MannKind Corporation (MNKD) Q4 2012 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by. Welcome to the MannKind Corporation Fourth Quarter and Year-End 2012 Conference Call. [Operator Instructions] As a reminder, this call is being recorded today, February 11, 2013. Joining us today from MannKind are Chairman and CEO, Alfred Mann; President and COO, Hakan Edstrom; and Chief Financial Officer, Matthew Pfeffer. I would now like to turn the call over to Matthew Pfeffer, Chief Financial Officer of MannKind Corporation. Please go ahead.

Good afternoon, and thank you for participating in today's call. I'll be summarizing our financial results for 2012 as reported earlier today. Hakan will then discuss our current operations, and I will conclude with a brief overview before we open up the call to your questions. Before we proceed further, please note that comments made during this call will include forward-looking statements within the meaning of federal securities laws. It is possible that the actual results could differ from these stated expectations. For factors which could cause actual results to differ from expectations, please refer to the reports filed by the company with the Securities and Exchange Commission under the Securities and Exchange Act of 1934. This conference call contains time-sensitive information and is accurate only as of the date of this live broadcast, February 11, 2013. We undertake no obligation to revise or update any statements to reflect events or circumstances after the date of this call. So turning to the financials. For the fourth quarter of 2012, total operating expenses were $33.5 million compared to $30.6 million for the fourth quarter of 2011 and $35.5 million for the third quarter of 2012. R&D expenses were $25.3 million for the fourth quarter of 2012 compared to $20.2 million for the fourth quarter of 2011 and $25.5 million for the third quarter of 2012. The increase in R&D expenses for the fourth quarter of 2012 compared to the same quarter in 2011 was primarily due to an increase in clinical trial-related activities as trials 171 and 175 were initiated in the fourth quarter of 2012, partially offset by the absence of insulin purchases in the fourth quarter of 2012 related to the termination of our insulin supply agreement in 2011. There was a slight decrease in R&D expenses this quarter from last quarter due to the clinical trial-related activities. General and administrative expenses were $8.2 million for the fourth quarter of 2012 compared to $10.3 million for the fourth quarter of 2011 and $10.1 million for the third quarter of 2012. General and administrative expenses were higher in previous comparative quarters primarily due to a litigation settlement accrual related the securities and derivative actions. Other expenses of $13.3 million for the fourth quarter of 2012 was primarily due to a noncash, nonrecurring adjustment in the fair value of a forward purchase contract with a related party, which was settled in December of 2012. The net loss applicable to the common stockholders for the fourth quarter of 2012 was $51.8 million or $0.23 per share based on 229.2 million weighted average shares outstanding compared with the net loss applicable to common stockholders of $36.4 million or $0.36 per share on 122.4 million weighted average shares outstanding for the fourth quarter of 2011. For the full year ended December 31, 2012, total operating expenses were $147 million compared with $140.6 million for 2011. R&D expenses were $101.5 million in 2012 compared to $100 million in 2011. Our clinical trial-related expenses increased $24.9 million in 2012. This increase was offset by the nonrecurrence of $16 million in expenses recorded during 2011 in connection with the settlement of the terminated insulin supply agreement and decreased salary-related expenses as a result of the reduction in force in February 2011. General and administrative expenses increased $4.9 million to $45.5 million for 2012 as compared to 2011, primarily due to noncash litigation settlement expenses during 2012, offset by lower salaries and benefits costs from the 2011 reduction in force. The net loss applicable to common stockholders for 2012 was $169.4 million or $0.94 per share based on 180.9 million weighted average shares outstanding compared with the net loss applicable to common stockholders of $160.8 million or $1.32 per share based on 121.8 million weighted average shares outstanding for 2011. Our cash and cash equivalents at the end of the year totaled $61.8 million, which compared to $2.7 million at December 31, 2011. Our cash burn during 2012 fluctuated from $33.3 million spend in Q1, $24.7 million in Q2, $30 million in Q3 and $25.9 million spend in Q4. We expect to accelerate our spending in 2013 as we complete the trials and prepare for resubmission of regulatory approval of AFREZZA. With that, I'd like to now turn the call over to Hakan.

