Mark J. Donohue - VP-Investor Relations & Corporate Communications George Frederick Wilkinson - President, Chief Executive Officer & Director Bryan M. Reasons - Chief Financial Officer & Senior VP-Finance Michael J. Nestor - President-Impax Pharmaceuticals Division Donald C.

Wood - President, Chief Executive Officer & Trustee, Federal Realty Investment Trust.

David A. Amsellem - Piper Jaffray & Co (Broker) Dana C. Flanders - JPMorgan Securities LLC Gary J. Nachman - Goldman Sachs & Co. Louise Chen - Guggenheim Securities LLC Gregg Gilbert - Deutsche Bank Securities, Inc. Marc Goodman - UBS Securities LLC Randall S. Stanicky - RBC Capital Markets LLC Jason M.

Gerberry - Leerink Partners LLC Michael Faerm - Wells Fargo Securities LLC Sumant S. Kulkarni - Bank of America Merrill Lynch.

Good afternoon. My name is Katelyn and I will be your conference operator today. At this time, I would like to welcome everyone to the Impax Laboratories First Quarter 2015 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Thank you.

Mark Donohue, Head of Investor Relations, you may begin your conference..

Thank you. Good afternoon, everyone. Welcome to Impax's first quarter 2015 financial results conference call. We issued our earnings release this afternoon after the market closed. Copy of the press release and a link to the webcast of this call are available on the company's website at www.impaxlabs.com.

Today, our President and Chief Executive Officer, Fred Wilkinson, will provide an overview of the quarter and some of the recent events; and Bryan Reasons, our Chief Financial Officer, will provide additional details on the financial results. Also joining us for the question-and-answer session is Michael Nestor, President of the Brand Division.

We ask that you keep to one question and one follow-up please and return to the queue. Our discussion today may include certain forward-looking statements and actual results may differ from those presented here. The factors that could cause such difference are outlined in our SEC filings and on our website.

Our discussion today includes certain non-GAAP measures as defined by the SEC. Management uses both GAAP financial measures and the disclosed non-GAAP financial measures internally to evaluate and manage the company's operations and to better understand its business.

Further, management believes the inclusion of non-GAAP financial measures provides meaningful supplementary information to and facilitates analysis by investors in evaluating the company's financial performance, results of operations and trends.

A reconciliation of GAAP to non-GAAP measures is available in our first quarter of 2015 earnings release, which can be found on our website. And with that, I'll turn the call over to Fred..

Thank you very much, and good afternoon, everyone. Thank you for joining us. This has been one of the more interesting quarter, since I've joined approximately a year ago. I think and more importantly, it really represents a quarter that is not atypical of a stub period, the quarter that has a stub period following the close of a major acquisition.

So, on this call, I'll attempt to provide some top-line color on the quarter with a focus on several of the key critical issues that occurred, as well as an outlook on 2015. Bryan will provide the financial detail, and how to bridge these events for the results reported.

I will also cover the status of the integration of Tower Holdings with the focus on the anticipated contribution to our 2015, as well as the acceleration of synergies in 2015 and the incremental synergies, we believe we will achieve in 2016.

I will also provide an update on the launch of RYTARY, as this is an important driver of both short-term and long-term growth. And naturally, I will provide additional details regarding the recent completed FDA inspection of our Hayward site as well as the implications of the observations listed in the Form-483. At the end, we will take questions.

So, let's turn to the quarter. The focus obviously for us is on 2015, not just on a single quarter. However, it would suffice to say that, there is really nothing that occurred in this quarter that would change our view on two important issues, the Tower transaction and on 2015 itself.

We made significant progress in first quarter, executing on our strategy to build out a diversified specialty pharmaceutical company. Two best examples are the Tower acquisition and then the launch of RYTARY.

First quarter results were impacted, however, by several timing events and Bryan will go through the detail here, but listed here are the three weeks of impact from Tower and it's only three weeks.

We had an interesting product mix that occurred during the quarter that were; the timing of several generic launches were delayed with the most specific was being lamotrigine ODT, and finally, we deferred the revenue recognition for RYTARY, but yet included all the launch expenses.

