Supernus Pharmaceuticals Inc (SUPN) 2014 Q3 法說會逐字稿

Speakers, you may begin.

Good morning, and thank you for joining us today for Supernus' third-quarter 2014 results call. Results discussed today are for the quarter ending September 30, 2014.

Yesterday the Company issued a press release announcing third-quarter financial results. On the call with me today are Supernus' Chief Executive Officer, Jack Khattar; and Chief Financial Officer, Greg Patrick.

Today's call is being made available via the Investor Relations section of the Company's website at www.ir.supernus.com. Following remarks by the management, we will open the call to your questions. We expect the duration of the call to be approximately 30 minutes.

Now during the course of this call, Management may make certain forward-looking statements regarding future events and the Company's future performance. These forward-looking statements reflect Supernus' current perspective on existing trends and information and can be identified by such words as expect, plan, will, may, anticipate, believe, should, intend, and other words of similar meaning.

Any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, including those noted in the risk factor section of the Company's annual report on form 10-K, filed March 21, 2014. Actual results may differ materially from those projected in these forward-looking statements.

For the benefit of those of you who may be listening to the replay, this call is being held and recorded on November 12, 2014, at approximately 9:00 AM Eastern time. Since then, the Company may have made additional announcements related to the topics discussed.

Please reference the Company's most recent press releases and current filings with the SEC. Supernus declines any obligation to update these forward-looking statements except as may be required by applicable securities laws.

With that, I'd like to turn the call over to Jack.

Thank you, Rich, and good morning, everyone. I appreciate you taking the time to join us as we discuss our third-quarter 2014 results.

I'm very excited about the third-quarter results, our continued solid growth in our business, and how the year is shaping up for Supernus. Let me give you some of the key highlights. Total revenue for the quarter was $52.5 million, which includes $30 million in royalty monetization revenue and $22.5 million in total net product revenue.

As you may recall in May 2014, our partner, United Therapeutics, launched Orenitram for the treatment of pulmonary arterial hypertension. And in July we entered into an agreement with Health Care Royalty Partners to monetize a portion of the royalty revenue stream on the product.

Underlying our net product revenues is strong growth in prescriptions for Oxtellar XR and Trokendi XR. Total prescriptions as reported by Wolters Kluwer, or Symphony Health, increased by 26% over the second quarter of 2014 to a total of 57,776.

Trokendi XR prescriptions for third-quarter totaled 39,524, which is a 28% increase over the 30,840 prescriptions for the second quarter. Oxtellar XR prescriptions for the third quarter totaled 18,252, a 22% increase over the 14,973 prescriptions for the second quarter.

We also achieved record total monthly prescriptions in October of 23,362 prescriptions. This represents growth of 2,438 prescriptions over the month of September.

In fact, prescriptions for September grew by a similar amount of 2,258 on a month-over-month basis as compared to August. At this accelerated rate of monthly growth, we will achieve our goal of 27,000 prescriptions in December.

I would like to remind investors of the originating context of this objective. In May of 2013 when we issued our six-year convertible notes, we provided a monthly prescription target for year end 2014 to give investors an indicator to help them evaluate whether we would need to come back to the market to fund our operations, and to give them the ability to track our financial performance until we reach profitability.

Given the projected year-end cash balance of $85 million, it is clear that objective has been met. At this point, we have already confirmed that we will not need to raise capital to reach cash flow breakeven or profitability.

In fact, our financial performance for 2014 has far exceeded our expectations due to the royalty monetization and our excellent execution on the product launches with continued momentum and product prescription growth. While we touched on this during last quarter's earnings call, we feel it is very important to clarify this crucial point as we get closer to achieving profitability by year end.

To further elaborate on how successful our product launches have been, we encourage you to look at the weekly or monthly performance of the most recent antiepileptic drug launches, such as Aptiom, Fycompa, and Potiga, as measured by reported prescriptions for months 1 through 14 after the launch of each product. You will notice that Trokendi XR and Oxtellar XR are among the most successful launches, if not the best, when you consider the following two factors.

