Acorda Therapeutics, Inc.
Q1 2015 Earnings Call Transcript

Published: 3 May 2015

[Operator:]

Welcome to the Acorda Therapeutics First Quarter 2015 Financial Results Conference Call. At this time, all participants are in a listen-only mode. There will be a question-and-answer session to follow. Please be advised that this call is being taped at the company's request. Now I would like to introduce you your host for today's call Felicia Vonella, Director of Investor Relations at Acorda Therapeutics. Please go ahead.

[Felicia Vonella:]

Good morning, everyone, and welcome. With me today are Dr. Ron Cohen, our President and Chief Executive Officer; and Mike Rogers, our Chief Financial Officer. Before we begin, let me remind you that this presentation includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts regarding management's expectations, beliefs, goals, plans or prospects should be considered forward-looking. These statements are subject to risks and uncertainties that could cause actual results to differ materially. For more information on these and other risks, please refer to our filings with the SEC. I will now turn the call over to our CEO, Dr. Ron Cohen.

[Ron Cohen:]

Thanks, Felicia. Good morning, everyone. On today's call, I'll provide an update AMPYRA and I will review our product development programs and then Mike will review the first quarter financials and then we will open the call for your questions. First on AMPYRA, AMPYRA sales were $92.4 million in the first quarter. That's a 27% increase over the first quarter of last year. This quarter's net sales continued the strong growth that we saw last year, and they were in line with our internal projections. We are reiterating our 2015 guidance of $405 million to $420 million in net sales. With regard to the ANDA litigation, the district court has scheduled a Markman hearing for March 2016, and a trial date for September 2016. In addition, we are preparing our responses to the two IPRs that have been filed. We have five Orange Book-listed patents on AMPYRA that extend into 2027, and we are defending our intellectual property vigorously. Moving to the pipeline. We continue to make progress across the programs. We are enrolling participants in our Phase 3 studies for dalfampridine in chronic post-stroke walking deficits, and CVT-301 for relief of off episodes in Parkinson's disease. Each of these products addresses major unmet medical needs. With respect to PLUMIAZ, we expect to provide a detailed update within the next month. Earlier this month, we presented data from our first Phase 1 rHIgM22 trial at the American Academy of Neurology annual meeting. This safety and tolerability data support advancing the program, and the study detected levels of rHIgM22 in the cerebral spinal fluid, or CSF, that were dose-dependent. That indicates that the antibody does enter the central nervous system, which is an important piece of information. We expect to begin a second Phase 1 study this quarter evaluating safety and tolerability of rHIgM22 in people with MS who are having an active relapse. Our second Phase 1 clinical trial of cimaglermin alfa continues to enroll, and we expect it to read out in the second half of this year. By way of reminder, cimaglermin alfa represents a unique mechanism for improving the function of impaired myocardial tissues, and our first Phase 1 study showed a dose-dependent increase in cardiac ejection fraction. Now I will turn the call over to Mike to review the financials.

[Mike Rogers:]

Thanks, Ron, and good morning, everyone. I want to take a couple of minutes to walk you through some of the financial highlights of the quarter. I will start with the P&L and then come back to the balance sheet. AMPYRA net revenue for the first quarter was $92.4 million compared to $72.5 million for the same quarter in 2014. As Ron mentioned, sales this quarter were strong and we are reiterating our guidance for AMPYRA net sales of $405 million to $420 million. Revenue from ZANAFLEX for the first quarter of 2015 was $2.6 million, including our own sales as well as product sales to Actavis and royalties received on Actavis' sales of generic tizanidine. FAMPYRA royalty revenue from sales outside of the United States was $2.3 million for the first quarter of 2015. Moving on to the expense side, total operating expenses for the first quarter of 2015 were $101.1 million, including $7.1 million in share-based compensation expense. This compares to $77.1 million, including $5.8 million in share-based compensation expense for the same quarter in 2014. The increase in operating expenses this year over last is primarily related to increased R&D costs to support our ongoing clinical development, as well as the addition of costs associated with our facility and operations in Massachusetts acquired in the Civitas transaction in the fourth quarter last year. We are reiterating our R&D guidance of $150 million to $160 million and our SG&A guidance of $180 million to $190 million. Both of these ranges exclude share-based compensation. On the tax line, for the first quarter of 2015, we recorded a net tax benefit of $2 million, and cash taxes for the first quarter were $743,000. Finally, a note on the balance sheet. Our financial position remains strong. At the end of the first quarter our cash, cash equivalents and investments balance was approximately $300 million, and we expect to be cash-flow positive for the year. With that, I'll turn the call back over to Ron.

