Good day. My name is Julie, and I will be your event manager today. At this time, I would like to welcome everyone to the Cubist Pharmaceuticals Fourth Quarter and Full Year 2013 Earnings Call. [Operator Instructions] Please note that today's web conference is being recorded. [Operator Instructions] And at this time, I would like to turn today's program over to Eileen McIntyre, Vice President, Investor Relations. Eileen, you may begin.

Good afternoon, and thank you for joining us for our review of the fourth quarter and full year 2013 business performance and financial results for Cubist Pharmaceuticals. Before introducing our speakers, I will read the Safe Harbor statement and describe the context for use of non-GAAP financial measures. Today's presentation includes forward-looking statements relating to our business, including those set forth on this slide. We may also make forward-looking statements during the Q&A session following our prepared remarks. These statements are neither promises nor guarantees, and there are a number of risks and uncertainties that could cause actual results to differ materially from those set forth in these forward-looking statements. These and other risk factors are described in the Risk Factors section of our most recent quarterly report on Form 10-Q filed with the SEC. Forward-looking statements are made as of today's date, and we do not undertake any obligation to update any forward-looking statements. We will also refer to certain non-GAAP financial measures that involve adjustments to GAAP figures in order to provide greater transparency regarding Cubist's operating performance. Please refer to the slide being shown regarding our use of non-GAAP financial measures, as well as additional slides on the Investor Relations page of our website, which contain the reconciliations between our non-GAAP financial measures and GAAP financial measures. Speakers on today's call will include: Cubist's CEO, Mike Bonney; President and Chief Operating Officer, Rob Perez; Chief Scientific Officer, Steve Gilman; and our Chief Financial Officer, Mike Tomsicek. We'll first hear from Mike Bonney. Mike?

Thanks, Eileen. As we report on our performance for 2013, we look back on a year of significant accomplishments. 2013 marks the first time that Cubist has delivered greater than $1 billion in total revenue. And on an end-user basis, CUBICIN now has achieved blockbuster status with worldwide sales of greater than $1 billion. Based on its Q4 performance, CUBICIN is also very close to an annualized quarterly run rate of $1 billion in the U.S. alone. In the fourth quarter, for the first time, we generated product revenues from 3 marketed acute care therapies: CUBICIN, DIFICID and ENTEREG. In the last quarter of the year, we also had important value-creating news. In October, we closed the acquisition of Optimer, the second of the 2-company acquisitions we announced last summer. We're pleased with the fact that after announcing plans to acquire 2 public companies on July 30, we moved forward decisively, and were able to close both transactions within less than 3 months. In October, we also announced the filing of an NDA for Tedizolid, a late-stage antibiotic candidate, acquired when we bought Trius Therapeutics in mid-September. And in November and December, we announced positive top line data in 2 Phase III programs for our Gram-negative candidate, ceftolozane/tazobactam. These results affirm our belief that ceftolozane/tazobactam can become a much-needed therapy to address infections caused by multi-drug resistant Gram-negative pathogens. With the closing of our acquisitions of Trius and Optimer, CUBICIN enhanced its position as a world leader in antibiotic development for treatments of serious bacterial infections, including those caused by multi-drug resistant pathogens. The assets we acquired helped position us to achieve the long-term objectives for top and bottom lines set forth in our Building Blocks of Growth that we announced in 2012. I'm quite pleased with the progress we've made since we closed the 2 acquisitions last fall, integrating and operationalizing the important commercial and late-stage programs we acquired and retaining select talent and capabilities to help us make continued progress against our long-term goals. In Q3, we also executed convertible debt transactions that facilitated the acquisitions and provides flexibility to fund Contingent Value Rights, pipeline build or other corporate activities consistent with our Building Blocks of Growth goals. We have created a very strong foundation on which to build in 2014 and beyond. But underpinning our plans and priorities for the year ahead is our continued commitment to making disciplined decisions based on our BBG strategic framework. This is a year in which our focus will be on execution and on delivery against multiple important milestones for Cubist. You will hear these discussed during the balance of our call. Now Mike Tomsicek will review our financial results and guidance for 2014. Mike?

