Q1 2024 Vanda Pharmaceuticals Inc Earnings Call

[music].

Operator: Thank you for standing by. My name is Hermione, and I will be your conference operator today. At this time, I would like to welcome everyone to the Q1 2024 Vanda Pharmaceuticals Incorporated earnings conference call. All lines have been placed on mute to prevent any background noise.

Thank you for standing by my name is <unk> and that won't be a conference operator today at this time I would like to welcome everyone to Q1, 'twenty four Vanda Pharmaceuticals incorporated earnings conference call.

Operator: After this speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star 1 again. I would now like to turn the call over to Vanda's Chief Financial Officer, Kevin Moran. Please go ahead.

Speaker Change: Lines have been placed on mute to prevent any background noise.

Operator: After the Speakers' remarks, there will be a question and answer session. If you would like to ask a question Julien. This time simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question Press Star One again I would now like to turn the call over to <unk>, Chief Financial Officer, Kevin Moran.

Kevin Patrick Moran: Please go ahead.

Kevin Patrick Moran: Thank you you Hermione.

Kevin Patrick Moran: Good afternoon, and thank you for joining us to discuss Vanda Pharmaceuticals' first quarter 2024 performance. Our first quarter 2024 results were released this afternoon and are available on the SEC's Edgar system and on our website, www.vandapharma.com. In addition, we are providing live and archived versions of this conference call on our website. Joining me on today's call is Dr. Mihael Polymeropoulos, our President, Chief Executive Officer, and Chairman of the Board, and Tim Williams, our General Counsel.

Kevin Patrick Moran: Good afternoon, and thank you for joining us to discuss Vanda Pharmaceuticals first quarter 2024 performance. Our first quarter 2024 results released this afternoon and are available on the Sec's Edgar system and on our website www dot manner pharma Dot com.

Kevin Patrick Moran: In addition were providing live and archived versions of this conference call on our website.

Speaker Change: Joining me on today's call is Dr. Mahalo spine, Rob Lewis, our President and Chief Executive Officer, and Chairman of the Board and Tim Williams, Our General Counsel.

Kevin Patrick Moran: Following my introductory remarks, Mahalos will update you on our ongoing activities, and I will then comment on our financial results before we open the lines for your questions. Before we proceed, I would like to remind everyone that various statements that we make on this call will be forward-looking statements within the meaning of federal securities laws. Our forward-looking statements are based upon current expectations and assumptions that involve risks, changes in circumstances, and uncertainty.

Speaker Change: Following my introductory remarks from also update you on our ongoing activities I will then comment on our financial results before we open the lines for your questions.

Kevin Patrick Moran: Before we proceed I would like to remind everyone that various statements that we make on this call will be forward looking statements within the meaning of federal securities laws or forward looking statements are based upon current expectations and assumptions that involve risks changes in circumstances and uncertainties.

Kevin Patrick Moran: These risks are described in the cautionary note regarding forward-looking statements, risk factors, and management's discussion and analysis of financial condition and results of operations sections of our most recent annual report on Form 10-K, as updated by our subsequent quarterly reports on Form 10-Q, current reports on Form 8-K, and other filings with the SEC, which are available on the SEC's EDGAR system and on our website. We encourage all investors to read these reports and our other filings.

Kevin Patrick Moran: These risks are described in the cautionary note regarding forward looking statements risk factors and management's discussion and analysis of financial condition and results of operations sections of our most recent annual report on Form 10-K as updated by our subsequent quarterly reports on Form 10-Q current reports on form 8-K, and other filings with the SEC.

Kevin Patrick Moran: <unk>, which are available on the Sec's Edgar system and on our website, we encourage all investors to read these reports and our other filings.

Kevin Patrick Moran: The information we provide on this call is provided only as of today, and we undertake no obligation to update or revise publicly any forward-looking statements we may make on this call on account of new information, future events, or otherwise, except as required by law. With that said, I would now like to turn the call over to our CEO, Dr. Mihael Polymeropoulos.

Kevin Patrick Moran: The information we provide on this call is provided only as of today and we undertake no obligation to update or revise publicly any forward looking statements. We may make on this call on account of new information future events or otherwise, except as required by law.

Mihael H. Polymeropoulos: With that said I would now like to turn the call over to our CEO Dr. <unk>.

Mihael H. Polymeropoulos: Thank you very much, Kevin, and good afternoon, everyone. Thank you all for joining us to discuss Vanda's first quarter 2024 results. Let me start by providing details on the progress for our psychiatric portfolio of compounds. FNAPT was approved on April 2nd as a first-line therapy for the acute treatment of manic or mixed episodes associated with bipolar I disorder in adults, which for this discussion I will refer to as bipolar I disorder. The results of the study, supporting this approval, were published in the Journal of Clinical Psychiatry earlier this year.

Mihael H. Polymeropoulos: Thank you very much Kevin and good afternoon, everyone.

Mihael H. Polymeropoulos: Thank you all for joining us to discuss Vanda is first quarter 2024 results.

Mihael H. Polymeropoulos: This approval for bipolar 1 disorder significantly expands the addressable patient population for FNAP, where patent exclusivities are expected to last at least through late 2027. For milsaperidum, the active metabolite of FANAP, a new drug application, NDA, is expected to be submitted to the Food and Drug Administration in early 2025. If approved for marketing for Schizophrenia and Bipolar 1 Disorder, their patent applications that they issued could extend exclusivity into the 2040s. We're currently planning clinical programs to test the efficacy of phenactin and milsapiridin in the treatment of depressive symptoms, which, if successful, will significantly further expand the addressable patient population.

Mihael H. Polymeropoulos: Let me start by providing details on the progress for our psychiatry portfolio of compounds.

Mihael H. Polymeropoulos: In addition, we're planning to initiate a registration study of the FANAP long-acting injectable, or FANAP-LAI, formulation by the end of 2024. FANAP-LAI, in earlier studies, has demonstrated a profile compatible with a once-a-month administration, offering a significant tool to address compliance issues in this disease population. Phenaptil AI could reach the U.S. market after 2026, and its pending patent applications that it issued could extend exclusivity into the 2040s.

Mihael H. Polymeropoulos: Fanapt was approved on April 2nd as a first line therapy for the acute effects of manic or mixed episodes associated with bipolar one disorder in adults, which for this discussion I will refer to as bipolar one disorder.

