Acorda Therapeutics, Inc.
Q2 2015 Earnings Call Transcript

Published: 30 Jul 2015

[Operator:]

Thank you for holding. Welcome to the Acorda Therapeutics 2015 Second Quarter Update. 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 your host for today’s call, Felicia Vonella, Senior Director of Investor Relations at Acorda. 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. Now, I will turn the call over to our CEO, Dr. Ron Cohen.

[Ron Cohen:]

Thanks, Felicia and good morning everyone. On today’s call, I will provide an update on AMPYRA, our pipeline programs and Mike will review the second quarter financials, and after that, we will open the call for your questions. To start, AMPYRA continued to perform strongly, sales were $105.5 million in the second quarter, that’s a 21% increase over the second quarter of last year. We are narrowing our 2015 guidance for AMPYRA net sales from $405 million to $420 million to $410 million to $420 million. With regard to the IPR petitions, we have submitted responses to both petitions, to the patent trials and appeal board, or PTAB. The deadlines for the PTAB decisions on whether or not to institute the petitions are in August and September. We are continuing to prepare as well for our ANDA litigation. As a reminder, we have five orange book patents listed on AMPYRA that extend into 2027. And we are defending our intellectual property vigorously. Moving to our pipeline, our pipeline addresses major medical unmet needs and has the potential to create substantial value. We currently have three late-stage clinical programs CVT-301 for Parkinson’s disease, PLUMIAZ for cluster seizures for post-stroke walking deficits. In addition, we are advancing earlier stage clinical programs, rHIgM22 for remyelination in MS and CVT-427 for relief of acute migraine and we are also continuing to work on cimaglermin alfa for heart failure. CVT-301 is one of our most advanced programs and it’s our highest priority. It’s in inhalable form of L-dopa intended to treat the reemergence for symptoms that afflict many people with Parkinson’s. These episodes are also referred to as OFF episodes. If approved, we project U.S. peak sales in excess of $500 million. We also have worldwide rights for this product and we are working on our strategy for commercializing it outside the U.S. We presented a poster of our Phase 2 data at the International Congress of Parkinson’s Disease and Movement Disorders, or MDS in San Diego last month. These data showed that patients experiencing an OFF episode treated with CVT-301 experienced significantly greater improvements in motor function than patients treated with inhaled placebo. The difference in improvement was already apparent 10 minutes after dosing and was durable for at least an hour, the longest time point at which patients were measured. Underscoring the potential importance of CVT-301, the presentation was included in the blue ribbon highlight session of the conference. It was one of only 19 selected from almost 1,500 poster presentations at this year’s conference and we were very happy about that. CVT-301 is based on our proprietary ARCUS technology for inhaled drug delivery. This technology is unique in its ability to deliver much larger quantities of drug product than ordinary dry powder technologies. This substantially increases the range of potential drugs that maybe delivered practically through the pulmonary route. How is this achieved? It’s achieved by formulating active drug into large porous particles, which behave aerodynamically like the much smaller particles that are found in ordinary dry powder formulations. Now, that means that we can deliver much larger quantities of drug that can be distributed deeply within the pulmonary track with a simple inhalation. And you see that illustrated here with the popcorn illustration, where you have ordinary dry powder granule represented on the left by a popcorn kernel and then the puffy porous particles by the popcorn, which explains why we can deliver more drug and still have aerodynamically favorable characteristics that enable them to be inhaled. So, we see the ARCUS technology as a potential source of additional products, where inhaled delivery may provide a therapeutic benefit to patients. We are actively assessing additional opportunities and we have selected the next product for clinical development, which is CVT-427 in acute migraine. I will talk about that more on the next slide. First, just underscoring the wide potential of ARCUS, last week, we announced that the Bill and Melinda Gates Foundation has awarded Acorda a $1.4 million grant to support development of a formulation and delivery system for a dry powder version of synthetic lung surfactant, which is used to treat neonatal respiratory distress syndrome, RDS. Moving to CVT-427, that’s a triptan that’s formulated for inhalation again with the ARCUS technology. It’s aimed at providing fast absorption and consistent relief of acute migraine. And by avoiding the gastric system, we anticipate that the inhaled triptan will be able to reach the brain within minutes of inhalation with absorption that’s targeted to be within a similar timeframe as that of a subcutaneous injection and also avoiding the oral route in these patients who suffer very frequently from severe nausea. We believe that there is significant segment of the market that would benefit from having an inhaled triptan and we expect to begin the Phase 1 study for this product before the end of this year. Moving to PLUMIAZ, this is a nasal spray formulation of diazepam. It is sprayed into the nostrils. It does not need to be inhaled. It is absorbed within the nasal mucosa. And this is being developed as a treatment for increased bouts of seizure activity also called seizure clusters. The only currently available therapy to treat seizure clusters at home is Diastat, which is a rectal gel. So, it’s administered rectally. It’s a rectal form of diazepam. We are planning a 505(b)(2) filing based on Diastat. And in May, we announced that we had completed discussions with the FDA. And based on the outcome of those discussions, we are conducting three clinical trials. If these are successful, we plan to resubmit the new drug application for PLUMIAZ in the first quarter of 2017 and we would anticipate that as a resubmission that would be a 6-month review. If approved, we project peak U.S. net sales revenue of more than $200 million. PLUMIAZ also has orphan drug designation. We also filed an 8-K this morning saying that we have amended our agreement with the former Neuronex equity holders from whom we bought the PLUMIAZ franchise. And this is regarding reducing certain future contingent payments. In consideration of those modifications and contingent payment reductions, we have agreed to pay the former Neuronex holders $8.7 million. Moving on to fampridine in post-stroke walking deficits, our Phase 3 study is continuing to enroll. There is no approved medical therapy that addresses the huge need of people who have walking deficits due to previous stroke. Importantly, we have made good progress in our collaborations to develop a once daily, or QD formulation of dalfampridine. We now have three prototypes from three independent collaborators that appear promising based on in vitro testing and modeling and we expect to move all three into Phase 1 clinical testing before the end of the year. With regard to our earlier stage pipeline – clinical pipeline, we expect to begin enrollment soon in our Phase 1 single ascending dose study of rHIgM22 in people with MS, who are experiencing an acute relapse. In addition to assessing safety and tolerability during an acute relapse, this study includes exploratory efficacy measures such as time to walk, magnetization transfer ratio, imaging of lesions and excuse me, lesion myelination in the brain and also various biomarkers. Regarding cimaglermin alfa in heart failure, in June we announced that we have stopped enrollment in the Phase 1b trial based on a case that met the criteria of Hy’s Law for hepatic toxicity. And we also subsequently received notification of a clinical hold from the FDA. Recall that we saw a Hy’s Law case in the previous Phase 1 study at the highest dose. In both Hy’s Law cases, the abnormal blood test returned to normal values within several days. The 23 patients who were dosed in the current trial will complete their follow-up. The results of that study are expected by the end of the year, including efficacy markers such as the six minute walk and cardiac ejection fraction data. We have ongoing analyses and non-clinical studies that are investigating the biological basis for the liver interactions and we plan to review these and other data from the cimaglermin studies from the FDA. With that, I will turn the call over to Mike, who will review our second quarter financials.