Thanks, Mike. I'll start with a brief look-back at what we accomplished in 2013, and then focus my remarks on the important year ahead. We grew total net revenue by 14% in 2013 and generated non-GAAP operating income of $190 million. We ended the year with $579 million in cash, cash equivalents and investments. This solid financial performance was achieved in a year when we took great strides in building for the future. We acquired 2 public companies, completed pivotal, global trials in 2 indications for ceftolozane/tazobactam, filed an NDA for Tedizolid and successfully issued debt under favorable terms, all of which strongly support our Building Blocks of Growth goals. We provided guidance in October that excluded the impact of the acquisition of Optimer. The results reported today met or exceeded these expectations for top and bottom line results, setting aside the costs generated by the Optimer transaction. Our R&D expense line came in right within our guidance range, reflecting continued significant investments in late-stage clinical trials. SG&A was a bit above our October guidance as a result of Q4 operating costs associated with the acquisition of Optimer. Our operating income results, on both a GAAP and non-GAAP basis, are right in line with where we guided in October. Now the guidance for 2014. I will take you through the key numbers. Our total revenue guidance, as you saw in our news release today, is around $1.2 billion, reflecting a full year of a 3-product portfolio in the United States and international revenues from 2 products. The guidance midpoint suggests year-over-year growth of around 17%, and Rob will provide some color on the key drivers here. We are providing guidance for all expense lines on a non-GAAP basis for 2014 and going forward. When we report financial results each quarter,…

Thanks, Mike. Cubist has entered 2014 well prepared to succeed in a rapidly changing health care delivery environment. Our commercial portfolio is well aligned with the health care environment increasingly focused on improving patient outcomes while reducing total cost of care. Our U.S. organization is skilled in helping customers to identify the appropriate patients for our product portfolio, where the clinical outcomes these products deliver are associated with overall reductions in the consumption of health care resources. We plan to leverage the insights gained on decision-making in the U.S. acute care setting for the international commercial organization we're building this year. The important health care challenges addressed by the antibiotics we market today, as well as those we hope to bring to market in the not-too-distant future, are of increasing concern, not only to physicians and patients, but to public health authorities and regulators around the world. As shown on this slide, public statements from global health care policy leaders are raising alarms about the need for new antibiotic therapies to address infections caused by pathogens, such as methicillin-resistant staph aureus, C. difficile and multi-drug resistant Gram-negative bacteria. Our revenue results for Q4 and full year 2013, as you've seen, are very strong. With net revenue growth of 12% for the year and 15% for Q4, CUBICIN continues to demonstrate that it is both a well-established therapy for patients with certain serious infections caused by MRSA, as well as the foundation of Cubist's long-term strategy for value creation. As you've heard us say for some time and as reflected in the 2014 guidance announced today, CUBICIN has established its position in a high-value niche in the relatively flat, but quite large, MRSA market. And we expect CUBICIN net revenue growth to continue in the low double-digit or high single-digit range.…

Thanks, Rob. In the past few months, we've achieved a number of important milestones in research and development. After filing the NDA for Tedizolid in acute bacterial skin and skin structure infections, we now have a PDUFA date of June 20 and anticipate a review of Tedizolid of the anti-infective decision advisory committee, which is tentatively scheduled for March 31. We also continue to be on track to submit the MAA, seeking European approval for Tedizolid in the first half of 2014. In Q4, we announced positive top line results for Phase III programs in 2 indications for ceftolozane/tazobactam, and we are moving towards a targeted NDA filing in the first half of this year. While we are limiting detailed disclosure ahead of a peer-to-peer presentation of data, I can tell you that for both trials, complicated urinary tract infections, or cUTI, and in complicated intra-abdominal infections, or cIAI, the results not only met the primary endpoints for U.S. and European regulatory requirements, but were also internally consistent and robust. We've long discussed the differentiated in-vitro activity of ceftolozane/tazobactam against multi-drug resistant Pseudomonas, as well as its broad spectrum of activity against extended spectrum beta-lactamases, or ESBL, producing Gram-negative pathogens, including E. coli and Klebsiella. One key takeaway from the cUTI study, which was designed for non-inferiority but where the results indicated statistical superiority over levofloxacin based on the 95% confidence interval and where Pseudomonas is relatively rare, is that ceftolozane/tazobactam demonstrated its potential as a broad spectrum Gram-negative agent beyond its unique in-vitro profile of activity against Pseudomonas aeruginosa. We are submitting data from the Phase III trials in both cUTI and cIAI to the European Congress of Clinical Microbiology and Infectious Diseases, or ECCMID, and look forward to discussing the exciting details of these trials with the infectious…

