Merrimack Pharmaceuticals, Inc.
Q1 2016 Earnings Call Transcript

Published: 3 May 2016

[Operator:]

Good day, ladies and gentlemen, and welcome to the Merrimack Pharmaceuticals’ First Quarter 2016 Investor Call. At this time all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] I’d like to introduce your host for today's conference, Mr. Geoff Grande, with Investor Relations. Sir, please begin.

[Geoff Grande:]

Thanks, Neisse. Good afternoon, everyone, and thank you for joining us on our call to discuss our first quarter 2016 financials and our recent commercial and clinical progress. A press release detailing this information issued a short while ago can be found in the Investors section of our website, merrimack.com. This call is being broadcast live and will be archived on our website for six weeks. Joining me on the call today are Bob Mulroy, our President and CEO; Tad Stewart, our Head of Commercial; and Yasir Al-Wakeel, our CFO and Head of Corporate Development. We’ll end the formal portion of the call with time for Q&A. Before we begin I need to remind you that during this call, we will be making forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These may include statements about our future expectations and plans, the potential success of our products and product candidates, clinical development timelines, and financial projections. These statements involve risks and uncertainties which are described in the Risk Factors section of our most recent Form 10-K and the other reports we file with the SEC, which are available online at sec.gov. While these forward-looking statements represent our views as of today, they should not be relied upon as representing our views in the future. We may update these statements in the future, but we are not taking on an obligation to do so. And with that, I’ll turn the call over to Bob.

[Robert J. Mulroy:]

Thanks, Geoff and good afternoon, everyone. It’s a pleasure to speak with you today, to review our latest quarter. On today’s call we’d like to focus on the following topics; review our progress on our commercial launch for ONIVYDE, update you on our business activities and our financial results and provide an update on the development of our pipeline. Overall the first quarter was a very productive operating quarter for Merrimack. We continue to see positive momentum in the commercial launch of ONIVYDE and remain on track with our goal to make ONIVYDE, the new standard-of-care for post-gemcitabine pancreatic cancer. As Tad will cover in a moment, we saw a 130% increase in sales over the prior quarter. More importantly we made significant progress in building the institutional and account access and breadth that will serve as the underpinning for our future growth. Towards the end of the quarter we received the additional positive news that ONIVYDE have been added to the NCCN clinical practice guidelines as a Category 1 treatment option for post-gem metastatic pancreatic cancer. The NCCN is the National Center -- National Cancer Center’s Network and is made up of the top 30 cancer treatment institutions in the United States. Their guideline serve as a lynchpin for cancer treatment in hospitals nationwide. We also made significant progress in the development of our targeted therapeutics pipeline, including execution on our two late stage registration programs, with MM-302 and MM-121. In addition we had a major presence at AACR, with 11 presentations, marking the research progress that spans our pipeline. I will return with a more complete update on our pipeline, but first let me turn the call over to Tad Stewart, our Head of Commercial, to report on our launch and then Yasir Al-Wakeel, our CFO and Head of Corporate Development to review our financials. Tad?

[Edward J. Stewart:]

