Jazz Pharmaceuticals plc (JAZZ) Q1 2018 Earnings Report, Transcript and Summary

Katherine A. Littrell - Jazz Pharmaceuticals Plc Bruce C. Cozadd - Jazz Pharmaceuticals Plc Matthew P. Young - Jazz Pharmaceuticals Plc Daniel N. Swisher - Jazz Pharmaceuticals Plc Michael P. Miller - Jazz Pharmaceuticals Plc Allen Yang - Jazz Pharmaceuticals Plc

David A. Amsellem - Piper Jaffray & Co. Ami Fadia - Leerink Partners LLC Umer Raffat - Evercore Group LLC David Maris - Wells Fargo Securities LLC Jason M. Gerberry - Bank of America Merrill Lynch Gary Nachman - BMO Capital Markets (United States) Randall S. Stanicky - RBC Capital Markets LLC Douglas D. Tsao - Barclays Capital, Inc. Jessica M. Fye - JPMorgan Securities LLC David R. Risinger - Morgan Stanley & Co. LLC Aaron Gal - Sanford C. Bernstein & Co. LLC Ken Cacciatore - Cowen & Co. LLC Gregg Gilbert - Deutsche Bank Securities, Inc. Irina R. Koffler - Mizuho Securities USA LLC David George Buck - B. Riley FBR, Inc. Liav Abraham - Citigroup Global Markets, Inc. William Tanner - Cantor Fitzgerald Securities Annabel Eva Samimy - Stifel, Nicolaus & Co., Inc.

Welcome to the Jazz Pharmaceuticals plc First Quarter 2018 Earnings Conference Call. Following an introduction from the company, we will open the call to questions. I will now turn the call over to Kathee Littrell, Head of Investor Relations at Jazz Pharmaceuticals.

Thank you, Sabrina, and thank you all for joining our investor call. Today, we reported our first quarter 2018 financial results and updated our 2018 financial guidance. The press release and the slide presentation accompanying this call are available in the Investors section of our website. On the call today are Bruce Cozadd, Chairman and CEO, and Matt Young, CFO. Dan Swisher, President and COO; Mike Miller, Executive Vice President, U.S. Commercial; Allen Yang, Vice President, Hematology/Oncology and Therapeutic Area Head and Acting CMO, will join for the Q&A session. I'd like to remind you that some of the statements we will make on this call relate to future events and performance rather than historical facts and are forward-looking. Examples of forward-looking statements include those related to our future financial and operating results, including 2018 financial guidance and goals, corporate development efforts, future growth and growth strategy, future product sales and volumes, litigation, and intellectual property-related events, inventory and supply challenges, product launches, regulatory submissions, ongoing and future clinical trials, and other product development and regulatory activities, and the timing of these matters. These forward-looking statements involve risks and uncertainties that could cause actual events, performance and results to differ materially. They are identified and described in today's press release, in the slide presentation accompanying this call, and under Risk Factors in our form 10-K for the year ended December 31, 2017, and our form 10-Q for the quarter ended March 31, 2018, which we will file shortly. We undertake no duty or obligation to update our forward-looking statements. On this call, we discuss several non-GAAP financial measures including adjusted net income and related per share measures and adjusted SG&A and R&D expenses and related measures. We believe 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 slide presentation found in the Investors section of our website. I'll now turn the call over to Bruce.