Thanks, Steve. As I stated at the start of our call, 2013 was a year of great accomplishment for Cubist and one that has positioned us well for future value creation. The behavior of the financial markets in the recent months suggest growing recognition of the value we are creating as we execute our strategy in alignment with our Building Blocks of Growth goals. Our focus in 2014 will be on execution against several important milestones that are designed to move us further toward achievement of our long-term aspirations. As Steve mentioned, we have important clinical and regulatory milestones this year for Tedizolid and ceftolozane/tazobactam. We're also targeting a U.S. launch of Tedizolid assuming approval. For CUBICIN, we are well prepared to assert our patents as we move towards a February 18 trial date and the end of litigation with Hospira. A positive outcome there is another key milestone this year. We also expect to get a third fill/finish CMO facility approved for CUBICIN by the end of this year. As Mike Tomsiceck mentioned, we are pleased with progress to date on the integration of our acquisitions of Trius and Optimer and expect the Optimer acquisition to become accretive in Q4, a year from the closing, as we targeted. We're also enthusiastic about our plans to introduce Cubist this year to key opinion leaders in the European infectious disease community. I want to take this opportunity to thank Cubist employees, new and long tenured, for their contributions to making 2013 such a success. We've set ambitious goals for the business in 2014, and I am confident that this organization is up to the challenge. With that, let's open the line up for your questions. Operator?

[Operator Instructions] And your first question comes from the line of Eun Yang.

The question on DIFICID. In terms of your relaunch plan or strategy this year, would that be dependent upon BMP data in the first quarter?

Rob?

No, Eun. When we speak about relaunch, it really means reengaging the team that's supporting DIFICID and also kind of changing the positioning, if you will, or the focus on DIFICID. So we're very excited about the sales meeting coming up, where we'll get a chance to get everybody energized around DIFICID. The incentives for the sales team are significant for DIFICID this year. Additionally, as I mentioned, we're spending some time focused on ensuring that physicians and hospitals understand where DIFICID is best used, and that is for patients who are most vulnerable. And that's the place where we think that DIFICID's differentiated data will really matter. So when I speak of relaunch, it's more that. It's not dependent upon the BMP data, it really is a matter of just refocusing around this product.

Sure. And then another question is on VAP and HAP trial for Tedizolid and CXA-201. Why is the number of patients in the trials different? Why would Tedizolid require 900 patients, however the CXA-201 is 650? And then follow up on that is how long did it take to enroll and complete all the trials?

Thanks, Eun. Steve, do you want to handle that one?

Yes. I mean, they're really different based on the rate of Gram-positive and Gram-negative infections in those 2 indications and on the particulars of the trial design, Eun. We're actually fairly close, one is about 600, 650 and the other is 725, so they're actually not that much different. With respect to the actual projections of trial completion, as we said last week at JPMorgan, we're going to wait until we have some enrollment history behind us. So we think we'll be able to really make that judgment in the middle of 2015 and then be able to accurately predict when those trials will finish.

And your next question comes from the line of Terence Flynn.

[Audio Gap] for Terence. I just wanted to get a little bit more color on your CUBICIN guidance. Can you comment on your assumptions about volume, pricing and gross to net? And also, what was the gross to net for the fourth quarter?

I can take the guidance part and then I'll let Mike handle the gross to net. This is Rob. Well, first of all, as we've been saying with CUBICIN for a while, we want -- everyone to think about it the way we think about it, which is as the foundation of our growth. So where we see CUBICIN is growing in the year in the 7% to 12% range. If you look at our guidance numbers, and we think those are right. We recognize that we were a little bit stronger than that in the fourth quarter and a little bit softer than that in previous quarters. But I think the important point is to really focus it -- on it for what it is, which is a high single-digit to low double-digit growth rate, and that's really where we see it. So that's how we think about guidance. The market overall was basically flat for the year. We think it was up about or -- up about 1%. I think that's the way we think about the overall market is it's going to be pretty much flat. It can be up a little, a percent or so or down a percent or so. But we don't see a lot of benefit from market growth. And I should point out that, that's data through November, which is all we have from IMF at this point. So hopefully, that gives you some color on how we think about the CUBICIN guidance. Mike?

And as far as gross to net concerned, our U.S. base gross to net in Q4 was 14.3%. So we did not get the lift in Q4 that we had in some previous quarters, as we pointed out. And as far as going forward is concerned, we expect the gross to net rates and our guidance is based on gross to net rates increasing during 2014 as the result of the implementation of the Affordable Care Act.

And your next question comes from the line of Jason Kantor. Jason Kantor - Crédit Suisse AG, Research Division: A couple of things on the tax. Could you -- are you going to have a cash tax benefit as well in 2015? Or will you burn through all those NOLs this year? And then also just kind of looking forward longer term, are you -- are there other strategies you can take to lower your tax rate, either by looking outside the U.S. for acquisitions or other strategies that you might put in place?

Mike?

