Travere Therapeutics, Inc. (TVTX) Q1 2016 Earnings Report, Transcript and Summary

Good day, ladies and gentlemen, and welcome to the Retrophin First Quarter 2016 Financial Results Corporate Update Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference, Mr. Chris Cline, Senior Director of Investor Relations. Mr. Cline, you may begin.

Thank you, Matt. Good afternoon everyone, and thank you for joining Retrophin's first quarter 2016 financial results and corporate update call. With me today are Steve Aselage, Chief Executive Officer; Laura Clague, Chief Financial Officer; and Dr. Alvin Shih, Executive Vice President and Global Head of R&D. Before we begin, I have to caution that comments made during this conference call by management will contain forward-looking statements that involve risks and uncertainties regarding the operations and future results of Retrophin. I encourage you to review the company's filings with the Securities and Exchange Commission, which identify specific risk factors that may cause actual results or events to materially differ from those described in the forward-looking statements. The content of this conference call contains time sensitive information that is accurate only as of today's date, May 3, 2016, and the company undertakes no obligation to revise or update any statements to reflect events or circumstances after the date of this conference call. With that, I'll now turn the call over to Steve. Steve?

Thanks, Chris. Good afternoon everyone. Thank you for joining us to talk about our progress to start [ph] 2016. When we did our year-end call a couple of months back, we talked about the need to focus on execution and reaching our key clinical milestones that could make 2016 a transformational year for Retrophin. In this regard, I'm very happy with that advancement made in the first quarter, specifically with the completion of enrollment in the Phase 2 DUET study of sparsentan for the treatment of FSGS. As a result of reaching this goal, we remain on track to top line data available to report in the third quarter. Between now and then, we will be working with thought leaders and the FSGS community to put together an in-depth package supporting proteinuria reduction as an improvable endpoint. This groundwork will put us in position to make a strong case with the FDA for accelerated approval should the DUET data readout as we expect with the robust and clinically meaningful reduction in proteinuria. Also encouraging for our pipeline in the quarter were new data for RE-024 presented at the ACMG meeting in March. Our teams did an excellent job of putting together an array of data that reinforce the need to aggressively pursue clinical development of RE-024 for PKAN. The data from four posters presented at the conference provided foundational evidence and promising insights into the profile of the drug, all of which reaffirm our belief that RE-024 could become the first approved treatment for people suffering from PKAN. We also look forward to the release of new data on two more PKAN patients receiving RE-024 under physician-initiated treatment at the upcoming MDS conference in Berlin at the end of June. The next key clinical milestone for RE-024 will be the initiation of the planned efficacy trial in PKAN patients. Progress continues, and we are in position to start enrolling the trial in the second half of this year. Turning to our operational performance for the first quarter, we generated $29 million in net product sales, and continue to manage cost effectively. The $29 million in net product sales in the first quarter represents a 67% increase over the same period last year. All three products had encouraging growth in new patient starts during the quarter. The new marketing programs rolled out at the end of January are having a positive impact, and underlying trends exiting the quarter are strong. We've said in the past that patient adds with orphan drugs can be unpredictable, so I'm very happy that for the first time I can say we're seeing consistent new patient additions to all three products. We experienced typical beginning of the year shifts in insurance coverage that cause some temporary prescriptions interruptions early in the quarter. We also saw larger gross to net discount due to the higher commercial and Part D copay assistance as patients' insurance deductibles reset at the beginning of the year. We expect both of these factors to ease for the balance of the year. Additionally, we saw a minor increase in the Medicaid percentage in our payer mix. Specifically, regarding Thiola, new patient additions accelerated in the first quarter, and demand remains strong. As a result of our continuing efforts to support Thiola and its accessibility, the medication was removed from the FDA's drug shortage list last month. This was a direct result of our further investment in securing adequate drug supply to meet ongoing demand. Thiola had been added to the shortage list due to supply issues prior to our acquisition of distribution rights in late 2014. Our development work on a more patient-friendly formulation of Thiola continues, and we will update you when we get closer to making it available. Lastly on Thiola, I know many of you saw in an announcement yesterday regarding our compounded formulation being developed. We did not view these products as a significant threat to Thiola. As we've said previously, compounded versions of our FDA approved medication are not valid substitutes for Thiola, which has been deemed safe and effective by the agency. As the FDA has said itself on numerous occasions and recently reiterated in its draft guidance on compounding facilities, the use of compounded drugs may put the health and the safety of patients at risk. While we take seriously this and any attempt to challenge the hard work we have undertaken on behalf of Thiola and the patients we serve, we do not expect significant demand for these unapproved products. Moving on to Cholbam, we saw patient additions accelerate in the first quarter. Promotional and educational efforts targeting the 70 centers of excellence for bile acid synthesis disorders and Zellweger spectrum disorders appear to be raising awareness of the disorders and the availability of potential treatment options. As we mentioned on our last call, we launched a new program in late-January that enables timely access to comprehensive genetic testing in order to simplify and accelerate the diagnostic process. This program, which is free of charge, has already proven to help diagnosis in the first quarter, and we believe it will help identify more patients as we continue to raise awareness about its availability. Shifting to Chenodal, we saw an encouraging increase in a number of patients initiating therapy in the first quarter as our efforts to raise awareness of CTX appear to be gaining some further momentum. Regarding our efforts to add CTX to the Chenodal label, we had a constructive meeting with the FDA last month and came away more optimistic on a potential pathway for the inclusion of this indication to the label, which Alvin will touch on shortly. Lastly, before I turn it over for our research and development update, I'll touch briefly on business development, and the authorized buyback. Regarding business development, our disciplined approach to engaging on rare disease assets that would diversify our commercial portfolio and or add to the late-stage pipeline continues to progress with multiple parties. And finally, our Board has authorized a share repurchase program of up to $40 million. The share repurchase program provides another option for the company to support our stock in the event of further market volatility. With that, I'll now turn it over to Alvin to walk through our research and development update. Alvin?

