Lisa Wilson - IR Scott Tarriff - President & CEO David Riggs - CFO.

David Amsellem - Piper Jaffray Randall Stanicky - RBC Capital Markets Irina Koffler - Mizuho Gregg Gilbert - Deutsche Bank.

Good morning. My name is Keith, and I will be your conference operator today. At this time, I would like to welcome everyone to the Eagle Pharmaceuticals Fourth Quarter and Full Year 2015 Earnings Results Conference Call. All lines have been placed on mute to prevent any background noise.

After the speakers' remarks, there will be a question-and-answer period. [Operator Instructions]. As a reminder, this conference call is being recorded, today, February 25, 2016. It is now my pleasure to turn the floor over to Lisa Wilson, Investor Relations for Eagle..

Thank you, Keith. Welcome to Eagle Pharmaceuticals' fourth quarter 2015 earnings call. This is Lisa Wilson, Investor Relations for Eagle Pharmaceuticals. With me on today's call are Scott Tarriff, President and Chief Executive Officer; and David Riggs, Chief Financial Officer.

This morning the company issued a press release detailing financial results for the three months and full-year ended December 31, 2015. This can be accessed through the Investors section of the Eagle website at eagleus.com, and you can also access the webcast of this call from there.

Before we get started, I would like to remind everyone that any statements made on today's conference call that express a belief, expectation, projection, forecast, anticipation or intent regarding future events and the company's future performance may be considered forward-looking statements as defined by the Private Securities Litigation Reform Act.

These forward-looking statements are based on information available to Eagle Pharmaceuticals management as of today, and involve risks and uncertainties including those noted in this morning's press release and our filings with the SEC. Such forward-looking statements are not guarantees of future performance.

Actual results may differ materially from those projected in the forward-looking statements. Eagle Pharmaceuticals specifically disclaims any intent or obligation to update these forward-looking statements except as required by law.

A telephone replay of the call will be available shortly after completion through March 9; you will find the dial-in information in today's press release. The archived webcast will be available for one year on our website at eagleus.com.

For the benefit of those who may be listening to the replay our archived webcast, this call was held and recorded on February 25. Since then, Eagle may have made announcements related to the topics discussed, so please reference the company's most recent press releases and SEC filings.

And with that, I'll turn the call over to Eagle's CEO, Scott Tarriff..

Thank you, Lisa, and good morning everyone. I'm pleased to be here today to review what has been an exciting quarter and an extraordinary year for Eagle Pharmaceuticals.

We achieved several major milestones over the last eight weeks, including the recent launch of BENDEKA where we expect a near complete market conversion by March 31 by our marketing partner Teva, and for which we are entitled to a 20% royalty.

The recent launch of our alcohol-free Docetaxel product, the upcoming PDUFA date for bivalirudin, by the way we now trademark that Kangio, and that will be in the next three weeks.

FDA fast track designation for RYANODEX for Exertional Heat Stroke, along with an upcoming meeting with the FDA to discuss our go-forward plans and agreement with AMRI to further advance our pipeline, and the issuance of another very important patent for bendamustine.

As you can see from our results, we turned the corner from an investment mode drug delivery company to a fully commercial profitable earnings driven specialty pharmaceutical company. Eagle for profitable in 2015 and as we achieved the milestones I just outlined, we expect significant EPS in '16 and beyond.

The fact that we were profitable in '15 is important, as is the fact that we maintained our cash levels throughout the year while investing heavily in our future. Now, we are poised to take advantage of the nine years of investments and build the earnings of the company.

At the end of '15 we took measures to establish a firm foundation for executing our '16 strategic objectives. We invested in our business by making key hires to advance our sales and commercialization infrastructure. We believe we are now well-positioned for what will be a busy 2016.

We expect to see significant activity between now and May of this year, as we launch new products in several key markets, and our growth outlook over the next several years is very strong. We have many key catalysts ahead of us in the next several weeks and coming months.

To recap, we are waiting to hear about our three and seven years exclusivities for BENDEKA.

The outcome, our FDA meeting on Exertional Heat Stroke, which we expect to hold next month, a decision on the TREANDA and the litigation in Delaware, the March 19 PDUFA date for Kangio or bivalirudin, the reimbursement status for bendamustine, the bendamustine clinical safety data reporting which is forthcoming, and additional information regarding meaningful label expansions for RYANODEX beyond Exertional Heat Stroke and malignant hyperthermia.