[Mike Rogers:]

Okay. Thanks Ron and good morning everyone. I would like to take a couple of minutes to walk you through some of the financial highlights of the quarter. And I will start with the P&L and then come back to the balance sheet. AMPYRA net revenue for the second quarter of 2015 was $105.5 million compared to $87.4 million for the same quarter in 2014. As Ron mentioned, sales this quarter were strong and we are narrowing our guidance for AMPYRA net sales from $405 million to $420 million, now to the new range of $410 million to $420 million. Revenue from ZANAFLEX for the second quarter of 2015 was $3.2 million, including our own sales as well as product sales to Actavis and royalties received on the Actavis sales of generic tizanidine. The AMPYRA royalty revenue from sales outside of the United States was $2.5 million for the second quarter of 2015. Alright, moving onto the expense side, total operating expenses for the second quarter were $108 million, including $8.7 million in share-based compensation expense compared to $86.2 million, including $7.6 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 SG&A guidance of $180 million to $190 million and we are lowering our R&D guidance to $140 million to $150 million from our previous guidance of $150 million to $160 million. As a reminder, guidance ranges excludes share-based compensation. On the tax line for the second quarter of 2015, we recorded a net tax provision of $1.1 million and cash taxes for the second quarter were $600,000. Finally, a note on our balance sheet, our financial position remained strong. At the end of the second quarter, our cash, cash equivalents and investments balance was approximately $302 million, and we expect to be cash flow positive for the year. I will now turn the call back over to Ron.

