Diane H. Schrick - Jazz Pharmaceuticals Plc Bruce C. Cozadd - Jazz Pharmaceuticals Plc Matthew P. Young - Jazz Pharmaceuticals Plc Michael Patrick Miller - Jazz Pharmaceuticals Plc Karen L. Smith - Jazz Pharmaceuticals Plc Russell J. Cox - Jazz Pharmaceuticals Plc

Jason Gerberry, JD - Leerink Partners LLC Douglas Tsao - Barclays Capital, Inc. David Maris - Wells Fargo Securities LLC Liav Abraham - Citigroup Global Markets, Inc. (Broker) Aaron Gal - Sanford C. Bernstein & Co. LLC Gary Nachman - BMO Capital Markets (United States) Annabel Samimy - Stifel, Nicolaus & Co., Inc. Marc Goodman - UBS Securities LLC Jessica M. Fye - JPMorgan Securities LLC Irina R. Koffler - Mizuho Securities USA, Inc. Ken Trbovich - Janney Montgomery Scott LLC Gregg Gilbert - Deutsche Bank Securities, Inc. David A. Amsellem - Piper Jaffray & Co. Louise Chen - Guggenheim Securities LLC John T. Boris - SunTrust Robinson Humphrey, Inc. Stephan Stewart - Goldman Sachs & Co. Katie Brennan - Wells Fargo Securities LLC

Welcome to the Jazz Pharmaceuticals Plc Third Quarter 2016 Earnings Conference Call. Following an introduction from the company, we will open the call to questions. I will now turn the call over to Diane Schrick, Director of Investor Relations at Jazz Pharmaceuticals.

Thank you for joining our investor call this afternoon. Today we reported our third quarter 2016 financial results and updated financial guidance in a press release. The release and the slide presentation accompanying this call are available in the Investor section of our website. With me for today's call are Bruce Cozadd, Chairman and CEO; Matt Young, Chief Financial Officer; Russ Cox, Chief Operating Officer; Mike Miller, Head of US Commercial; and Karen Smith, Global Head of R&D and Chief Medical Officer. Following some remarks, we'll open the call for your questions. I'd like to remind you that some of the statements we will make on this call relate to future events and future performance rather than historical facts and are forward-looking statements. Examples of forward-looking statements include statements related to our 2016 financial guidance and goals, our corporate development efforts, future product sales and volume, future litigation and intellectual property-related events, future inventory and supply challenges, future share repurchases, ongoing and future clinical trials and other product development activities, including regulatory events and the timing of such events and activities. These forward-looking statements involve numerous risks and uncertainties that could cause actual events, performance and results to differ materially. These risks and uncertainties are identified and described in today's press release, the slide presentation accompanying this call and under Risk Factors in our Form 10-Q for the quarter ended June 30 and our Form 10-Q for the quarter ended September 30, which we will file shortly. We undertake no duty or obligation to update any forward-looking statements we make today. On this call, we will discuss several non-GAAP financial measures including historical and expected 2016 adjusted net income and the related per share measures, and historical and expected 2016 adjusted SG&A and R&D expenses and measures derived therefrom. We believe that these non-GAAP financial measures are helpful in understanding our past financial performance and potential future results. They are not meant to be considered in isolation or as a substitute for comparable reported GAAP measures. Reconciliations of GAAP to non-GAAP financial measures discussed on this call are included in today's press release and the slide presentation accompanying this call. Both are posted in the Investor section of our website. I'll now turn the call over to Bruce.

Thanks, Diane. Good afternoon, everyone, and thank you for joining us. We've made significant progress toward meeting our corporate goals for 2016 and believe the company is well-positioned to continue to deliver significant value to patients and investors in the years to come. Commercially, we continue to deliver strong top-line growth through higher Xyrem and Defitelio volumes, while remaining focused on the recent U.S. launch of Defitelio and the potential U.S. launch of Vyxeos in 2017. In R&D, our increasing investments have led to significant clinical and regulatory achievements and our expanding development portfolio in 2016, including initiating the rolling NDA submission for Vyxeos for the treatment of acute myeloid leukemia, completing enrollment in two Phase 3 studies of JZP-110 evaluating excessive sleepiness in obstructive sleep apnea, completing enrollment in the Phase 3 study of Xyrem in pediatric narcolepsy, and activating clinical sites in the Phase 3 study evaluating defibrotide in the prevention of veno-occlusive disease in high risk patients following hematopoietic stem cell transplantation. On the manufacturing front, we began shipments of Xyrem to the U.S. from our Athlone manufacturing facility, lessening our reliance on single source manufacturing for Xyrem. And in corporate development, we completed the Celator acquisition in the third quarter and continue to invest in other R&D related opportunities that provide access to innovation and potentially differentiated products, thus expanding our portfolio. Finally, we believe that our strong cash flow, low leverage ratio and flexible capital structure allow us to continue to meaningfully invest in portfolio diversification and expand our leadership role in the sleep and hema/onc therapeutic areas, all with the goal of delivering significant future value. I'll now provide an update on key commercial, legal, regulatory and clinical development activities in the third quarter, provide highlights of key events for the fourth quarter and…

