Talphera Inc (TLPH) 2013 Q2 法說會逐字稿

Welcome to the AcelRx Pharmaceuticals second quarter 2013 financial results conference call. At this time, all participants are in a listen-only mode. Following management's prepared remarks, we will hold a question-and-answer session.

(Operator Instructions)

As a reminder, this conference is being recorded today, August 12, 2013.

I would now like to turn the call over to Jim Welch, Vice President and Chief Financial Officer. Please go ahead.

Thank you, Denise. Good afternoon, and welcome to today's call. This is Jim Welch.

Joining me on the call today is Richard King, AcelRx's President and CEO. Earlier today, AcelRx issued a second quarter 2013 financial results, which we will discuss in more detail on this call. In addition, we would like to provide you with a corporate update and a review of our clinical program for Zalviso, which was previously known as ARX-01, or the sufentanil NanoTab patient controlled analgesia, or PCA, system that has been evaluated for the treatment of moderate to severe acute pain in the hospital. The financial results press release has been posted on our website at www.AcelRx.com. Also, a replay of this conference call will be available later today on the investor page of our website.

Please keep in mind that the risks and uncertainties involved in the Company's business may affect the matters referred to in forward-looking statements made by management during today's call. As a result, the Company's performance may differ from those expressed in, or indicated by, such forward-looking statements which are qualified in their entirety by the cautionary statements contained in this press release in the Company's Securities and Exchange Commission filings.

At this point, I will turn this call over to Richard King for a Company overview.

Thank you, Jim, and welcome, everyone, to this afternoon's call.

AcelRx's has come a long way over the course of the first half of 2013 and expects to continue to transform itself in the remainder of this year and into next year. In May we successfully completed our third planned Phase III trial for our lead product candidate, Zalviso. We reported top line -- positive top line results for this trial conducted in adult orthopedic surgery patients following either total hip or total knee replacement surgeries.

With positive results from all three of our Phase III clinical trials for Zalviso, the preparation of our new drug application, or NDA, is in high gear. We plan to submit our NDA filing by the end of the third quarter 2013 for Zalviso with proposed indications for treatment of moderate to severe acute pain in the hospital setting. Presentation of the results from the Zalviso Phase III program at major medical meetings has begun and will continue through 2013 and into 2014 as we educate anesthesiologists, surgeons, nurses and other of the relevant hospital staff on the clinical profile of Zalviso.

Some of the key medical meetings we plan on attending include the American Society of Anesthesiology annual meeting in San Francisco in October, the European Federation of IASP chapters, also in October, and the American Association of Hip and Knee surgeons meeting in Dallas in November. The process of preparing for commercial readiness is underway at AcelRx.

In July we completed a public offering of approximately 4.4 million shares of common stock. The total gross proceeds of this offering were approximately $50.9 million with estimated net proceeds to AcelRx of $47.9 million after deducting underwriting discounts and expenses. AcelRx intends to use the net proceeds from this offering to fund potential registry approval of Zalviso, both in the United States and Europe, to continue preparations for the potential commercial launch of Zalviso in the United States and for working capital and other general purposes.

Let me review a few of the important results from the recently completed Phase III orthopedic study. Utilizing a randomized double-blind placebo-controlled design, this pivotal Phase III study included 419 adult patients recruited at 34 US sites in the intent to treat population for treatment of moderate to severe acute pain immediately following major orthopedic surgery. Patients were treated for a minimum of 48 hours and up to 72 hours and were randomized 3 to 1 with 315 total patients randomized to sufentanil treatment and 104 total patients to placebo treatments.

Both treatments were delivered by the patient as needed using the Zalviso system. Patients in both groups could receive up to 2 milligrams of morphine intravenously per hour as a rescue medication, the primary purpose of this rescue medication being to enable placebo treated patients to stay in the study. Pain scores were recorded just prior to the delivery of rescue medication, and were collected and the scores imputed forward to minimize the impact of this rescue opioid on efficacy evaluations.

