Zogenix, Inc.
Q2 2015 Earnings Call Transcript

Published: 10 Aug 2015

[Operator:]

Good day, and welcome to the Zogenix Second Quarter 2015 Corporate Update Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Brian Ritchie with LifeSci Advisors. Please go ahead sir.

[Brian Ritchie:]

Thank you, operator, and thank you all for joining us this afternoon. With me on today's call are Chief Executive Officer, Dr. Stephen Farr; Chief Financial Officer, Ann Rhoads; Chief Development Officer, Dr. Gail Farfel and Chief Medical Officer, Dr. Brad Galer. This afternoon, Zogenix issued a news release announcing financial results and providing a business update for the second quarter ended June 30, 2015. Please note that certain information discussed on the call today is covered under the Safe Harbor provision of the Private Securities Litigation Reform Act. We caution listeners that during this call, Zogenix's Management will be making forward-looking statements. Actual results could differ materially from those stated or implied by these forward-looking statements due to risks and uncertainties associated with the company's business. These forward-looking statements are qualified by the cautionary statements contained in Zogenix’s news releases and SEC filings, including in the annual report on Form 10-K and subsequent filings. This conference call also contains time-sensitive information that is accurate only as of the date of this live broadcast, August 10, 2015. Zogenix undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call. Now, I'd like to turn the call over to Steve.

[Steve Farr:]

Thank you, Brian, and good afternoon to everyone who is joining live on today's call. Since our last quarterly conference call, our business has gained significant momentum. We've achieved a number of critical successes in multiple aspects of our business. I am extremely pleased with where we are as a company and more importantly where we're headed. On the clinical development front, new data was presented at the European Pediatric Neurology Society Congress in Vienna Austria demonstrating sustained efficacy and tolerability for patients treated with low-dose fenfluramine as an adjunctive therapy for Dravet syndrome. During the five-year follow-up period from 2010 to 2014, over 80% of patients all of whom had a confirmed diagnosis of Dravet syndrome experienced a greater than or equal to 75% reduction in seizure frequency each year. A majority of patients experienced long periods of seizure freedom. The drug was well tolerated and no patient discontinued treatment due to an adverse events. This announcement included 10 patients from the original study group and two patients who began treatment in 2011. We believe these data represent the most robust long term dataset of any investigation treatment for Dravet syndrome, especially since some of these patients have now been treated for over years. This presentation was offered by world renowned experts in the field of Dravet syndrome, [Berdin] [ph] M.D., Ph.D. and Lieven Lagae, M.D., Ph.D. from the Universities of [indiscernible] and Leuven in Belgium. Dr. Lagae is also the current President of the European Pediatric Neurology Society and is an elected Board Member of the International Child Neurology Association. From a regulatory standpoint, our recent correspondence with the FDA in regards to our Phase 3 program for ZX008, which is an investigational proprietary pediatric formulation of low-dose fludarabine should enable us to file an IND by the end of August. As such we expect the initiation of this Phase 3 program will occur during the fourth quarter. Dr. Gail Farfel who recently joined us as our Chief Development Officer will review the anticipated protocol for the ZX008 Phase 3 program shortly. We're very excited about this program and are confident in our plans for this study. Gail's appointment to not have Thierry Darcis as our General Manager of Europe were other key recent achievements for Zogenix. The addition of two highly experienced product development of commercial leaders in the orphan CNS disease category further advances our core strategic focus on our late stage CNS product development pipeline. Gail will lead all product development activities including clinical development and regulatory strategy. She has a diverse background in leading global product development and regulatory approvals of CNS treatments including for epilepsy. Thierry joined us to establish Zogenix's pre-commercial presence in Europe and lead commercial operations in Europe for the anticipated launch of ZX008. She brings a successful track record of launching rare disease products in Europe and will have a small experienced leadership team joining in the U.K. and that team will represent clinical, regulatory and commercial disciplines. We're also very pleased to host a successful key Opinion Leader Meeting in New York in July that was attended by approximately high quality investors and analysts with another 75 buy side and sell side professionals participating via a live webcast. The event focused on Dravet syndrome including an overview of ZX008 and featured keynote presentations from Dr. Lagae and also by Dr. Joseph Sullivan who is Associate Professor of Neurology and Pediatrics at the University of California in San Francisco and is also the Director of the Pediatric Epilepsy Center. Gail also presented additional details on our development readiness and proposed clinical protocol for the Phase 3 program of ZX008 and Dravet syndrome. The event was extremely well received and generated a significant amount of interest in our story from investors and from analysts. In light of the shifting of our strategic to CNS disorders and orphan drug development and in an effort to support a per share valuation for Zogenix that's more in line with our peers, we received approval from our Board and shareholders and subsequently executed a one for eight reverse stock split and will further discuss the reverse stock split later on this call, but we really felt this action was in the best interest of all our shareholders. All this positive momentum enabled us to opportunistically raise approximately $92 million in net proceeds in an underwritten public offering in which we sold approximately 5.5 million shares of $18 a share. This financing now extends our confident runway through 2017. During this time we anticipate multiple key inflection points for ZX008 which will include initiation of the Phase 3 efficacy trials in U.S. and Europe. These are expected to begin in the fourth quarter of this year with topline results anticipated in 2016. Potential U.S. and European approvals for ZX008 in Dravet syndrome, which we currently anticipate in 2017 and opportunity to explore ZX008 efficacy in other orphan indications. Before I ask Galer to review our progress towards the Phase 3 program, let me take a moment to discuss our strategy for Relday, which is our proprietary subcutaneously injected formulation of risperidone with dose once monthly, and for which we commence dosing patients with schizophrenia in a Phase IB multi-dose clinical trial earlier this year. We believe it represents a significant commercial opportunity based on this differentiated product profile and we have concluded it is in the best interest of Zogenix and the company's shareholders for us to seek a global development to commercialization partner for this product candidate who will then take responsibility for the Phase 3 program in the U.S. and also in Europe. Once we have the results from our ongoing multiple dose pharmaceutics study, we intent to kick off a full process later this year aimed at identifying the ideal partner for Relday. And with that I will now turn the call over Gail. Gail?