Mihael H. Polymeropoulos: The results of this study supporting the approval were published in the journal of clinical Psychiatry.

Mihael H. Polymeropoulos: Earlier this year.

Mihael H. Polymeropoulos: This approval for bipolar one disorder significantly expands the addressable patient population for Fanapt.

Mihael H. Polymeropoulos: Patent exclusivity is expected to last at least through late 2027.

Mihael H. Polymeropoulos: For middle of the page the active metabolite of connect a new drug application NDA is expected to be submitted to the food and drug administration in early 2025.

Mihael H. Polymeropoulos: If approved for marketing for schizophrenia, and bipolar one disorder. They had patent applications that he should could extend exclusivity into the 'twenty fortis.

Mihael H. Polymeropoulos: We're currently planning clinical programs to test the efficacy of Fanapt in mills have paid in the treatment of depressive symptoms, which if successful will significantly further expand the addressable patient population.

Mihael H. Polymeropoulos: In addition, we're planning to initiate a registration study of the Fanapt long acting injectable or Fanapt L. A I formulation by the end of 2024.

Mihael H. Polymeropoulos: Lee I in earlier studies has demonstrated a profile compatible with a once a month administration offering a significant tool to address compliance issues in this disease population.

Mihael H. Polymeropoulos: Absolutely I could reach the U S market after 2026, and the pending patent applications that it issued could extend exclusivity into the 2014.

Mihael H. Polymeropoulos: This is a key differentiation from some currently marketed, branded anti-psychotics for which physical chemical properties or dosing requirements prevent the development of long-acting injectables. Fanatec LAI could potentially address a large patient population with chronic psychiatric conditions, where compliance is a significant treatment challenge. We're also evaluating the use of an active LAI in the treatment of major depression for which there is currently no approved long-acting injectable treatment. In addition to FANAP... Milsa Peridon has further differentiated physical and chemical properties that, beyond the oral formulation, could permit the additional development of long-acting injectables with a variable duration that could extend up to several months.

Mihael H. Polymeropoulos: This is a key differentiation from some currently marketed branded anti psychotics for which physical chemical properties or dosing requirements prevent the development of long acting injectables.

Mihael H. Polymeropoulos: Fanapt LTI.

Mihael H. Polymeropoulos: Could you potentially address a large patient population with chronic psychiatric conditions, where compliance is a significant achievement talents.

Mihael H. Polymeropoulos: We're also evaluating the users have absolutely eye in the treatment of major depression for which there is currently no approved long acting injectable treatment.

Mihael H. Polymeropoulos: In addition to her that.

Mihael H. Polymeropoulos: We also paid that has further differentiated physical chemical properties that would be on the oral formulation could permit the additional development of long acting injectables with variable duration that could extend up to several months.

Mihael H. Polymeropoulos: It is worth underscoring that most currently approved drugs in this atypical and psychotic class have not been formulated as long-acting injectables, making FANAP and milsapiridone differentiated in this greater-than-a-billion-dollar estimated commercial opportunity. It is our vision to develop a multiproduct psychiatry portfolio that will address multiple psychiatric indications and will expand the estimated addressable patient population to over Turning now to Hitler.

Mihael H. Polymeropoulos: It is worth underscoring that most currently approved drugs in these atypical antipsychotic class have not been formulated as long acting injectables, making phenom and Mississippian done differentiated it is greater than a 1 billion dollar estimated commercial opportunity.

Mihael H. Polymeropoulos: It is our vision to develop and multi product psychiatry portfolio that will address multiple psychiatric indications and will expand the estimated addressable patient population to over 20 million people across these indications.

Mihael H. Polymeropoulos: Turning now to <unk>.

Mihael H. Polymeropoulos: Hetlios, our circadian rhythm regulator, approved in 2014 for non-24-hour sleep-wake disorder, is the first and only treatment approved for this disorder that disproportionately affects totally blind people. Hetlios, with its unique mechanism of action, has revolutionized treatment for this disorder and has significantly impacted patients' lives. Hentley's LQ was approved in 2020 for the treatment of nighttime sleep disturbances in Smith-McGinnis syndrome, again offering the first ever approved treatment for symptoms of this rare orphan disorder.

Mihael H. Polymeropoulos: Partly is a circadian rhythm regulator approved in 2014 for non 24 hour sleep wake disorder is the first and only treatment approved for this disorder that disproportionately affects totally blind people.

Mihael H. Polymeropoulos: <unk> with its unique mechanism of action his revolutionize treatment for this disorder and has significantly impacted patients lives.

Mihael H. Polymeropoulos: Help us L. Q was approved in 2020 for the treatment of nighttime sleep disturbances in space again, you syndrome again offering the first ever approved treatment for symptoms of these rare orphan disorder.

Mihael H. Polymeropoulos: The FDA application for heterozygous insomnia received a complete response letter from the FDA in March 2024, and the final agency action on our application for the treatment of jet lag disorder is being challenged in the U.S. Court of Appeals for the D.C. Circuit.

Mihael H. Polymeropoulos: The FDA application for exactly the same in some year received a complete response letter from the FDA in March 2024, and the final agency action of our application for the treatment of jet lag disorder is being challenged in the U S Court of appeals for the D C.

Mihael H. Polymeropoulos: Great.

Mihael H. Polymeropoulos: A study of Hetlios in delayed sleep phase disorder, an indication with no approved treatments, is ongoing in the U.S. and Germany. We're currently evaluating the initiation of a clinical program with Heplios LQ in pediatric insomnia for children with or without neurodevelopmental comorbidity. Hetlios LQ is not subject to a generic challenge at this time. Although exact estimates of the prevalence of insomnia in children are difficult to quantify, it is estimated that 20 to 40 percent of children experience significant sleep problems.

Mihael H. Polymeropoulos: The study of <unk> in delayed sleep phase disorder, and indication with no approved treatment is ongoing in the U S and Germany.

Mihael H. Polymeropoulos: We're currently evaluating the initiation of the clinical program with <unk> in pediatric concern yet for children with or without Neurodevelopmental comorbidities.

Mihael H. Polymeropoulos: There are currently no approved treatments for pediatric insomnia. If ultimately approved for marketing, the addressable patient population for Hetlios-LQ would be significantly expanded, and market exclusivity would be expected to last in the 2040s. The headless capsule formulation commercial opportunity is subject to the launch of the three generic formulations. Vanda is currently challenging all three products on the grounds of unlawful FDA approval, patent infringement, and other statutory violations in U.S. federal courts. We believe that the exceptional mechanism of action of Hetlios can be leveraged to address the needs of millions of people that suffer with disorders where the circadian rhythm circuitry is perturbed. Turning now to Pornhub.