As with our other Phase III studies, there was no upper age limit on age or weight in recruitment of patients in the study, a design employed to provide the regulatory agencies with data on the use of Zalviso in a real-life population undergoing surgery. The oldest patient treated was 90 years of age and the heaviest had a BMI of 62 kilograms per meter squared. Historically, older patients are more susceptible to be adverse events caused by opioids and heavier patients tend to have greater risk of obstructive apnea, which is often worsened by opioids.

215, or 68.3% of the Zalviso treated patients completed the 48-hour study period compared to 43% or 41.3% of the placebo treated patients. Primary reasons for dropout in the sufentanil and placebo treated groups were adverse events at 7% and 6.7% respectively and lack of efficacy 14.3% and 48.1% respectively.

The FDA requested primary endpoint of summed pain intent to [differ] the baseline, known as SPID- 48, was met with a split score of plus 76.1 for sufentanil treated patients and minus 11.5 for placebo treated patients. The difference in SPID-48 between the two groups being highly statistically significant with a P value of less than.001. SPID separated between sufentanil and placebo treated patients after the first hour and was also highly significant at both the 24 and 72 hours time points in addition to the 48-hour time point.

In this study, treatment emergent adverse events was generally mild to moderate in nature and similar for the majority of adverse events between sufentanil and placebo treated patients. Adverse events of nausea, vomiting, dizziness and itching were the only adverse events that statistically separated between sufentanil and placebo treated patients Nausea, vomiting and itching are common in postoperative patients and can be managed effectively with antiemetic and antihistamine treatments.

The orthopedic study was the last of three successful Phase III trials conducted by AcelRx to support US and ex-US regulatory review of Zalviso. In November 2012, AcelRx announced positive results for a Phase III open label active comparative study evaluating the efficacy and safety of Zalviso compared to IV PCA with morphine in the management of moderate to severe acute pain after surgery.

In March 2013, we also announced top line results from a randomized double-blind placebo-controlled pivotal Phase III study evaluating the ability of Zalviso to control moderate to severe acute pain after major abdominal surgery compared to placebo. Results from these studies demonstrated that Zalviso met the primary endpoints in both cases. Additional analyses also demonstrated that Zalviso was statistically superior to IV PCA morphine for a patient global assessment with method of pain control and that nurses managing patients in the study and the patients themselves reported that they had significantly greater overall satisfaction with the NanoTab system compared to IV PCA morphine and significantly greater overall ease of chair with the NanoTab system compared to IV PCA morphine using a validated assessment questionnaire.

AcelRx believes that the results from the Phase III program meet the requirements defined by the FDA to submit an NDA for the management of moderate to severe pain in the hospital setting.

In early May 2013, AcelRx presented five posters related to clinical and pharmacokinetic data from the Phase III Zalviso clinical program, as well as data from design and human factor studies relating to the Zalviso delivery system at the American Society of Regional Anesthesia and Pain Medicine at the annual meeting in Boston. In one of these posters, new analyses from the active comparative Phase III trial comparing Zalviso to intravenous patient controlled analgesia, or IV PCA with morphine, demonstrated that Zalviso had a significantly faster reduction in pain intensity compared to IV PCA morphine with a P value of less than.01.

In addition, fewer patients experienced oxygen desaturation events below 95% in the Zalviso treated group compared to the IV PCA morphine treated group with a P value equal to 0.028. Overall adverse events were similar between groups and most were generally mild to moderate in nature in both groups. Zalviso was designed to provide patients the ability to control their own moderate to severe pain in the hospital setting. Patient control of pain has historically been demonstrated to provide better satisfaction for patients and nurse controlled management of a patient's pain.

Using the Zalviso system, sufentanil in our proprietary NanoTab sublingual formulation is delivered through the Zalviso noninvasive preprogrammed dedicated to delivery device. We chose sufentanil due to its high therapeutic index, its highly lipophilic, or fat loving nature, which results in rapid brain penetration, and its potency which allows microgram dosing. As sufentanil NanoTabs are formulated as tiny pills that rapidly adhere to the sublingual mucosa when placed under the tongue and dissolve within five minutes or so after dosing.