[Ron Cohen:]

Thanks Mike. So in summary, our pipeline is addressing major medical needs – unmet medical needs. It has the potential to create substantial shareholder value. We are advancing three high value late-stage clinical programs as well as three promising programs in earlier clinical stages. We also continue to view business development as a driver of shareholder value that can leverage the deep expertise at Acorda in neurology and specialty drug development as well as our outstanding commercial infrastructure and capabilities. And speaking of our commercials capabilities, AMPYRA continues to perform strongly and we are maintaining our focus on ensuring that all people with MS who may benefit from AMPYRA have the opportunity to try it. I will now turn the call over to the operator for Q&A.

[Operator:]

Thank you. [Operator Instructions] And our first question comes from Paul Matteis of Leerink. Your line is now open.

[Paul Matteis:]

Hi, great. Thanks for taking my questions and congrats on a good quarter. A couple on one times daily and CVT-301. First, Ron can you talk a little bit about what the Phase 1 studies are going to be for one times daily, are those going to directly compare to BID and try to show bioequivalence, are you going to look at multiple doses, are you going to look at potential dose something issues, just wondering how much clinical work you are going to be doing there? Thanks.

[Ron Cohen:]

Hi, Paul. I don’t have a specific answer for you, but the initial Phase 1 is meant to look at the PK profiles of the drugs to ensure that they actually meet our specifications. Based on the in vitro modeling, they look encouraging, but you never know until you actually put them into the human testing. So the initial testing is going to be just making sure that they meet our PK specifications. And based on that, we will be able to compare that to what the known specifications are for the current BID and so forth.

[Paul Matteis:]

Okay, thanks. And then on CVT-301, can you remind us what the other ancillary studies are that you are doing outside of the Phase 3, like a smoker study in that and what the status of those are and degree to which those are rate-limiting for the NDA? Thanks.

[Ron Cohen:]

Yes. So there are two sort of special studies that are relatively small to look at smokers, and then separately look at people with asthma. That’s pretty typical for inhaled therapies. Those are small. Those are not rate-limiting. And I guess that’s it.

[Paul Matteis:]

Okay, thanks. And just quickly and a follow-up on that, are smokers or asthmatics a meaningful proportion of the Parkinson’s disease patient population?

[Ron Cohen:]

Well, I would not think so. But I don’t have those figures. The short answer is no. I mean, obviously there are smokers, but in this country, smoking is not as popular as it once was. But having said that, I don’t have specific figures for you.

[Paul Matteis:]

Okay, thank you very much.

[Operator:]

Thank you. And our next question comes from Michael Yee of RBC Capital. Your line is now open.

[Judy Liu:]

Good morning. This is Judy Liu on for Michael Yee from RBC Capital Markets. Thanks so much for taking our questions and congrats on the quarter. So, two questions, first question is, you provided sort of an update on your IPR situation you expect the first decision on the institution to come in August, but do you have a clearer date than just August like you have an exact date by chance?

[Ron Cohen:]

Well, there is a deadline, which is August 26, but that does not mean that the decision will come on August 26. The PTAB has the ability to render decision anytime they want after the responses go in to the filing, which was up to three month mark. So it’s up to August 26.

[Judy Liu:]

Great. Thanks so much. And second question is on the post stroke study, could you, I guess remind us are we expecting an interim look at the Phase 3 results coming soon?

