Spectrum Pharmaceuticals Inc (SPPI) 2010 Q2 法說會逐字稿

Good day, ladies and gentlemen, welcome to the Spectrum Pharmaceuticals quarter two 2010 earnings call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session, and instructions will be given at that time. (Operator instructions). As reminder, today's call is being recorded. I would now like to introduce your host for today's conference, Mr. Paul Arndt. Paul, you may begin.

Thank you, Joe, and good morning and thank you for joining us today for Spectrum Pharmaceuticals' second quarter 2010 corporate update conference call. I'm Paul Arndt, Senior Manager of Investor Relations for Spectrum Pharmaceuticals. With me today are Dr. Raj Shrotriya, Chairman of the Board of Directors, Chief Executive Officer and President; Shayam Kumaria, Senior Vice President of Finance; Dr. George Tidmarsh, Chief Scientific Officer; and Jim Shields, our Chief Commercial Officer.

Here is an outline for today's call. First, Shayam Kumaria will provide a summary of second-quarter financial performance followed by Dr. Raj Shrotriya, who will highlight our recent accomplishments and provide outlook for the rest of 2010, before we open up the call to questions.

Before I hand the call over to Shayam, I would like to remind everyone that during this call we will be making forward-looking statements regarding future events of Spectrum Pharmaceuticals, including statements about the product sales, profits and losses and the safety, efficacy, develop time lines and clinical results of our drug products that involve risks and uncertainties that could cause actual results to differ materially. These risks are described in further detail in our reports filed with the Securities and Exchange Commission. These forward-looking statements represent the Company's judgment as of the date of this conference call, Tuesday, August 10, 2010, and the Company disclaims any intent and obligation to update these forward-looking statements.

However, we may choose to update them, and if we do so, we will disseminate the updates to the investing public. For copies of today's press release, historical press releases, 10-Ks, 10-Qs, 8-Ks, SEC filings and other important information, please visit our website at www.sppirx.com. I would now like to turn the call over to Shayam Kumaria.

Paul, thank you very much, and good morning to everyone on the call today. We appreciate your interest in Spectrum Pharmaceuticals. I would like to present just some key financial highlights of our operations for the three-month and six-month periods ended June 30, 2010. Please note that all numbers I'll refer to are approximates.

For the second quarter ended June 30, consolidated revenue was $12.3 million and comprised of product sales, $9.3 million, which included $6.9 million from ZEVALIN, $2.4 million from FUSILEV, and also included $3.1 million attributable to the amortization of deferred licensing fees.

Net loss for the quarter was $9.7 million, or $0.20 per basic and diluted share. For the six-month period ended June 30, consolidated revenue was $23.4 million, and it comprised product sales of $16.4 million, which included $13.4 million from ZEVALIN and $3 million from FUSILEV. Also included in consolidated revenue was $7 million attributable to the amortization of deferred licensing fees.

Net loss for the six-month period was $48.7 million and included the $30 million one-time licensing fee paid for Belinostat in the first quarter. During the six months ended June 30, net cash used in operations was $29.4 million. This included $17.5 million received from Apaziquone up-licensing and milestone fees and also included the one-time up-front payment of $30 million for Belinostat. Cash, cash equivalents and investments in marketable securities totaled $94.5 million as of June 30. There are currently 50 million shares of common stock issued and outstanding.

I will now hand the call over to Dr. Raj Shrotriya.

Thank you, Shayam, and good morning, everyone. I would also like to thank you for taking time out of your busy schedule to join us today.

We recently took several important and strategic steps that we expect will help Spectrum continue its growth trajectory. We have further augmented the depth, breadth and experience of our commercial and drug development operations. Among the many new employees we have added with impressive track record, I would like to highlight two key appointments. We recently appointed two seasoned professionals, Jim Shields as our Chief Commercial Officer, and George Tidmarsh, M.D./PhD, as our Chief Scientific Officer, to help us maximize the potential of our two marketed cancer drugs as well as our broad and diversified pipeline.