First, that we built our commercial organization only two years ago. And Supernus was an unknown Company in CNS and to neurologists.

Second, we introduced our Company and launched two products all in 12 months with a much smaller sales force and lower marketing spending than many of our competitors who are well established in CNS. Trokendi XR and Oxtellar XR continue to generate positive feedback from patients benefiting from the once-a-day-therapy of topiramate and oxcarbazepine.

With Oxtellar XR, we are now targeting the broader epilepsy market and have positioned the product as a once-a-day add-on therapy to patients who are still experiencing seizures. The product has strong efficacy data as represented by seizure frequency reduction and percentage of patients who become seizure free.

That, coupled with its favorable tolerability and side effect profile, offers physicians a treatment option that they did not have before. A recent survey among prescribers of Oxtellar XR shows that more than 70% of current prescribers of Oxtellar XR have prescribed it as an adjunctive therapy for patients already on other medications.

And roughly 50% have prescribed it as an adjunctive therapy for newly diagnosed patients. This compares to 58% and 32%, respectively, a year ago. We believe this strategy will further expand the market potential of Oxtellar XR beyond just switching current oxcarbazepine immediate-release patients.

The primary factors for prescribing Oxtellar XR are seizure control, seizure freedom, and potential for reduced side effects. We are very pleased with the performance of Oxtellar XR and its continued growth, considering that in most of our sales calls, it is in the second position behind Trokendi XR. With Trokendi XR, our strategy continues to be that of converting epilepsy patients from immediate-release topiramate.

We know from our clinical study that when given the opportunity to switch to Trokendi XR, 93% of patients prefer Trokendi XR over twice-a-day Topamax. Our survey among Trokendi XR prescribers shows that 90% of them have prescribed Trokendi XR for patients who were previously on immediate-release topiramate, and that 46% have prescribed it for newly diagnosed patients.

That is basically unchanged compared to a year ago when we first launched the product. The primary factors for prescribing Trokendi XR are once-a-day dosing and potential for reducing side effects.

In addition, Trokendi XR and Oxtellar XR continue to benefit from further expansion in managed-care coverage. Oxtellar XR now has 180 million lives covered, and Trokendi XR has 174 million lives covered. Roughly 88% of Trokendi XR and 89% of Oxtellar XR national claims are approved by payers.

Before moving to our pipeline, I would like to take a minute to address the Paragraph IV notifications that we have received on both products. While we can't give investors complete certainty around outcome of litigation, we would like to highlight the following.

First, these Paragraph IV notifications were expected, as we mentioned numerous times over the past few years. And therefore, we have planned and prepared very well to address them.

As you know by now from our previous press releases and the most recent one this past Friday, we now have a strong intellectual property portfolio comprising of four issued patents protecting each product. All these patents have expiration dates that are no earlier than 2027.

We also have additional patent applications that we believe will further provide the protection that these innovative products are entitled to. Second, the Company has a proven track record in successfully managing through Paragraph IV notifications, securing and protecting the longevity of products using our technologies over a 24-year timeframe.

These include legacy products such as our Adderall XR, Carbatrol, Oracea, Intuniv, and Sanctura XR. We will vigorously defend our IP and novel products and are comfortable and confident in managing through these issues.

Regarding our pipeline, we continue to progress on schedule with our two pipeline candidates. First SPN-810, which is for the treatment of impulsive aggression in ADHD, has received fast-track designation from the FDA. This is a major accomplishment, as we believe the product represents true innovation in the treatment of a condition for which there are no approved treatments.

We have completed the scale up at a commercial manufacturing site, had our end of Phase II CMC meeting with the FDA in September, and are scheduled to have our end of Phase II clinical meeting next month. We expect to start our Phase III clinical program during the second half of 2015.