[Gail Farfel:]

Thank you, Steve. As stated earlier, we recently received feedback on our queries to the FDA enabling us to file our IND for ZX008. The target for this filing is the end of August. Importantly FDA confirms that if 505b2 NDA submission is acceptable and they have encouraged us to file for fast track designation once the IND is active. With regard to CMC, FDA has agreed with the starting material and proposed synthetic pathway and they have given us clear guidance with respect to stability and impurity testing, the drug substance and our liquid oral formulation have been manufactured and are currently on stability. For the non-clinical program, FDA agreed we could file the IND with the results of the juvenile toxicology dose range finding study including the histopathology data. That study has been completed and the data are clean. In addition FDA has agreed that the required reproductive and developmental toxicity and carcinogenicity studies can be run as post-marketing commitments. So an NDA could be filed with the completion of the clinical development program. Moving on to the clinical aspect of the Phase 3 program, FDA agreed we could conduct two double-blind placebo controlled randomized studies of ZX008 using what we refer to as the high dose and the low dose of fenfluramine as well as placebo. The doses will be calculated on a milligram per kilo basis as you often see in pediatric dosing and the high dose will be capped at 30 milligrams per day, which importantly is significantly lower than what was previously used in the treatment of obesity. The studies will have an initial screening visit followed by eight weeks of baseline data collection along with continuation of screening procedures during that baseline period. Those who meet entry requirements will be randomized to one of three arms, placebo or high dose or low dose of fenfluramine solution. Subject to randomized trials will titrate to their target dose over two weeks and continue on that dose during the maintenance period which is an additional 12 weeks. The subjects in the study will be two to 18 years of age and will stratify for approximately equal numbers of subject who are two to six years old and seven to 18 years old. We're targeting 105 subjects in each of the two studies. One study is planned to be conducted primarily in the U.S. and one would be an multinational study. Subject to complete, the double-blind study and our medically eligible and our compliant will be eligible to continue in long-term open label extensions. Our primary endpoint will be the change in frequency of convert procedures from day one for the high dose fenfluramine group compared with placebo. The key secondary endpoints will be the 40% and 50% responder analysis which are important for the European Regulatory Authorities and the consult procedure free intervals which is of great interest to parents and to patients. And compared low dose fenfluramine treatment with placebo and the low dose versus the high dose are secondary efficacy endpoints. Additional secondary endpoints include the incident of status [level] [ph] and the rescue medication use. Also caregiver and clinician global impression of change ratings and quality of life assessments. In terms of safety, we’ll capture adverse events and the typical lab signs and urinalysis parameters will also administer electrocardiograms and echocardiograms every three months for the first year treatment and every six months thereafter assuming that no specific issues arise. That concludes my prepared remarks. So now I’ll turn the call over Ann Rhoads. Ann?