Good afternoon, everyone, and thank you for joining us. We had a strong start to 2018 with continued progress in our pre-clinical and clinical programs and the successful accomplishment of multiple regulatory milestones. Our focus on driving performance of our key products resulted in robust Xyrem net sales and continued growth in demand for Vyxeos in the first quarter of 2018. In March, FDA accepted our NDA submission for solriamfetol for the treatment of patients with excessive sleepiness in narcolepsy and OSA. And last month, we submitted our supplemental NDA for Xyrem for pediatric narcolepsy patients with cataplexy and excessive daytime sleepiness. In late April, we entered an agreement with Spark Therapeutics to purchase for $110 million a rare pediatric disease priority review voucher that will allow Jazz to accelerate the review process by FDA for one of our future regulatory submissions. Finally, we remain on track with an accelerated assessment for Vyxeos in the EU leading to a potential approval this summer and with our planned submission of an MAA for solriamfetol in the EU by year-end. We're very excited about the opportunities ahead for multiple upcoming product launches. Now, I'll provide updates on some of our key commercial, legal, regulatory and R&D activities and then turn the call over to Matt to update you on our financials. In the first quarter, we observed growing Vyxeos demand from key academic institutions and expanding use among community hospitals. Since launch, 236 accounts have ordered Vyxeos with academic centers representing the largest segment in volume. Three-quarters of the top 75 target accounts have ordered product and we are pleased with the formulary placement in these important teaching centers. This is a promising time for AML patients with the recent introduction of multiple new therapeutic agents into the market. KOLs and many AML treaters strongly support the use of Vyxeos in its studied population, and pharmacy directors are working to integrate these new agents into their AML protocols and pharmacy budgets. Guided by our recent market research, our newly dedicated AML sales force is focused on effectively delivering the most critical message for physicians, the overall survival benefit of newly diagnosed high-risk AML patients who receive Vyxeos compared to 7 + 3 in our Phase 3 study, and has extended its coverage within key academic accounts and to high-potential community accounts and outpatient clinics. Our field teams are also concentrating on ensuring that the clinical superiority of Vyxeos in high-risk AML patients and value proposition are well understood by pharmacy directors and other stakeholders in each institution. We believe that there is significant upside opportunity for Vyxeos growth as we increase demand in our top academic accounts and further prioritize community hospitals. We're also excited to begin our promotional activities to increase physician awareness of the recently published NCCN AML guidelines. With respect to the EU, our Vyxeos team is preparing for potential approval. We've hired key account managers and reimbursement experts and filled medical roles to support a rolling launch of Vyxeos in the EU. This launch will be an ongoing process rather than a onetime event as we first need to obtain pricing and reimbursement in each country. We are well along in our P&R (06:44) work with individualized plans ready for focused implementation in every major market country. We expect that our EU launch of Vyxeos will occur in waves, beginning in countries with the opportunity for favorable early market access, such as the UK, Germany, Austria, the Netherlands and the Nordic countries. We continue to make progress on our Vyxeos R&D strategy. Our plan includes generating data through multiple avenues to support the use of Vyxeos as the new therapeutic foundation in high-risk AML. We are also implementing initiatives to evaluate Vyxeos in other AML patient segments, such as pediatric patients and adults with standard or intermediate risk AML, relapsed/refractory settings and in combination with other targeted AML agents. We also expect to expand research into other hematological malignancies such as MDS. We look forward to sharing more details on our progress later this year when we anticipate the protocols and contracts will be finalized to support a broad clinical data generation plan through support of ISTs, cooperative group studies and Jazz-sponsored studies. Turning to Defitelio. Our new and dedicated adult transplant team in the U.S. began to reach out to transplant centers beginning in early April. The team continues to focus on VOD-related educational efforts. We believe we are making progress on this front as our recent market research indicates that physicians are beginning to recognize, diagnose and treat VOD earlier. We also believe that the introduction of newer anti-cancer agents that can increase a patient's risk of developing VOD is further heightening physician awareness and recognition of VOD. On the development side, our Phase 3 study in prevention of VOD and our Phase 2 study in prevention of acute graft-versus-host disease are enrolling patients. The protocol for our planned pivotal study for the treatment of TA-TMA will be finalized following feedback from FDA and scientific advice from the EMA with site activation expected in the fourth quarter. Now onto our sleep therapeutic area starting with Xyrem and the low sodium oxybate programs. We were pleased with the strong growth of Xyrem in the first quarter of 2018 including bottle volume growth of 9% compared to the same period last year. We believe that the underlying early indicators observed in late 2017 translated into strong volume growth in early 2018. The average number of active Xyrem patients increased to 13,800 in the first quarter of 2018, up 7% compared to the same period last year. During the first quarter, the Xyrem central pharmacy successfully navigated the typical heavy payer churn and we observed consistent high payer reimbursement approval rates. The educational efforts of our field reimbursement team continued to impact the approval rates for prior authorizations in key accounts across the country. Our disease awareness education efforts in 2017 are leading to increased diagnosis of new narcolepsy patients. The narcolepsy diagnosis rate for full-year 2017 reversed a downward trend with an uptick in diagnosis rates once again. As a reminder, in 2017, our disease awareness program ran for six months. Our 2018 program is underway and will run the full year. The observed positive trends in newly diagnosed narcolepsy rates and commercial metrics, such as patient enrollments and first-time prescription fills, support our belief that we can continue to generate volume growth in 2018 and beyond. Turning to a brief legal and intellectual property update on Xyrem and an update on progress around the U.S. Department of Justice subpoenas. We recently entered into a settlement with a sixth ANDA filer resolving our patent infringement litigation and related proceedings against Teva, formerly Watson. In connection with the settlement, we granted Teva a non-exclusive patent license to launch its generic sodium oxybate product, as of December 31, 2025, subject to customary acceleration events. Patent litigation is ongoing against the three remaining generic Xyrem ANDA filers. Two of the remaining filers, Amneal and Lupin, are in a consolidated case. Although no trial date has been set in that case, trial could be scheduled as early as the fourth quarter. A brief update related to the subpoenas we received in 2016 and 2017 from the U.S. Attorney's Office for the District of Massachusetts regarding our support of 501(c)(3) organizations that provide financial assistance to Medicare patients. We have been engaged in discussions with the U.S. Department of Justice about a possible resolution, and last month we reached an agreement in principle on a proposal for a civil settlement of potential claims by the DOJ subject to the negotiation of a definitive settlement agreement and other contingencies. We recorded an accrual of $57 million in the first quarter related to this matter. On the development front, we remain focused on completing enrollment in our JZP-258 clinical trial in adult narcolepsy patients with cataplexy and excessive sleepiness. JZP-258 provides a 90% reduction in sodium load compared to the current Xyrem formulation. We believe this sodium reduction would be a meaningful improvement in patient safety for a product that treats patients with a chronic, persistent, debilitating disease like narcolepsy, where lifelong therapy is clinically indicated. 2017 hypertension guidelines linked excessive consumption of sodium with an increased risk of stroke, cardiovascular disease, and other adverse outcomes. The FDA Commissioner recently communicated the need to reduce sodium intake in the American diet and identified this as an FDA priority. Throughout 2017 and the early part of 2018, we have been actively progressing both of our reduced sodium oxybate product candidates, JZP-258 and JZP-507. Recently we made the decision to focus our efforts on JZP-258, our product candidate with a 90% reduction in sodium load compared to Xyrem. As a result, we have decided to suspend our NDA submission efforts for JZP-507, our product candidate with a 50% reduction in sodium compared to Xyrem, although we could rapidly move towards a submission if our priorities change. We expect to complete enrollment in the JZP-258 Phase 3 study in adult narcolepsy patients in the fourth quarter to support an NDA submission next year assuming positive safety and efficacy data. Now onto solriamfetol. We announced the FDA acceptance of our NDA submission for solriamfetol in March and have a PDUFA date of December 20. We are planning for a U.S. launch in the first quarter of 2019 following the DEA scheduling decision for the product. We are making significant progress with our U.S. launch readiness initiatives including brand management staffing, disease awareness programs, health economic outcomes research to support the value proposition of solriamfetol, sales force sizing analyses, OSA and narcolepsy market assessments, and payer and patient access plans, among many other initiatives. In late April, solriamfetol Phase 3 results in narcolepsy were presented during the main plenary at the American Academy of Neurology Annual Meeting, and we expect to have a strong presence at the SLEEP APSS 2018 Meeting next month with multiple accepted abstracts and oral presentations. Our team is also progressing toward a planned regulatory submission in the EU late this year for solriamfetol. On the development side, we're pleased with the rate of enrollment in our Phase 2 proof-of-concept study of solriamfetol in excessive sleepiness and Parkinson's disease, and we expect to complete enrollment by year-end. Before we turn to other matters, I'd like to take a moment to thank Karen Smith, our outgoing Chief Medical Officer, for her leadership and contributions to Jazz over the last three years. We've appointed Allen Yang, our VP, Hematology and Oncology and Therapeutic Area Head, to serve as acting Chief Medical Officer. Allen and other members of our strong R&D leadership team will ensure the continued progress of activities across our R&D portfolio during this transition. We believe that management transitions provide valuable opportunities for us to strengthen organizational leadership by advancing high-performing internal leaders, as well as attracting seasoned and highly capable external candidates as we continue our transformation of Jazz into a leading integrated biopharmaceutical company. We're encouraged by the progress we made in our highly productive first quarter which was marked by strong financial results, significant progress with our ongoing regulatory reviews, and a continued advancement of our broadening R&D pipeline. We're excited to continue this momentum as we ramp up for multiple near-term product launches, prepare for additional regulatory filings, and continue to pursue further expansion of our product portfolio through the execution of our corporate development and internal R&D initiatives. Matt, now I'll turn the call over to you.