While we will not be issuing guidance for the year, we think it would be helpful to provide some visibility into the key components of what will drive Eagle's success in '16 and beyond. Q1 will be a pivotal quarter, largely dependent upon the timing of several factors, some of which are outside of Eagle's control.

Principally, this relates to the rate of conversion of BENDEKA, as well as our receiving approval from the FDA for Kangio or bivalirudin. It is hard for us to project quarters. For example, if bendamustine share a sales shift $10 million into one quarter or the next, the swing could result in $0.12 impact to EPS in either quarter.

However, as we look out and assuming we fully achieved our internal BENDEKA conversion estimate, and we have launched Kangio, we are generally comfortable with the current external projections during the first half.

As we gain more visibility into the launch of BENDEKA and approach the end of the first quarter, we believe that Eagle will be in a much better position to comment on the remainder of '16 and into '17. I will also be discussing the longevity of our bendamustine franchise in more detail shortly.

But first, I'd like to ask David Riggs, our CFO, to review our financials.

David?.

Thank you, Scott. For the period ending December 31, 2015, our revenue mix consisted of product sales comprised of sales of RYANODEX, which we launched in August 2014, sales of diclofenac-misoprostol, which we launched in January 2015, and sales of argatroban to two commercial partners.

Also a part of revenue are royalties we received on commercial partner net product sales of argatroban to their respective customers, and license and other income. As Scott indicated, we are pleased to report a profitable 2015 and look forward to being an earnings driven company in 2016 and beyond.

With that, let me now turn to a full review of the financial results. For the three months ended December 31, 2015, total revenues were $18.2 million, as compared with $5.6 million in the prior year quarter.

The increase was driven by $15 milestone payment earned with the FDA approval of BENDEKA, an increase in RYANODEX product sales, and offset in part by lower argatroban royalty income. We took several measures in Q4 to invest in the business to prepare for 2016. These investments are reflected in our expenses and enable us to solidly move into 2016.

R&D expense increased by $4.8 million to $8.8 million in the fourth quarter of 2015 compared to the prior year quarter. The increase is due primarily our ongoing investment in EHS, pemetrexed, R&D personnel costs, and other investments in our pipeline.

We elected to spend more in the fourth quarter on EHS, the EHS clinical development program based on what has become a much more robust clinical trial. Additionally, we elected to commence development work on projects that are part of our joint product development program with AMRI, giving us a head start on work that will continue into 2016.

These products are offset in part by a decrease in spending related to bendamustine for which we submitted the NDA in the first quarter of 2015. For 2016, we expect R&D investments to focus on our EHS label expansion program on the preparation and filing of an NDA for pemetrexed.

But more importantly, on new and as yet undisclosed organic development programs. We expect total R&D spending for the year to be around $30 million. Although our programs are scalable which is consistent with our spending in this level on forecasting in '16 is consistent with our spending in '15.

SG&A expense increased by $1.9 million to $5.6 million in the fourth quarter of 2015 compared to the prior year's quarter. Personnel related expenses accounted for the bulk of this increase and were due to overall expansion of this business especially related to our commercial development activities.

To that end in the fourth quarter, we began our internal infrastructure build-out plans needed to support 2016 launches and that will ducktail with our efforts, the efforts of our co-promotion partner Spectrum Pharmaceuticals activities. We expect sales and marketing expenses in 2016 will ramp up as new product launches began and gain momentum.

We expect to spend in the range of $18 million to $20 million. In G&A, expenses are expected to be in the $19 million to $21 million range.

Net income attributable to common stockholders was $1.2 million for the fourth quarter of 2015 or $0.08 per basic and $0.07 per diluted share compared with a net loss attributable to common stockholders of $5.5 million or $0.39 per basic and diluted share for the same period last year. Turning now to our results for the calendar year 2015.

Total revenues were $66.2 compared to $19.1 million in fiscal 2014. This increase was primarily due to milestone payments earned on our BENDEKA product.

R&D expenses were $27.9 million in the 12-month period ended December 31, 2015, up from $16.8 million in fiscal 2014 due primarily to investments in BENDEKA, Kangio, pemetrexed, EHS, and our ongoing development programs along with R&D personnel costs.

SG&A expense for the full calendar year increased by $10.8 million to $20.2 million primarily as a result of the expansion of our commercial activities including selling, salary and personnel expenses, and support of our multiple product development programs.