Yes, Jason. As far as 2015 is concerned, although I'm not guiding to cash tax in 2015, we'll continue to see the benefits from net operating losses that were gained from Optimer and Trius during 2015 and even beyond. And there are further steps that we're taking with the assets that were acquired, that you get a little bit more insight into later this year to try to get the optimal tax structure for international, rest of world profits. Jason Kantor - Crédit Suisse AG, Research Division: Can you give us the number for the NOLs that you brought in, at least, so that we can do the -- our own calculation?

I have them. I might -- from a disclosure standpoint, I might wait for the issue of the Q, Jason, or the K.

And your next question comes from the line of David Friedman.

It's just a question on the beta-lactamase inhibitor that you guys are putting into the clinic. I just wanted to maybe hear you talk a little bit about, if you can, what the plans are for that drug over time? Is there a plan to ultimately swap out tazobactam in CXA-201 or is this something that would be additional and separate or paired with even a different drug?

Thanks, David. Steve, do you want to speak to this one?

Sure. The -- this is a beta-lactamase inhibitor, which is sort of similar to tazobactam but has the additional activities of quite significant KPC activity. So it does inhibit these carbapenem-resistant strains. We are -- clearly, we're just starting Phase I, so we're not really talking about our full-fledged development plan at this point. But I will say that the molecule, at least based on preclinical studies, has the ability to be paired with not only ceftolozane, but also with other carbapenems and other beta-lactamase antibiotics. And so once we see our safety and efficacy and PK/PD data, we'll be able to assess where to take that combinations and what combinations to take forward later on.

And your next question comes from the line of Adnan Butt.

Just 2 questions. First, what drove CUBICIN use in the fourth quarter. Is it still the expectation that there's no inventory in there or are there inventory movements on there now?

No, we don't see any evidence that there's anything unusual there from an inventory standpoint, Adnan.

Okay. And then in terms of the second question, so is the intention now to position ceftolozane/tazobactam as a broader spectrum compound versus something that's organism-specific? What's the company's thinking and what was the feedback of the FDA that you gathered for, for the HAP/VAP studies?

Sure. Let me start the conversation around this positioning of cef/tazo and then invite Rob in, and Steve can comment on the conversations with the FDA on HAP/VAP. Clearly, since we have the results, we've been out talking to some of the key opinion leaders around these results. And certainly, the feedback we're getting is that we are doing them and this product a disservice if we limit our positioning to just Pseudomonas given the results that were generated so far. So we do think that these data support a bit broadening -- a bit broader positioning within the Gram-negative marketplace. Rob, you want to chime in on that one?

Yes. I guess, Adnan, the way we think about it is, first of all, just to reiterate, the Gram-negative marketplace is huge. So we're talking about a market that's got 75 million days of therapy in the U.S. and the EU, which compares to about 45 million for the Gram-positive space where CUBICIN competes. So it's a huge market and there's room for a number of products. That being said, we think the positioning for ceftolozane/tazobactam is going to focus on the fact that it covers the major pathogens that people worry about every day, and that is Pseudomonas and these ESBL-producing E. coli and Klebsiella. And I think that the good news that we saw in the UTI trial and I think that we're seeing in overall surveillance is the ESBL-producing E. coli and Klebsiella is becoming a bigger issue. So that, again, makes some of the generic products more concerning and less appropriate, and gives more of a market for ceftolozane/tazobactam as more than just the product you use only if you're concerned about Pseudomonas. So the big things are breaking our way, and we think that this product will have utility across the Gram-negative spectrum.

And with respect to the agency comments on that, well, if you'll recall in the summer, following some guidance about limited population pathways and the like, we did have a conversation with the agency about HAP/VAP and they were quite consistent with what Rob said from our KOLs that doing a special pathogen type of approach with ceftolozane/tazobactam is too limiting and doesn't take full advantage of the spectrum of the molecule. And that's really one of the reasons why we went back to the modified original protocol in HAP/VAP.

If I can ask a follow-up, for the new beta-lactamase inhibitor that's going into the clinic, is the approach there going to be organism-specific or resistant-specific versus a broader base in population?

It has no antibacterial activity whatsoever. It's all up around the enzymes that the bacteria produce, so that all depends on the strain. And this will have a pretty broad spectrum, including the kind of coverage that tazobactam gets, and expanding that into these carbapenemases.

Yes. And if I could just add, I think the -- these carbapenemase-producing organisms are very scary. They're rare. They don't show up very often, but they're very scary. And ceftolozane/tazobactam does not cover these types of agents, so -- or these types of pathogens. So that's, I think, the reason for this beta-lactamase inhibitor and why it could be beneficial and why there's room for more than one product in this space.