We designed the dedicated device at that the patient uses to deliver NanoTabs to avoid misprogramming errors during setup that can cause possible harm to patients from drugs such as morphine and hydromorphone, both of which are commonly used for IV PCA. Patients are able to ambulate easily after surgery with Zalviso because the device is tethered to the patient's bed, unlike the current standard IV PCA where the pole mounted infusion pump is physically connected to the patient via IV tubing. The nurse has controlled access to set up Zalviso through a radio frequency identification key, and the patient controls access to their own system through a radio frequency identification thumb tag that prevents people other than the patient from using Zalviso.

Postoperative pain treatment is a large attractive market that exceeds $5 billion in annual sales. It continues to grow based on estimates to the US, Japan and the five largest EU countries combined. In the US, we believe there are over 12 million surgeries per year where moderate to severe postoperative pain occurs, and approximately 95% of these patients will be candidates for treatment with Zalviso. Within this postsurgical population, about two-thirds of the population are admitted as inpatients to the hospital where we will be attempting to replace IV PCA as the current standard of care for managing postoperative pain.

In addition, about one-third of that population is ambulatory, meaning they are in the hospital for less than 23 hours where IV PCA system is too cumbersome to set up, but a simple to use, noninvasive patient controlled analgesia system such as Zalviso may be highly appropriate. Our market research also indicates that there are in excess of 7 million hospital inpatients with moderate to severe pain that -- sorry, that over two-thirds of this patient group may be candidates for treatment with Zalviso. This group would include patients in hospital with a variety of clinical conditions that result in moderate to severe pain such as diverticulitis, burns, or sickle cell disease patients, among others.

Outside the US, in countries that have advanced healthcare systems, we believe there are three to four times as many patients undergoing surgical procedures that result in moderate to severe pain each year and for who Zalviso could provide effective and well tolerated postsurgical management. On April 24, 2013, AcelRx reported top line data showing that the primary endpoint was achieved in a placebo-controlled dose finding Phase II clinical trial of ARX-04 for acute pain.

This trial randomized 101 patients following bunionectomy surgery in a 2 to 2 to 1 ratio to 30 micrograms sufentanil, 20 micrograms sufentanil or placebo treatment. Results demonstrated that patients receiving 30 micrograms of sufentanil NanoTab doses administered by a health care professional no more frequently than once per hour had significantly greater pain reduction as measured by some pain intensity difference of the baseline during the 12-hour trial period than placebo treated patients with a P value equal to 0.003.

The clinical study and associated research activities for ARX-04 are funded by a grant from the US Army Medical Research and Material Command, or USAMRMC. This product is designed to address the needs for a rapid acting strong analgesic where IV access is not available or possible. This type of product could provide short-term treatment of moderate to severe pain for wounded soldiers on the battlefield, for victims of roadside traffic accidents, and for patients in medically supervised settings such as the emergency room or for short stay ambulatory surgery patients.

According to the CDC data, there are more than 45 million injury related emergency department visits and 43 million ambulatory surgery procedures per year in the US.

With that overview, let me turn the call back over to Jim who will review our financial results for the second quarter of 2013.

Thank you, Richard, and good afternoon, everyone.

AcelRx reported a net loss in the second quarter of 2013 of $17.4 million, or $0.47 per share compared with a net loss of $7.2 million, or $0.35 per share for the second quarter of 2012. Common shares used in calculating the basic and diluted earnings per share were 37.3 million in the second quarter of 2013 and compared to 20.6 million in the period one year ago. During the second quarter of 2013, AcelRx recognized revenue of $407,000 compared to $224,000 in the second quarter of 2012. The revenue resulted from reimbursement for the work completed under the research grant from USAMRMC for the development of ARX-04, a sufentanil NanoTab for the treatment of moderate to severe acute pain.

