming a cash flow positive, sustainable company not reliant on the markets for equity capital. With the recent launch of MOVANTIK and the anticipated approval of BAX 855, this goal is now in sight.

We are proud of the pipeline we built at Nektar, which includes four Phase 3 programs, one filed BLA, and a recently approved and launched medicine. Our clinical late stage partnered programs combined with the revenue streams from MOVANTIK and BAX 855 could lead to peak royalty revenue of $750 million annually.

Our strategy has always been to balance our development risk across multiple drug candidates in therapeutic areas. We are currently taking a hard look at our near-term development priorities and spend with a goal of advancing our pipeline while at the same time avoiding dilutive financings.

As I just said, with the recent launch of MOVANTIK and the upcoming potential approval of BAX 855, we're beginning to see important new medicines emerge from Nektar's pipeline. MOVANTIK is a first-in-class new targeted medicine for patients with OIC and it has the potential to be a multi-billion dollar market opportunity. BAX 855, as the next generation ADVATE, also has the potential to be a multi-billion dollar market opportunity.

With respect to NKTR-102, we're working diligently to find a regulatory path forward for NKTR-102 in the US and Europe based upon the BEACON data alone. NKTR-102 is a promising anti-cancer drug, and to illustrate this Dr. Edith Perez of the Mayo Clinic will be presenting BEACON results in an oral abstract presentation on June 1 at the upcoming ASCO Meeting. We expect to complete our regulatory discussions for NKTR-102 by the end of this year.

Now I'd like to first focus on the recent successful launch of MOVANTIK and the near-term potential approval of BAX 855. Later in the call, Ivan will talk more about two of our clinical candidates NKTR-181, which could address a major problem in our society, opioid abuse, and NKTR-214, which has the potential to become an important medicine in the next-generation of cancer immunotherapies.

We're pleased that AstraZeneca has reported that the recent launch of MOVANTIK in the US is progressing well. AstraZeneca has indicated that the drug is being positively received by physicians, which is resulting in increased time with sales reps. In Q1, AstraZeneca signed a co-marketing collaboration with Daiichi Sankyo in the US, under which Daiichi will provide primary care sales reps starting in May, which will add to the AstraZeneca sales reps currently promoting MOVANTIK.

We're pleased with the new Daiichi partnership for several reasons. First, Daiichi Sankyo clearly believes in the potential market for MOVANTIK and this was demonstrated by the $200 million upfront payment made by Daiichi for the rights to market the drug and receive commission-related sales payments. Second, the collaboration gives MOVANTIK a broader and larger sales force than originally planned and a further contribution by Daiichi to the direct-to-consumer advertising program for the drug. Third, AstraZeneca will continue to book all of the revenue for MOVANTIK, demonstrating their commitment to the drug and their desire to retain ownership of the long-term success of MOVANTIK in its largest market. As you know MOVANTIK is the first and only Peripherally-Acting Mu-Opioid Receptor Antagonist or PAMORA to be approved to treat OIC. As I just stated, although it's early in the launch, AstraZeneca is reporting that it's progressing nicely. We're particularly pleased that AstraZeneca was able to gain preferred formulary access.

We believe there is a significant market potential for MOVANTIK in the United States and Europe. In the US, there are approximately 38 million patients who take daily opioids to manage their chronic pain. These chronic pain patients have an approximate therapy duration of about five months and up to 80% of these patients experience OIC. With this high number of patients and cost of $260 per month, it is not difficult to imagine that even with a very small percentage of these patients, MOVANTIK sales could easily reach over $1 billion annually.

In Europe, there are an additional 12 million patients taking opioids for chronic pain. As the first oral PAMORA, MOVANTIK provides an important new targeted mechanism to address the underlying cause of OIC. We believe MOVANTIK is unlikely to face competition from other oral PAMORA therapies for at least two years. Our partner AstraZeneca estimates the sales potential of MOVANTIK to be more than $1 billion annually. In Q1, for the US launch and first commercial sale in the US, we received the $100 million milestone payment from AstraZeneca. European launch and a major market triggers another $40 million milestone payment to Nektar.