And your next question comes from the line of Ken Cacciatore.

You all were kind of answering the question, but I wanted to just get some thoughts on Forest. It seems to be sneaking up here with the ceftazidime-avibactam. You've talked about that there's need for room here for a couple, but can you help differentiate between that product and talk about its potential impact on the launch dynamics?

Sure. We think that overall, the news that Forest has announced this week with respect to their regulatory strategy is very consistent with what we've seen from the FDA, and frankly, from other regulators around the world as the threat of resistant bacteria becomes more and more relevant every day. This is an interesting product that has, with avibactam combined with ceftaz, has activity against these carbapenemase producers. And we do think that there's lots of room in this market for both ceftolozane/tazobactam and for ceftaz-avi. We view them much more as complementary than competitive. Beta-lactamase inhibitors don't improve coverage against Pseudomonas in any kind of significant way. And so as a result, you have an old -- a third-generation cephalosporin that has activity against CREs but is not great against Pseudomonas. Whereas in ceftolozane/tazobactam, you cover broadly Pseudomonas, ESBL, E. coli and Klebsiella. So we do see these as more complementary. Rob, you want to chime in here?

No, I just think physicians will be very excited about the addition of both these products because they'll have a product for those rare, very serious and scary situations that they don't have right now, and they also don't have to use -- overuse that product on the pathogens that they see every day in a space where it's, frankly, not as well-suited as we think our product will be. So they'll be able to utilize our product in the Pseudomonas and ESBL-producing space, and have something to cover those rare and scary CRE-producing pathogens.

And your next question comes from the line of Steve Byrne.

Given your earlier remarks, Rob, about the Gram-positive market being relatively flat, what do you see as the key market opportunity for Tedizolid?

Yes, I think one thing that I should point out is that when we define the Gram-positive market, we really define it with the products that are used today to treat patients. And one thing that isn't in that market basket are the products like Bactrim and clindamycin that are often used as kind of outpatient, discharge type products. So there is a larger market opportunity in that space. So -- and frankly, we haven't commented on what the dynamics of that space are. So I think the opportunity for Tedizolid are going to be in various niches. Certainly, it has the possibility of being a once-a-day, short-course, well-tolerated therapy, of being a great agent to discharge patients from the hospital. And I think a number of the new therapies are likely to try to access that segment, particularly the long-acting IV agents, for example. But we think that Tedizolid, giving it -- being able to just have a physician write a prescription and have a patient take a once-a-day oral is the winning application there. We also think that Tedizolid is a better oxyzolidinone than ZYVOX. We recognize that ZYVOX is going off patent in the 2015 range and that we may not get as much business from ZYVOX as we would if it were branded for many more years. But even with that, we do think there are patients where Tedizolid would be a more appropriate choice. And those are patients who -- where there's concern about drug-drug interactions, particularly patients on SSRIs, and patients where there's a concern about myelosuppression. We have to see what the label ultimately says and we'll obviously have to be bound by that. But we think based on the clinical data and what we've seen, there is differentiation between Tedizolid and ZYVOX in that way. So with all of those niches, we think that the opportunity for Tedizolid is a significant one.

And would you expect the use of Tedizolid to be roughly equal between being administered IV versus oral? Or which way would you think might be greater?

My suspicion, and also, I think if you look at what's happened with ZYVOX, is that the oral will be utilized more. IV will be a start, but ultimately, the real utility and differentiation in this product is the oral. That's where a once-a-day oral is something that you don't see from anyone else. And that's, I think, a big reason why Tedizolid, we think, will have uptake.

And just one last one on this one, Rob. Do you think that it's reasonable to price this relative to a branded IV product like CUBICIN or more like other orals?

Well, that's a good question, Steve. But we're not going to talk about pricing just yet. We've got a lot of work to do before that.

And your next question comes from the line of Marko Kozul.

Just a quick follow-up on the question regarding relaunching DIFICID. I was hoping you could maybe discuss your interest and the opportunity in better -- at better penetrating long-term care facilities. And then I have a financial question. I was wondering if you could elaborate on your R&D expense guidance for 2014. In 2013, GAAP R&D expense was about $478 million. And in 2014, your guidance is $470 million to $494 million on a GAAP basis. Can you give us some additional color on the synergies you're assuming related to the Optimer and Trius acquisitions?

Sure. Rob, why don't you take the relaunch DIFICID long-term care question and, Mike, you could pick up the financial.