Thanks, Bruce, and good afternoon, everyone. We are pleased with our financial performance in the third quarter of 2016 as total revenues increased 10%, driven primarily by higher sales of Xyrem and Defitelio compared to the third quarter of 2015. We expect strong top-line growth for 2016 and are maintaining our total revenue guidance in the range of $1.485 billion to $1.53 billion. Net sales of Xyrem for the quarter were $286 million, up 18% from $243 million in the third quarter of last year. We are updating our guidance range for Xyrem net product sales to $1.1 billion to $1.125 billion from a previous range of $1.095 billion to $1.13 billion and continue to expect mid to high single-digit volume growth for the full year 2016. Turning to Erwinaze, third quarter worldwide net sales were $43 million, down 24% compared to net sales of $56 million in the third quarter of 2015. We experienced a supply interruption that led to back orders of Erwinaze in the U.S. At the end of the third quarter, there was no inventory on hand at our U.S. distributor as compared to 16 days on hand at the end of the third quarter of 2015. The inability to supply certain markets resulted in approximately $13 million impact on net sales; approximately $10 million related to the reduced inventory worldwide and approximately $3 million related to back orders at the end of the quarter. While we expect to continue to experience supply disruptions, we are maintaining our guidance for Erwinaze net sales with a range of $190 million to $215 million for 2016. Worldwide, Defitelio net sales were $28 million in the third quarter, an increase of $8 million compared to the third quarter of 2015. U.S. sales in the third quarter were $7 million.…

Thanks, Matt. Before proceeding to Q&A, I'd like to comment briefly on the challenging macro environment within our industry where the sustainability of many business models is being called into question. I'll remind you that we remain focused on generating value through our consistently articulated sustainable business model of identifying differentiated assets with significant clinical value to patients, executing on the development and commercialization of these assets, maximizing their value through disciplined investments, including line extensions, and using our strong balance sheet and cash flow to further diversify our portfolio through acquisitions, licensing transactions or partnerships. We believe that this model supports our goal of delivering meaningful therapies for patients while building shareholder value. Diane?

Thanks, Bruce. We request that you limit your questions to one at a time and then feel free to reenter the queue if you have further questions. With that said, I'll turn the call back to the operator to open the line for your questions.

Thank you. And our first question comes from Jason Gerberry with Leerink Partners. Your line is now open.

Hey. Good evening. Thanks for taking my question. So I guess just on the new Xyrem programs, just kind of curious how we should think about the ability to get patents around these. Is this something that could be eligible for NCE status? Or will this mainly be something covered by formulation IP? And in general, what proportion of patients are on the higher 9-gram dose that get this high quantity of sodium? Thanks.

So, Jason, on the first part of your question, yes, we have patents and additional pending patents on both of the product candidates I mentioned, JZP-258 and JZP-507, and that, we believe, will offer protection for those products. In terms of the breakdown of dosing, we find that most of our patients do move to the higher end of the dosing interval over time to get the efficacy they need. I think the average is probably 7.5 grams or higher, but we do have a substantial number of patients who are in fact on the 9-gram total dose per night.

Got it. Thanks.

Thank you. And our next question comes from Douglas Tsao with Barclays. Your line is now open.

Hi. Good afternoon. Thanks for taking my questions. Just, Bruce, again on the follow-on Xyrem products, just trying to understand how you're thinking about both the regulators as well as payers, sort of more substantively sort of demonstrated the sort of clinical value over the existing Xyrem product. I mean I guess, I hear you in terms of the lower sodium content being better in abstract, but obviously this is a very tough environment in terms of reimbursement. And so, what kind of outcome studies or – presumably (27:56) you don't have an outcome study or sort of data are you going to provide to sort of justify switching patients over and getting reimbursement for this product? Thank you.