[Ann Rhoads:]

Thank you, Gail. That was the case in the first quarter of 2015 as a result of the strategic decision to sell Zohydro ER business and focus on the clinical development of ZX008 and Relday. All Zohydro ER revenue and expenses have been excluded from continuing operations for all periods herein and are reported as discontinued operations. All prior period information has been recast to confirm to this presentation. Before I begin my review of the financials to three and six months ended June 30, 2015, I want to elaborate a bit more on a couple of the areas Steve touched on during his prepared remark, those being the reverse stock split and the follow-on offering. With respect to the reverse stock split on July 1 following the Board and shareholder approval, we executed one for eight reverse stock split. As Steve said the execution of the reserve stock split supports a per share valuation for Zogenix that’s more in line with our drug development peers. An additional objective supporting the reverse stock split was to potentially allow a broader range of institutions to invest in the company's common stock, namely funds that are prohibited from buying stock with a price per share below a certain threshold. In conjunction with the reverse split, the Board also approved a change in the number of authorized shares of common stock to $50 million shares. As you've heard we've built quite a bit of momentum in our business over the past several months. This provided us with the opportunity to bring additional capital into the company. At the end of July we raised net proceeds of approximately $92 million through an underwritten public offering of 5.4 million shares of our common stock at $18 per share. The final order book reflected a high level of demand resulting in a greater than 4.5 times oversubscribed book and this allowed us for an upsizing from 3.8 million shares to 4.75 million base shares. As Steve said, we were quite pleased to meaningfully extend our cash runway through 2017. Following the reverse stock split and the closing and the follow-on offering, we now have 24.7 million shares outstanding; I’ll now turn to results for the quarter. Total revenue for the second quarter of 2015 totaled $7.4 million and reflected $6 million of contract manufacturing revenue and $1.4 million of service and other product revenue. This compares to total revenue of $6.7 million in the 2014 second quarter and included $2.2 million of contract manufacturing revenue and $4.5 million of net product and other service revenue. The increase in contract manufacturing revenue and decrease in net product revenue in the second quarter of 2015 was due to the sale of Sumavel DosePro business to Endo, which occurred in May of 2014 and the subsequent performance under the related supply agreement. Second quarter 2015 research and development expenses totaled $6.2 million up from $3.2 million a year ago as we continued preparations for our two Phase 3 studies for ZX008 and a multi-dose clinical trial for Relday. Selling, general and administrative expenses for the quarter totaled $7.6 million that's down from $9.1 million a year ago as the company incurred selling expenses for Sumavel DosePro prior to its sale in May of 2014. Income from discontinued operations was approximately $79.2 million, compared to a loss of $14.7 million in the second quarter a year ago. Income from discontinued operations includes a gain on the sale of the Zohydro business of $75.6 million net of tax expense and $5 million from the Purdue waiver agreement that we received on June 29, 2015. We reported a net loss from continuing operations of $6.7 million for the second quarter of 2015, compared with net income of $77.5 million a year ago. Net income including discontinued operations for the second quarter of 2015 was $72.5 million or $3.78 per share and included the pretax gain on the sale of Zohydro ER which was sold in April 2015, that compared with a net income of $62.9 million or $3.59 per share for the second quarter a year ago, which included the pretax gain on the sale of Sumavel DosePro. Total revenue for the six months