Net income attributable to common stockholders for the full-year was $2.6 million or $0.17 per basic and $0.16 per diluted share compared to a net loss attributable to common stockholders of $19.6 million or $1.97 per basic and diluted share in fiscal 2014.

We closed the quarter and the year with $79 million in cash and cash equivalents and $197.4 million in additional paid-in capital. We had $90.3 million in stockholders' equity as of December 31, 2015.

Lastly note that inventory at year-end includes $14 million in launch quantities of BENDEKA that will be purchased by Teva and that accounts receivable contains $15 million due from Teva and for which we collected in January. These two items combined to restore $29 million to our cash balance. And with that, I will turn it back over to Scott..

Well, thank you, David. Our fourth quarter was characterized by several major developments and achievements in our pipeline and commercialization strategy.

With the FDA approvals and launches of BENDEKA and alcohol-free Docetaxel, along with several additional product decisions that are due in the first half of this year, we expect to expand our end market products along with revenue and earnings power significantly in '16.

On December 8, 2015, the FDA approved BENDEKA, our rapidly infused bendamustine product. Teva is now shipping BENDEKA putting this differentiated product in the hands of healthcare professionals and patients as scheduled.

Per our agreement, Eagle is entitled to 20% royalties on future net sales of the product as well as possible incremental step up royalties if we achieve additional milestones.

Based on $760 million in sales of Teva's TREANDA in '15 and sales of just under $200 million last quarter, we expect BENDEKA to be an important earnings driver for us going forward. And we expect BENDEKA to have a significant lifecycle.

We issued a press release earlier this week discussing our newly issued patent and summarizing our current patent situation. We feel that we have developed a very strong patent position, very early in the lifecycle of the product.

We view the longevity in bendamustine to be derived by several factors and to review those first and foremost is the attributes of the product, the safety profiles of BENDEKA. We believe that the attributes of the product will speak for themselves.

Then we have our robust patent portfolio, the potential for exclusivities of either three and seven years reimbursement under a potential new J-code and the contract or reversion rights we have in certain circumstances which gives us the ability to take back the asset if competition exist.

Many if not all of these should provide a long revenue stream. I realize that we are waiting for some clarity regarding the exclusivities reimbursement and the outcome of the ANDA litigation. These outcomes will be clear soon enough. What we can concentrate on are the known value drivers today.

We already know that the product attributes and our patent position are strong. These may in fact be the most significant pillars of bendamustine sustained exclusivity and longevity. The benefits to patients and providers of the bendamustine products are well known and are being well received by the market. The patent situation is also well known.

At this time Eagle has six patents issued and listed in the Orange book. Given the nature of our patent portfolio we believe it will be very difficult for any ANDA filers to design around these patents. And these patents run from 2026 to 2033 which puts us in great shape.

As for the ongoing TREANDA litigation, remember all of these defendants have already admitted that they infringe the patent. These patents must been invalidated for TREANDA to reach the market again at high hurdle.

As you will recall our bendamustine 500 ml product has been tentatively approved and we have the contractual right to launch on May 1 of this year. This covers bendamustine and with that I'm going to switch to our next portfolio product that we are excited about.

We had another win in December when FDA approved our alcohol-free Docetaxel injection making our product the first and only alcohol-free formulation in the U.S. We announced the shipment and commercial availability of Docetaxel injection earlier this month. As the first alcohol-free formulation approved in the U.S.

we think this product address a compelling need in the Docetaxel market. Its novel formulation has the potential to improve the lives of patient's, resolved concerns among healthcare professionals at hospitals and infusion centers, and ultimately drive value for Eagle stakeholders.

We've already began to see positive movement with Docetaxel in the last several weeks as our newly engaged sales force began marketing the product. Next up is our PDUFA milestone on March 19 for Kangio or RTU bivalirudin which is less than three weeks from now.

Based on the Appellate Court's decision being vacated on Angiomax we currently expect to be the next entrant into this market ahead of other generics.

Our version of the drug is easier to use because you just spike it and hang in thereby reducing the potential for error by healthcare professionals compared to Angiomax and the other generic formulations. So we feel good about our chances of capturing a meaningful share of that market.

We have been interacting with FDA and we are preparing for launch, everything seems to be on track for a March 19 approval, and we anticipate shipping in late Q1 or early Q2. Obviously, the timing here would impact our first quarter 2006 performance.

But the important point to keep in mind is that we will likely be the next entrant into this limited market and the market continues to look very promising over the near-term. By the time we launched Kangio our sales force will be substantially complete.

