Teva Pharmaceutical Industries Ltd (TEVA) 2005 Q4 法說會逐字稿

Good morning, ladies and gentlemen. My name is Jenelle and I will be your conference facilitator today. At this time, I would like to welcome to the Bentley Pharmaceuticals full-year and fourth-quarter 2005 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer period. (OPERATOR INSTRUCTIONS). It is now my pleasure to turn the floor over to your host, Lev Janashvili. Sir, you may begin.

Thank you, Jenelle. Good morning and thank you all for joining us today to discuss Bentley Pharmaceuticals' performance in 2005. If you haven't received a copy of the earnings release that we distributed yesterday after the market closed, please call me. My number is 617-761-6731. You can also find the press release on Bentley's website at www.Bentleypharm.com.

On the call today are John Sedor, President, and Mike Price, Chief Financial Officer. Jim Murphy, Chairman and CEO, will join us for the question-and-answer session at the end of the call.

Before I turn the call over to John, please listen to the Safe Harbor statement. This presentation contains forward-looking statements, including without limitation, statements regarding prospects for revenue growth outside of Spain, Bentley's plans to increase spending on research and development in 2006, the prospects for Bentley's intranasal insulin and Nanocaplet programs and the prospects for growth of Bentley's businesses.

These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from future results expressed or implied in these statements. Factors that may cause such differences include but are not limited to risks associated with the timing and nature of regulatory approvals, changes in third-party reimbursement and government mandates that impact pharmaceutical pricing, development and commercialization of Bentley's proprietary products and formulations, competition from other manufacturers of generic and proprietary pharmaceuticals, intellectual property litigation, the efficacy and safety of Bentley's products, the unpredictability of patent protection, the risks associated with international operations and other uncertainties detailed in Bentley's most recent annual report on Form 10-K and its other subsequent periodic reports filed with the Securities and Exchange Commission.

Bentley cautions investors not to place undue reliance on forward-looking statements contained in this release. These statements speak only as of the date of this document and Bentley undertakes no obligation to update or revise such statements except as may be required by law. Now I would like to turn the call over to John Sedor. John, please go ahead.

Thanks, Lev. I would like to thank every one of you for joining us today. In my first conference call, I said that I was excited about joining Bentley. Well, now six months later, I can honestly say to you I am even more excited about being part of Bentley.

2005 was an important and exciting year for us. During the year, we strengthened our management team, delivered impressive top-line and bottom-line performance, continued to expand our generic product revenue base beyond Spain, made significant progress in the development and commercialization of our proprietary drug delivery technologies and laid the foundation for an exciting strategic growth plan as a unique specialty pharmaceutical company.

Our total revenues rose 33% to $97.7 million in 2005, extending a multiyear track record of double-digit growth and our net income in 2005 increased 92%. A number of factors have helped drive this growth and I would like to highlight five of them for you. First, Bentley occupies a clearly differentiated competitive position in the large and steady growing specialty generic markets. Between 2005 and 2009, the European generic market is projected to grow at a compound annual growth rate of 12%, reaching sales of nearly $20 billion by 2009.

Over the past few years, Bentley has consistently outpaced this growth largely because of our proven formulations and manufacturing expertise, which has positioned us to compete for more complex, tough to manufacture products with less competition.

Second, I would like to discuss our pipeline. We continue to be successful in securing new product approvals. In 2005, we received 51 marketing approvals on 9 generic products. This pace continued with 12 additional marketing approvals in the first two months of 2006. In Spain, the 2005 approvals included branded and generic versions of risperidone, Cipro and [Prilostat].

In the U.K., we have received approval for omeprazole and lansoprazole and our newly formed [Ari] subsidiary received its first Irish marketing approval for omeprazole.

Third, we benefited from favorable demographics and market dynamics as the aging population continues to boost demand for prescription pharmaceuticals and the reimbursement trends increasingly favored generic versions of the innovator product.

Fourth, we continue the diversification of our revenue base with sales outside of Spain increasing 95% in 2005 outpacing our overall revenue growth threefold.

Fifth, our drug delivery platform is providing increasingly tangible results. Our license and collaboration revenues grew 86% in 2005 based on the strong sales of Testim, a testosterone gel containing our CPE-215 permeation platform technology. The product is marketed by Auxilium Pharmaceutical and since its launch in 2003, Testim has gained 15% of the estimated $400 million testosterone gel market.