So, Doug, we haven't talked about – it's not appropriate to talk about pricing at this point, but given the choice of Xyrem or a reduced sodium version of Xyrem, assuming all other things are equal, we do believe it would be an easy choice for payers to put patients on the reduced sodium product. We know there are patients for whom high sodium load is a concern about even putting patients on sodium oxybate at all, or requires other changes to their sodium intake. And so if you had a choice of those two products, I think it's pretty clear.

And then just one quick follow-up, if I might. I mean, are you surprised given how quickly – last quarter you talked about seeing a slowdown in diagnosis rates, and it sounds like you sort of were able to refocus effort with some of the sales force. I mean to see an improvement this quickly, does that surprise you?

Yeah, just to be clear, Doug, I think what we said last time was a commentary on overall narcolepsy diagnosis, and what I referenced in this call was in particular an improvement in the diagnosis of type 1 narcolepsy, which is narcolepsy with cataplexy. So it's a little bit apples and oranges. I know they're related, but slightly different measure.

And what would you say is sort of more significant for total Xyrem volume?

So let me hand that over to Mike.

Yeah. Type 1 is the ideal Xyrem patient because it has the cataplexy component.

Okay, great. Thank you very much.

Sure.

Thank you. And our next question comes from the line of David Maris with Wells Fargo. Your line is now open.

Hi. On the R&D activity for 2017, Bruce, it sounds like you're going to be quite active. So should R&D rise faster than sales, and on the one study that you said 185 patients in 60 sites over 18 months, is that 18 months of enrollment or to complete the study? Because it seems like a long enrollment, but thanks.

Yeah. I will hand the second part of the question over to Karen, but on the first part of your question on the growth in R&D activities, of course, we haven't yet given guidance for 2017 spending. But I will say the strategy we've articulated generally calls for an increasing percentage of sales to go to R&D over a 3- to 5-year period. Exactly how that changes year to year can be strongly influenced by, are we in the heavy spend portion of a particular program. I'll note that we'll be coming out of JZP-110's heavy spend period as we start heavy spend in other programs. So we probably need to wait to get more specific until we're ready to give 2017 guidance. But if I broaden that out, not just to 2017 in particular, but sort of the next few years, assuming we've got the right programs to invest in that we're confident are a great fit with our strategy and offer good return characteristics, then we'd actually like to take it up somewhat over time. Karen, you want to address the question about the 18-month period?

Sure. The JZP-258 study has 185 patients that were seeking to enroll at the 60 sites crossing both the U.S. and Europe. It is 18 months approximately to enroll and looking at an FPI beginning of next year. And the reason why it takes that long is because these are narcolepsy patients. It's a rare disease, and so it does often take that long. And certainly we have a lot of experience enrolling this type of patients through our JZP-110 studies. So we believe that's an appropriate timeline.

Great. Thank you very much.

Thank you. And our next question comes from Liav Abraham with Citi. Your line is now open

Good afternoon. Can you just clarify on the two follow-on products, JZP-507 and JZP-528? Perhaps, you can give us specifically when you think these products could come to market and then make any comments on the commercial strategy. I understand it's early, but any preliminary comments that you can make on that front would be interesting. Would you be actively looking to move patients? And if so, to JZP-507 or to wait until JZP-528? And how you are thinking about that at this point? Thank you.

Yeah, Liav, it's probably too early to spend a lot of time on commercial strategy. I think the thought with developing both these products is they'd be appropriate therapy choices for patients initiating therapy but also conceivably for patients who are on existing product Xyrem. So I think our expectation is there'd be a pretty broad potential for both products. And I forgot the first part of the question. What was the first part of your question, Liav?

(33:37)

Oh, timing.

Well, if you could be a little more specific on timing, yeah.

Yeah. Probably not a lot more to say right now other than for the faster of the two programs, our hope would be to get something submitted early in 2018. For the second program, as you just heard from Karen, our thought is we'd be still enrolling patients in 2018 before we turn our sights to completing the trial, analyzing the data and moving to a regulatory submission.

All right. Thank you.

Thank you. And our next question comes from Ronny Gal with Bernstein. Your line is now open. Aaron Gal - Sanford C. Bernstein & Co. LLC: Hi. Good afternoon. Thank you for taking my question. About the sales force you introduced to help physician with reimbursement for Xyrem, can you just quantify for us the opportunity here? Are there a lot of patients who don't get the drug because of the challenges? Is that simply a delay in refill rates? How should we think about what – the return on investment on that sales force?