Thanks, Bob and good afternoon, everyone. We continue to be pleased with the launch of ONIVYDE, still early but we’re seeing progress in Q1 that we believe will fuel our future growth. First, let me start with the high level results for the first quarter. Gross revenue for the quarter was $11.3 million and net revenue for the quarter was $10.0 million, which reflects a gross to net discount of approximately 12% and sequential growth of approximately 130% compared to Q4. Now getting into the details, at a high level there are three key takeaways for the quarter that I want to discuss. Awareness of ONIVYDE among prescribers has increased significantly. We are seeing broad uptake in trial of ONIVYDE early in the launch and our market research points to continued growth in utilization and depth of ONIVYDE use. First, our initial focus has been on driving awareness of ONIVYDE in the NAPOLI data. Awareness of ONIVYDE has grown significantly from our baseline at launch. We’ve been able to analyze our first post-launch wave of market research, which was conducted with approximately 150 oncologists and we are very pleased to see that awareness of ONIVYDE has grown to 84% between launch and early Q1. This is consistent with the awareness we observed for Abraxane in our market research and we believe this is very positive relative to other launch benchmarks. In our view this speaks very highly of the need for new treatments in metastatic pancreatic cancer, particularly in the post-gem setting and the interest in the new therapies such as ONIVYDE and the effectiveness of both our personal engagements with oncologists and our broader marketing and educational efforts to educate oncologists and generate awareness. The second major area focus for our commercial efforts has been driving breadth of access. The initial uptake of ONYVIDE by oncologist continue to be high. Through Q1 we continued a consistent pace of shipping to approximately 20 to 25 new institutions each week. And through Q1, we had shipped ONYVIDE to a total of about 550 unique facilities more than doubling the number of facilities we shipped to through Q4. We continue to see progress and uptake of ONYVIDE in the major academic centers. Taking the NCCN site as an example, the number of sites to have ONYVIDE on formulary has almost doubled. ONYVIDE has now received PNT approval and is on formulary in just under two thirds of all NCCN centers compared to about one third at the end of Q4. And in the group practice and community setting, we continue to see rapid uptake and utilization of ONYVIDE. All of this leads us to believe that we’re continuing to increase penetration into our addressable patient population. Given our success in building awareness and access, our focus over the months ahead will be on driving depth of utilization. We believe the ONYVIDE regimen is well positioned for increases in both number of cycles or time on treatment, as well as increased utilization across the post-gemcitabine pancreatic cancer setting. The latest version of NCCN guidelines for the treatment of pancreatic cancer were released in late March. And we’re very pleased to see the regimen of ONYVIDE plus 5-FU and leucovorin recognized with a category 1 designation. The highest level of evidence by the NCCN panel based on the robustness of the NAPOLI-1 study and the results. ONYVIDE is the only category 1 regimen in the post-gemcitabine setting and the NCCN guidelines clearly position ONYVIDE as a recommended choice for patients with metastatic pancreatic cancer who have received treatment with the gemcitabine containing regimen. These guidelines along with articles for peer reviewed journals are reinforcing the positioning of ONYVIDE, the ONYVIDE regimen as the therapeutic choice for our oncologists treating post-gemcitabine pancreatic cancer patients. This growing consensus will help to increase both the breadth and the depth of ONYVIDE utilization as we move into Q2 and beyond. With respect to reimbursement, we continue to receive very positive feedback on coverage, and inclusion of ONYVIDE in the NCCN pathway, which is referenced by or used by the majority of institutions and payers should only help to further accelerate access to ONYVIDE. So overall, we continue to be very pleased with the commercial progress we’re making in the launch of ONYVIDE, awareness is high, initial uptake is growing, and we’re very proud of our team’s initial success at driving awareness and the result and breadth of the institutional uptake of ONYVIDE. We believe the NAPOLI-1 results provide a strong foundation to focus our efforts on driving the depth of utilization across the entire post-gem patient population and the NCCN guideline should provide additional momentum to our efforts to make ONYVIDE the post-gem standard of care. We look forward to updating everyone after Q2. And with that I’ll hand it over to the Yasir to review our financial results.

[Yasir Al-Wakeel:]