Thanks, Bruce, and good afternoon, everyone. First quarter of 2018 total revenues were $445 million, an increase of 18% compared to the first quarter of 2017. Higher sales of Xyrem and sales from the U.S. launch of Vyxeos were the main drivers of the increase. Net sales of Xyrem for the quarter were $317 million, up 16% from $272 million in the first quarter of last year. We are updating our guidance range for Xyrem net sales for 2018 to $1.32 billion to $1.35 billion from a previous range of $1.31 billion to $1.34 billion, representing expected growth of 11% to 14% over 2017. In the first quarter of 2018, Xyrem bottle volume grew 9% over the same period last year. I'll remind you the first quarter of 2017 volume growth was unusually low due to payer mix and heavy payer churn. We are updating our 2018 volume growth guidance to mid-single digits from our previous guidance of low- to mid-single digits. Turning to Erwinaze, net sales were $51 million in both the first quarter of 2018 and 2017. Late in the first quarter of 2018, following temporary supply disruptions in several markets, we observed strong demand when supply became available and believe this ordering pattern included some stocking at various institutions. We are currently again experiencing temporary global supply disruptions and anticipate these may continue to occur from time to time in 2018. We are maintaining our guidance for Erwinaze net sales for 2018 in the range of $190 million to $220 million. Defitelio net sales were $35 million in the first quarter of 2018 versus $36 million in the first quarter of 2017. U.S. product sales in the first quarter of 2018 were consistent with the same period in 2017. I'll remind you that we expect continued inter-quarter variability in Defitelio product sales in both the U.S. and EU markets because Defitelio treats an ultra-rare acute condition. We are maintaining our guidance for Defitelio net sales for 2018 in the range of $145 million to $165 million. The midpoint of our guidance reflects year-over-year growth of approximately 16%. Vyxeos net sales were $26 million in the first quarter of 2018, reflecting a 9% increase over sales in the fourth quarter of 2017. We continued to be pleased by the growing demand for Vyxeos following the U.S. launch in August 2017. We are maintaining our guidance for Vyxeos net sales for 2018 in the range of $130 million to $155 million. For 2018, we expect strong top line growth and are updating our total revenue guidance in the range of $1.88 billion to $1.93 billion, from a previous range of $1.86 billion to $1.93 billion. Turning to operating expenses, adjusted SG&A expenses for the first quarter of 2018 were $132 million or 30% of total revenues, compared to $118 million, or 32% of total revenues in the same period of 2017. The increase in adjusted SG&A expenses reflects our investment in the continued U.S. launch of Vyxeos and pre-launch activities for the anticipated approvals of solriamfetol in the U.S. and Vyxeos in the EU. For 2018, our guidance for adjusted SG&A expenses remains in the range of $525 million to $555 million, or 27% to 29% of 2018 revenue guidance. Adjusted R&D expenses for the first quarter of 2018 were $47 million, or 11% of revenues, compared to $41 million, also 11% of revenues in the same period of 2017. Adjusted R&D expenses in the quarter included costs related to our asparaginase, defibrotide, and oxybate-related R&D programs, the EU solriamfetol and Vyxeos regulatory submissions and ongoing support of ImmunoGen's antibody-drug conjugate programs. Our 2018 guidance for adjusted R&D expenses remain in the range of $205 million to $225 million or approximately 11% to 12% of 2018 revenue guidance. First quarter 2018 adjusted net income was $182 million, or $2.98 per diluted share, compared to $141 million or $2.31 per diluted share in the first quarter of 2017. We are narrowing our 2018 non-GAAP adjusted EPS guidance to a range of $12.75 to $13.25 per diluted share from our previous range of $12.65 to $13.25 per diluted share. In the first quarter, we generated $162 million of cash from operations and used $35 million to repurchase shares, with $148 million remaining under our share repurchase program. We also made milestone payments totaling $11 million related to the FDA's acceptance for the filing of the solriamfetol NDA. As of March 31, the outstanding principal balance of our long-term debt was $1.8 billion, and we had $708 million in cash, cash equivalents, and investments, and $1.25 billion undrawn under our revolver. Before we take questions, I want to take a moment to thank Craig Parker, who recently transitioned to a CEO role at a biotech company, for his corporate development contributions and leadership at Jazz. Over the recent years, we've strengthened and broadened the capabilities and scope of our corporate development team including expanding its life science and commercial acumen. Our activities in corporate development remain a high priority, and we are ready and well-positioned to execute on promising new opportunities to support our growth strategy. Thank you for joining us on the call today, and I'll now turn the call over to Kathee.

Thanks, Matt. 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 the first question will come from the line of David Amsellem with Piper Jaffray. Your line is now open. David A. Amsellem - Piper Jaffray & Co.: Thanks. So I wanted to delve more deeply into your thinking on JZP-507 and your suspension of the NDA submission efforts. I guess the question here is, is that – should we take that to mean that you're even more excited or enthusiastic regarding JZP-258 or is this just a case where you want to just see what the data looks like for JZP-258 before you make any decisions on JZP-507? I'm just trying to get a better understanding of your thought process here. Thanks.

Yeah, David, I would say our JZP-258 program continues on track, and as a result, we think the time difference between a potential approval of JZP-507 and a potential launch of JZP-258 would be relatively brief. And so as we think about the complexity of transitioning patients and physicians through multiple changes of products, including what that means in terms of operation of our REMS, and you know we've been through REMS transitions before and that does have some disruption factor to those audiences, we think it's better to focus on getting patients to the product we believe is the bigger improvement over Xyrem, which is JZP-258 with its 90% reduction in sodium. As I said in my comments, the JZP-507 NDA submission is ready to go. Should we need to reactivate that for any reason, we could, but we think at this point the best path is the most rapid one toward introducing the better product. David A. Amsellem - Piper Jaffray & Co.: Okay. And if I may sneak in a follow-up on JZP-258, are you expecting, or is it reasonable to expect you'll have a differentiated safety language in the label should you get approval, at least regarding sodium content and consumption?

Yeah, this is Dan Swisher. Yeah, it's probably a little preliminary to comment on that until we actually get the Phase 3 clinical results. So I think just echoing what Bruce said, we're on track to fully enroll this year, have clinical data, and be prepared for a filing. And at that point, we'll be thinking through the label strategy. David A. Amsellem - Piper Jaffray & Co.: Okay. Thank you.

Thank you. The next question comes from the line of Ami Fadia with Leerink Partners. Your line is now open.

Good evening. Thanks for the question. To limit myself to one question, I would ask, given your growth that you saw with Xyrem in this quarter, could you sort of illustrate for us some of the drivers and also help us understand which of these drivers may be more sustainable beyond 2018 as well and which ones are more specific to some of the difficulties faced in 2017 which have been resolved and thus are driving growth in 2018? Thank you.

Yeah, maybe I'll start the answer and then hand it over to Mike. I think, Ami, you're right to differentiate a little bit between things that we think are long-term growth trends and things that are more specific to this time period. And it's certainly true that we have seen higher government-pay patient volume in 2018 than we did in 2017. That increase, essentially, is the opposite of what we saw coming from 2016 into 2017, and as such, you could think of it as a little tailwind to our volume growth as compared to a headwind last year. And that is probably not sustainable for the long term. It's an impact we expect to see for the remainder of this year, but we wouldn't expect to see that same delta next year. Maybe I'll have Mike talk about the pieces of the growth that we think are ongoing and in fact sustainable.

