Elite Pharmaceuticals' CEO Discusses 2Q 2013 Results - Earnings Call Transcript

Aug.15.13 | About: Elite Pharmaceuticals, (ELTP)

Elite Pharmaceuticals Inc (OTCQB:ELTP) 2Q 2013 Results - Earnings Call Transcript August 15, 2013 3:00 PM ET

Executives

Jerry Treppel - Chairman

Nasrat Hakim - President and CEO

Carter Ward - Chief Financial Officer

Doug Plassche - EVP, Operations

Analysts

Operator

Good afternoon, ladies and gentlemen and welcome to the Elite Pharmaceuticals Conference Call. At this time, all lines have been placed on a listen-only mode and we will open the floor for your questions or any comments following the presentation. (Operator Instructions).

Before management begins speaking, the company has the following statements. This conference call contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995. Including those related to the effects if any on future results, performance or other expectations that may have some correlation to the subject matter of this conference call.

Listeners are cautioned that such forward-looking statements involve risks and uncertainties including without limitation, it's ability to obtain FDA approval of the transfers of the ANDAs or the timing of such approval process, beliefs, uncertainties, inability to obtain necessary ingredients and other factors not under the control of Elite, which may cause actual results, performance or achievements of Elite to be materially different from the results, performance or other expectations that may be implied by these forward-looking statements.

These risks and other factors, including without limitation the company's ability to obtain sufficient funding under the under the LPC Agreement or from other sources, the timing or results of pending and future clinical trials, regulatory reviews and approvals by the Food and Drug Administration and other regulatory authorities, intellectual property protections and defenses, and the company's ability to operate as a going concern, are discussed in Elite's filings with the Securities and Exchange Commission, including its reports on forms 10-K, 10-Q and 8-K.

Elite undertakes no obligation to update any forward-looking statements.

With that covered, it is now my pleasure to turn the floor over to your host, Mr. Carter Ward, Chief Financial Officer of Elite Pharmaceuticals, sir the floor is yours.

Carter Ward

Thank you, Tom, and thank you everyone for calling in and participating today. We also have on the call today Mr. Jerry Treppel, Elite’s Chairman of the Board and Mr. Nasrat Hakim, Elite’s newly appointed President and CEO. And after our presentation we’ll open the floor for questions.

Yesterday, Elite filed its 10-Q for the quarter ended June 30th, and issued an earnings press release detailing the company’s quarterly results, hopefully that we’ve had a chance to view this by now, but if not the copy can be obtained by contacting Dianne Will at 518-398-6222, or by viewing it at our company's website which is www.elitepharma.com, and that would be under the Investor Relations section.

So let me start things off with the discussion of Elite’s operations. Our revenues for the quarter ended June 30th, were $722,000, this amount represents a 41% year-on-year growth in manufacturing and profits split revenues and it's an overall 25% revenue growth when you include the licensing revenue.

During the quarter we launched two new products Phentermine capsules of 15 milligrams and 30 milligrams that bring the number of commercial products online during that quarter to seven.

Our product line is still relatively new in the market with two products just being launched, we have four products which are less than three years in the market and our oldest product Phentermine tablets it just had its two years in the market anniversary joined this quarter.

We also have one other product, naltrexone tablets which is approved and we expect to launch it this year. It’s a very high level picture of Elite's operations during the June quarter. However that picture is much different today than it was on June 30. At the beginning of this month, at the beginning of August 2013, Elite acquired a total of 30 new products, 11 of these products are already approved ANDAs that require site transfer, the site transfer approvals from the FDA, one of these products is already approved for manufacture at Elite facility and one of the product is a filed ANDA which is under active review by the FDA currently.

So that's rather significant change in our operations. And while we continue to manufacture support and grow the products that were online during the June quarter and that's doing well in the market, we are also keenly focused on bringing the new products online as quickly as possible.

Each of these products, each of the new products that is have been assigned a priority and schedules are being created for a phased in launching of these products. This phased in launching is one of our top priorities and our operations have changed quite a bit as a result of this extremely positive development. So, this is something that anyone that following our company should always keep in mind when reviewing the Q that we filed yesterday.