ended June 30, 2015 totaled $12 million, which reflected $10.2 million of contract manufacturing revenue and $1.8 million of service and other product revenue and this compares to total revenue of $14.1 million in the six months ended June 30, 2014 and included $2.2 million of contract manufacturing revenue and $11.9 of net product and other service revenue. The increase in contract manufacturing revenue and decrease in net product revenue in the second quarter of 2015 was due to the sale of Sumavel DosePro business to business to Endo and the subsequent performance under the related supply agreement. Research and development expenses for the six months ended June 30, 2015, totaled $11.4 million, up from $5.7 million a year ago as we continued preparations for our two Phase 3 studies for ZX008 and a multi-dose clinical trial for Relday. And selling, general and administrative expenses for the six months ended June 30, 2015, totaled $13.9 million down from $21.6 million a year ago as the company incurred selling expenses for some of Sumavel DosePro prior to the sale in May of 2014. Income from discontinued operations was approximately $66.5 million compared to a loss of $3.7 million in the year ago period. Income from discontinued operations includes a gain on the sale of Zohydro business of $75.6 million net of tax expense and the $5 million for the Purdue waiver agreement that we received on June 29, 2015. We reported a net loss from continuing operations of $16.9 million for the six months ended June 30, 2015, compared with net income of $72.6 million for the six months ended June 30, 2014. Net income including discontinued operations for the second quarter of 2015 was $49.6 million or $2.59 per share and it included the pretax net gain on the sale of Zohydro ER, which was sold in April 2015. This compared with a net income of $41.9 million or $2.40 per basic share and $1.31 on a fully diluted share basis for the year ago period, which also includes the pretax gain on the sale to DosePro. Cash and cash equivalents as of June 30, 2015, totaled $77.4 million. This balance does not reflect the net proceeds of approximately $92 million from the recently closed follow-on offering, which we received subsequent to the quarter's end. Pro forma cash on hand including net proceeds from the offering is $169.4 million. We anticipate our current financial resources including those related to the recently closed offering will provide us with sufficient cash to fund operations through multiple key milestones including the U.S. and European Phase 3 studies for ZX008, which are expected to be initiated in the fourth quarter of this year and the potential regulatory approval for ZX008 in the U.S. and Europe, which we currently expect to occur in 2017. Looking at our financial expectations for 2015 reflecting continuing operations following the sale of Zohydro ER, these remain unchanged and now includes second quarter actual. We expect that our research and development expenses will be in the range of $19 million to $22 million through the fourth quarters of 2015. In addition we continue to anticipate that selling, general and administrative expenses will be $40 million to $60 million for the second half of 2015. Also we still expect that contract manufacturing revenue from the supply of Sumavel DosePro prior to Endo will continue at a lower single digit mark-up over the cost of contract manufacturing. And finally the company does not expect gain or loss from continued operations to be significant in the third or fourth quarter. I'll now turn the call over the operator to begin the Q&A session. Blake would you please provide the instructions?

[Operator:]

Yes. Thank you. [Operator Instructions] And we'll take our first question from Annabel Samimy with Stifel.

[Andrew Finkelstein:]

Hi, this is Andrew in for Annabel. I had a few questions. First on Relday, can you provide any color into what the potential Phase 3 study design would look like and if you have any timeline in mind, of securing your partnering with Zogenix would play in this partnership and I have two follow-up questions on ZX008.