Jim is a seasoned pharmaceutical sales executive. Ever since joining us, Jim has immersed himself in the organization and has already spent a significant amount of his time in the field with our oncology sales force. He has been busy optimizing the sales structure to focus on results and maximizing our return on investment. He is supported by two field Vice Presidents, Ed Barnes for sales and field operations, and Ray Gonzalez for government affairs and business solutions. Jim's results-oriented, hands-on approach is expected to be an important driver for our product revenue. In addition, Jim will also lead the strategic launch efforts for our latest-stage products, Belinostat and Apaziquone.

Our second appointee, Dr. George Tidmarsh, is our Chief Scientific Officer. He is a successful oncologist and biotechnology leader with more than 20 years of experience in leading and operating biotechnology companies, FDA drug approvals and company financings. Among other areas of oncology, George has extensive leadership and experience in radio immunotherapy, having provided oversight for the development of Bexxar and a radio immunotherapy anticancer drug. He also played a key role in the FDA's approval process of Taxol, including the successful presentation to the FDA's ODAC, or Oncology Drug Advisory Committee. George will provide the strategic planning and leadership necessary for managing all of the Company's scientific operations, including clinical research, medical and regulatory affairs, biostatistics, data management and pharmaceutical operations, while supporting the commercial organization.

Let's briefly talk about the strides we have made with our marketed oncology products, starting with ZEVALIN. First, we successfully achieved FDA approval in the first-line consolidation setting late last year. This significantly increased the number of patients eligible to benefit from ZEVALIN therapy beyond the originally approved relapsed/refractory setting.

Secondly, a lack of adequate reimbursement policy historically presented a barrier to patients' access and utilization of ZEVALIN. We have now removed this barrier by achieving uniformity and transparency of ZEVALIN's reimbursement in the hospital and physician office settings for the first time in its eight-year history. We continue to educate the marketplace on these important achievements.

Lastly, ZEVALIN received site category one status, the highest obtainable in the NCCN, or National Comprehensive Cancer Network guidelines. This achievement requires uniform consensus by a panel of experts that there is unequivocal evidence of patient benefit. This highest-level status further supports favorable reimbursement policy.

Let me put this into perspective. Our efforts involved understanding the issues and barriers related to ZEVALIN, and then removing those barriers one by one like peeling off the layers of an onion. This has resulted in six-month ZEVALIN revenues that are 36% higher in the first half of 2010 than in the second half of last year. But, we still have work to do to fully realize the ZEVALIN potential. We are working effectively and efficiently to achieve certain key goals to grow the brand, including, among others, number one, executing the sales optimization plan that has just been put in place, submitting to the FDA data supporting removal of the bioscan requirement, developing a synergistic, supportive clinical trial development program and, fourthly, enhancing our physician and patient education programs.

And we are happy to report that progress is being made on all fronts. Yet it is important to note that the expected positive impact of these initiatives on sales of ZEVALIN is likely to occur gradually over time.

Regarding the sales optimization plan, it includes directives on enhanced performance and accountability with a focus on key account initiatives and field resource allocation. Regarding the bioscan removal, we have guidance from the FDA as to what is necessary to consider removing the bioscan requirement. We have assembled a dedicated project team, including the consulting services of the former FDA medical reviewer of ZEVALIN.

We believe removal of bioscan achieves the following benefits. Number one, patients would not need to travel to nuclear medicine centers to receive the imaging dose and the bioscan. Number two, it will reduce the logistical coordination that is necessary between the referring oncologist and the administering sites. And thirdly, it will reduce costs by thousands of dollars per administration to the healthcare system.