Sure, this is Mike. It's not a sales force, just to be clear. It's a field reimbursement force (34:52) that helps offices and providers navigate the prior auth process. And the advantage to that is you actually do some teaching to the staff on how to navigate it. This cuts down on rejections, it speeds processing, and overall, we think it will help more patients get through the process and eventually to drug. Aaron Gal - Sanford C. Bernstein & Co. LLC: Can you quantify that?

No, I think – but most brands of this magnitude have these types of sales forces or have these type of access folks in the field. This is a common offering and I think it's going to help us a lot. It's going to help patients. Aaron Gal - Sanford C. Bernstein & Co. LLC: Thank you.

Thank you. And our next question comes from the line of Gary Nachman with BMO Capital Markets. Your line is now open.

Hi. Good afternoon. Another one on the Xyrem follow-ons. How far out will those patents that you mentioned go in terms of timeline? And just describe a little more what the difference is between JZP-507 and JZP-258 in terms of the sodium load. Is there anything else, other potential benefits over Xyrem, either one or the other? Thanks.

So, Gary, on the IP that's been issued, that's out through 2033. On JZP-507 and JZP-258, JZP-507 has about a 50% reduction in sodium load; JZP-258 has about a 90% reduction in sodium.

Okay. And is there anything else that you think? Any other types of benefits that you might have with those formulations? Or it's really just the lower sodium?

Well, as I said in my comments, we believe Xyrem is actually a very effective product already. We think in this particular case, we're improving one of the ways in which the product is not ideal and that that is potentially a significant benefit to patients.

Okay. Thank you.

Thank you. And our next question comes from Annabel Samimy with Stifel. Your line is now open. Annabel Samimy - Stifel, Nicolaus & Co., Inc.: Hi. Thanks for taking my question. I thought I'd change the subject a little bit and talk about Defitelio. I'm a little bit surprised that it was down sequentially. I know you had some stocking in the first quarter, but you also added a number of sites and you've had a number of reorders. So can you tell us any other dynamic that's going on that can help us understand the sequential decline? Thanks.

Sure. This is Mike. Yeah. We are early in the launch, and in Q2, we had a significant amount of stocking both in our distribution partner, as well as initial orders by institutions. We have, since launch 105 accounts have ordered Defitelio. 86% of those have reordered. We are pleased with that. Those accounts account for about three-quarters of all the adult allo transplants. Again, we have kicked off a significant education effort. We have trained about 30 speakers in Q3, and we'll conduct about 40 educational programs in Q4. I would say the adoption right now, though we don't have patient-level data, is more pediatric than adult, and that goes back – I think we did predict that based on our relationships with pediatric centers from Erwinaze. So we're currently focusing on the adult centers, and we said the NTAP is effective on 10/1, so we'll pull that through the adult center as well. Annabel Samimy - Stifel, Nicolaus & Co., Inc.: Okay...

And, Annabel, I'll just add, remember on a global basis, both Erwinaze and we expect Defitelio may bounce around a little bit from quarter to quarter for reasons Matt outlined. That's one of the reasons we give annual guidance, and we took the annual guidance from $105 million to $125 million to $105 million to $120 million, so effectively, I think we're right on track. It doesn't change our expectations for the product. And I'll say this going forward into 2017 and 2018 as well, I just think you'll see some bouncing around from quarter-to-quarter for products that treat as few patients as these products do. Annabel Samimy - Stifel, Nicolaus & Co., Inc.: Okay, thank you.

Thank you. And our next question comes from Marc Goodman with UBS. Your line is now open.

Could you talk about Defitelio in Europe and just what was happening there in the quarter relative to the previous couple quarters? And then just one question on the JZP-507 product. Do you think that we'll have data in 2017, or do you think that's going to move into 2018?

Yeah. So let me ask Russ to take Defitelio in Europe first.

Yeah. So no significant change overall in the way that we're thinking about Defitelio in Europe. We saw some really nice uptake in the UK and Italy in the second quarter, and then we saw a little bit of a slowing in the third. But ultimately, we feel like we're on a very strong pace for a good year with Defitelio in Europe.

And on the JZP-507 program, we haven't made clear yet exactly when we'd release data. Our goal will be to complete the study next year and move to early 2018 NDA submission. Exactly when on that timeline we'd be releasing data, we haven't decided yet.

Okay.

Thank you. And our next question comes from Jessica Fye with JPMorgan. Your line is now open.

