Acorda Therapeutics, Inc.
Q3 2014 Earnings Call Transcript

Published: 31 Oct 2014

[Operator:]

Welcome to the Acorda Therapeutics Third Quarter 2014 Financial Results Conference Call. [Operator Instructions] 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, Ms. Felicia Vonella, Director of Investor Relations at Acorda Therapeutics. Please go ahead. Thank you.

[Felicia Vonella:]

Thank you, everyone, and good morning. 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 the 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 Ron Cohen.

[Ron Cohen:]

Thanks, Felicia. Good morning, everyone. Today, I'll provide an update on AMPYRA, I'll recap the strategic rationale around our acquisition of Civitas and I'll review our product development programs. Mike is going to review the third quarter financials and after that, we'll open up the call for your questions. Starting with AMPYRA. I am pleased to report that the third quarter net sales were $96.4 million, that's up 24% from third quarter last year. Year-to-date, net sales in 2014 are up 18% compared to the first 3 quarters of last year. A number of factors contributed to this strong performance. Our educational programs have steadily increased awareness among consumers, and neurologists increasingly view AMPYRA as a key MS therapy and a standard of care. In addition, our First Step Program, which we launched 4 years ago, continues to be a meaningful component of the marketing effort. More than 60% of people who start on AMPYRA now do so through First Step. And we're finding that patients who start on First Step have a higher persistence and compliance rates over time compared to the non-First Step patients. But based on this performance, we're increasing 2014 AMPYRA net revenue guidance, from the previous guidance of $328 million to $335 million, now to $345 million to $350 million. And we'll provide guidance on 2015 net sales in January. Now last week, we announced that we've completed the acquisition of Civitas Therapeutics. I'll review some of the highlights of that transaction in the next few slides. As part of the transaction, we obtained worldwide rights to CVT-301, a Phase-3 ready inhaled formulation of levodopa, or L-dopa, for the treatment of OFF episodes in Parkinson's disease. CVT-301 is a strong strategic fit for Acorda. It's a late-stage asset with compelling science, clear clinical need and the potential to be a transformative therapy for people with Parkinson's disease. It also aligns with our core development and commercial expertise and it provides a potential starting point for us to expand globally. Now we're projecting that if approved, peak sales in the U.S. alone could exceed $500 million. In addition to CVT-301, we acquired the proprietary ARCUS technology, which is a dry powder pulmonary delivery system that we believe has applications in multiple disease areas. And for example, an inhaled triptan product is already in preclinical development for the treatment of migraine. We also acquired a GMP manufacturing facility for products based on the ARCUS technology. This facility is producing CVT-301 clinical trial material and it's already been scaled up to manufacture commercial product. We also have retained the Civitas team, who have decades of experience in the technology and in neurology and various aspects of product development. And in that regard, I'd like to take this opportunity to recognize the remarkable work that the Civitas' team has done to bring CVT-301 and the ARCUS platform to this promising stage of development. A little background on Parkinson's. Parkinson's is a progressive neurodegenerative disorder that results from the gradual loss of certain neurons in the brain that are responsible for producing dopamine. It's characterized by symptoms such as tremor at rest, rigidity and impaired moment. The standard of care for Parkinson's is oral L-dopa, but there's significant challenges in creating a dosing regimen that consistently maintains therapeutic effects. The unpredictable reemergence of symptoms is referred to as an OFF episode. And current strategies for treating OFF episodes are widely regarded as inadequate. People experienced OFF episodes at different intervals, and the majority of patients have multiple OFF episodes per week. In the Phase 2b clinical trial, which recruited people with OFF episodes, the average number of uses of CVT-301 was twice daily. The market research we've conducted to date with physicians, payers and patients indicates a large market need, more than 70% of people in the U.S. with Parkinson's are treated with L-dopa and about half of those will experience OFF episodes within 5 years of starting therapy. Overall, we believe there are approximately 350,000 people in the U.S. with Parkinson's, who be eligible for CVT-301 therapy. CVT-301 is based on the proprietary ARCUS technology platform, which we also acquired in the deal. This platform allows delivery of significantly larger doses of medication than are possible with conventional dry powder formulations. This in turn provides the potential for pulmonary delivery of a much wider variety of pharmaceutical agents. Turning to the Phase 2b data that was announced last spring. This was a study in 86 patients, again, presented at the American Academy of Neurology Annual Meeting. Motor responses were evaluated during regularly scheduled clinic visits using the unified Parkinson's disease rating scale or UPDRS Part III. This is a standard measure in both clinical trials and clinical practice. Efficacy was also evaluated during outpatient use with diary-based outcome measures. CVT-301 met the primary endpoint of mean improvements in the UPDRS, demonstrating clinically meaningful reductions in average UPDRS III motor score versus placebo at time points ranging from 10 to 60 minutes post administration and the P value was less than 0.001. With self-administration during at home use, CVT-301 use was not associated with any increase in either non-troublesome or troublesome dyskinesia. All doses of CVT-301 were safe and well tolerated and the CVT-301 inhaler was also shown to be easily utilized by Parkinson's disease patients even in their OFF state. We expect to begin the Phase III program by Q1 2015. The program includes a Phase III efficacy trial and safety extension. 2 PK studies in specific subpopulations seen here and a separate safety study will also be required and this can be completed following the NDA submission. The regulatory path will be a 505(b)(2) filing referencing the branded L-dopa product [indiscernible]. Based on Civitas' interactions with the FDA, we believe a single Phase III efficacy study will be needed for filing, supported by the existing Phase 2b data. Top line details of the Phase III efficacy trial are shown here. The primary outcome measure is similar to the primary outcome in the Phase 2b study, and we expect results from this trial in 2016, followed by an NDA filing in late 2016. The CVT-301 adds another late-stage opportunity to Acorda's high potential pipeline. Our 2 highest priority programs are dalfampridine and post-stroke walking deficits or PSWD, and CVT-301 and Parkinson's disease. We're on track to initiate the Phase III dalfampridine trial by the end of this year and study details are now posted on ClinicalTrials.gov. The rHIgM22 and GGF2 programs are expected to read out in early 2015 and second half of '15, respectively. And we're continuing to discuss the PLUMIAZ and NP-1998 programs with the FDA. The acquisition of CVT-301 and the ARCUS technology platform underscores our focus on aggressively building shareholder value. And in that regard, we're in the process now of the reprioritizing the company's is R&D program. We're going to provide an update on this process in early 2015. I'll now turn the call over to Mike, who will review the financials for the quarter. Mike?