For SPN-812, which is a novel treatment for ADHD, as we announced previously, we have selected an extended release formulation that will be the basis for the product that will be used in the pivotal trials. We expect to start the first pivotal trial during the second half of 2015.

We continue to progress development activities on the active drug substance, conducting further pharmacokinetic studies and preclinical activities that are eventually required for the completion of the New Drug Application. Regarding corporate and business development activities, we are actively pursuing opportunities that fit well with our strong presence in neurology and CNS.

We continue to look for products, partnerships, and strategic transactions that build on the success we have achieved so far and allow us to realize our vision of becoming a leading CNS pharma company. Before I hand it over to Greg to go over the financial overview, I would like to summarize by saying that our Company, including our commercial team and sales organization, have done an outstanding job in launching Trokendi XR and Oxtellar XR.

These products continue to post solid prescription growth despite increased competition. In the first nine months of this year, both products, combined, have generated close to $60 million in net product revenues.

We continue to believe that the peak potential of both products combined is $400 million to $500 million. And that our proven track record and experience in navigating through paragraph IV notifications will allow us to build long-term brands. We have built and will continue to strengthen our patent portfolio to protect Trokendi XR and Oxtellar XR.

With that, I will now turn it over to Greg to walk you through the financial results.

Thanks, Jack, and good morning.

As I review our financial results, I will remind our listeners to refer to the third-quarter 2014 earnings press release issued yesterday. We expect to file our form 10-Q for the third quarter later this week.

Net product revenue for the third quarter of 2014 was $22.5 million. This is comprised of $15.3 million for shipments of Trokendi XR to wholesalers and $7.2 million for shipments of Oxtellar XR to wholesalers.

Both of these products are still in a growth phase having been launched in 2013. As such, we believe the best basis for analyzing revenue growth is to compare revenue versus the prior quarter, as reviewing sequential quarters helps us to understand the momentum in revenue growth.

As discussed during our last call, revenue for second-quarter prescriptions filled at the pharmacy level for Trokendi XR was reported as $10.5 million. Third-quarter revenue for Trokendi XR, based on shipments to wholesalers, was $15.3 million and reflects a growth rate of approximately 50% as compared to prior quarter.

Net revenue from shipments of Oxtellar XR to wholesalers for the third quarter of 2014 was $7.2 million, an increase of $2.2 million or 44% over revenue from the prior quarter's shipments to wholesalers, which was $5 million. Gross margin for the quarter was 94.1%. Going forward, we expect product gross margins to continue to exceed 90%.

Selling, general, and administrative expenses for the third quarter 2014 were $17.3 million. Year over year, SG&A increased 18.6% from $14.6 million in the third quarter 2013.

This reflects the expansion of the sales force to more than 150 reps in 2014, as compared to 90 reps in 2013, coupled with increased promotional and marketing-related programs. Research and development expenses during the third quarter of 2014 were $4.7 million, as compared to $3.8 million in the third quarter of 2013.

We expect our research and development costs to continue to increase for SPN-810, as we prepare for the December end of Phase II meeting with the FDA and for pivotal clinical trials that start in the second half of 2015. For the quarter, operating income totaled $29.1 million, as compared to a $17.2 million loss in the third quarter of 2013.

Reported net income for the quarter, for the third quarter 2014, was $27.9 million, or $0.39 per diluted share, as compared to a net loss of $24.1 million, or a loss of $0.78 per diluted share, reported for the third quarter of 2013. This year-over-year increase of $52 million in net income primarily reflects the revenue generated from our commercial products, coupled with the $30 million payment from Health Care Royalty Partners to acquire a portion of the royalty rights for Orenitram.

Approximately 50.8 million weighted average common shares were outstanding in the third quarter 2014, as compared to 30.9 million shares in the third quarter of 2013. Adjusting our net income to remove the impact of the $30 million royalty monetization payment, loss on extinguishment of debt, and changes in fair value of derivative liabilities, we have shown significant improvement since the beginning of the year.