Thanks, Tad and good afternoon, everyone. Over the next few minutes I’d like to cover a couple of key topics. Firstly, I will discuss our first quarter 2016 results, this discussion will focus on both ONYVIDE’s revenue growth, as well as our successful efforts in proactively managing Merrimack’s total operating expenses during this period. The other topic that I’ll cover on today’s call is the recent inducement of our convertible notes. The conversion does not have an impact on first quarter results, but it does successfully eliminate $30 million of future cash interest payments that we would have been required to make and also removes approximately $64 million of debt from our balance sheet, thus improving our debt to equity ratio. With that, let’s turn to our Q1 2016 financial results, which were included in our press release distributed just a short while ago. Total revenue for Q1 2016 was $21.3 million. This includes the $10 million of net product revenues from sales of ONYVIDE, which represent 130% increase compared to Q4 2015. As Tad mentioned we are very pleased with the result from our launch so far, and we expect to continue to see strong sales into the second quarter. The remaining $11.3 million of total revenue is license and collaboration revenue that was recognized under our proportional performance model. Cost of goods sold for the first quarter was $711,000. We expect cost of goods to continue to increase as a percentage of revenues as we sell through the zero cost products that was manufactured prior to receiving FDA approval and therefore did not have capitalized costs associated with it. Aggregated R&D and SG&A expense for Q1 2016 was $50.7 million of which approximately $32.9 million or 65% consisted of research and development expenses. This represents a decrease from the fourth quarter of $11.9 million. While a portion of this decrease was due to one-time fourth quarter cost that we discussed on our last call. A portion is also attributable to the company’s cost management program, which involves a focus on striking the right balance between continuing to invest in our robust pipeline and prudent financial management of our business. The other $17.8 million of aggregate expense or 35% consisted of selling, general and administrative expenses with a significant portion related to cost incurred in supporting ONYVIDE sales. These items were the primary contributed to the $38.5 million of net loss attributable to Merrimack during the third quarter of 2016 and have left us in a strong position entering the second quarter. At the end of Q1, 2016 we had more than $132 million of cash and marketable securities on our balance sheet and over $15 million of accounts receivable that we expect to collect in the near future. In addition, we continue to expect to receive $46.5 million of net milestones related to ONYVIDE from Baxalta in 2016 after offsetting payments to pharma engine. Finally, as I alluded to earlier, I’d like to take a moment to discuss the recent inducement of our convertible notes. During April, we entered into agreements to convert approximately $64 million of our convertible senior notes into Merrimack shares. The 8-K we issued at the time of conversion goes into further detail around the specifics of the transaction. But I want to take this opportunity to provide some context around the shared issues as part of the conversion, which should provide some inside into why we elected to convert these notes at this time. What I will say is that it’s important to understand that the shares issued as a result of the conversion were relatively insensitive to the timing of the transaction and the price at which the stock was trading. So first off, of the approximately 12.4 million shares in total we issued as part of the conversion, 10.3 million or more than 80% were related to our contractual obligation under the convert. Said in other way, we would have been required to issue this exact number of shares at some point in the future regardless of how our stock performs. Because this rate was set when we originally issued the convertible notes in 2013. We also issued approximately 2.1 million shares in order to essentially entice convertible holders to convert their notes early and forgo 4.5 years or approximately $13 million of future cash interest payments on the retired bonds. Overall, we felt that issuing approximately 200,000 shares over the interest due was a small price to pay to eliminate $64 million of debt from our balance sheet, avoid $13 million of future cash interest payments, and better align our debt structure with management’s positive outlook for our future stock performance. A final point to note in regard to the conversion is that we specifically targeted parties who we believed were hedging their convertible holding, by having significant short positions in Merrimack stock. What this means is that while Merrimack’s overall share count outstanding has increased by approximately 12.4 million shares, actual incremental trading shares in the open market is far less. As we expect these parties use a large portion of the shares received from the conversion to clear their short positions. With that, I’ll turn the call back over to Bob.