Yes. Thanks, Bruce. So I'm very encouraged with the early indicators of treatment demand, which is our patient enrollments and our first time fills which, as Bruce mentioned, picked up in the second half of 2017 and really began to blossom in terms of real bottle volume in Q1 2018, which was very much a good day. I would say that on some of the long-term drivers, our general awareness campaign around driving the diagnosis of narcolepsy remains very much a key investment for us as it was said earlier. We are doing that for the full year of 2018 and expect to see that continue to perform well. I would say that our PA approval rates have been very good, and in 2018 we'll have the full complement or the full-year complement of our field reimbursement team which has done well in the second half of 2017 helping both customers and patients get access to drugs. So we're very pleased with all those moving in the right direction.

Could you help me just quantify the difference like if you're talking about a high – given your growth guidance for this year, could you help break out which ones are more sustainable longer term maybe in percentage form if possible?

Yeah. So we haven't provided any further breakdown of the volume growth first quarter over first quarter. We did give you some sense last year for the amount of the impact that we thought was nonrecurring and gave you a sense that our underlying normalized volume growth probably was mid-single digits. We're thrilled with the strong first quarter we had. At this point, we're giving guidance for mid-single digits again for this year which would represent that more normalized growth rate. Let's obviously see how the numbers continue to progress for the rest of the year with some of the efforts and initiatives that Mike detailed. But I think that normalized growth rate in the mid-single digits feels about right to us.

Thank you.

Thank you. The next question comes from the line of Umer Raffat with Evercore SII (sic) [Evercore ISI]. Your line is now open.

Hi. Thanks so much for taking my questions. Perhaps two if I may, or I may have a third follow-up if we have time. Bruce, there was a press report recently from some of your top shareholders citing the idea of valuing the company on some of the parts basis, and part of the thesis being potential split. So I guess my question to you was, has there ever been strategic interest in the sleep business because that seems to be part of the thesis? And secondly, how do you think about this idea in general? And secondly on Vyxeos, A, I'm curious the quarter-over-quarter trend, what explains that. I know you kept the guidance for the year. And also, as you think about designing your MDS trial, it's my observation that one of the most important contributors to your survival benefit in Phase 3 AML was more number of patients being able to get the transplant. And my question is, what's your expectation for the percentage of MDS patients that will require transplant in your MDS trial? Thank you.

Okay. Umer, that was quite a one question but artfully asked.

I can ask one more.

Let's take it piece by piece. I'll take the first one, and I'll invite Matt to jump in with any additional commentary he'd like, and then maybe Matt could take the Vyxeos trend question and Allen could take the narrower question about MDS and percentage of patients moving to transplant. The observation that a sum of the parts evaluation for the company or a variety of valuation approaches for the company might yield a price that indicates we're currently undervalued is something we think about. We're happy to see some additional visibility I think right now in the sustainable growth of Xyrem as a product, increased progress of our low sodium oxybate efforts and sort of helping people think about this franchise longer term, continued evolution of our pipeline, and then progress on a new launch with Vyxeos. And we think as our success on multiple dimensions becomes more visible, it might cause people to rethink that. Thinking about sleep as a strategic part of our business, I would say Xyrem is not a stand-alone product, right? It's a product that's our initial entry into the sleep therapeutic area, in this case pretty much a U.S.-only opportunity for us given the prior partnering of that product ex-U.S. But as we move forward with our low-sodium programs, potentially the once-nightly program, we think we have the ability to continue to grow that franchise, potentially realize value for that franchise outside the U.S. as well. And then with the pending submission of solriamfetol, we're coming up on launching a product that we think is exciting which has great overlap with Xyrem. A common patient population on the narcolepsy side with expansion into OSA, utilizing a sales force that would have high overlap with our current target audiences, meaning we're already well-positioned to execute on that. We are, of course, active on the corp dev side as well, looking at things we can add given our expertise and commitment to the sleep therapeutic area. So we do see real value in that business as a continuing piece of Jazz overall. And obviously the cash flow coming from the strong continued performance and growth in Xyrem is part of what makes us confident that we can continue to execute on corporate development opportunities as we have over the past five or six years to continue to broaden our portfolio. Mike, maybe I could have you – Matt, do you want to add anything to that?

No, that's fine.

Okay. And, Mike, maybe talk about Vyxeos' pattern.

Sure. Sure. So, I mean, we're very pleased with the growth in Vyxeos in the academic centers and that we're seeing, I'd say, even faster adoption in the community to a much smaller scale, but it's certainly catching on the community hospitals for outpatient consolidation. So that, I think, is a good thing for patients and institutions. Our newly-dedicated AML sales force, now that we've built the BMT dedicated sales force, will allow us greater reach into the community. We are pleased with the formulary status of Vyxeos. To date, we're at about 72% of the top decile accounts. We're on formulary there. And I think we're, again, pleased with the uptake. We received the NCCN Guidelines late in Q1 and have yet to really begin any promotional activities with those, and they're about to begin as we speak.

Allen, do you want to take the question about Vyxeos?

Yeah. So I think there were two questions there. One was about the data in the 301 study where the transplant patient is the one that benefited. And the answer is yes, but remember the OS was based on all patients and actually the number of patients who went to transplant, although it was greater in the Vyxeos arm, they did make up a minority of the study population. And so the OS benefit was proven across the different populations. But clearly, I think what you're referring to was this post hoc analysis looking at those patients who went to transplant. And in that group, we did see a varied market benefit, and that's a very interesting thing scientifically and we're trying to understand that. And that could reflect two things, either very deep remissions or perhaps better condition of patients as they go into transplant, better sort of performance status. And we're doing additional analyses to try to understand that. It could be one or the other or a combination of both. So the next question you asked was around our MDS study. We haven't disclosed the details of our MDS study but I will sort of answer your question about how we think about MDS, and maybe this will address that. So clearly Vyxeos has shown a benefit in patients with AML, with mild dysplasia-related changes, so it seems like a no-brainer to move into MDS. And when you think about MDS, you have to really think about two populations, those that are transplant-eligible and therefore eligible for curative therapy, and those that are unfit for transplant. Now there's a lot of overlap between transplant-eligible and fit for intensive chemotherapy and unfit for transplant and unfit for intensive chemotherapy. So clearly the low-hanging fruit for us would be moving into this fit for chemo therapy and fit for transplant population where we know the dose of Vyxeos. But we would also want to someday move into those patients with MDS that are unfit, but in those patients, we're going to sort of explore new doses and schedules that will be optimal for those patients.

Thank you very much. Super helpful.

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

Good afternoon. A couple questions. So can you describe a likely scenario that the accelerated review voucher would be used? And it would seem that if low sodium oxybate is something with a safety advantage that it should have, that it would be almost unethical to hold back using an accelerated review voucher if you had one. Would you agree with that? And then lastly, if there is a low sodium on the market and a 10x sodium on the market, does it make any sense, like would you remove the other one just for safety concerns? I mean, again, from an ethical standpoint, Bruce, do you think that it makes sense to have both on the market?