[Ron Cohen:]

We expect it in 2016. We have not narrowed that guidance yet, because obviously it depends on enrollment and when we get up to 50% mark people who have been dosed in the study. But yes, there is plan to be an interim look, it’s an adaptive trial design.

[Judy Liu:]

Alright, great. Thank you.

[Operator:]

Thank you. And our next question comes from Cory Kasimov of JPMorgan. Your line is now open.

[Unidentified Analyst:]

Hey, good morning. This is Morgan on for Cory and congrats on the quarter. I just had a quick question on the AMPYRA commercialization as far as the first step occurring I think on your last update you said that about 70% of new prescriptions are coming from this program. I guess, how much potential do you see is left in this program? Do you think you have maxed out the positive impacts here? I guess, what are the next levers of growth beyond this program?

[Ron Cohen:]

Well, I mean – I guess the short answer is, no. We have not maxed out on the program. We expect to see continued inroads. Obviously, once you are over 70%, there is only 30% left, but we do expect to see continued increased proportion of the new prescriptions coming out of first step. Now, it’s not going to be at the same rate that we have seen in the last several years. The important thing to realize is that it remains a driver of growth, in that it makes it so much easier for both the physician or clinician and the patient to try the drug and see if it works. So, it makes it easier. Psychologically, it makes it easier. Financially, it makes it easier in reality. So, it gives them every incentive to try the drug and see if it’s helping the patient. Once that happens and if it does help the patient, it then becomes easier in many ways to get access to commercial pay.

[Unidentified Analyst:]

Okay, great. And then just one other quick question on the ARCUS technology, so you have announced obviously 301 and 427, is the next direction with that program, the agreement announced with the Gates Foundation or are we looking at other possible directions as well?

[Ron Cohen:]

I am sorry, could you say is the next direction in the Gates Foundation or…

[Unidentified Analyst:]

The neonatal RDS is that the kind of the next frontier we will be going into with the ARCUS technology or should we connect other indications as well?

[Ron Cohen:]

Well, so 427 is the next substantial substantive one and substantial one that we are going into for migraine. It’s worth noting that for non-oral entrants into the migraine space up-to-date, they have captured anywhere between 1%, all the way up to 9% of the market depending. So, we think it’s a substantial opportunity for us and we are quite excited by it as again we see it as an unmet medical need. The neonatal respiratory distress is the collaboration through the Gates Foundation. And as I mentioned on the call, in and of itself as the program is initially construed is not aimed at a commercial product, it’s aimed at providing an easier way than the technology that’s needed and not available in developing countries, so providing the easier way to treat these kids who often die from these horrible respiratory complications. What we are very interested in there in addition is that what we will learn through developing ways of adapting the ARCUS technology in neonates could be very valuable in terms of expanding the range of products that we can then look at commercially.

[Unidentified Analyst:]

Okay, great. Thanks a lot.

[Operator:]

Thank you. And our next question comes from Mark Schoenebaum of Evercore ISI. Your line is now open.

[Salim Syed:]

Hey, Ron. Hey, Mike. Ron, I will spare you the question. This is Salim in by the way for Mark.

[Mike Rogers:]

Hey, Salim.

[Ron Cohen:]

Hi. Hey, Salim. I read your boss’ note this morning and I just….

[Salim Syed:]

Yes.

[Ron Cohen:]

You can just tell him we are going for the man bun.

[Salim Syed:]

Okay. I will let him know, assuming post a picture on Ron’s hair at some point.

[Ron Cohen:]

Yes, that’s not happening.

[Salim Syed:]

Thank you. Just two quick questions. Mike, the first one just on guidance, can you just give us a little bit more color how you are thinking about it? I mean, by my math, it implies negative volume growth, 8% price increase for the 3Q and 4Q over 3Q and 4Q last year and flat volume growth over last year. So, are you looking at more on a sequential basis or you guys are just being conservative, what’s going on there? And then just on BD, how are you guys prioritizing ex-U.S. acquisitions if at all? Thanks.