[Michael W. Rogers:]

Thanks, Ron, and good morning, everyone. AMPYRA net revenue for the third quarter of 2014 was $96.4 million, a 24% increase over AMPYRA revenue of $77.8 million for the same quarter in 2013. Through 3 quarters, AMPYRA net revenue was $256.3 million and 18% increase over the corresponding period in 2013. As Ron mentioned, we are increasing our guidance for AMPYRA net sales from a range of $328 million to $335 million, up to $345 million to $350 million. Overall revenue from ZANAFLEX for the third quarter of 2014 was $4.5 million, and that includes 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 U.S. was $2.5 million for the third quarter of 2014 compared to $2 million for the same quarter in 2013. Moving on to the expense side. Total operating expenses for the quarter ended September 30, 2014, were $85.1 million, including $7.3 million in share-based compensation expense compared to $73.5 million, which includes $6.5 million in share-based compensation expense for the same quarter in 2013. We are reiterating our 2014 R&D expense guidance of $60 million to $70 million and our SG&A expense guidance of $180 million to $190 million. As Ron mentioned based on our recent acquisition of Civitas, we are in the process of reprioritizing the company's programs. I want to highlight that regardless of any reprioritization. We're expecting a significant increase in R&D expense in 2015, largely related to the fact that we will be conducting Phase III clinical trials that we didn't have in 2014. We will provide more specific expense guidance in January of next year. A brief note on the tax line. On a year-to-date basis, our effective tax rate is 44%, which translates to our tax provision of $13.4 million for the 9 months ended September 30. However, cash taxes for the first 9 months of 2014 were $1.8 million. There are a number of factors that can cause significant differences between the effective tax rate shown in our financials and our actual cash tax position. As a reminder, we had available federal NOL carryforwards of approximately $174 million as of December 31, 2013, which are available to offset future taxable income. For this reason, we do not currently pay substantial U.S. federal income taxes and we adjust for noncash tax portion in our non-GAAP presentation. Finally, a note on the balance sheet. Our financial position remains strong. At the end of the quarter at 9/30, our cash equivalents and investment balance was $766.4 million. Our current cash, cash equivalents and investment balance is approximately $275 million. And this factors in the purchase price and deal expenses related to the Civitas transaction as well as the cash we acquired from the Civitas balance sheet. With that, I'll now turn the call back over to Ron.