[Ron Cohen:]

Thanks, Mike. So, to summarize, we are driving growth of AMPYRA, which continues to show impressive gains. We have an exciting pipeline with high value programs across both late and early clinical stages. And we also remain active in business development, and we are continuing to assess additional assets that can further enhance shareholder value. Before opening for Q&A, I want to provide a special disclosure for Mark Schoenebaum. Ron Cohen's hair grew approximately 0.5 centimeters in the quarter; therefore, there will be no cut to that guidance. Thank you. And, operator, we can now open the call for Q&A.

[Operator:]

Thank you. [Operator Instructions] And your first question comes from the line of Michael Yee of RBC Capital Markets. Please go ahead.

[Michael Yee:]

Hey, Ron, two quick ones. One is, you mentioned briefly addressing the IPRs. Maybe you could just remind the Street what you think the timing is more specifically in terms of responding to the IPRs and then when you would expect to hear back. What are the different milestones with that that we should be paying attention to in terms of timing? And then, secondly, you posted or presented some rHIgM22 data, obviously, recently at AAN. Based on that, what is the design of the Phase 1b? Are you actually going to be looking at clinical efficacy endpoints and when would that data be? Thanks.

[Ron Cohen:]

Okay, thanks, Mike. So, with respect to the IPR, there is a regimented set of timing for that, so there is a required set of timing. So, we will submit, and we're required to and we will submit our responses to the IPRs within three months of the filing dates. And there were two different IPR filing dates, so the first response is due in May, and I believe the second one would be due in June. Then the decision as to whether or not to institute the IPR would occur for the first one sometime in August or by August, and for the second one by September. With respect to rHIgM22, this trial, again, it's primarily a safety and tolerability, but in people who are having acute relapses, so we will be looking at some functional measures as well. In particular, we will be looking at a special form of MRI called MTR, which is magnetic transfer ratio. That is considered to be the most sensitive technique for detecting myelin and myelination. We will be looking at some clinical functional measures. Now, having said that, I just want to make sure everyone understands, it's early days. It's a Phase 1 study. It's going to be a single dose study. So we can hope to see some signals there, but clearly this is not designed to be an efficacy study. And with regard to timing, we are planning to start the study this quarter, actually. I don't have a forward-looking date for you as to when that is. I think we will – I am being informed, hold on. I don't believe we have given a specific date for when the trial will end other than to say we expect the results to be in 2016.

[Michael Yee:]

Okay, thank you.

[Operator:]

Thank you for your question. Your next question comes from the line of Mark Schoenebaum from Evercore ISI. Please go ahead.

[Mark Schoenebaum:]

Hey, guys, thanks for taking my question. Ron, if your hair has really only grow 0.5 centimeter in a quarter, you probably have an underlying chronic degenerative disease. You should probably get that looked at.

[Ron Cohen:]

Yes, I think you ought to check your facts there, Mark, because hair in general grows about 0.4 millimeters a day on average, so if you multiply that by 90 days, you get about 45 millimeters. So, I think at 0.5 centimeter, we are actually ahead of the curve here.

[Mark Schoenebaum:]

That's why I don't build models anymore. Hey, I was wondering, just a 27% increase in AMPYRA. Your year-end looks, frankly, fantastic. Are you guys willing to give us just price versus volume in the U.S. on that? And then I was just wondering if it's possible, just to make sure we're all clear, can you just update us on the stroke and the 301 timelines, please?