[Ron Cohen:]

Right, thanks. So, with respect to the sales and the sales trajectory, we don’t look at it quarter-over-quarter or year-over-year, quarter-by-quarter. We look at it year-over-year, because there are vagaries every year in terms of the patterns in the middle of the year and so forth. So, for example, last year when we reported at the third and fourth quarters, we said that we thought that there were one-offs, because there were unusually robust quarters. If you look back historically and those one-offs had to do with the ACA, ObamaCare bringing more insured patients into the system as well as new entrants into the disease-modifier arena, which brought people from the sidelines who had MS back into the doctors’ offices. So, we thought those were pretty much one-offs and we think we were right about that. So, we are not looking at third quarter over third quarter, fourth quarter over fourth quarter. If you look sort of on a year-over-year basis to-date where – that would equate to about 15% year-over-year growth at this point, so that does imply a reasonably good volume growth as well.

[Salim Syed:]

And then the BD question?

[Ron Cohen:]

Yes. And then with regard to the BD question, we are looking at a number of types of initiatives. So, we are very interested in – yes, we are very interested in ex-U.S. Most of our pipeline we own for worldwide distribution and commercialization. So, we would like to find a sound business development opportunity that with good industrial logic for establishing at least the European commercial base for the company, because we think that, that could be very valuable going forward as our pipeline develops. So, that’s one area, but we are also looking more broadly at opportunities that are either, particularly in late-stage development, similar to what you saw us do with Civitas, where we have a lot of confidence in the available products and data, but there is room for adding value through some additional development and also some in-market products, because we have an outstanding specialty sales force. They certainly know the neurology space extremely well, but specialty overall. So, having additional products to put in the bag even if they are not blockbusters would be incrementally accretive and also help us establish the groundwork for future growth.

[Salim Syed:]

Great. Thanks so much, guys. Congrats on the quarter.

[Mike Rogers:]

Thanks.

[Ron Cohen:]

Thanks.

[Operator:]

Thank you. And our next question comes from John Newman of Canaccord. Your line is now open.

[John Newman:]

Hi, guys. Thanks for taking my question and congrats on the continued progress. I just have a question about the inhaled triptan program. I am just curious what you know right now about what the adverse event profile might look like compared to some – some of the orals that are out there. It seems like it’s pretty well accepted that triptans work well in migraine, but the orals tend to have some trouble with the first event profile. I am just curious as to how you are thinking about that with the inhaled product if you can get around some of that – some of those problems? Thanks.

[Ron Cohen:]

Yes, it’s – I don’t want to get ahead of our SKUs here. We have yet to be in human beings with the product. Now, we have done a number of studies in animals to look at adverse events profiles and so forth. We are encouraged enough certainly to go into the clinic at this point. But until we get into the clinic, we are not going to know. I think it’s worth noting that triptans comprise I think over 70% of the migraine market right now, well over 70% even though they have some adverse event profiles. So, that also put it in context.

[John Newman:]

Okay, great. Thank you.

[Operator:]

Thank you. And our next question comes from Phil Nadeau of Cowen & Company. Your line is now open.

[Phil Nadeau:]

Good morning. Thanks for taking my questions. First one on the patent challenges, are legal consultants as I said in the past, in the ANDA case, we will often wait until challenges are decided so as to not waste time and resources litigating patents that no longer exist. Is that your expectation for your district court case? Will that likely be heard after the IPR process at least finishes its initial review?

[Ron Cohen:]

Yes. There is no way I can comment on the legal ins and outs. What I can tell you is we have Markman hearing date set next March. As you know, we have a court case set to begin in September of 2016. And we have a great legal team and we are prosecuting vigorously to defend our intellectual property.

[Phil Nadeau:]

Okay. The IPRs are accepted by September of this year. That process should be done by September of 2016.

[Ron Cohen:]

My understanding is that the IPR process, if they institute they have up to a year to complete the process, so that would be correct.

[Phil Nadeau:]

Okay. Then second on CVT-301, I was wondering if you have any plans to look at CVT-301 in morning off.

[Ron Cohen:]

We do as part of the lifecycle management for the product.

[Phil Nadeau:]

And when can those trials start?

