Antares Pharma, Inc.
Q4 2014 Earnings Call Transcript

Published: 12 Mar 2015

[Operator:]

Ladies and gentlemen, welcome to the Antares Pharma, Fourth Quarter 2014 Operating and Financial Results Conference Call. Throughout today’s recorded presentation all participants will be in a listen-only mode. After the presentation there will be an opportunity to ask questions. I will now hand the conference over to Jack Howarth, Antares Vice President of Corporate Affairs. Please go ahead, sir.

[Jack Howarth:]

Thank you Orlando and good morning everyone. This morning we released our fourth quarter and full year 2014 operating results and recent achievements and a copy of the press release can be found on the Antares website at www.antarespharma.com under the News section. In addition, this morning’s teleconference also contains an interactive slide presentation. If you are currently accessing the audio only portion of our call, a copy of the slide presentation has been posted on the Investor Information section of our website under the Presentations tab, which is found under the Reports and Documents tab. Before we begin, please be advised that during the course of this call we may make forward-looking statements concerning the company that are not historical facts. These forward-looking statements may include but are not limited to statements concerning the potential benefits of OTREXUP and the products in development, clinical trial designs and outcomes, timing of the FDA actions including product approvals, actions of third party partners and timing thereof, time of launch of products and development, growth of product sales and timing thereof and future collaborations in our device platform. Forward-looking statements provide Antares' current expectation or forecast of future events. Actual results could differ materially from those reflected in these forward-looking statements due to decisions of regulatory authorities and Antares' ability to execute on its development plans, capital needs and general financial, economic, regulatory and political conditions affecting the pharmaceutical industry generally. Additional information concerning these risks and uncertainties are contained in the Risk Factors section of Antares' Annual Report on Form 10-K and in Antares' periodic filings and other filings made with the Securities and Exchange Commission. Antares is providing this information as of the date of this release and does not undertake any obligation to update any forward-looking statements contained in this earnings call as a result of new information, future events or circumstances after the date hereof, except as required by law or otherwise. The company cautions investors not to place undue reliance on these forward-looking statements. Joining me on the call today are Eamonn Hobbs, President and Chief Executive Officer; Robert Apple, Executive Vice President and Chief Operating Officer and Jim Fickenscher, Chief Financial Officer. I’ll now turn the call over to Eamonn Hobbs.

[Eamonn Hobbs:]

Thanks Jack and good morning to all of you joining us on today’s call. Let’s begin by reviewing the agenda for today’s call on slide three. I will begin with an overview of our 2014 accomplishments. Bob Apple will provide an update OTREXUP results and activities and Jim Fickenscher will take you through the fourth quarter financial results. I will then discuss our pipeline and how we plan to build on our momentum in 2015. We will conclude with a Q&A session. Moving on to slide number four, we believe that 2014 was a pivotal year in our history. We launched our first propriety product, OTREXUP, which ended the year with $7.3 million in revenues and our total company revenues reached a record $26.5 million in 2014. This represents a 29% growth over 2013. We also saw significant progress in several of our pipeline candidates. With respect to our QuickShot testosterone program, we announced positive Phase II results in February and worked swiftly to enroll all patients in our Phase III PK study by the middle of November. This quick enrolment allowed us to announce positive top line results of this Phase III study in February of 2015. We worked to support Teva, so they could submit their final amendment on the Epi pen ANDA by the end of December. We look forward to Teva getting feedback from the FDA on this filing in the second half of 2015. We also submitted a response to the FDA on our ANDA for Sumatriptan, and in January 2015 we heard back from the FDA. We believe that we are poised for a possible approval of this product later this year. Finally, we navigated through a change in CEOs last year and I am honored to leading Antares. I believe that we have strengthened our management team though the appointment of Bob Apple to the position of Chief Operating Officer; the hiring of Jennifer Evans Stacey as our General Counsel and Head of Human Resources and Jim Fickenscher as our Chief Financial Officer. I look forward to continuing to make addition progress in 2015. I’ll now turn the call over to Bob Apple. Bob.