We are reaffirming our full 2015 financial guidance and we get comfort and that's because of the number of launches that we have lined up. We have up to 14 generic launches in 2015, 11 of them are already approved products and only two are pending from the Hayward facility. We've actually had a very busy April.

We launched five products including lamotrigine ODT, and to remind that you comes with six month of exclusivity, and finally, the nine weeks that we've owned Tower. We have found the opportunity to not only accelerate, but to increase the synergies related to that transaction. So, with that let me turn to Tower for a few minutes.

It's been nine weeks since the close of that transaction and we believe that at this particular point, we've actually completed all the planning for and then implementation of the integration of our two companies. Management structures have been defined and then communicated throughout the sites to all employees.

The policies and procedures especially those that relate to financial management of the company have been implemented and all customer transition activities occurred without any issues.

Our launch programs are now well-organized to take advantage of the diversification strategies from both Impax and Tower as evidenced by the mix of our potential generic launches for this year. And we are now operating under a single R&D portfolio and have reprioritized the projects to provide the greatest future value for our shareholders.

As reported in today's press release, we've also identified an additional $10 million in synergies coming primarily from the prioritization of R&D projects, manufacturing and supply chain efficiencies, sales and marketing coordination and revenue synergies that we'll experience from our expanded product line and we'll be able to go through in a little bit more detail on those.

Therefore, we think that we'll end up with is, accelerating all the $10 million in synergies that we had previously announced, so that they occur in 2015 and we'll be adding $10 million of additional synergies to our model for 2016. Let me turn to the RYTARY launch.

So, it's still very early, but we're very, very pleased with the script trends, with our managed care coverage to-date, with the sales force activities, and then the responses from both the targeted physicians and from patients.

I think TRx has reported an IMS last week of around 813, which is up 13% over the previous week and to-date we have about little over 5,000 TRx that have been filled with RYTARY. Our coverage for managed care is around 70% of all the commercial lines.

We do have coverage in the federal government and we are working very aggressively to try to put us in a position to close out many of the large Part D programs as timing usually takes anywhere between four months to six months.

Our sales force coverage is actually ahead of plan, they seem to be getting great entrée into the key targeted audiences, and remember that our focus is on neurologists. We did a soft launch in February, where we put the product into the marketplace and then a full launch in April.

And I actually had the opportunity at the American Academy of Neurology Meeting a couple of weeks ago to observe not only our rep promotions, but the physician response to that promotion, and I'm confident that we can make RYTARY a success. With that, let me turn to the most recent event, which is the FDA inspection of Hayward.

My stated goal as I got here was that we would complete all of our inspections at each of our sites without any observations, and that didn't happen. The inspection that occurred just – and closed out this last Friday, included both a GMP component, as well as PAIs for several products.

We believe the 43 observations are very specific and detailed, and thus, provide us a clear roadmap toward the areas that we need to spend additional attention on. We also know that they are addressable and correctable and will be part of our 15-day – our response that goes in within the 15 days allotted.

Based on the acceptability of our response, we do not believe that there will be any impact on the ability for us to supply our current manufactured products from Hayward.

What we cannot do at this point is predict the outcome approvals, as this is reliant not only on the recommendations from the PAI activities that just occurred, but also the overall status of the facility and the overall review by the center of each of the files.

We did get confirmation during the inspection that the prior inspection that closed in July of 2014 was classed as VAI and what we believe is that we continue to make progress and that our QIP program has been effective in helping us improve our system. Although, we still recognize work is needed.

So with that, and I'm sure we'll answer as many questions as you have, when we get to this point. Let me turn it over to Bryan, so he can cover the first quarter and the financial details. Thank you..

Thanks, Fred. Good afternoon, everyone. As Fred mentioned, we made significant progress in the first quarter, executing our strategy of building a diversified specialty pharmaceutical company with the completion of the Tower acquisition and the launch of RYTARY.

While the first quarter's results were impacted by the timing of several meaningful events, we do not believe they're indicative of current expectations for our full-year 2015 performance and as Fred mentioned, we are reconfirming our previously issued full-year guidance.