We also recently took steps to safeguard an increase of supply of radioactive isotope yttrium 90 by signing a contract with a new supplier. We are now able to supply and administer ZEVALIN to patients all seven days of the week, rather than the previous availability of only two days per week. To be responsive to the investor community requests, we are providing ZEVALIN 2010 sales guidance for the first time. Based on current trends, financial data and our current operating plans and assumptions, we are projecting ZEVALIN revenue for 2010 to be between $27 million and $29 million. Please remember, we sold only $15.7 million of ZEVALIN in the entire last year, so this estimate is over 85% growth over past year.

For our second marketed product, FUSILEV, we sold $2.4 million in the second quarter. In June we learned of a leucovorin shortage. Working with the FDA and others, we mobilized many of our resources to help the medical community address this serious medical emergency created during the shortage of this critical drug. Assuming the leucovorin shortage is resolved soon, we would expect FUSILEV revenue to range between $3.5 million to $4 million for this year.

It is important to note we believe FUSILEV's ultimate sales potential is largely dependent upon obtaining FDA approval for its use in colorectal cancer. To that end, we are generating the data requested by the FDA. We anticipate submitting the data before year end; and, based on PDUFA guidelines, would expect the FDA's decision in 2011. We continue to view the opportunity in colorectal cancer as the growth driver for FUSILEV sales, a market that is substantially larger than its currently approved indications.

Outside the United States, greater than 95% of sales of leucovorin are in colorectal cancer.

Our next drug, Apaziquone, or EOquin, remains a key focal point of our development program. In 2012 we expect to see top-line data from the recently enrolled Phase III bladder cancer trials involving 1600 patients. Our goal is to submit NDA shortly thereafter.

With regard to our recently licensed anticancer drug, Belinostat, a novel HDAC inhibitor in later-stage clinical trials, we are continuing to open new sites and enrolling patients both in the United States and Europe. Belinostat's initial target indication, PTCL, or peripheral T-cell lymphoma, has received orphan drug and fast-track designations from FDA. Belinostat is currently in a registrational trial for PTCL under a special protocol assessment that requires 100 evaluable patients.

Belinostat is also being studied by our partner, TopoTarget in carcinoma of unknown primary, or CUP indication. No drugs have been approved for CUP, although the National Cancer Institute estimates about 2% to 4% of all cancers fall into this category, accounting for approximately 10% of all cancer deaths. TopoTarget expects completion of enrollment by year end in a Phase II trial for CUP that is being conducted and fully funded by them.

In addition, the National Cancer Institute is also conducting several studies on Belinostat both in solid tumors and hematological malignancies.

As a summary, here is what we expect to accomplish in 2010 and beyond. With regard to ZEVALIN, our focus is to continue to grow the brand, submit to the FDA supporting removal of the bioscan requirement and continue to educate the marketplace on the uniformity and transparency for reimbursement.

For FUSILEV, we plan to submit to the FDA requested data for colorectal cancer supplemental NDA by year end. And for Apaziquone, top-line data from the registrational Phase III bladder cancer trial is expected in 2012. For Belinostat, for PTCL, or peripheral T-cell lymphoma indication, we anticipate NDA filing in 2011. For carcinoma of unknown primary indication, TopoTarget reports that they are on track to complete enrollment by year end in the ongoing Phase II trial.

The second quarter of 2010 was full of activity. We expect to continue to achieve additional success in the remainder of 2010, 2011 and 2012. We believe that the combination of our novel product portfolio, business development strategies and fiscal discipline will allow us to realize the full commercial potential for ZEVALIN, FUSILEV, Apaziquone, Belinostat and the remainder of our pipeline.

It gives us a great sense of satisfaction that everything we do at Spectrum has the potential of benefit patients with cancer. We now have many patients who owe their life or quality of their life to the drugs that we bring to them.

I will now open up the call to questions.

(Operator instructions) Shiv Kapoor.

My first question is regarding sales, general and admin costs this quarter. It seems like they ramped up quite a bit. Could you explain the ramp quarter over quarter and whether there are any one-time expenses that are loading the numbers this quarter, and whether this is a read that we're looking at for the next few quarters?