[Robert Apple:]

Thanks Eamonn and good morning everyone. Slide number five provides an update on OTREXUP progress. You will recall that on our last operating results conference call we spoke about integrating the contract sales force from Quintiles into Antares to create a dedicated field organization. We had successfully completed this process, keeping a high performing OTREXUP representatives and expanding from 25 to 32 territories through the hiring or experience representatives. We feel really good about the Antares sales team. Many of the representative either have previous RA selling experience or are proven top performers from other pharma companies. We know it will take several months for the new reps to get up to speed, but we are extremely optimistic about their potential. Approximately 40% of our territories are covered by new OTREXUP reps, but the high performing reps who have been with us since before the sales force expansion are excited about smaller and more focused territories with new selling aids and powerful tools to work with. Since the beginning of 2015 we have signed contracts with multiple managed care organizations covering millions so of commercial lives. Our goal is to not only ensure coverage of OTREXUP, but also remove time consuming prior authorizations and step edits wherever possible. The nature of third party contracting will dictate that in some plans we will be in a preferred or exclusive position to our competitor and vice versa. We are generally satisfied with being a parity to our competition on those plans. These contracts take effect at various times from January 1 through April this year and we plan on to continue to negotiate with additional payers on a physically responsible basis. Turning to slide number six, we recently held our first national sales meeting for the Antares OTREXUP field force, since they became full time Antares employees. We reviewed improved messaging and outlined new sales tools such as the OTREXUP Total Care program designed to make it easier for patients and physicians to get access to OTREXUP. We also reviewed the status of contract with Managed Care organizations. The sales representatives spent two days in training and we believe that they left fully energized to go back out into the filed with the tools in hand to grow OTREXUP prescriptions. Slide number seven, presents the OTREXUP monthly prescriptions for 2014, as reported by Symphony Health Solutions. In the beginning of November we gave Quintiles notice that we intended to integrate the sales force into our new organization, and when you do something like that it creates uncertainty among the sales representatives, because naturally they wonder if they will be asked to join the new organization. Uncertainty creates distraction and distraction can create a drop-off in productivity. Couple the distraction with the entrance of a competitor to the market place, and you got a potential for declining prescriptions. Despite these distractions, Q4 2014 prescriptions grew 23% over Q3. We believe we made great strides in our first year of commercialization by increasing the number of unique prescribers of OTREXUP to approximately 1,400 physicians at the end of the fourth quarter 2014 as compared to approximately 1,000 physicals at the end of the third quarter. This Symphony data indicates that roughly half of our target position universe have now prescribed OTREXUP, generating approximately 15,700 prescriptions in 2014. With the adjustments to our sales team complete, effective messaging to physicals and patients, steady progress on the reimbursement side and growing clinical belief and adoption of our product, we believe that prescriptions will continue to grow in 2015. I’ll now turn the call over to Jim. Jim.

[Jim Fickenscher:]

Thanks Bob and good morning everyone. I would like to point out that all of my comments this year relate to the fourth quarter of 2014 with comparisons against the fourth quarter of 2013. If you have any questions on the full year figures, I’m happy to discuss those in the Q&A session. Let’s get started on slide number eight. Total revenue for the fourth quarter of 2014 was $8.4 million, a 77% increase over the $4.7 million recorded in 2013. Product sales, which represent sales of our proprietary products, devices and device components to our partners were $4.5 million in ’14 compared to $0.9 million in 2013. The increase in product sales was primary driven by the launch of OTREXUP. Development revenues represent amounts earned under arrangements with partners in which we develop new products on their behalf. Frequently we received payments from our parents that are initially differed and then recognized as revenue over a development period or upon completion of the defined deliverables. 2014 development revenue was $2.3 million compared to $1.5 million in 2013, representing a 57% growth. Licensing revenue represents the amounts recognized from upfront or milestone payments received from partners that are initially differed and recognized over the entire life of our agreements. Licensing revenue was $0.9 million in 2014 compared to $0.6 million in 2013. Royalty revenue is recognized from the end market sales of products sold by our partners. 2014 royalty revenue was $0.7 million compared to $1.7 million in 2013. The decrease in royalties is primarily due to the decision taken by Teva in April 2014 to recall the drug product TevTropin and hence temperately eliminated all revenues related to TevTropin in the U.S. for the balance of the year. In December of 2014 Ferring reacquired the rights to TevTropin from Teva and we expect that they will relaunch TevTropin in the United Sates at some point in 2015. Let’s now move to slide nine and have a look at the fourth quarter income statements. Total gross profit decreased in 2014 to $3 million compared to $4.1 million in 2013. Gross margin represented 35% of 2014 revenues versus 86% in 2013. The company recognized a noncash expense of $2.2 million in the fourth quarter of 2014 related to excess and obsolete inventory of OTREXUP, which contributed to this unusually low gross margin rate. Gross margin rate for 2014 was also lower than ’ 13 because we saw an increase in lower margin development revenues and a decrease in royalties, which of course have a 100% gross margin. 2014 total operating expenses were $13 million versus $10 million in 2013. The increase in operating expenses were driven by cost associated with the sales and marketing of OTREXUP, higher spend on litigation and higher research and development expenses, primarily related to QST. Net loss was $10.1 million for 2014 versus $5.6 million in 2013. This translates into net loss per share of $0.08 and $0.04 for the fourth quarter of 2014 and 2013 respectively. At December 31, 2104 cash and investments totaled $40 million, compared to $69.1 million at December 31, 2013. With that, I’ll turn the call back over to Eamonn.

