August J. Moretti - Chief Financial Officer, Principal Accounting Officer and Senior Vice President James A. Schoeneck - Chief Executive Officer, President and Director Jack Anders - Matthew M. Gosling - Senior Vice President and General Counsel.
Jason N. Butler - JMP Securities LLC, Research Division Brian E. Jeep - WallachBeth Capital, LLC, Research Division Chiara Russo - Janney Montgomery Scott LLC, Research Division.
Good afternoon, everyone, and welcome to Depomed Reports Third Quarter Fiscal Year 2014 Financial Results Conference Call. [Operator Instructions] Please also note today's event is being recorded. This time I'd like to turn the conference call over to Mr. August Moretti, CFO. Sir, please go ahead..
Thank you, operator. Good afternoon, and welcome to our Third Quarter 2014 Financial Results Conference Call. With me today are Jim Schoeneck, President and Chief Executive Officer of Depomed; Matt Gosling, Senior Vice President and General Counsel; and Jack Anders, Vice President, Finance.
I'd like to remind you that the matters discussed on the call will contain forward-looking statements that involve risks and uncertainties, including those relating to the commercialization of Gralise, CAMBIA, Lazanda and Zipsor and achievement of our financial guidance for 2014.
Actual results may differ materially from the results predicted, and recorded results should not be considered an indication of future performance.
These and other risk factors are more fully discussed in the Risk Factors section and other sections of our Annual Report on Form 10-K for the year ended December 31, 2013, and of our quarterly report on Form 10-Q that we expect to file tomorrow with the SEC.
Depomed disclaims any obligation to update or revise any forward-looking statement made on this call as a result of new information or future developments.
Depomed's policy is to only provide financial guidance and guidance on corporate goals for the current fiscal year, and to provide, update or reconfirm its guidance only by issuing a press release or filing updated guidance with the SEC in a publicly accessible document.
References to current cash, cash equivalents and investments are based upon balances as of September 30, 2014. All guidance, including that relating to the company's expected product revenues, total revenues, EPS and adjusted non-GAAP EPS and cash usage, is as of today, November 05, 2014. I'll now turn the call over to Jim Schoeneck..
CVS Caremark, Express Scripts and Catamaran. Gralise is differentiated from other gabapentin products because it is taken only once a day to achieve 24-hour pain control, and has a favorable tolerability and side effect profile. Tolerability is crucial, especially among the elderly to effectively titrate to an optimal dose of the drug.
Gralise recorded third quarter prescription growth of 7% over the prior quarter just as it did last quarter. We have also substantially changed the long-term outlook for the Gralise franchise following victories in 2 court cases this past quarter that uphold and enforce our patents and respect Gralise as an innovative treatment. In August, the U.S.
District Court for the District of New Jersey found all claims and counterclaims in favor of Depomed in our patent infringement lawsuit against Actavis, upholding the validity of all 7 Depomed patents. The ruling prevents generic entry of the first generic file from Actavis until the last Gralise patent expires in 2024.
Then in September, the Federal District Court for the District of Columbia ruled in favor of Depomed versus the FDA. The judge issued an order requiring the FDA to grant Gralise Orphan Drug exclusivity for the management of postherpetic neuralgia.
Each of these cases in their own represents a significant accomplishment in protecting our IP and validating the innovative nature of Gralise. I hope that you'll agree that having both of these positive outcomes in one quarter after several years of work by our legal team is quite a feat. But I have one more piece of news regarding Gralise.
Although the FDA filed a notice of appeal regarding our Gralise Orphan Drug case earlier this week, we received notice today that the government intends to dismiss their appeal as soon as the case is docketed in the D.C. District Court. Depomed informed the government that we will support the dismissal of the appeal.
CAMBIA and Lazanda were major contributors to our growth this past quarter. Both are demonstrating how Depomed can create value from underappreciated assets in pain and neurology. CAMBIA is the only single-agent NSAID approved by the FDA for the treatment of acute migraine in adults.
We recorded CAMBIA sales of $5.8 million for the third quarter, an increase of 16% compared to the $5 million that we recorded for the second quarter of 2014. New prescriptions for CAMBIA were up 25% in the third quarter, compared to the first quarter of 2014 when we relaunched the product.
Recall that we only acquired the product in December of last year, so our promotion of CAMBIA is really just getting rolling. CAMBIA is benefiting from the synergies with our Gralise commercial efforts. Nearly 70% of CAMBIA prescription are written by neurologists, half of whom already prescribe Gralise.