[Ron Cohen:]

Okay, Mark, thanks. So, yeah, look, we're obviously pleased with the progress of AMPYRA, particularly over the last year. We've talked in the past about some of the factors that we thought had kicked in last year on that. With respect to the guidance, we are staying as-is. The first quarter came in in line with our internal projections. Obviously, we put a lot of work into the projections that we just gave, I think, in January. So, we are comfortable with the guidance as it is. With respect to the Phase 3 trials, the CVT-301 in Parkinson's is targeted – there are actually a number of trials there. They are targeted mostly to be complete in 2016. There is a long-term safety study that will continue beyond that. However, we believe we can file before we finish that study, depending on how much good safety data we've been able to accumulate. So, we will get more clarity on that as we get the enrollment up and then talk to FDA next year. With respect to the stroke trial, we are continuing to activate centers. There are a lot of centers in that trial, so in that trial, so we are continuing to bring them online. We need a few more months to really get the critical masses centers up and then get a gauge on enrollment. And the reason for that is, this is a new indication. The only information we have to go on is a relatively small study that we did at a limited number of centers before, which may not be predictive. So, before we guide people, we want to make sure we have confidence in the dates, and we're going to need a few more months of enrollment there to get back to you.

[Mark Schoenebaum:]

Okay, thank you so much.

[Operator:]

Thank you for your question. Your next question comes from the line of Yaron Werber of Citi. Please go ahead.

[Yaron Werber:]

Great. Thanks for taking my question. The first question and most important is the hair growth; is that a self-reported measure or has that been validated by [indiscernible]? We want to see the data, we want to see the data.

[Ron Cohen:]

That's entirely understandable, Yaron, and I'm going to get my team together and maybe we can get a separate call and talk about that.

[Yaron Werber:]

With pictures, yes. I have two more legitimate questions. The first one is on rHIgM22. So, the next study essentially for single dose looking at patients in a relapse, what are you trying to see there with MTR? And why not do immediately sort of a longer term study? And then, secondly, in PLUMIAZ, what kind of an update can we get next month? Is this going to be potentially Phase 3 plans or kind of give us a sense for that, if you can, anything?

[Ron Cohen:]

Okay. Well, so on M22, the key issue obviously, and I know you agree, everyone, we all agree with this. The key issue anytime you have a new medication is safety, and particularly when you've got a biologic. And I'm going to say even more particularly when you have a member of the immune system family, in this case an IgM, in an immune disease. So, you need to proceed with respect and caution as you go in the early part, and then, of course, you can accelerate if things look good. So, the interest here is that because MS patients are prone to relapses, where they have acute increases in inflammation and in their overall immune status and escalation, you want to make sure that in that case, when we're putting that antibody in, that we're not doing anything deleterious. Now, it's encouraging that in the last trial, which was in stable people with MS who were not having active or severe active inflammation, it looked good and it was safe and tolerable. But you really want to see it in this population before you go and design larger trials with multiple dosing and so on. So, that's really the main impetus for it. Now, since we have to do that anyway, it makes sense to look at some additional measures in the trial, but because it's a safety study and it's only single dose, there is only so much you can hope for there. Having said that, in MTR, the field uses MTR now as the most sensitive measure for detecting myelin and myelination. So, if there is remyelination occurring in lesions that we can see at baseline, the MTR might pick that up and it might be an interesting signal. Now, again, the numbers are going to be small in this trial, so differentiating a natural myelination – which happens; natural remyelination happens in acute relapses – from something that has been stimulated by drug may be difficult to differentiate that. You probably need larger numbers. But having said that, we are doing these measures and we'll see what we get. With respect to PLUMIAZ, I don't really have anything else I can say now other than to say that the discussions with FDA with respect to a regulatory path forward have been encouraging and we expect to give a full, detailed status on update within a month.

[Yaron Werber:]

Great. Thank you.

[Operator:]

Thank you for your question. Your next question comes from the line Cory Kasimov of JPMorgan. Please go ahead.