[Robert J. Mulroy:]

Well thank you, Yasir. Let me turn now to some of the development updates for our pipeline. With respect to ONIVYDE we continue to make strong progress in driving a broad development program to expand into additional indications. We believe the engineering behind ONIVYDE provides the product with the rational to be developed in a wide range of solid tumors with a microenvironment into each drug delivery. During 2016 we expect data from three studies investigating ONIVYDE in new indications, including pediatric sarcoma, glioma and breast cancer. These studies remain on track and we look forward to discussing the results once available. At the end of last year we launched a front-line metastatic pancreatic cancer study, that is investing the new regimen of ONIVYDE plus 5-FU and leucovorin in combination with [indiscernible]. Our goal is to develop this NAP-OX [ph] regimen as a new front-line therapy for pancreatic cancer based on the potential for improved efficacy and tolerability. Part one of the front-line study is designed to assess the safety of the NAP-OX regimen in the first line pancreatic cancer patient population. Part one is well underway and on track to transition to the randomized efficacy phase or part two later this year. As noted at the launch of the study we plan to announce the completion of part one and the transition to part two. Part two of the study will test the efficacy and safety of the NAP-OX regimen as well NAPOLI regimen. First, the combination of gem in Abraxane. The efficacy portion of the study was initially designed to use the PFS rate at 24 weeks as a primary end point. In order to expedite the development of ONIVYDE into a pivotal study. The PFS hazard ratio, the biomarker CA19-9 and other measures of the patient health served as secondary end points. Based on further input from our advisers and discussions with our partners at Baxalta we have decided to elevate the PFS hazard ratio to serve as a primary end point and shift PFS at 24 weeks to a secondary endpoint. We are confident that the switch to PFS will improve the sensitivity of the results as well as our ability to communicate the benefit more effectively to the medical community by using a more familiar endpoint. We have previously guided that we would have data in the first half of 2017 with a new primary endpoint and the greater variability of patient response. We are revising the guidance for data to the full academic in calendar year 2017. Beyond ONIVYDE we have two other programs in late stage studies designed to support registration MM-121 and MM-302. Our MM-121 team has made some very important and positive progress towards commercialization over the past quarter. Since our last call we have been able to confirm with the U.S. FDA the suitability of our single study of MM-121 in heregulin positive non-small cell lung cancer for registration. We agreed on the design, the OS endpoint and the statistical plan. One very positive outcome of our decisions with the FDA is that we were able to amend our study to eliminate the entry requirement of prior treatment with platinum. This change allows MM-121 to meet the significant needs for new therapies in non-small cell lung cancer following immunotherapy agents, where the vast majority of patients do not respond adequately and to progress quickly. Our study now has the potential to position MM-121 for the significant opportunity to treat heregulin positive patients immediately following immunotherapy. We also took a major step forward towards commercial readiness with MM-121 in advancing our diagnostic for heregulin. Based on the data generated from our Phase 2 program we have confirmed with the FDA the suitability of our heregulin diagnostic assay for using our pivotal study and our plans to submit a PMA or pre-market approval application to gain an approval for the heregulin companion diagnostic for MM-121 in parallel with the drug. To make that plan a reality this past quarter we entered a collaboration with Leica Biosystems. Leica is a global diagnostics company with a leading platform supporting the commercialization of precision medicine cancer diagnostics. Leica will support MM-121 by adapting the heregulin assay that Merrimack developed in our Phase 2 program into a commercial diagnostic kit. We believe the partnership with Leica and the resulting kit will ensure that our heregulin assay will be easily accessible on a worldwide basis to support the broadest possible identification and treatment of this important patient population. The non-small cell lung cancer registration study is well under way screening prevalence for