Thanks, Steve. The research and development team began the year with some key achievements that helped advance the portfolio and kept us on track to reach our strategic milestones in 2016. I'll start with our later stage development program, which is sparsentan for the treatment of focal segmental glomerulosclerosis or FSGS. I'm very pleased that we met our goal of completing enrollment of the Phase 2 DUET study, this March, thanks in large part to the tremendous efforts of the clinical team and our multinational network of investigators. The DUET trial is the largest industry-sponsored trial in FSGS that's ever been enrolled. And we take a lot of pride in the fact that we're breaking new ground on behalf of the FSGS community. Importantly, delivering on this goal keeps us on track for a top line readout of the primary endpoints in the third quarter of this year. We ran completely blinded to the data, so we do not anticipate significant program updates between now and then. As a reminder, the DUET study was designed to detect a clinically meaningful reduction of proteinuria after eight weeks of treatment, compared to the active control of irbesartan which is an angiotensin receptor block. Reduction in proteinuria is widely regarded to be beneficial in the treatment of nephrotic conditions, including FSGS, and is believed to be associated with the decreased risk of progression to end-stage renal disease in these patients. Based on our previous regulatory interactions, we believe that proteinuria will be given consideration as the surrogate endpoints for Subpart H approval in the U.S. if the data from DUET are robust and supportive. And as Steve already mentioned, our scientific team is also collaborating with academic research networks and patient advocates to develop a supportive data package to articulate the rationale for proteinuria as a surrogate endpoint for the treatment of FSGS. Also importantly, the randomized eight-week treatment data will be supported by the open-label extension data that we're collecting. We're encouraged that a vast majority of patients who have enrolled in DUET have opted to continue into the open-label extension, where all patients are given access to sparsentan. This open-label extension will allow for collection of additional longitudinal data for sparsentan, with many patients already having been on drug for more than a year. Our hope is that the totality of the DUET data, supplemented by our efforts with the FSGS community will bolster the case for accelerated approval. Sparsentan would represent a major advance in the standard of care for FSGS patients, where there are no currently indicated pharmacologic therapies. The first quarter also marked significant progress for RE-024, which is our novel phosphopantothenate replacement therapy for the treatment of pantothenate kinase-associated neurodegeneration or PKAN. RE-024 has the potential to be the first approved therapy for PKAN. And since it targets the underlying chemical cause of PKAN, we believe it also has the potential to be fundamentally disease-modifying. At the ACMG Meeting in March, we presented new data supporting further clinical development of RE-024. There were a number of key takeaways from the data, including results of a Phase 1 study of RE-024 in 40 healthy adult volunteers where single oral doses, up to 1,800 milligrams were found to be safe and well-tolerated. No serious adverse events were reported, and the majority of the treatment-emergent adverse events were related to taste. Next, data from a case report of a 35-year-old PKAN patient receiving RE-024 as part of a physician-initiated treatment showed sustained clinical benefit over a 12-month period. This was measured by a 30% improvement in the unified Parkinson's disease rating scale, or UPDRS. The patient was able to walk independently for short distances, something he'd been unable to do since becoming wheelchair-bound after years of steady disease progression. While these data are only from an n-of-1 in an uncontrolled setting, the patient's improvement was noted by the treating physician to be a clear departure from the course of this patient's previous disease progression. New non-clinical data was also presented at the conference. We described the first human cellular model of PKAN, in which Coenzyme A levels can be modulated and then restored via treatment with RE-024. We also presented preclinical data supporting the proposed mechanism of action of RE-024 in mice, as well as data demonstrating the molecule distributes to the brain in monkeys. These data provide reason to believe that RE-024 will distribute to the brain in humans. And once in the brain, it can be incorporated into Coenzyme A. These data presented at ACMG support the continued advancement of RE-024 into a study in PKAN patients in which we'll look for signs of efficacy. We continue preparations to initiate this efficacy trial of RE-024 in PKAN patients, and we're slated to start in the second-half of 2016. Constructive interactions with the FDA and EMA about protocol design are ongoing, and we're excited to move forward. Before ex-U.S. PKAN patients receiving physician-initiated treatment, all remain on RE-024, and have now been receiving treatment for up to 23 months. We continue to encourage investigators to find their findings through appropriate scientific and medical channels. We're pleased that new data from two of these patients will be presented as a poster at the upcoming Movement Disorder Society meeting in June, in Berlin. We look forward to having that data in the public domain as we continue to collect foundational evidence supporting RE-024 for the treatment of PKAN patients. Wrapping up the portfolio discussion with RE-034, which is our synthetic formulation of ACTH. Manufacturing and scale-up activities for RE-034 have been successful, and we're exploring options to achieve in-vivo proof-of-concept to support further clinical development of RE-034 in a rare disease indication. We're targeting to have insights from additional data in the coming months, which would enable us to reach a decision on further development of RE-034. Now shifting the focus to the R&D team's support for our proof therapies, we continue to work very closely with a commercial organization to ensure that we're optimizing the effectiveness and reach of our products. For Thiola, this means we continue our efforts to produce a more patient-friendly formulation in conjunction with our partners at Mission Pharmacal. For Chenodal, our education and disease awareness efforts through the CTX prevalence study are in full swing. I'm pleased to share that enrollment of this long-term study is progressing well, with the addition of new centers and subjects during the quarter. As a reminder, this dual-purpose study is aimed at establishing the prevalence of CTX, which is insufficiently characterized in the medical literature. And the study will also serve to keep CTX top-of-mind within the physician base that could be the first to pick up juvenile idiopathic bilateral cataracts, which are one of the key signs that could enable earlier diagnosis of CTX. Regarding the efforts to get CTX included on the Chenodal label, we met with the agency last month and had a very constructive dialogue. The agency understands the issues at stake, and has been very collaborative with us in thinking through the options to enable the label change. This latest dialogue with the agency has left us optimistic that we'll be able to come to an agreement on a path forward that will be both feasible and acceptable to the CTX community. We continue to believe that a label reflecting the true nature of Chenodal's utilization is in the best interest of CTX patients. And we continue to enjoy the full support of the patient advocacy community. In support of Cholbam, our team continues to work on the development of the disease registry, which is a component of our post-marketing commitments. We also continue the development of a quantitative diagnostic tool to measure urinary bile acids. All these efforts remain on track. Combined with the recent availability of the genetic cholestasis sequencing panel, our efforts are improving the diagnostic and treatment paradigm for potential Cholbam patients. Finally, our early stage efforts continue, including our collaboration to explore a novel approach towards NGLY1 deficiency. As we make progress on the early stage pipeline, we will provide further updates. And so with that, I will turn it over to Laura to walk through the financials.