We have entered 2006 in a strong position. In generic products, our portfolios include 94 generic and branded generic products. We maintain a growing pipeline currently numbering 20 products and dosages, which are pending approval in Europe. We continue to leverage our core strength on a broader geographic scale through more than 140 licensing and supply agreements for distribution of our products throughout Europe. And we have advanced the development of our proprietary drug delivery technology to address the significant need for improved delivery of hormones and large molecules such as proteins and peptides.

We have presented initial clinical data at the ADA meeting on intranasal administration of insulin with CPE-215 and we entered two development and commercialization alliances.

Over the next 12 to 18 months, we plan to scale-up manufacturing of clinical supplies for Phase II and Phase III studies. We plan to complete all PK/PD studies for supporting expanded clinical research. And we plan to conduct Phase II clinical trials in India and the United States, as well as prepare for Phase III trials.

In the meantime, we continue to characterize and optimize our early stage Nanocaplet technology expanding on the insulin base proof of concept in animals.

As we look at 2006 and beyond, we have a clear sense of Bentley's strategic direction. As promised in my third-quarter conference call, during the past three months, we initiated an intensive Companywide strategic review process. The initial results of this effort promise to strengthen Bentley's position as a unique specialty pharmaceutical business.

Our strategic planning efforts are continuing in this quarter and I hope to share conclusions with you as we progress.

In the meantime, I would like to share with you some of the salient facets of our strategic vision. We plan to continue expanding our base beyond Spain building on our proven formulation capabilities in solid oral dose and microencapsulation. These capabilities will be applied to launch a series of identified, tough to manufacture generic products. We see considerable opportunity in the EU for profitable application of our generic know-how.

In 2005, our sales outside of Spain grew to 29% of total revenue, up from 19% in 2004. We believe that this strategy of revenue diversification will best position Bentley for continued growth. We also see considerable opportunity in the U.S. market for profitable application of our generic know-how. In the coming years, we plan to expand our strategic foothold in the U.S. market.

Our first development program with Perrigo continues to progress through the regulatory stage. In the meantime, we are assessing other prospective partners and look forward to keeping you informed as they develop.

As we noted in the press release yesterday, we plan to boost our investments in the research and developments of our drug delivery technology, CPE-215 and Nanocaplet. We believe that these investments lay the foundation for significant, long-term incremental increases in Bentley's growth. Beyond the successful application of CPE-215 drug delivery technology and testosterone and the encouraging development in insulin, we have identified a series of additional injectable product opportunities in what promises to be an expanding large molecules drug development effort.

In addition, we are exploring the possibility of applying our generic formulation assets to electively to [small] off molecule development that may offer us the opportunity to introduce branded products under the 505(b) 2 approval process. The results promise to be a unique, two pronged, specialty pharmaceutical development platform near to midterm in selected small molecules, 505(b) 2 and longer term in the large molecule drug delivery.

Bentley's accomplishments so far and our strategic direction position us clearly as a differentiated specialty pharmaceutical company pursuing large market opportunities with a business model that mitigates development and investment risks. And again, I am excited about being part of the Bentley team.

Now, I would like to turn it over to Mike, our CFO, for discussions of the 2005 financials.

Thanks, John. In previous conference calls, we have discussed the seasonal patterns of our revenue stream. As many of you know, our third-quarter revenues typically retreat slightly from the second-quarter levels as we head into the holiday season in Europe. We usually finish the year with a very strong fourth quarter as the cough, cold and flu season begins. We have emphasized in the past that we expected the second half of the year to be better than the first half. Even though we have had an extremely mild cough, cold and flu season and foreign currency exchange rates worked against us in the fourth quarter, you can see that we ended 2005 on a high note.

First, I'd like to discuss the full-year 2005 results. Our revenues for 2005 increased 33% to $97.7 million. Growth in 2005 product sales was fueled by strong sales of our top-selling product lines like omeprazole, simvastatin and enalapril and sales to licensees and royalty revenues from sales of Testim increased about $3.3 million to $6.1 million in 2005. These revenues include the benefit of a $1.1 million change in estimate of royalty revenues earned based upon publicly available data.

Excluding this $1.1 million adjustment, royalty revenues from sales of Testim increased 83% to about $1.5 million in the fourth quarter. Sales outside of Spain now account for 29% of 2005 total revenues versus 19% in 2004.