Hey, there. Thanks for taking my question. I wanted to follow up on David's question about R&D as a percent of sales. Bruce, I know you said this will increase over the next several years, so maybe less of a 2017-specific question, but I'm trying to get a better sense of kind of where we're headed, right? So this quarter, I think we were close to like 12% of product sales, maybe it would have been a little lower if Erwinaze had been a little higher. But I think the guidance for this year implies something more in the 10% range. So is it 12% where we're ultimately heading to? Is it higher than that? Any kind of, I don't know, bookends you could put around that would be helpful.

Yeah, let me ask Matt to comment on that.

Yeah. Hey, Jessica. I'd say we're – broadly speaking, the trend that Bruce articulated is the right thing to focus on, which is as we continue to have programs, we want to take forward from our existing molecules or as we layer other products in – or pipeline programs in through corporate development or licensing transactions, we are looking to make sure as we deploy capital that we shift some of the capital spend away from corporate development and into identified R&D. And that's been something that both through our corporate development transactions and through the molecules we have we've been focused on doing. Whether or not that's 10% or 12%, we again haven't given forward-year guidance or multi-year guidance. But we had indicated we thought it would go up towards 10% which, as you said, is roughly in line with the guidance for this year. And as we continue to identify and discuss programs that may increase that, I think, we'll provide more visibility on whether or not that number would move up again from there as time progresses. But near term, I – and again with the guidance we actually have put out, it's the 9% to 10%.

Okay. Thank you.

Thank you. And our next question comes from Irina Koffler with Mizuho. Your line is now open.

Hi. Thanks for taking the questions. I just wanted to see if you could confirm if there's any change in your formulary status as we head into 2017. And then also, what if anything are you doing to prepare for the choppiness of the first quarter with the high deductible plans to prevent attrition of your Xyrem patients? And then I have a follow-up on the sodium oxybate life cycle extension. Would you expect step edits in that product just for patients who are at risk of hypertensive events or are obese or whatnot if most patients that start on the drug are actually young adults that might not be at risk for sodium-related tolerability issues? Thanks.

Yeah. So let me take the second one first, Irina, then I'll have Mike comment on formulary status and navigating through the first quarter. Before we get to how payers will look at JZP-507 or JZP-258, let us get the clinical data. Let us get our filings in and let's talk about pricing. I don't think they're going to step edit us if the price is at or a slight discount to Xyrem. If it's a huge premium to, maybe, but I think it's a little too early to be trying to figure out how they'll manage it. I'm confident they'd love to have their patients on a better product with lower risk to the patients, all other things being equal. Mike, you want to talk about Xyrem formulary in first quarter?

Sure. So for the third quarter, our reimbursement rates were very steady, no different than in the past couple of quarters, so we're very pleased with that. And to speak for the first quarter 2017, we're also very pleased with the way SDS has been operating. They've been operating well. As Bruce mentioned, we have completed the REMS so that now SDS is very focused on processing prescriptions and being ready for Q1. And again, that's an environmental – certainly an event. But I think we'll be well prepared for it.

Is there any plan to buy down any of these deductibles or any additional co-pay assistance you'll be offering?

Not at this time.

Thanks.

Thank you. And our next question comes from the line of Ken Trbovich with Janney. Your line is now open.

Thanks for taking the question. I was wondering if you could address the shortfall with regard to Erwinaze quantities being available and then the fact that you did not change guidance with regard to the overall outlook for the year. Can you help us understand what gives you confidence with regard to the overall outlook?

Yeah. So, Ken, our focus on trying to fix this problem is very much based on ensuring we get treatment to the patients who need it. From a financial perspective, of course, once we have product available and we ship it out to folks who are on back order or we put it into the hands of our distributor, that builds back up the usual and customary couple weeks of supply that sits there. So our financial results over time balance out and aren't as impacted. We're focusing the comment on mentioning we've had temporary outages because our business is to make sure we have the product for the patients that need it. And that's where we've fallen short. That's the important piece of this. From a financial perspective, really less of an impact over time.

Okay. Thank you.

Thank you. And our next question comes from Ken Cacciatore with Cowen & Company. Your line is now open.

Hey, Ken Cacciatore, are you there?

Ken, your line is now open. And our next question comes from the line of Gregg Gilbert with Deutsche Bank. Your line is now open.