Research and development, or R&D, expenses for the quarter ended June 30, 2013 totaled $6.1 million compared to $5.4 million in the quarter ended June 30, 2012 and compared to $9.3 million for the preceding quarter ended March 31, 2013. The increase over the quarter ended June 30, 2012 was primarily due to expenses associated with the Phase III clinical studies of Zalviso. The decrease in R&D from the first quarter of 2013 reflects lower Zalviso Phase III cost as we completed Zalviso's Phase III program.

General and administrative expenses were $2.1 million in the second quarter of 2013 compared with $1.8 million for the second quarter of 2012. The increase was related to increased market research activity.

Other income and expense includes a $9.3 million non-cash charge in the second quarter of 2013 resulting from the liability accounting related to warrants issued in connection with a PIPE financing completed in June of 2012. The primary determinant of this charge is an increase in the share price during the second quarter of 2013 and its resulting impact from the Black Scholes valuation of these warrants. If the $9.3 million non-cash charge in the second quarter is excluded from the GAAP earnings per share calculation, our second quarter 2013 net loss per share would be adjusted down to a loss of $0.22 per share.

As of June 30, 2013, AcelRx had cash and cash equivalents and investments of $36.8 million compared to $59.8 million at December 31, 2012 and $48.2 million at the end of the quarter ended March 31, 2013. Our net cash burn for the second quarter of 2013 was $11.4 million. The cash balance does not include the proceeds of the recent financing where we raised approximately $48 million in net proceeds.

Now, I would like to provide you with some guidance of our financial expectations for the rest of '13. AcelRx records reimbursement receipts from the $5.6 million USAMRMC grant to fund the development of ARX-04 as revenue. We have received $4.8 million from this grant through the end of the second quarter of 2013 and expect to record the remaining $800,000 during the rest of the life of the grant, which terminates on January 31, 2014.

We anticipated that research and development expenses in the second half of 2013 will be lower than the $9.3 million and the $6.1 million reported in the first and second quarters of 2013 respectively due to lower clinical development expenses associated with Zalviso and the ARX-04 program. These decreases in R&D will be partially offset by the preparation of an NDA for Zalviso expected to be submitted to the FDA by the end of the third quarter of 2013.

Additionally, AcelRx anticipates modest increases in 2013 in general and administrative expense due to costs associated with commercial preparations for the launch of Zalviso in the US and the expansion of its corporate infrastructure to support commercial launch. Total operating expenses in -- for 2013 are anticipated to be only modestly higher than the $32.1 million recorded in 2012.

Other income and expense in future periods is expected to include non-cash charges that result from the liability accounting related to the warrants were issued in connection with the PIPE financing completed in the second quarter of 2012. The primary determinant of this charge is share price change during the quarter and its effect on the Black Scholes valuation of warrants. The impact in future periods is very difficult to predict and is not included in our guidance.

AcelRx believes its cash and cash equivalents and investments, including funding from the recently completed public financing are sufficient to fund operations through at least the end of 2014 and actually, well into 2015. We expect to use our cash, and our cash will decrease over the second half of 2013 to the first half -- when compared to the first half of the year as expenditures, primarily R&D and clinical activities, have been completed and many of our final payments to the contact research organizations have been made.

With that, I will turn the call back over to Richard at this time.

Thanks, Jim.

Before we answer your questions, I'd like to summarize our major goals and potential milestones looking out over the coming months.

The value of our NanoTab system in the management of acute moderate to severe pain in the hospital is beginning to emerge. Zalviso, we believe, is a product which not only manages moderate to severe pain effectively for 48 to 72 hours, but can provide early pain control to a better level than an IV delivered pain medication.

Zalviso has demonstrated superior patient global assessment of method of pain control compared to IV PCA with morphine, nurse and patient satisfaction and ease of care during use are also enhanced with Zalviso. Due to its intrinsic design, Zalviso eliminates the risk of programming errors. And since it frees the patient from an IV connection to an infusion pump, it can enable patients to ambulate more easily. The side effect profile related to this study drug we have observed in that placebo controlled Phase III clinical trials is similar to placebo treated patients, except the itching, which is the only adverse event considered related to study drug that is higher in Zalviso treated patients than in placebo treated patients.