Thank you, Alvin. Net product sales from our commercial portfolio consisting of Thiola, Cholbam and Chenodal were 29 million in the first quarter of 2016, a 67% increase over the same period last year. This increase was driven by more patients receiving Thiola and Chenodal treatments and the addition of Cholbam to the commercial portfolio in March of 2015. We reported GAAP net income of 11.2 million for the first quarter 2016, compared to 39.7 million for the same period in 2015. Adjusting for extraordinary and one-time expenses, net income was 5.2 million for the quarter. Significant adjustments for the quarter included 13.4 million of non-GAAP operating loss adjustments, offset by a 14.3 million change in the company's derivate liability due to share price fluctuation and an income tax benefit of 5.1 million. Research and development expenses on a GAAP basis were 14.7 million for the first quarter of 2016, compared to 10.3 million for the same period in 2015. The year-over-year increase is largely a result of higher clinical trial expense related to the Phase 2 DUET study for sparsentan and ongoing preparations for the next RE-024 study. On an adjusted basis, R&D expense for the first quarter of 2016 was 12.1 million. Relevant non-cash expenses for the first quarter included 2.6 million of stock-based compensation and amortization. Selling, general and administrative expenses were 19.1 million on a GAAP basis in the first quarter of 2016, compared to 14.9 million in the same period last year. The increase over 2015 is attributable to increased headcount and support of the expansion of our commercial efforts, and amortization related to the acquisition of Cholbam. Note that we had a 3 million benefit in the first quarter from the reversal of disputed legal fees as a result of this settlement with our former external legal counsel. Adding this in fact would have put our SG&A expense closer to 22 million for the quarter. On an adjusted basis, SG&A expense for the first quarter was 11 million. Significant one-time and non-cash adjustments for the quarter consisted of 8.1 million related to stock-based compensation, and depreciation and amortization. During the quarter, we had a tax benefit of 5.1 million, which resulted from a favorable effective tax rate as a result of orphan drug and R&D tax credit. As of March 31, 2015, we had approximately 315.4 million in cash and cash equivalents, marketable securities, and notes receivables from the sale of our PRB. This value includes the present value of the two 47.5 million payments that we will receive from Sanofi this July and also and also in July 2017. Looking to the balance of 2016, our emphasis remains on allocating resources to make sure we reach our strategic goals centered on developing our pipeline and furthering commercial growth. As we've said in the past, we expect operating expenses and cash flow from operations to vary slightly throughout the balance of the year as we invest in the success of our pipeline and our commercial growth. I will now turn the call back over to Steve for his closing remarks. Steve?