We have about 160 reps reaching those prescribers versus only 35 selling CAMBIA before we acquired the product. CAMBIA's unique clinical profile is also helping drive the growth. The product can be a complementary treatment strategy for patients taking triptans.
Due to its rapid absorption, CAMBIA can be used in patients who have missed the initial 20- to 30-minute treatment window when triptans are most effective, or alternatively when doctors can not use triptans or want to otherwise limit their use. With market exclusivity expected until 2023, we see a long and promising future for CAMBIA.
Lazanda's growth trajectory is also taking off. In fact, it looks much more like a launch curve than a product starting its fourth year on the market. Lazanda is a rapid-acting fentanyl nasal spray for the management of breakthrough cancer pain.
Product sales of $2.3 million for the third quarter of 2014 were up over 400% compared to the 400,000 for the third quarter of 2013, and a 64% increase when compared to the $1.4 million we reported in the second quarter of 2014.
We relaunched Lazanda about a year ago with the refined positioning targeted at an expanded prescriber base that focuses on pain specialists as well as oncologists. The results have been exceptional. We sold more products in the third quarter of 2014 than the prior marketer had sold in the 12 months before we acquired the product.
Lazanda's nasal delivery for the management of breakthrough cancer pain is proving to be an attractive differentiator when compared to other rapid acting fentanyl meds. Lazanda is quickly absorbed and starts to relieve pain within about 5 minutes. By giving the drug nasally, less of the fentanyl is swallowed.
These 2 characteristics are reflected in the Lazanda drug levels, which move up quickly to provide pain release, but also dissipate within about 80 minutes matching the typical course of a breakthrough episode. We anticipate more upside for Lazanda.
Over the last 2 quarters, our Lazanda growth has been primarily driven by increased volume for mid and high-decile writers of the rapid-acting fentanyls where previously most of the prescribing of the product was in low-decile physicians. Our product volume for mid and high-decile writers has almost tripled in just the last 6 months.
Our strategy of focusing on pain physicians in addition to oncologists appears to be paying off.
Another factor that has the potential to contribute to additional growth next year for Lazanda is that Lazanda will become the only branded rapid-acting fentanyl on the formulary at Express Scripts, one of the largest pharmacy -- pharmaceutical benefit managers.
Last week, Express Scripts sent an alert to pharmacies stating that all other branded competitors have been excluded from their formulary starting January 2015. Lazanda is listed as one of 2 preferred alternatives on the formulary, along with the generic Actiq lollipop.
Express Scripts states that pharmacy claims for excluded medications will be rejected as not covered plan benefit exclusion. Plus they'll send a message to the pharmacists saying that they have covered alternatives, specifically Lazanda, as the only branded option.
With approximately 25 million lives covered by Express Scripts National Preferred Formulary, this development could have a significant impact on Lazanda market share.
In response to the rising interest among physicians and the coverage benefit changes for 2015, we are announcing that we are increasing the size of our dedicated Lazanda sales force by 50% effective January 1. Zipsor is another example of creating value from an asset in pain and neurology.
Prescriptions were declining when we acquired the product for approximately $26 million 2 years ago. We have now booked over $50 million in net sales since acquiring the product, with gross margins over 95%. Zipsor sales of $18.3 million for the first 9 months of 2014 are up 25%, compared to $14.6 million for the same 9-month period a year ago.
Zipsor remains a highly-profitable asset within our pain and neurology franchise. And now turning to our financial strength. As many of you know, we raised $345 million in a convertible note offering in early September. The deal is upsized from its original $230 million offering to $345 million.
The 7-year notes bear an interest rate of 2.5%, have a conversion premium of 37.5%, and include a 5-year call feature. The financing gives us over a $0.5 billion in cash available for acquisitions, a powerful lever in pursuing larger market high-growth opportunities. Hopefully the transformation taking place at Depomed is apparent.
Since 2011, we've grown our product portfolio from 1 to 4. All 4 products are within our focused areas of pain and neurology, and we believe that each will have a lengthy period of exclusivity. In that time span we've increased our sales of our directly marketed products from $1 million to an estimated $113 million to $117 million by year end 2014.
And we've increased our cash position to $560 million as of the last quarter -- the last day of last quarter. It's no coincidence that we were recently added to the S&P 600 small cap index, and since then added to the Barrons 400 as well, which I think is a reflection of Depomed's maturation as a company.
