Sucampo Pharmaceuticals, Inc. Q4 2008 Earnings Call Transcript

Sucampo Pharmaceuticals, Inc. (NASDAQ:SCMP)

Q4 2008 Earnings Call

February 19, 2009, 04:30 pm ET


Kate de Santis - VP, IR and Corporate Communications

Ryuji Ueno - Chairman, CEO, CSO and Co-Founder

Jan Smilek - CFO

Stan Miele - SVP, Sales & Marketing

Gayle Dolecek - SVP, Research & Development


Ian Sanderson - Cowen & Company

Scott Hirsch - Credit Suisse

Jim Malloy - Caris & Company

Andrew Finkelstein - Leerink Swann


Good afternoon and welcome to Sucampo's Fourth Quarter 2008 and Full Year 2008 Financial Results Conference Call. For opening remarks and introductions I would like to turn the call over to Kate de Santis, Sucampo's Vice President of Investor Relations and Corporate Communications. Please go ahead.

Kate de Santis

Thank you, operator and good afternoon everyone. With me on today's call are Dr. Ryuji Ueno, Sucampo's Co-founder, Chairman and Chief Executive and Scientific Officer; Jan Smilek, Vice President of Finance and Chief Financial Officer; and Stan Miele, , Sucampo's Senior Vice President of Sales and Marketing.

Other members of Sucampo's management team are here as well and available to answer your questions during the Q&A portion of this call. The format of today's call is as follows. Dr. Ueno will begin with the review of 2008 highlights and then summarize the recently announced license and commercialization and supply agreement with Abbott. Jan will then provide us the summary of our financial results for the full year and fourth quarter. Stan will follow with an update on our commercial activities surrounding Amitiza. And then Dr. Ueno will offer some concluding remarks regarding upcoming clinical and preclinical milestones we expect to see for the remainder of 2009.

Before we begin, please note that various remarks management makes on this conference call about Sucampo's future expectations, plans and prospects will constitute forward-looking statements for the purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995.

Forward-looking statements may be identified by the words project, believe, anticipate, plan, expect, estimate, intend, should, would, could, will, may or other similar expressions. These statements may involve risks and uncertainties and we encourage listeners to review them as they are found in the company's filings with the Securities and Exchange Commission. These filings can be accessed through the for investors page of Sucampo's website at

In addition, any forward-looking statements represent the company's views as of today, February 19, 2009. These statements should not be relied upon as representing the company's view as of any subsequent date. While Sucampo might elect to update forward-looking statements at some point in the future, the company specifically disclaims any obligation to do so.

I will now turn the call over to Dr. Ueno. Dr. Ueno?

Ryuji Ueno

Good afternoon everyone, before we discuss the financial results for the quarter and the year, I wanted to review some of the operational highlights and the terms of agreements with Abbott that we announced earlier today. This past year 2008 was a successful one, both operationally and financially.

In April, the FDA approved Amitiza 8 microgram for the treatment of irritable bowel syndrome with constipation or IBS-C in women 18 years or older within in the 10 month PDUFA timeline. This approval triggers the receipt of the development milestone payment of $50 million from Takeda our partner in the United States and Canada which was fully recognized in the second quarter.

In May we received notice that all of the European marketing authorization applications for Amitiza for the treatment of chronic idiopathic constipation in adults has been received and validated by the individual regulatory agencies to which they had been submitted.

These applications include Belgium, Denmark, France, Germany, Ireland, The Netherlands, Spain, Sweden, and The United Kingdom. With a validation the agency is begun their formal review of the applications.

We also filed our marketing applications for Switzerland and that review is on track as well. We anticipate receiving responses to those applications in 2009.

These European applications represent Sucampo's first activity in seeking an international market approval for Amitiza.

In September, we announced the successful results of the phase 2b trial of Amitiza for chronic idiopathic constipation in Japanese patients.

The study demonstrated statistically significant dose related increase in spontaneous bowl movements from baselines together with improvements of various other symptoms associated with chronic constipation.

We plan to initiate Phase 3 clinical trial of Amitiza for chronic idiopathic constipation in Japan in mid 2009. The successful trial result facilitated partnership discussions for Amitiza in Japan and other countries. We will talk about that in a moment.

In December 2008, we announced the completion of patient enrollment into the Phase 3 pivotal trial for Amitiza in opioid-induced bowel dysfunction or OBD patients. We continue to anticipate having the results from these pivotal Phase 3 trials about the middle of 2009.