Sure. Thanks a lot. So yes, definitely, long-term care is a part of the plan for DIFICID. It is a major segment in this market and a part of how we see growing this product. I'm not going to say more than that in terms of the specific tactics in long-term care, but without question, we do see this as a significant part of the market, and we will be addressing the long-term care opportunity. Mike?

As far as R&D is concerned, as you pointed out, there's sort of comparability between the R&D guidance between last year's actuals and our guidance for this coming year. I'm not exactly sure how to answer your synergy question other than to say that as announced, entering into HAP/VAP trials on 2 products, Tedizolid and the ceftolozane/tazobactam, that will be sort of on the upswing in terms of costs from an R&D standpoint. And with UTI and IAI behind this, at least from a trial execution standpoint, that will be on a downswing. We'll continue to need to support marketed products with necessary trials, including pips trials, as I said, during the course of the script. And from a structural standpoint, we've recognized synergies pretty rapidly from the R&D structure that we acquired from Trius and Optimer. But as announced today, we are maintaining a small presence in San Diego on a permanent basis to support both the Tedizolid and DIFICID programs going forward.

And your next question is from the line of Liisa Bayko.

Can you just maybe drill down a little bit more on what the gross to net was for CUBICIN? And you mentioned it would be changing in the future given the Affordable Care Act. Can you maybe give us some parameters about how to think about that change?

Yes, Mike?

Yes, I guess I'll reiterate. To be clear, our gross to net in the U.S., and I'm going to resist the urge of breaking down into products because this will become unwieldy as we further progress towards a multiproduct company, but we experienced 14.3% gross to net in the U.S. compared to 12.0% in Q2 and 12.4% in Q3. We're very clear at that point in time that we were adjusting reserves driven by the Affordable Care Act and that those quarters were 2 points low. So we're experiencing 4.3 in Q4 and we expect it to increase. I'm not going to give specific guidance. But as we take price increases and as the Affordable Care Act comes into play, a longer-term trend that we've seen, the increase in these gross to net rates are going to continue. So again, 14.3% gross to net in Q4, I may have missed it -- spoke earlier.

Okay, that's helpful. And then for DIFICID, for your strategic plan, just a couple of questions. Can you maybe talk about the timing which you will think -- it will take to get DIFICID back on track? Have you -- are you -- how do you and are you going to take any price increases? And maybe a comment on seasonality.

Rob?

Sure. As far as the time that it will take, Lisa, I guess the best -- the way we think about it is if you go back to our experience with Adolor and when we purchased Adolor and we're kind of relaunching ENTEREG, it took a good part of a year to get our head around that and really get that momentum behind that product the way we wanted. And now, as you've seen, the results have been very, very strong. Now with DIFICID, obviously, it's a little bit more -- it's more our space and we've been working with the product before. But nonetheless, there are changes that we're making and it is going to take some time. So I would think that you'd be looking at momentum improving throughout the year. But it's not going to be something where it's going to change overnight. So that's the best way to think about it. As far as -- what was the other part, seasonality?

Seasonality and price increase.

And as far as price increase, we took price this year on January 1 for CUBICIN and for ENTEREG. We did not take price on January 1 for DIFICID. And I'm not commenting on what we're going to do in the future, but the thinking behind that is we really wanted to establish a dialogue on DIFICID based on the merits of the product and the value the product delivers. And we want to try to get away from the price discussions that I think have dominated the conversation regarding DIFICID. So we did not take a January 1 price increase. I won't talk about what we're going to do in the future, but that will at least give you a sense for what we're doing as of right now.

And your next question comes from the line of Mario Corso. Mario Vincent Corso - Caris & Company, Inc., Research Division: A couple of things. On surotomycin, I was wondering if you could talk about the rationale for waiting for some of the NDA-enabling activities. I mean is it -- it wouldn't seem to be prohibitively expensive to maybe do that in parallel. And then bigger picture, I'm wondering how you think about your $2 billion revenue goal now in light of what you have in-house. Do you have enough to get there? And how do you reconcile that with what you think you need on a business development basis?