So with that in mind, I just like to give a brief summary of the performance of our commercial products during the quarter. All of our product categories achieved double digit year-on-year growth during the June quarter.

Starting with our bariatric products. The Phentermine tablets which are marketed by TAGI Pharma continues to perform well. We had some problems with the supply of raw materials for Phentermine, but those problems have been resolved and they are now behind us.

Thanks to the resolution of these problems, we were able to launch two new bariatric products during this quarter, the Phentermine capsule products. These products are also being marketed by TAGI Pharma and Elite received a milestone when they were launched.

We have the third bariatric products Phendimetrazine tablets, which was formally a product that we manufactured on a contract basis for Actavis and for Mikah. I can tell you now that, this product is one of the 13 products that we recently acquired. So we are now and the ANDA holder as opposed to the contract manufacturer.

So, obviously, Elite is already the approved manufacturing site for this product, we've been manufacturing it for quite a while. The product currently being marketed on an interim basis by Mikah as we pursue various marketing options for this product. So that’s pretty positive news and we will keep you updated when there is something to report on this product.

Next we have Elite's generic pain product which consists of Hydromorphone and Methadone. The Hydromorphone, which is also marketed by TAGI Pharma achieved double-digit growth on a year-on-year basis during this quarter. This is a DEA listed drug and it required quotas, we had some delays in getting enough quota to meet the increasing demands. Without these quota delays revenues would have been even better, but we believe this problem has now been addressed and that we do have adequate quota to meet the anticipated demand for this product this year.

Methadone is a product, which we contract manufacture for Ascend Laboratories, Ascend has been doing a great job with that product it’s a steady product and the demand is growing nicely for Methadone so it’s quite a nice product for us.

Rounding up the commercial product lines is our allergy and that’s the immediate release Lodrane D, this is an OTC product which is marketed by ECR Pharmaceuticals it’s a modest product it’s a steady product for Elite.

So that’s the commercial products, which have generated revenues during the June quarter, but remember we also have the naltrexone tablets which we expect to launch this year as well as 12 additional products which were just acquired two weeks ago. We plan on bringing those to market in phases as quickly as we can and we do expect the first ones to start contributing revenues during this fiscal year itself.

One final thing in operations I would like to add, and that is we have a new Executive Vice President of Operations, Mr. Doug Plassche, who started with Elite this week. Bringing 13 new products on line while also ensuring that we're able to keep up with the growing demand in the existing seven products, not to mention stepping up our R&D operations which is a quite a task.

Elite’s operations are growing, they are diversifying and accordingly becoming much more complex. Doug brings more than 20 years of experience running small, large, rapidly growing and complex manufacturing facilities. Executing our strategic operational plan requires leadership, experience and skills. Doug brings what is needed in to Elite at this critical point in our history and he brings it just when we needed.

So while we talk a lot of our new products, about growth, about product pipelines, it's also important to have the people and the leadership in place to achieve everything we talk about. So we welcome Doug onboard and we're all excited to have him with us. Doug will be giving the operations updates in the future. So you will all get to know him pretty soon as well.

So moving on from commercial operations, just have a few comments on our product development activities. That’s an area we get a lot of calls, lot of messages and there is a lot of interest from so many people. Two things to look at, if you look at our financials you will see that R&D expenses have almost tripled from 200,000 last year to just under 600,000 this year.

Combined that with the fact that we establish a $10 million equity line with Lincoln Park Capital during this quarter, the June quarter just ended, that means we finally have the critical mass level of financing that has been so lacking until now. And most importantly our new CEO, Mr. Nasrat Hakim is just like Doug is just the right person with the experience and skill sets that needed for Elite to finally commercialize our innovative and superior technology. I am sure Nasrat is going to have much more to say on this area, but the take-a-way from my comment should be that with regard to product development, we now have a strong quarter of technology. We have the product. We have the right facility, finance, experience, skills, and mostly importantly leadership.