Thank you, Matt, and good afternoon. Since our last call in early November, we have completed the recruitment phase for both trials in the Affinity program and this achieving this major milestone. The clinical and medical teams, together with our contract research organizations, have been intensely focused on the execution of our trials. The monitoring of patients at the clinical site is all in accordance with the study protocols, MannKind's operating procedures and good clinical practice. As a reminder, we are running 2 key Phase III studies. The first of these studies, study 171, is an open label study in patients with type 1 diabetes. The study includes a run-in period, during which all patients are optimized on their basal insulin, a total of 518 patients were randomized to 1 of the 3 treatment groups for the mealtime insulin: a control group in which patients utilize injected rapid-acting insulin analogues; the AFREZZA using the MedTone inhaler; or AFREZZA using the generation 2 inhaler. After initial trial with mealtime inhalation optimization period, there is a subsequent 12-week stable insulin dosing period. The primary objective is to establish noninferiority between rapid-acting analogues and generation 2 treatment groups and also competitive safety profile of the AFREZZA treatment groups with the 2 devices. The other Phase III study, the 175, assesses the addition of AFREZZA using the generation 2 inhaler to patients with type 2 diabetes whose disease is inadequately controlled on metformin with or without a second or a third oral medication. Again, after run-in period, during which the patients stabilized their oral medication, a total of 354 patients were randomized to additional treatment with AFREZZA or to a placebo group using only the Technosphere inhalation powder. This study also includes the titration period, followed by a 12-week evaluation period to assess the H1c -- HA1c (sic) [HbA1c] levels, other secondary parameters and safety. Randomization was complete for both trials in November of last year, so the individual patient visit for the remainder of the trial are now visible and can be tracked and managed in real time by both the clinical site and the MannKind monitors. Our teams are now managing patients through the trials patient by patient, and the last patient last visit continues to be on track to May and June, respectively, on 2013. The operational plan for rapid database lock and the production of final tables, figures and listings is in place, and we expect to share the key trial results with you sometime in mid-August. We have also submitted a written request this month to inform the FDA of our intention to submit a Class 2 resubmission in 2013. The purpose of this presubmission meeting is to seek concurrence with the agency on the content and the format of the resubmission. The FDA has already informed us that it will provide a written response to a briefing package in March. We are targeting to resubmit the AFREZZA NDA between late September and early October, and we expect a 6-month review. All other activities that support the resubmission are well underway and progressing according to plan. We remind you that the amount of data and supporting information including tables, graphs and listings for the resubmission is extensive. A detailed operational plan outlining all of the activities required for the resubmission is in execution, and we remain fully committed to meet the 2013 timeline. And with that, I will now hand the call over to Al. Al, please?