Income from operations increased 80% in 2005 to $15.7 million while net income improved 92% to $10.9 million or $0.48 per diluted common share. Currency fluctuations had very little impact on the overall 2005 results and reduced 2005 revenues by only $155,000 and net income by $85,000. However, the foreign currency impact did reduce the values of our assets and liabilities during 2005. The net impact for the year was a reduction in shareholders equity of about $8 million.

We have continued to grow revenues and earnings and generate positive cash flow, so it should be no surprise that our balance sheet remains very strong. Our assets now total almost $125 million at year-end and we have about $32 million in cash. Our current ratio is a very healthy 2.6 to 1 and we've also reduced our trade and royalty receivables from 125 days of sales outstanding last year to 89 days of sales outstanding at December 31. At the same time, we have intentionally increased our inventory levels to ensure that we can meet expected demand for our products in 2006.

Now let's review the results for the fourth quarter. Fourth-quarter revenues increased by 40% in local currency, but foreign currency exchange rate fluctuations reduced the fourth-quarter revenues by $2.1 million and net income by about $379,000 effectively neutralizing the benefits of currency fluctuations earlier in the year.

Consequently, fourth-quarter revenues increased 29% to $25.2 million driven by strong growth across all major product lines and by a 196% increase in licensing and collaboration revenues, which primarily represent royalty from sales of Testim by Auxilium, including the benefit of the change in estimate discussed earlier.

Importantly, total sales outside of Spain grew even faster in the fourth quarter than they did for the full year 2005 showing steady acceleration in the diversification of our revenue stream. Fourth-quarter sales outside of Spain accounted for 38% of total revenues, up from 15% in the fourth quarter of 2004. As John mentioned, sales outside of Spain were 29% of total revenues in 2005, up from 19% in 2004.

Income from operations increased 127% over the prior year fourth quarter to about $4.4 million and net income for the quarter increased by 85% to $3.7 million. Diluted earnings per share for the quarter increased 78% to $0.16 per share compared to $0.09 in last year's fourth quarter. Cash flows from operations increased to $12.6 million during 2005 further confirming that our business model is on track and very healthy.

Operating expenses for the quarter increased 7% to $8.6 million and now represents 34% of revenues compared to 41% this time last year. The increases include costs associated with successfully managing a rapidly growing business. Our effective tax rate for the fourth quarter was 21%. This is a decrease from the effective tax rate of 36% for the third quarter of 2005 and is primarily a result of research and development tax credits and the fact that losses in the U.S. are decreasing.

I want to make a couple of points about the year-end balance sheet. Even after recording the change in estimate related to Testim royalties, we still have Testim royalties from Auxilium totaling about $350,000 recorded as deferred income on our balance sheet at December 31. When we have enough data to predict future product returns, we will recognize royalty revenues based on net products shipped to customers. This change in revenue recognition methodology should result in a onetime recognition of the related deferred income, which, as of December 31, represents about $0.02 per diluted share.

Second, we have received upfront payments from our licensees in Europe. These payments have also been treated as deferred income on our balance sheet. In total, about $2.6 million as of December 31, 2005. While significant in absolute terms, these deferred revenues represent a very small portion of the revenue stream we expect to generate and are now generating from product sales under those agreements.

As we noted in the press release yesterday, our growth in revenues and cash flows enable us to support an increase in our investments and research and development in 2006 perhaps by more than 50%. The purpose and goal of this increase is to advance the research, development and commercialization of our delivery technologies, CPE-215 and early stage Nanocaplet technology. The potential of these technologies has already received significant validation through the success of Testim and through the initial clinical data on intranasal insulin.

Our increased investment in R&D is designed to help us fully capitalize on these and other opportunities for the improved delivery of large molecules and hormones.

So to summarize, we've entered 2006 with a clear strategic vision and with the resources and the determination to bring it to life. And that wraps up our presentation. Operator, would you please open the call for questions?

(OPERATOR INSTRUCTIONS). Mike Krensavage, Raymond James.

Good morning. When I look at the deferred income lines on your balance sheet, they decreased by $1.95 million in the fourth quarter from the third and I would like to know the effect of that on net income in the quarter please? Thanks.

Sure. Hi, Mike. Thanks for the question. I tried to give that some flavor in the call. We did have a change in estimate during the period and we recognized $1.1 million that was previously deferred as deferred income on the balance sheet as a result of truing up our financial statements with the information that is reported by Auxilium. So that the royalty rate on the revenues that we earn from Auxilium now matches Auxilium's balance sheet.