So, interesting questions, David. On the is it unethical to delay approval of a product, you could make that argument for any product that's designed to be a better treatment for patients on efficacy, tolerability, or both. Of course, there are some mechanisms already in place such as we experienced with defibrotide and Vyxeos for priority review breakthrough therapy for things where I think we and the regulators would agree that speeding that treatment to patients as quickly as possible is mandated. This gives us an opportunity to take other review processes which would otherwise be standard review processes, and accelerate those for any reason, whether that's because of the severe patient need, whether that's how it tracks to our internal priorities of how we use resources, how we stagger launches, whether it relates to competitive situations where it would benefit us to move to market faster in terms of long-term potential for the product. There are lots of ways to think about that, and I would say as we sit here today we don't yet know where it will make most sense. But having that optionality to use it on any of our existing programs or any new program we bring into the company through corporate development I think is a real advantage for us and could differentiate us as a buyer of a new asset to be more attractive in terms of realizing value from that asset with this. So lots of ways to think about it. On your other question about removing a higher sodium version from the market, once a lower sodium version is available, I think there are multiple parts to your implied question. One is, how do you continue to support or not support the higher sodium product in terms of your promotional efforts, and in terms of manufacturing distribution. That is essentially within our control, and there are different questions about whether that product remains available from a regulatory standpoint. That's not our decision. What we get to decide is how we use our resources and what product we're helping physicians and patients access that we believe is the best treatment.

Okay. So just as a follow-up, from what I hear you saying is, hey, listen, people shouldn't assume that the accelerated review is going to be used for low sodium. In fact it may be used for something that's business development-related. And then secondly, that you may do a hard switch because of safety-related but you may also just focus your attention on one and make sure the doctors are aware that there is something with a potential better safety. Is that correct?

I'll stick with what I said. On the first one, I think you're correctly pointing out, David, there's optionality, right? It could be used in a number of different ways, and part of our job will be to figure out how to get optimal use out of that priority review voucher. And on the second one, I know what we control, which is how we allocate our resources, and we are excited about the potential for JZP-258 and getting that to market as soon as we can.

Great. Thank you.

Thank you. And the next question comes from the line of Jason Gerberry with Bank of America. Your line is now open.

Hi. Good afternoon. Thanks for taking my questions. Bruce, just in terms of the rumblings out of FDA and the Commissioner regarding REMS in delaying generic entry, just kind of curious, it's my understanding that generally this has to do with restrictions around generics getting drugged around biostudies, which has never been an issue with Jazz and the generic developers there. But my question to you is, as you talk to your legal team, do you see any risk that your Xyrem patent settlements could be prospectively challenged in any way? Or do you feel like sort of the generous term that you allow generics to come in advance of the DDI patents puts you in a pretty safe position?

Well, we certainly view the settlements that we've reached as pro-competitive in a number of ways, and so they certainly, like all settlements, can be reviewed but we feel that they were good settlements. And I would agree, Jason, that a lot of the commentary about REMS being used to delay generic entry are really focused on other things. The issue that you brought up in particular. In our case, there are approved generic products, and we've already reached settlements that will bring generic versions to market in the future well ahead, as you point out, of patents we have covering our product.

Got it. Thank you.

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

Hi. Good afternoon. A couple on solriamfetol. Could you describe the latest payer conversations you've been having, the receptivity for the product and if there are any updated thoughts on a pricing range for it? And regarding the planned filing in Europe, remind us of your plans to commercialize there and what sort of effort you would need. Thanks.

Mike, you want to take the first part of that?

Yeah, I'd be happy to. So as part of some of the pre-launch activities, we're doing market research and all the branding, messaging, consumer awareness, and importantly developing the payer prop and payer messaging, as you touched on, and we have begun a lot of that research. And we're learning a lot as it goes along, and we think this drug is very much – it's well-differentiated. The clinical efficacy is quite good, and I think we can get to a place with the payers to understand what the impact of – ES is a neurological condition and that there is an urgency to treat it.

Dan, do you want to talk a little bit about Europe?

Sure. On the European side, our European team, which is a specialty-focused team, has been doing some work in thinking about this, and we do see a lot of benefit in the solriamfetol and moving into this additional franchise. The data is very strong. It cuts across various regions. We have KOLs in Europe that stand behind it. The market need is quite strong. We've been doing some work which is really the question is the value proposition and potential pricing and how that could lead to a potential return. And we do think the initial signs are promising that this could be the beginning of a new franchise for Jazz in Europe.

Okay. And then one quick follow-up. As you're building out the infrastructure a little bit more for Vyxeos and you already have a presence with Defitelio in Europe, how much are you going to be able to leverage that with a product like solriamfetol? Is there synergies there?

Yeah, there's clearly synergy with the leadership, the pricing reimbursement expertise, the geographic presence of the affiliates. So there may be some specialty accounts that we're going to be covering that would be different. But again, there is some synergy in the organization.

Okay. Thank you.

Thank you. The next question comes from the line of Randall Stanicky with RBC Capital Markets. Your line is now open.

Great. Question for Matt. How are you conceptually thinking about larger diversifying transactions versus a continuation of pipeline deals? And I guess to follow up on a prior question, does the voucher provide any read-through to how you're thinking about that? And then, Matt, just another follow-up for you, if you could talk about spending for the year and cadence. It looked like Q1 was a little lighter than you might have expected. Are you running light? How should we think about the rest of the year from an R&D, SG&A perspective? Thank you.

Yeah. Thanks, Randall. On the first one, we continue to look at a range of potential transactions, so larger and later transactions, as well as pipeline-building transactions that would be development stage assets. I would not read into anything with respect to the acquisition of the PRV, any particular focus as it relates to that because it could be used, again, for internal or external programs. So that's not really going to help you determine where we're going on the M&A side. I would continue to say that with respect to very large transactions, there are fewer of those opportunities and they're often more complicated to get done. So as we've many times said, our base case would be transactions of the ilk we've done in the past, but we're always open-minded to thinking about, again, larger transactions, and we'll continue to do so. On the spending side, again, we reiterated guidance with respect to both SG&A and R&D in the ranges that we had previously provided. While I would agree with you the first quarter's results we spent a little less than might be anticipated in that regard, and a lower percentage of revenue than in previous years, though again, I'd mention we did have a strong revenue growth in the quarter, we continue to be very excited about the investments we're going to make including in our expansion of existing programs, addition of new programs on the R&D side and some of the launch-related investments we talked about at the start of the year when we set guidance related to preparing for solriamfetol, preparing for Vyxeos in Europe and continuing to invest around our Vyxeos launch, and also the more dedicated AML and BMT sales forces we have. So I think we have a lot of investments to make. They're ongoing and we've reiterated our guidance as such.

Okay. Great. Thank you.