Thanks. I'll take Ken's questions. Let me go back to the narcolepsy diagnosis comments because I'm a little confused. Cautious tone last quarter, more positive tone this quarter. Bruce, you said they're apples and oranges in terms of the definition that you are speaking to. So I guess I'd like to know what your takeaway is from here going forward and how that marries your confidence in continued bottle growth, perhaps heading into next year conceptually based on whatever diagnoses, sort of leading indicators you're talking about because I'm left confused on that issue. And the second part of my question is how your current stock price changes, if at all, your capital deployment priorities? It sounds like the prepared remarks, Matt, you offered a quite similar to over the past several quarters. Just wondering to what degree the level of your stock price changes anything even on the margin. Thanks.

So on the first part of your question, Gregg, we've had a long-term effort in place over a couple of years now to try to improve narcolepsy diagnosis, in large part to speed the path to diagnosis for patients that we know often go undiagnosed for many years. I was actually talking to a mom of a patient today who has been through a multi-year process to get to diagnosis. We hear this from adults who often go 5 to 10 years or more to diagnosis. And anything we can do to move more patients from the unknown status of being a sufferer who doesn't know what disease they have or how to treat it to patients who are diagnosed and can start to seek appropriate treatment the better. We've expressed some confidence over a couple of years that we've had a real – some success there, some traction, and on a number of conference calls, we've highlighted that, that we've seen in fact nice growth in overall narcolepsy diagnosis rates. I think we made a comment on the last call to say we had seen a slowdown in that diagnosis. I thought that was appropriate fair balance after telling you the good news for a couple of years that we were increasing it to at least be fair and say we have seen a little bit of a pull-back in that. We've also had an effort under way specifically targeted at type 1 narcolepsy diagnosis, so a subset of the whole disease. This is narcolepsy with cataplexy. By focusing on use of a diagnostic tool called the Swiss Narcolepsy Scale, among other things, which is sensitive for uncovering cataplexy. And that's been a focus of our efforts, our educational efforts, and we're pleased to see that in that subset of narcolepsy patients we are seeing a nice increase, and I think as Mike told you, those are some of the best candidates for Xyrem therapy. I hope that helps. On the stock price level and how that makes us think about capital allocation opportunities, I'll hand that over to Matt to talk about, but I'll just remind you that the issue is not just where our stock price is, it's where valuations are generally. And while I'm not particularly pleased with our stock price these days, if that means that other valuations are down, too, which they are and we're a net buyer of assets, that honestly is good news for us. That allows us to earn higher returns on the types of investments we make, where we do deploy assets or do deploy capital to buy assets that diversify our business, give us new growth opportunities in sleep and in hem/onc. So on the one hand, lower stock price means better opportunity to buy back our own stock, but I'll just remind all of you that it also means we have some really nice opportunities to buy other assets at better prices.

So, Bruce left me a lot of room there to talk about other stuff, Gregg. I'll just make the point I think we are pleased. We finished the previous $300 million repurchase program, I think, a little faster than we anticipated, even including the – which was about a year from start to finish. And we did that even with a pause as we went forward with the Celator transaction and thought through what we wanted to do from a capital structure perspective related to that transaction. So I think that tells you we're eager to invest in our stock price, but as Bruce – in our stock at this price and prices higher than this, but we need to balance that with the opportunity to continue to diversify and grow our business over time.

Thanks. I'll jump back in.

Thank you. And our next question comes from the line of David Amsellem with Piper Jaffray. Your line is now open. David A. Amsellem - Piper Jaffray & Co.: Thanks. On Vyxeos, just curious to get your thoughts, since you talked about regulatory filings, your thoughts on the kind of label you're going to request and, in particular, how wide of a label are you going to shoot for and what you think is realistic to expect in the AML setting. And then any updated thoughts also on pricing, and how we should think about that in the U.S. market? Thanks.

So, David, let me have Karen comment on the first part of your question around potential breadth of label.

So I think it's a little early to speculate on exactly what the label would say. What I can tell you is that they often start with what was the eligibility for the patients that were studied in the trial and these were frontline patients previously untreated. There was a focus on secondary AML, so therapy related or myelodysplasia-related changes for these patients. And in terms of an age range, they were 60 to 75-years-old, which is in accordance with the average age of patients for AML. As you know, the results were highly statistically significant from an overall survival as a primary efficacy endpoint of both 12 and 24 months. So still to be discussed with the FDA, and we look forward to having those discussions when the time is right.

And I would say probably, David, a little too early to talk about pricing at this point. David A. Amsellem - Piper Jaffray & Co.: Okay. Thought I'd try. Thanks.

Thank you. And our next question comes from the line of Louise Chen with Guggenheim. Your line is now open.