Mihael H. Polymeropoulos: Jetblue sell Q is not subject to a generic challenge at this time.

Mihael H. Polymeropoulos: Although exact estimates of prevalence of being 78 children.

Mihael H. Polymeropoulos: Difficult to quantify it is estimated that 20% to 40% of children.

Mihael H. Polymeropoulos: <unk> significant sleep problems.

Mihael H. Polymeropoulos: There are currently no approved treatments with regard to consulting if ultimately approved for marketing the addressable patient population for a healthier sell queue who'd be significantly expanded and market exclusivity would be expected to last into 2014.

Mihael H. Polymeropoulos: They haven't been as capsule formulation commercial opportunity is subject to the launch of the three generic formulations vanda.

Mihael H. Polymeropoulos: Vanda is currently challenging all three projects on the ground, so unlawful FTA approval patent infringement and other statutory violations in U S federal courts.

Mihael H. Polymeropoulos: We believe that the exceptional mechanism of action of <unk> can be leverage to address the needs of millions of people the chocolate with disorders, where the circadian rhythm circuitry.

Mihael H. Polymeropoulos: His return.

Mihael H. Polymeropoulos: Turning now to Paul Borja.

Mihael H. Polymeropoulos: With the December 2023 acquisition of Ponvore, this makes the third commercial product for Vanda, currently approved as a once-a-day oral treatment for people with multiple sclerosis. Pornopori has a differentiated profile from other drugs in the class with high specificity and rapid reversibility, making for a versatile use to address the needs of people with multiple sclerosis. The transition from Janssen, a Johnson & Johnson company, is progressing well, with completion expected in the coming months.

Mihael H. Polymeropoulos: With the December 2023 acquisition of poor Boy. This makes the third commercial stage product for Vanda.

Mihael H. Polymeropoulos: Currently approved as a once a day oral treatment for people with multiple sclerosis, putting 40 has a differentiated profile from other drugs in the class with high specificity and rapid reverse ability, making for a versatile years to address the needs of people with multiple sclerosis.

Mihael H. Polymeropoulos: Yes.

Mihael H. Polymeropoulos: The transition from Janssen and <unk>.

Mihael H. Polymeropoulos: Johnson <unk> Johnson company is progressing well with the completion expected in the coming months.

Mihael H. Polymeropoulos: In preparation for the U.S. commercial launch, Vanda is planning a host of commercial activities, including the creation of a specialty sales force, a Prescriber Awareness Program, and a Comprehensive Marketing Program. In addition, Vanda is evaluating Kunfori in additional autoimmune disorders, including psoriasis and ulcerative colitis. Prior to our acquisition, Fulvori was tested in patients with psoriasis and demonstrated significant effects in both induction and maintenance of response. If approved in this indication, PONVORI would be the first oral sphingosine 1,4-state analog for treating psoriasis and would significantly expand the addressable patient population of PONVORI with over 8 million people diagnosed with psoriasis in the U.S. Additionally...

Mihael H. Polymeropoulos: In preparation for the U S. Commercial launch Vanda is planning a course of commercial activities, including the creation of a specialty sales force.

Mihael H. Polymeropoulos: Prescriber awareness program and a comprehensive marketing program.

Mihael H. Polymeropoulos: In addition, vanda is evaluating <unk> in additional autoimmune disorders, including psoriasis and ulcerative colitis.

Mihael H. Polymeropoulos: Prior to our acquisition.

Mihael H. Polymeropoulos: 40 was tested in patients with psoriasis and demonstrated significant effects in both induction and maintenance of response.

Mihael H. Polymeropoulos: If approved in this indication, but volume will be the first oral sphingosine, one phosphate analogue in treating psoriasis and will significantly expand the addressable patient population of converted with over 8 million people diagnosed with psoriasis in the U S alone.

Mihael H. Polymeropoulos: Additionally, this class of drugs has proven to be effective in treating ulcerative colitis, where <unk> with its differentiated profile could have a competitive advantage and significantly expand the addressable patient population with an estimated prevalence in the U S of Approx.

Mihael H. Polymeropoulos: This class of drugs has proven to be effective in treating ulcerative colitis, where Punvori, with its differentiated profile, could have a competitive advantage and significantly expand the addressable patient population with an estimated prevalence in the U.S. of approximately 2 million individuals with ulcerative colitis. Our vision is to increase awareness for pulmonary as an option for patients with multiple sclerosis in need of a specific and versatile aid system. In addition, we intend to explore the application of Pulvori in a host of autoimmune disorders in which its mechanism of action could be therapeutically desirable.

Mihael H. Polymeropoulos: Nearly 2 million individuals with ulcerative colitis.

Mihael H. Polymeropoulos: Our vision is to increase awareness for Voya as an option for patients with multiple sclerosis in need of a specific and versatile paycheck.

Mihael H. Polymeropoulos: In addition, we intend to explore the application of <unk> in the heart of autoimmune disorders in which its mechanism of action.

Mihael H. Polymeropoulos: Could be therapeutically desirable.

Mihael H. Polymeropoulos: Finally, an update on Tredevita, our Neurokinin-1 receptor antagonist, is currently being developed for the treatment of gastroparesis with a new drug application under review by the FDA and an expected target action date in September of 2024. Gastroparesis prevalence is estimated to be over 6 million individuals in the U.S., and there has been no approved treatment in over 40 years. In addition to the FDA review, a clinical study is ongoing with over 600 patients to examine the safety and the exposure-response relationship of 3-Diphthantia in patients with gastroparesis. Close to 40 people have also been approved for treatment in the Expanded Access Program, with some of them having now been treated for a duration in excess of two years. Approval in this syndication got got surprises.

Mihael H. Polymeropoulos: Finally, an update on two dividend.

Mihael H. Polymeropoulos: Through dividend or neuro Canyon, one receptor antagonist is currently being developed for the treatment of gasoline producers with a new drug application under review by the FDA and an expected target action date in September of 2024.

Mihael H. Polymeropoulos: Gastroparesis prevalence is estimated to be over 6 million individuals in the U S and there has been no approved treatment.