The drug is already available in the Nordic markets including Sweden, Norway, Finland, and Denmark. The first planned launches in major European markets are Germany and the UK, which are expected to occur in the second half of this year. Nektar will receive escalating royalties on net sales, which in the US start at 20% and then Europe and Rest of World start at 18%. In addition to these royalties, we also have the potential to receive up to $375 million in sales milestones based on achieving certain annual sales targets.

Following the recent accomplishments for the launch MOVANTIK and the significant level of commitment from AstraZeneca and Daiichi through the success of the drug, we are very positive about the prospects for MOVANTIK as an important new medicine for patients with OIC and about its potential ability to provide Nektar with substantial revenue. I've just told you about MOVANTIK where we achieved positive Phase 3 clinical results leading to a successful approval and launch.

Now let's talk about the next important medicine that we expect to contribute to our path to cash flow positive, Baxter BAX 855. Based upon highly successful Phase 3 clinical results for BAX 855, we anticipate approval and launch of BAX 855 by the end of this year. Baxter recently announced that they submitted a new drug application to Japan's Ministry of Health for the approval of BAX 855. In addition, in the first quarter, Baxter completed enrollment in the pediatric trial with BAX 855. This study will support post approval label expansion in the US for previously treated pediatric patients and European regulatory submission in 2016.

BAX 855 is also being evaluated in a PK specific dosing study to support both US and European label expansion and regulatory approvals. As you know, BAX 855 is the next-generation ADVATE, a medicine which has global sales of over $2.5 billion. As an important continuation of the ADVATE brand, we are excited about the potential approval and launch of BAX 855 later this year. Nektar is entitled to receive mid-single digit royalties on sales up to $1.2 billion and royalties in the low-teens on sales greater than $1.2 billion, as well as an additional $73 million in development and sales milestones. Again, the economic potential of MOVANTIK and BAX 855 alone can contribute substantial revenues to Nektar.

Two additional late-stage programs Amikacin Inhale and Cipro Inhale are also poised to become important new potential medicines. These programs are scheduled to complete Phase 3 in 2016, and they too represent significant potential revenue streams for Nektar. Amikacin Inhale and Cipro DPI are both novel drug device anti-infective products that have been granted qualified infectious disease product or QIDP designation by the FDA. Both products are designed to deliver the anti-bacterial therapy deep in the lungs in order to achieve both higher concentrations at the site of infection and also lower systemic exposure, therefore significantly reducing the toxicities associated with these agents when administered systemically.

Amikacin Inhale targets Gram-negative pneumonia in ventilated patients. With an SPA in place, the primary endpoint of the Phase 3 program is clinical response at test of cure visit following a 10-day treatment period. Bayer expects to complete these trials in the first part of 2016. The global market for Amikacin Inhale is estimated to be approximately $700 million, which could translate into highly significant revenues for Nektar. We will receive a flat 30% royalty on US sales and an average of 22% on ex-US sales. This level of royalty is the equivalent of owing half of the drug. Cipro DPI is targeting non-cystic fibrosis bronchiectasis or NCFB. The Phase 3 RESPIRE program features two 48-week multinational randomized placebo controlled studies with data expected in the second half of 2016. The market for Cipro DPI is estimated to be about $750 million and Nektar will receive an average 10% royalty on net sales. With that I'd like to turn the call over to Ivan to provide a clinical update.

Thanks Howard. Good afternoon. As Howard mentioned, Nektar's technology has enabled us to develop what I think could emerge as an important drug in addressing the major societal problem of opioid abuse. NKTR-181 is particularly interesting, because it is designed to be a revolutionary opioid that could represent the next step in pain medicine. The important fact about this drug is that it is not a formulation.

While NKTR-181 acts as a full agonist of the mu-opioid receptor, it has a unique absorption and distribution kinetics that are related to the actual structure of the NKTR-181 API. This structure causes it to cross the blood-brain-barrier at a slow rate when compared to traditional opioid therapies. The slow rate of entry has been designed to reduce NKTR-181's potential for euphoria and abuse. And the drug is also being granted fast track by FDA.

We began enrolment in the Phase 3 SUMMIT-07 trial in February. The trial compares NKTR-181 to placebo in opioid-naive patients with chronic low back pain with approximately 200 patients being randomized to each arm. Patients from this efficacy trial will also be eligible to roll into a long-term safety study of NKTR-181.