Thanks, Laura. We're very pleased with the progress made in the first quarter, particularly in the clinical development area, where we believe we're moving the pipeline forward and getting closer to reaching our 2016 milestones. We're also encouraged by the underlying patient trends for all three commercial products, which signal increased growth from the first quarter through the balance of the year. As a result, we remain confident in our full year revenue guidance range of $130 million to $140 million. Looking ahead, we have some significant catalysts in store for the rest of the year. We are excited to the top line Phase 2 DUET data in the third quarter, which will give us clarity on potential for sparsentan to be the first approved treatment indicated for FSGS. We also look forward to progressing RE-024, with further case report data at the MDS conference in June, and the initiation of what we expect to be a registration-enabling efficacy trial of PKAN patients during the second half. Coupling those catalysts with further clarity on RE-034's development path and increasing commercial growth sets us up to create significant value for our shareholders throughout the rest of 2016. Let me now turn it back over to Chris to open up the line for questions.

Thanks, Steve. Matt, can we go ahead and open up the line please?

Certainly, thank you. [Operator Instructions] Our first question comes from Joseph Schwartz of Leerink Partners. Your question, please.

Great. Thanks very much. Congrats on all the progress. First, on the commercial products, I was wondering if I could just follow-up on your statement that you expect revenue growth to accelerate throughout the year. Is there a backlog of patients, or are there other reasons why you're confident in saying that?

Thanks, Joe. There is no backlog. What we see though is a really encouraging trend with all three products, and I should say Q1 was a bit of an unusual quarter, in that we saw some of the best patient growth, net new patients that we've seen for several quarters. And it's probably obvious to everyone that we did have a slight decrease in net revenues from Q4 to Q1. So we saw patient growth with net revenues go down, which is not something you normally put together. A number of factors influenced that, the primary one being that patient copays were reset with the advent of the New Year, whereas in Q4, we had a gross-to-net that was substantially different from Q1 as we picked up those copays. That gets minimized as the year goes on, and even by the end of the first quarter most of that impact was gone, but it did have a substantial impact on our January net, and put us in a bit of a hole, which by the end of the quarter we felt good about, and we're going to Q2 on a strong run.