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

Good afternoon. Thanks for taking the questions. Just following up on the issue of the priority review. Just curious if this is the first time that you pursued one. Obviously there have been transactions for them. Was it just sort of opportunistic or did you have any kind of thinking in terms of why doing it this time versus other times that they were available? And then just in terms of spending, following up on Randall's question in terms of sort of cadence from the spending standpoint, how should we think about the – should we see a little bit more spend in the fourth quarter just given the ramp-up as you plan for the anticipated launch of solriamfetol? Thank you.

Sure. I'll start I guess, Doug, on the PRV. Just to say, we can't comment on sort of tactically how we might approach the market on these things, as you may imagine, though I will say we've contemplated what optionality they provide and have thought about economically based on what you expect, or what you could look at in terms of the area under the curve for sales that you could pull forward for any particular product, what could they be worth in various scenarios. So we thought about that many times, but I can't really comment on when and how we enter the market for stuff like this. As it relates to spending, while there will be some amount of activity later in the year, it is actually ongoing already, so we've started to layer in some of those investments, again, related to some of the dedicated sales forces to some of the start of the investment related to the European infrastructure for Vyxeos, though, again, it'll build as the year goes on. And as far as market building and medical education and other expenditures related to solriamfetol, that's starting as well. So while it will increase as the year goes, it's not all loaded in the fourth quarter.

Okay. Great. Thank you.

And our working assumption is that any significant expansion of our field sales force would actually occur beginning early next year.

Okay.

Just given the PDUFA date and time for DEA scheduling, again, we've indicated the first quarter of 2019 would be the appropriate time to think about that, the launch.

Thank you. And the next question will come from the line of Jessica Fye with JPMorgan. Your line is now open.

Hey there. Thanks for taking my question. I wanted to follow up, not to beat a dead horse here, but I think you've made a couple of comments on the call about the PRV potentially differentiating Jazz as a buyer of a new asset. Can you elaborate on that point and the degree to which that difference in review timing in the area under the curve would really be different, do you think? Thank you.

Yeah. I mean, my comment was just meant to say that the potential value of an asset if its regulatory approval date could be brought forward can be higher. And whether that means it's worth more to us or we can provide more value back to a seller or some combination of the two, it does provide one aspect of value that might be available to us, maybe not to others pursuing the same asset. I don't think there's more to say than that.

Okay. Thank you. And can we take Allen's current role and his background as any indication of the potential therapeutic area for the next business development transaction?

No comment.

Thanks, guys.

Thank you. The next question will come from the line of David Risinger with Morgan Stanley. Your line is now open. David R. Risinger - Morgan Stanley & Co. LLC: Yes. Thanks very much. So my question relates to JZP-258 timing. Could you provide some more color on when you expect to have the final data in-house, when you expect to be able to issue a press release, et cetera? The reason I ask is that the primary completion date that I last saw was November of 2018 and I just want to make sure that I understand the appropriate timing to expect the results. Thank you.

Okay. David, so we expect to complete the enrollment, I would say, this year toward the end of the year and it'll take us a while to clean the database. So we're really expecting data most likely in the earlier part of 2019 and submission in 2019. David R. Risinger - Morgan Stanley & Co. LLC: Okay. Thank you.

Thank you. And the next question will come from the line of Ronny Gal with Bernstein. Your line is now open. Aaron Gal - Sanford C. Bernstein & Co. LLC: Hi. Good afternoon, everybody, and thank you for taking my question. Two parts. First, Erwinaze, can you tell us a little bit about the efforts to remediate that product and the next-generation product you guys are working with? And second, about Vyxeos. How is EU pricing featuring versus U.S. pricing? Is it like three-quarter, one-half, where are we in that range of pricing just for our modeling purposes?

Yeah. So, Ronny, on the asparaginase business, unfortunately, we continue to face supply disruptions, disappointing to us, though, as you know from our prior commentary, we are working with the manufacturer to do everything we can to improve quality, reliability, capacity and ultimately reliability of supply. But that effort is not one that can be finished quickly. It's a lot of work and with a long cycle time of manufacturing. Even successful improvements take a while to result in actual increased supply to the market. And hence, our probably wider than normal guidance for this year in terms of where we'll end up on revenues. We are working to bring even better asparaginase treatments to patients in the future through several development initiatives designed to yield improvements in manufacturability, immunogenicity, frequency of dosing or other attributes that would be a benefit to patients. So that effort continues. Dan, any comment on Vyxeos EU pricing?

Yeah. No, it's a little premature to talk about that there. As Bruce said in the script, significant efforts have been underway in terms of building the pricing reimbursement strategy. So, obviously, the value proposition that goes across Europe and across the various regions, but then very country-specific and sequencing strategies that are ready for implementation. Aaron Gal - Sanford C. Bernstein & Co. LLC: Thanks.

Thank you. And the next question comes from the line of Ken Cacciatore with Cowen and Company. Your line is now open. Ken Cacciatore - Cowen & Co. LLC: Thanks. Bruce or Matt, I was wondering if you'd want to comment on this Servier purchase price of the Shire Oncology division. It was – it seemed pretty healthy and wanted to see if that's any reflection of kind of a changing nature in business development in orphan oncology and hematology. Just generally speaking, is it getting a little bit too rich? Kind of general thoughts around it. Thank you.

Yeah. Ken, I think I'll avoid commenting on any one particular transaction, but I think your general question goes to viability of a strategy to continue to buy diversifying assets in the fields that we're in or in a new therapeutic area. And I would say, from time to time, we see transactions that trade at prices that, in our view is – at least we analyze the opportunity, wouldn't provide a sufficient opportunity for return to make it worth committing our shareholders' capital in that direction. But for the most part, we find that those are limited circumstances. It's a piece of the market. It's assets at a particular stage of development aimed at a particular target that get hot as opposed to everything. And so, with the commercial development focus that spans commercial assets, near market assets, programs in development that spans global deals, European deals, U.S.-only deals, that looks at big deals, that looks at small deals, our view is we will continue to find opportunities to put capital to work in transactions that are both a strategic fit for Jazz, but also offer really good return possibilities. So, our watch word hasn't changed over the past four or five years that we want to be disciplined and make sure we're investing wisely, but we remain confident we can in fact do that in this environment. Ken Cacciatore - Cowen & Co. LLC: Was there any FTC reasons why you could or could not have participated in that auction?

Yeah, can't comment on that. Ken Cacciatore - Cowen & Co. LLC: Okay. Thank you.

Thank you. The next question comes from the line of Gregg Gilbert with Deutsche Bank. Your line is now open.

Thanks. Bruce, let me ask you the M&A question a little differently. Several months ago, you indicated that you were not being more aggressive on share buybacks because you saw better uses for the capital relatively soon. Is that still the case? And for Mike on Vyxeos, now that more patients have moved into the consolidation phase, are you seeing more outpatient treatment? And is that something you expect to see gain traction over the course of 2018? Thanks.