We expect to have a team of about 50 by launch time and it will be a great opportunity to test and observe the new team. We are also taking steps to safeguard our intellectual property; we have two patents already issued and the third currently pending. On February 4, we announced the appointment of Michael Moran to the role of U.S. Head of Sales.

He joins us from GlaxoSmithKline where he most recently served as Field Vice President overseeing more than 100 sales reps and increasing key customer reach by 45%.

Mike's extensive experience and innovative selling strategies will be instrumental as we continue to develop our sales capabilities and strengthen our market position as a fully commercial specialty company. Mike will play a key role in coordinating our co-promotional activities with Spectrum as we finalize building our internal sales force.

Turning to RYANODEX. Despite it's now been on the market for about 18 months for malignant hyperthermia, RYANODEX remains a clear advantage over other treatments in terms of the ease and speed with which it can be administered, and we remain confident that it will become the treatment of choice for malignant hyperthermia.

We are hopeful that the sales gains we are seeing now will be accelerated once we have additional representatives handling the product towards the end of the quarter. We expect to have 20 people selling RYANODEX for MH versus the five today.

If you are at all familiar with Eagle's story, you know that one of our main focuses is on expanding RYANODEX's label to include a second indication for the treatment of Exertional Heat Stroke or EHS. EHS is a sudden life-threatening condition that affects individuals who had spent large amounts of physical energy in extremely warm temperatures.

It is a leading cause of death amongst student athletes, and one of the primary causes of non-combat related death in the military. There are currently no drugs available in this market. And so you can imagine how very encouraged we are when the FDA granted fast track designation to RYANODEX for EHS a few weeks ago.

In our view, this was a clear acknowledgement by FDA, the seriousness of Exertional Heat Stroke and the current lack of a drug treatment.

With this fast track designation we will be able to work very closely with the FDA and potentially expand the products label to include EHS as an authorized second indication, pending the outcome of our FDA meeting.

We already received orphan drug designation for RYANODEX as an EHS treatment in the U.S., and hope to also be able to receive seven years of exclusivity in the future. Last fall, we successfully completed a novel clinical trial with 34 patients who suffered from EHS during the Hajj in Saudi Arabia. Our results were strong.

And using the Glasgow scale, a widely validated measure used to evaluate neurological functioning, we found that using RYANODEX in conjunction with the current standard of care is much more effective with treating EHS and the standard of care alone.

Patients who received RYANODEX took about 55 minutes to cool down on average compared with about 70 minutes for the control route. Given the intense risk associated with having prolonged internal body temperature approaching 106 degrees; we think the 15 minute difference is extremely important.

We are in the process of providing the FDA with more robust date than was originally planned and we are optimistic about our upcoming meeting with them next month. We look forward to sharing the outcome of this meeting with you at the appropriate time. And also as you know, we hired Sherry Korczynski for the future launch of RYANODEX.

Sherry has more than 20 years of experience in the pharmaceutical industry, including her most recent direct role in the marketing of EpiPen, which we believe had similar market characteristics to RYANODEX for EHS. As our SVP of Marketing she will focus on positioning our approved and pending products for successful commercialization.

We are exploring potential marketing strategies for the product and we are very encouraged by what we think will be a very significant market with the indication. And as students, we hear from FDA, we will be able to provide more detail on the expectations for the product. We truly see RYANODEX as potentially one of our biggest products.

And we are excited to potentially further expand the label indication to ecstasy and methamphetamine overdose in the future, which addresses a large audience. Turning to pemetrexed RTU, we plan on filing this NDA at the end of this year. In early January, we took additional steps to diversify and expand our portfolio pipeline.

We announced the partnership with AMRI to produce and market several parenteral drugs in the US. This will be a joint development program for several new product candidates. Once those drugs are approved AMRI will be responsible for their development and manufacturing.

Eagle will handle clinical trials, regulatory submissions, and commercial distribution. We expect this partnership to expand our portfolio considerably in the coming years, and we're looking forward to collaborating with AMRI. Over the year, we will also speak more about our expanded internal portfolio.

So as you can see, '16 is shaping up to be a very promising year for Eagle, one that we expect will define a strong market position for years to come. By May 1, we expect to have as many as seven in-market products addressing large and dynamic markets in a profitable sector with a promising pipeline in development.