[Eamonn Hobbs:]

Thanks Jim. Please advance to slide 10. We are very excited about our late stage development pipeline, which includes QuickShot Testosterone in Phase III clinical development and three more compounds in registration, with approvals in the near future possible. Let’s move on to slide 11. We see QST as filling a void in the current TRT treatment landscape. We believe that a once weekly at home injection through a very thin needle will be very appealing to men who have experience with gels and intramuscular injections alike. QST is designed to eliminate the risk of transference and messy application associated with gels. Our view is that these patients may also enjoy the once a week dosing regimen rather than the daily application required by gels. We believe men who have experience with intramuscular testosterone injections should see the value of a quick at home injection that we believe will be virtually pain free and which produces the consistent levels of testosterone that we saw in our Phase III study. The very positive results of this study are summarized on slide 12. The primary end point in this study was having at least 75% of patients attaining a C average testosterone level in a predefined range at week 12. Of the 150 patients that received one of more doses of QST, 92.7% were in this range. Of the 137 patients that completed all 12 weeks of dosing and had PK sampling completed, 98.5% were within the predefined range. The lower level of a 95% confidence interval on 87.3% was well above the 65% level required by the study. There were no patients in the study whose measured C average exceed 1500 ng/dL, let alone the upper level allowed. Overall the regimen demonstrated a clinically meaningful mean concentration of testosterone or 553.3 ng/dL. 150 patients have received at least 1 dose of study drug and to-date there have been no reported deaths and one series adverse event or SAE of hospitalization for worsening depression. This patient received a single dose of QST and the SAE was not considered to be related to the study drug. Thus far there have been no reported adverse events consistent with hives. We will continue to monitor for safety through the conclusion of the 52 weeks study period. In January we announced that the FDA recommended that we expand our safety database to allow us to collect data from a total of 350 patients exposed to QST, including safety data and 200 patients exposed for six months and 100 patients exposed for one year. Based on the request, we believe that we will need approximately 70 additional patients with six months of safety data. To summarize, we remain optimistic about QST’s potential to be a once weekly, self administered, subcutaneous dose of testosterone, with convenient at-home use. We are fully committed to working closely with the FDA on the expansion of the safety database and the filing of the new drug application. Please turn to slide number 13. This past December Teva submitted an amendment to the Epi pen ANDA and this is under review by the FDA. Teva has since disclosed [ph] to the investment community that they have included risk adjusted revenues from an AB rated generic versions of Mylan’s Epi pen in their 2015 guidance. Separately Mylan has stated that their revenue guidance reflects the potential for a second half 2015 launch of an AB rated generic to Epi pen. Ultimately approval and AB rating of a generic Epi pen is an FDA decision. Teva has stated that they expect a response from the FDA in the second half of 2015. We are currently manufacturing pre launch quantities of the Vibex Epi pen for Teva based upon their forecast for this year and we should see revenues from the sale of these devices throughout the year. If approved, we will also receive mid to high single digit royalties on Teva’s net sales of the generic Epi pen. Given the size of the market, we believe that this is a very important event for Antares and our shareholders. Moving onto slide 14, in January 2015 we received some very encouraging news on our Vibex Sumatriptan auto injector project, which is a combination drug device product and development for the acute treatment of migraine. Although the news was received in the form of a complete response letter from the FDA, it provided revisions to product labeling and sited minor deficiencies. The FDA outlined the revisions necessary to support approval of the ANDA and we submitted our response to the agency last week. If approved, the Vibex Sumatriptan auto injector would represent the companies first AB rated and approval of a complex generic and a second device approved from the Vibex platform. You may recall that Teva will be our distribution partner for this product. Antares will receive a milestone payment up-front then upon large and split profits equally with Teva. We will need approximately six to nine months from the date of approval to build the commercial capacity to support launch quantities. Perhaps the most exciting part of this opportunity is that it validates our ability to expand and develop a platform of our own complex generics going forward. Moving onto slide 15, we recently disclosed that Teva had received acceptance of its ANDA with the FDA for exenatide, which was formally known as Teva Pen 2. This product is a multi dose exenatide pen for the treatment of diabetes and is intended to be the first generic to Byetta. According to Symphony, Byetta generated revenues of approximately $350 million in 2014. We look forward to working with Teva to drive the availability of this very exciting complex generic. Let’s wrap up our prepared remarks with slide 16. With the run of good news recently received, we believe that we are on the verge of bringing several of these projects to completion and 2015 is shaping up to be a transformative year for us. We are looking to build on our momentum and will be focused on the following four key goals in 2015. First, commence the QST safety study requested by the FDA and provide an update on the filing date for this NDA. Second, continue to grow OTREXUP prescriptions and revenues. Third, supply Teva with Vibex Epi devices required for the launch of an AB rated generic product and finally, prepare for an approval and put in place the commercial capacity to support the launch of our first proprietary complex generic, the Vibex Sumatriptan auto injector. In closing, I want to thank all of our shareholders for your support since I became CEO of Antares. I also want to thank the dedicated employees of Antares. Without them none of these opportunities would be available. We believe that 2015 promises to be a very exciting year for all of us. Thank you for your attention. Operator, could you now open the lines for Q&A.

