Good afternoon. My name is Amy, and I will be your conference operator today. At this time, I would like to welcome everyone to the Impax Laboratories Fourth Quarter and Full Year 2013 Earnings Call. [Operator Instructions] Mark Donohue, Vice President of Investor Relations, please go ahead.

Thank you. Good afternoon, everyone. Welcome to our fourth quarter and full year 2013 financial results conference call. We issued our earnings release today after the close of the U.S. financial markets. A copy of the press release and a link to a webcast of this call are available on the company's website at www.impaxlabs.com. Today, Bryan Reasons, our Chief Financial Officer, will provide remarks on the quarter and full year and Bryan; as well as Dr. Carole Ben-Maimon, President of the Generic Business; and Michael Nestor, President of the Brand Business, will be available to take any questions you may have. Our discussion today may include certain forward-looking statements, and actual results may differ from those presented here. The factors that could cause such a 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 fourth quarter and full year 2013 earnings release, which can be found on the company's website. And with that, I'm going to turn the call over to Bryan.

Good afternoon, everyone. Thanks for joining us. I'll begin by reviewing some of our 2013 events and our fourth quarter and full year results, then briefly discuss our 2014 objectives and updated 2014 financial outlook. Reflecting back on 2013, we're disappointed receiving a complete response letter on RYTARY early in the year and a Form 483 at the Hayward facility. Those events, combined with the patent expiration on 2 of our 3 Zomig products and the potential impact of additional competition on several generic products, led us to our cautionary remarks in August regarding possible quarterly operating losses during the second half of the year. During 2013, we took a number of steps to align our business to better meet our current expectations and ensure that resources were allocated to future growth plans. At the same time, we continue to monitor our cost structure in order to be more efficient in the near-term and to ensure our business is aligned with our strategic goals longer term. While we manage our cost structure across a number of areas, we continue to commit significant resources to quality and compliance operations and fulfilling our commitments to the FDA. We brought in a number of highly qualified external consultants, as well as redeploying internal personnel to focus on this critical effort. We enhanced our quality governance structure with the addition of an oversight committee which includes senior executives, third-party consultants and independent advisors to make sure the quality improvement program is implemented properly and timely. We previously announced that in late October of 2013, we participated in a regulatory meeting with the FDA to discuss our remediation work and quality improvements. Since that meeting, we have continued to have dialogue with the agency and provide monthly status updates on our progress and commitments. As…

[Operator Instructions] Your first question comes from the line of Randall Stanicky from RBC Capital Markets.

I'm sure how you should address this question but if the FDA was to come back tomorrow, are you guys ready for that inspection? And I'm just trying to get a sense of with the additional $25 million to $30 million in spend on the remediation, is there anything to read into what you need to do in terms of next steps?

So I'll answer that, it's Bryan. Yes, if you mean will we pass the reinspection? Everyone knows that's difficult to predict. What I can say is, we're working very hard around the remediation. We're completely committed to put in a world-class Quality Improvement Program, and from top down, quality culture is instilled in this company at this point.

I guess, Bryan, more specifically, are you guys ready for a reinspection if it was to happen tomorrow?

So yes, like I said, we are. We've worked hard to address the 483 observations. I feel like we've invested heavily and in put in a top-notch Quality Improvement Program, but once again, you never know with the FDA.

Okay. Maybe just to switch gears on RYTARY, and this may be for Michael. Obviously, you're still working to separate this. If you were -- I guess what are the next steps? When could we find out if that can be separated? And if that was the case, how could we think about the earliest timing for you guys to be in a position to launch RYTARY?

Okay, Randall. Thanks for the question. So where we are relative to RYTARY at this point is we are still in discussion with the FDA about separating RYTARY from the warning letter. That would really be the, if you will, the first step is that separation. If we get the word that in fact, we can do that, and we would then resubmit our NDA, and that -- when I say, resubmit, it's to make sure that we have all the updated safety information in the NDA that would need to be filed. In that filing, then we would be looking at 1 of 2 scenarios, either a short review cycle with the submission, or the other option is there is a longer review cycle. The shorter review cycle typically is supposed to take about 2 months. We find that it's, in reality, now it's roundabout 3 to 4 months that it's taking, the longer review cycle, which is supposed to be 6 months, which is typically, if there's additional clinical information requested. That, in reality, is taking anywhere from 8 to 9 months in terms of actual time for occurrence at this point. So I think in terms of the shortest time that we could be ready to launch once we have submitted the updated NDA, if we were given the 2 months, if you will, review cycle would probably get the review -- excuse me, if we were to get the approval, give us 3 months after that. So if you say in the shortest, say, 3 or 4 months now plus 3 months on top of that, we could launch probably before the end of the year, but just barely. That answer your question?