[Unidentified Analyst:]

Good morning, guys. This is Morgan [ph] on for Cory. I just had a quick question on your BD. You talk a lot about bringing in new assets, and you actually have a lot going on right now. What is the capacity to bring an asset in from the outside? Would it have to fit the broadening of your core portfolio or are you open to branching out in different areas? Thanks.

[Ron Cohen:]

Thanks, Cory. So, the preference clearly, and the question you ask is one of those that we focus on every day here, so I think it's a great question with respect to, you know, you can bring in assets, but then can you do the right thing by them? Can you develop them effectively and efficiently? So, we put a lot of thought into that. And clearly if we stay within our domain, which is broadly neurology and certain adjacencies within neurology or near neurology, we are better off, because we have the infrastructure all across-the-board, from the development and regulatory side, and also the commercial side. Now, having said that, if we were to come across a great opportunity, let's say – and I'm truly making this up, so don't read anything into this – but let's say we're in a particular specialty area that we thought had a lot in common commercially with what we're doing now with AMPYRA in terms of specialty pharmacy networks and all of the infrastructure and knowledge that we have gained through AMPYRA. Would we consider something like that if it was a high value proposition? Sure, we would have to if it was at the right price and had a lot of value. So, we might consider something like that, but we would certainly make sure that we bolstered ourselves with the right personnel on the development side to handle that and ultimately on the commercial side as well. So, I guess the message is that the strong preference, when we go out looking is to stay within our boundaries and our areas of expertise. We are not totally excluding going outside, but it would have to be absolutely a very special and right situation for us.

[Operator:]

Thank you for your question. Your next question comes from the line of Raghuram Selvaraju of MLV. Please go ahead.

[Raghuram Selvaraju:]

Hi, thanks very much for taking my questions. A couple of very quick ones on rHIgM22. With regard to the preferred context in multiple sclerosis for this agent, would you say that that is more likely to be in the context of progressive disease or still in the relapsing-remitting context, what we can potentially expect going forward within MS? And then could you perhaps comment on the likelihood of Acorda pursuing development of this drug in other demyelinating disorders beyond MS? And, finally, with respect to cimaglermin, again, when do you anticipate being able to make a decision as to whether or not this is going to remain an in-house Acorda asset or whether this is something that would potentially be developable in conjunction with a partner? Thanks.

[Ron Cohen:]

Great. Thanks, Ram. So, with respect to the antibody, we've talked at great length and continue to collaborate with a core group of KOLs in the MS field to talk about exactly the question you asked, in terms of where is a remyelinating therapy likely to do the most good? And the answer that comes back is really, it's across-the-board, right? So, if you have something that will remyelinate more effectively than, let's say, the current standard of care, which is steroids, in an acute relapse there is a strong feedback from the field that that would be a very good thing. There is accumulating evidence, for example, that those people who recover fully from their relapses actually do significantly better long term than those that only recover partially. So, if you can show that you can get a more complete recovery from a relapse that could be considered very valuable for the patient. In addition, obviously, in progressive disease there is really nothing viable now to offer people with progressive disease. And if you have something that is capable of remyelinating in progressive disease, that would be a major, major step forward. So, the short answer is, it's really all of the above. We are going to sort out as we go forward what the sequence of studies should be to show that, and obviously we will want to get the highest likelihood or the highest probability of success trials out first and then build on those. So, stay tuned and watch this space. With respect to other demyelinating conditions, absolutely, if this winds up working in people with MS, we would certainly be looking at a variety of demyelinating conditions out there, and there is a whole list that one could mention that we could talk about at another venue. So, with respect to cimaglermin, we will get the data in the second half of this year. If they look remotely like what they looked like in the first trial in terms of improving cardiodynamics, ejection fraction, so forth, we do have a six-minute walk test in that trial as well. We will be interested to see if a single dose shows us anything. Again, it's single dose, but interested to see it. But if these results are positive and we stay away from the liver issues that we saw at the highest dose in the last study, this is going to be potentially an extremely important and valuable therapy for people with heart failure. I guess your question is, would we keep it in-house and would we go on to Phase 2 or do we partner it, and if we do partner it, when do we partner it? I think everyone would agree that's under the heading of a high quality problem to have. So, we will make those determinations as we go forward. I think it's early right now to commit to any particular path. If we feel that we can do justice to it at any given stage of value creation, obviously, we are going to keep it. If we feel that it's in everyone's best interest to partner with maybe a larger cardiology focused company, well, we will do that. So, all of that is on the table and we'll see.