Mihael H. Polymeropoulos: 40 years.

Mihael H. Polymeropoulos: In addition to the FDA review, our clinical study is ongoing with over 600 patients to examine the safety and the exposure response relationship of three dividend.

Mihael H. Polymeropoulos: In patients with Gastroparesis.

Mihael H. Polymeropoulos: Close to 40 people have also been approved for treatment in the expanded access program.

Mihael H. Polymeropoulos: With some of them have now been treated for a duration in excess of two years.

Mihael H. Polymeropoulos: Approval in this indication Gastroparesis every seat will address a serious unmet medical need and bringing a new therapeutic option to these patients for the first time in over 40 years.

Mihael H. Polymeropoulos: Every seat will address a serious and mathematical need and bring a new therapeutic option to these patients for the first time in over 40 years. Tradiputant is also now completing its clinical program studying its effects on motion sickness, with an NDA filing expected by year end. Results from the second and final phase of the clinical study are expected in the coming months. The efficacy of tradiptin in motion sickness has previously been demonstrated in two clinical studies where tradiptin was effective in preventing vomiting associated with motion sickness while traveling in the coastal waters of the United States.

Mihael H. Polymeropoulos: So the dividend is also now completing the clinical program study and its effects and motion sickness with an NDA filing expected by year end.

Mihael H. Polymeropoulos: Results from the second and final phase three clinical study are expected in the coming months.

Mihael H. Polymeropoulos: The efficacy of credibility in the motion sickness has previously been demonstrated in two clinical studies with the dividend was effective in preventing buffeting associated with motion in traveling in the coastal waters of the United States.

Mihael H. Polymeropoulos: An eventual approval for this indication we've received will significantly expand the addressable patient population with approximately 30% of the U.S. population reported to suffer from motion sickness under ordinary travel conditions that include sea, air, and land. Our vision is to evaluate and commercialize Predipitant for a host of indications including gastroparesis, motion sickness, and other disorders where this mechanism of action is desired. Vanda also has earlier clinical programs that seek to address some medical needs for common and rare disorders ranging from dry eye, performance anxiety, and onychomycosis to polycythemia vera and sarcoma retube disease.

Mihael H. Polymeropoulos: And eventual approval for this indication with <unk> will significantly expand the addressable patient population with approximately 30% of the U S population.

Mihael H. Polymeropoulos: Wanted to suffer promotional sickness under ordinary travel conditions that include sea Air Inlet.

Mihael H. Polymeropoulos: Our vision is to evaluate and commercialized the dividend for a host of indications, including Gastroparesis motion sickness and other disorders, where this mechanism of action is desirable.

Mihael H. Polymeropoulos: Vanda also has earlier clinical programs, which seek to address unmet medical needs for common and rare disorders, ranging from dry eye.

Mihael H. Polymeropoulos: Performance anxiety, and onychomycosis to polycythemia, Vera and secure Marie tooth disease.

Mihael H. Polymeropoulos: We have been able to accomplish all this, with a small but efficient organization that is enthusiastic to continue developing and commercializing treatments for people who need them. We expect several significant milestones in the coming months, including the launch of FANAPT in bipolar 1 disorder, the launch of 0.40 in multiple sclerosis, the potential approval of tradiptin and gastroparesis, the Phase III results of tradiptin-emotion sickness, the upcoming NDA filings of milsapiridone in psychiatric disorders and of tradiptin-emotion sickness, and the initiation of clinical programs in depression, psoriasis, ulcerative colitis, and pediatric insomnia.

Mihael H. Polymeropoulos: We have been able to accomplish all this.

Mihael H. Polymeropoulos: With a small but efficient organization that is enthusiastic to continue developing and commercializing treatments for people who need them.

Mihael H. Polymeropoulos: We expect several significant milestones in the coming months, including the launch of Fanapt in bipolar one disorder, the launch of <unk> in multiple sclerosis.

Mihael H. Polymeropoulos: The potential approval of <unk> in Gastroparesis.

Mihael H. Polymeropoulos: Phase III results of dividend in motion sickness, the upcoming NDA filings of mill set Paragon in fact that tic disorders, and after dividend in motion sickness and the initiation of clinical programs in depression, psoriasis, ulcerative colitis and pediatric insomnia.

Mihael H. Polymeropoulos: We're confident that our robust revenue, strong cast position, and efficient operations position us for significant growth and value creation in the years to come. Before turning to Kevin to walk you through our business and financial performance for the quarter, I want to take a minute to cover some other recent developments at Vanda. Yesterday, we issued a press release announcing that we are in receipt of a revised unsolicited takeover proposal. The board and management team are dedicated to acting in the best interests of our shareholders, and we would consider any ideas that would drive long-term shareholder value.

Mihael H. Polymeropoulos: We are confident that our robust revenue strong cash position and efficient operations position us well for significant growth and value creation in the years to come.

Speaker Change: Before I turn to Kevin to walk you through our business and financial performance for the quarter I wanted to take a minute to cover some other recent development Savannah.

Mihael H. Polymeropoulos: Yesterday, we issued a press release announcing that we are in receipt of a revised unsolicited takeover proposal.

Mihael H. Polymeropoulos: The board and management team are dedicated to act in the best interest of our shareholders and we would consider any ideas that will drive long term shareholder value.

Mihael H. Polymeropoulos: To that end, our Board of Directors, alongside our independent financial and legal advisors, is in the process of reviewing and evaluating these revised and solicited proposals. We will not comment further on this list of answers, or present our proposal before the board has completed its review. With that, I'll turn now to Kevin to discuss our financial results. Kevin? Thank you, Bob.

Mihael H. Polymeropoulos: To that end our board of directors alongside our independent financial and legal advisors is in the process of reviewing and evaluating this revised unsolicited proposal, we will not comment further on this answer lease takeover proposal before the board has completed its review.

Mihael H. Polymeropoulos: With that I'll turn now to Kevin to discuss our financial results Kevin.

Kevin: Thank you boss.

Kevin Patrick Moran: I'll begin by summarizing our first quarter 2024 financial results. Total revenues for the first quarter of 2024 were $47.5 million, a 24% decrease compared to $62.5 million for the first quarter of 2023. This decrease was primarily due to the launch of generic versions of Helios, which we've discussed in detail. Notably, total revenues for the first quarter of 2024 increased by 5% as compared to $45.3 million in the fourth quarter of 2023.