Our bendamustine family has a long lifecycle, supported by robust path protection for which we are entitled to earn a 20% royalty. Combined with the numerous other products that will shape Eagle's future for many years to come, we are comfortable with the way that the earnings power of Eagle is shaping up for '16 and '17.

We look forward to sharing more details with you in the first half of the year. Our commercial strategy is robust with excellent partnerships and a growing increasingly skilled and marketing team. We are supported by a strong balance sheet that includes about a $100 million in cash and net receivable and our current and future revenue opportunities.

As we just outlined, we only continue to strengthen our capital position, earnings potential, and enhance our free cash flow. All of this leads us to anticipate that we will be able to achieve continuous year-over-year growth for the next several years.

We are excited about what's in store and we are confident that we will be able to deliver meaningful value to Eagle's shareholders. With that, I'd like to open the call for questions. Operator, please go ahead with the instruction..

[Operator Instructions]. And we'll take our first question from David Amsellem with Piper Jaffray. Please go ahead..

Hello. Just a couple. First on bendamustine. So this may be tough to answer. But this is a question on the big bag. So Teva has suggested that you wouldn't need to launch the big back in May if they indeed are successful in switching the entire bendamustine markets in BENDEKA.

So I guess with that in mind, with their comments in mind, what are your thoughts on that? And then I have a couple of follow-ups..

Yes. Thanks David. Good morning. Look, as we've said all along over the course of the year that we have the contractual right to launch in May. And it's good opportunity for our shareholders. We've been looking at the segment of the dish hospitals; the 340B's is our target. And certainly, between now and May we'll continue to plan.

But we do have that capability for May 1. And so it's important to us..

Okay. And then switching gears to bivalirudin, couple of questions.

So now that the medicines company has sued you, does that -- just to be clear, does that change your thinking in any way at all on launching right after you get the approval in March, assuming you actually do get the approval? And then secondly, assuming that you do enter the bivalirudin market, how are you guys thinking internally about one; MD, CEOs cases verse Hospira resolved in the Appellate Court and when you think other entrance with tentative approvals like ORO, Wendell, and Sagent, would enter the market, what are your thoughts there? Thanks..

Yes. So let's go through all of that David. And to new lawsuit. As both parties reported at the time, the parties previously arbitrated a dispute under licensing development agreement between the parties. In '13 -- 2013, an arbitration panel ruled in Eagle's favor regarding medicines, material breach of that agreement with us.

As a result, we terminated that agreement. Medicines accepted that termination in October of '13. We have the right as a result to develop and move forward with our own RTU product, which we are doing. And we expect to prevail in this new lawsuit. And we expect to launch the product upon approval.

In terms of the timing of all the other issues being resolved in the Appellate Court it's very hard to predict. Our best thinking it's towards the end of this year. And the expectation from our side is there will not be any other entrants other than us until it's resolved, which means it could be us entering into this market that exists today.

And it's in keeping the status quo in that market until its resolved, which could be up to eight months or longer..

Okay. And if I may, just sneak in one quick additional question on bivalirudin. Just in terms of your commercial supply.

Would you be able to supply the vast majority of the bivalirudin market or are there any constraints that we should be thinking of?.

Yes. Well, I think the best way to answer that David is, we are moving forward in developing the product, the inventory, and commercial. And we certainly have enough capability as we move through the year to meet all of our internal expectations for the product. So I think we're going to be fine..

Our next question comes from Randall Stanicky with RBC Capital Markets..

Great. Thanks. Scott, I think we've talked a lot couple of days but just a couple of additional questions. Number one just a follow-up, why wouldn't you launch the big bag given the margin benefits and these strategic opportunities that that gives you.

And secondly, can you just give us some additional color on your confidence in the BENDEKA launch by your partner Teva clearly that's a major focus for the stock and also your P&L.

And then my third question is can you just talk about the pipeline; I understand you're not going to be able to disclose some of these additional products that you're working on. But obviously this is an important focus as we think about the ongoing recurring earnings.

Can you talk about the strategy in terms of targeting additional products beyond pemetrexed? Thanks..

Yes, thanks Randall. Let's take your second question first the BENDEKA launch by Teva. Here is what I'll say about that. They are just doing a tremendous job. The two companies are working together incredibly well. I have nothing but great respect for what they are doing. They are doing everything that they said that they would do really just wonderful.

The BENDEKA launch is going as well we could have expected probably ahead of what we were thinking. And we believe that most of this market, nearly all of this market is going to be BENDEKA by the time you get into April. And so, we can't say enough things about the way that launch is going which is important for both companies.