[Ron Cohen:]

Thanks, Mike. As we discussed in recent quarters, the 3 pillars of Acorda's growth strategy are

[Operator:]

Certainly. [Operator Instructions] And your first question is from the line of Michael Yee of RBC Capital Markets.

[Michael J. Yee:]

Two questions. One is with regards to the Civitas program. You obviously required a factory. Just trying to understand within your clinical development plan and the studies you laid out there, what other things need to be done as regards to manufacturing, stocking up supply, CMC approval, those types of things? And I presume there's going to be a big ramp-up of R&D because of all that and all that drug is being booked as R&D. And therefore, going forward when you launch of the drug in '16 or '17, all of that drugs sold is at -- COGS would be 0, is that correct? And then secondly, you mentioned something very interesting, which is reprioritizing your R&D programs. Can you just expand on that a little bit? I know, you'll get specific in January, but can you expand on that? What does that mean? Does that mean you'd consider out-licensing things, is that how should we think about it?

[Ron Cohen:]

Okay. Thanks, Mike. So with regard to the manufacturing facility, the facility is already scaled up to commercial scale. It's a full GMP manufacturing facility. The team there has done a phenomenal job. They have been engaged in ongoing discussions with FDA, every step of the way. So we've been very pleased with the way that relationship has gone. And they have -- there have now scaled up, manufactured to the point, where we actually could launch with the facility as it is right now. So that's a big plus. I'm going to let, Mike talk to you with respect to the financial treatment.

[Michael W. Rogers:]

Yes, Michael. I guess, as this is typical -- I don't know but big pharma may view this a little bit differently as this is bit differently, as it's typical for companies of our side. Anything that you manufacture for commercial use prior to typically approval would be expensed as R&D. And then so you're -- some of your initial load or your initial sales are at 0 or low cost of goods. So you're correct on that.

[Ron Cohen:]

And then with regard...

[Michael J. Yee:]

Have you stocked up like a year's supply of drug already? Have you already done or that's all be -- that's all going to be done in '15?

[Ron Cohen:]

No, no. There's need to do that at this stage. There is a plan in place and so that's -- it's locked and loaded, but there is no need to actually incur that expense right now. With respect to the reprioritization, when we look at the profile of the company now that we've added Civitas, it's obviously very exciting and we think it is potentially transformative for the company and for the shareholder value. And as we look at that and we look at our pipeline and the expense line that goes with it, it's clear that we need to -- as a management team, take a fresh look in the context of the Civitas additions at the whole pipeline and just make sure that the returns on investment are at a level that we believe matches up with an aggressive focus on building shareholder value. So that's what we're doing now as a management team. There are no decisions yet with respect to any of your questions, how we're going to sell off things, what are we going to do. This is merely by way of telling people that management has a focus on aggressively building shareholder value and we're going to take that focus to the pipeline and make sure that anything we're investing in has a very clear return at a level that we think justifies the investment.

[Operator:]

Our next question is from the line of Mark Schoenebaum with ISI Group.

[Salim Syed:]

This is Salim in for Mark. Two questions just on AMPYRA. So looks like that this quarter was particularly strong. Could you just maybe comment on inventory and growth, and then if that had any impact? And then also, for the implied guidance, by my math, it looks like 4Q is supposed to be down somewhere in the range of 2% to 8% versus 3Q. Can you just comment on that as well?