So finally I want to briefly discuss our finances. Starting with the P&L statement, as I said we reported total revenues of $722,000 for the quarter, that’s a 25% overall year-on-year increase. But as I mentioned earlier, the manufacturing component of our revenues actually achieved a year-on-year growth in excess of 40% with double-digit growth in all products plus we launch two new products during the quarter at excellent year-on-year growth. But those closely follow our company will note that our June revenues are only half of the record revenues which we reported in the March quarter, and I am people are wondering why the drought.

There are number of timing issues most notably we have delays in getting DEA quotas for our Class 2 listed products. The demand for our Hydromorphone and Methadone products was well ahead of historical demand and fortunately things don’t move so fast in the government board of bureaucracy. So the increased quotas from the DEA did not take place with the increasing demand.

We ran out of quota, we ran out of raw materials and for a period we didn’t have the raw materials so therefore we are not able to manufacture the products. The issue was finally resolved towards the end of July. We got new quota, we got product in, we got materials in and we just started shipping these products this week itself. So we got a lot of catch up to do. We expect to that quota issue from the June quarter because of the timing of the resolution will also affect our September quarter, the one we are currently in now.

Another thing speaking of September quarter, another thing I would like to mention with regards to the September quarter is that we traditionally shutdown manufacturing operations during the first week or 10 days of July to perform annual maintenance protocols. That’s is something we do every year, something we have to do and it always has an effect on revenues for the September quarter, it’s just the way the business operates.

Moving down to P&L, you see there was a big year-on-year increase in our R&D expenses. We went from just under 200,000 last year to 570,000 this year. That's also you really need to know about just how much our focus on commercializing our abuse resistant opioid products and technology has changed since last year.

We expect R&D cost to rise even further this year, as we conduct the various trials and studies required. We are moving forward with our abuse resistant opioid on an accelerated pace. It's the value, and it's the future of Elite. But the approval process is not inexpensive, it's necessary, what unfortunately that also costs.

One more item on the P&L that’s operating loss which was $9475,000 for the quarter. The main drivers of this result were the increased R&D cost and the fact that our revenues need to increase. The 13 products acquired this month should go a long way to addressing the revenue situation. The transfer process for these products, it takes several months for each product and we can't transfer all of them at the same time. But we do expect to have the first, two or three of the products online during fiscal year itself. And the contributions from just these two or three products are expected to finally bring us to breakeven and maybe even better than that.

So moving to the cash flow statement. We had an operating cash burn of $355,000 for the quarter, which was driven primarily by our operating loss. If you dig down in to the cash flow statement, you will know that our operating loss was financed in part by decreases in inventories and receivables totaling almost $600,000. All I could say is there is the quota issue and the raw material shortage issue showing clearly on our financial statements. Our quota was delayed we used up raw material and without being able to replenish them. But quota issue has been resolved, so we are now increasing inventories, we are increasing production activities, and receivables are on the rise yet again.

One final comment on our financials and it’s a section that I had never mentioned in the past that is note 14 through our financial statements it’s the note for subsequent events. This footnote discloses events that happened after the end of the quarter that are important enough to be disclosed to our investors. I believe that this footnote is the most important part of our financial statement. This single note contains three standalone events in Elite’s history.

Number one, the employment of Nasrat Hakim as our CEO and President; number two, the appointment of Doug Plassche as Executive Vice President of Operations; and number three the acquisition of the 13 new products. The magnitude of these events cannot be over estimated. Our patented technologies and products are finally ready to move into the approval process and Nasrat is now here with the exact blend of experience, technical knowledge and leadership skills that are needed right here and right now. We are looking at significant cost to execute the plan which is been put in place by Nasrat and there's a pipeline of 12 approved products and one filed product which we'll be phasing in to commercial production and which will begin to contribute to cash flow during this critical period.

Finally, we have Doug Plassche as the President who is now leading our manufacturing operations. He has just the right experience and skills required to get these new products online, support our growth and the R&D activities and to enable Elite to grow from a small operation to a much larger and a much more complex unit. So there are three really big grand slam home runs in that footnote.