[Ron Cohen:]

I don’t have a date for you yet. Our focus is to make sure we get the current trials done for registration. However, I can tell you the team is actively working on morning off studies as are planning for morning off studies.

[Phil Nadeau:]

Great. And then one last question on the AMPYRA quarter, are there any changes in inventory, where does inventory currently stand?

[Ron Cohen:]

Mike?

[Mike Rogers:]

Yes. No changes in inventory Phil.

[Phil Nadeau:]

Okay, thanks for taking my questions.

[Ron Cohen:]

Thank you, Phil.

[Operator:]

Thank you. And our next question comes from Ram Selvaraju of MLV & Co. Your line is now open.

[Ram Selvaraju:]

Hi, guys. Thanks very much for taking my questions. Just a couple of very quick ones, firstly with respect to FAMPYRA outside of the U.S., I just wondered if you could give us some color on what's happening there and how you anticipate FAMPYRA sales to evolve going forward, if there has been any direct potential reason for the reduced royalty number based on a year ago period. And then secondly, with respect to share based compensation, can you give us a breakdown of how you anticipate R&D share based compensation to evolve as well as SG&A base – stock-based compensation going forward. And then finally, with respect to cimaglermin, what would be the gating factor that – on which your decision to take forward the development of this project would depend, i.e. for example, if the FDA elected not to lift the clinical hold or maybe provide us with some perspectives on how likely the FDA is to lift the clinical hold in the relatively near future? Thanks.

[Ron Cohen:]

Okay. Ram, let me start with FAMPYRA. FAMPYRA is doing fine. Units and other measurements everything is moving along. There was a decrease, but the decrease is attributable to foreign currency exchange rates is what it comes down to. As you know, the dollar has significantly appreciated over the last year against the euro. And based on the reporting that we are getting from Biogen, it’s not in units, it’s not in like discounts and allowances, it’s in the exchange rate, so that’s one. Second question was?

[Ron Cohen:]

Second one about cimaglermin.

[Mike Rogers:]

Share based compensation, the only thing I will mention with share based compensation, we have been pretty consistent. I think the numbers show a trajectory. It’s largely dependent on the growth of the company. There has been headcount growth in the company. But also recall, as a sort of a special item is that we acquired Civitas in the fall and brought on a great good size operation up in Chelsea, Massachusetts. So that would account for an increase a little bit over our typical average increase so far what we have seen in 2015. Other than that, there is nothing to report on that.

[Ron Cohen:]

I mean it’s worth noting, I mean we brought in another 50 to 60 employees as a result of that acquisition. So that was a special event.

[Mike Rogers:]

And then cimaglermin?

[Ron Cohen:]

Right. And then so let me follow-up on the cimaglermin, so as I mentioned earlier Ram, we are still enthusiastic about the potential for cimaglermin, clearly, the Hy’s Law case is a serious issue and it could ultimately not be surmountable. However, having said that we think that the results of the current study are going to be very important to look at in terms of what the potential benefit of this molecule could be in a very, very sick population with essentially a fatal disease. So that’s an important factor in looking at the risk benefit. And the second one is it’s hard to use the word silver lining, but let me just say that some of the interesting factors with these two Hy’s Law cases are that both of them returned back to normal values, both patients returned to normal liver blood values within several days. So, that actually is a better prognostic sign than other types of Hy’s Law cases that you would see. And then our laboratory is working – our deep folks are working on other aspects of that in terms of looking at what the mechanism might be. So, where we are right now is we have additional work we are going to do. We are going to look at the data from the clinical trial by the end of the year. And at that point, we will have a much clearer picture of where we stand and what our conversations with the FDA are going to be.

[Ram Selvaraju:]

Okay, thank you very much. That’s very helpful. Thank you.

[Ron Cohen:]

Okay, thank you.

[Operator:]

Thank you. And our next question comes from [indiscernible] of Stifel. Your line is now open.

[Unidentified Analyst:]

Hi. [indiscernible] on behalf of Tom Shrader from Stifel. Good morning everybody and thank you for taking my question.

[Ron Cohen:]

Good morning.