Yeah, Gregg, on the first part of your question, I would say, yes, it's still the case, meaning that, while we have continued to buy stock back under our stock repurchase program, and we will continue to buy stock back under that program, which I think, as Matt indicated in his commentary, still – or in our press release, still has $148 million remaining as of the end of the first quarter. We also believe it's very important for us to stay ready to execute on attractive corporate development opportunities. And our significant cash position, our undrawn revolvers, our strong balance sheet, our good cash flow, all in our mind position us very well. While we think the stock is a great buy at today's price and you could argue we should buy a lot more of our stock back, we think ultimately a better use of capital is to invest in other opportunities to earn a return that at the same time diversify the company's growth drivers for the future. So, as long as we continue to feel those opportunities are out there and it's something we can execute on, I think we want to maintain the flexibility financially to go after those from a strong base. Mike?

Yeah, Gregg. So, yeah, so I would say that probably two-thirds of the newer accounts that ordered in Q1 2018 were community-based, which indicates to me that we are getting traction in that and that is consolidation treatment. But we feel very good about the significant upside that Vyxeos has in the indicated population. And I think this outpatient consolidation is a great thing for patients and families, and you certainly avoid the hospitalization costs associated with inpatient treatment.

Thank you.

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

Hi. Thanks for taking the question. So, when I attended AAN a couple weeks ago and sat in on some of these sleep presentations, there was another drug called pitolisant that was supposedly being filed in the U.S. around the same time that JZP-110 is being filed and – or is filed, and is also a wakefulness agent. And I believe the drug is approved in Europe. So, could you talk about the competitive positioning of solri versus that product? And also, will its existence in Europe affect your potential pricing in Europe in any way? Thank you.

Yeah. Irina, so our NDA for solriamfetol was submitted last year. It has been accepted for filing. We have a PDUFA date. At least to my knowledge, the drug you're talking about has not yet been submitted or we don't know it's been submitted. In terms of relative positioning of the products, what we know is our data and we know that solriamfetol's data on subjective and objective measures of its efficacy are very strong. They were strong in two different Phase 2 trials and in a number of Phase 3 trials across multiple indications. They were consistent, results were maintained over time, appeared quickly for patients. And so we think we have a drug in solriamfetol that, I think as Mike said in answer to a question earlier, position it as a real potential benefit to patients who've been dissatisfied with existing therapies for excessive sleepiness in both narcolepsy and obstructive sleep apnea. In Europe, obviously, as we do our pricing reimbursement access analytics and thinking about opportunities for sleep-related drugs, we'll look at availability and pricing of all agents, not just that one, and that is built into our thinking.

Okay. Thank you.

Thank you. And the next question comes from the line of David Buck with B. Riley FBR. Your line is now open.

Yes. Thanks for taking the question. On Defitelio, can you talk about what markers we should be looking for from the sales force, how long it might take, what type of markers you're looking at for success in terms of growing that product and better diagnosing VOD? Can you also talk about, maybe conceptually for Matt, the sustainability of your 93% or so gross margin as you move into Vyxeos in Europe, solri in Europe potentially in 2019-2020 and have a little bit of a shifting mix? And finally, I guess, on the pediatric review voucher, was it more opportunistic and a question of the price being more right near term given that your purchase price was significantly lower than some of the other ones in recent years? Thanks.

Yeah, so on Defitelio, what we're seeing in Europe and in the U.S., so really globally for the product, is we think better recognition of VOD and better responsiveness to start treatment when physicians see progression indicating that Defitelio would be an important treatment intervention. And we don't, unfortunately, on a day-to-day basis have a lot of metrics that give us more information. We certainly know vials sold and to whom, but that doesn't necessarily translate in every case to knowing exactly what that usage is on a patient-by-patient basis. But looking at ordering patterns of accounts, and again, this is in U.S. and in Europe, whether we're looking at repeat orders or whether we're looking at average size of orders, whether we're looking at penetration in pediatric which has been good, but adult which has been growing, we remain encouraged that we're seeing the right trends. I think, in today's comments, the new news, if there is, probably falls into two categories. One is we've reconfigured our sales force in the U.S. to give a dedicated team toward adult transplant centers. That's a very new effort so I don't think we have a lot of data from that, but we were pleased to see some of our top talent internally want to take those roles and focus on that. We think that's a good sign and we think they're doing a great job. And the other thing that's still relatively new is the introduction to the market of some new important treatments that have as one of their downsides higher incidents of VOD. And so, as those agents are utilized more, we think it increases awareness of and watchfulness for VOD. And we hope that will benefit many patients in the future.

Yeah. So, just on the gross margin question, David, I would not worry about any near-term diminution in the gross margin. I think it'll be relatively incremental for the foreseeable future. So I'd expect we can maintain very good and attractive gross margins given the cost of sales for all of the products in our portfolio. The lowest of those is Erwinaze which obviously is not one we're able to grow dramatically right at the moment. As it relates to PRV dynamics, when you can enter markets where there are more sellers than buyers or if that is an appropriate thing to do or when you're able to buy it at a time when you don't need it immediately, that you might be able to attract – get better prices as a buyer. So I think we're conscientious of those dynamics, and again, I wouldn't say you can read much into that in terms of a long-term trend either way, but we're happy to again have been able to create the opportunity to use this against either an existing or future development program.

Thank you. The next question will go to Liav Abraham with Citi. Your line is now open.

Good afternoon. A follow-up question on JZP-258 and your low-sodium once-nightly version of Xyrem. Just given the prioritization of JZP-258, I'd be curious on your thoughts regarding the timelines on a once-nightly low-sodium version. Are there any updates you can provide about whether this is in development and to what extent is this a priority at this time? Thanks.

Yeah, Liav, no current updates on the status of the once-nightly low-sodium development program. It does continue, it is active. The priority right now is getting the product that is nearer to market to market which is JZP-258 which, while not bioequivalent to Xyrem, is very similar in terms of that PK profile. And therefore, we have high confidence that what we'll see in terms of efficacy and safety ought to be consistent with our expectations for Xyrem. Once-nightly represents a change to that PK profile, and thus a little more uncertainty in how that'll prove out in clinical trials. So, let's first get JZP-258 to the market because we believe that satisfies achieving that lower sodium that we think will benefit patients quickly. And then if we can also introduce the benefit of once-nightly dosing, so much the better.

Thank you.

Thank you. The next question goes to Bill Tanner with Cantor Fitzgerald. Your line is now open.

Thanks for taking the questions. Bruce, just back on the low sodium discussion, I think you made a comment just – I think you said something about it remains to be determined if the higher sodium will be available, will still be available. And I'm wondering if that would suggest that a case could be made to pull the NDA for safety reasons. And then the follow-up would be, can you just remind us how a JZP-258 launch or I guess a JZP-507 launch impacts the settlements or doesn't impact the settlements? Thanks.

Yeah, Bill. On the first one, I think too early to comment. We need to finish our clinical trial. We need to look at the data from our clinical trial. We need to put a submission package together. We need to go through the regulatory process before it makes sense to talk about what you do with both products since, at the moment, we only have one. And the second part of the question?