[Steve Farr:]

Hi, this is Steve. Thanks for your question. Regard to the clinical trial design just we've given about a lot of thought and also we actually had a very good pre-ind meeting with the FDA sometime ago where we started the talk about what the Phase 3 program would look. One of the reasons why we decided to try and find a strong global partner was recognizing that we really should be running studies in U.S. and Europe combined in order to get concurrent approval of this product about half of the value of these products actually is in Europe today. So we're looking at a Phase 3 program that is two efficacy trials, one to U.S. requirements, one to EU requirements and then there will be a single open label trial that will collect all the patient exposure required for submission in the United States. So we haven't given a lot of consideration right now to how long that study would take. If you look at other companies who have developed these types of products is not unusual for these Phase 3 efficacy trials to take around 18 months or even two years to conclude. So that I think we should assume that this trial will take about the same length of time. With respect to our timelines for finding a partner, we really want to ensure that the product is what we call Phase 3 ready before we would initiate partnering discussions. On the chemistry side, we're basically there. We've been working with a commercial supplier formulation and who packaged the formulation both of Phase 3 as well as for commercial. And now we're waiting for the final piece on the clinical side, which is the results from the Phase 1B trial that's currently up and running. That's a multi-dose PK tolerability safety trial forearms, three arms and involving different doses of Relday and around Risperdal Consta. We expect to get the topline PK data for that at the end of this quarter and then to get the full data set in the fourth quarter. However, we will be moving forward with a formal process as I said towards the end of this quarter close to when we have those PK data available because we think they are quite important to have been able to have meaningful discussion with potential partners.

[Andrew Finkelstein:]

Great. So on ZX008, can you discuss your commercialization strategies for the program and second, you previously reported on the correlations between the SCN1A gene? To what extent would your team be digging into that type of correlation? Thank you.

[Steve Farr:]

I'll take the first question and pass it on to Gail for the second. Obviously we're thinking about the commercial strategy for ZX008. We did retain some very critical commercial talent in Zogenix after we divested Zohydro and they're working on the commercialization strategy for the U.S. right now. And likewise we brought on a Thierry Darcis who will be heading up the European side of our business. We think is obviously very different to our previous experience with Sumavel as well as Zohydro. This is much more concentrated market. We think that we can access this market with a relatively small commercial team. We can't give you a precise number right now who would be in the commercial team, but we do know that it's going to be relatively small compared to our previous experiences with Zohydro.

[Gail Farfel:]

And with regard to the second question about exploring relationship between the SCN1A mutation in Dravet syndrome with ZX008, Dravet syndrome remains the clinical diagnosis, not 100% of individuals with Dravet syndrome have an SCN1A mutation. So I believe we spoke at our investor meeting or Professor about the zebrafish model and we're also looking at other pre-clinical models of Dravet syndrome that might enlighten us about the genetics of Dravet and also the price or the specific mode of action of fenfluramine. Some of these data will be presented in December at the American Epilepsy Society Meeting and further we're exploring genetic genotyping of individuals who have the clinical diagnosis of Dravet Phase III program, which may help to advance the field in understanding the treatment response of the Dravet syndrome.

[Steve Farr:]

Great, thank you.

[Operator:]

Thank you. And we’ll go next to Paul Matteis with Leerink.

[Paul Matteis:]

Great, thanks very much. I’ve a few as well. My first one -- my first question is on Relday. So I know that the study puts forth a lot of different end points on pharmacokinetics. I guess I am wondering is there an actual primary efficacy analysis or primary end point in this study and is there a statistical analysis on that? Are you looking for overlapping standard error bars during the oral supplementation period? I guess can you just expand upon what exactly would be study success here? Thanks.