And as we disclosed today in the financial result press release the safety extension trial of OBD program is also enrolled as well. We anticipate having long-term data from that study at the end of this year.

We completed enrollment in our Phase 2 trial of cobiprostone for prevention of NSAID-induced ulcers in the United States. We expect to report top line results from these trials in mid 2009. Also in December, we initiated a Phase 1 clinical trial of SPL-017 new prostone compound for peripheral arterial disease in Japan.

This is first IV formation in a prostone pipeline.

Now, let's talk about today's partnership announcement Sucampo's license, commercialization and supply agreement with Abbott for Amitiza in Japan. Sucampo has entered into a license and commercialization agreement with Abbott for Amitiza in Japan. For those of you on the call, that may be new to Sucampo story, Amitiza is the only FDA approved treatment for chronic idiopathic constipation in adult and for the treatment of irritable bowel syndrome with constipation in adult women.

We are very pleased to enter into this agreement with Abbott because of a strong international presence and infrastructure. As we have indicated previously, entering the Japanese market represents a key element of Sucampo's overall growth strategy of bringing up proprietary product to the global market place while also continuing to develop and commercialize other prostone based portfolio candidates.

Before going on, I want to review some of the terms of the agreement with Abbott.

Abbott will receive exclusive rights to commercialize Amitiza in Japan for the treatment of chronic idiopathic constipation and to also receive the right of first refusal to any additional indications over Amitiza in Japan.

Abbott will be responsible for all commercialization expenses and effort. Sucampo will receive an upfront payment of $10 million in the next few days.

Sucampo could potentially receive additional significant payment based on achieving specific development regulatory and sales milestones. Sucampo will continue to lead the development and regulatory activity for Amitiza in Japan.

Following marketing authorization and pricing approval Abbott will purchase finished product from Sucampo for distribution. Sucampo retains a right to co-promote Amitiza in Japan.

In addition, Sucampo and Abbott have agreed to begin negotiating license, commercialization and supply agreement of Amitiza covering other countries outside the United States, Canada and Japan.

We will have additional insight shared with you at the time of any subsequent deal announcement.

Now, I will turn the call over to Jan to review the financial results for the fourth quarter and full 2008, Jan?

Jan Smilek

Thank you Dr. Ueno. We announced our fourth quarter and full-year 2008 financial results this afternoon just after the close of the US financial markets. If you have not yet seen the press release you can find the copy posted to our website at www. let's review the financial highlights.

The year 2008 represented the third year of consecutive profitability for Sucampo. We finished the year with record net income of $25 million or $0.59 per diluted share compared to $13.2 million or $0.35 per diluted share for 2007.

For the fourth quarter of 2008 Sucampo reported a net loss of $3 million or $0.07 per share compared with a net loss of $0.7 million or $0.02 per diluted share in the fourth quarter of 2007.

The increase in our profit for 2008 can be attributed primarily to $50 million in milestone payments that we received upon the approval of Amitiza for IBS-C from Takeda. Due to increased product royalty revenue from sales of Amitiza in the United States tend to reduce general and administrative and sales and marketing expenses.

On the other hand our research and development expenses have increased substantially in 2008 to a large extent into second half of 2008 subsequent to the previously mentioned IBS-C approval and the increase was primarily in respect to the development programs for Amitiza outside of the United States and for our other clinical and preclinical prostone compounds. Both of these activities are solely funded by Sucampo and they probably are also the primary reasons for a loss in the fourth quarter 2008.

Let me now review the key components of our revenue. Product growth revenues from sales of Amitiza in the United States increased to $34.4 million for full year of 2008 from $27.5 million for a prior year.

For fourth quarter of 2008 product gross revenues increased to $9.7 million from $8.7 million in the same period last year.

When compared to the third quarter of 2008 the product royalty revenue increased by $2 million from $7.7 million in the third quarter of 2008. These increases reflect the continuing acceptance by patients and physician of Amitiza 24 microgram for the treatment of CIC and also the increase in sales of Amitiza 8 microgram for the treatment of IBS-C in adult women.

Product growth revenue during the fourth quarter of 2008 continued to be impacted by the drawdown of inventory from the initial stocking of Amitiza 8 microgram up approximately $1.1 million offset by increased sales during the quarter.

As you may remember we recognized about $1.9 million of product gross revenue in the second quarter of 2008 upon the completion of the initial stocking of Amitiza 8 microgram.