The impact of that was $1.1 million. The $1.9 million reduction that you referred to did include some foreign currency fluctuation that reduced those balances and it also included recognition of revenues that were previously deferred with respect to cut off at the third quarter where product was shipped out to customers, but those customers had not received the product as of the end of the quarter. So we deferred that revenue.

So what is the effect on net income? Do you have to deduct any expenses or do you have to tax that at all?

Absolutely. Here in the U.S., there were no tax effects because we have NOLs to shelter the U.S. income from taxes, but in Europe for product that was shipped and recorded as revenues, there is associated costs of sales and there is an associated tax effect as well. But I can tell you that as a result of the change in estimate, there was an impact of $1.1 million on revenues and income.

[Reece Williams], Columbia.

That was pretty much my question also but I just want to add one follow-up to it. I don't quite understand it. You make an estimate of what the Auxilium revenues are going to be the quarter before and then you kind of true up in the following quarter. Is that true every quarter or is that once a year kind of thing?

Hi, Reece. Let me try to answer that question for you. Essentially what we do is we receive information from Auxilium each quarter and they inform us about the level of product that they have shipped out. We record that as a receivable from Auxilium for the royalties that we earn and we record that as deferred revenue on our balance sheet.

Then we use external data to estimate the number of units that are dispensed into the market. We use that estimate of units dispensed to record our revenues on the income statement and relieve the deferred income from the balance sheet. That is something we do each quarter.

I got you. Is this IMS data or where do you get this data?

That's right. There are various sources of the data. IMS is one of those sources and we take a look at all the data that is available to us and then try to determine which is the most reliable and most accurate.

I got you. Thank you very much.

Dave [Cohen], Midwood.

I was just looking at -- can you give some color on your gross margin on the product sales in the quarter and the extent to which cost of that margin is affected by one, higher level of depreciation and/or the currency impact? If I look sequentially at your gross margin, it is lower. So I want to understand what the movement is like, is caused by.

Sure. I think that currency did impact not only the assets and liabilities on the balance sheet, but it did impact the revenues and the expenses, including cost of sales especially during the fourth quarter. I can tell you that currency did have the impact of lowering revenues and lowering expenses in that fourth quarter.

I think what you're seeing with respect to the margins is higher depreciation expenses with respect to the investments that we've made in the factory and I think if we try to --.

About how much --? What is the magnitude of that?

I can tell you that in 2005, we invested about $11 million to $12 million in investments in our factory. Those investments are now being depreciated and flowing through cost of sales. So that is having a dampening impact on the margins. But what we think is it is going to give us the opportunity to flow more product through the factory and with a higher level of output, will have a lower cost per unit of production and improve the margins in the long term. That is our objective.

(OPERATOR INSTRUCTIONS).

Operator, do we have no questions?

Yes, we do have one question coming from Mike [Beard], [Sandco] Capital.

You got approval to market lansoprazole in the United Kingdom in December. It probably didn't have a whole lot of impact in '05, but could you give us some idea of what impact that might have had in '05 and how sales have gone so far this year?

Mike, this is Jim Murphy. How are you?

How are you?

Good. We did ship (technical difficulty) in December into the U.K. So we really didn't see much of an impact in the year 2005. It is a tumultuous market, a very competitive market in the U.K., which is typical and we expected that sort of thing as new entries enter the market and battle for position. But we also see, with the history of our simvastatin and omeprazole in a similar fashion, that the market then tends to come to a more stable level.

We are starting to see some change in that later in this quarter. So it is a very competitive market. We have, through our licensees, secured a very good position in the U.K. market and I think that it will be a good performer for us going through the year 2006.

Do you have any revenue estimates for what it might have contributed in say the first quarter of this year or so far?

No, not as of yet. I think that you will see that it will steadily gain ground throughout the year 2006 and we might be able to give you further indication of that, Mike, when we report the first quarter.

Jason Williams, [Buddy Brown].

Thanks so much for taking my question. I was just curious, do you guys know what you expect your tax rate to be going forward in '06?

I think, Jason, as we move forward and we achieve profitability here in the U.S., we have NOLs that are sheltering our income in the U.S. In Spain, we are paying a slightly lower than a 35% tax rate there as a result of tax credits we get in Spain. So it really depends on the mix of the profits, the mix of the pretax profits spread among the various geographical segments that we have.