[Ron Cohen:]

Yes, Salim. So it was a great quarter. And I think when you look at our projections for the 4 -- the implied projections for the fourth quarter in the range, I'll point out a few of the highlights here. Number one, if you look -- let's say at the top of the range that we have for the new range at $350 million, that would imply -- even though that it's a slight down, as you pointed out, from third quarter, that would imply about an 11% increase over the fourth quarter of last year. And obviously, the overall yearly projection is now higher than we had at the beginning of the year. So all of that is good news. The reason we're not being more aggressive in the projection is that the third quarter was particularly strong even against the context of an overall strong year, which we saw in the first 2 quarters. The -- as I said during the slide show, we believe we understand most of the reasons for that. Inventory is not a reason for that. Let me just state that flatly. Inventory is not a reason for that. It is -- we have tight control over our inventories now, much tighter than we've ever had in the past. And inventory levels now are, if anything, tighter than they've been in the past. So that is not a factor at all. This is a reflection of actual TRxs and actual sales of the drug. Now having said that, there are always fluctuations quarter-over-quarter, and we don't want to take a single particularly strong quarter and impute that going forward, full bore. So that's what you're seeing in our overall projection. We want to get comfortable over the next few quarters about what the change in trend this year really means, and how that plays out on a quarter-by-quarter basis or a seasonal basis, because this has all been going on just over the last year. Again, we believe we understand the reasons for it in terms of our education programs, increased usage of First Step and so forth, but we do want to be careful. And then one other thing to consider, just by the way of example of what I'm talking about, is that in the third quarter for example, we had more selling days or more shipping days this year, right? And a single shipping day increase on the right day can account for a pretty meaningful swing between the third and the fourth quarter. So we're just being, I think, appropriately conservative. Overall, the news is very good. We're having a very strong sales year for AMPYRA and that was reflected even more in the third quarter.

[Operator:]

And our next question is from the line of Yaron Weber of Citi.

[Kumaraguru Raja:]

This is Kumaraguru Raja in for Yaron. So for the rHIgM22 antibody, what are you seeing in terms of penetration in the brain in, like, animal models, and how does it -- what are you expecting to see in, like, human patients?

[Ron Cohen:]

Yes. This was actually covered in an R&D Day we had that -- or actually not that we had, but the New York Academy of Sciences had earlier this year, in which they had an entire day on remyelination. So we have had radio labeling studies in animal models, mouse models. And really, it's hard to know how that translates. What we can say is that the antibody given systematically does get in to the brain in animal models, so that's clear. We're going to have to wait and see what the story is in humans, although it's encouraging that in animals we see it. And we're just going to have to see what the results are in the human trials before we can comment further.

[Kumaraguru Raja:]

And also a question on the First Step. Like in the press release, you said that there's a higher compliance and persistency in this patient. Is there any specific reason for that?

[Ron Cohen:]

Is there a specific reason why patients on First Step are more compliant?

[Kumaraguru Raja:]

Yes.

[Michael W. Rogers:]

And more persistent?

[Kumaraguru Raja:]

Yes.

[Ron Cohen:]

Yes. Look, that -- I'm sure, there are. We can speculate about why that might be. Clearly, if you have someone who is getting free drug, is not paying anything out of pocket upfront and they try the drug. For them to make a decision to go ahead and then pay for the drug after 2 months, that's a bigger hurdle than if you just put them on upfront and they're paying a co-pay upfront and then they made decide, "Well, I'll just -- maybe I'll see how this is going." But if they actually then, after 2 months, for the first time have to pay, that adds another level of difficulty, right, to making that decision. So the odds are that when they make that decision if they're on First Step, they're even more convinced that the drug is really working for them and more likely to stay on drug.

[Operator:]

And our next question is from the line of Philip Nadeau of Cowen.

[Philip Nadeau:]

Ron, one on AMPYRA then one on CVT-301. So on AMPYRA, I guess I'm still trying to understand what has produced the growth and what's changed through the year. I think early in the year, you guided to modest organic growth for AMPYRA. But clearly, you had programs that you're attributing the uptake to in place of that time. So have those programs been more effective than you thought or has their success been earlier than you thought -- earlier in the year? And then kind of a related question, the total IMS scripts haven't really moved much. And so, again, is it just that the scripts aren't accurate or is something else going on?