As of December 31, 2008 the entire inventory from the initial stocking was utilized and therefore the future periods will not be impacted by this revenue recognition factor.

Net product sales of Amitiza as reported by our partner Takeda Pharmaceuticals on a calendar year basis were approximately $193 million in 2008 compared to about $155 million in 2007 and approximately $59 million for the fourth quarter of 2008 compared to about $47 million for the fourth quarter of 2007.

Our R&D revenue decreased to $5.3 million in the fourth quarter of 2008 compared with $7.3 million in the fourth quarter of 2007.

The decline reflects slower revenue recognized for the ongoing Phase 3 clinical trials for Amitiza to treat opioid-induced bowel dysfunction that are funded by Takeda and that were initiated in August 2007.

As of December 31, 2008 we deferred approximately $3.9 million of this R&D revenue as a result of the previously disclosed change and the estimated completion date of this program, which occurred in the second quarter of 2008 and we expect to recognize this deferred revenue in 2009.

In respect to the expense side of the income statement, Sucampo's total operating expenses increased by $7.6 million to $81.1 million for 2008 from $73.5 million in 2007. For the fourth quarter of 2008, the total operating expenses decreased to $18.6 million from $19.3 million in the fourth quarter of 2007.

R&D expenses for 2008 increased significantly to $46.2 million from $31.7 million in 2007 and similarly, in the fourth quarter of 2008, they increased to $10.6 million from $9.4 million in the fourth quarter of 2007.

The higher spending levels were associated with our increased clinical activity for development of Amitiza in the United States, Europe and Japan. The increases were also attributable to expenses for clinical development of cobiprostone for NSAID-induced ulcers. For expenses related to SPI-017, that was recently moved into Phase 1 clinical trial in Japan for the treatment of peripheral arterial disease and finally due to increased preclinical development activities for our other prostone based compounds.

G&A expenses decreased to $14.4 million in 2008 from $21.4 million in 2007 and for the fourth quarter of 2008 they decreased to $3.8 million from $4.1 million in the comparable period in 2007.

As disclosed previously our G&A expenses in 2007 included $9.2 million expense for a one-time cash and stock based award granted to Sucampo's founders.

Selling and marketing expenses decreased to $10.9 million in 2008 from $13.5 million in 2007 and for the fourth quarter of 2008 they decreased to $2.5 million from $3.7 million in the fourth quarter of 2007. The decreases reflect reduced marketing expenses and the completion of the initial build-up of our internally dedicated sales force.

For the year 2008, Sucampo's consolidated effective tax rate was 24.7% and 37.3% for 2007. The reduction in the effective tax rates in 2008, primarily reflect the reversal of the US deferred tax asset evaluation allowances.

In the fourth quarter of 2008, Sucampo recorded $1 million in net tax provision as compared to $0.1 million in net tax benefits for the fourth quarter of 2007.

The net tax provision in the fourth quarter of 2008 resulted from the updated estimates of the sourcing of revenue for state income tax purposes, lower research and development credits and through up of deferred tax assets in respect to stock option expenses.

Let me finish by highlighting our strong financial and liquidity position. Our cash, cash equivalents and investments totaled $121.5 million at December 31, 2008 as compared to $86.5 million at the end of 2007. Sucampo continues to have no debt as of December 31, 2008.

Now I will turn the call over to Stan Miele our Senior Vice President of Sales and Marketing.

Stan Miele

Thank you Jan, and good afternoon everyone. I will start with brief review of the quarterly trends but then focus more on the annual prescription and commercial trends for Amitiza. Additionally, I will provide an overview of sales in the institutional and long-term care segments targeted by Sucampo's sales force.

We are encouraged by the most recent IMS monthly data that demonstrates a total Amitiza prescriptions increased 7.42% in the fourth quarter of 2008 compared to the fourth quarter of 2007.

In addition total retail Amitiza prescriptions increased 1.5% from third to fourth quarter 2008.

In terms of new retail prescriptions the increased quarter-over-quarter and year-over-year was 2.9% and 8.7% respectively.

As of the week ended February 2nd, IMS data indicate that 8 microgram prescriptions now account for more than 21.7% of new Amitiza scripts and 16.8% of total scripts.

On an annual basis they were in excess of 1.09 million total retail prescriptions for Amitiza. This demonstrated an annual increase of 4.5% in total retail prescriptions year-over-year.