In addition, in a single head-to-head study with IV PCA delivered morphine, Zalviso demonstrated a reduced incidence in oxygen desaturation events in comparison to IV PCA morphine. Now that we have all of our Phase III data, we plan to submit our new drug application to the FDA by the end of the third quarter of 2013 for the indication of moderate to severe pain management in the hospital setting. Our filing in the EU will be sometime after US submission. We are in the process of presenting full data from all three Phase III studies for Zalviso at major medical meetings in 2013 and 2014 with the goal of raising awareness for product physicians, surgeons, nurses and pharmacists, both in the US and in Europe.

We are beginning to build our commercial capabilities and plan to establish our marketing team in the second half of this year and our sales management team in 2014. We plan to put actual sales force in place in the first quarter of 2015 and plan to bring on board medical science liaisons in the first half of 2014 to be deployed for educational purposes in the hospital.

We continue to engage in discussions with potential partners regarding US commercial rights for Zalviso -- ex-US commercial rights for Zalviso, sorry, of business objectives for AcelRx remains and ex-US licensing agreement with a partner skilled in commercializing products in the hospital environment outside of the US.

The coming months will be busy at AcelRx with the analysis of additional clinical results, the preparation of filing of our NDA, planning and building infrastructure to support the commercial introduction of Zalviso in the US, and ex-US partnering discussions.

With that, I'd like to open the call for questions. Denise, I wonder if we can invite the first question?

Certainly.

(Operator Instructions)

Louise Chen, Guggenheim.

First question I had was on your SG&A spend. Just curious how we should model that in 2014 and 2015. And if you don't want to give specifics, maybe you could give us generally what we need to think about adding on in that time frame? Second question I had was on your label for ARX-01. Just wondering if you think you may be able to include the head-to-head data and also, favorable labeling for the two at-risk groups, older and heavy patients, wondering about that. And then lastly, curious in terms of early adopters for your products. Would Kaiser be possibly one of those types of organizations, given that it's also an investor in the Company? Just kind of curious there. Thank you.

Okay. Thanks, Louise. Maybe Jim, you might want to talk first about SG&A. And the one commentary I'll give to start the ball rolling, the big bolus of headcount will come in January '15 as we add what we anticipate to be a sales force of about 65 people. So clearly, SG&A will ramp significantly at that moment. Jim, do you want to give any other commentary?

Well, what I would add is, what you'll see starting here during in the second half of this year, you'll see a -- I'll say a drifting up in the SG&A expenses as we start to kick off on various market research activities and other commercial preparation activities. As Richard had identified a little bit earlier, in terms of the hiring of people, in terms of marketing, the MSLs and so forth, those will occur over the course of 2014. And so you'll see an accelerated increase on the expenses. And then as Richard just said, the real bolus will come in in the first part of 2015 as we bring on the sales force which we estimate to be, about 65 people is what's necessary, and that will be brought in over the course of a few months in 2015. We are, at this point in time, not giving any specific guidance out that far, but if you look at the expenditures, that should give you the shape of where we expect things to happen.

On your second question, Louise, in relation to label, I don't anticipate the head-to-head study as a single study will be included in the label. Although some of the data from that study, particularly the safety-related information, likely will be referred to in the label. And certainly, the information as it relates to older and heavier patients, it's unclear at this stage whether it will be called out specifically in the label itself. But certainly, the fact that the information is available in the study data, that's -- that will be forming the basis of approval, the two placebo-controlled studies specifically. There will be a lot of information related to the use of Sufentanil in older and heavier patients.

Lastly, in terms of early adopters, yes, certainly hospital systems with significant patient volume that manage both postoperative patients and certainly admit patients into hospital with broader disease states that require management and support for pain, I think will be early adopters. We haven't called out any specific group at this stage. I don't think we're in a position yet to be able to do that. But over the course of the next year, we certainly imagine and anticipate that work will lead to defining very specifically who early targets for Zalviso will be. And then making sure that we have a sales force that is aligned to go and talk to and speak with those early-stage adopters.