Yes. No, that's helpful.

Your next question comes from the line of David Buck with Buckingham Research.

The assumptions that, Bryan, for gross margin, you mentioned that the RENVELA authorize is the only new product approval. Can you talk about -- maybe this is one for Carole, can you talk whether you're expecting any meaningful approvals outside of the Hayward facility? And in terms of timing, is there any sense you're getting from the FDA that you could actually get approvals out of Hayward this year?

So...

You want me to address the guidance? The gross margin assumes the only new launch in gross margin is RENVELA. Everything is off by generic RENVELA. There's no other approvals contemplated in that gross margin guidance. Sorry, Carole.

No, I'm sorry, Bryan. Yes, and with regard to approvals, we obviously do have some other partnered products, as you well know. We don't really know exactly the timing for the launch of those products. But most of them are contingent upon FDA approval, as well as some of them are in litigation. And so some of them will require resolution to the litigation. But obviously, we are continuing to pursue all those products and those approvals. We're excited about the G RENVELA. We're excited that we will be able to launch that this year. And then with regard to internal products, once the warning letter is lifted, as we've said, I think, in the past, there are several products that have been going through the review process at FDA are coming to completion. And once the warning letter is resolved, we'll be able to start launching those products. Most of them are relatively small with the exception of G Concerta, and the G Welchol that we have the date certain for January 2015. But in their totality, when you add them together in aggregate, they still are new products, they still keep us in the face of their customers and they still add value to the company. So we've got G Concerta, G Welchol and then some smaller products coming out of Hayward once the warning letter is resolved and there are some partner products but it will take time.

Great. And then if I can sneak in one more. Is there any update at all for the CEO search in terms of when we might hear the timing of that?

Yes. The board is focused on the CEO search. They're really focused on getting the right person to lead Impax to its future growth, so I don't have an update on timing of that.

Your next question comes from the line of Chris Schott with JPMorgan. Dana Flanders - JP Morgan Chase & Co, Research Division: It's actually Dana Flanders in for Chris. Could you maybe just walk through your assumptions on generic RENVELA, what you're expecting in terms of the competitive environment, maybe the constraints on what you can sell and then how long the agreement lasts?

Yes. So we have obviously a settlement agreement with Genzyme. We are going to be launching in the second quarter, as we've said. The -- it is the specific allotment of product. We should be the only ones launching initially. The patent does expire September '16, and there are other filers and we expect that others will come to the market sometime after September '16. There are no tentative approvals at this point, and so that's an important issue. This is a relatively challenging product for a whole host of reasons. So we will sell through these specific allotment of product during 2014. We continue to pursue our own ANDA, which is dependent on the Hayward facility. But once the warning letter is resolved, we'll be able to get that product approved, and then we'll be able to launch our own product subsequently. Dana Flanders - JP Morgan Chase & Co, Research Division: Okay, great. And then just last question here. On the Taiwan facility, just in light of the warning letter. When can we see generic product approvals from that facility? Is that a 2015 event? I know there's quite a wait time at the FDA, but just curious in terms of when we could see some generic products from there?

It should be some time. I mean, we are starting to utilize that facility clearly. Products have been transferred there and we're manufacturing out of Taiwan. But from the standpoint of products actually having been filed out of Taiwan, with the 30-month review time in that facility just coming off online in the last couple of years, it could still be some time before you actually see approvals out of there.

Your next question comes from the line of Louise Chen with Guggenheim.

So first one I had was on the $25 million to $30 million of Hayward spend on QIP. I was wondering if you could give more color on exactly what the QIP spend is. And then are these one-time in nature or are some of these recurring costs over time? And then secondly, on the Zomig nasal spray, I was wondering if you could comment on post the generic entrants of the other formulations, if it's been cannibalized at all or if it's still growing opportunity? And then would you provide any color on the gross margin for RENVELA so we can try to get just sort of a sales number for the product.