I'll now turn the call over to Augie to discuss our finances..
Thank you, Jim. Before I summarize our financial results for the third quarter and the first 9 months of the year, I want to take a moment to remind folks about the impact of the accounting for the PDL biopharma transaction.
As most of you will recall in October 2013, we sold interest in future royalty and milestone payments in the type 2 diabetes therapeutic area to PDL for $240.5 million, which we received at the closing of the transaction in October 2013. Depomed is accounting for the transaction under the debt accounting method.
The debt accounting method requires us to recognize as revenue the underlying royalties and milestones that we sold to PDL. To record the proceeds of $240.5 million as a liability and to impute an ongoing interest charge against the amount of the liability that is deemed to be unpaid.
As we have discussed in our earlier earnings calls this year, in addition to GAAP presentations, we have presented non-GAAP financials in today's earnings release, along with an appropriate reconciliation to give our investors and other readers of our financials a view of our operations that among other things eliminates the PDL noncash royalty income and the noncash interest charge.
In the third quarter of 2014, we recognized $19.8 million of PDL noncash royalty income and $4.4 million of PDL noncash interest expense. In the first 9 months of 2014, we've recognized $95.9 million of PDL noncash royalty income and $14.6 million of PDL noncash interest expense.
We have recently amended various agreements relating to our continuing obligations relating to production of Glumetza. Sales of Glumetza give rise to the vast majority of the PDL noncash royalty income, and we are reviewing the impact of these amendments on our accounting for the PDL transaction.
I would now like to summarize the financial information for the quarter and 9 months ended September 30, 2014. Total product revenue for the quarter ended September 30, 2014 was $30.6 million, compared to $16.3 million for the quarter ended September 30, 2013.
Total product revenue for the 9 months ended September 30, 2014 was $80.3 million, compared to $39.5 million for the 9 months ended September 30, 2013. The increases in product revenue in the 2014 periods were principally the result of significantly higher Gralise revenue and the addition of CAMBIA and Lazanda revenue.
Gralise product sales were $16.3 million for the third quarter of 2014 and $42.3 million for the 9 months ended September 30, 2014. This compares with $9.8 million in the third quarter of 2013 and $24.5 million for the first 9 months of 2013. The 2014 increases reflect increased prescription growth and increased unit prices.
CAMBIA, which we acquired in December 2013, had net sales in the third quarter of 2014 of $5.8 million and $15.4 million for the 9 months ended September 30, 2014. And Lazanda, which we acquired in late July 2013, had net sales in third quarter 2014 of $2.3 million and for the 9 months ended September 30, 2014, $4.3 million.
Zipsor sales in the third quarter of 2014 were $6.1 million and for the first 9 months of 2014 were $18.3 million. This compares to $6.0 million and $14.6 million in the comparable periods in 2013. Zipsor prescriptions were essentially flat year-to-year and the increased revenues in the 2014 periods reflect price increases.
Selling, general and administrative expenses were $27.1 million for the third quarter of 2014, and $92.2 million for the 9 months ended September 30, 2014, as compared to $26.4 million and $77.7 million in the comparable periods in 2013.
The increases in SG&A expense in 2014 were primarily due to increased sales and marketing expenses related to Lazanda, which we acquired in July 2013; and CAMBIA, which we acquired in December 2013 and in the first half of 2014, increased legal expense related to ongoing patent infringement cases.
SG&A expense for Q3 2014 was $5.5 million below that for Q2 2014. We discussed this issue on our last earnings call. The reduction from Q2 to Q3 resulted principally from lower legal expenses in Q3 than we incurred in Q2 in connection with our patent litigation.
Research and development expenses were $1.6 million for the third quarter of 2014 and $5.1 million for the first 9 months of 2014, as compared to $1.3 million and $6.0 million in the comparable periods of 2013.
A decrease in R&D expenses for the first 9 months of 2014 primarily related to the absence of all SEFELSA expenditures, which occurred in Q1 2013. GAAP net income for the third quarter 2014 was $6.5 million, or $0.11 per share. In the third quarter of 2013, we achieved similar performance of GAAP net income of $6.5 million or $0.11 per share.
The 2014 third quarter GAAP net income was impacted by our recognition as revenue of $19.8 million of noncash PDL royalty revenue on Glumetza sales. These royalties were sold to PDL in 2013 and the proceeds were paid over the PDL pursuant to our agreement. Non-GAAP adjusted earnings for the third quarter 2014 was $2.1 million, or $0.03 per share.