Our total revenues in the first quarter increased $24 million, or 21% to $143 million compared to last year. This increase was attributable to higher sales on the company's existing products; especially Lidocaine, generic Adderall and Solaraze. In addition, the results included three weeks of revenues from the acquisition of Tower Holdings.

Revenues were negatively impacted by the later-than-anticipated close of the Tower acquisition, the delayed launch of lamotrigine ODT, which resulted from the delayed receipt of inventory from our supplier and the deferred revenue recognition of approximately $3 million of product sales from the launch of RYTARY.

Our adjusted gross margins in the first quarter 2015 decreased to 47% from approximately 61% last year, primarily due to higher sales of lower margin generic products, the impact of additional competition on generic digoxin, the later-than-anticipated close of the Tower acquisition and the delayed launch of certain other products.

We expect gross margins for the full-year to be in line with our previous guidance.

Moving on to operating expenses; adjusted R&D expense in the first quarter 2015 were lower by approximately $5 million, compared to last year, primarily due to the reduction and project spending and the impact of the R&D restructuring we now flash here, partially offset by the inclusion of R&D expense from the Tower acquisition.

First quarter 2015 patent litigation expense continued to decline to approximately $1 million due to the reduction in legal activity and prior settlements. The decline in adjusted R&D and patent litigation expenses in the first quarter were offset by higher adjusted SG&A expenses.

Our first quarter 2015 adjusted SG&A expenses increased by approximately $15 million. This was primarily driven by $7 million on advertising and promotion related to the launch of RYTARY and higher share-based compensation and information technology expenses as well as the inclusion of SG&A expense from the Tower acquisition.

During the first quarter, we had several events negatively impact, our first quarter effective tax rate. Higher non-deductible executive stock compensation and the exclusion of the R&D tax credit expected to be renewed by the end of the year. Adjusted earnings per diluted share decreased to $0.09 in the first quarter, compared to $0.24 last year.

This decrease was primarily attributable to unfavorable product sales mix, as a result of the timing of several late first quarter events. In addition there were $7 million and costs associated with the launch of RYTARY and $1.6 million in interest expense related to the Tower acquisition, for which there were no comparable amount in the prior-year.

In the first quarter of 2015, we invested approximately $4 million in CapEx, about $6 million less than last year. This decrease was primarily due to the delay in new project spending. We ended the quarter with $153 million in cash as compared to $415 million at the end of 2014.

The decrease primarily used to pay for the Tower acquisition along with approximately $420 million in net deb. Thanks for your attention. And I'll now turn the call back to Katelyn for questions..

Your first question comes from the line of David Amsellem from Piper Jaffray. Your line is open..

Thanks. And, I guess, I'll ask a couple on Hayward. This feels like maybe my 73rd and 74th questions on Hayward in my sell-side career on an earnings call, but here it goes. So, maybe elaborate on the nature of the Form-483s? You said they weren't repeat observations.

I guess, is there anything else you can tell us about them? And then secondly, do you feel like you need to make further personnel changes out of the facility, maybe talk about that? And then just switching gears, on the 11 approved products that are up for launch, how many of these are already multi-sourced products? And how many of these are going to be at market formation, how many of these would you classify as more complex dosage forms? Thanks..

Yeah. So, let me start with the first, I would classify these observations as something we need to absolutely pay attention to, they were very, very specific. I mean, if you read our Form-483s and you follow the sequence of the Hayward site, which I know you have, these were very specific, they were primarily in the lab.

They were focused on a lot of the investigations, and some things that we actually were aware of and we were working on. In many cases, just a matter of close-out times and completeness of the activity. Look, we have the – we're well identified, we've got answers to all of them there.

The response is probably going to be the easier response that this company has written for. But, it is indicative of the fact that we're not done with our quality program, but we still have some work to do and it did not meet the goal we're trying to have inspection without any observations.

Regarding personnel, I still have absolute confidence in the personnel that's driving this process.