So talking about the -- I think you're talking about the sales and general administrative expenses. Is that your focus, Shiv, as I understand?

[Yes].

So let me give you an idea. The number $13.8 million that we have reported in our second-quarter earnings comprises of three or four items, major items. And let me first get it out that there is a charge, non-cash charge of about $1 million included in this. And then the payroll expenses are actually pretty much similar between the Q1 and Q2. The major difference is that in Q2 we didn't spend money with consulting outfits that have focused on what's called educating the physicians and also helping us with various activities, including the reimbursements and things like. So that has been the major difference in Q1 and Q2.

But going forward, as you have seen that our focus remains in while we are trying to grow the sales of ZEVALIN, we will maintain a tight control on our expenses. That has been number-one priority for Jim Shields and Ed and Rick and Shayam, and we continue to focus on that.

So if I get this correctly, you might have spent about $2 million to $3 million on these consulting arrangements?

Yes, we did.

Okay, that makes sense, thanks for that. One quick question on ZEVALIN -- I noticed that your sales quarter over quarter -- there wasn't that much of a jump in ZEVALIN, and that was probably because of about a week-long shutdown. My question is, how have sales recovered since then, and is the trajectory still looking upwards?

Yes. The answer is that we lost about two weeks actually, Shiv, during the volcanic ash. We were caught by surprise, like most people were. So we lost about two weeks, not one, but two weeks of the usage of ZEVALIN in our country. But we are very excited with the traction we are seeing. We are very pleased with the number of doctors that are interested, the clinics, hospitals. Overall, the traction is to our satisfaction. We are very pleased with the progress we're making.

So if that's true, it seems like you are being conservative on your guidance, because $27 million to $29 million would imply about $15 million in sales in the next two quarters, and that wouldn't suggest the kind of growth that you were seeing in the past quarters. But the Company is known to be conservative, so should I take that your guidance range is conservative, or not?

Well, let me just say, this is the first time we are attempting to give you guidance. So I think it is good business to be on the conservative side. And also, let's not forget the fact that ZEVALIN for the last seven, eight years of its launch in 2002, the drug had seen only decline in sales until Spectrum stepped down and has started making a difference. So we would like to trade on the conservative side, Shiv.

Fantastic. I do have a couple of other questions, but I'll give way to other people. Congratulations on a great quarter, and I'll follow up.

Ren Benjamin.

Good afternoon, thanks for taking the questions, and congratulations on the quarter. A couple of questions regarding -- maybe just starting off with ZEVALIN. Would you expect some sort of an inflection point in ZEVALIN sales, once the community setting ASP and reimbursements sets in? And, can you give us an update as to what's happening and what steps you guys are taking in order to secure that reimbursement?

So I'll give you a broad brush stroke answer here that we have achieved exactly what we set out to achieve. We got full reimbursement in hospital setting, and we now have achieved full understanding of the reimbursement. Everybody who prescribes or uses ZEVALIN, there is total transparency and they know exactly what they're going to get. So, in other words, we have accomplished now, as we speak, exactly what we set out to do almost a year and a half ago. So we are very pleased with the progress we have made, and now the concerns that we had about reimbursement six, seven, eight, nine months ago have really gone away.

So, going forward, we expect that ZEVALIN will continue to get -- we will continue to see the traction that we have seen in the last quarters.

Raj, maybe I'm just not understanding you correctly, then. Is the community setting a focus at all to obtain additional ZEVALIN sales, or are the majority of sales being done in the hospital setting?

That is true. The sales of ZEVALIN have been -- majority of them are in hospital setting. But up until recently, the people who use in community setting, they used to lose money, and that's not the case today.

Okay. Can you give us a sense as to the breakdown in sales of ZEVALIN? How much is the standard sort of salvage line setting which it has been approved for initially? And, how much is the first-line therapy for which it got approved recently?