Okay, that's great. And then, I was just hoping to ask also on CTX, and I guess what led to the breakthrough with the FDA, it sounds like you had? And then what do you think will be required to get the data, either existing data or do you think you'll have to generate new data for [ph] label to reflect the way the drug is being used?

Yes. So Joe, instead of characterizing it as a breakthrough, I would say, it's more progress in terms of the continuing dialogue we've had. And again, we've always found the agency to be very receptive when it comes to the interest of the patients, which we think are best served by having CTX on label. So the agency's previous position was that we should conduct a placebo-controlled trial, which we found during our conversations with the community to be not acceptable with patients given the current availability of therapy, which is standard of care. So during our last interaction the agency signaled some flexibility with regard to clinical design. The ball is in our court, so we're following up with them with regard to what an acceptable data package might look like. And so that's still under discussion, but again, we see significant progress in those discussions.

Okay, great. And then just one last one on sparsentan, what data do you think would be supportive of registration? What would that look like in terms of being robust and clinically meaningful? And then, can you talk a little bit more about what you're doing to wrap some other contextual information in terms of patient advocacy and other information which, I think you used the words totality of the data in order to support potential registration?

Yes, that's right. So the totality of the data means that, not only will we have the eight-week randomized data, but we'll also have the open-label extension data, where all patients who've elected to go into the open-label extension will be on sparsentan for an extended period of time. By the time we're ready to go to the agency some patients will have been on sparsentan for multiple years. And so I think that that can address both the efficacy and the potential safety concerns that the agency may raise. So in addition to that, but we'd also like to present our data from observational cohorts. And this is what we're working with our academic collaborators on, to really try and tie proteinuria to long-term kidney outcomes. And so that can best be done through looking at natural history and observational data sets to best understand how tight the linkage is between proteinuria and risk of developing ESRD. So that's what we think of in terms of the totality of data, and that's what we're aiming at.

And then just the first part of that question, what would you hope to see that would be clinically meaningful and robust enough to file for accelerated approval?

So that's not been defined for us prospectively by the agency. What we have designed the trial to detect is a meaningfully greater decrease in proteinuria than irbesartan. So recall that we're trialing sparsentan against an active-control irbesartan. So we need to see a clinically meaningful separation between those two arms. And that's what we've powered the study to produce.

So when you say power, that would imply statistical significance, but meaningfully greater implies the same or different degree, do you think?

I would say that the two are related. We need it to be both statistically and clinically meaningful.

Okay, thank you.

Our next question is from Do Kim of BMO Capital Markets. Your question, please.

Hi, everyone. This is Alex Xenakis on for Do Kim. I had a couple of questions, first one is financial, [indiscernible] that big stock repurchase, and we wanted to know if that means that there will not be a product acquisition this year?

Sure, good question. It does not mean that at all. We are still very hopeful of acquiring additional assets this year. We are actively engaged at this point. And we do feel that the best way to use our capital is to move our pipeline forward, and to acquire additional assets or business development efforts. But we saw erratic and sometimes what we felt was irrational stock movements in Q1, and felt like it would be important to have that arrow still on our quiver should we need it in the future.

Okay, thank you. And a little bit about the sparsentan and we want to know what the market research suggests about how well FSGS is diagnosed by clinicians?

The diagnosis of FSGS is I won't say it's easy, but it's relatively straightforward. It's a pathologic diagnosis, which means that FSGS describes the particular lesion that's found once the kidney is biopsied. So the typical course of events would be a patient might present with proteinuria or with peripheral edema. And the workup would ultimately lead to a renal evaluation, where there would be blood work as well as potentially a kidney biopsy if no other sources of disease can be identified. And so once that biopsy is taken, it's a relatively straightforward jump to the diagnosis of FSGS.

Okay, thanks. And in the hypertension studies, this is for sparsentan; sparsentan increase edema over placebo, but was similar to the active control. And is the balance of edema rates that you're looking for in Phase 2 similar or what would be an unacceptable increase over the comparator [ph]?

Yes, it's hard to say, because these are apples to oranges comparisons. So when you look at a hypertensive population, that's very different than looking at a population that has active kidney disease. So I would say the translation between those two patient populations is tenuous at best. So I think what ultimately is going to be the bar is going to be it's going to be a risk-benefit analysis that we perform with the DUET data that says that the risk of edema is acceptable in terms of the clinical benefit of the drug. So we didn't go into it with a particular bar. I think we just have to have acceptable safety, and that's in the discussion that we'll have with the regulators with the data in hand.