We removed these items as they are significant in amount but ancillary to our primary operations. Our non-GAAP net income was a loss of $14.5 million for the first quarter, net income of $2.6 million for the second quarter, and a loss of $2 million for the third quarter.

As a reminder, the second quarter included an adjustment for Trokendi XR revenue, as we switched our revenue recognition methodology from prescriptions filled at the pharmacy level to shipments to wholesalers. You can see that, on a sequential basis, net income has improved substantially during the year.

We expect to see continued growth in income during the fourth quarter of 2014 and all of 2015. As of September 30, 2014, we had $88.3 million in cash, cash equivalents, marketable securities, and long-term marketable securities, an increase of $25.6 million versus the balance of $62.7 million as of June 30, 2014.

Given the third-quarter results, the Company is raising its revenue guidance from approximately $105 million to a range of $115 million to $118 million. The Company is also reducing its cash burn guidance for the year from a range of $5 million to $10 million to approximately $5 million, and raising its guidance for year-end cash and marketable securities from a range of $75 million to $85 million to approximately $85 million. That is the upper end of the previous range.

The Company anticipates achieving cash flow breakeven by year end and being profitable in 2015.

And I'll now turn the call back to Jack for some closing remarks.

We're closing in on a historic moment for Supernus; that of achieving our first $100 million in revenues. We're also excited to be in a position to achieve our objectives of being cash flow breakeven by year end and becoming profitable.

We will start 2015 with a strong cash position that should allow us to continue our legacy of strong execution against our goals. We are proud of all the remarkable milestones this Company has been able to achieve in 2014, which is a relatively short period of time after having gone public in 2012 and after launching two products in 2013 in the neurology space.

We appreciate the support of our current shareholders and invite others to join us on this exciting journey in building a premier CNS specialty pharma company.

And with that, we'll open it for questions.

(Operator Instructions)

David Amsellem, Piper Jaffray.

Thanks, just a couple of questions. First, can you comment on inventory levels for Trokendi and Oxtellar? How that changed, if at all? And whether you have inventory management agreements in place?

Secondly, can you just give us a little color on the extent of step editing for both products? And also the extent of access on Medicare Part D plans?

And then lastly, just on the business development front. What's the extent to which you would access capital, additional capital, in order to get a deal done? Thanks.

Let me take the first question first, David, in terms of inventory. With respect to inventory for both products, we're very cognizant that our supply chain is a, if you will, an outsourced, third-party driven supply chain. And so we must maintain reasonable and prudent inventory levels at all stages of the supply chain going forward.

That being said, the portion of the supply chain that we make sure that we protect is the bulk API supply portion of the supply chain because that's the one which takes the longest time, and is also one which is sole-sourced.

Our inventory programs for both products generally cover on a forward-looking basis. And it's impossible to calculate a forward-looking number based on historical results.

But look at a forward-looking coverage somewhere in the range of 9 to 15 months. And that's an all-in number. So it includes all stages of production and assumes that instantaneously we can convert what is intermediate stage product to finished product.

So if I say 15 months of coverage, it sounds like a lot. But you have to remember that includes product at very early stages of production. And I think going forward that number will get managed down progressively over time.

But we're going to recognize that we're still in very much of a growth-rate mode for both products. And it's necessary and prudent to make sure that we're not caught short with respect to either of the two products.

Can you say, Greg, how many weeks of inventory wholesalers are holding right now?

That's a little bit of a different question. So the weeks of inventory --

That was essentially my question. How many weeks of inventory are on hand?

Yes, somewhere around a month. And again, that's based on a -- that's a forward-looking number. So that's based on what we're looking at for demand for the next quarter and the next several quarters.

Okay, and how is that managed? Is that managed in a tight range, relatively speaking?

We fulfill orders when the wholesalers step up and order product. So we're very cognizant of what they're holding at their level. We can actually monitor it quite closely.

Remember, they don't make money by holding more inventory than they need. So in that regard, their needs and our needs are alike.