Thank you, Hakan, and good afternoon, ladies and gentlemen. During the last conference call, we reported we had completed recruitment for the 2 key clinical trials, MKC-171 in type 1 diabetes, now known as Affinity 1; and MKC-175 in insulin-naive type 2 diabetes, now known as Affinity 2. Those 2 recruiting milestones were critical because they have set the timeline for a completion of those trials that will be the primary basis of our NDA resubmission to the FDA. Hakan has described some of the details in the progress of those 2 trials, and I'm going to provide a little more detail so that we can focus more on some of the details and results that we expect. This study protocol was generated in close collaboration with the FDA. After run-in period of 4 weeks for Affinity 1 and 6 for Affinity 2, there are 12 weeks of titration, 12 weeks of treatment and a 4-week follow-up after completion of the therapy. Affinity 1 will thus complete in late May and Affinity 2 in mid-June. Data log and preparation of the resubmission will take at least about 3 months, so as Hakan noted, the filing is anticipated in late September, early October. We should be able to release the Affinity trial results in August. We had reported that for these trials, the FDA wanted to include patients with A1Cs averaging between 8% and 8.5%. Such a high average A1C required of some patients at baseline A1C of 10% or more. Those high initial A1Cs will enable a patient to show truly substantial lowering, but as the premier centers are conducting these trials, there are not many such poorly controlled patients. To satisfy that baseline and ensure that we have more than 399 and 246 completers respectively for the 2 studies, we screened 1,402 patients for Affinity 1 and 1,381 for Affinity 2. That was a major challenge and took more time but was successfully achieved. One of our concerns had been potential patient dropout because of the substantial demands on the patients in those trials. We therefore overenrolled to better ensure that we have adequate statistical power. We are pleased to report that both studies are tracking well. At this point, we are quite confident that the trial will be completed as scheduled with more than enough patients. As of last week, 297 patients already completed the treatment phase for Affinity 1, that's about almost 75% of the total, and 167 for Affinity 2 or approximately 2/3 -- a little over 2/3 of the target. For almost all of the major earlier trials, the primary target was noninferiority for A1C versus rapid-acting analogue prandial insulin. The endpoints of those trials were successfully met and showed AFREZZA to comparable to the best of the current prandial insulins in A1C. Additionally, those studies showed clear advantages of AFREZZA [ph] and other measures of efficacy and also a much lower incidence of hypoglycemia. Yet even though the kinetic dynamic profile of AFREZZA is so much more physiologic, our early trials were not yet able to clearly validate superiority of AFREZZA for A1C. But that can be explained. Since A1C effectively reflects the average blood sugar over about 2 to 3 months, substantial lowering of A1Cs can only be realized by reducing fasting level, as well as lowering prandial rises. However, since the excessive late persistence of current prandial insulin is the primary cause of hypoglycemia, out of concern for such risk in clinical practice today, physicians typically resist increasing basal insulin to lower fasting levels. As a consequence, they are managing their diabetes patients at very high fasting glucose levels that result in higher A1Cs with increased risk of long-term diabetic complications. Since there is no excessive -- such excessive persistence with AFREZZA, fasting glucose can be much more safely lowered. At a fasting level over 100 milligrams per deciliter, it's really hard to imagine how the kinetic dynamic profile of AFREZZA could lead even to a mild hypoglycemic incident. Modular A1Cs should thus be achievable, and that would reduce the risk of long-term complications of diabetes. Since our earlier trials, basal insulins were actually not titrated, the fasting glucose for the AFREZZA patients were thus excessive. What is different in this trial is the protocol very clearly defines the proper titration of the basal insulin. As a result, the AFREZZA patients end up with much lower fasting levels, though far less change would likely be possible with the current prandial insulin because of their excessive persistence. The caveat of this is that nonphysiologic interpatient variability in glargine, the basal insulin used in Affinity 1, which can also cause -- which is really the primary cause of hypoglycemia, there will probably be some residual hypos even in the AFREZZA cohort. Past experience suggest that there should not be many of those exceptions, so we are confident of good outcomes in this -- in the trial. Expectations for the Affinity 2 trial in insulin-naive type 2 are also very positive. Approval for such patients would rise only modest comparative advantages for A1C in this study for the patients of AFREZZA versus those on the placebo. Prior trials have shown that AFREZZA itself lowered fasting glucose levels. According to opinion leaders, because it reduces insulin resistance. That effect, coupled with the adequate dosing to reduce prandial rises, should enable much lower A1Cs for the oppressive cohort with virtually no risk of hypoglycemia. Enrollment in this trial also includes some patients with very high fasting glucose levels of A1Cs. For those type 2 patients with more advanced disease, they will surely benefit from the substantial lowering dose measures of AFREZZA, but they should be using basal insulin in addition to AFREZZA. In any case, this trial ought to validate AFREZZA as a very effective and very safe antiglycemic agent in insulin-naive type 2 diabetics. Ultimately, we anticipate the use of AFREZZA throughout the entire spectrum of diabetes, not only for Type 1 but also for gestational diabetes and almost the entire range of type 2, at least after metformin. That would seem to offer an enormous opportunity for AFREZZA, although our factory, even with additional equipment, will be able to serve only about 2 million people. I anticipate that we will surely soon need to plan additional manufacturing facilities. As I have communicated before, I believe AFREZZA will become a major weapon in the battle against the global diabetes pandemic. AFREZZA is so very significant because it addresses the prandial glycemic problem in the most natural and most effective way. AFREZZA delivers the very same regular insulin that is supplied from a healthy human pancreas. Importantly, AFREZZA's kinetic dynamic profile in the blood quite closely mimics the natural insulin physiology of a nondiabetic in response to a typical meal. AFREZZA should thus enable a much improved glycemic control without the serious problems, risks and limitations of current antiglycemic products. And I mean not just today's insulins but also the alternative antiglycemic drugs. The value of the alternative antiglycemics is really due to the lack of any physiologic insulins today. Indeed, in spite of the deficiencies with days of exogenous insulin products, the limited efficacy benefits, the side effects and the potential safety risk of the alternative antiglycemics are fostering a growing movement towards early use of insulin in type 2. A more physiologic insulin should surely accelerate that movement. The American Diabetes Association is one of the organizations urging ever earlier use of insulin. In the January 28, 2013, issue of The Wall Street Journal, there was a frightening article entitled, "Grim New Diabetes Milestone," expressing serious concern about the explosion of type 2 diabetes in children. Metformin, now the only oral antiglycemic approved for use by children, is apparently much less effective in pediatric patients, more even with than in adults. What appears to be evolving for these young patients is far greater early use of insulin soon after diagnosis. The ultrafast kinetic dynamic profile of AFREZZA should certainly be even more important for children. Moreover, the simple, discrete and convenient inhalation of AFREZZA should be an important contributor to compliance, especially in the very young. However, AFREZZA will not soon be available for pediatric patients. The clinical trials to date were all in adults, and the initial label upon approval will be limited to use by people over the age of 18. Last year, that FDA requested we submit a protocol for a Phase IV study in pediatric patients. They directed us to conduct that clinical trial in children down to age 4. The protocol is almost final, but as the Phase IV trial will not be initiated until after approval of AFREZZA for adults. Key opinion leaders are becoming increasingly positive and enthusiastic about the potential of AFREZZA. Some are suggesting that by reducing pancreatic stress, AFREZZA may slow and perhaps stop and even reverse progression of type 2 disease. Moreover, delivery of AFREZZA by the inhalation with a tiny, whistle-size inhaler is so simple, so convenient and will be so very cost effective. I truly believe many patients will prefer this therapy modality. As I have consistently said in previous calls, I am absolutely convinced that AFREZZA will become widely recognized by patients and clinicians alike as the better, safer and more effective therapy throughout almost the entire diabetes spectrum. For quite a few years in the future, I assert that AFREZZA plus the basal insulin patch pump ought to be the optimum basal-bolus therapy for type 1 and late type 2 diabetic patients. Since the first launch of early type 2 is prandial control, not fasting control, at least after metformin, an ideal therapy for most of these patients should be AFREZZA alone -- or along with metformin. As you can see, I remain absolutely confident of the clinical significance and the enormous opportunity with the AFREZZA. And now let me open -- let's open up the call to your questions. Operator?