Kevin: I'll begin by summarizing our first quarter 2024 financial results total revenues for the first quarter of 2024, or $47 5 million or 24% decrease compared to $62 5 million for the first quarter of 2023. This decrease was primarily due to the launch of generic versions of heavier, which we've discussed in detail, notably total revenues.

Kevin Patrick Moran: For the first quarter of 2024 increased by 5% as compared to $45 3 million in the fourth quarter of 2023.

Kevin Patrick Moran: Hetlios net product sales were $20.1 million for the first quarter of 2024, a 49% decrease compared to $39.6 million in the first quarter of 2023. Hetlios net product sales in the first quarter decreased by 5% as compared to $21.1 million in the fourth quarter of 2023. The decrease in net product sales relative to the first quarter of 2023 was attributable to a decrease in volume partially offset by an increase in price net of deduction.

Kevin Patrick Moran: <unk> net product sales were $20 1 million for the first quarter of 2024, or 49% decrease compared to $39 6 million in the first quarter of 2023.

Kevin Patrick Moran: <unk> net product sales in the first quarter decreased by 5% as compared to $21 1 million in the fourth quarter of 2023, the decreased net product sales relative to the first quarter of 2023 was attributable to a decrease in volume partially offset by an increase in price net of deductions.

Kevin Patrick Moran: Our Hetlios Net Product Sales as reported for the first quarter of 2024 and 2023 included transactions that resulted in higher unit sales as compared to the recent prior period. The higher unit sales during the first quarter of 2024 and 2023 resulted in a significant increase in inventory stocking at certain specialty pharmacy customers. Headleose net product sales during the first quarter of 2024 reflect lower unit sales as compared to the first quarter of 2023, which was partially attributable to lower demand and the continued reduction of the elevated inventory levels at certain of our specialty pharmacy customers during the first quarter of 2024. Turning to FNAP,

Kevin Patrick Moran: Our heaviest net product sales as reported for the first quarter of 2024 and 2023 included transactions that resulted in higher unit sales as compared to recent prior periods.

Kevin Patrick Moran: The higher unit sales during the first quarter of 2024, and 2023 resulted in significant increase of inventory stocking at certain specialty pharmacy customers heavier net product sales during the first quarter of 2024 reflect lower unit sales as compared to the first quarter of 2023, which was partially attributable to lower demand and the continued reduction of the Ela.

Kevin Patrick Moran: Inventory levels at certain of our specialty pharmacy customers during the first quarter of 2024.

Kevin Patrick Moran: FNAP net product sales were $20.6 million for the first quarter of 2024, a 10% decrease compared to $22.9 million in the first quarter of 2023. FNAP net product sales in the first quarter of 2024 decreased by 9% as compared to $22.6 million in the fourth quarter of 2023. This decrease was partially attributable to inventory destocking at wholesalers in the first quarter of 2024 relative to elevated inventory stocking levels at the end of 2023. FNAT prescriptions in the first quarter of 2024, as reported by Equivia Exponent, decreased by approximately 4% compared to the fourth quarter of 2023.

Kevin Patrick Moran: Turning to Fanapt.

Kevin Patrick Moran: Net product sales were $20 6 million for the first quarter of 2020 for a 10% decrease compared to $22 9 million in the first quarter of 2023.

Kevin Patrick Moran: Fanapt net product sales in the first quarter of 2024 decreased by 9% as compared to $22 6 million in the fourth quarter of 2023. This decrease was partially attributable to inventory destocking at wholesalers in the first quarter of 2020 for relevant relative to elevated inventory stocking levels at the end of 2023.

Kevin Patrick Moran: Fanapt prescriptions in the first quarter of 2024 as reported by <unk> exponent decreased by approximately 4% compared to the fourth quarter of 2023.

Kevin Patrick Moran: PINVORI net product sales were $6.8 million for the first quarter of 2024. As a reminder, we purchased the right to market and sell PINVORI in the U.S. and Canadian markets in December of 2023. As such, this represents the first full quarter of PINVORI revenue recognition at Vanda and a positive step in diversifying our product mix with innovative and value-generating products. For the first quarter of 2024, Vanda recorded a net loss of $4.1 million compared to net income of $3.3 million for the first quarter of 2023 and a net loss of $2.4 million in the fourth quarter of 2023.

Kevin Patrick Moran: <unk> net product sales were $6 8 million for the first quarter of 2024 as a reminder, we purchased the right to market and self onboard in the U S and Canadian markets in December of 2023 as such this represents the first full quarter of <unk> revenue recognition at Vanda and a positive step in diversifying our product mix with innovative and value generating prop.

Kevin Patrick Moran: <unk> for.

Kevin Patrick Moran: The net loss for the first quarter of 2024 included an income tax benefit of $0.5 million as compared to an income tax provision of $2.3 million for the same period in 2023 and an income tax provision of $0.7 million in the fourth quarter of 2023. Operating expenses in the first quarter of 2024 were $56.7 million, compared to $60.5 million in the first quarter of 2023. The $3.8 million decrease was primarily driven by lower SG&A expenses related to spending on sales activities for our commercial products and other corporate activities, partially offset by an increase in R&D expenses related to spending on our CFTR development program.

Kevin Patrick Moran: For the first quarter of 2024, Vanda recorded net loss of $4 1 million compared to net income of $3 3 million for the first quarter of 2023, and a net loss of $2 4 million in the fourth quarter of 2023.

Kevin Patrick Moran: The net loss for the first quarter of 2024 included an income tax benefit of <unk> 5 million as compared to an income tax provision of $2 3 million for the same period in 2023, and an income tax provision of <unk> 7 million in the fourth quarter of 2023.

Kevin Patrick Moran: Operating expenses in the first quarter of 2024 were $56 7 million compared to $60 5 million in the first quarter of 2023 to $3 $8 million decrease was primarily driven by lower SG&A expenses related to spending on sales activities for our commercial products and other corporate activities, partially offset.

Kevin Patrick Moran: By an increase in R&D expenses related to spending on our <unk> development program.

Kevin Patrick Moran: Operating expenses in the first quarter of 2024 increased by $4.3 million as compared to $52.4 million in the fourth quarter of 2023. This increase was primarily driven by additional spend on legal and other corporate activities, a portion of which is not expected to continue in future periods, partially offset by a decrease in R&D spend due to one-time activities in the fourth quarter of 2023, including $2.4 million of expense recorded for the tridipitin NDA filing fee, $2 million for the associated NDA milestone payment to Eli Lilly, and $3 million of mil-superidone manufacturing costs.