We don't want them ordering excess product, which would then produce perturbations or a revenue stream going forward. And they have no interest in doing that.

So we monitor it. They monitor it. I think Trokendi XR is probably fewer weeks than Oxtellar XR, simply because it's a bigger product.

And you get to -- with products, you get to a certain unit size where at both the wholesaler level and pharmacy level, you can't have less than one unit of sitting on the shelf. So yes, it's monitored carefully by ourselves and by the wholesalers. And we've consistently see it run in the four to five-week range at the wholesaler level, really, since the products got established.

Okay, and then on reimbursements?

Could you just recap what your question was on reimbursement?

Yes, the question was on step editing and also on Part D access.

The typical step edits we have on reimbursement is the generic step edit. And given that both markets are basically 90% plus generic products, oxcarbazepine and topiramate, that means most likely the patient has already gone through a generic prescription on either one of these products.

So that's typically the kind of step edit that we get. As far as Medicare, that has been an evolving process for us over time.

We first emphasize the commercial area as we launch the products and get coverage there. Then we started with Medicaid, and Medicare is really the second part in the second phase for us from a growth point of view.

Yes, I'd also point out, David, that with respect to step editing for most plans, it's an automatic step edit or it's an automated step edit. Meaning that when the pharmacist types in the prescription for the patient, you can pull up that patient's prescription history.

In most plans if there's a record that they've received the generic product before, then automatically that edit has been satisfied, that step edit has been satisfied. So they step through the generic, and they can verify they've taken generic product before.

And so they're free to dispense Trokendi XR, Oxtellar XR. So it doesn't require manual intervention from the physician.

Yes, and the other thing I would add is when it comes to PA's, or prior authorizations, which we see some of those, we have a very, very strong program supporting the physicians to go through these processes. We handle a lot of the paperwork and issues to make it as simple as possible, as well.

And we have a very specific program that supports both products. So we've had some success there also. And we are reducing the burden on physicians and having to go through PA's if required.

And I think, David, you asked a question about external development?

Yes, capital access to execute on M&A?

Well, that's a question which, it gets proceeded by the famous, it-all-depends phrase. So we look at a lot. Many of the deal transactions we look at would follow and form one of two buckets.

One would be a product in which would be some sort of co-promotion or in-licensing arrangement with modest upfront and mostly royalty driven. Those wouldn't require additional capital.

Were we to do a transformative transaction in terms of acquiring a company, or a company with multiple products, that would probably be an equity transaction. And we remain open to do that.

So I think the only barrier to capital, external to the Company, would be, the covenants around our convert transaction. We believe that the level of holdings that would convert are fairly modest right now, at $36 million.

And then if we were to approach those investors with a transformative transaction, which would be in the best interest of the Company and, therefore, their best interest as well, that we would either roll them into the next transaction or find a way to take them out.

Thank you.

Sure.

Annabel Samimy, Stifel.

Hi, thanks for taking my questions. And congratulations on a good quarter. Just to continue on the lines of the business development. Could you just help us understand what your priorities are in terms of business development?

You clearly have -- your products right now are humming along. But your pipeline is still, let's just call in mid-stage, and is going to be there for a little while until you start the Phase III.

So is your priority to bring in on-market products, late stage products? How do you prioritize your business development? Thanks.

Yes, the key priorities, the first top priority is, obviously, a commercial product that will fit very nicely with our strategic focus in the neurology space. Clearly, given now that we have a very big footprint in the neurology space with our 150 plus sales representatives, we look for products that could really fit well with our sales call and is very synergistic where there is a great overlap from a physician point of view.

So that is our top, top priority. Right behind it would be a product, for example, that is either in registration, or a product in late Phase III, that is also within that same space.

In addition to that, we look for opportunities that could also be a prelude for us in the psychiatry space. So that allows us to get into the psychiatry space and prepare with experience in the field with sales representatives or sales force in the field of a couple years before we bring in SPN-810 or SPN-812.