[Ron Cohen:]

Okay. So we're obviously always limited, Phil, in how certain we can be about what is driving the growth. We can point to factors that we know about that are contributing. How much each factor contributes on a relative basis is difficult even for us. But I think it's clear that the education programs and the promotional programs are playing a role. Because you get to a point where there's an accumulative effect, if you will. Where you're out there, you're delivering the messages, you're delivering the messages and we know from just from basic marketing 101, that most people -- most physicians, even patients, don't absorb and act on a message the first time they hear it. And in fact, if you look at sort of classical marketing, they'll tell you it's usually 6 to 7 exposures to a message before they take action, that's an average. Some people will be early adopters, some people take longer. So we're getting to a point where people have heard the message enough and in enough different ways, and they've seen the data. And also, whether the prescribers have had more and more experience and seen more and more patients of theirs have results from the drug. So there is that aspect of just accumulative gathering of force. So I think that's part of it. Clearly, First Step continues to add to that. Because now that we have over 60% and that's continuing -- that's been continuing to increase. Those patients clearly are staying on drug longer, more persistent for the reasons that I just discussed on the last question. So you put that all together and I think that gives you a sense of it plus the fact that there probably has been some expansion of the MS market due to the new oral entrance. I can't account for IMS. I can tell you, from an internal tracking point of view, our TRxs are up and they're up very healthily this year.

[Philip Nadeau:]

That's helpful. And then on CVT-301, can you talk a little bit more about the safety, specifically the pulmonary safety data that you think the FDA will want to see? It does look like you have the efficacy study, a long-term safety study, safety in asthmatics and safety in smokers, so can you give just some sort of global understanding of exactly what the FDA wants to see, how many patients and what pulmonary measures you'll need to take in all those safety studies?

[Ron Cohen:]

Yes. I don't have a very specific answer for you on that. It's just not in my head right now. But I can tell you that the Civitas team and our medical teams do. There are specific guidelines that are published for this sort of thing. I believe it's -- typically on the safety, 100 patients for a year, 300 patients for 6 months, who've have been taking it. And then you do an array of accepted pulmonary function tests, which is all going to be part of the safety study. So all of that is baked in, all of that has been discussed explicitly in detail with the agency, with the FDA, as have the entire safety program. So from animals to humans, the work they've already done with pulmonary function test and the previous clinical trials, all of that has been in lockstep with what the agency has recommended. And we're very comfortable that the agency is both aware of everything that we're doing and also is accepting of what we're doing. And it's worth noting that there had been no safety signals so far, and specifically, no pulmonary safety signals so far, even in patients.

[Operator:]

Our next question is from the line of David Amsellem of Piper Jaffray.

[Traver A. Davis:]

It's Traver Davis on for David. Just to kind of piggyback off the last question that was asked on the Civitas product and on the safety. But how are you thinking about the regulatory risks here, given the of incidents of cough? And also, the FDA sensitivity to pulmonary delivery products for non-pulmonary conditions? And then just a second on that product, how are you guys thinking about pricing here? Is this something that gets priced more like other brand, adjunctive therapies in PD? Or say closer to where do we dopa is priced? And then -- and just lastly, any update -- I missed it, on the Diazepam Nasal Spray product and how you guys thinking about that opportunity now that it looks like Upsher-Smith's product may have a little bit of head start now?

[Ron Cohen:]

Okay, Traver. That sounds like many questions in one.

[Traver A. Davis:]

Yes, yes. I apologize, I apologize. I tried to...

[Ron Cohen:]

No, it was deftly done, deftly done. So with respect to the safety profile, I'd like to point out -- All right. So with respect to the safety profile in cough, there were, I believe, 4 reports of cough in an 86-patient study on the drug group and one on the placebo group, all of those were mild. They were rated as mild. No one dropped out, as a result. We considered it a nonevent from that study. There has been, so far, no indication of safety issues with respect to this product and in particular, with respect to the inhalation. And it's not uncommon that when people use any kind of inhaler, that some of them might have a tickle and maybe have a little cough that's mild. So I would not read anything into that. With -- does that answer your question on the cough?

[Traver A. Davis:]

Yes, absolutely.