[Raghuram Selvaraju:]

Okay, and just very quickly, the update on the Markman hearing next year. Could you tell us what specifically is likely to be the subject of that, or is it too early to tell at this point? Thanks.

[Ron Cohen:]

Yeah, it's much too early to comment on that.

[Raghuram Selvaraju:]

Thank you.

[Operator:]

Thank you for your question. Your next question comes Tom Shrader of Stifel. Please go ahead.

[Tom Shrader:]

Good morning. I thought the rHIgM22 data, its retention in the CNS, how interesting is that? Does that mean the antibody is finding a target? Is that a reasonable assumption? And I'm also curious, did you see any signal as a function of disease state? I think you had some pretty late-stage people. Is there a chance you learned something about the drug from that parameter?

[Ron Cohen:]

Thanks, Tom. Yeah, so we are actually quite excited by the CSF result. We think that was the most exciting part of the data, in addition to obviously the safety and tolerability, which you need to go forward. As you know, there have been for a long time speculation and questions, and I would say skepticism, that a large molecule like an IgM gets into the CSF or into the CNS when administered intravenously. This pretty well settles that. We saw a dose-dependent increase or levels in the CSF, and the fact that it increased over time we think is significant. That is important. What it says is that very likely, once the antibody gets in, it doesn't get out as quickly as it got in, so it sticks around and it accumulates, which in terms of dosing is a very good thing. So, from that perspective, we couldn't have asked for a better result. With respect to what we learned from later stage, early stage patients, there is really not much we can learn from this study. It's too small and the patients were too distributed across different types of MS, different stages of MS, so not only is it small, but then if you try to subdivide into those subgroups, you really get just small handfuls of patients in each one. So, in a single dose study where you have that situation, there is really not much we can learn. That's going to have to wait for the future studies.

[Tom Shrader:]

And if I can follow up on a pretty related question. On the two arms that you could be addressing, which is remyelination and neuroprotection, what did your preclinical data look like in neuroprotection? Did you have a signal? The other guys really didn't, and maybe that’s showing up in the clinical world. And I'd just be curious of your thoughts there.

[Ron Cohen:]

You know, Tom, I don't know the answer to that. That’s something that our R&D folks would have the best handle on, so we can certainly follow up with you and with them and talk to that in more depth. And I can tell you that there has been voluminous animal work published on the antibody in a number of different demyelinating models. Most of the papers have used the Tyler virus model, which is a – actually, it mimics a chronic, progressive type of MS where the animals progressively demyelinate up to the point where they are so impaired that they die from the function, unfortunately. So, in that model, they were able to show increased survival and delays of morbidity in those animals, in addition to remyelination. So, that much I can tell you, but the rest will have to get you in front of our R&D folks.

[Tom Shrader:]

All right. Thanks a lot.

[Operator:]

Thank you. Your next question comes from the line of Phil Nadeau of Cowen and Company. Please go ahead.

[Phil Nadeau:]

Good morning. Thanks for taking my questions. Just a few loose ends to tie up. First, is there any update on the once daily AMPYRA formulation? Second, on scheduling the court case, the Markman and the actual hearing, is that at all fluid? Does that depend on the results of the IPR process and whether that’s completed by that time or if there is an appeal could the court case be pushed back? Then last on rHIgM22, could you talk a bit about the challenges of enrolling patients who are in active relapse? It seems like that's kind of a fleeting thing, so how quickly do you have to be able to identify those patients and dose them in order to still have the patients in the relapse? Thanks.