heregulin positive patients continues in line with our expectations and enrollment is progressing as planned. We continue to expect data read out from this study in 2018. As mentioned at the outset we had a major presence at the 2016 American Association for Cancer Research Annual Meeting. We hosted 11 presentations that featured a wide range of scientific and clinical progress expanding our pipeline. Updates include research and progress on MM-302, MM-141 and the introduction of MM-310. MM-302 is the second Merrimack targeted study program and the study is designed to support registration. MM-302 is the first of our antibody directed nanotheraputics or ADN product candidates. The study is underway and HERMIONE trail is a Phase 2 study of MM-302 in anthracycline naive HER2-positive breast cancer patients designed to support a potential accelerated approval. The MERMIONE study enrollment remains on track and we continue to expect data in 2017. Also highlighted AACR, was our biospecific antibody MM-141 it is being investigated for the treatment of IGF positive tumors. MM-141 is currently advancing in a Phase 2 study in frontline pancreatic cancer in combination of Gem / Abraxane. We are pleased to report that the study has successfully progressed through Part I, which tested the tolerability and safety of MM-141 in combination with Gem / Abraxane. The study has been given the go ahead from the Data Safety and Monitoring Board to progress marking an important step forward in a [indiscernible] patient population. Part I was also important in that we were able to test and ensure the execution of our diagnostic serum based assay for IGF. Beyond safety we are pleased that the Part I also confirm the prevalence of IGF-1 positive patients with pancreatic cancer above our expectations at 60%. However, the work to confirm the execution of the IGF diagnostic through Part I took more time than anticipated. But in the end, we feel we have addressed a major risk factor by validating the execution of the assay and as a result, we were amending our expected date for data readout to 2018. We are pleased that MM-141 continues to advance through clinical milestones and that Part II being conducted as a randomized blinded and placebo-controlled trail of Gem / Abraxane plus or minus MM-141 is now underway. One of the additional highlights of AACR was a presentation that introduced our second antibody directed nanotherapeutic program or ADN. MM-310 is the next product from our systems engineering discovery platform and represents a great conversions of our system approach as well as our drug technology capabilities. As a reminder, American’s ADN technology is engineered to achieve superiority over other nano delivery systems and target technologies on several critical dimensions. Great tumor specificity, longer half-lives and significantly less systemic exposure. Our clinical and preclinical work with MM-398 and MM-302 have demonstrated a 70-fold and greater increase in tumor specific drug exposure versus chemotherapy and a 20-fold increase in exposure of our other nano and target delivery methods. Our ADN also offered technical advantages that can accommodate a greater diversity of pay loads. MM-310 was specifically engineered to maximize delivery and local activation of newly engineered docetaxel as a pro-drug to tumor cell that express the ephrin receptor A2. FA-2 as it is known is a tumor marker that is both highly specific and highly prevalent as a tumor antigen. It is over expressed in 50% to 100% of many major tumor types including lung, gastric, prostate, ovarian and bladder cancers. The pro-drug designed is engineered to concentrate the active cytotoxic within the tumor. The data presented at AACR demonstrated the preclinical efficacy of MM-310 delivering complete and sustained responses in animal models expressing FA-2. We are very excited about the therapeutic potential for MM-310 and the medical opportunity to address a large patient population. Last, we will be hosting an R&D Day for analysts and institutional investors on Thursday May 19. You will provide a more detailed update on our R&D efforts and the development plans across our pipeline. We plan to focus to talk on the development of our pipeline in GI cancers and feature a talk from guest speaker Dr. Charlie Fuchs of the Dana-Farber Cancer Institute. We will also feature an update on our efforts to utilize our systems engineering platform to develop a novel next generation sets of immunotherapies. A live webcast of the event will be available to investors on the investor section of our website. With that, I’ll turn the call back over to Geoff.