[Ron Cohen:]

Okay. With regard to pricing, we don't have any numbers to give you. It's early days for that. But we have done as part of our diligence, a full market analysis, our commercial team has been all over that. We actually even did some primary payer research, in addition to prescriber and patient research. And what we can tell you is that, no matter which way we cut it, in terms of the pricing sensitivity, the toggle is if you increase the price beyond a certain level, you risk reducing access. If you bring the price down, you get to increase access in general. And we believe there's about 350,000 patients in the U.S, who could benefit from this therapy. We also believe, as a company, it's our responsibility to make sure that they have as much access as possible. So any way you cut it, when you look at the numbers and you look at reasonable pricing assumptions, we still get to in excess of $500 million U.S. market opportunity. And then with regard to PLUMIAZ, we can't -- we don't have anything new to say about that. We are still actively engaged in conversations with the FDA and as soon as we have a conclusion, we're going to come out and tell you all.

[Operator:]

Our next question comes from the line of Bill Tanner of FBR Capital Markets.

[William Tanner:]

A couple of for you, Ron. Just on the AMPYRA performance. Just curious some of the feedback from the field, if that's giving you reason to maybe think about increasing the marketing support. It sounds like the DTC efforts are paying off. And I'm wondering if incremental spend would get incremental usage or you think you just a bit kind of playing catch-up to what's been done in the past? And then, just to go back to PLUMIAZ actively discussing things with the FDA. Is the contemplation still that there is nothing going to be required as it relates to any outcome studies?

[Ron Cohen:]

So we look at this repeatedly to your question. And you'll be happy to know we have certain board members who ask the same question about the marketing spend on a regular basis. So we're all over that. I would tell you that one of the key toggles that I didn't mention earlier, but I really should have because they deserve, is that our sales force has been doing a phenomenal job out there, in terms of hitting their targets, getting in front of prescribers, getting the messaging out, responding to issues and questions. At this point after having been doing this for well over 4 years on the launch, the sales force is at peak -- at a peak of efficiency and performance. And they are doing a fantastic job. We do not feel that we need to increase the size of the sales force. They are doing -- we're fully covered for the prescriber universe that we need right now. In terms of promotional spend, likewise. We've actually reduced the promotional spend commensurate with the stage of the product. And we don't see any reduction in efficiency of our promotional activities. In fact, on a cost-effective basis, it's more efficient now. Because we are heavily using digital, marketing techniques, where we can target at a much finer level than we have ever could before. And we're seeing -- we can actually track results far better than we used to before. So whereas you have the old line about, I know 50% of my advertising dollar is wasted. I don't know which 50%. We now know, maybe not the whole 50%, but we know a lot more of it. So we can pare away the stuff that hasn't been working. And that's what we've been doing. So the short answer is, no, we feel we are at just the right level of spend now. Now with respect to PLUMIAZ, I don't have any more that I can say right now. Our view has been all along that based on the CRL, we would need to do another clinical study or studies depending on where the conversations with the agency go. And we are still trading thoughts with the FDA, back and forth. Hopefully, we'll come to a conclusion on that soon, and then we'll be able to give you more detail. We -- just to be clear, we like this product a lot, we always have and we're pushing forward to the FDA.

[William Tanner:]

And if I could just follow-up quickly on that, as it relates to the ARCUS technology, it seems like if you wanted to leverage that, you could really transform the nature of the pipeline. I guess you'll speak to that next year. But I'm just curious if we should be thinking about PLUMIAZ as also being potentially the -- I don't want to say the target, but the subjective of reprioritization or you're still very much committed to taking that?.

[Ron Cohen:]

So It is fair to say that we are really happy with the ARCUS technology and that our teams are -- our R&D team is in -- already in close contact with the Civitas' R&D team, now it's all part of one R&D team. And we are looking at where we should be taking the ARCUS technology next.

[Operator:]

Our next question comes from the line of John Newman of Canaccord.

[John L. Newman:]

It's a question about AMPYRA and your guidance for this year. So it looks like your guidance implies about 3% to 4% of demand growth above the 10% price increase that you take on an annual basis. I'm just wondering, is that sort of a good way to think about AMPYRA long-term or do you expect that the efforts that you put in place should sort of accelerate that growth? Or do you think that the growth will sort of steadily settle in?