Thank you.

Randall Stanicky, Canaccord Genuity.

There's been a lot of focus, most of the focus has been on the US opportunity, appropriately. Richard, Jim, can you help us think about the ex-US opportunity? And then a couple of questions on that, number 1, how do we think about what you're targeting? Is it Europe? Is it global, more broadly? And then as you think about the potential peak or potential opportunity, how does that compare to the US? And then finally, with respect to a partner, is that something that if you don't see the right terms, you could hold off on? And we could see that coming well post-NDA submission or even post-approval, and then that would be need to file for Europe on your own? Thanks.

Okay. Great questions. So, the ex-US opportunity, first and foremost, in the context of the US opportunity, procedures, hospital procedures and painful hospital procedures are a reality worldwide. Doesn't matter which country you're in. There is a significant procedural volume that's done, in Europe for example, where in the US we have about 12 million or so procedures resulting in moderate to severe pain on an annual basis for about 300 million people in the US. In Europe, we estimate is about 18 million -- 18 million to 19 million procedures resulting in moderate to severe pain from the 500 million European total population volume. So, to give you some sense that it does scale based on populations, number 1. Certainly in markets which are quite westernized.

As you go more towards Asian markets and towards South American markets, it doesn't quite scale in the same linear fashion to population. But there remains substantial opportunity for products like Zalviso beyond the realms of US and Europe. We do tend to submit them when we think about the world. Our primary goal right now and focus is a European partner. And that's -- clearly is a market that's well established, it's definable in a significant way, and we are working down that road. The global partnership that's part of it, I do believe it has relevance on a global basis. In many countries outside of Europe and the US, the way in which postoperative pain, for example, is managed is still on the basis of patient sticking their hand in the air when they're in pain and the nurse getting push opioids because the acquisition of the IV PCA technology was too expensive. Where we think the acquisition of the Zalviso technology will be within the reach of many less well-funded healthcare systems around the world. So, I would say that's we see opportunity on a global level.

In terms of the partnership, Randall, it's a great question. Certainly, completing the recent financing that we did allows us to be comfortable waiting for the right partner with the right terms to present itself. And I think that further that we carry the product down the regulatory pathway will open up that particular opportunity for other partners to play here. But we're working to find the right partner with the right profile, the right capabilities to commercialize products, primarily in Europe. And if we can do that sooner rather than later, then we absolutely will do. But certainly, this recent funding gives us some options and some opportunities.

Great color. Thanks, guys.

Mario Corso, Mizuho.

In terms of data presentations in the second half of the year, I wonder if there's any kind of specific analysis or lead -- sub analysis we should be looking for? It's a matter of we're going to see similar cuts of data to what we've already seen, but obviously you're building awareness in the various physician populations. And I'm wondering what you can say separately longer-term about where you see the product and the Company breaking even? Finally on the pipeline, anything -- any thoughts percolating that you're willing and able to share about future NanoTab targets or where ARX-04 may be heading? Thanks.

Thanks, Mario, great questions. In Greece, you should anticipate that the data presentations later this year are primarily focused at covering much of the ground that we covered earlier in the year, providing additional contact and additional outreach to additional audiences. Next year, as we start to build towards commercial launch, you'll see some additional data analyses presented at meetings in 2014, derived from broader analysis across the entire database of the three studies that we completed in our Phase III program. And we'll look at subpopulations, we'll look at a host of other interesting aspects of managing moderate to severe pain in the hospital setting. So, that's more 2014 to think about those [additional] translations for the data rather than 2013. In terms of your question about breaking even, we're still anticipating a breakeven point around the middle part of 2016, with a penetration rate in the US, and that's based purely on US commercialization, by the way. But with our commercialization in the US, the penetration rate of around 4% to 5% by the midyear point of 2016.