The efficacy study includes an interim analysis that will allow for adjustments to the sample size in order to maintain appropriate study power to detect a statistically significant difference between NKTR-181 and placebo. Such an analysis is designed to increase the probability of a successful outcome and we expect the SUMMIT-07 trial to be completed in about 24 months.

Now, I want to move on to what we are doing in cancer immunotherapy. As you know, this field is revolutionizing treatment for cancer patients and we believe our technology platform could play an important role in the development of next-generation immuno-oncology therapies. NKTR-214, which is a CD122 biased immune stimulatory cytokine, is our first clinical candidate in this area. CD122, which is also known as the IL-2 receptor beta subunit is a key signaling receptor on CD8+ effector T-cells, which are the body's most effective tumor killing cells.

Activation of CD122 increases the proliferation of these effector T-cells. So our objective with NKTR-214 is to increase these tumor killing cells specifically within the tumor without stimulating production of T regulatory cells, which will suppress an anti-tumor response. In preclinical studies, using a subcutaneous B16F10 mouse melanoma model, NKTR-214 resulted in a 400 to 1 ratio of CD8+ effector T-cells as compared to T regulatory cells within the tumor itself.

To give you an idea of how meaningful this ratio is, in this same model, treatment with vehicle results in a ratio of 1 to 1. So NKTR-214 clearly tips the balance of the immune system toward effector T-cell function within the tumor microenvironment. We believe this explains why NKTR-214 performed exceptionally well as a single agent in very difficult tumor models of melanoma and lung cancer. We have also combined NKTR-214 with PD-1 inhibitors and CTLA-4 inhibitors in various tumor models, which resulted in synergistic anti-tumor immune responses.

For example, in tumor re-challenge experiments, the combination of anti-CTLA-4 and NKTR-214 achieved durable and long-lasting responses after a single course of the combination was administered. Furthermore, although it is a cytokine, NKTR-214 is designed to be dosed like an antibody similar to the dosing schedules with PD-1 and CTLA-4 agents. From a safety standpoint, the molecule appears to be well tolerated in our toxicology studies of predicted therapeutic doses based upon pre-clinical modeling including several non-human primate studies where we have observed no evidence of vascular leak syndrome or low blood pressure. Our clinical program for NKTR-214 will evaluate it in a variety of tumor types both as monotherapy and in combination with other agents including a PD-1 inhibitor. Also, as part of this program, we are planning a comprehensive assessment of potentially predictive biomarkers, which we would use to maximize the likelihood of successful development of NKTR-214. We are currently finalizing the protocol and we are planning to begin our first clinical study later this year.

And with that, I would like to turn the call back to Howard.

Thanks Ivan for the clinical update. Based on the progress we've made with NKTR-214, we have a continuing research emphasis at Nektar in the area of immunotherapy. We're focusing on the next generation of agents beyond checkpoint inhibitory antibodies, which have dominated the field today. Our objective is to develop novel agents that increase stimulation of the immune system in the tumor environment and to reduce or eliminate immune evasion by tumor cells. These include new drug candidates that target more precisely known immune regulatory pathways like IDO pathway inhibitors and new cytokine therapies such as IL-15. With that, I'd like to turn the call over to John for a discussion of our financial results.

Thank you, Howard and good afternoon everyone. I will start with the review of our first quarter 2015 financials and then I will go through our annual financial guidance. Total revenue in Q1 2015 was $108.8 million versus $19.8 million in the first quarter of 2014. This increase was driven by the $100 million milestone received from AstraZeneca for the first commercial sale of MOVANTIK in the US. In March, we signed a revision to the AstraZeneca agreement, which allows Nektar to gain certain US rights from AstraZeneca to proprietary commercial and marketing information for MOVANTIK over the life of the agreement, which were not available to Nektar under our original licensing agreement and are typically not available to licensing partner.

In exchange for this, Nektar agreed to contribute a small portion of the MOVANTIK DTC television advertising campaign over the next two years in the total amount of $10 million, of which $5 million will be paid in 2015 and $5 million will be paid in 2016. Under these new terms and according to FASB ASC 605-50 guidance on revenue recognition, we recognized $90 million of the $100 million launch milestone we received from AstraZeneca.