[Ron Cohen:]

Okay. Great, Phil, thanks. So, QD, we continue to work with several different collaborators independently on formulation, and when we have something to report, we obviously are going to report it. But it takes some time, because they have to do the prototypes, then we have to test the prototypes, then you have to go back and refine them. So, all that work is ongoing. With respect to the Markman hearing, I do not know the answer to that. As far as I know, once they set the date, that's the date, and I don't think that that's likely to change unless the court decides that they need to change it. But I don't have expert information on that in my head. With respect to recruiting on the M22, we polled several KOLs on this. We are going to have enough centers for this study that they feel that they can recruit that. Remember that these are centers that are bringing in on a regular basis, sometimes on a daily basis, people who are in active relapse because they're giving them three days of high dose infusions of steroids for the relapse. So, this is a standard of care and they have ready access to those patients. So, we don't anticipate that that is going to be a special issue recruiting.

[Phil Nadeau:]

Great, that’s very helpful. Thanks for taking my questions.

[Operator:]

Thank you for your question. Your next question comes from the line of Paul Matteis of Leerink. Please go ahead.

[Paul Matteis:]

Hey, how are you?

[Ron Cohen:]

Hey, Paul.

[Paul Matteis:]

Thanks for taking my question and thanks for the update on your hair, I appreciate it. It was good seeing your hair [indiscernible]. Hey, so, I had a couple on more of the commercial strategy side. One, so, people look at stroke and they look at the Civitas product and they see a somatic overlap in the CNS space. But I guess I'm wondering more broadly to what degree to those potential product launches, AMPYRA in stroke and CVT-301 in Parkinson’s, to what degree are they levered to your current AMPYRA MS sales franchise versus to what degree would you have to build out and get more reps and target a different physician mix?

[Ron Cohen:]

Yes, that's great, thanks. So, with respect to Parkinson's disease, there is a fair amount of overlap in our call points now. We will not need significant expansion of the sales force there. We will have to tweak it because there is – geographically speaking, there are certain areas where there is more overlap and certain areas where there is less. You can think about multispecialty practices that typically will have an MS neurologist and also have a movement disorder neurologist. So, from that respect, there is a high degree of overlap. Stroke is – there is a high degree of overlap with respect to the neurologist. However, it is important to realize that for chronic stroke, which is what we are targeting, these are people who could have had their stroke 10 years ago or 20 years ago. Many of those people are no longer seeing their neurologist; they're seeing other doctors, including primary care. So, that's going to require a different approach. We will be able to target some of it with our current sales force; it's likely that we will have some expansion for the other parts of that market.

[Paul Matteis:]

Okay, interesting. That's helpful. And then I guess on the AMPYRA side and continued investment in AMPYRA. So, between today and 12 months from now, we are going to know, in my opinion, at least, we're going to have a much better idea about where you stand with the AMPYRA lifecycle. We will have institution decisions on the IPR, we'll have a Markman. To what degree are your plans or investment in stroke dependent on some of these upcoming catalysts? And in your opinion do you need a viable one-time daily formulation to charge ahead in stroke should these litigation and IPR catalysts go against the way that you're hoping and expecting? Thanks.

[Ron Cohen:]

Well, so we do contingency planning all the time around here, not just for AMPYRA but for everything we do. The answer to your question is not straightforward, because it's multilevel. It just depends on different combinations of factors that occur. So, if I can condense it for you, but this is really simplifying it, to the extent – well, let me start by saying, as I always do, we have five patents on this product in the Orange Book, and we're defending them vigorously. So, in order to get on the market with another product, someone's going to have to overturn all five patents, so that's the first issue. Now, four of those patents go between 2025 and 2027. To the extent that, as events unfold over the next year, two years, three years, we continue to be confident that we have that timeframe with the current formulation, it would not affect our stroke plans. To the extent that anything were to happen where we had less confidence in that timeframe, then we would have to take that into consideration, unless we have a once-daily formulation. So, it's different considerations. If the current IP, we continue to be confident in that all the way to 2025, 2027, even with the BID formulation, stroke is, from our point of view, a winning program for us to invest in. If we have a QD, then we don't have to consider the BID IP nearly as much; then it becomes IP on that QD formulation plus other IP that we've already filed on the stroke indication, and that becomes a different set of considerations.