[Operator Instructions] Our first question is from Ian Somaiya with Piper Jaffray.

This is Matthew on for Ian. So first, I guess, the one that always seems to come up, and that's -- I was hoping you could give us sort of the latest color, the latest take on where you guys are in terms of partnership status and how diligence is progressing with potential partners. And then I have just a couple more after that.

Yes, this is Hakan. And which we have indicated before is that we are in discussions and also in diligent sessions with a number of interested parties. Again, since we've indicated earlier, with the addition of the type 2 market and the significantly increased opportunity, that attracted additional potential partnerships. So those, say, discussions and due diligence sessions are underway as we speak.

Okay. And Matt, one for you. Could you just give us your sense as to expectations for operating expense run rate in 2013 and beyond, particularly once the trial is complete?

I'll try. So you'll remember that I've been saying we're going to burn somewhere in the $10 million to $12 million a month range for a long time. We consistently seem to underspend that. So I'm getting a little reluctant. That is what our projections are showing. So I do still think it's going to pick up into that range as we hit the kind of crescendo period of clinical trials in the first couple of quarters here, after which it should start winding down. There will be a slight offset as we gear up a little bit for this commercialization, I think, post filing. But you should see some of the -- certainly, the clinical trial expenses, which have been the major driver for the increases on that side, will start coming down a little bit in the latter part of the year. Beyond that, I can't be too terribly much more specific.

Okay. And somewhat sort of related in the -- I guess Al actually mentioned the manufacturing facilities in his remarks. And I was just hoping you guys might be able to comment on that in terms of expectations. Is that something that -- in terms of timing? And also, is that something that you think you guys would handle yourselves? Or is it ultimately the expectation that the partner would take care of that?

Well, initially, we certainly will handle it ourselves based on the Danbury facility. As Al mentioned, they have the capacity on a commercial basis to service up to 2 million patients. Beyond that, that certainly will be a discussion. We potentially thought as to whether they would have an infrastructure to help build out that and the structure for doing so is still open ended. But it would certainly, I would say, have probably a couple of years on the opportunity once we have a deal in place to determine which is the most efficient way of doing so.