The revised agreement does not change the $40 million milestone payment owed to Nektar for the first commercial sale of MOVANTIK in a major European market, which we expect to receive and recognize in Q3 2015. And the agreement does not change our royalty rates in the US, which start at 20% and escalate, and in Europe which start at 18% and escalate. With respect to total operating costs and expenses, the first quarter 2015 was $65.8 million versus $56.2 million in the same quarter a year ago. The increase was primarily driven by increased R&D expenses as a result of the initiation of the NKTR-181 Phase 3 program.

R&D expense in Q1 2015 included the start of the NKTR-181 Phase 3, including SUMMIT-07, the 12-week efficacy study, and SUMMIT-LTS, the long-term safety study. The continued production of devices for the two ongoing Phase 3 studies of Amikacin Inhale and preparing the commercial licenses for the production of the commercial devices. Some remaining course for NKTR-102 Phase 3 BEACON study, the dose escalation Phase 1 clinical study of NKTR-171, which is ongoing and which we expect to complete in the second half of 2015. IND enabling manufacturing and final preclinical activities for NKTR-214. Research and development expenses also included $4 million of non-cash stock-based compensation and depreciation expense.

For the first quarter of 2015, G&A expense was $10.3 million, which was included approximately $2.7 million in non-cash expenses. Cash and investments at March 31, 2015 were $325.8 million as compared to $262.8 million at the end of 2014. Our year-end cash guidance for 2015 remains unchanged. We still plan to end the year with approximately $200 million in cash and investments. This represents a net use of cash of approximately $63 million.

As Howard stated, the launch of MOVANTIK by AstraZeneca occurred at the end of the first quarter. However, our cash and revenue guidance does not include projections for royalties from net sales of MOVANTIK in the US and Europe. We believe it will be more appropriate to provide guidance once there is an established sales history for the product. As a reminder, we will recognize all royalties on net sales one quarter in arrears.

Revenues for 2015 is now expected to be between $215 million and $225 million, including $21 million in non-cash royalty revenue. We expect to recognize the $40 million milestone payment in Q3, following the first commercial sale in either Germany or the UK.

Additionally, we expect to recognize a $10 million milestone from Baxter in the fourth quarter upon approval of BAX 855. Other than milestones discussed, we expect the remaining revenue for the year will be approximately evenly split between the last three quarters. Again, our revenue guidance does not include MOVANTIK royalties, although we expect to begin receiving these royalty payments in Q3.

Our R&D expense guidance is now between $185 million and $195 million with [approximately $60 million] of this as non-cash items such as stock-based compensation and depreciation expense. 2015 G&A is anticipated to be between $42 million to $44 million, which includes $11 million of non-cash expense. And let me remind you again, our cash guidance for the end of the year is unchanged and we still expect to end 2015 with $200 million.

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

(Operator Instructions) Jessica Fye, JPMorgan.

I guess, my main question is on MOVANTIK and I realize you might not be able to speak for Astra here, but can you talk a little bit about the goals for ultimate levels of Tier 2 coverage. It sounds like you've gotten some wins there already, but where are you trying to get that to over time?

I think that's a good question. I can't comment specifically on what they're attempting to do, but I think their goal is pretty clear that they want to get broad Tier 2 coverage. I think even with a copay structure, under even Tier 2 or Tier 3 with the kind of [wack] pricing that they put together even with a Tier 2 or Tier 3 copay situation, it probably cost less than to the patient than the cost of laxatives at the supermarket. So I think they've got a good structure. I think they're working very hard to get this as broad as they can and we've been very happy with their thinking on this.

Okay, great. And then, just, you talked about DTC as well and I think this is for you to serve a DTC sensitive category, but should we be looking for an inflection point in scripts when starts happening or can you set some expectations there?

Look, I think clearly direct to consumer advertising and television advertising is very important for a drug like this. There is no doubt about it. As you know with 38 million patients that are taking opioids, the vast majority of them develop OIC and some of them respond to laxatives and some don't, but clearly they need to go to the physician's office and ask for help, and they want to ask for help. So the direct to consumer advertising, in particular the television advertising is without a doubt going to, I think, drive sales.