That's a very good question. We are still trying to collect the data. We're trying to understand what our preliminary observations reveal, that about 30% to 35% of usage has now shifted to first-line use. But this needs to be confirmed, and I would wait for another two weeks to give you the exact, precise percentages. But we are seeing increasing use in the first line setting, and currently we estimate, based on preliminary numbers, that the number is about 30% to 35% usage in the consolidation first-line setting.

Okay. You mentioned during your prepared remarks that there are several things that you are currently doing to boost ZEVALIN sales. One was a sales optimization plan. Can you talk to us a little bit about that? What does that entail? Is it just adding more salespeople, or is it something else? And while we're at it, how many sales and marketing people do you have now?

Okay, so let me have Jim Shields answer this question. This is his baby, optimization of sales plan. But I can assure you that we are not planning to add any more salespeople. Optimization to me, at least the way I have understood it is optimize the resources that we have at hand. Jim?

Thanks, Ren, and the optimization plan was birthed out of a couple of things. First, it included my own personal observations from being out in the field setting, as well as counsel from the members of the field leadership team. It became apparent to us that we needed to make some adjustments to optimize our efforts in the field. So we put this optimization plan into place, and it was designed to address those issues, primarily at the field level, where we felt that we were not getting the level of traction that we felt we needed and, frankly, that we would have to have to move forward with our continued trajectory with ZEVALIN.

So the results of the optimization plan, there are several points here. I'll just list them fairly quickly, and then I'll be glad to address any individual questions that you have about them. But what we've managed, what we've strived to do was enhance our selling focus and enhance the level of service qualities at the account level, in the individual territories. We started out to -- what we wanted to do was streamline our overall business model at the field level to more effectively align the responsibilities and the accountability, by the way, of the field sales folks as well as the management team. Now, what we've done is we've refocused and optimized the team efforts relative to their activities overall, and that has helped us to add a level of priority to accounts within -- to our priority accounts within each territory. And as Dr. Raj mentioned earlier, we were also able, as a result of this, to enhance our ability to align our field resources to a better level that would allow us to optimize our return on investment. So it was a fairly in-depth package, but with the assistance of our field leadership team, we have been able to put this in place. And we've already begun -- although it's early, we have already begun to, I think, see some early positive results.

Thank you, Jim. Just to put it in perspective, Ren, just to give you an idea, a more concrete idea, you remember we used to talk about SNOS, the senior nuclear oncology specialists. After having experience with them for about a year, it was decided that we need to replace SNOS for what we call as the people who are part of business solutions. Once a doctor has decided to put a patient on ZEVALIN, then there is somebody who follows this patient through, makes sure that all the logistics are taken care of.

So they are called clinical (technical difficulty) [logistical] specialists. We call them, now, CLS. So we actually shut down the whole apartment that was dealing with SNOS, and we took handful of those people and converted them to the clinical logistics solutions, which our experience now, little experience over the last couple of months has been that doctors love it, hospital loves it and our salespeople love it because after the salesperson has made the sale, there's somebody who follows through to make sure the patients actually get ZEVALIN therapy. And if there are any issues about getting Indium scan, if there are any logistical issues, barriers to getting ZEVALIN (inaudible) dispensed, patients brought to the clinic, they're all taken care of by one dedicated person.

Just to give you an example, so that has actually meant reduction and change in the requirement of the work by some people, what we call SNOS, to changing them to the logistical specialists.

Okay, all right, thank you for the clarification. We've talked about in the past about these Z-ready clinics and penetrating these clinics. Can you give us a sense, either you or Jim, what sort of penetration we have with -- how many -- again, in your mind, especially after the optimization plan, how many target clinics do you see out there? And, is the penetration at 100%, or do you still have more to penetrate? Just give us a sense as to how that's coming along.

Okay, so clearly, we don't have 100% penetration. Our eyes are focused on -- there were about 250 Z-ready clinics in the beginning, and we decided to grow them to about 400, and then the second year would be like 700. What we know that the -- by focusing on key accounts, the 80-20 rule is very applicable to our ZEVALIN sales. 80% of our ZEVALIN sales are coming from about 20% of our accounts.