Manny Reiser, Wachovia.

Hi. It's Manny Reiser. Good morning. A couple -- John, in terms of Testim, you mentioned in your comments that the market is currently about $400 million and we have about 15% of the market. What are your expectations on the growth of that market going forward and how fast has it been growing say in the last year or two?

When we take a look at the market, we believe the market is going to continue to grow. Auxilium -- in our mind, Auxilium -- they just did their conference and Auxilium has indicated that they see their sales increasing significantly to somewhere between $64 million and $68 million. So the market continues to grow. We believe Auxilium is positioned extremely well with our technology in the sense that I am not sure you are aware of it but Watson got approval of a generic version of the drug, which is not AB-rated against the Auxilium drug. So therefore Auxilium will be out there as the only non-generic drug and they are marketing and sales efforts will now I think start to benefit to them going forward. So we are excited about Auxilium's growth in this marketplace.

Do you anticipate Watson taking some marketshare away from Auxilium?

No. Actually what will happen is Watson can't take marketshare in the sense that when a prescription comes in, pharmacists can only dispense drugs that are AB-rated against the innovator and Watson's drug is not AB-rated against Auxilium's drug. In fact --.

-- competitors in that market space right now?

Yes. AndroGel is a competitor and Watson is AB-rated against these guys.

Another question concerns both the Nanocaplet area and intranasal. Could you maybe give us a little bit of a time table as to when we might see some first developments first in the Nanocaplet area?

In Nanocaplet -- and if you listened to what I had said was that Nanocaplet is an early stage development we are working off. We have done a proof of concept with insulin in some animal studies and we are now developing the technology. So that is early stage and it's longer term and I can't give you any timelines on it.

I try to give you timelines and I clearly try to say in the next 12 to 18 months on the intranasal insulin, we plan to scale up and we are in the process of scaling up for clinical supplies for Phase II and Phase III studies. Once we complete the PK and PD studies, we plan to conduct Phase II studies in India and the U.S. and then prepare for Phase III studies. So we see that happening in the next 12 to 18 months.

Very good. Going back to Nanocaplet, are we having any discussions with potential partners in that area or is this something that you see us going alone at this point?

This is Jim Murphy. Yes, we are having discussions with others. What we're doing now is we are highly concentrating our research efforts into producing reproducible formulations and we are doing animal screening to determine the amount absorbed and to be able to characterize the formulations. Based upon the interest that has been derived from the insulin studies, those that have other peptide molecules, we would like to take a look at the application of our Nanocaplet technology.

We're not quite to that stage yet, but we continue to talk to these people. But once we characterize our formulations and get a little bit more advanced, then we will take some other [model] peptides, to be proprietary peptides of others or soon-to-be generic peptides and put it into our system and test it. So it's a little early is what I'm saying.

Mark Taylor, Roth Capital Partners.

I have a number of questions. Thanks for taking the question. First, just curious, Jim, on IMS ranking in Spain, could you tell me where the Company wound up '05 versus '04?

I don't have that right handy, Mark, but I can give that to you. I believe that we still are well entrenched within the top 10. The reason I'm hedging here is because there has been some consolidation with some recent companies that have been bought. Like Sandoz for example merging has put them in a different position and a few other mergers have altered that listing in the recent months.

Are you still in the top 5 or 7 of generic players?

Yes, I think -- don't hold me to this, Mark, but I believe that we are. I mean we have been very strong. We have been growing as you can see at a very strong rate within the nation, as well as throughout all of geographical Europe. But we still hold a very commanding position in Spain.

Thanks. The second question on -- is the Teva relationship terminated or still in progress?

It is still very much in progress. We have had some new approvals based on that collaboration. Although the formal agreement ended in July 2005, there is a one-year automatic renewal if there is no notice given. And of course neither of us have given notice. So that relationship still does continue. Now you know that each time we take a product from Teva, we are restricted to distribution only in Spain. So we are very careful about what products we wish to collaborate and which we would like to develop ourself and exploit the market throughout all of geographical Europe, as well as the potential for the United States.

Mark, I guess -- Mark, I would just like to add to that. The base agreement with Teva was originally a five-year agreement, as Jim said, renewable annually thereafter automatically unless notice is given. But with respect to individual products launched under that agreement, the term of the agreement is five years from date of product launch and then is renewable annually thereafter just as the base agreement was.