I can't comment on how that will change the ramp rate. It's too early, and I know AstraZeneca has plans for direct-to-consumer television advertising and it will be a number of months before that kicks in, but I would expect to see a change in the ramp rate based on that, yes. And I think, this is a market that is very much driven by the patient who is suffering with OIC, and of course laxatives really aren't going to work.

The beauty of a drug like MOVANTIK is that it deals with the biology of the situation. It deals with the underlying biology, it un-paralyses the bowel and laxatives are not going to do that. So, I think it's a very good -- it's a nice story. It's a very clean science. When AstraZeneca sales reps talk to the physicians, it's very easily understood and appreciated, and I do think with the patients asking their physician for help after seeing some direct to consumer advertising, I think that will have an effect on sales. So we're pretty happy about that.

Jonathan Aschoff, Brean Capital.

Howard, you're saying that you'll use the BEACON alone for reg path forward, mean that you definitely will not do another 102 trial?

At this point, we're not going to commit any further studies in NKTR-102 without having substantial regulatory discussion. There's lots of possibilities -- post regulatory discussion, it depends on the results of those discussions, but at this point, we said we will have our regulatory discussions by the end of the year. I have no plans to start any studies this year, no.

Okay. Is there anything you can tell us about 181 enrollment, how it's proceeding now?

I'll let Ivan take that. Go ahead Ivan.

Well, it's off to a good start. Actually I was talking with the team today, it's proceeding slightly ahead of plan in fact. I mean -- it's obviously early days, we've got about a quarter of the sites up and running. We are getting a good distribution of the doses as we look at it. So the patients getting randomized across the dose range more towards the sort of the higher doses, which we thought would be the case and which is pretty typical for these types of studies. So, I'm actually pretty pleased with how it's going.

And I can't recall the prior trial, whether it was naive or washed out, or what were they?

The prior studies, they were naive, but you'll recall it was a very very different from this study, and as much as it was in osteoarthritis, and patients were on concomitant non-steroidal anti-inflammatory drugs and as we've said previously on quite a few occasions, there were several potential issues that we identified with that study and we believe that we've optimized the design of this study. It's pretty consistent with the sort of state-of-the-art if you like in the field at this time.

And last for, John, can you just tell me where the rest of the $100 million went in 1Q. There was $96.7 million in that accounts for what's often on that line, and the $100 million, I'm just trying to figure that out?

Yes, Jonathan, basically what I said was that from a revenue standpoint, basically the $10 million is going to go to DTC. So even though we will pay $5 million in this year, and we'll pay another $5 million in 2016, that $10 million has to be accounted for in the first quarter of this year.

Bert Hazlett, Ladenburg.

I guess to follow-up John, with regard to the DTC payments and the, let's call it the modest restructuring of that deal, are there any other residual obligations and all that Nektar is responsible for?

The only thing we are still responsible for, and we've told you this last year is that, for the study that's going to be done by AZ basically to look, if there is any cardio effects based upon MOVANTIK, that basically we would have to share in that, and that basically we would share in third-party expenses on that. Other than that, in the $10 million that, you know we mentioned in the call today there is nothing else.

Bert, this is Howard, I would add that long-term study is capped and we had a very small obligation, I think $10 million maximum over the life of the study and I think that study runs for something like 10 years.

Okay, thank you for that color. As the MOVANTIK franchise moves forward globally, how do we think about 119, are there any particular clauses in terms of the specific timing where AZ needs to make a decision for 119 or any other structures that we should be aware of with regard to the combinations?

Yes, they do have an obligation to develop 119. However, I think they've always said, and I completely understand this; that they want to see the development of MOVANTIK before they do that and I would do the same thing if I were them. I think it makes absolute sense to develop 119 with the successful MOVANTIK launch, but I think we have to wait and see when they start that.

Steve Byrne, Bank of America.

Can you comment on how many reps Daiichi is going to be using to promote MOVANTIK and what other drugs they will be promoting at the same time?