Yes, just to make sure we're all on the same page. When we talk about a 2 million patient capacity at the Danbury facility, that's a fully built-out stake. We expect to launch with about 1/4 capacity. We have the footprint in place for that usage of the full amount of the 2 million capacity, but we haven't put all the equipment in because obviously, we didn't want to spend all the money before we had to. So it has a 12 full finished line capacity. We expect to launch with 3. So it's about 1/4 capacity roughly. And then we can build that out as we need it. Remember, the 2 million capacity, while we're talking about it, is not very much. It equates to somewhere in the $4 billion of sales range. So we're looking forward... [Audio Gap] Forward to starting to worry about outstripping that facility.

Next question is from Steve Byrne with Bank of America.

Well, I welcome your thoughts on the merits of FDA's decision to require Novo's degludec to have a cardiovascular outcome study. And more importantly, what data do you have to that either shows the lack of -- or the strength of your view of a lack of cardiovascular signal with AFREZZA?

Well, our cardiovascular signal showed a 1.01 cardiovascular effect, which was negligible, and the FDA has not pursued this any further. The degludec numbers were enormously higher, and that's why they have to -- that's why they got the CRL.

Okay. With respect to the enrollments in the 175 trial, you had 167 have now completed. I think you said 360 or so were randomized. Can you, at this point, estimate how many you think will complete at this point?

We only need 246. But -- Bob?

Yes. Al, this is Bob Baughman in Danbury. We have 124 subjects who have completed the trial in its entirety. And we still have about 173 subjects in the study. So that gives us up to 297 subjects to complete 246. And as you know, we are well on our way for this study. So we will have more than enough subjects to be able to complete the trial.

And Bob, based on the discontinuation rate, can you estimate how many out of that 173 will complete?

Of that total, I would say we will only lose maybe 15% of them. As you know, most of the drops in all of our trials occur early on when patients are still getting used to the inhaler. Relatively few drop out at the end of the trial, and that's essentially where we are. So I do not expect to even see the 15% rate in the 175 study.

Okay. And one last one for me. Matt, can you talk about the adequacy of the $62 million of cash right now to take you through at least the results in August?

Well the $62 million, by itself, will get us right to about the time of results. Remember, we do still have a large line of credit available from Al across the table from me here, not only the stuff that was available previous to the last financing but also some monies that were reinstated. So that should be enough to bridge the gap if we decide to use it. That said, we have been trying to make that line go away. So we might be looking at other alternatives to that -- from that in the meantime. But really what we need to bridge to is just the data which is -- it is in August, as we said. So that should take us right to about that point. Remember also, we have at the -- in late October, the expectation of a large inflow of money on a semiautomatic basis from the warrants we issued with the last finance, which will otherwise expire late in October. With any kind of data at all, we obviously expect very positive data from these studies. We would expect those warrants to be in the money, and that should bring in almost $90 million additionally. I think we're going to be generally in pretty good shape financially this year.

Next question is from Jason Butler with JMP Securities.

Just first on the trials. You incorporated some new titration requirements in these trials, and FDA gave you the power to enforce them. Can you give us an idea of whether -- of what you're seeing in the clinic in terms of adherence to these protocols and how your new measures are working as well as hoped or not?

Bob should answer that, but we're really blinded to the data, Jason. So Bob?

Yes. Jason, this Bob Baughman again. We cannot comment on the data because we remain blinded. We have an independent titration management committee that makes those recommendations to the investigators. But we are blinded to that, and the outcome of that, we will only see when we evaluate the data.

Okay, great. And then question from -- sorry.

My additional comment was only going to be -- is that we get the comment back from the committee that the investigators are being attentive to the recommendations.

Okay, great, that's helpful. And then just...

We have to win big.

Right. And then for Matt -- for Matt, just a question on the warrants, following on from Steve's question. Could you talk about the cash and cashless provisions for those warrants? And then I think there were also warrants issued to Mr. Matt at the same. Are those warrants exercisable in the timeframe? And are they cash or cashless?

Yes. Well, there's just the usual cashless provisions if we don't have a value listing and so forth. So for all terms and purposes, you should think of them as only being cash exercised warrants in the normal course. And the same will be true of Al, although that doesn't preclude him from using his debt or debt cancellation to exercise those warrants. But they do have the same, otherwise the same terms. The warrants have the same terms for everybody.

Except I had to pay a lot more for them.

Al paid more for his, but once he has them in his hands, they're the same terms of the warrants.

I still think they're cheap though.