Your question on pipeline, yes. Obviously, ARX-04 presents some very interesting opportunities for us as we think about this product that can potentially manage the pain of wounded soldiers on the battlefield, as well as provide other acute pain management situations with a product that can respond effectively for those conditions. Certainly, we are interested in moving that program forward, ideally with support from a third party to move that forward. ARX-02 and ARX-03 at this stage are definitively waiting for partners to move those forward, although I do see significant opportunities for each product. And certainly, I think in many cases, ARX-01's clinical dataset provides a lot of insight to how ARX-02 and ARX-03 may be able to help manage cancer breakthrough pain and also procedural pain and anxiety in an effective fashion. But certainly, ARX-04 at this moment is one that we're focusing on to see if we can move that forward quickly.

David Amsellem, Piper Jaffray.

I have just a couple of questions. Regarding your thoughts about use of cash for '14 and '15, does that build in any spend on potential post-approval post-marketing studies? And just the broader question about Phase IV studies, can you give us some color on what kind that you have planned in order to enable the product to gain further traction? This is beyond the subgroup analyses and more expansive analyses that you just alluded to. I was thinking about your thoughts -- your plans on that front. Thanks.

Okay. Jim, do you want to talk about use of cash in '14 and '15 first?

Sure, absolutely. As we sit and look at the '13, we don't have any further studies that we have planned in '13. I do think that as we look forward, we've got a number of things that we want to look at in terms of the Phase IIIb 4, but most of that's going to be out in '14 -- out in 2014 and 2015 is when we expect those things to occur, rather than having it occur concurrently with the evaluation of the NDA with the FDA.

To add a bit more specificity as well for you, David. In terms of specific sorts of studies, clearly, a sister study to the head-to-head study would be very helpful for gaining traction from a labeling standpoint, and would be certainly part of our plans and expectations. We're still looking at which population would be the appropriate population to study for that head-to-head -- additional second head-to-head study, but certainly, I think a study to support the IV PCA morphine comparison would be helpful. We'll also do work in pediatrics. Initially, I think we'll look for expansion of our labeling to basically accommodate adolescents between the age of 12 and 18. We anticipate an indication, by the way, for 18 years and above on initial approval. But we certainly are interested in providing support for the pediatric population ages 12 to 18. As we go back to the between 6 and 12 population, which is -- will be a second push, obviously it will depend on how we see the ability of younger children to utilize the Zalviso device effectively. But we certainly see some value for Sufentanil and its application to manage the pain of the younger population -- younger than adult population.

Okay. That's helpful. And then another question, if I may, this is a clarification question about the proposed indication in the labeling. You may have alluded to this, but would you expect the label indication to be just in moderate to severe postoperative pain, or a more general pain indication where potentially you could see usage of Zalviso in the ICU or in the emergency room or in, say, the HemOnc section of the hospital? How should we think about that?

We certainly think about this as being a broader indication than just postoperative moderate to severe pain. It will be specific to hospitals; clearly, our REMs will be focused on ensuring that the product stays within the environment of the hospital, and that's something which we are very committed to as a Company. But moderate to severe pain in a hospital certainly encompasses a broad range of arenas. Yes, the emergency room, but I think more particularly, I anticipate -- you mentioned the HemOnc environment, certainly I think that's one where there is significant amounts of pain that could be managed -- assisted in management by Zalviso. Burns unit would be another one, where delivering an IV medication to a burns patient is not necessarily an ideal set up at all. And a variety of other situations. Most people are in the hospital with pain, if you think about the conditions that you find in a hospital. So, an effective way of managing pain is certainly something which I think would be found to be of use by a broad set of people in a hospital setting. And our indications should support that.

Thank you.

(Operator Instructions)

I'm showing no additional questions at this time. This will conclude the question-and-answer session. I would like to turn the conference back over to Richard King for his closing remarks.

Thank you, everyone, for joining us on the call today. If you have any additional questions, you'd like to ask them, please feel to contract contact either Jim or myself. In the meantime, have a great evening, everybody. Thank you.

Ladies and gentlemen, the conference has now concluded. We thank you for attending today's presentation. You may now disconnect your lines.