[Steve Farr:]

Thanks Paul for your question. The short answer is no, we do not power this study for efficacy. They would have been a much bigger study that we're running currently which is just 60 patients spread over four cohorts. So it's been designed to allow us to establish the study state concentrations of risperidone and active moiety delivered by Relday versus the active comparator Risperdal Consta. There is a very rich literature out there to support what is the therapeutic window for these products to provide efficacy in patients of schizophrenia. So it's our belief that if we were able to establish that indeed the levels of Relday are within that therapeutic window no one established for Risperdal Consta but also for Invega Sustenna then I think that we would go Phase 3 program with a high level confidence that would established efficacy. Now we will be collecting safety and as part of that we will be looking at patient's wellbeing during the study. So we have -- if you like some idea of efficacy, but in no way this past study being powered to establish efficacy. We don’t think it's necessary, it's more important to establish the steady state PK.

[Paul Matteis:]

Okay. That makes sense and then could you talk about what additional data on ZX008 you will be presenting at the American Epilepsy Society in December?

[Gail Farfel:]

So Brad Galer, is on the phone, our Chief Medical Officer, Brad can you respond to this question?

[Brad Galer:]

Hi Paul, all I can say right now is that we submitted two clinical posters and one basic science poster. They are still in review. We assume that indeed they will be accepted, but since they have not been accepted yet as none have, we're awaiting word and will let you know as soon as we know.

[Paul Matteis:]

Okay. Thanks. Do any include new patient's of efficacy data?

[Brad Galer:]

Yes from the ongoing Belgium, we will have new data to present more current data.

[Paul Matteis:]

Okay. Great, thanks very much. I appreciate it. One more actually if you don’t mind, just wondering now with the expanded sample size in the Phase 3 program, I’m wondering what effect size you're powered for in the Dravet study, thanks very much.

[Gail Farfel:]

This is Gail. We have not discussed that publicly at this time.

[Steve Farr:]

Yes I can just say couple of things Paul, just one the sample size was expanded because we're looking at more groups than our original design. So that was one of the reasons we went from 156 to 105. And also we had some good feedback from the FDA in terms of airing on the site of conservatism with respect to selecting a sample size. So we've taken that to half as we've gone through a revaluation of the protocol, but Gail is right. We haven’t discussed publicly yet what are effect size is, what the standard deviation is that's gone into our prior analysis, but I would say that we've had a number of people working on it both internally and externally and we feel comfortable where we’re at.

[Paul Matteis:]

Okay. Great. Makes sense. Thank you.

[Operator:]

Thank you. And we will go next to Difei Yang with Brean Capital.

[Difei Yang:]

Thank you. Good afternoon and thanks for taking my questions. Just a couple, so the first question is with regards to the long term open label extension study, would you comment on the length of this study that the FDA wanted to see and if the approval is contingent upon the completion of that study?

[Gail Farfel:]

The length of the study initially will be one year which is customarily according to the regulations for the long term data in chronic illnesses, as often happens with orphan disorders, it is our intention at this point to have sequential extension for individuals to respond to the drug and our compliant and wish to say on ZX008 until its available commercially.

[Difei Yang:]

Okay. Thank you. And so does that imply you’ll need to have at least one year study completed by the time of approval that’s sounded like implies that?

[Gail Farfel:]

So that is generally what happens organically one submits when the clinical when the double-blind trials has completed and are reported out and the first subject to enter double-blind have already begin their open label, and the very last people enter who exist double-blind are the last one to finish open label. And so generally one meets the regulatory requirements of having enough data for individuals who have been on in this case ZX008 for one year by the time of approval.

[Difei Yang:]

Okay. Thanks. And the next one is easy one contract manufacturing, revenue from contract manufacturing I've noted that Q2 has a higher revenue versus previous quarter. Is this just a one-time thing or seasonality related or going to see this recurring?

[Ann Rhoads:]

So it’s a good question Difei. I would just tell you that there are some seasonality related considerations as it relates to the number of shipments that are released during a given quarter, but this is probably a good number to think about on a go-forward basis, but it will move around a bit.