Kevin Patrick Moran: Operating expenses in the first quarter of 2024 increased by $4 three as compared to $52 4 million in the fourth quarter of 2023. This increase was primarily driven by additional spend on legal and other corporate activities a portion of which are not expected to continue in future periods, partially offset by a decrease in R&D spend due to one time activities.

Kevin Patrick Moran: In the fourth quarter of 2023, including $2 4 million of expense recorded for the true dividend NDA filing fee 2 million for the associated NDA milestone payment to Eli Lilly and $3 million of most apparent on manufacturing costs.

Kevin Patrick Moran: SG&A expenses may increase in future periods as a result of the upcoming commercial launches of Phenaptin Bipolar I Disorder and Penvorium Multiple Sclerosis. Vanda's cash, cash equivalents, and marketable securities, referred to as cash, as of March 31st, 2024, was $394.1 million, representing an increase of $5.9 million in cash compared to December 31st, 2023 and a decrease of $1 The change in cash during the first quarter of 2024 benefited from the timing of cash in from customers for revenue and related payments of rebates to payers as compared to recent prior periods.

Kevin Patrick Moran: G&A expenses may increase in future periods as a result of the upcoming commercial launches of Fanapt in bipolar one disorder and <unk> in multiple sclerosis.

Kevin Patrick Moran: We ended cash cash equivalence and marketable securities referred to as cash as of March 31, 2024 was $394 1 million, representing an increase of $5 9 million to cash compared to December 31 2023.

Kevin Patrick Moran: And a decrease of $107 4 million compared to March 31 2023.

Kevin Patrick Moran: The change in cash during the first quarter of 2024 benefited from the timing of cash in from customers for revenue and related payments of rebates to payers as compared to recent prior periods.

Kevin Patrick Moran: The change in cash as compared to the first quarter of 2023 is driven by the acquisition of Funvorium from Janssen for a $100 million upfront payment. Given uncertainty surrounding the U.S. market for Hetlios for the treatment of non-24 as a result of the continued generic competition in the U.S. and the upcoming commercial launches of Phenaptin Bipolar I Disorder and Pemboria Multiple Sclerosis, Vanda is unable to provide 2024 financial guidance at this time.

Kevin Patrick Moran: The change in cash as compared to the first quarter of 2023 is driven by the acquisition of <unk> from Janssen for $100 million upfront payment.

Kevin Patrick Moran: Given uncertainty surrounding the U S market for <unk> for the treatment of non 24 as a result of the continued generic competition in the U S and the upcoming commercial launches of Fanapt in bipolar one disorder and <unk> in multiple sclerosis, Vanda is unable to provide 2024 financial guidance. At this time, we will continue to evaluate its ability to provide financial guidance.

Kevin Patrick Moran: Vanda will continue to evaluate its ability to provide financial guidance in future periods. Hetlios net product sales will likely decline in future periods, potentially significantly related to the launch of generic versions of Hetlios in the U.S. Additionally, the company constrained Hetlios Net Product Sales for the full year 2023 and the first quarter of 2024 to an amount not probable of a significant revenue reversal. As a result, Hetlios Net Product Sales could experience variability in future periods as the remaining uncertainties associated with the variable consideration are resolved and depending on inventory levels at specialty pharmacy customers.

Kevin Patrick Moran: In future periods.

Kevin Patrick Moran: <unk> net product sales will likely decline in future periods potentially significantly related to the launch of generic versions of <unk> in the U S. Additionally, the company constrained have U S. Net product sales for the full year 2023, and the first quarter of 2024 to an amount not probable of significant revenue reversal as a result, <unk> net product.

Kevin Patrick Moran: <unk> could experience variability in future periods as the remaining uncertainties associated with variable consideration are resolved and depending on inventory levels that specialty pharmacy customers.

Kevin Patrick Moran: We are highly focused on sustainable, long-term value creation. In regards to the upcoming Q3 launches of Phenaptin Bipolar I Disorder and PINVORI in Multiple Sclerosis, we have initiated a host of commercial activities on both products, including an expansion of our neuroscience sales force detailing Phenaptin to psychiatrists, PCPs, and other prescribers, the creation of a targeted specialty sales force detailing PINVORI to neurologists, as well as Prescriber Awareness Programs and Comprehensive Marketing Programs for both products.

Kevin Patrick Moran: We are highly focused on sustainable long term value creation in regards to the upcoming Q3 launches of Fanapt in bipolar one disorder and <unk> in multiple sclerosis, we have initiated a host of commercial activities on both products, including an expansion of our neuroscience sales force detailing fanapt psychiatrist pcp's and other prescribers the creation of.

Kevin Patrick Moran: With targeted specialty sales force detailing <unk> voyage neurologists as well as prescriber awareness programs and comprehensive marketing programs for both products.

Kevin Patrick Moran: We believe these commercial investments in FNAT for Bipolar I Disorder and PINVORI for Multiple Sclerosis will result in near-term revenue growth. Our goal is efficient revenue generation, ultimately resulting in profitability and cash flow generation. Vanda has a proven and long track record of fiscal responsibility and successfully commercializing products in an efficient manner, leading to seven consecutive years of positive cash flow. We're moving for the impact of capital offerings and acquisitions, which results in our current strong cash position. With that, I'll now turn the call back to Mihael. Thank you very much, Kevin.

Kevin Patrick Moran: We believe these commercial investments in Fanapt for bipolar one disorder and <unk> for multiple sclerosis will result in near term revenue growth. Our goal is efficient revenue generation ultimately, resulting in profitability and cash flow generation Vanda has a proven and long track record of fiscal responsibility and successfully commercializing products in an efficient manner leading to seven.

Mihael: That could have years of positive cash flow, we're moving for the impact of capital offerings and acquisitions, which results in our current strong cash position with that I'll now turn the call back to the house.

Mihael H. Polymeropoulos: Thank you very much, Kevin. At this point, we'll be happy to answer any questions you may have.

Mihael: Thank you very much Kevin at this point, we'll be happy to answer any questions you may have.

Mihael H. Polymeropoulos: Okay.