[Operator:]

Certainly. [Operator Instructions] And we’ll take our first question from Oren Livnat with JMP Securities.

[Oren Livnat:]

Good morning. Thanks for taking the question. I have a few. On the QuickShot testosterone, when do you expect timing wise to have some FDA feedback and a sign off on your expected 70 patient six months plan and when might you expect that that should be filing this product? And then you actually have a follow-up.

[Eamonn Hobbs:]

Well, we have replied to the FDA’s letter to us in January and are currently awaiting their reaction to our response. As we mentioned in our call, our anticipation is that we’ll be conducting a approximately 70 patient additional supplementary study that is focused on safety data generation at a six month time period. As far as the timing of the FDAs response to us, I’m afraid we don’t have any insight into that, although we’re hopeful that it will be in the near future. We are still shooting for a 2017 commercial launch and at this point it would be in the second half of 2017.

[Oren Livnat:]

All right, on Epi pen so clearly you highlighted that both Mylan and Tavener [ph] explicitly are talking about some amount of generic AB rated Epi pen out there, which is great. At the same time I think we have to see in the market right now, Mylan is making a pretty big marketing push and they’ve talked about brand equity being a crucial element to maintaining their market share. Do you have a feeling of how that plays out if and when a generic is approved that’s AB rated, in terms of how you guys think reasonable erosion rates would go and does Mylan have anything besides brand equity that your aware of to place barriers to entry or a conversion of a AB rated generic.

[Eamonn Hobbs:]

Well, we’re not aware of Mylan having any additional tools at their disposal outside of brand equity and with regard to the forecast for the penetration of an AB rated generic, I think that would be a better question for our partner than for us, although our partner has stated that they don’t see any reason why the entry of an AB rated generic wouldn’t gain market shares that are typical for a first generic entry into the marketplace.

[Oren Livnat:]

Great, thanks. I’ll get back in the queue. I appreciate it.

[Eamonn Hobbs:]

Thanks Or.

[Operator:]

[Operator Instructions] We’ll move onto Louise Chen with Guggenheim Securities.