[Paul Matteis:]

Okay, fair enough. That's really helpful. Thanks a lot.

[Operator:]

Thank you for your question. Your next question comes from the line of Chris Raymond of Robert W Baird. Please go ahead.

[Laura Chico:]

Good morning, guys. This is Laura Chico on for Chris Raymond today. Thanks for taking the question. I think most of my questions have actually been asked already, but I guess I'll follow up on the last one and maybe ask it a little differently. Ron, on the post-stroke opportunity, now separate and distinct from the IP situation, you’ve discussed the strategy here. The current Phase 3 trial is using the BID dose and that will inform on the second Phase 3 trial, and then if the QD dose is ready, you're going to be using that in the second trial. And then assuming both trials work, you'd file only on the once-daily formulation and complete a bridging study. So, if I'm understanding this correctly, that walls off the post-stroke from the twice-daily formulation. I guess my question is, what should happen if the results from the BID trial are more compelling than the once-daily trial? I guess, how does that change your filing strategy at all?

[Ron Cohen:]

That's an interesting contingency, but – so, let me take a moment so I'm not giving you a glib answer. Yes, I guess you would have to define what you mean by they were more compelling. I mean, the reality is, if we meet our prospectively defined endpoints in those studies and both of them are suitable for filing, then we can file just on the QD. They are not going to be the same study in which you're going to compare the QD to the BID. So, regardless, I guess what you're saying is what if quantitatively you show somewhat more difference from placebo in the BID trial than the QD? Well, those differences happen all the time. In fact, that's the norm, where you'll see variations from trial to trial even with the exact same formulation, the exact same drug. So, I just don't see that being an issue as long as we hit the endpoints with the QD. I should take the opportunity to remind everyone that there is another contingency here, and I don't know at this point which we would go with. But depending on the timing, if we have the QD formulation in time, we're going to have an interim analysis on this first trial. And that interim analysis will come back essentially with one of three answers – either keep recruiting according to plan; or keep recruiting, we think it might be a little underpowered, so we recommend you add X numbers of participants to each arm; or the only answer you don't want to hear is, well, it's futile; stop the study. If it's any of the first two answers and, indeed, even if it's all three answers, we could choose to stop the study at that point and actually unblind and look at the data. And why might we do that? Well, if we have the QD formulation, there is an argument to be made that maybe what you do is you look at the interim analysis – excuse me, you look at the data from the interim analysis point. You then use those data to power two parallel Phase # studies both of which use the QD formulation, because the odds are quite high, we think, that those studies each would be significantly smaller than the studies that we are planning now. Because the studies that we're planning now are based on the original Phase 2 study, which was relatively small. Having the data from the interim analysis would enable us to have much better powering, and so you get a number of good things out of that. Now, both trials are the QD and they are much more focused, much better powered trials, and you probably don't lose much time, if at all, because they're smaller and you can do them faster than you would have otherwise. So, that is just something to think about. I'm certainly not committing to that, but, as I say, we do contingency planning, and that's one of the potential contingencies. The other one is the one you articulated, and I don't believe that if you saw a somewhat better result on the BID than you did, in terms of numerically, on the QD, that that would change the calculus.

[Laura Chico:]

Very helpful, thank you.

[Operator:]

Thank you for your question. Our next question comes from the line Traver Davis of Piper Jaffray. Please go ahead.

[Traver Davis:]

Hi, guys. Thanks of taking the questions. Most of my questions have been answered, but I just wanted to circle back again on the timing here for potential IPR review, and then also the new update of the Markman hearing in March 2016. So, I guess from the information you guys have provided and what we know about the IPR reviews and the timeline there, so it seems like if a decision was made in the August-September timeframe to grant an IPR review, do you still believe that it will take about six months to have a decision on what that review uncovers? And that sounds around the time where we could have the Markman hearing in March of 2016 for the ANDA filer. So, what impact or how impactful do you think that decision will be on what an eventual Markman decision…?