Okay, that was several questions. We'll take them in order. So I think, one will be mine, and then Michael will handle the Zomig one. So the remediation cost, what we include in that is what we consider one time. So it's truly external consultants that are either helping us with remediation or putting in the QIP program, which involves systems, processes, SOPs, it's a large undertaking, lots of work streams. But we've analyzed all the cost and the only cost we put in there are the ones that we're confident that are nonrecurring in nature and will go away. And the QIP program, it's hard to go from to get into a lot of detail on that, it's such a large program. Certainly, I'm not an expert in that area. But it involves a lot of processes and a lot of systems and implementing these things, as well as extensive development of training programs, et cetera.

Louise, on your question about Zomig nasal spray. So when the RO tablet and the ZMT went generic, we did not see any cannibalization of the Zomig nasal spray. In fact, what we've been able to do is grow our share with our sales force efforts and now have, I think, it's around about 29% share of the nasal triptan market place in the total market. And with the physicians, just with the target physicians we call on, we have about a little over 50% share of the nasal triptan market at this point. So we feel we're making some nice progress in the growth of that product.

And then on the gross margin on RENVELA, we don't give top line guidance or product-specific gross margin. But like Carole said, the competitive landscape is such that we're the authorized generic, and we're alone for a period of time with the brand. So we're certainly very excited about the opportunity.

Okay. And -- sorry to just maybe squeeze in one more. On this QIP, is this over and beyond what the FDA is asking? Are there things in here or is this purely to address the issues that the FDA has raised in the warning letter 483.

This is over and beyond, kind of what I said in my prepared remarks. This is to create a world-class sustainable quality organization so that not only we address the current regulations the FDA have, but we're in front of the ever evolving landscape.

Your next question comes from the line of David Amsellem with Piper Jaffray.

I have a few. Just wanted to follow up on the CEO search. There had been companies in the space that are far greater than Impax who had been able to turn around the CEO search faster than you guys. So I guess the question is, what has been the challenges, if any, on finding the right person? Maybe you can expand upon that. And then just a couple of other quick ones. Number one, on Zomig, on the nasal spray, what to the extent to which you think there's additional pricing power on that product? And then in terms of business development, can you give us a sense of whether or not you're looking at commercial stage assets primarily or are we going to see other small in-licensings along the line of ELADUR going forward?

So the CEO search, like we previously had discussed, yes, the board formed a search committee. They're really -- and have retained a search firm -- they're really handling that search. But I can assure you that it is a focus of the board and certainly a focus of the search committee. The actual day-to-day and how it's going and that type of thing I'm not privy to so I can't answer that. I'll skip down to the BD question then Michael can jump to your Zomig question. So the BD, yes, we have a process and we look at everything. And if we had our choice, we would prefer a commercial product that would be immediately accretive absolutely. That said, if a nice late stage pipeline product came to our attention, we would evaluate that as well.

So in that regard, David, ELADUR was a pipeline opportunity that we felt was a good one to take advantage of. It fits strategically with our pursuit to the post-herpatic neuralgia indications for that patch, for which we believe it's uniquely suited. And as Bryan said, our preference would be for a marketed product that could add top line sales right off the bat. But sometimes, you have to be opportunistic and take advantage of opportunities as they come along. Let me -- relative to Zomig nasal spray, we believe that there probably is some additional pricing opportunity in that market space. We just have to take a very close look at the overall structure from a pricing perspective of the market given the fact that much of the market is a managed one, if you will. Not withstanding, we believe that there is additional pricing power, although I certainly wouldn't kind of go into what our analysis shows at this point.

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

First, for Bryan. Could you talk a little bit more about the $19 million of customer credits from pricing activities in generics? Are you following what some of your competitors are doing with regards to price increases? And how much will that benefit you going forward? And if you could talk a little bit more about which products were being impacted if it's more like the controlled substances or if it's some others as well?

Yes. So yes, like I said in the prepared remarks, common in the industry when you take a price increase, the wholesalers have price protection. And as a result, in most instances, the accounting requires you to estimate an accrual, accrue that full amount upfront, and then hopefully you enjoy the impact of that price increase going forward. So that's kind of how the financials work. I'm going to have Carole actually talk about some of the generic products.