[Unidentified Analyst:]

I have a quick question regarding manufacturing, so is manufacturing for dalfampridine and stock is going to be different than manufacturing for MS, which is a smaller indication, do you plan some extension?

[Ron Cohen:]

The manufacturing is done through Alkermes who had bought the original manufacturing capability from Elan. So, that’s for the current AMPYRA formulation. Now, with the new formulation assuming that we have a good QD formulation, Alkermes certainly has the right to manufacture that. They may or may not choose to exercise that right. And if not, we have other external vendors that we would turn to.

[Operator:]

Thank you. And our next question comes from Bill Tanner of Guggenheim Securities. Your line is now open.

[Ron Cohen:]

Hey, Bill.

[Bill Tanner:]

One is just on the post-stroke, the data from the, I am just trying to figure out, when you see the data for the BID and understand that you guys are advancing or working on several formulations, but what do you think that’s going to tell you as it relates to the translatability to the QD?

[Ron Cohen:]

Could you...

[Bill Tanner:]

Well, I am just trying to – what I am thinking is if the trial is a success, then you can say okay, it’s great, but the real commercial opportunity I would think would lie with the QD. So then you would feel comfortable that the QD is going to – the data is going to be somewhat replicatable with the QD. Alternatively if the trial is a failure, would you think then the QD would also not work. I am just trying to understand the merits of going ahead to establish the fact that dalfampridine is effective for post-stroke, but then changing the formulation presumably from a BID to a QD, I am wondering how you kind of think about the translatability of the data to when you change that dosing paradigm?

[Ron Cohen:]

Well, so first of all, I think it’s important to note that before we get to the QD that depending on what happens to our patent challenges, if we are able successfully to defend our intellectual property around MS and the AMPYRA it’s possible that we could use a BID in stroke going forward. The QD, yes, we think that we would be able to tell from the current BID trial that we would be able to read through potential and obviously until you actually do the study you never know. So, we designed the study with the BID and then interim look to give us confidence that we are in fact on the right track in post-stroke walking deficit with the BID formulation. If we get a signal of that kind from the interim look, we would have the confidence to go into a second Phase 3 trial with the QD formulation or as we have said before even to stop the current study and then go forward with two parallel studies with the QD and we’ll have to wait until we get there to see which way we go.

[Bill Tanner:]

Okay. And that was kind of one of the things that I was wondering is would it make sense to stop the BID study or you kind of pretty far into it so that it might make sense just to go ahead and complete it versus stop it?

[Ron Cohen:]

No, the plan very much includes assessing whether at the time of the interim analysis depending on what we hear back, whether it would make more sense to actually stop the trial, do a more complete analysis and then use those results to power two parallel phase [ph], because there is we think a probability or very good possibility that if you did that, you would wind up with two smaller and much more focused and well-powered studies that you could do with the QD based on having a larger essentially now retrospectively a Phase 2 study that you could power off of in addition to the one that we had before.

[Bill Tanner:]

Okay, thanks. It’s helpful. And then maybe just thoughts on BD activity, I mean obviously, this was a big deal that you guys did. And I would assume that you are always looking for assets, but just kind of conceptually or philosophically, you are taking the foot off the pedal a little bit, full speed ahead, how should we think about that?

[Ron Cohen:]

We are, as I pointed out in my, I think in my summary slide, we have three pillars that we are building the company on and hopefully building a lot of shareholder value going forward. One of those pillars is BD. So, we are not at all taking our foot off the pedal. We are very aggressively looking at BD opportunities and looking at ways to use that to leverage what we already have, the assets we already have in the company.

[Bill Tanner:]

Okay, great. Thanks very much.

[Ron Cohen:]

Thanks, Bill.

[Operator:]

Thank you. I am showing no further questions at this time. I’d like to turn the conference back over to Dr. Cohen for closing remarks.

[Ron Cohen:]

Thank you very much and thanks everyone for joining us. Have a great day. We will see you next time.

[Operator:]

Ladies and gentlemen, thank you for participating in today’s conference. This does conclude today’s program and you may all disconnect. Have a great day everyone.