Next question is from Cory Kasimov with JPMorgan. Matthew J. Lowe - JP Morgan Chase & Co, Research Division: It's actually Matt Lowe in for Cory today. Just to quickly come back to the partnership, to the ongoing. Just wondering, is there a certain type of deal that you are seeking, I guess, what matters most to you with the deal? Are you looking for a company that's already in diabetes care or a company with a primary care sales force? And then regarding Europe, are you looking to file yourselves there or to wait for a potential European partner to do this?

Well, in terms of the type of company we're looking at, yes, I mean, if they do have a primary care sales force, that certainly is an advantage, an opportunity because we've seen in our market resource study, if the primary care physicians can retain their patients over a longer period time, and not to have them say, go to specialists, that is, for them, certainly a continuing care and revenue opportunity. They do not necessarily have to be, say, in insulin or in diabetes, even though some of the people we're talking to certainly are in diabetes care. In regards to the European submission, we have conducted the U.S. trials and even the ones that we are underway right now. So they will, say, very easily fit into the requirements that we would expect out of the European application. Probably the timing of a potential partnership deal will determine whether we go alone in Europe in terms of submission, say, subsequent to acceptance of our filing in the U.S. by the FDA or whether we will utilize a European partner for doing so. So I would say that's a discussion that's pending until the appropriate time.

[Operator Instructions] Our next question is from Simos Simeonidis with Cowen and Company.

A question for Bob. I know you're blinded on the data. But your data monitoring committee, have they seen any concerns of hypoglycemias up to this point?

I can tell you that the data is being reviewed, and we have not been alerted to any concern with hypos in the studies.

Okay, great. And the final question for Matt. Matt, how much is available under the line of credit from Al?

Approximately $120 million.

As of the start of the quarter, right? Or I guess the end of the quarter, I should say.

I mean, obviously, we haven't drawn anything from that since the financing. So the full amount remains available. Remember, when Al bought the stock he reinstated that portion of the debt back into the line should we need it. Obviously, we hope we won't.

Next question is from Keith Markey with from Griffin Securities.

I was just wondering, some people have brought to my attention that there are blogs posted by different patients ostensibly who participated in one trial or the other. And I was wondering if you had any kind of-- about the results that these patients have posted, saying that they've never had such great control? And I was wondering if these patients are eligible for use of AFREZZA on a compassionate use basis?

First, let me say that we get lots of those inputs. People send us information. I've gotten letters from patients. I've gotten e-mails from patients, all talking about how their experience has gone, how successful it's been, how pleased they are. I had one physician who was involved in 171 who called me and wanted -- pleaded with us to get all of his patients to remain on AFREZZA on a compassionate care basis simply because they've never seen results had been so significant. And I said, "Tell that to FDA. Don't tell that to us." And then a few weeks ago, I ran into a physician involved in the Affinity 2 trial in type 2, and his remark was that he's never seen such incredible results and without any hypos and that he intends to put all of his patients, his type 2 patients, on AFREZZA. Now those are just anecdotal stories. So you can't really draw any conclusions from it. We will get the data sometime in July, probably, and we will be analyzing it. And once we get all of that data, then we'll be able to make a definitive statement. But until then, we have to treat these only as anecdotal stores. I think perhaps the most significant fact is that I've personally heard of dozens of very positive comments and opinions about AFREZZA and I have yet to hear one that was negative. So that, to me, is significant.

There are compassionate use applications with the FDA from physicians in trying to address their patients. So we do know that. But again, it's on a patient-by-patient basis.

Next question is from Michael Tong with Wells Fargo Securities.

This is David on for Michael. Just a quick question. Can you repeat first the number of patients who completed the MKC-171 and 175 studies, please?

Well, the 171 was 297 patients, which turns out to be 74.4% of the total completers that are required. And the one -- and Affinity 2 was 167 or 70 -- 67.9% of the total. So we're roughly 2/3 -- 3/4 and 2/3 done as of last week.

Okay. And then in terms of the Q4 G&A, should we expect that to be the run rate as we go into 2013?

Yes. Absent the other nonrecurring items in other income we talked about, G&A should be more or less the same.

If there are no other questions, let me thank you all for joining us today. Our next quarterly call will be in mid-August, and by then, we hope also to have been able to release our top line results from our current trials. And as I've said before, I'm very confident that we will be announcing very significant results, and we look forward to that call. Thank you all for joining us today.

Thank you, ladies and gentlemen. This concludes today's conference. Thank you all for attending. You may now disconnect.