Hi. Thanks for taking my questions. The first question I had was back on the sodium oxybate. Just curious if you could give us more color behind the clinical benefit of having less sodium and why that's meaningful. And then secondly, if you could give us any updated thoughts you have on the market opportunity for Vyxeos. Thanks.

Yeah, Louise, for the first part of your question, let me have Karen talk to that.

So, hi, Louise. I think it's well documented and there's been many, many epidemiological studies around the association and the correlation between morbidity, modality, cardiovascular disease and increased salt intake. And we also know that the recommended daily intake is 2,500 milligrams to 1,500 milligrams per day depending on the type of patient. So if you look at the narcolepsy population, we also know that they have a higher incidence of cardiovascular comorbidities than the average population. So although we can utilize Xyrem and it's proven to be safe and effective when prescribed according to the recommended regimen, it is still a 9-gram dose. The dose they take over a period of a night is still 1,640 milligrams of sodium. So we truly believe that a reduction in sodium in a new formulation of Xyrem would provide significant benefit in a clinically meaningful way to patients, not only from an improved safety profile but also particularly for patients who have a sensitivity to sodium through sodium-sensitive conditions, or really for any patient who is concerned about salt intake. So we do believe that it is going to be a clinically meaningful difference for patients and for prescribers in terms of the choices that they make.

So, Louise, let me have Mike comment on the Vyxeos market opportunity.

Sure. So in the United States, about 20,000 AML patients per year, about half of those are designated chemo fit, meaning that these patients are challenged with chemo. And then when you really look at eligible drug-treated patients, you get to about 3,600 adult patients with this secondary AML, as Karen described. So, obviously, a very, very sizable patient population that does not respond well to 7+3, so a real clinical need. And I think moreover, when you look at some of the data for Vyxeos, there may be an opportunity to actually increase the amount of patients that are in the chemo fit category. So we're excited.

Thanks.

Thank you. And our next question comes from the line of John Boris with SunTrust Robinson Humphrey. Your line is now open

Thanks for taking the question. Most of them have been answered but just one related to litigation. I'm not sure if you covered this early on in the call. But I guess Amneal was looking to consolidate their case. Was there any news that occurred on the consolidation with Amneal? And then any update on the timing with Roxane on the litigation front? Thanks.

Yeah, John. You didn't miss it. We didn't comment yet. The Amneal attempt to consolidate back into the Roxane timeline was denied and that was fairly recent. And in terms of a timeline with Roxane, no real change, still headed for the May 1 proposed trial date.

Thank you. And our next question comes from the line of Stephan Stewart with Goldman Sachs. Your line is now open. Stephan Stewart - Goldman Sachs & Co.: Hey, guys. Thanks for the questions. Sorry to belabor the point, but just wanted to come back to the follow-on sodium oxybate products. Any reason why there should be two separate programs, seeing that it's really just different sodium concentrations? And then secondly really quickly, on Xyrem patient volume this quarter, I saw it stepped down sequentially a bit, haven't really seen that much in the past. Any reason why patients step down?

Yeah. So let me take the second one first. We report a somewhat crude measure once a quarter, which is an average number of patients. And how we derive that number ends up bouncing around a little bit depending on which days we take as the start and the end and what shipments happen to go out and what things happen in our – at the Central Pharmacy. It's not a super-accurate measure. We find over time shipped bottle volume is a much better way to measure progress. We have seen this before. It's not common. But I will say particularly when we looked at our business at the end of the third quarter, it was doing exceptionally well, so I wouldn't read too much into that. On your first part of your question about why we're moving forward with two programs? We're very excited about both of these, but it's R&D. There's no guarantee that any program has 100% probability of making it through to the end. We've been talking for years about wanting to make sure we had multiple shots on goal. These are slightly different development paths, one bioequivalent; one not. One's a little bit faster and cheaper; the other takes a little bit more time and has the potential for a bigger benefit. And honestly, we thought it made sense to pursue both. This is important to us to get right and we intend to do that. Interestingly as we debated how much to disclose, part of our decision was driven by the fact that we were about to go public with the JZP-258 program because we were going to need to make that publicly visible through ClinicalTrials.gov. And as we contemplated disclosing JZP-258, it occurred to us that we had a program inside of that one that people didn't know about yet, and so we decided to go public with both of those at the same time today. I hope that helps people understand the timing of our disclosure. I do think these both could represent improvements over Xyrem. We'll pursue both. And depending on where we end up with those R&D programs, we'll make the best decisions about the path forward for the benefit of patients and our business. Stephan Stewart - Goldman Sachs & Co.: Great. Thanks for the update.