[Difei Yang:]

Okay. Thank you.

[Operator:]

Thank you. And we’ll go next to Akiva Felt with Oppenheimer.

[Carlos:]

Yes, hello this is Carols [Lorsenov] [ph] for Akiva Felt. Thanks for taking my question. Actually I have a couple of question. The first one is with regards to ZX008, what are the orphan indications that you're thinking about or you think are worth explaining for this compound?

[Steve Farr:]

Go ahead Brad.

[Brad Galer:]

Yes, hey Carlos. We actually haven't disclosed that yet, but what I can say is that we should be initiating one proof of concept study evaluating one particular pediatric orphan cephalopathy by the end of this year. And in addition we're actively discussing and evaluating several other orphan pediatric conditions of epilepsy both internally and with external experts and those are likely to start early next year. So these are things that we are very much evaluating seriously and also as Gail mentioned we have ongoing studies looking at and further understanding mechanism of action, which also may help us points two where ZX008 may benefit patients.

[Carlos:]

Okay, great. Thank you. Then my next question is your cash position looks really strong after Zohydro and the recent financing and so do you guys have enough cash to fund the pre-commercial for ZX008 and how should we think about longer term sales and marketing expense going forward?

[Gail Farfel:]

So we do believe that we’ve got adequate capital to get through the approval and pre-commercial spending that would be required for ZX008. We haven’t started to give specific on expense guidance regarding kind of commercial infrastructure to support the product, but I think as Steve mentioned, we expect it will be substantially less than what we’ve seen for our previous two commercial products. And if you take a look at the number of treating physicians you can see that on that on the Dravet website, you can see that it's a pretty concentrated group of specialist who treat these with Dravet Syndrome and so we do believe that with a reasonably small kind of commercial/medical on team that we could be covering these doctors at a far less cost or expense level than what we've seen on our previous product.

[Carlos:]

That makes sense. Thank you.

[Operator:]

[Operator Instructions] We’ll go next to Tim Lugo with William Blair.

[Raj:]

Hi, this is Raj in Tim. Taking for taking the question, did you conduct any DDI studies or have there been DDI studies conducted with the synthetics and firming given the number of combinations with the patients have with these?

[Gail Farfel:]

This is Gail. We have not conducted any of the human clinical DDI studies. Yet we are creating a project plan to run in parallel with Phase 3.

[Raj:]

Great, and then I think you mentioned in your prepared remarks that the high dose of three mgs per kg, did you guys say what the low dose and how will that dose titration will be done over the two weeks?

[Gail Farfel:]

What was mentioned in the prepared remarks was that the high does would be capped at 30 milligrams per kilo, per day, and the range of the study goes to adult weigh. So 18-year-old on the top I am sorry the rest of your question was.

[Raj:]

How about the low dose

[Gail Farfel:]

So we have not specified and we are waiting for upon submission of the IND we will he waiting for regulatory feedback on the thoughts of dosing and so we will -- once we receive that feedback, then we’ll be updating clinicaltrial.gov and we'll inform you all of the doses when they're complete.

[Steve Farr:]

Just to let you know that the doses selected have been informed from the ongoing study in Belgium. So we feel confident that we have the right dose and we will be submitting that as part of the IND to the FDA.

[Raj:]

Great. Thank you.

[Steve Farr:]

Okay.

[Operator:]

Thank you. And that concludes our question-and-answer session. I will now turn the call back to Dr. Steve Farr for closing remarks.

[Steve Farr:]

Well, thank you everyone for joining us today. We're in a really strong position, properly the strong position we've ever been as a company financially and operationally and I am really excited about our future prospects. We all look forward to keeping you apprised of our further progress throughout the year. Thanks for joining us today. We really appreciate your interest in Zogenix. Have a great day.

[Operator:]

Thank you, sir. And that does concludes today’s conference. We thank you for your participation. You may now disconnect.