Cash, cash equivalents and marketable securities were $560 million as of September 30, 2014. We were cash flow positive for the quarter and in September, we completed our convertible debt financing, which generated $334 million of net proceeds. I'll talk for a moment about the accounting for the convertible debt.
Under the GAAP accounting rules, we have to evaluate and separately account for the debt and equity or conversion option components of the convertible debt. We have determined the fair value of the liability to be $227 million and have recognized that amount as a long-term liability.
We have recorded the difference of $118 million between the gross proceeds and the fair value of a liability as debt discount with a corresponding increase in paid-in capital.
That debt discount cost will be amortized to interest expense through September 2021 using the effective interest method, and as a result we will record noncash interest expense in addition to the 2.5% coupon.
Total interest for the 3 and 9 months ended September 30, 2014 included $1.3 million of interest expense on the convertible notes, which includes $800,000 of noncash interest. Interest expense will increase in future periods as the September 2014 expenses only reflect 21 days of interest on the convertible debt.
All of this is set out in great detail in Note 9 to the financial statements included in our 10-Q, which we will file tomorrow. In addition, we will use the if converted method of accounting for calculating fully diluted earnings per share and adjusted non-GAAP earnings per share.
This method adds back total interest expense net of tax to earnings and assumes that 17.9 million shares underlying the convertible notes are converted to common stock. I'll now move on to our guidance. But before addressing our guidance for the remainder of the year, I'd like to point out that the guidance is based on our current budget.
As you can well understand the budget is based on a large number of assumptions given the complexity and scale of our business and the uncertainties in estimating future product revenues.
I would direct you to the Risk Factors section of our annual report on Form 10-K and our 10-Q filing that we will make tomorrow for a more complete discussion of the relevant risks relating to guidance. With that said, we are increasing our guidance for total revenues for full year 2014 to $232 million to $242 million.
And we are increasing our guidance on GAAP earnings per share to $0.48 to $0.58. These increases are entirely due to increased estimates of noncash PDL royalty income from net sales of Glumetza by Salix. We have recentered our product revenue guidance around the lower end of our prior range.
We now expect product revenue for 2014 of $113 million to $117 million. We are narrowing our non-GAAP adjusted earnings per share guidance to $0.06 to $0.14 per share, and reiterating our guidance for positive cash flow for the full year.
Depomed is using non-GAAP adjusted earnings per share for its 2014 guidance and for the presentation of its financial results in 2014. And I refer you to today's press release for an explanation of non-GAAP financial measures and the table that reconciles the company's non-GAAP adjusted earnings per share. That concludes the financial discussion.
I'll now turn the call back to Jim..
Thanks, Augie. Depomed is closing out 2014 with a full head of steam, ready for what we believe will be a great 2015. We've now seen 3 full quarters with all 4 products integrated into our commercial infrastructure.
Augie and I have provided commentary on the record setting quarters in terms of product sales, as well as our outlook for a record setting year for Depomed in terms of product sales and total revenues. During the quarter, we prevailed in 2 court cases that we believe extend exclusivity for Gralise well into the next decade.
We also recently expanded our leadership team, adding Srini Rao as our new Chief Medical Officer and Scott Shively as our Chief Commercial Officer. Srini brings to Depomed deep experience in pain and neurology, along with a key eye for product opportunities.
Scott has extensive commercial leadership experience in the sales and marketing of pain and neurology products both for specialty and larger pharmaceutical companies, including Pfizer, Endo and Alpharma. Before we open the call to questions, I know many of you are wondering what we're going to do with over $500 million in cash.
Our team has honed its skills on the CAMBIA, Lazanda and Zipsor deals, and has demonstrated our ability to integrate new products and to create value from those deals. We're eager to pursue larger details that can accelerate the growth and further transform the company. Our cash balance puts us in a position to pursue those larger opportunities.
We've been clear in outlining the types of deals that fit within our strategic focus. Specifically, growth products in pain and other nervous system disorders and adjacencies. Second, products with annual revenues between $20 million and $200 million or late stage assets already through Phase III that can produce revenue within 18 months.
And finally, a preference for assets with lengthy periods of exclusivity and peak sales still ahead. Our business development team is actively pursuing deals that fit these criteria. As we've shown in our recent transactions, we'll be diligent and we will strike when the right opportunity emerges.