We have strengthened our team over the last little bit, there are two key members that in senior management, of Core, that are coming over and joining us in key roles within the quality and operational areas, and both of these individuals were a major focus for us in Core out of their warning letter and into the position where they're getting receivables – risk approvals.

We've also, I think as you saw a couple of weeks ago, hired a corporate compliance officer, someone I had worked with closely for years, primary role of Deb Penza will be on the sales and marketing side and the brand and the generic arena, but she has experience in assisting us and making sure that we have completeness to what we do in our responses and, the quality program just has another set of eyes on it.

So, that's kind of a status of where we are. As far as the approvals, I'll let Bryan kind of fill you in on some of the logistics behind it..

Okay. I'll run through that quickly David. Of the approvals, four are from Hayward, two of which are either approved re-launches, and two are pending. But, to your question are they multi-sourced those they were at Hayward, four are out of Core at the Middlesex plant, and the remaining are partner primarily topical from our TOLMAR partner..

Yeah. And if your question is that, are they going to be entering into multi-source environment, the majority of those are..

Yeah..

Thank you..

Your next question comes from the line of Chris Schott from JPMorgan. Your line is open..

Hi. Thanks. This is Dana Flanders on for Chris. Just a question on the pre-approval inspections that the FDA did for some of your products? Maybe you can't tell us what specific products, but should we assume that these are some of your higher value generic pipeline products out of that facility, and maybe the FDA has prioritized those? Thanks..

Yeah. So, I think as we've described before, we put it, in a very aggressive, and we think thorough PAI-readiness program in place. We had sequenced the project as we thought they might pick them up. We have gotten about two-thirds through all the way through all the products that are pending.

They did pick up all products that we thought that they would and that they sequence them in a way that was okay by us. So, we can't really go into any more specifics than that and really can't predict what the outcome will be. But, we were prepared ready and not surprised at all by the selection of products..

Thank you..

Your next question comes from the line of Gary Nachman from Goldman Sachs. Your line is open..

Hi, a couple more on Hayward.

So Fred, do you think these issues could be resolved without the FDA coming back to do an inspection? And do you think you'll need some outside consultants to come back in, or could you fix this internally? And then Bryan, just go a bit more into the gross margin, why that was so light for generics in 1Q, and how you are comfortable to get to the mid-50%s for the full-year?.

Great. So, the idea – are they coming back in for an inspection, we just don't know. We think these are things that can be answered through our response and that if the responses are appropriate that there would not be a need for them to come back and re-inspect for us to have a status change or anything else occur.

However, like I've done in the past, I'm going to prepare us for another inspection, I'm going to prepare us for additional PAIs.

We're just going to be ready to kind of handle whatever approach the agency takes, and actually it would be – I'd welcome the process because in making these improvements, I want to make sure that the results are done appropriately. As far as consultants, we still have consultants that are within our facility.

We are going to be spending a significant amount of time trying to understand how we would better utilize both the consultants and the internal staff. We're going to make sure that we've got the appropriate focus and resources of both internal or external people.

We don't think that there is a need to bring in more consultants, we think, it's probably just the focus of the consultants and then maybe just a process of the mindset that we'll go through in that approach..

On the gross margin, several things impact it and many of them were timing, specifically in April we had five launches. Some of those we had expected to launch in March. The biggest driver on the margin was lamotrigine, that's a high margin opportunity for us.

So, that's kind on the generic side, certainly deferring RYTARY – the total company margins deferring RYTARY is deferring also revenue, it's very high margin for us. The timing of the Tower, of course, impacted it, we owned them for three weeks during the quarter and we didn't control shipments, obviously, before we owned them.

So, really the timing there impacted it. And as we look forward in the business, especially with these launches that are happening in April, we thought we'll get to the mid-50%s range..

Okay. Thanks..

Your next question comes from the line of Louise Chen from Guggenheim Securities. Your line is open..

Hi. Thanks for taking my question.