So that is what Jim has described and Rick and Ed have described as optimization by focusing on key account initiatives and making the allocation of resources. So we are focusing on oncologists who manage these patients and not those who administer the drug. See, these SNOS were focusing on the people who administered the drug. However, the oncologists are the ones who decide, who make the decision as to who should get ZEVALIN. So our focus is now turned 100% to the oncologists. And once an oncologist makes a decision, then we have our logistical expert to go and follow through and make sure that all the other barriers are removed.

Got it. And as you were talking about barriers, you had already mentioned the advantages to the bioscan removal. I'd like to dig in a little bit more than just talk about -- and you reviewed this in prior conference calls -- but just wanted to see where we are in that progress to getting bioscan removal and when we might eventually hear that decision. Can you give us an update as to where we are, what more might be required and when we might hear either a positive or negative recommendation?

So, Ren, let me have George Tidmarsh, who has taken a bull by the horn and his number one priority has been to get the bioscan removal data fully analyzed and filed with the FDA as soon as possible by -- before the end of the year. So I'll have George comment on this.

Where we sit right now is we have meeting minutes from FDA through several discussions that give us clearly on what the FDA is expecting. We have augmented that by the addition of consulting services of the former FDA medical reviewer who was involved in the approval of both ZEVALIN and Bexxar to give us even greater clarity on what the FDA is asking for. It is a substantial package, but right now we are on track to get that filed by the end of the year, assuming we can continue to get the data that is requested by FDA. And we look to, sometime in 2011, to have the nod from FDA yes or no on our request.

The overall opinion of the folks who are in the know who were at FDA is that the FDA really should want this to happen, and so we are -- I'm quite optimistic. But obviously, until that decision is rendered, we don't know. But we are on track.

Okay, terrific. Switching gears very quickly to FUSILEV, clearly, Teva and Bedford have aided in the sales once again by having a shortage. You have provided some nice guidance so, assuming that the shortage doesn't continue, how FUSILEV sales should go on. The colorectal package -- you had mentioned that you would like to resubmit that by the year end. Is that -- once that is resubmitted, is there a special type of review that takes place, like priority, or is it more standard? Can you give us some sense as to -- I know you said it will likely be a decision that would be made in 2011. But could it be in the first half or the second half, based on what sort of review it gets?

And then also, could you give us a little bit of clarity -- I know we haven't had it before, but I don't know if you are willing to talk about what sort of studies the FDA would like you to complete for this resubmission.

So I'll just be brief on this, Ren. You know we don't like to comment how much time FDA will take or what decisions they will make. We have no crystal ball to judge that. But clearly, what they have asked is doable. We are doing this, and we plan to submit that by the end of the year.

And I am hoping -- and again, this is my hope -- that the FDA will quickly make the decision because now the shortage has happened a second time in the last 18 months, and FDA has come to us a second time. The drug shortage group approached us last year, as you know, in December of '08 and January of '09, when we were called upon to fill in the need for leucovorin. These are colorectal cancer patients. This drug is needed for those patients. And now, second time we have been asked to be ready to supplying leucovorin, to replace leucovorin with FUSILEV.

So, this has happened twice in 18 months, so I'm hoping that the FDA will look at favorably with our submission. But clearly, I have no crystal ball to tell you how long they will take and if they will decide favorably. But we are doing everything we can to make sure that the package looks good, and I'm hoping that the FDA will approve the drug.

And what's happening with the oral formulation of FUSILEV?

Yes, oral formulation is under review by the FDA, and I'm hoping that that decision should also be -- I keep expecting that decision any day by the FDA. It hasn't come yet.

Okay, switching gears to Apaziquone -- I apologize; you guys have a very big pipeline -- but a good thing for shareholders. What's happening with the multiple installation trial in BCG failures? Is that something that is still in the works? Is that still being talked about at all? Has it been shelved? Can you give us an update?