Settlements.

Oh, and on the impact on the settlements, the settlements are very specific to Xyrem, the existing product, meaning that we certainly don't give any rights to our later development programs such as a JZP-507 or JZP-258. By the same token, the market decline provisions that are typical to most of these types of settlements really just track sales of the Xyrem product itself, so would not – introduction of a new product that caused a decrease in the sales of Xyrem could impact those parts of the settlement.

Okay. Great. Thank you very much.

Thank you. And the next question goes to Corey Davis with Seaport. Your line is now open.

Corey, are you there? Okay. Operator, next question?

Next question will come from Dana Flanders with Goldman Sachs. Your line is now open.

Hi. This is Chris Zell (01:13:33) on for Dana. Thanks for the questions. Can you maybe touch on how you think JZP-258 will be received in the market when Xyrem generics are available? And are you assuming it will be used broadly across all patients, even those without ongoing sodium-sensitive comorbidities or will you focus on patients at higher risk for volume overload and other sodium-based complications? And then any changes to OpEx spend given the suspension of JZP-507, excluding obviously the pushed out launch when JZP-258 is coming?

So, Chris (01:14:10) the question about the reception of JZP-258 when generics are available, of course, under our current timelines, our hope is that JZP-258 would be available before generics were available. And then the question if JZP-258 is on the market is, would patients switch from a product with 10% of the sodium of Xyrem back to a product with 100%, or put another way, a tenfold increase in sodium? And our view is that would be a sizable increase in sodium going to a level that at the 9 gram per night dose would be above the AHA's recommended maximum daily intake of sodium in a population that's taking the medication chronically. In the second part of your question, you were specifically getting at, does it matter to all patients? Certainly, there are patients with increased cardiovascular risk where I think this would be particularly important. We know that in part because doctors contacted during earlier market research indicated that there are a fraction of their patients for whom they will not start them on Xyrem – these are narcolepsy patients – because of the fear of the high sodium load alone, that but for that they would put patients on Xyrem. So we know there are patients for whom it already would make a difference now if physicians think about it. But again, if you're being put on a medication potentially in adolescence, early adulthood and being told you're going to take it for the rest of your life, going on 1.6 grams of sodium per day in your medication alone – that's pre-dietary sodium – is a lot to do to someone when there's a safer alternative available. And then on the spending, no, I wouldn't assume that suspension of the JZP-507 NDA submission would have a meaningful impact on spending. We're redirecting those resources toward ensuring progress against all of our regulatory submissions, including being as ready for a rapid JZP-258 NDA submission as we can be.

Got it. Maybe just to clarify, but is there any outcomes-based study you feel you'll need to do in order to guard against payers potentially putting pressure to prescribe the generic over JZP-258 once it is on the market? Thanks.

So, I would say there is a lot of evidence already available about the impact of sodium intake on a variety of health outcomes in very large, very long-term studies across large numbers of patients. That's not specific to our drug. It's not specific to this indication, but I think physicians have a good sense developed through lots of evidence of the impact of excessive sodium intake. So I think your question is a great one in terms of what people will look at to determine how important this is. Whether those are specifically trials we need to run I think is a different question.

Great. Thanks for the clarification.

Operator, we'll take this speaker, this next question, and then we'll take one more after that. Okay?

Perfect. And the next question will come from the line of John Boris with SunTrust. Your line is now open.

Hey, John, are you there?

John? Okay, operator, we'll move on to the last question.

Thank you. And our last question will come from the line of Annabel Samimy with Stifel. Your line is now open. Annabel Eva Samimy - Stifel, Nicolaus & Co., Inc.: Hi. Thanks for taking my question. I get the prize, I guess. So, with Vyxeos, can you – I know that you just started marketing with NCCN listing, but maybe can you discuss the impact that that ability to market with that listing will help uptake? Do you have any good analogs to help us sort of quantify what that trend could be going into the second, third and fourth quarter? And then, finally, on Vyxeos, can you talk about the uptake on and off-label and give us some timing on the readout of other studies with Vyxeos that are ongoing right now by investigators? Thanks.

Mike, do you want to take NCCN and on/off-label?

Sure. So, as you said, largely, our use right now is very much within indication for a labeled population. But as you may have seen, the NCCN guideline also included reinduction for patients who received 7 + 3 in the first induction, post-remission for any patients following a previous intensive therapy and relapsed patients that were given Vyxeos in first induction and then progressed 12 months, that would be down the road, but also completing induction treatment. So, these are populations that are not in our labeled indication and would provide I think payers' support for reimbursement and coverage of these populations. And so we're very pleased with this, as we said, we just began promoting this with the NCCN. They announced their guidelines and then it takes a little while to get the materials. Annabel Eva Samimy - Stifel, Nicolaus & Co., Inc.: Okay. Maybe on the additional studies that could be emerging, when could we see some data and when do we see potential uptake in those other areas?

Dr. Yang?

Yeah. Well, Annabel, let me just jump in and say we haven't even published all of the data from existing studies. So I think you'll see additional data coming out there. And then most of our effort having just received approval of the drug in the third quarter last year has been to get additional studies up and running. And we've talked about studies that are IST studies, that are co-op group studies, that are maybe Jazz-sponsored studies. And so, right now, the effort is aimed at getting a number of those studies up and running. We're still a little ways away from data coming out of any of those. Allen, do you want comment?

Yeah. So I would just say Celator was resource-constrained, and so they didn't have a lot of studies. And there are some ISTs that they had initiated with some cooperative groups including pediatric data as well. Now, the challenge of course with that (01:21:25) is that we don't control those studies, and so we're sort beholden to when they complete those studies and put those data forward. But our strategy has not changed. We intend to make Vyxeos the backbone of AML therapy. Around that, I think some of the key scientific issues that we're going to address are dosing and schedule and different populations, combination therapies against with targeted agents, of course, and then new populations, and the new populations within AML, standard risk AML, unfit AML, and then adjacent malignancies as MDS, as we mentioned earlier. So, all of these are being addressed by the team. The team has been working very aggressively. I know you want to hear more about that, but as we just got the label at the end of last year, the team has been moving aggressively, and shortly, we're going to be sort of showcasing a series of Jazz-sponsored studies, cooperative collaborations and collaborations with external sort of KOLs to address those data needs. Annabel Eva Samimy - Stifel, Nicolaus & Co., Inc.: Great, thank you.

Thank you. I would now like to turn the call back to Ms. Kathee Littrell for closing remarks.

Thanks, Sabrina, and thank you again for joining us today and all the questions. We will be participating in the upcoming Bank of America Merrill Lynch, UBS, Bernstein and Goldman Sachs healthcare conferences this quarter. We will also host and webcast an investor event from SLEEP Meeting in Baltimore in June, and hope to see many of you. This now ends our call.

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