I can't comment specifically on what other drugs they'll be promoting, but clearly I believe that they consider this an important part of their portfolio. I know that in the past we've said that AstraZeneca would be putting approximately 500 sales reps that are specialty sales reps, approximately 200 sales reps that are primary care and Daiichi will be joining them with approximately 500 sales reps in primary care.

So we've said that the approximate number of total sales reps is 1,200. We've said that in the past, but that of course could be modified on an as needed basis, but that should give you some sense of where they are and I think we discussed this last time as well.

And AstraZeneca is not pulling back on their number of reps that they've committed to, to use post the agreement with Daiichi?

No, not at all. The purpose of the agreement with Daiichi was to expand the sales organization. I know AstraZeneca a few weeks ago had of course had their significant and very, very impressive sales launch meeting with all their sales reps. They are absolutely committed. They have, as I can tell, some of their finest sales reps in their organization promoting and detailing MOVANTIK and the main reason for joining together with Daiichi Sankyo was that they already have an excellent relationship with that company. I believe that Daiichi markets Nexium for them in Japan and in addition to that, the desire to expand the reach to the primary care physician was very, very important and they should be a great partner for this. They have a real desire to build their franchise there. So I think the two companies combined are just tremendous for MOVANTIK.

Okay, and then a question on 214, I just wanted to drill into that a little more. Ivan can you talk a little bit about some of your preclinical studies in that what indications do you think that there will be an opportunity here i.e., an indication where you're likely to have the effector cells that are dormant, that could respond to a stimulant like this?

Hi Steve, this is Steve Doberstein. When we look across the preclinical models and then the emerging field of biomarkers in immunotherapy, I think there's a couple of places where people look. Of course melanoma has traditionally been the mainstay of the exploratory trials in this field and that's because they have a large number of infiltrating lymphocytes and they have a fairly high mutational load and I think if I would look forward into indications that might very well respond to the kind of immunotherapy we are thinking about here, and those are the two things that I would point towards are those tumors that are known to have a fairly high number of lymphocytes, those include things like lung cancer, renal cell carcinoma, it falls into that category of course.

And then those tumors, there are some really interesting emerging science about the total mutational load of those tumors and the higher the number of mutations encoding sequences, the more likely patients are to respond to immunotherapy in general. I think that's an area of emerging research that could lead to some prospective biomarkers as well. So those are the kind of things we're going to be looking for -- looking at very closely in Phase 1, and keeping track of the science.

I have to say that I'm not sure that the preclinical models really help us predict the human tumors very well and that's because, of course you know mouse models are only predictive up to a point in predicting human responses, but I think we're pretty excited about the prospects here because the checkpoint inhibitors are of course carrying the load of directing the science right now, but the unique ability of NKTR-214 to stimulate and change that T cell response as Ivan talked about it earlier, I think that leads us to some specific tumors that we'll be looking at in expansion cohorts in Phase 1 and Phase 2.

In the combination with the checkpoint inhibitors, sure seems logical. Have you published any of that?

Yes, we've published some of that in posters already and we'll be of course continuing to talk about those results at future scientific meetings, but I think if you look on our website, you'll find some of that early work on the anti-CTLA-4 and NKTR-214 combinations in particular, as well as I think some of the data on the anti-PD-1 combinations as well. You'll find them on our website.

Thank you. There are no further questions. I will now turn the call back over to Howard Robin, President and CEO for closing remarks.

Well again, thank you to everyone for joining us this afternoon. I also want to thank all of our employees for doing such a fantastic job. We are very pleased that the launch of MOVANTIK is off to a strong start, that Baxter is looking forward to approval of BAX 855 later this year. We are proud of the pipeline we built which includes four Phase 3 programs and filed BLA and a recently approved and launched medicine. As I said earlier, our clinical late stage partner programs combined with revenue streams from MOVANTIK and BAX 855 could lead to peak royalty revenue of $750 million a year for Nektar. So we're very excited that we are on our path towards becoming quite a sustainable company. I would like to invite everyone to our R&D Day on October 8th in New York to showcase our new programs and to present the Phase 1/2 clinical study design for NKTR-214. Everyone have an enjoyable evening. Thank you very much.

Thank you ladies and gentlemen. That does conclude today's conference. You may all disconnect and everyone have a great day.