[Ron Cohen:]

Yeah, so, let me just correct what might be a misimpression. So, the six months is the decision to institute or not. So, the patent, the three administrative law judges make a decision as to whether they will, in essence, consider the case, or adjudicate the case. And I've actually, since the last question I've been given the specific dates. So, we have until May 26 to file our preliminary response to the first IPR, and we would then expect a decision on whether or not to institute by August. The second one is due June 19, and we would expect a decision on whether or not to institute by September. Now, if they decide to institute, which means they are now going to consider the case and the parties come in and it's considered, then it's a year to render a decision.

[Traver Davis:]

Okay.

[Ron Cohen:]

Okay? So, that would not be coincident with the March 2016 Markman hearing date.

[Traver Davis:]

Okay, gotcha. That's helpful, thanks.

[Ron Cohen:]

I mean, I guess, it’s all worth letting everyone know that the IPR is a new process. It's only been around for a couple of years, so, as you can imagine, there is not a whole lot of experience yet with the entire process. So, the interplay between IPR and how the courts handle dates and litigation is not at all clear.

[Traver Davis:]

Great. Thank you, guys.

[Operator:]

Thank you. Your next question comes from the line of John Newman of Canaccord Genuity. Please go ahead.

[Kevin Dai:]

Hey, guys, this is Kevin Dai in for John Newman. Just two quick questions. First on rHIgM22. Initially from the last quarterly conference you guys said that you guys would start the trial at the end of the year, but now you are starting next quarter. Just wondering what the catalyst for moving the trial start date earlier. And, secondly, can you give us a little guidance on AMPYRA inventory levels at the beginning and end of this quarter? Thanks.

[Ron Cohen:]

Okay, great. So, I guess the team was so excited by the first Phase 1 results they could hardly wait to start the second one. And less glibly, yes, I mean, originally we were thinking it would be later, but the team has done a great job, frankly of accelerating the timeline and getting it up and running on the heels of what was a very good result in the first study. With respect to AMPYRA, inventory levels are absolutely flat, so we've seen no fluctuation in the inventory levels.

[Mike Rogers:]

In the channel. You may have noticed on our balance sheet inventory has gone up, and that's just a function of overtime. Inventory levels had crept down and we made a decision to sort of bring them back up to our historical norms.

[Ron Cohen:]

But the channel is flat.

[Mike Rogers:]

But the channel has been very consistent and flat.

[Kevin Dai:]

Okay, great. Thank you guys so much.

[Mike Rogers:]

Sure.

[Operator:]

Thank you. Your next question is from the line of Robert LeBoyer of Maxim Group. Please go ahead.

[Robert LeBoyer:]

Good morning, and thanks for the answer on dalfampridine in stroke a few questions ago. The only one I would follow up that with is, is there a projected timeframe for this interim look? And then on PLUMIAZ, could you just elaborate on what the issues were and what the possibilities are going forward in terms of the scope of the work, whether it's safety or efficacy and the timeframes associated with those?

[Ron Cohen:]

So, let me just say, I'll answer the second one first, because with respect to PLUMIAZ, we're going to give a detailed update within the next month, so there is really nothing I can add to it right now beyond what I already said during the slide show. With respect to post-stroke, as I mentioned, I think, in response to an earlier question, we have a lot of centers in this study, and the team is going overtime getting them up and running, and we're still doing that. We would like to get essentially, maybe not all, but most of the centers actively recruiting so we get a real sense of what the recruitment rates are before we go and guide you with respect to when the interim look would be. Because it is entirely dependent on recruitment, because it's about 50% – the interim look takes place at the 50 % mark, so after about 50% of the patients are in and dosed and through the study we would do the interim look. So, we will take a few more months, I believe, to get to that point, and then we'll be able to give you a confident guidance on it.

[Robert LeBoyer:]

Okay, thank you.

[Operator:]

Thank you for your questions, ladies and gentlemen. I would now like to hand the call over to Dr. Cohen for closing remarks.

[Ron Cohen:]

All right. Well, thank you very much, everyone. We will look forward to seeing you on the next quarter and have a great rest of your week.

[Operator:]

Thank you for joining in today's conference, ladies and gentlemen. This concludes the presentation; you may now disconnect. Good day.