Now I would like to turn the floor over to our Chairman, Mr. Jerry Treppel.

Jerry Treppel

I would like to welcome everybody to our conference call. This maybe the last time you'll hear from me on this conference call. So I guess just the formal changing of the guard so to speak.

Now on, you will be hearing more from Nasrat, and Doug and Carter than from me. I don't know whether I should be happy or sad that the stock seems to go up when I announced my resignation. I guess some people tell me, well, also Nasrat came on as CEO, I said, okay, I feel better about that.

My stint as CEO was sort of like fire management. Just trying to keep the company alive long enough to reach this point, quite frankly I've spoke about in prior quarters about the need to put the assets in place to build this company to what we will hope it can be and I think you're beginning to see the results of that.

We have the equity line of credit. As Carter said this is really the first time, in five years when we don’t have to live hand-to-mouth financially and when you're living like that you just focus solely on what you need to stay alive and not necessarily what is the best almost efficient ways to do things.

And I think what you're going to see over the coming months is the company is really going to focus on being more efficient, doing things better, putting the infrastructure in place that is required to be much bigger because that clearly is our goal.

Nasrat's only been here I think a little less than two weeks and I get (Inaudible), it's made a dramatic difference we’ve already had meeting with company we spoke about in the prior conference call that helps companies file 505b2, as in fact is involvement here the 505s, we just filed in the United States. You know, it is always good news and bad news when you do these things.

The good news is that we think they say that we can file our Oxy product faster and less expensively than we had originally thought that’s a very good thing. The bad news is, is that you know we have a lot of information on our product, it's not in a format that is required to file a 505b2 application. And we're going to have to concentrate on doing that, there are pieces of data that need to be done and they will be done. But I think we all came away from that meeting feeling very good about the Oxy product and you as the shareholders should feel good about that too.

So with that I will turn it up over to Nasrat, if he has any comments, if not we can just open it up for questions?

Nasrat Hakim

Thank you, Jerry. I'm extremely happy to be here. I am sure our shareholders will have a lot of questions. So conference update was very subtle and thank you for your comments. And we'll go ahead and open it up for questioning.

Question-and-Answer Session

Carter Ward

Tom?

Operator

(Operator Instructions) Thank you, got our first question from the line of [Steve Smith]. Your line is live.

Unidentified Analyst

Good afternoon, gentlemen. I appreciate your time and opportunity to ask questions about the company. First and foremost, I'd like to thank you Jerry for your herculean efforts, you undertook and especially solo, I would add, in terms of steering the company out of the bankruptcy. And you deserve a lot of credit, respect, and guys thank you.

One question I have is for Mr. Hakim, given that the Actavis has an ANDA for generic Oxycontin would need some form of abuse-deterrent technology. Do you know if there are many imports coming up with their own technology or might they be considering licensing Elite's patented abuse-resistant technology?

Nasrat Hakim

Very good question. I cannot articulate or state what Actavis is thinking, but I'll tell you what I'm familiar with our Alpharma's technology, with Actavis' technology. My background started at ALZA Pharmaceutical and my graduate thesis was on the subject of polymers and (Inaudible) technologies. I do believe that our technology here at Elite is superior to any that are seen.

Second if I'm correct, Actavis is planning to filed a an ANDA, analysis of 505 (b)2. So it goes through a different division, it will go to brand division, President Wilson is in charge of that and other will go through the generic division.

I will tell you this, though, Actavis is a third largest pharmaceutical company in the world and they could be one of the companies, that when the time is right for us as my former company and colleagues, I may approach them to discuss potential options with them okay. But at this time, we're focusing on getting to our clinical trials and showing the viability of our superior technology.

Jerry Treppel

I'll just clarify, just to maybe quickly here, Mylan is getting its -- if they filed an ANDA, and they have much more likely than that use the same, abuse-resistant approaches per do, which is a hard-shell technology. So in all probability that's what they did.

Nasrat Hakim

Thank you, Jerry I couldn't say that.