[Geoff Grande:]

Thanks, Bob. Before we wrap up I’d like to mention that we’ll be attending a few investor conferences over the coming months including the Deutsche Bank Securities Annual Healthcare Conference this Wednesday May 4th in Boston as well as the Wells Fargo Biotech Corporate Access Day on July 26th in Boston. We hope to see you at one of these events. And with that we’d like to open up the line for any questions.

[Operator:]

[Operator Instructions]. Our first question will come from the line of Anupam Rama from JPMorgan. Your line is open.

[Anupam Rama:]

Hey, guys. Thanks so much for taking the question. I just had a quick modeling question about how we should be thinking about long-term gross to net here. And I apologize if I missed this on the call, but can you talk a little bit about how inventory levels were in the quarter? Thanks so much.

[Edward J. Stewart:]

Hey, Anupam this is Tad. Thanks a lot for the question. I think on gross to net what we’ve discussed is estimating at somewhere in the range of 10% to 15%. And as far as inventory, that was pretty consistent this quarter. We had inventory that was just about 12 days on hand at the end of Q1, which I believe was pretty consistent with what we were last quarter as well.

[Anupam Rama:]

Great, thanks for taking the question.

[Operator:]

Thank you our next question will come from the line of Eric Schmidt from Cowen & Company. Your line is now open.

[Eric Schmidt:]

Well thanks for taking my questions as well and congrats on the solid ramp up here on ONYVIDE. Another one for Tad, I think you spoke to trying to increase the number of cycles for patient. Could you give us any inside into where you think average duration of therapy is? I know it’s very early.

[Edward J. Stewart:]

Sure thanks for the question Eric. It is too early for us on cycles. We are still gathering the data and it’s definitely something that’s very important to us as we look out into the launch and something that we look to collect and have more data on as we go forward. Right now just too early in terms of the patients that have come on and being able to follow them for a long enough to have a good understanding of the cycles.

[Eric Schmidt:]

I mean is there anything you’re trying to do to try and maximize that duration, is there education or any effort do you think?

[Edward J. Stewart:]

Certainly we’re educating very broadly on the NAPOLI data and we’re finding that to be very differentiating and highly motivating for oncologists. The efficacy data that we’ve seen there and other things have been very well received. And what we understand from positions as they intend to use ONYVIDE in the same patient population that we saw in the NAPOLI study and consistent with the NAPOLI study.

[Eric Schmidt:]

So maybe a similar type of question in terms of broadening out the prescribing or maybe you call it depth of use. When physicians who are aware of ONYVIDE and already have the drug on formulary aren’t using it broadly. What is the issue in your opinion is there any alternative therapy that’s being used instead or they just reluctant to put all the patients on it right way, what might be the barrier in such physician seeing?

[Edward J. Stewart:]

I think when physicians understand the data and are aware and have that ability to prescribe we are seeing them prescribe the product or all order the product. We are obviously continuing our efforts to educate them and do everything that we can to make sure they understand that and know which patients are the most appropriate patients for them to prescribe. And doing everything we can to remove barriers in terms of P&T, formulary approval and educating them on the medical side as well.

[Eric Schmidt:]

Great, thanks a lot.

[Operator:]

Thank you. Our next question will come from the line of Eric Criscuolo from Mizuho. Your line is open.

[Eric Criscuolo:]

Hi, good afternoon guys, thanks for taking my questions here. Regarding the NCCN, how much is that as a percentage of the U.S. ONYVIDE market that you’re targeting?

[Edward J. Stewart:]

NCCN it’s made up of approximately 30 or 31 centers around the country. So those are some of the major academic centers. As we mentioned before, we’re targeting a much broader focus of sites. We have about 250 priority accounts around the country that we’re looking at and we’ve reached a vast majority of those accounts already and are continuing to educate there. It’s important to remember, I think about NCCN that they may not always be big users of the drug, but they are certainly very big influencers through the NCCN guidelines. So really getting on the pathway there has a big effect across not just the NCCN centers, but also across the other academic centers community and group practice.

[Eric Criscuolo:]

Okay. So they wouldn’t make up say like 50% of the patient population.

[Edward J. Stewart:]

No, there is not that much of concentration in this market.

[Eric Criscuolo:]

Okay, thank you for that. And I think I apologize because I think I missed point of it. But you were discussing MM-121 in non-small cell lung cancer and some of the clinical trial talks with the FDA and how that could affect 121’s use after PD1s, could you go inside again? I’m sorry, I kind of missed it.