I want to thank the entire team at Depomed for the tremendous progress we've made in 2014 and for dedicating their time, talent and energy to making Depomed a great company. We look forward to updating you on our continued progress, and we want to thank you for your support. That concludes our formal comments.
And at this point, we'll open the call to question..
[Operator Instructions] Our first question comes from Jason Butler from JMP Securities..
Just starting off maybe with inventory changes.
Can you mention if there were any meaningful changes for any of the 4 key products during the quarter?.
This is Jack. Inventory levels at our wholesalers were relatively flat. There were a few days down for Zipsor, but for the other 3 products, they were flat versus June 30..
Okay. And then for CAMBIA, you showed good growth quarter-over-quarter, but maybe could you talk about what you think the ultimate potential for this -- sales potential for this drug is given this is a large indication and you still have a lot of room to go.
But realistically, where is the ceiling for this product?.
Jason, we haven't given guidance on what we think the ultimate peak sales for the drug are. But certainly we believe at a substantial growth from where it is. And I think the question will be do we get it into the 9-digit territory or not.
And so that really is what we would hope to do with it, but at this point we haven't given any guidance around that..
Okay, great.
And then just last question for me, in the context of your guidance, can you talk about the prescription trends you've seen so far in October and now into November, and how you're thinking about the product -- the continued growth of the product lines?.
So far in October, we've seen good and continued growth with Gralise. We've seen our first months over 6,000 scripts over the last 4 weeks. We've been setting records almost every week on CAMBIA. Just continues to jump up, and so we've seen really good growth there.
And on Zipsor, we see basically a stabilization on Zipsor, the scripts, which we're happy to see. And then finally on Lazanda, I mean, there we continue to see a lot of things going up. It's interesting, though, because you don't see it fully reflected in the SHA data.
I think because you've got a number of the prescriptions that go through channels that don't report or alternative channels in that TIRF REMS class, that fentanyl class. A lot of it just doesn't necessarily get reflected in the SHA scripts..
[Operator Instructions] Our next question comes from Brian Jeep from WallachBeth Capital..
First on Zipsor on the volume.
From here, would you expect it to be roughly flattish and we're going to see growth from price increases? Is that kind of the thinking?.
I think it's a good way to think about it, Brian. I think that's -- clearly even as we've positioned on this call, it's fourth in the hierarchy of products that we have. I mean, a great product from a standpoint of the revenue and the dropdown on it.
But we think that the other products have really got a bit more differentiation and really a bit more upside in terms of the growth..
Okay. And you mentioned an increase in the Lazanda salesforce.
Can you remind us how the salesforce is structured -- how many reps you have?.
This will put us at about 25 people still in Lazanda as of the 1st of the year..
Okay. And I wonder if you could talk a little bit, forgive me if you mentioned it, but you lowered product revenue guidance. I wondered if there was specific reasons behind that, something that changed between last quarter and this quarter..
No, I think it's just a matter of looking at where we've been the last couple of months and where we see the trends through the end of the year, and so that really is what we do. We really -- that's, as he says -- Augie said, we're just really centering it around that low end of that range..
Okay. And one last question.
Are you seeing good development options out there? Do you think you'd be able to do something by the end of, say, 2015?.
Yes. I think there's 2 parts there. One is we do see a awful lot of opportunity out there that is interesting to us. These deals, particularly the larger deals, take longer to get done.
Sumant had asked me a while back if we were going to get something done by the end of this year and I told him pretty clearly, that was very unlikely since we obviously weren't in the position of disclosing a deal when we did the convert and just how long this deals take to do.
So I think you're exactly right by looking at it as a 2015 event and we're continuing to pursue a number of things here..
[Operator Instructions] Our next question comes from Chiara Russo from Janney..
Just kind of a quick bit of house -- well question I want to ask about the acquisition. Sort of piggyback off of what Brian said, with the biz developments, in terms of -- you said there are definite options out there.
Is -- with the hypothetical deal, do you see that yes, there are available assets and are the economics just not kind of falling into place there sort of -- like you said that these take time.
Is it assets or is it economics that sort of aren't meshing at this point?.
I don't know that I would characterize it as not meshing, I think it's a matter of us being very focused on what we want that can leverage our infrastructure and really focused on those deals. And sometimes the deals are ones where somebody is decided to divest something.