Sure. With respect to surotomycin, we're not going to comment on what the total costs were. We just decided that given we are now relaunching DIFICID, we're going to learn a bunch more about this marketplace and how both payors and patients and physicians think about this disease and value, and where the value for a drug like DIFICID can be delivered that it made sense to rather than double down on the expense for surotomycin, to let some time pass, collect a -- continue to Phase III, see what the Phase III outcome looks like, and then make the decision on investments on these NDA-enabling studies. The bulk of what Steve said is around manufacturing, scale-up and so forth. And again, I'm not going to get into specifics, but I think it is possible that in certain circumstances, those expenses are more than you're assuming that they are. So we just think we'll have a better sense of how to position the drug. That will drive what our volume requirements are and we'll be able to make a better decision about manufacturing costs at that point in time. With respect to the $2 billion revenue aspiration that we had in the 2017 Building Blocks of Growth, I think we are obviously very comfortable that the activities of 2013, both the acquisitions and the Phase III data from ceftolozane/tazobactam, put us in a very favorable position there. With respect to how that interacts with business development, certainly, we believe that we need to continue to build the pipeline. But we also don't see the Building Blocks of Growth as a cap for what we can accomplish in 2017, but rather, what our goals were -- aspirational goals were in the middle of 2012 when we put them out. And I think to the degree that the infrastructure that we have and that we're investing in, in the European Union can be further leveraged with additional BD, we shouldn't -- we wouldn't walk away from that because we have confidence that we can get to the BBG. If we can get higher than that, I think, and we think it's at a good fair value, we would certainly act.

And your next question comes from the line of Greg Wade.

Mike, I just wonder if you could help us to understand what's going into the onetime charges that affected COGS in the quarter and then maybe break down the $55 million impairment charge.

Yes, just hold on. Greg, as far as the COGS is concerned, Greg, you're going to begin to see in the quarterly reporting, the amortization of intangible assets associated with DIFICID as that purchase price is amortized over the useful life of the product. And so since that's a selling product to date, you can see in our reconciliation of GAAP to non-GAAP that we've begun to amortize that asset. That's kind of a big step-up from the asset that we were amortizing for ENTEREG before from a previous purchase. So in COGS, that's the biggest factor. And what was your second question?

The $55 million impairment charges, was that all the OBD program or did something else go into that as well?

Yes. So there's a variety of charges in there inclusive of Adynxx and then also impairment associated with the bevenopran program whose valuation is decreased by the conditionality of our moving forward and the delay in our execution.

Okay. And then I just want to have a quick follow-up. Rob, could you break down what inpatient and outpatient CUBICIN demand was in the fourth quarter? And maybe outline for us why you don't think you can drive growth in the outpatient setting from this point on.

Sure. The inpatient, outpatient sales breakdown was similar to what it was previously, 53%, and what we call a hospital now, because some of that is hospital outpatient that we can't tease out and 47% outpatient. And I never said that we couldn't grow CUBICIN in the outpatient setting. A matter of fact, it grew 15% in Q4 in outpatient and it grew 16% in hospital. So I think I commented on market, and we're not suggesting that it's not going to grow at all, but we're just trying to give you a sense, Greg, for how to view this very large product with a big denominator in a market that's pretty flat. So that's the best way to think about it.

Your next question comes from Irina Rivkind. Irina Rivkind - Cantor Fitzgerald & Co., Research Division: I had one on CXA-201 about the HAP/VAP program, the open label. Previously, you used to indicate that this trial would help physicians understand how to use the drug in pneumonia. Should we now think about it as something that they're going to learn more about after the bigger study reads out? And then the other question is on revenue guidance. Does that include anything for Tedizolid in there?

Sure, Irina. With respect to CXA in the open label, basically, our thinking was that given the acquisitions and the need to do another HAP/VAP study for Tedizolid, we sort of stepped back and said with -- our view of the physicians' interest in learning about pneumonia has not changed, but we did step back and say, look, we've got data from a long pharmacokinetic standpoint, BAL study. We have safety data, limited number of human subjects, but we do have safety data at the higher dose. And we knew from the ClinOps analysis that Steve referenced that having 3 pneumonia, ventilator-associated pneumonia studies, in the field was going to cause competition for patients that would delay all of them. So we made the decision that we would stop the open label, focus our energy and resources of both financial and human on getting the 2 registration studies up and executing them as fast as possible. And we will -- if physicians have questions about what we know about ventilator-associated pneumonia or treating, in -- along with ceftolozane/tazobactam, we do have data that's been presented in various forums that show them how the drug gets into the lung, which is very high for cephalosporin, and is maintained for a very high percentage of dosing interval, as well as some of the safety data. It's not as much as we would have had with the open label, but we made the decision that, that was a trade-off worth making. With respect to Tedizolid revenue, yes, Tedizolid revenue is included in the all -- sort of the other product revenue there. We're not going to be breaking it out at this point, though.

Your next question comes from Alan Carr. Alan Carr - Needham & Company, LLC, Research Division: A couple of quick ones. One, with respect to surotomycin and the potential delay there by putting off the CMC work and stability testing, I was wondering if you could give us a sense of the scale that, to my understanding, is that stability testing can take a while. And the other is for international CUBICIN sales in 2014, are there any drivers or new drivers in '14 that we should be thinking about?