Operator: Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star 1 again. If you are called upon to ask your question and are listening via loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. Again, press star 1 to join the queue, and your first question comes from the line of Andrew Tsai with Jeffreys. Please go ahead.

Mihael: Thank you we will now begin the question and answer session.

Lin Tsai: We have dialed in and would like to ask a question. Please press star one.

Lin Tsai: Sure. Thank you Hi, Jane the Q2, you'll likely with a question simply press star one.

Lin Tsai: If you are called upon to ask a question in <unk> by a large pizza.

Lin Tsai: Hi, Steve.

Operator: Pick up your handset and ensure that your phone is not on mute when asking a question again first I want to join thank you and your first question comes from the line of Andrew Tsai with Jefferies. Please go ahead.

AJ: Hey team, this is AJ for Andrew. First of all, congratulations on all the progress, especially FNAP's approval and Bipolar. And thanks for taking our questions. So, I guess firstly for FNAP, what kind of expenses will you need to launch this effectively, and how are you thinking about this peak sales potential ahead of IP expiry?

Operator: Hey, Tim This is AJ for Andrew first of all congrats on all the progress, especially for <unk> approval in bipolar.

AJ: Thanks for taking our questions. So I guess, firstly for Fanapt, what kind of expenses will you need to launch this effectively and how are you thinking about peak sales potential ahead of IP expiry.

Mihael H. Polymeropoulos: I will let Kevin address some of the parts of this question, but what we do know about this class of drugs is that bipolar I disorder represents a significantly larger opportunity than the one in schizophrenia for which PNAP has been approved up to now. We also know that despite the availability of a number of atypical antipsychotics, there remains a significant unmet medical need where patients cycle very frequently from one drug to another seeking control of their symptoms.

Speaker Change: I will let.

AJ: Kevin addressed some of the parts to this question.

Kevin: What we do know about this class of drugs is that bipolar one disorder represents a significantly larger opportunity than the one in schizophrenia.

Mihael H. Polymeropoulos: <unk>.

Mihael H. Polymeropoulos: Fanapt was approved up to now we also know that.

Kevin: Despite the availability of a number of atypical anti psychotics.

Speaker Change: There remains a significant unmet medical need.

Mihael H. Polymeropoulos: Basins for recycling.

Kevin: Very frequently from one drug to another.

Mihael H. Polymeropoulos: Seeking control of their symptoms.

Mihael H. Polymeropoulos: And in terms of marketing, we know that this class of drugs is significantly sensitive to promotion and increased awareness among prescribers. So it is very important to make significant but efficient investments before you drive growth. Kevin? Yeah.

Kevin: And in terms of.

Kevin: The marketing.

Kevin: We know that this class of drugs is significantly.

Kevin: Sensitive to promotion.

Kevin: And increase awareness among prescribers.

Kevin: So it is very important.

Kevin: To make.

Mihael H. Polymeropoulos: Significant but efficiently investments before you can drive growth, but Kevin.

Kevin Patrick Moran: Yep. And AJ, thanks for the question.

Kevin: And a J thanks for the question.

Kevin: Actually we haven't provided guidance at this time, so I'll give you some kind of general direction on where we see things going so as a reminder, fanapt already was approved and in the market for schizophrenia for quite some time. So we had established commercial infrastructure and personnel, but that being said we are in the process of expanding our sales force to meet the apo.

Kevin Patrick Moran: Obviously, we haven't provided guidance at this time, but I'll give you some kind of general direction on where we see things going. So, as a reminder, FNAP has already been approved and on the market for schizophrenia for quite some time. So we have, you know, established commercial infrastructure and personnel. But that being said, we are in the process of expanding our sales force to meet the opportunity that this bipolar 1 disorder indication presents, as well as support it with the appropriate marketing and awareness programs.

Kevin Patrick Moran: This bipolar one disorder indication presents as well as support it with the appropriate marketing and awareness programs.

Kevin Patrick Moran: Some of those activities and increased spend are reflected in the second or first quarter financial results. And some of it would be expected to be seen, you know, progressing throughout this year, beginning with the second quarter.

Kevin Patrick Moran: Some of those activities and increased <unk>.

Kevin Patrick Moran: Spend is reflected in the second or the first quarter financial results and some of them will be expected to be seen progressing throughout this year, beginning with the second quarter.

Mihael H. Polymeropoulos: Got it. Okay, so maybe we're shifting gears a little bit. So for Ponvori, how have sales trended to your expectations, and where could they go in 24 hours?

Speaker Change: Got it okay. So maybe shifting gears a little bit so for <unk>.

Speaker Change: How have sales trending to your expectations and where could they go in 'twenty four.

Kevin Patrick Moran: This is the first quarter that we are booking sales without, of course, having any marketing activity. There was no marketing activity from J&J or Vanda because we're in the midst of this transition. But, Kevin, go ahead.

Speaker Change: Yes so.

Speaker Change: Just to.

Kevin Patrick Moran: Setup and Kevin can give you more detail.

Kevin: This is the first quarter that.

Kevin: We are booking sales.

Kevin Patrick Moran: Without of course, having any marketing activity there was no market connectivity.

Kevin Patrick Moran: J&J or vendors because we're in the midst of this transition.

Kevin Patrick Moran: Yep, and AJ, on that side, as a bit of a reminder of the background here, J&J had kind of decreased their commercial activities towards the end of 2022 and the beginning of 2023 around Ponvori, such that there was limited commercial support for the product during 2023. And so, in the audited financial statements for Ponvori that we filed subsequent to the acquisition, the annualized run rate of Ponvori was in the neighborhood of $30 million a year, which is in line also with the portion of revenue that we recognized in the fourth quarter.

Kevin Patrick Moran: Kevin go ahead, and AJ on that side as a bit of a reminder, on background here J&J had.

Kevin Patrick Moran: Decreased their commercial activities towards the end of 2022, beginning of 2023 around <unk> such that there was limited commercial support for the product during 2023 and so in the audited financial statements for PON brewery that we filed.

Kevin Patrick Moran: Subsequent to the acquisition the annualized run rate of <unk> was in the neighborhood of $30 million a year, which is in line also with the portion of revenue that we recognized in the fourth quarter and so the approximately $7 million of revenue that was recognized in the first quarter as we're transitioning the product in house and as miles mentioned.