So that is another area we look at in case there is something from a commercial point of view that we can bring to the table here with a timing that will fit well with SPN-810 and SPN-812. And then finally, and I wouldn't say that the finally is really the least of the priorities, we pretty much run in parallel on all of them, on all fronts.

We are also look for transformative transactions from a strategic point of view that really makes us break through to the next level. Meaning, bringing products that could be new chemical entities, things with much longer patent protection and longevity into the marketplace.

Again, our focus is CNS. And we continue to be disciplined in looking at CNS areas. But having said that, that doesn't mean if something comes up that could be opportunistic and that we can be very successful, as we have proven so many times in this specialty area, that we could commercialize and really grow. We're open to that as well.

Okay, great, thanks. That was helpful. And then if I could follow up with another question.

Obviously Trokendi is seeing some competitive entrants in the market. We're not going to hide it's Upsher-Smith. We haven't really seen any kind of impact.

Now your prescriptions are growing very nicely. Do you see them in the marketplace? Have they helped your efforts?

They clearly haven't hindered it. So can you just help us understand the dynamic a little bit, given that they have a brand as well as an AG in the marketplace? Thanks.

Yes. The prescriptions, from what we see from prescriptions, obviously, most of the prescriptions they're getting are not on their brand, as you would expect, given that they launched the product and their brand and authorized generic at the same time. So naturally, the bulk of their prescriptions, we see it on a weekly or monthly basis, is coming, obviously, on their authorized generic.

As far as promotional activity and activity in the marketplace, we knew that they had launched with about 80 or 90 reps, give or take, initially. We don't know where they are right now.

We bump into some of their folks every once in a while, as far as effort and activity. But their main message has been mainly, at this point, not necessarily promoting the Qudexy XR as a brand. It's been more of a cost/price kind of strategy at this point.

So, so far have they helped in increasing the awareness and the importance of topiramate extended-release in general? I have to believe so. Because you have more people talking about topiramate extended-release, obviously.

And then at the end of the day, it's an issue of how you differentiate yourself and how do you really sell the real benefits to the patients and really convincing the physicians that these products are important for the patients. And actually, we have some of the strongest data as far as preference.

93% of patients who try Trokendi XR preferred it over Topamax. I really don't know when was the last time nine out of ten people even agreed on one thing.

So, to have 93% of patients, that really is an overwhelming preference. And these patients tried both products, sequentially, as would be in a real clinical setting.

And at the end of the four week treatment, we asked them a very simple question, which one do you prefer? Which really is a measure of their collective overall experience on both products, whether it's side effects, whether it's efficacy, the whole collective experience.

Okay, great. Thank you very much.

Sure.

Thank you. (Operator Instructions)

Ken Cacciatore, Cowen and Company.

Hey guys, good morning. Jack, you were very consistent when you were launching these products. You had to stay focused on Trokendi and Oxtellar.

You really couldn't pick your head up and talk about business development because there would be no Company to even leverage if you didn't execute. It sounds in your voice like we're getting to the point where you're feeling a bit more comfortable now talking about business development. So just wondering, how close are we as you work through some of opportunities that you're looking at?

And stated even differently, when's the ideal timing? Although nothing in life is ideal. Or you can't dictate terms all the time. But when would be an ideal time to layer something into the portfolio? And then I have a follow-up.

Yes, thanks. I think you're absolutely right. We had to execute on Trokendi XR and Oxtellar XR. That is the primary and has been the primary objective for us.

And without them we don't have Company. So you're absolutely right on that. And you're also absolutely right in looking at it by what is really the ideal time for us, because we can never predict when these deals happen or not.

Obviously, as we all know, we could work on a hundred things, and maybe one will end up happening at the end of the day. The ideal time for us is really in 2015, always has been in 2015 and not 2014.