Obviously, we can't really talk about, for competitive reasons, about specific products with specific prices. But as you've seen across the industry, pricing has improved and the ability to take some price increases has clearly been available. Obviously, we're really careful and we want to make sure that we do that in a very rational way so that we make sure that the price -- that what we're doing sticks and that we actually do make more money in the long run. But we're pretty confident that what we did through towards the end -- throughout the end of last year and the beginning of this year will result in more profitability from many other products that we have been able to take some price on.

Okay. And then a couple more. In Hayward, I just want to clarify. So a few months ago, you had said you were several months away from completing the remediation efforts. So are you theoretically done with the 483 concerns and now you're just going above and beyond that with the QIP? And I know that you don’t have real visibility as to when the reinspection will occur, but would you be surprised if it's not by, let's say, mid-year?

So I can talk about the remediation versus the QIP. Certainly, when we got the 483 in early 2013, much of the resources shifted to addressing those specific observations. As we work through a lot of those, resources began and still are beginning to shift with a more focus on the QIP. So it's kind of a shift over time. So -- and in 2014, the majority of the work will be related to the QIP program.

Okay. Then timing of reinspection. I mean, do you feel comfortable with this year but you really can't pin down anything beyond that?

Yes, they don’t call and schedule it. So it's when they come and knock on the door.

Okay. And then just one last follow-up on the earlier BD question. Are you guys holding back at all on the bigger type of deals until you have a new CEO in place? Or is the board comfortable and is senior management comfortable moving forward with something that could be transformational if it presents itself?

Yes, we have not changed the types of things we look at and how we look at them. And if we have an opportunity that we like, the management team would not hesitate to present those opportunities to the board.

[Operator Instructions] Your next question comes from the line of Marc Goodman with UBS.

Could you talk about the gross margin coming in a little better than expected in the fourth quarter and why you raised gross margin guidance for this year? And then can you talk about the branded R&D? I think you made a comment that were killing 2 projects. Can you tell us what they were?

So the fourth quarter gross margin coming in positive mainly driven by continued growth of oxymorphone, and -- sorry, what was your second question?

Well, you raised guidance, the gross margin for this year.

The change in gross -- sorry, and we also -- sorry, I was just reminded, Q4 is also favorably impacted by the launch of Solaraze, generic Solaraze. And then the raise of gross margin in 2014 was purely factoring in our planned launch of generic RENVELA.

And then the comments on the projects that are going away?

Yes. The 2 projects, Marc, that Bryan alluded to was IPX218 program which was an epilepsy candidate product that we were looking at in last year, as well as IPX159, which was restless leg product. We did a Phase II product on that program and it didn't meet the endpoints we were looking for it to meet, so we killed it. But we do have other programs in our R&D pipeline that we're going to be continuing to move through the process.

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

Just wondering on a specific one on the [indiscernible]. Could you comment on the competitive dynamics there after product launch on authorized generic? Has everything been rational or have you seen more than typical price pressure?

So I don’t want to really specifically talk about pricing [indiscernible]. You know that the market has been pretty stable enough, as you suggested part of a launch in AJ. We're pretty comfortable that what we've done is rational and will result in ongoing profitability for that product. And we've continue, obviously, to do everything we can to maintain our own share.

And the second one on generic RENVELA, are you limited in any way on launching your own product? As in, do you have to launch the specified numbers of authorized generic workings or if you get an approval, let's say, quicker than you think, could there be upside to the $50 million to $70 million?

We are not limited in any way with our own application. We continue to pursue that application. As I said, nobody has definitive approval. It is a challenging product. And it does come out of Hayward, so it is dependent on the resolution of the warning letter. But we have a license agreement from Genzyme and we continue to pursue that product and we'll launch it as soon as we get an approval.

And my last question is for Bryan. You've seen a lot of inversions happen in the spec pharma space. Could you comment on how easy or difficult it might be for a small company like Impax become a TLC?

So yes, we're very aware of inversions and understand how they work. And as we look at opportunities, we certainly keep inversion as one of the lenses we look through. Yes, you need to find something that actually qualifies. You need to find something that's reasonably close to the right size. And it's certainly nice to have something that makes some strategic fit as well. So yes, if it was really easy, everyone would, I think, would do it. So we certainly are looking hard and would explore that type of opportunity.