Thanks. And one last question with regards to RE-024. In the compassionate use of PKAN, what has been the rate of improvement that you've been seeing the physical sign improvements where people started to show benefit?

Yes, so if you refer to the abstract and the poster that were released at ACMG, you will see that the rate of improvement in UPDRS was roughly 30%, which is clinically meaningful. And the qualitative description of that patient, I think gives you some sense of what that means. He at first was essentially wheelchair-bound, and the improvement on therapy allowed him to be ambulatory. And so I think that's the magnitude of difference that we're seeing. But again, I just want to caveat that by saying that's n-of-1 in an uncontrolled setting. So you have to take that for a while. It's worth. When you see the results coming out from Berlin, I think you'll have more data points pushed to you to contextualize that.

Great. Thank you so much.

[Operator Instructions] Our next question is from Liisa Bayko of JMP Securities. Your question, please.

Hi, there. I'm wondering if you can just expand a little on the gross to net changes [ph]. So, for the different products, maybe you can go through what was the gross to net in the first quarter, and what is that coming out of the first quarter? In other words, what's kind of the rate for the rest of the year? Ballpark.

Sure. The gross to net changes impacted Thiola disproportionately, you know, for whatever reason, and we saw several different things impact that. I mentioned copay is an interestingly -- the copay issue in January was cut in half when we went into February, and then cut in half again by the time we got to March. So we're going into Q2 essentially with something pretty similar to what we had in Q4 of last year; not exactly, but no meaningful difference anymore. But it was a pretty big hit on January sales. We also saw a change in our rebate liabilities in the DoD and TRICARE Systems and the VA System. So that had a bit of an impact. And then the other thing that did have an impact on January is we saw some additional shipments go out at the end of December, and we think that was predominantly related to people who knew their insurance was going to change, and wanted to get some extra product and make sure they didn't run out of supply, whether new insurance was giving authorization. So I've actually given you a broader answer than you just asked for, but the net impact that we see going forward -- it's probably a 2% to 3% difference in gross to net as compared to Q4 of last year, was in the -- in Q1, it was closer to 6% difference in gross to net as compared to Q4 of last year.

Okay, that's really helpful. Thank you. And then could you at all comment on what is kind of the rate of new patient add now? I know you were kind of on a roughly 30 per month or so rate. Is it back up to that level at this point for Thiola?

I think it was closer to 30 per quarter towards the end of last year, but we are quite giving specific numbers, I just -- I don't want to get into a patient counting mode with any of those three products. What I will say is that Q1 had a very significant number of new patient adds for Thiola. Chenodal had the best new patient headquarter since we acquired the product. And Cholbam had the best new patient add number since we rolled the clinical trial patients on to commercial therapy in Q2 of last year. So we're encouraged with the patient numbers. And I think as I said, going forward into Q2, we're going to see less of an impact on the gross to net, and should see solid growth, and that's why we're still very comfortable with 130 million to 140 million forecast on the top line for the share.

Okay, great. And then just for your SG&A, I missed the comment you said about backing out legal would have been something, I'm just wondering if you could sort of give us a -- so this year is the current rate sort of a good run rate for both R&D and SG&A, or no? Maybe you can give us the shape what the year would look like for both of those.

Yes. Hi, Liisa. So in Q1 we had a SG&A credit, if you will, for reversing some legal expenses due to its settlement. So our expense would have been 3 million higher, or closer to maybe 22 for Q1. And so, I think you'd want to neutralize for that going forward, and we do expect that Q1 is probably a little low compared to our future quarters going forward throughout the year. There will be some peaks in Q3, late-Q2, Q3 timeframe as we complete our DUET study, and then we also have the PKAN cost coming in for RE-024. So, our SG&A will increase a little bit, and R&D across the board for those, but I wouldn't say materially from these levels. But this is a low quarter compared to where we expect to be through the year, lower.

Okay. Okay, that's helpful. Thank you.

And at this time, I'm showing no further questions from the audience.

Okay. All right. Thanks, Matt. And that brings the call to an end, and thank you all for joining us, and we look forward to updating you next quarter.

Thanks, everyone.

Ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may now disconnect. Good day.