Kevin Patrick Moran: And so the, you know, approximately $7 million of revenue that was recognized in the first quarter as we're transitioning the product in-house and, as Mihael has mentioned, towards the third quarter, beginning our commercial activities in full force, is essentially flat with what we saw kind of the trajectory last year with J&J, you know, not providing any support. So it's essentially maintaining where it was, and, you know, we'll look to, as we initiate activities, resume patients being added and revenue growth in future periods.

Kevin Patrick Moran: Towards the third quarter, beginning our commercial activities in full force is essentially flat with what we saw kind of the trajectory being last year with J&J.

Kevin Patrick Moran: Not providing the support so it's essentially maintaining at where it was and.

Kevin Patrick Moran: We will look to as we initiate activities resumed patients being added in revenue growth in future periods.

AJ: Okay, got it. So is it fair to, I guess, expect, you know, potentially a sales inflection in Q3 or when will those marketing activities really start?

Speaker Change: Okay got it so is it fair to expect.

AJ: Potentially a sales inflection in Q3 or.

AJ: When will those marketing activities really start.

Kevin Patrick Moran: Yeah, so those activities, Aja, will start, some of them have already commenced some of the commercial support activities, and some of them will commence in full effect in the beginning of the third quarter, such that I would expect to see, you know, sales inflection in the back half of the year, but it may take, you know, a quarter or so to see the results of the activities in the third quarter.

Speaker Change: Yes, so those activity digital start some of them have already commenced some of the commercial support activities and some of them will commence in full effect in the beginning of the third quarter, such that I would expect to see sales.

Kevin Patrick Moran: Sales inflection in the back half of the year, but it may take.

Kevin Patrick Moran: A quarter or so to see the results of the activities in the third quarter.

AJ: Okay, understood. And then maybe on tritipatent for gastroparesis, can you speak to how your FDA discussions have been going? Or, you know, what's your level of confidence here in an approval? And how would you expect the label to look?

Aja: Okay understood and then maybe on the on trade it traded for Gastroparesis.

AJ: Can you speak to how your FDA discussions have been going or.

Speaker Change: What's your level of confidence here in an approval and how would you expect labor to love it.

Mihael H. Polymeropoulos: Yeah, I would say the FDA is very good at not giving you a signal on this or any other product. However, I would admit that the interactions are continuous and very significant, with a very large number of requests for additional information that we're responding to. So I would characterize it as the review team being very engaged.

Speaker Change: Yes, I would say the FDA is very good now to give you a signal on these or any other product. However, I would.

Mihael H. Polymeropoulos: I admit that the interactions are continuous and very significant.

Mihael H. Polymeropoulos: With a very large number of requests for additional information.

Mihael H. Polymeropoulos: That we're responding to.

Mihael H. Polymeropoulos: So I would characterize it that the.

Mihael H. Polymeropoulos: <unk> team is very engaged.

AJ: Okay, that's very helpful. And then, you know, last question here, I just have to ask on the shareholder activism front. Are you able to summarize your communications to date? And, you know, how do you think you can unlock more value as a standalone company?

Speaker Change: Okay. That's very helpful and then.

AJ: Last question here I, just I have to ask so on the on the shareholder activism Brian.

Speaker Change: Are you able to summarize our communications today and.

AJ: How do you think youre going to unlock more value as a standalone company.

Mihael H. Polymeropoulos: Yeah, you know, the back end of your question, I think what we discussed today presents a good summary of the value proposition: a company with three commercial assets, a significant revenue stream, financially very prudent in how we make investments, and a very deep pipeline with very late-stage assets, some of them that can address very quickly multi-billion market opportunities. In terms of the unsolicited offer, as we've expressed already, the Vanda Board of Directors considers any and all offers with our independent financial legal advisors, and in this case, it was not in the best interest of the company and its shareholders as it significantly undervalued the company.

AJ: Yes.

AJ: The back end of your question I think.

Mihael H. Polymeropoulos: And as you know, there was a second or additional revised offer publicly communicated yesterday, and as I expressed a minute ago, this is again an offer that the board will carefully evaluate with our financial and legal advisors, and that is all we can say for now.

Mihael H. Polymeropoulos: What we discussed today.

Mihael H. Polymeropoulos: <unk> presents a good summary of the value proposition.

AJ: You understand. Thanks so much and congrats again on all the good work.

Mihael H. Polymeropoulos: Company with three commercial assets.

AJ: A significant revenue stream.

AJ: Financially.

AJ: Very prudent of how we make investments.

AJ: And a very deep pipeline with very late stage assets.

AJ: One of them that can address very quickly multibillion market opportunities.

Mihael H. Polymeropoulos: Thank you very much, Hector.

AJ: And in terms of the unsolicited offer.

Speaker Change: As with <unk>.

Mihael H. Polymeropoulos: Expressed already.

Mihael H. Polymeropoulos: <unk> Board of directors considers any and all offers.

Mihael H. Polymeropoulos: With our independent financial and legal advisors.

Mihael H. Polymeropoulos: And in this case as we said.

Mihael H. Polymeropoulos: Earlier.

Mihael H. Polymeropoulos: It concluded that the offer presented.

Mihael H. Polymeropoulos: Was not in the best interest of the company and its shareholders as they are it is significantly undervalued the company and as you know there was a second or an additional.

Mihael H. Polymeropoulos: Revised.

Mihael H. Polymeropoulos: Offered publicly communicated yesterday and as I expressed a minute ago.

Speaker Change: This is.

Mihael H. Polymeropoulos: Again, an offer that the board will carefully evaluate with our financial and legal advisors.

Mihael H. Polymeropoulos: And that is all we can say for now.

Hector: Understood. Thanks, so much.

Hector: Congrats again on all the good work.

Speaker Change: Thank you very much.

Operator: That concludes our Q&A session. I will now turn the conference back over to Finance Management for closing remarks.

Speaker Change: That concludes our Q&A session I will now turn the conference back over to finance management for closing.

Operator: Okay.

Mihael H. Polymeropoulos: Thank you very much everyone for joining us on this first quarter call, and we look forward to talking to you in future periods. Ladies and gentlemen, that concludes today's call. Thank you all for joining us.

Finance Management: Thank you Matt.

Operator: Everyone for joining us on this first quarter call and we look forward to talking to you in future periods.

Mihael H. Polymeropoulos: Okay.

Operator: Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

Mihael H. Polymeropoulos: And gentlemen that concludes today's call. Thank you all for joining you may now disconnect.

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