Operator, we'll take one more question.

Thank you. Our last question comes from the line of David Maris with Wells Fargo. Your line is now open.

Hi. It's Katie Brennan on for David. Thanks for taking the last few. I just would like to follow up on the Erwinaze supply constraint and what you're doing to make sure that you kind of resolve that going forward. I remember you saying you had begun running 24/7 shifts and that that possibly you'd see the benefits of that in late 2016. So wondering kind of where that stands? And then the longer-term solution to that? And if you can just clarify if the deuterated sodium oxybate candidate, which you'd hope would be once-nightly dosing, would that product be at the reduced sodium levels of the – farther along follow-ons or at the original currently marketed Xyrem sodium level? Thanks.

So, Katie, on the second part of your question, again, for the once-nightly effort, we've got multiple pieces of that puzzle, so it's not one answer to that question. On Erwinaze, think about it this way; right now, we need every vial of every batch of Erwinaze to supply all of the demand we'd like to supply. And so, we're working as hard to make sure that every vial gets produced is high quality, gets released on time, and a lot of our efforts are around reliability, quality, yield. Over time, as we increase capacity, we'd like to get to the place we're at, frankly, with some of our other products where we've got some safety stock, right? We've manufactured some. It's sitting on the shelf here and provides a buffer. If anything goes wrong with a particular lot that we're manufacturing, we throw it away and make a new one and the market never sees that because that's just an expense to us. That's where we are, for example, with Xyrem. To get there, we're going to have to make significant improvements in capacity, and we're going to have to get far enough ahead of the demand curve that we have a full extra lot sitting there, or a couple. That's going to take time. So think of the near-term efforts as improve quality, reliability, yield, think of the mid-term efforts as really focused around significantly improving capacity so we can get ahead of this and really cushion the market against any shocks in supply. I'll also point out that we do have some asparaginase related development efforts. We've talked on this call about our oxybate-related development efforts. We've talked about defibrotide in terms of prevention of VOD. We've talked about our JZP-110 program. I mentioned interest in potential additional development of Vyxeos. But this is another area where we're interested in and we have efforts under way to see if we can come up with even better products for patients than the existing Erwinaze product. Those are earlier-stage development efforts. They're not close to coming to market, but think of us trying to address this problem on multiple ways: short term, medium term and long term.

If I can add one just follow-up on something that also has yet to be addressed on the call, diversifying away from Xyrem with internal candidates we've spoken about, but can you speak a bit about the external opportunities, your appetite for bolt-on deals and how much room on the balance sheet you have to do so?

I'm going to hand this over to Matt, and this time, I'm not going to steal all his thunder before I let him answer.

Yeah, thanks. So we continue to be very interested in pursuing corporate development and are seeing some attractive opportunities as we said in the comments we made about share repurchases and in our general remarks. So given the environment from a capital markets perspective, we believe there are a number of good opportunities, both within our existing therapeutic areas and as we continue to seek to broaden and expand the business. And so we expect to definitely be active as it relates to both searching for and evaluating and ultimately, hopefully, securing new assets. It's always hard to predict timing, which we always say. And the other part of that, I would say, is you asked about balance sheet, so we've still got substantial capacity on the balance sheet. The leverage finance markets have improved in recent times and through to the summer in terms of where high-yield secondary levels are and CLO formation and the term loan market. So ultimately, the capacity is still there to do several billion of acquisitions. Again, that depends a bit on the target and what cash flow it may bring in in the near term and the relative risk profile of the assets in terms of how aggressively we would lever up and pursue some additional product opportunities. But we think the landscape's favorable and operationally, we're in a good position to execute on that.

So this is Bruce. We're a little past the bottom of the hour, and I think we're going to wrap up. Let me close by thanking all of our employees around the world for their efforts around Erwinaze supply, but also on a high-quality launch of Defitelio in the U.S. and the many, many R&D programs we have going across our portfolio. I think a number of you have noticed how much busier we've become on that front. I think that's going to be pretty exciting for us in 2017 and beyond but requires a lot of hard work from a team. So I just want to say thanks to everyone and thanks to the investors who've weathered the ups and downs of our industry lately. We are really focused on having a sustainable business model and executing against it well. Diane, over to you just to wrap up.

Yeah, thank you. Thanks again for joining us today. We will be participating in the Jefferies, Piper Jaffray and BMO Healthcare conferences this quarter and hope to see many of you there. This now ends our call.

Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program, and you may now disconnect. Everyone, have a great day.