[Louise Chen:]

Hi, thanks for taking my questions. I had a few here. So I was wondering, in your early stages of launch with OTREXUP, could you provide some feedback that you’ve gotten from physicians regarding the product and then in 2015 do you expect any acceleration of growth given all the initiatives that you mentioned earlier in the call. The second question I had was just regarding your cash position and time to profitability, if you can give more color on that. And the last question is just on the forecasting for ’15. Just curious how we should think about SG&A and R&D expenses year-over-year and if there’s anything to think about with respect to quarterly EPS progression given at your launching project development products and with the Teva opportunity at a view in the middle of the year. Thank you.

[Eamonn Hobbs:]

Good morning Louise. We’ll let Bob handle the first part of that and then Jim the second part.

[Rob Apple:]

Sure. Louise, thanks for the question. Regarding OTREXUP to being received in the field both from physicians and patients. I think that’s probably one of the shining stars that we see that it is being received quite well from both patients and physicians. From a patient side they think it’s an easy device to use. It’s a painless injection and I think the patients are seeing the clinical value of it with regards to their RA. From a physician’s standpoint, I think that our data suggests that it’s being received well too. That half of our target audience has written a script for OTREXUP as a huge benchmark that hit in less than a year. So over 14,000 doctors have tried it – I mean, I’m sorry, 1,400 out of 2,800 or so and we still see the penetration continuing to increase. I think the biggest barrier we’ve had to this point to be honest is just the reimbursement process and so we put a lot of things into place this year in order to streamline that process for both the physicians and the patients, and using our total care programs I think we’re going to see a nice increase in prescriptions on a go forward basis, given that if a doctor feels comfortable in writing a prescription for OTREXUP and it will get reimbursed in a timely manner, I think that’s the biggest barrier that you see from those product launches in any space. And so we feel really good about what we’ve seen with the product and I think that’s the most important thing and then all the other things we’ll do is just tactical of getting the reimbursement process improved and continue to grow prescripts into 2015. I think that with our new sales force going into place really in January and February, we’ll start to see the impact of not only the sales force, but the new tools really in – I think we’ll see continuing increase in prescriptions, but see more it towards the middle of the year and then latter part of the year as these things take effect.

[Eamonn Hobbs:]

Louise, with respect to your question and the financials from a cash point of view, we have $40 million. We went through about $8 million in the fourth quarter of 2014. Obviously as Bob was talking, we feel confident that we are going to continue to see an increase in revenues in OTREXUP and there are certainly some good opportunities for us, particularly the fact that we’ll be shipping devices to Teva for the launch quantities and obviously if they get the AB generic rated, then as soon as that happens we will also get mid to high single digit royalties that will generate a significant amount of cash in the back half of the year as well. So I think that we feel okay where we are with our cash position right now. With respect to some of your questions around EPS and expense progression, I mean obviously we don’t give any guidance in our financial parameters, but just a couple of things for you to think about. First is, with respect to R&D, in 2014 we did have pretty significant expenses related to the QST trial that we’re going in and so if it weren’t for the fact that we had this additional safety study, I would say that we would see some type of leveling off or reduction in expenses. I think that to assume that we are still at a growth stage and we are going to spend money on R&D as an appropriate item, we are obviously looking for new products and compounds, whether internally developed formulations and such things or in licensing, plus we’ll be spending some money on the additional trial for QST. With respect to our SG&A expense, one of the big drivers of incremental expense last year was the litigation that we have with Medac that is continuing at this point in time. So I think that it’s probably wise to assume that we’ll continue to see some progression in the SG&A as well. While we brought on more sales reps, I think that we’re over the big “launch costs” that we have and I think that Bob and the team are taking a very good approach from an economics point of view. I think they are investing the right amount of money in trying to grow OTREXUP without being lavish. So overall hopefully that gives you a little bit of feel for how we see the year playing out.

[Louise Chen:]

Thank you.

[Operator:]

And next we’ll hear from Akiva Felt with Oppenheimer.

[Akiva Felt:]

Thanks. For me another question for Jim. Would it be possible to break out the sales and marketing expenses directly attributable to OTREXUP and any thoughts on how that trends in 2015. Thanks.