[Robert J. Mulroy:]

So we are really excited about the 121 opportunity. As we mentioned in the call we have the opportunity to confirm that our single study is suitable for full approval for 121 in heregulin positive patients and even more positively that we could amend this study such that we the only prior therapy patients would need to have exposed to is PD1 our immunotherapy and what’s exciting about that as those therapies move upto front-line, it gives us the opportunity to be that first-line of therapy post PD1 and immunotherapy increasing the patient population significantly. So it broadens that population and increase it significantly and meets a very significant need for the vast majority of patients who are not getting an adequate response from those therapies. So we are thrilled with both of those steps forward.

[Eric Criscuolo:]

Okay, thanks for going over that again. And just you had mentioned that you were carefully balancing the spending in some of the efforts. Does that include any discontinuation of any ongoing trials or any pauses or delays in anything?

[Edward J. Stewart:]

Thanks for the question. No, that does not include any pauses in ongoing trials. I think as we mentioned at the beginning of the year the guidance that we provided reflected the fact that the NAPOLI trial expense was winding down and significantly decreased in 2016 as well MM-111. So that’s an example of a couple of isolated trials cost that come down. But also we’ve been working very, very hard to drive efficiencies here at Merrimack and conserve capital.

[Eric Criscuolo:]

Great, thank you very much.

[Operator:]

Thank you. [Operator Instructions]. Our next question will come from the line of Kaitlin Sandor from Guggenheim. Your line is open.

[Kaitlin Sandor:]

Hi, guys. I just had a few questions on ONIVYDE performance for the quarter. And the first one is kind of book keepings. We know that acceptancy between IMS reported revenues is about $12.5 million and what you guys had and I’m just wondering if you add any color on why that might be, I’d say you can go. I can follow-up on with another question.

[Robert J. Mulroy:]

Sure. I think early on in the launch like this we are going to expect some variability in the projections. Obviously we don’t know exactly what capture rate IMS has and how they are extrapolating from the data they have into their estimates at this point. I think what we do know is at this point we are very excited about where we are with the growth and the growth from Q4 to Q1 of 130% was very exciting for us and we are very pleased with where we are.

[Kaitlin Sandor:]

Okay, great. And then how have you seen April did it continue to grow? Do you have those numbers here?

[Robert J. Mulroy:]

No, we are not commenting on those numbers at this point we don’t have that available.

[Kaitlin Sandor:]

Okay. And then addition to your market research have you gotten any feedback from the sales force. Are you seeing any first line use yet?

[Edward J. Stewart:]

We are getting a lot of good feedback from the field and from our market research and across the board we are seeing physicians telling us that they are using the product consistent with the NAPOLI study and you’ll recall NAPOLI study had about 15% of patients who were first lined, about half of them are second line and the remainder in third line. So we’re glad to see that the NAPOLI data is resonating and that they’re using the product consistent with that.

[Kaitlin Sandor:]

Okay. And then last question, I know you talked to [indiscernible] I may have missed this, but did you talked to the FDA about changing the frontline endpoint for ONYVIDE?

[Edward J. Stewart:]

Yeah so the study that we’re doing with ONYVIDE in the frontline is the Phase 2 study. Setting up data so as a study that’s not a registration study, it’s not something that we would negotiate with the FDA it’s certainly something we submitted to the FDA from a protocol perspective and from a good practice perspective. But typically with a study that you’re looking to submit for registration that’s where you’re going to invest the time and make sure that they agree that the design of the study, the statistical plan that’s in the study and the start with your endpoints and the endpoints are appropriate for them to review a study for approval. So this is a proof of concept study for the new NAP-OX regimen. So it’s not something we confirmed as a registration endpoint with the FDA.

[Kaitlin Sandor:]

Okay. Alright I just wondered if you had feedbacks. Thanks so much guys.

[Operator:]

Thank you. This concludes the Q&A portion of the call. I would like turn the call back over to management for any closing remarks.

[Robert J. Mulroy:]

Great well thanks everyone for joining us. We look forward to speaking with you again soon.

[Operator:]

Ladies and gentlemen thank you for participating in today’s conference. This concludes the program. You may all disconnect. Everyone have a great day.