And the reason for that is, for the main factor you mentioned, is we wanted to get Trokendi XR and Oxtellar XR very well entrenched in the market, very well established on a very high growth trajectory. And also, we didn't know what to expect because we did have increased competition in both markets with Aptium launching, the other topiramate XR launching.

So we had to be very careful in what we do from a sales force point of view, paying attention to these products and continue to have and execute a very strong launch. And therefore, ideally, it is 2015.

Is it more the second half of 2015, second quarter of 2015? Probably some time around that time, it will be reasonable for us to believe that will be something we can certainly execute.

Because again, we don't want to bring in a third product and make everybody feel happy and great, but then we don't have the capacity to execute well on that third product as well like we've done with Trokendi XR and Oxtellar XR. And without taking our eye off the ball on both products that we already have.

So it's a delicate balance and the timing is very important for us to get right, not just to rush into a deal just to do a deal. We have to do it right, and we have to be able to execute once we do the deal like we've always executed in the past.

Great. And then on 810, just wondering as you approach the Phase II meeting, in terms of the potential size and length of the upcoming study you're going to be discussing and the primary and secondary endpoints. Just give a little perspective of what you're hoping to accomplish as you enter that meeting.

We had, as we said, in September the CMC end of Phase II meeting. And that was actually -- went reasonably well. No showstoppers there, so I'm pleased to report on that.

As far as the clinical end of Phase II meeting, which will be before year-end, we're looking at protocols, clinical trials that are not necessarily that lengthy, or not necessarily unreasonably large. This is a well-defined area.

We're also very pleased with some of the progress we've made on the outcome measurement instrument and the development of that measurement instrument that we can include in the protocol and so forth. So what we're hoping to accomplish, obviously, is an agreement with the FDA on the protocols and the designs.

We do expect that we will be required, as we said in the past, to have two Phase III studies that we need to do for the ADHD area. And then what remains open for discussion is, clearly, what else will the FDA require us to do if we choose to go with impulsive aggression and also autism or bipolar or schizophrenia or -- this is a huge market opportunity.

And clearly, we want to -- first our goal is to get the product to the market as soon as possible, with the shortest period of time, with the least amount of investment initially. Get it to the market, and then continue to augment and expand the label as time goes on.

So whether that will require another one Phase III in autism and autistic patients, and another Phase III in bipolar, and then they can give us a broad label, that really remains open to discussion at that meeting. We certainly will update you guys on how those discussions go once we go through the meeting, digest it, and have a clear direction as to how the development program is going.

Great, congratulations on all your progress.

Thank you.

Joel Beatty, Citi.

Thanks for taking the questions, and congratulations on a nice quarter. My first question is related to Trokendi and the competition from Upsher-Smith.

Have you seen any changes in reimbursement discussions with pairs related to that product being on the market now? And then also, have you been seeing a difference in tier levels for the two products?

The answer to both questions is really no, nothing significant, nothing major on both ends. Actually, their product is also being -- has very highly reversal rates, interestingly, which you wouldn't have expected given the strategy they went through. So the answer is no on both of them.

Great. And then one last question on the revenue per script. I noticed that it seems a little bit higher this quarter, compared to last quarter for both products. What were the factors behind that?

We have taken a price increase on Trokendi XR, I believe, in September, if I remember. I don't remember the exact week. We had taken, I think, around a 7% price increase. So you may have started to see some of that impact.

And we have taken a price increase in July or August on Oxtellar XR, which about 13.9%. So that's probably -- some of that is, obviously, starting to show impact on the dollars.

Great, thank you.

Sure.

Thank you. That concludes the time we have for questions. I'd like to turn the call over to Jack Khattar for any closing remarks.

Thank you very much for joining us today. We appreciate it.

We look forward to finishing the year of 2014 in a very strong position and setting the stage for what we believe will be another exciting year in 2015. And as we mentioned we really appreciate your support and invite others to join us on this exciting journey. Thank you.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program.

And you may all disconnect. Have a good day, everyone.