Beyond that the big bag, as I keep saying May 1 is going to be here in a few weeks. We have the right to launch and it does add some value to our earnings obviously.

The pipeline we continue, I think we've done a marvelous job and you look at today's financial that David went through, we've been doing this now for nine years, we're very proud of the fact that we raised about $90 million privately in the seven years we're a private company. We raised another $100 million as a public company.

We still have about $100 million of cash in the bank, which means we've created this company with a net $90 million. And we've done it by developing products that have low clinical risk and relatively low cost of development relative to other segments in the industry.

And as we look at our pipeline we believe that the opportunities to continue to develop products like bivalirudin, like bendamustine, pemetrexed, dantrolene, and RYANODEX and then label expansion, it's just about limitless. We're finding new product opportunities all the time. We have a core team of people that are looking for additional products.

We have announced now that we have two additional products that we can't go into a lot of detail. The first one that we've given a little bit of color to we think leaves us with a significant change in about $400 million and we believe we can get that product to the market before generics because our patent deal apply.

And our expectation is just continuing to expand the pipeline filling in with partnerships like we did with AMRI. And I think our future when it comes to internal capabilities of developing products is very bright..

The next question comes from Irina Koffler with Mizuho..

Hi good morning.

Can you just remind us about the pricing strategy on the Docetaxel and the Kangio? When you are selling products into these fairly genericized markets in these cases, are you thinking about premium pricing or more on par with generics? And then second question is on BENDEKA and if the layoff life powder goes generic and you take back the rights.

I mean how do we get conviction that you would be able to penetrate that market longer-term if you took the product back versus if that remained with Teva and they just sold it as a generic themselves. Can you help us think through those two cases? Thank you..

Yes, thanks Irina. Well let's go to the first part, the first product the Docetaxel and the Kangio. This is the cornerstone to the way we're thinking here as a company. We have two products that we're launching into somewhat generic markets, Docetaxel, Paclitaxel and Kangio.

We have better products, innovative products with significant product attributes and we're into those markets and we're going to price those products around parity to the market pricing that exists now. And so why we're doing that? Well several reasons. First far most of importance to us converting the market share over Teva products.

Part of reason for that is these are therapeutic substitutes not generic substitutes and we think with the 50% sales force protecting the product once we have it, it will be a little bit sticky, and we will keep share over time. So I think that's very important, get the share, we make nice money on each of these products, get the products over here.

And in second to that, just from a global franchising of the company, what a great idea to ingratiate ourselves with our customers especially in the environment that we have today provides significant improvements of products.

But the socially responsible for price, so when the time comes that we have products that have more pricing power, that have greater innovations, that require increased pricing, we are in a good balanced situation.

And so we think it's the right thing to do for our shareholders to garner as much share as we can early and to help build the value of our company as we bring these innovative products to our customers.

As we move to your question about BENDEKA and if generics do enter and into the vial product and we wind up being the marketer of both big bag and BENDEKA against the generic LYOS, we think we have more than enough sales and marketing capability and expertise here to be extremely successful.

We think that the 50 people that we have, the Spectrum sales force has been very successful selling oncology products. I don't think they need any more people to have a full marketing capability for BENDEKA if that's the situation that arises, coupled with the 20 people that we have and the sales team that we have, I think we will do great.

But keep in mind the big difference is the fact that we would keep around 80% of the profit if we market it ourselves as opposed to receiving 20% of the market. So that difference of the margin by taking back the market more than makes up for any slippage factor there might be.

So and our belief and the reason we negotiated this is we believe that aspect of the contract puts us in the best shape for the company in the event, the unlikely event, that those lives do get through the court's next month or so..

Okay thanks. And if I can just have a follow-up, so the CMS is trying to now do away with the ASP plus 6% as we see. And does that change the way that you're planning your pipeline and the types of things that you're looking and introducing to the hospital setting, how are you thinking about that development? Thanks..

Yes, you're welcome. It's really hard to predict what is going to happen with the government in CMS, Irina, it's really, it's complicated and difficult. From our standpoint, we think the best way of building value for our shareholders is just to continue to introduce valuable products that are differentiated and meets the needs of the marketplace.

And if we keep doing that, I think it all take care of itself and we will build significant value in Eagle..

And our next question comes from Tim Lugo with William Blair..

Hey this is Ross in for Tim, thanks for taking the question. Just a follow-up on BENDEKA is there a scenario I know you have the ability to take a bag of generics launch in May.