So, my first question is on RYTARY, just curious how we should forecast, or think about forecasting sales for the remainder of the year, if the second quarter number should be the $3 million that's deferred, or would you expect sales on top of that? And then secondly, just curious, the VAI status, that seems like a positive, so curious if you could comment a little bit more on that, and what that means for Hayward? Thank you..

Yeah. Let me start with the VAI status. I think, this has been probably the biggest point of confusion that, that we've had for the last little bit, if you actually went on the FDA website, you would see Hayward listed as NAI, which makes no sense, because there were observations.

We've been trying to seek some clarity as to where we actually stood with that and we had several communications that the inspection from July had been slated as VAI. During the inspection, we simply asked the questions and got confirmation that in fact that previous inspection was VAI. The reason we put it out there is because of the confusion.

We just wanted to make sure that everybody was starting from the starting point as to where the facility was. Regarding RYTARY, our view as we deferred the revenue from first quarter to second quarter, if we only sell $3 million in second quarter, we won't be saying that, this is successful launch anymore.

A good majority of that product will be pulled through and prescriptions well early in 2Q, and we see this trending very, very nicely. I mean, we've had almost every quarter or every week, week-over-week growth and pretty good solid growth in both the news and totals and the ratio of news to totals is matching up very nicely.

And, Michael, I don't know if you would like to add anything to it?.

Now, the only thing I would add, Louise, is that, RYTARY, as Fred said earlier in his comments, we're pleased with the progress so far, it's tracking as we had anticipated it would, and certainly, our expectation is to have greater sales than $3 million a quarter, as we go forward, that's for sure..

I think it's – I mean, one maybe observation is, all of the wholesalers have reordered since the initial supplies, and many of them several times.

So, we have the nice natural flow of products that's occurring, almost all the metrics of this are dead on target with where we'd expect things, way in the minutia of like size of scripts and refill rates and all those pieces. So, for an early read on weeklies, which most people hate to do, this looks like we're tracking very nicely..

And going forward, our goal and expectation would be to recognize revenue upon shipment. So, we deferred the initial launch quantities; but going forward, we'll recognize upon shipment the way we do all our products..

Okay. Thank you..

Next question?.

Your next question comes from the line of Gregg Gilbert from Deutsche Bank. Your line is open..

Thanks.

Bryan, can you help us with the gross to net to apply to RYTARY, and whether you would expect that to change going forward? And secondly, back to the gross margin improvement, can you confirm that there are no additional launches – not yet approved launches factored into the gross margin prediction for the year? And lastly for Fred, I hope I'm not putting words in your mouth, but are you still predicting a material deal announcement in 2015? Thanks..

Why don't I start. I am hopeful of a material deal announcement, and you can put words in my mouth anytime. So, we are very actively working on transactional side. And as we've mentioned, we've got several irons in the fire for, not only product acquisitions but both brand and generic side, but large corporate transactions along the line.

So, with that, I'll turn the other questions over to the other folks..

On gross margin, in the guidance, we have assumed no net new launches out at Hayward. But, we do have partnered launches and some core launches in that plan. So, no new out of Hayward.

What was your second – your third question?.

Gross to net on RYTARY?.

Yeah. I mean gross to net on RYTARY. I think we've kind of guided toward a 28% to 30%. And I think, it appears so far that is about in range..

Okay. Thank you..

Your next question comes from the line of Marc Goodman from UBS. Your line is open..

Hi, a couple questions, I guess, on RYTARY. Can we talk about where the scripts are actually coming from, and how many pills per script we're seeing so far? Second question is, there was an approval for Opana by a competitor, Sun.

Do we expect them to launch? I know there's like all these things that are potentially blocking, so I just wasn't sure whether you're expecting them to launch or not.

And then just on Hayward, one other question, so in the past, I guess Fred, just in your experience, when you've seen a situation like this, I mean, three doesn't seem like that much observations. I mean, it makes a lot of sense that we could see them, not need to come back and do an inspection.

But, I was just curious, given just the issues, and how long they've been going on with Hayward, just your experience just looking at other companies historically, what's your best guess? I mean, do you think, they have come back in the past in those situations? Or how should we think about that?.