In addition, to the total prescriptions the greatest increase in growth is coming from the 8 microgram dose which we launched for IBS-C in women in May of 2008. This dosage continues to increase on a monthly basis and has now given physicians a viable option in the treatment of IBS-C.

As stated in the last earnings release we are also seeing a continued increase in the average number of capsules per script from approximately 55 initially to 61 to 62 in the most recently reported weeks.

This further validates that physicians are beginning to recognize the dose and indication differences for the 24 versus the 8 microgram strengths. Despite a difficult environment for the prescription in constipation market and the economy in general, we are encouraged by the success of Amitiza for both indications of CIC and IBS-C.

According to IMS retail prescription numbers, total retail prescriptions for the constipation market are down nearly 4.5% for the calendar year 2008 yet Amitiza prescriptions increased 4.5% during the same period.

We continue to believe that Amitiza's unique position in the constipation and IBS-C market place as well as the maturation of the Takeda integration accounts for some of the success.

Our own Sucampo sales force, which targets long-term care facilities and key opinion leaders within the academic medical centers, continues to perform inline with our internal expectations.

Sales for these segments are not reflected in the IMS retail prescription data, but are available from IMS in the hospitals, Department of Defense in long-term care segments. Sucampo continues to see an increasing portion of the total Amitiza sales coming from these institutional segments.

In the Sucampo segments, Amitiza sales increased 9.2% for the fourth quarter versus the third quarter of 2008 and 42% fourth quarter '08 versus fourth quarter '07.

As Amitiza 8 microgram and 24 microgram have no upper age restrictions and a favorable adverse event profile, it is suited for the long-term care market.

Our sales team's success in implementing our novel account management business model confirms that Sucampo continued to play a vital role in the success of Amitiza. We're looking forward to parlaying this model and its success to our global affiliates. I will now turn the call back to Dr. Ueno.

Ryuji Ueno

Thank you, Stan. Despite the difficult economic turmoil, Sucampo continues to demonstrate successful in a number of areas. Success of Amitiza in the market place continues to improve. We continue to invest in research and development of new prostone molecules. We also invest in our international Amitiza operations. The results of these investments were demonstrated by the clinical and the corporate achievements over the quarter, such as positive data from the Japanese Phase 2b trial of Amitiza, completion of the enrollment of the Phase 2 trial of cobiprostone NSAID-induced ulcers and the initiation of Phase 1 trial of SPL-017 peripheral arterial disease.

Most recently, when we completed the licensing, commercialization and supply agreement with Abbott in Japan, we intend to continue our focus no clinical development of prostones, ongoing discussions with potential partners for Amitiza in Europe and Latin America and continuing to build our international infrastructure.

We look forward to keeping you informed about all of these activities as we proceed through 2009. These will include, first, Phase 3 trial for AMITIZA for chronic idiopathic constipation in Japan. We anticipate initiating the trial in mid-2009. Second for Amitiza for OBD, we expect to announce top line indicative results from the two pivotal Phase 3 trials of Amitiza for treatment opioid-induced bowel dysfunction in about the middle of 2009.

Also for the OBD program we anticipate announcing top line results from the safety extension trial at the very end of 2009.

Third for Amitiza in Europe, we anticipate receiving response for Amitiza applications in up to 10 European countries during 2009. Upon approval in each of these countries we may then proceed to pricing negotiations with relevant operatives. Fourth for cobiprostone, we anticipate reporting top line results of the Phase 2 trial for the prevention NSAID-induced ulcers in mid 2009.

Fifth for SPL-017, we are continuing the Phase 1 trial of the IV formulation in Japan. I would like to conclude my comments by reiterating that Sucampo's financial position is sound Amitiza sales are growing and our R&D pipeline is advancing.

Today's announcement of the agreement with Abbott for Amitiza in Japan is another significant corporate accomplishment towards our goal of maximizing the value of our commercial product and research pipeline. That ends our prepared comments for this afternoon and we will now be happy to answer your questions. Operator?



(Operator Instructions) And your first question comes from the line of Ian Sanderson from Cowen & Company. Pease proceed.

Ian Sanderson - Cowen & Company

Good afternoon thanks for taking the question. And if I could ask a couple, first I don't know if this is an answerable question but if you can give us some guidance on Takeda's promotional plans for Amitiza for IBS. We are hearing from docs that there is somewhat [invisible] on that initiation and wondering if you have any visibility on when and if they plan to step that up. Related to that do you have some refill rate information for Amitiza 8 microgram just to see whether patients are staying on it and the third question is if you could just remind us what Amitiza dose is being used in the OBD Phase 3 trials. Thank you?