But more often, you're trying to actually convince someone that you can make it worth their while to have them in your hands instead of theirs. And those tend to take a bit more time. So I think I would really characterize it more that way. I have said on calls previously -- people have asked about the multiples that we paid for products.
I think clearly, as you get into bigger products, I mean anything that starts to round toward $100 million, you're going to, depending on the length of exclusivity, you're going to see multiples that are 4 plus or minus versus what we've paid on some of the deals so far that have all been subbed 3x last [ph] 12 months revenue.
I do think as we get up farther into that revenue stream that we're going to see some multiples that go higher. But again I don't think it's necessarily price or availability, it really is just the time it takes to get them done..
Okay, okay. Great. And just sort of 2 other sort of quicker questions, actually maybe 3.
With Gralise going into Orphan Drug status, what does that sort of mean in terms of your pricing strategy?.
Oh, I mean pricing, we don't proactively talk about pricing strategy. I think I don't -- see the granting of the Orphan Drug exclusivity as a large factor on the pricing simply because we're in a competitive market. But, Matt, if you want to make any more specific comment about the Orphan Drug, go ahead..
Yes, the other thing that the Orphan Drug status does is it certainly guarantees exclusivity up through the 7 years that end in January 2018. Obviously, we expect to get out to '24 based on the patent litigation, but that's the other nice added benefit from the Orphan Drug exclusivity..
Okay. Got you. And just a refresher on Lazanda.
How many reps do you currently have on that product?.
We've got just under -- we've got 16 people now, and we'll be going to about 25 people as of the 1st of the year. And again we see that product growing very well. And I really think this opportunity to Express Scripts is a big one.
I mean, the fact that you've got other drugs that are literally just going to be rejected at the pharmacy in 25 million -- population of 25 million if they're on the drug, I think gives us one heck of an opportunity, and we want to make sure we're ready to leverage that..
Okay. And sort of a last question. I was kind of poking around the other day.
And I found -- and I was curious if you could perhaps educate us a little bit on -- I know that there was a recent ruling on the interparts issue that you guys were having with Endo and I was just kind of curious sort of what your take on those types of patent reviews is as it's just going to start picking up..
I'm going to turn it over to Matt. Because this is related to our suits that we filed against Purdue and Endo for infringement of our patents. And so I'll let Matt talk about both the effect on the litigation against Purdue and Endo but also specifically about the interparties review..
Yes, please..
Yes, you're probably referring to the -- Patent Trial and Appeal board did pick up 3 of Endo's petitions related that -- that are related to the litigation we have ongoing with them. So we're now headed toward a short kind of half-day trial with the PTAB with Purdue in March and then with Endo in June.
We'll have decisions in the kind of July timeframe and September timeframe for Purdue and Endo after which, all going well, we would pick the litigation back up. It's certainly -- I think these IPR proceedings are becoming more common, and I think we'll start to see more of them.
Good news as far as these go, is not all of the claims were picked up in either case. Two claims of the -- of each of the 2 patents we have asserted against Purdue weren't picked up.
So long as we get -- as little as kind of one or a handful of these -- of additional claims will be well positioned to continue against Purdue and likewise in the case of Endo, there are 7, 8 of the claims -- 8 or 9 of the claims total that were not picked up, and we feel like we're certainly in good shape there moving forward with maybe 1 or 2 more claims.
So point being, where we'll be out kind of into the middle Q3 and -- Q3 of next year before we know kind of how well we're positioned moving forward. But we continue to think of those lawsuits as kind of good investments and we certainly expect to do well there as we have elsewhere..
And at this time I'm showing no additional questions. I'd like to turn the conference call back over for closing remarks..
So again I'd like to thank everybody for the interest in Depomed. I believe we really have had a terrific quarter, and I'm excited about our growth trajectory for the rest of this year and beyond. I think we've shown the ability to execute on product acquisitions and turn them into growth generators.
We're building on those successes now and we have set our sights on bigger opportunities. Our business development strategy for finding, acquiring, growing products in pain and neurology, I think, is at this point well-established. And our path is set for creating value over the long term.
And I think our success on the court side has also been demonstrated this last few months and again it was several years of work that came to fruition with those 2 verdicts in the third quarter.
So again I thank you for your support, and I invite you, if you're not a shareholder, to join with us, or if you are, to stay with us as we continue the transformation of Depomed..
Ladies and gentlemen, that concludes today's conference call. We do thank you for attending. You may now disconnect your telephone lines..