Why don't we start with RYTARY, because Michael's chomping a bit to talk about RYTARY, so this is good..

Okay. So, the prescriptions primarily coming out of the neurology segment, as we look at total prescriptions, it's probably on the order of 75%, 80% of those being written by neurologists or physicians' assistant or nurse practitioners within their practice.

In terms of number of capsules, latest data we have is that the number of caps per prescription is averaging around 220 capsules. So, that averages about seven capsules, so figure a range from seven capsules to 10 capsules or so, maybe 11 capsules.

Keep in mind that we do have four capsule strengths available, 95 milligram, 145 milligram, 195 milligram and 245 milligram, the degree to which a physician would prescribe a higher strength capsule would have an impact on the number of capsules per prescription..

This is a similar prescription positions, as we saw in our clinicals and as we anticipated in our models..

Yeah. Yeah. Nothing – not....

Marc, let me do the next, I mean, OPANA I think, there is going to be a lot of movement on this through the next several weeks and months. We have seen a couple of other approvals. We got a very solid share position on that product and have seen no wavering there.

We're going to watch the events that occur and are in a position to take advantage of something changes and also be prepared for competition if it comes. And then regarding Hayward, I think, we've been living with these Form-483s for now three days. So, including Mother's Day, so it made an interesting day yesterday.

They are observations that we are taking very seriously, because if the FDA writes to the extent that they wrote and with the specificity that they wrote and things that we need to absolutely dig to the bottom and make sure our responses are completely appropriate.

Whether they come to re-inspect or not, I don't know, all I know is to be prepared for that advantage that happens and be well ahead of the curve on anything that was identified here that could lead into anything else. So, I just think that this is appropriate planning to say, they may come.

We are hopeful that our responses will suffice them and we're hopeful that FDA inspections were appropriate, and that we can come to the tunnel the other ways. Obviously, we're preparing for everything, and are making sure that we focus all of our attention in our responses..

Okay. Thanks..

Your next question comes from the line of Randall Stanicky from RBC Capital. Your line is open..

Great. Thanks. Fred, just a quick follow-up, and hopefully the last question on this.

But, are you going to – do you expect that you're going to learn whether they need to re-inspect, based on communication you have with FDA in the coming weeks? And if you do learn that, are you going to let us know, or should we just effectively watch for new approvals to come through via press release? And then, I have one follow-up..

Yeah, I think the – I don't know if we'll learn, we will simply – we will ask that, we do all the time. I think our communication was pretty good on this inspection. So, I think we will continue to try to get clarity on both sides, right. I mean, they should see everything that we're working on too.

And probably the best marker for you, is watching for the approval process. If we get to that point, then I think you'll get a picture of it, or I think we'd probably, if there is a formal status announced about the site, which could lead to anything – any change in the existing warning letter we would clearly be announcing that..

Got it.

And one for Michael, can you just comment so far in your – in terms of what you're seeing on RYTARY, how are you seeing the breakdown in terms of moderate and severe? Are you guys reaching into that moderate market, and maybe just any color you can provide there would be helpful?.

Randall, we don't actually have, if you will, independent characterization as to where we're penetrating into that marketplace. Anecdotally, what we are hearing from key opinion leaders, movement disorder specialists, as well as our sales reps, is that most of the prescriptions are coming from that moderate to advanced type patient.

Does that answer your question?.

Yeah. No, that's helpful. Thanks, guys..

Sure..

Your next question comes from the line of Jason Gerberry from Leerink. Your line is open..

Hi, good evening. Thanks for taking the questions.

Just on Tower, can you just remind us, are you done identifying new synergies? Just trying to get a sense of whether we could expect to see any incremental synergies? And, Bryan, should the Tower revenues be kind of flowing through our models at roughly about a 60% gross margin? I think that's a number that I had written down, but I want to make sure I was thinking about the contribution there correctly..

Yeah. It will be difficult probably for us to identify and be able to communicate additional synergies, because another month to two months from now, we'll be operating the company as a single company. So, it will be a little bit harder to figure out, whether there are synergies coming from the deal or whether we're just optimizing our spend.