On the approvals in '05, 51 authorizations, 9 products. How many of those were Spain only?

I think we put them in the press release. Let me take a look at that, Mark.

Just while you are looking, maybe a question to Mike. On your CapEx, I heard you say, what, $11 million or $12 million in '05.

That's right. Let me just tell you what that was, Mark. We had a very ambitious CapEx program for 2005 and I think that we had indicated it was $19.3 million. I can tell you that at the end of the day, we ended up expending only $11 million for fixed asset additions during the year and about $2 million for drug licenses and related costs for a total of $13 million. Now that's not to say that we're not going to spend the balance of what we intended to. It's just that it has rolled into the year 2006, into the first half of 2006.

So you'll be spending another $8 million or so in '06 for CapEx over in Zaragosa?

We are going to be spending the money that was intended to be spent in '05 in early '06 in Zaragosa and in addition to that, we have some additional CapEx programs that we are going to disclose when we file the Form 10-K to give a full picture of that.

Okay. Thank you. And on those products, how many in Spain?

Mark, what we said is that we had signed 142 license agreements. Of those license agreements and of course the majority of them were for the new products that we received approval for, 17 of the agreements were with customers in Spain. 64 were with customers outside of Spain and then of the remaining licenses, 2 additional were in Spain and 59 were with customers outside of Spain. You'll see that on page 2 where we outlined that in the press release.

Mark, the other thing -- I will send you the exact number on it, but best I can recall, I think there was like 30 in Spain and 22 outside of Spain, 21 outside of Spain. But don't hold me (indiscernible). So I'll get you the right number on that.

Thanks. Just another couple of questions if I may. On the press release where you break out the revs, the branded, generic and others, I just want to make sure I understand what goes where. In the case of the other category in Spain, you have all other products, then you have sales to licensees and others and licensing and collaboration. That is in Spain. So the $11.5 million that you did, is that contract manufacturing?

That would include some contract manufacturing, but it would also include sales to licensees where we have entered into 5 or 7 or 10-year exclusive supply agreements with those customers and we're selling to those customers pursuant to those license arrangements.

In Spain?

That's right. We do that both within Spain and outside of Spain.

And then in the other category, revenues outside of Spain, where does the API go and the other question along with that is how much did you book in '05 of API because I remember it being $3.2 million a year ago or so and I am just curious what it was this year?

I can tell you that it was in round numbers $2 million in 2005, Mark. And that is because we are focused on building the business because, if you recall, the real reason that we bought the API facility was not for its existing business, but we wanted to be able to make the investments and be able to produce our own API. We wanted to be able to use it for our own internal use and that is what we're gearing up for. And that is really about half of the CapEx program that we had set aside for 2005 was for the API facility.

Barry Blank, [Murphy] & Co.

Good morning, John. I had two questions. The first one is when do you think we will see the next results from India on insulin and I believe that is Phase II and then how long after that does the next phase take to be able to prove it up?

Barry, this is Jim Murphy. How are you?

Fine, Jim. How are you?

Good. We actually have studies actively underway in India now. They are just at the in vivo portion. The in life portion is just winding down now, so we're starting to collect the data and beginning to analyze it and do the statistical work on it. And this is being done to characterize the reproduceability and the tolerance that will be used for more expansive study in India, which we also have already planned and designed. So I think it will be probably late in the first quarter or early in the second quarter that we would actually be reporting results.

The second question that I have regards to Perrigo. I know it's in the regulatory process, but can you briefly just tell us a little bit where it is and what possible guidelines would be before an approval can be received?

Barry, I will address that. First of all, because we are under agreement with Perrigo and Perrigo has asked us not to comment on the status of it, that we really can't comment on it, but it is in the regulatory process. It has been submitted. It will take the customary approval time within the FDA to get through the regulatory program. Clearly keep in mind we can't talk about it because we just can't divulge that with respect to our agreement with Perrigo.

(OPERATOR INSTRUCTIONS).

Well if there are no further questions, operator, we would like to wrap up the call and we would like to thank everybody for joining us today. If you do come up with additional questions during the day, please feel free to give us a call. Jim and John and I are here in the office and you can reach us at the office at 603-658-6100. Thanks very much.

Thank you.

Thank you.

This does concludes today's Bentley Pharmaceuticals conference call. You may disconnect your lines and have a wonderful day.