Sure. On surotomycin, it's really the scale-up so that you can get to stability testing, that was the key driver here, stability testing once you have scaled up to your commercial process. It's just a function of time, right? You produce a product under the commercial conditions, and then you set it down and monitor the stability of the product over a given period of time. So that's what's going on with surotomycin. On the international, I would say -- I guess I would turn it over to Rob to give you a sense of what's going on. We seem to be seeing pretty nice growth in many of the international markets.

Sure. Yes, we are seeing nice growth internationally, Alan. We were up about 16% for the year on international CUBICIN sales. And overall, we see strength both in the Novartis territories. Merck Japan continues to believe that this product could be $95 million by 2020 in end-user sales, and we're starting to see some uptick in Merck. So we're seeing it across the territories, certainly led by Novartis. And what I think is really interesting as well is Novartis is seeing some significant strength in the major markets of the EU as well. So I think what we're seeing is often the life cycle curves for products in terms of their sales penetration lag, the U.S. and Europe. And as the U.S. starts to flatten, you start to see the benefit of increased sales in the EU. And that's one of the things we hope to tap into with our own international organization with our future products. Alan Carr - Needham & Company, LLC, Research Division: And coming back to surotomycin, do you need to do 1-year stability testing?

It varies depending on the territory you're from. I believe, 9 months to 12 months, that's right.

Your next question comes from Brian Skorney. Brian P. Skorney - Robert W. Baird & Co. Incorporated, Research Division: A couple of quick ones. I guess, Rob, I was wondering if you can kind of give the breakdown that you've given in the past in terms of the different indications that CUBICIN sales saw for the quarter, bacteremia, skin and maybe other?

I sure can, Brian. It is the same as what we saw before just because we have not had new AMR data. But here it is. It's 46% skin, 32% systemic infections, 9% bone and joint and 13% other. That's the breakdown in use. Now again, that data is lagged because we can only get the indications specific from AMR data, and that comes out twice a year. So that's the same numbers I gave you last quarter. Brian P. Skorney - Robert W. Baird & Co. Incorporated, Research Division: Okay, great. And then I'm just wondering, Steve, on the planned protocol designs for the HAP/VAP studies, for both of the agents, is there -- do you require in the protocol, a specific agent for alternative coverage? So for Tedizolid, would there be a required agent for Gram-negative coverage or would it be kind of physician's choice and vice versa for CXA-201? And then just a little more longer-term, have you thought about trying to do studies of these 2 drugs in combination with each other maybe in like Phase IV?

Well, let me take the second one last because it's straightforward. We certainly are having those conversations now but given that neither one of them are approved, I think [ph] our agents were -- wouldn't be studying those studies or thinking about those in any significant way. You do get some information about whether the infection is Gram-positive oriented or Gram-negative information, although it's not quite like skin where you get a pathogen all the time, you know exactly what it is. So the more kind of treatment paradigms that lean you towards the Gram-positive or Gram-negative as opposed to just doubling down on both. But the protocols, I'd have to get back to those fine details to you, Brian. But the protocol always has a coverage of other pathogens, if they're suspected, whether it's Gram-negative or Gram-positive. So you never do a protocol that you restrict usage by the physician in his or her mind that they need to cover for a Gram-positive with a Gram-negative trial. You can't really do trials like that. So there are definite provisions in order to make sure that coverage is available as the physicians choose.

Your last question comes from [indiscernible].

I just want to know whether Cubist will consider having a tax inversion transaction, and if so, when do you plan to do so?

Well, we certainly won't tell you when we plan to do so. And frankly, our view is that the first priority in considering any kind of business development deal is the strategic rationale and whether we think we can increase shareholder value. As you've heard from Mike, we are taking steps to appropriately manage our tax rate going forward. The very trendy inversion transactions of the past few months are certainly within the mix. I would say we're getting smarter on them, but I'm not going to make any commitment to you because I think, overall, I think tax strategies, as we look to the future, become more important as our profits continue to grow and we become a broader international organization. There'll be some natural decline in our tax rates, as Mike has already indicated, as we create more and more profits in the EU at lower tax rates. Beyond that, I think stay tuned and we'll see how we try to manage this element of the expense on the P&L.

I would now like to turn the call back over to the presenters for closing remarks.

Thank you, operator, and thank you, all, for joining us to review Cubist's performance in 2013 and discussion of what's going to be a very exciting and milestone-laden year in 2014. Have a great evening, and thanks for joining us.

Thank you, again, for joining us today. This concludes today's web conference. You may now disconnect.