Is there a scenario for conversion on maintenance of patients on BENDEKA where you just let Teva handle it? I know they mentioned being able to have 50% at least of patients on BENDEKA by May if our generic is launched.

First kind of thinking about, is that a financial exercise to that point?.

Yes, I think would wind up happening is -- no, I think the relationship between Teva and Eagle is very strong, they are -- as I mentioned they are doing great job, they are easy to speak to, if we winds up in this situation, I'm sure the parties will get together and figure out the best plan for the two groups to move forward.

The relationship between the organizations allows for free communication back and forth. It's really hard to predict all of the outcomes. There are so many possible decisions here that I'm sure that parties will get together and figure out the best course of action..

Great. And then just a quick question on pemetrexed. Is there any way through that you can find it with the UK decision for the Actavis pemetrexed trometamol.

Does that impact your patents at all or your strategy going forward with that product?.

Without going into too much detail, I think that UK ruling certainly encourages us with the approach that we've taken to the product..

[Operator Instructions]. We will go next to Gregg Gilbert with Deutsche Bank..

Could you remind us of the mechanics of the exclusivity decisions perhaps mechanics what they are looking for and when you would find out on the three and seven years and may be the same exercise for the J-codes situation?.

Sure. The three years that comes from the Orange Book group within FDA and the criteria for that is having run a clinical trial, which we believe that we have done. And if you remember, our clinical trial was in about 80 cancer patients. It was a head-to-head study between BENDEKA and TREANDA. And we're dialoging with them. It's a slow process.

But that is provided to you. We're having developed a clinical trial, that's number one. On the seven years, which is a little bit more complicated on the orphan drug group, if you remember, we spent a considerable amount of time with FDA prior to the approval of BENDEKA.

And in that situation, what you need to do is provide a hypothesis, if you will, of why your product meets one or three categories either clinical benefit, safety superiority, or major benefits of patient care.

And at the same time, that you do that, you provide the agency with the data and what you'll actually want to providing them in support of the hypothesis. And in this case, it was the results of the clinical trial. So we did receive the orphan drug designation.

We think that we've been able to show that we need all three criteria, although you only need to wind up in one of the three buckets. We had a successful clinical trial and I think that's defined by the fact that the drug was approved by the FDA based on that clinical trial.

And so now, once the drug is approved you get back together with FDA, you provide them the data that you said they would. There are some dialogues. And now, we're in the process of FDA reviewing the dataset and rendering a decision. And I believe that it's hard to pinpoint. It took us about seven months to get the orphan drug exclusivity for RYANODEX.

But if I had to guess, Greg, we're 30 days or so away from hearing. It could be longer or shorter, but that's about where we are. For the J-code, the process there is to show that your product is differentiated from the other products on the market. In this case, we need to prove that BENDEKA is significantly different than TREANDA.

I think we've done a good job. What I've said to people along though is I think I have my numbers about right. I don't have notes in front of me. But in last three years 46% of the 505(b)(2) that have asked for new J-code were successful, which means 54% were not successful. We think we have a better than average case compared to the ones that failed.

I believe we did a really nice job. We meet with CMS. Our application is in. And now, we wait for the response. And typically that response comes out of CMS around the April or May timeframe. And I think so therefore, by the time you get to May-ish we'll know the exclusivities in next couple of months..

Great. And one last follow-up. What's the latest market opportunity estimate that you and your colleagues have for EHS? Thanks..

So you know we have an updated EHS forecast. Sherry has been with us for about a month and she is now working diligently Greg on helping us. In the past, we have sent the EHS opportunity out to two independent companies to help us derive the value. We were nervous about getting caught up in our own hype, if you would.

We thought we want to be grounded and have outside companies come in and help us. Both those companies came up with about the same numbers, so we're encouraged by that. But we have someone now within the company that we believe is more expert at this than we are. And we need to give her a little bit of time.

And at the appropriate time we will come back to the market with a better forecast and better process to show you how we get to the numbers and a little bit of what we believe the marketing plan will be..

And it appears we have no further questions at this time. I will return the floor to Scott Tarriff for additional or closing remarks..

Thank you everybody for attending. As you can tell we're just very excited about our future. Appreciate the time you spent with us today, and look forward to providing more good news to the marketplace overtime. Thanks again. Bye now..

This does conclude today's program. Thanks for your participation. You may now disconnect. Have a great day..