[Eamonn Hobbs:]

No, we’ve actually made the decision that we are going to move forward with just an SG&A number as the lowest level of disclosure. I think that you could probably get a pretty good estimate based on industry standards of – we’ve got 32 territories and an appropriate four or five district managers and some support there behind that, so I think our reps are pretty typical within the industry in terms of their compensation structure. So my guess is that you can probably get a pretty good feel for what the sales side of it is. From a marketing point of view, I mean we spend money on access to physicians, but we don’t do any DTC, we don’t do a lot of additional things. So again, I think it’s an appropriate amount that we spend, but we won’t at this point in time break out exact dollars of spend for competitive reasons.

[Jim Fickenscher:]

Yes, I think what’s important to note is that we’ve increased our sales force by probably some 20% and we don’t really see an increase in our overall costs compared to last year. I think what we’re doing is really honing in on where we want to spend our money and be judicious, but still not risk the increase in prescriptions and so forth for OTREXUP. So I think generally we’re spending about the same we did last year, but we’ve increased the number of reps quite a bit and so we think that that will provide a future value for OTREXUP going forward.

[Eamonn Hobbs:]

Orlando, you want to move onto the next call?

[Operator:]

Yes. [Operator Instructions] We’ll hear from Oren Livnat with JMP Securities.

[Oren Livnat:]

Thanks again. I just wanted to clarify. R&D looked pretty high, certainly well above ours this quarter and does that just reflect the higher development rev also on your books or is there any material increase in fundamental spending on your own pipeline in there. You talked about being excited about Sumatriptan, the ANDA precedence. I’m wondering if you are maybe already investing more money in your own proprietary pipeline.

[Eamonn Hobbs:]

Yes, Oren actually there is one unusual item in the fourth quarter in R&D, so we had a – the way that the timing fell for the approval or OTREXUP in October 2013, it resulted in the FDA not sending an invoice for some product and facility fees to us until December of this year and so there’s about $1 million that got booked in the fourth quarter of this year that’s not a normal recurring item. So that’s probably why you’re off on your estimate.

[Oren Livnat:]

Well, sorry if that was disclosed already. And the other – I think I guess just with regards to development rev, that is strong and I imagine that’s a reflection of ongoing partner R&D and you did talk about having a new license in there. So I’m just wondering, how is that trending do you think and is that a reflection of perhaps new pipeline opportunity that we should expect to see unveiled in 2015.

[Jim Fickenscher:]

I mean, I can handle that if you want. On the development revenue side it’s a combination of the new program that we have with the unnamed partner, but its more so on the Teva side with all the different programs that we’ve been working on, whether it’s the exenatide, the Epi and then other undisclosed product that we have with Teva. But clearly we believe that the one development program with the unnamed partners is still moving forward and we think that we are going to continue to see a nice increase in the development revenue as we finish up the programs with Teva and continue this other development what we call a lifecycle management project with a already approved product on the marketplace. So we believe that it’s a core part of our business and that continues to grow and so we expect to have a good 2015 in that line item.

[Eamonn Hobbs:]

Oren, I’m going to be very happy to trade out development revenue with its low margin for Epi royalties with 100% margin at any point in time as well, so.

[Oren Livnat:]

Sure. I’m just wondering if it’s a reflection of an expanding pipeline we’ll learn about. And just lastly speaking, your pipeline Sumatriptan, can you just characterize how you see that market opportunity now with regards to where it stands and how competitive it is and how big an opportunity it might be for you and Teva?

[Eamonn Hobbs:]

Sure. I think that from a Sumatriptan standpoint it’s a highly genericized market. There are about three auto injectors on the market currently that right now the dominant player is Sun Pharma. It’s still about $150 million or so in market cap or market size. It maybe a little bit more than that depending on the particular month. But we are coming out if its approved with both strengths, both the 4 mg and the 6 mg, which is we would be the first one to have both strengths other than the RLD and so we believe that that will have a nice advantage from a contracting standpoint. The only thing is we are going to rely on, obviously as we chose Teva to be our partner in this area and we think they are one of the best generic companies in the world as far as being able to take market share when they have a generic product and we will rely on their leverage of getting a lot of products reimbursed through the generic process with third party payers. So I think that Teva’s expectations are good and we haven’t disclosed anything yet, but obviously we need to get it approved first and then get it on the market, but we don’t see that market going away, we don’t see a whole lot of entrance into this market place. Again, to remind everybody that the nice aspect of combination products with devices is that when they go generic it’s not a race to the bottom like you see with tablets, because there’s very few players that can do this and so we see a long term value of our Sumatriptan product as soon as it gets approved and we think that we can gain a good bit of market share in the carrier market today.