Stan Miele

Ian this is Stan, so I will address certainly the first part of your question as it relates to Takeda's promotional plans. As you know as stated in the contract there is a joint commercialization committee between both companies and we have routine meetings discussing a myriad of different topics as it relates to promotional plans and activities.

There is clearly a commitment on the part of Takeda to ensure that they continue to stay focused on not only the 24 microgram, but 8 microgram dosing as well for IBS-C. As I stated in the call there has been an increase of 4.5% overall. And the greatest increase of growth in total prescriptions is clearly coming from the 8 microgram dosing.

So, we will continue to have discussions with our partner about optimal measures to drive both physician response, patient request and to measure and to improve measures to drive and improved increase prescriptions. In terms of the refill rates I will have to get back to you on that.

Ian Sanderson - Cowen & Company

Okay. And then follow-up to their promotional efforts was there a contractual commitment to a spending level in the first two years post the IBS approval?

Stan Miele

Yes, there is a, I think it's stated inside, in the contract. I am not going to disclose that over the call, but I think it's very clear that 36 months post IBS-C launch it's stipulated in our contract in terms of minimal spend levels for marketing and commercialization.

Ian Sanderson - Cowen & Company

And presumably these levels are being met.

Stan Miele

At this current time yes according to our estimates.

Ian Sanderson - Cowen & Company

Okay. Thank you.


And your next question comes from the line of Scott Hirsch from Credit Suisse. Please proceed.

Scott Hirsch - Credit Suisse

Hi there. Good afternoon. Just a few questions. I think you did indicate that there would be an opportunity to proceed forward with Abbott in other territories, would this include Europe and can you update us on what kind of partnership would go on for the European markets?

Ryuji Ueno

Okay. This is Ryuji Ueno. As we have been talking to you, we have started the talking of the Western Europe primary, but just recently we have started talking with Abbott on the emerging market such as Latin America, Eastern Europe or other territories.

Scott Hirsch - Credit Suisse

Okay. And would you be partnering with both someone for the managed care negotiation plus, marketing partner or is this still something you're considering potentially doing yourselves?

Ryuji Ueno

In Western Europe, as we pointed out in our last earnings call, we have already finished doing some primary research whether we can get into the sales of the marketing segment or not at least in UK and Ireland. So, we are still seeking if we can get our own sales force in UK and Ireland. But the rest of the territories, we are quite open to discuss with anybody. That is our status in Western Europe. But the Eastern or Latin America, we are now talking with Abbott for further licensing negotiations.

Scott Hirsch - Credit Suisse

Okay. And then just to the 8 microgram, anecdotally are you hearing any signs of significantly less nausea than the 24 microgram dosing?

Stan Miele

Anecdotally absolutely yeah so I can’t give you a quantifiable number but I would say we certainly know based on the clinical data as well as any of the reports that come in through medical that are nausea related there is significantly last reports as it relates to the 8 microgram relative to the 24 microgram.

Scott Hirsch - Credit Suisse

And then just on a few financial matters, should we expect the Abbott $10 million milestone in the first quarter. And then can you talk a little bit to what you might be interested in doing with some part of your cash, is it really going to be focused on

R&D for the program this year, is there any else of interest you might be looking to do?

Ryuji Ueno

We're supposed to receive the milestone payment from Abbott probably within the next 15 days as you know we've signed the agreement today. And the situation in the contract is that we should receive the cash within the next 15 days or so. Similarly to our agreement with Takeda we are bound by revenue recognition rules of US GAAP. So you will not see that as one-time revenue in our financial statements. The cash is obviously going to come in but the revenue relating to the milestone payment they are the initial upfront payment and then potentially other milestone payments they maybe received over a period of next few years. That will have to be amortized over the development period that means the period between, the period that is going to be completed by the filing of the commercial application in Japan.

In respect to your cash question, right now as many other companies we are in a situation we would like to preserve our cash as much as possible. And so we will continue to invest into R&D pipeline. We will continue to invest into our international operations because we believe that there is going to be growth coming from those in the future. But our strategy is to maintain cash, preserve cash and be as diligent as possible on that front.

Scott Hirsch - Credit Suisse

Great. Thanks.

Ryuji Ueno

I mean there was one question with respect to the OBD and I will ask Gayle Dolecek to answer it.