I think what we've found in this though is that there were some very clear wins that we could go a little farther with, in some of the areas where we had dug early.

And that people kind of signed up for and helped us do that work to make sure that we could get faster recognition of the activities that we put in place and then a little deeper dive into it.

So, things like supply chain, I think, there was a lot of improvement in that area that allowed us to get comfortable with a little larger number and a little larger acceleration and synergies. The next question on gross margin..

And I think we've said that the Tower gross margins are looked very similar to legacy impacts gross margins. Yeah, we saw early on a little bit of unfavorable mix, but still think that they'll be reasonably in line..

Great. Thanks..

Your next question comes from the line of Michael Faerm from Wells Fargo. Your line is open..

Hi. Thanks for taking the question. My question's on the sector M&A more generally, as potentially some of the big are getting bigger here, how do you think about the impact on smaller U.S. generics players like yourselves, when it comes to things like pricing, potential products becoming available, and other factors? Thanks..

Yeah. So, we're a rooter for something to happen with the big three that are in discussions here, because we think that there will be opportunities for acquisitions, with some of the necessary divested products. We've been at the table for those before and most recently got with the Actavis transaction before us.

And so, those are the nice opportunities that come out of it. I'm a believer that a mid-tier generic house is going to be required to by the customers, in order to keep pricing and keep supply and keep competition appropriate. So, that they don't rely on one, on possibly two suppliers, but they have a range of suppliers to come from.

And what is most important for a company our size is to make sure that we have a portfolio of products that are coming that is unique and diverse and has some unique items in it that we may be one of one or one of two. And so, therefore, the customers are always going to need to have an interaction with you.

So, my – I think the industry is shaking the way, it looks like it was going to shake. The larger guys are getting larger and the mid-tier are getting a little bit larger and probably the people who are going to struggle the most are those that are in the bottom part..

Thank you..

Your next question comes from the line of Sumant Kulkarni from Bank of America Merrill Lynch. Your line is open..

Thanks for taking my questions.

The first one is, given that we're in the days of limbo between the voluntary action indicated, and some other status that you still have to receive, have you received any target action dates from the FDA? Or is that something that the FDA does not issue for a plant that's under a warning letter? And secondly, it looks like the shares on the epinephrine auto-injector have been going up slightly in the past few weeks.

What are you doing differently there, if anything?.

Okay. So, target action dates, you're right. They generally are not supplied to companies who have some kind of action against it. But, it is actually site specific. So, for the previous Core company or the Middlesex site, as well as the partnerships that we have in place. We have been receiving target action dates.

And I believe we actually may have received one target action date for a Hayward-related product. So, it's slowly kind of working its way and the consistency there, we're starting to see more and more of it from the agency, it's greatly appreciated to get to those target action dates.

So, I would hope that at some point we would have those on all of our products. But, all those products are in third-party hands or are in the middle – out of the Middlesex R&D group there are target action dates related to those. And then second question....

Epinephrine auto-injectors....

Yeah. It's actually we've – that was one of the opportunities that we could do some planning on it, some preparation for in our integration planning prior to the close. I think that there are more opportunities for the epinephrine product.

We are right now trying to hone down our position in promotion, making sure that we'll have a supply channel that will be supportive of that. And that our – just to remind everybody, our base model was really defined on us having a Dx status throughout the year. That could change, but that's essentially the way, we're driving this model.

So, the increase that you may be seeing or that we are seeing may be related to the fact that we're just simply making a little more noise with it. But, it's only going to, maybe 1.5 month, since we've done anything with this product, as long as we have owned the company..

Thanks..

Okay. With that, let's close up.

I do want to remind everybody that we still are actually with all the events going on, focusing on the four key areas, that we've identified for the last year, that being heavy focus on our quality initiatives, trying to take advantage of every commercial opportunity we have, refocusing our R&D programs although it's optimized and then heavy, heavy involvement in business development, whether that will be M&A or product selection.

So, we look forward to reporting Q2 and all the events that go on in between, so thank you very much..

This concludes today's conference call. You may now disconnect..