[Operator:]

[Operator Instructions] We’ll take our next question from Wang Zili [ph] with Ladenburg.

[Unidentified Participant:]

Hey, good morning. This is [Indiscernible] from Ladenburg. Thanks for taking my questions. So I have just three questions. The first one is regarding the OTREXUP sales. I mean we see solid growth in the first quarter. I’m just wondering, do you have further color in terms of what are the portions of new prescriptions and how much are revealed?

[Eamonn Hobbs:]

Yes, it’s a difficult question to answer for a product like OTREXUP. Typically when you see new prescription, you know it’s a new patient and then you can actually gauge how the product is going from a growth standpoint. What makes it difficult with OTREXUP and other products like ours in the space is that because we offer multiple strengths and the doctors titrate the patients up depending on how its working or how the RA is progressing. You may have a patient that started on 15 mg and may go to 20 mg the next month to try to get a bump on the efficacy and they show up as a new prescription in new patients. So it really confounds the data, because that happens quite a bit. What I can tell you is that we had a nice growth quarter-over-quarter and based on the number of physicians growing from 1,000 to 1,400, you’d have to assume that they are new patients, but we are seeing nice people staying on the product, nice maintenance and we see that data really through our co-pay assistance program. We can track when a patient uses that program over a series of months and we continue to see consistent patient persistence on our products through that program. So I think it’s a combination of both, its new patients and also patients staying on the products for a number of months.

[Unidentified Participant:]

Oh! That’s great. So for the patients staying on the drug, do you get a sense of virtually how many cycles or how many prescriptions that you have to stay on?

[Eamonn Hobbs:]

No, again based on our co-pay card we have some patients on that, we have some patients that have been on well over six months and we are seeing that trend grow. So as we get more data, to be honest with you we just launched this – we only had data through January, so that’s less amounts of data and as the ramp progresses, we get more and more patients. So I think that’s going to be a question that maybe we can tackle in a few quarters or so, but like I said, the persistence data looks good so far.

[Unidentified Participant:]

Okay, fair enough, thank you. Now which QST for the additional safety population of about 70 patients. I know you’re still waiting for FDA feedback, but just to get a sense, is that the new start [indiscernible] like open label safety or we are also including some PK, just to get a sense about that.

[Eamonn Hobbs:]

Well, the study is primarily a supplementary study to generate the safety data that FDA has requested. There are a number of smaller segments, small patient cohorts within that study that we propose to generate some additional data and one of those small cohorts is PK. Of course, this is all subject to FDA review and agreement, but at this point in time the study is really driven by the 70 patients at six months safety data requirement that FDA has asked us for.

[Unidentified Participant:]

Okay, great. And then the last question is about the Sumatriptan program. So the CIO [ph] says there’s some minor deficiencies. Its okay to disclose what the deficiency is or…

[Jim Fickenscher:]

We typically don’t get into that kind of granularity, but essentially what we have said in previous disclosures is that it’s been – it was all mostly around labeling and so it was a rather quick turnaround for us to answer those and unfortunately that’s just how the agency works. You get a letter which lays out how they want you to change certain things and you still have to reply and then with and there is no timeline. So we are just waiting for the response back from the FDA and we hope that we will get that product moving forward very shortly.

[Unidentified Participant:]

Okay, fair enough. Thank you for answering my questions and congratulations on the progress on 2014. Thank you.

[Eamonn Hobbs:]

Thank you.

[Operator:]

And we have no further questions. I’ll turn the call back over to Jack Howarth for any additional or closing remarks.

[Jack Howarth:]

Thank you Orlando and thanks again for joining us on today’s conference call. If you have any follow up questions you can reach me at 609-359-3016. That completes today’s call.

[Operator:]

And ladies and gentlemen, once again that does complete our call for today. We thank you very much for your participation.