Gayle Dolecek

Probably your question is to what the dose is, used in the OBD study and we are using the 24 microgram twice daily the same as the indicated dose for chronic idiopathic constipation.


And your next question comes from the line of Jim Malloy from Caris & Company. Please proceed

Jim Malloy - Caris & Company

Hi guys. Thanks for taking my question. Jan, on the Abbot deal the $10 million upfront, is any color you could give to how the, what the follow on might look like as it relates to that 10 million. How much of that may be development milestones versus sales milestones?

Jan Smilek

We can not disclose the total amount of milestone but I can say it's significant and it's much bigger than the upfront payment of $10 million.

Jim Malloy - Caris & Company

And any thought on the timeline for achieving, good chunk of those numbers?

Jan Smilek

Some are within this year, but some are in the later time.

Jim Malloy - Caris & Company

All right and may be an overall relative size of milestone you think could be achievable in 2009 across various development commitments you have?

Gayle Dolecek

It's very difficult to answer for the moment.

Stan Miele

Yes, I think at this time we would rather not disclosed essentially some of the terms of the milestones, but we are refraining from answering that at this time.

Jim Malloy - Caris & Company

Okay. I certainly understand that tactically you can not give that information I was wondering is there a way that is relatively but if there are $100 million it could be coming in $50 million or is that not that you want to disclose this line?

Stan Miele

Yes, again we will just differ on that at this time anyhow.

Jim Malloy - Caris & Company

Okay. Great. Thank you very much for taking my questions.


And your next question comes from the line of Andrew Finkelstein from Leerink Swann. Please proceed.

Andrew Finkelstein - Leerink Swann

Yes, taking that from a different direction I was wondering if you would be able to give any sense of how the economics or product supply Abbott compared at least your deal with Takeda? And then in terms of you are possibly promoting a product in Japan with those commercial activities to be paid for by Abbott, or will you bear this costs yourself? Thank you.

Jan Smilek

There is some difference between the Takeda contract and Abbott contracts. In case of the Abbott contract Sucampo will supply the finished product to Abbott for the commercialization in Japan. So, we do not have any some COG or relatively, but we supply the finished product to Abbott.

One answer is you may know or not know in Japan reimbursement price is set by the [kico] National Health Insurer. So the pharmaceutical company can not set the price, so we still do not know what price range will be given. So, that's one of our uncertainty.

Stan Miele

And the second part of your question in terms of commercialization, if Sucampo elects to have our own sales and marketing, those costs would be incurred by Sucampo at that time. That's part of the agreement with Abbott. But those costs would be bear by Sucampo.

Andrew Finkelstein - Leerink Swann

Thank you.


(Operator Instructions) And your next question comes from the line of Ian Sanderson from Cowen & Company. Please proceed.

Ian Sanderson - Cowen & Company

Yeah, just a follow up for Stan. Could you update us on the size of your internal sales and marketing effort in the US?

Stan Miele

Well, my current sales team has not changed from what we internalize. Currently still have 38 representatives, across the US and regional managers to support that as well and internal infrastructure to support that. But we have maintained our sales rep coverage of 38 since we internalize our firm inventive back in July of 2007.

Ian Sanderson - Cowen & Company

And then, if there is plan to expand that fairly significantly in the representatives from the background for now?

Stan Miele

At this current time, we are certainly, we still have many different options that we are evaluating and accessing but in terms of timing that’s, it has not been determined but we are exploring many different types of alternatives, but at this point in time, there is no immediate plans to have any sort of an expansion.

Ian Sanderson - Cowen & Company

Okay. And then on the development side, any plan to initiate a trial of SPL-017 in Alzheimer's or did you decide that it is where you are going back?

Gayle Dolecek

For the Alzheimer’s disease one difficulty is the Alzheimer market is going to be crowded now. So we are still thinking about which one is the best compound to be selected among our pipeline products. So, we still have the plan to go into some our CNS program. We're still thinking to choose the best indication for the moment.

Ian Sanderson - Cowen & Company

Okay thank you.


At this time there are no more questions. Thank you. I’ll now turn the call back over to management.

Ryuji Ueno

Thank you very much for joining this conference and we look forward to keeping you updated on our progress and to seeing you at upcoming investment conferences. Thank you very much for joining the call.


Thank you for your participation in today's conference. This concludes your presentation. You may now disconnect and have a wonderful day.

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