Yes. I can't comment on that at this time; this is in discussion among our partner Allergan and the FDA and various regulatory authorities. So it is, right now, at discussion stage.

And what about the Phase II-III trial in Japan with your partner? Is that still something that's on schedule for 2011?

And again, we don't like to comment how our partners are doing. Clearly, we don't pay for it, we don't supervise it. We just provide them some help if they need it. But to best of my knowledge, Nippon Kayaku is fully committed and moving along with their development plans for registration of Apaziquone in Japan.

And so I'll ask just one last question on a partner program. Regarding Belinostat, is there any way to give us some sort of an enrollment update as to what's going on in the Phase III trial right now?

Well, we don't like to give numbers [added] for competitive reasons and various reasons, but clearly it is a difficult trial. As you know, the patients are fewer patients, and this is a fatal disease. And now there is one drug approved; [Favertin] is approved for the treatment of this indication. We are required to complete only 100 evaluable patients, but it is a challenge. We have something like about 40 centers in the United States and about 60 centers -- additional 60 centers worldwide, mostly in Europe. So we have a lot of centers in place, but I hope and wish that every center will enroll at least one patient and we will be able to do 100 patients in the time frame. But at this time, I'm not at liberty to give you the exact number of patients that have been enrolled.

Well, what about the plans to initiate a small cell lung cancer study? Or do you have any idea as to what's happening with the NCI studies are ongoing and whether we might expect any data in the upcoming conferences in the fall season, maybe AACR or ESMO or ASH?

So the lung cancer trial is still being planned and is still being discussed among ourselves and the FDA and the investigators. George, do you want to comment on that?

We are planning to initiate that soon. We are finalizing the design. I met with the investigators just last week, and I think we've come to a final design and now we just need to implement the final protocols. So yes, we are very excited to be initiating a combination trial in front line non-small cell long with Belinostat. It should happen very shortly.

In terms of NCI and data, there will be data out of the NCI on numerous other indications, and we can update you as that approaches.

Is that something that will happen this year, or is that just as the trials complete?

As the trials complete.

Okay, and since I was successful for the first time in getting everyone to contribute on this conference call except for Shayam, I would like to just ask one final question on the financials, if I may. Shayam, the accounts payable seem to have increased quite a bit from the first quarter to the second quarter, and just wanted to get a sense of what's happening there and will it go back to more historical levels or is it something that will be maintained at this level?

I think it's a timing issue. A lot of the expenses came towards the end of the second quarter, and in the future, they should go back to more historical levels.

Thank you guys very much, congratulations on the progress and good luck going forward.

(Operator instructions) George Zavoico.

Hi, everyone, and welcome, Jim and George, to Spectrum. I see that Raj has got you going very quickly and right away. A lot of my questions have already been answered. If you just follow-up on the ZEVALIN with the submission with the FDA with -- to remove the bioscan. Are the additional trials and studies that need to be done -- are they pretty much finished now and you are just involved in the paperwork, or how extensive have those trials been?

No, there's no additional trials. It's a matter of --

I mean studies.

Yes, no additional trials, no additional studies, etc. Analyzing the data in a manner that's been requested by FDA and also in tracking down the worldwide post-marketing safety database to make sure that we give the FDA as much information as possible. But we are not waiting on the completion of any trial to make that submission.

That should accelerate the process, then. That's pretty much it. Congratulations on good quarter.

I am showing no further questions. I will now turn the conference back to Raj.

In closing, I would like to say that with two drugs on the market, with increasing revenue, two drugs in late-stage development and cash at hand, we believe that Spectrum is in a unique position, and I believe it is poised for success.

Once again, I would like to thank you for your time today and your continued support of Spectrum Pharmaceuticals. We look forward to updating you again on our third quarter conference call in November. Thank you.

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the program, and you may now disconnect. Everyone have a great day.