[Ron Cohen:]

Yes, John. The earlier part of this year, we told everyone that we were expecting low single-digit organic growth, right in line with what you just said in your question, coupled with the price increase. And one thing to say about the price increases, we took 10.75% the last 2 Januarys in a row. Remember that -- that we don't realize the benefit of that entire increase because you have pull out the DNA lines. So it's a smaller number that's net to us in terms of looking at what the growth is. But if you look at, let's say, 2013 over 2012, I believe that amounted to about a 10% year-over-year growth, if I'm remembering correctly, factoring in the organic growth and the net effect of the same 10.75% increase. So you kind of look at that and get a sense at least for 2013 over 2012 how that translated. Moving forward, it's difficult to say because the organic growth this year has been higher than we projected at the beginning of the year. And that's all to the good, obviously. And we do believe that our programs have had a significant role in that. But because we're just seeing the results of that this year, it's very difficult to project what the longer-term trend will look like off of that. So we need several more quarters under our belt to get a better handle on that.

[John L. Newman:]

Okay. And I had one additional question. What can you tell us about the status of the once daily formulation work for dalfampridine, which could potentially be tested in a stroke study at some point?

[Ron Cohen:]

Yes, that work is ongoing. We have several collaborators now that are working in parallel. And our intention is basically spreading our bets so that, hopefully, we have the best chance of getting a good usable formulation the quickest out of that process. And our intent would be that whoever gets there first with the right formulation, that's the one we'll use.

[Operator:]

Our next question is from the line of Thomas Shrader of Stifel.

[Thomas Shrader:]

Some questions on CVT-301. Given that First Step is working so well, should we envision that kind of program for the new drug? And is that a significant expense we should be in thinking about?

[Ron Cohen:]

Well, Tom, I think it's early to be thinking about that. And I think it's worth reflecting on the fact that they're 2 very different types of drugs. In AMPYRA, you have a specialty-only distributed and closed system distributed drug through specialty pharmacies, drop shipping to all patients and so on. So it's a different level. We envisioned that CVT-301 would be distributed through more conventional retail channels, for the most part, and would really be a different tier of drugs. So it's not clear that we would need to go into something as involved as the First Step program. But we'll be accessing all possibilities we can think of as we go forward.

[Thomas Shrader:]

And a quick additional question. I don't know how patients feel after a rapid blast of L-dopa but is there any concern this is an abusable drug? Has the FDA bought that up?

[Ron Cohen:]

Yes. There is 0 concern that this is an abusable drug. If you think about it, the drug has been in use for 40 years or something as an oral formulation. There's absolutely no hint of abuse potential for this drug.

[Operator:]

Our next question is from the line of Mark Schoenebaum with ISI.

[Salim Syed:]

So Ron, I don't mean to delay with the point here. But you mentioned something about shipping days being more in this quarter. I just wanted to clear, do you know exactly how many shipping days more and versus what quarter are you comparing to, is it 3Q of last year or 2Q of this year?

[Ron Cohen:]

No, we're comparing it this year to the fourth quarter. The third quarter this year to the fourth quarter and the anticipated shipping days. And I don't have the exact number in my head, no.

[Salim Syed:]

Okay. Do you a rough -- is it single -- like, low single-digit?

[Ron Cohen:]

Yes. No, I don't have any rough or anything. Although -- I mean, let's face it, it would be unusual to have more than a small handful of the days different. It's not the number of days, it's the quality of the day. It depends on -- we have specific days of the week, where most of the shipping occurs -- actually, essentially, all of the shipping occurs. And if the month includes an extra one of those days, it -- there's a meaningful ship from one month to the next or from one quarter to the next.

[Operator:]

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

[Ron Cohen:]

Well, it was a great quarter from our perspective, and certainly hope you agree. We're looking forward to reporting on the year in January. And meanwhile, happy Halloween, everyone.

[Operator:]

Thank you, ladies and gentlemen, for participating. That now concludes your conference. You may now disconnect. Have a great day. Thank you.