Your next question comes from the line of Ken Cacciatore with Cowen.

I apologize, I didn't hear the prepared remarks, but I have heard the Q&A. I just want to clarify. Has the FDA recently been in the there or is the FDA now at your facility? Just -- when it's been asked, I don’t know if you've answered it though [indiscernible] are actually there now?

No, it was in my prepared remarks. No, they have not come back.

Okay. And then just listening to the Q&A as well, it just struck me as when you're talking about QIP that you can't fully say that you all feel that you're 100% ready for the agency. And I know you can't predict what outcomes are, but at least, from your perspective, do you feel as if you're 100% ready to have a facility that is cleared at this moment in time if they did come tomorrow? I know you'll kind of do your best to talk around it, but I'm not clear why that would be difficult to say that we feel we have an FDA-ready inspectable facility at this point in time as opposed to there's a little bit more work to be done. I just want to clarify that you feel that at this moment in time, it's an approvable facility. And then lastly, on the refiling of the NDA, again, I'm not quite clear for RYTARY what information is necessary, I thought it was an approval product over a year ago, so just a little more clarification on that as well.

So on the FDA, I think any type of inspection, it's hard to say definitively, we are 100% ready, right? That's hard to say. Have we improved our processes, improved the quality culture, putting in a best-in-class QIP program? Yes. So we -- it's a continuous process and we'll continue to work to drive quality. But yes, I think it's hard to say any type of inspection to say you're 100% ready.

So, Ken, relative to RYTARY, we got a complete response letter in early January. And some 483s when the FDA came in, we responded to those promptly and within the required time. So we've answered the 483 observations that we were given. And due to the fact that some of the early development work for RYTARY was done here in Hayward, RYTARY has kind of gotten tied up with the warning letter here in Hayward. Now RYTARY will not be manufactured in Hayward going forward, it will only be manufactured out of Taiwan, which had a successful pre-approval inspection back, I think, in July of 2012. We are in discussion with the FDA at this point in time about separating RYTARY from the warning letter here in Hayward, and that process is ongoing. When we have some information that kind of leads to, if you will, or has led to the decision from FDA, we'll certainly let you all know what the status is.

Great. Can I follow up with one last thing on the Hayward facility? Have you had your consultant -- you had -- you're spending quite a lot of money. Have you had your consultants do a full-on mock inspection, walk-through recently where you were given a clean bill of health, at least, through the mock inspection?

So as part of that, we have obviously lots of consultants, you can see from our spend. And part of the activities going on is certainly various mock inspections, yes.

And your final question comes from the line of Jim Molloy with Janney.

Can you talk a little bit about products that you're going to miss without having Hayward fixed? And to what time do you have to get Hayward fixed to be able to get on the generic Welchol, generic Concerta? And then on RYTARY, I know you're waiting to hear more information on when -- what the next steps are. When do you think you will hear that?

So I'll answer the questions with regards to G Concerta and G Welchol. As you know, we have a date, certain launch, for G Welchol, that's not till January. So I think we still have plenty of time. And G Concerta has been moving through the process, through the review process. And we're continuing to pursue that application. Once the warning letter is resolved and we can begin to get approvals, some of these products will require preapproval inspections and that will take time. Obviously, we'll work with the agency to try and set that priorities we have. But really, it's their call as to what products they come in and inspect, in what timeframe. So it's a little bit difficult to predict when we will actually be able to launch those products. But I think at least at this point, we still have some lead time.

And relative to RYTARY, Jim, I cannot predict when we'll hear from the FDA relative to RYTARY's disposition. However, I am very encouraged with the fact that we are at least able to have a dialogue with the FDA about trying to separate RYTARY from the warning letter in Hayward.

And then I guess lastly, any thoughts on timing for an O.U.S. partner, or that depends on I guess getting this cleared up?

There's a little bit about getting all this squared away. The other aspect, however, is that we intend to file the marketing application authorization ourselves with the EMA. We have had an opportunity now to go through the documentation that we got back from GSK, and currently, it is going through the hands of a consultant firm that we have engaged who is very familiar with the EMA process and marketing authorization applications. So I think once we're a little further along with that process, we'll be in a better position.

Thank you, everyone, for joining our call today. We look forward to speaking to you in the future. And that concludes our call.

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