Jerry Treppel

Yeah, well I knew that so, I figured I'd just -- I don't come from Actavis.

Carter Ward

Thank you, Steve.

Unidentified Analyst

Let me ask one further question then, please. I'm wondering whether or not the company will commence whether you decide to commence with the larger bio equivalency trial or whether you're thinking normally in towards the smaller human trial with twice daily Oxy product?

Nasrat Hakim

That is an excellent question. Steve you are a very smooth gentleman. Jerry, just mentioned we are in active negotiations on work with the largest company in the world that trials 505 (b)2s, they have meetings with FDA literally one to two times to times a week. And we are seeking their counsel on what gives us the fastest out and least amount of clinical trials because clinical trials, translate to money and potential obstacles to get us to an approval.

And I hope that we will have an answer for all of you guys very soon but our focus right now is regardless of that answer is to get to the clinical trials stage later this year. Okay, if there aren't obstacles we'll update you on that, but my target right now is this year, regardless of the filing.

Unidentified Analyst

That was the question that I had. So appreciate your time gentlemen.

Operator

We'll take our next question from the line of [Adam Miller]. Your line is live.

Unidentified Analyst

So as regards to naltrexone the last update I think we received, we were going to have that launched within a few months. Earlier on the call, I noticed that Carter said that Naltrexone would launch this year. Has there been a delay in that, are we using the APIs for the abuse-resistant product? What's the reason for the verbiage?

Carter Ward

The reason is that we're right on the border line now whether we launched it in September or early October and just because of the way our filings work, a few days, one way or the other means it determines which 10-Q it goes on. So I just used that verbiage for that reason only.

Nasrat Hakim

It really is within a matter of couple of weeks, but one falls in one quarter, the other in the concurrent.

Carter Ward

Correct. The function of the calendar.

Unidentified Analyst

Right, any idea on when you are planning on submitting CBE-30 for the remaining 11?

Nasrat Hakim

No. I cannot tell you exactly. All I can tell you is this we are first prioritizing what we need to do in order to get the cream of the cup to the market. So let me backtrack for a second. Carter just presented the best what happened in last three months, what we're presently working on is looking at our systems. So in bringing in 12 products into any organization will overwhelm that organization. So first we need to upgrade our systems. Carter just went ahead and purchased an MRB that we are working on to expand our system.

Second, you will need to evaluate the equipment. Do we have all of this equipment or do we need new ones? First, and I met with a vender last week and went to warehouse for some equipment restored, and he selected some that he may need and he is in the process of looking at that as well.

Third, you need to look at capacity. Are we going to have to sacrifice any of our present products or some work we're doing on the anti abuse, which is not going to happen and how can we do this in parallel. And finally you look at personnel and that's one of the main reasons [Bank] is with us and we are reorganizing our organization.

So all of these factors go in through which products you work on. Once we start working on the product it's a matter of putting it on stability and filing CBE 30 and then waiting for FDA's approval.

We are moving forward as fast as we can there is also raw materials involved you have all the raw materials, so it's going to take few weeks, or few months to for us to get the ball rolling but once it does, okay, it will roll very quickly.

Unidentified Analyst

Thank you Mr. Hakim.

Operator

Our next question comes from the line of (Inaudible) Your line is live.

Unidentified Analyst

Good afternoon, gentlemen. I am a private investor a long time shareholder of Elite Pharmaceuticals' stock. I truly believe in the company and the direction its headed with its short mid and long term business strategy in place.

Everything I see, I hear from conference calls that I read from the quarterly reports and such, it looks very positive as far as the future Elite Pharmaceuticals, however why do you feel, and this is because some of the questions have already been answered that I was going to ask, but do you guys feel the shareholder price - value is kind of languishing at the levels it is at right now?

Why we're not attracting more, larger investors and that what increased the value at this point with all these positives on the horizon for Elite Pharmaceuticals?

Jerry Treppel

Well as the Chairman and someone who's involved with this will be probably the longest. Let's be honest with ourselves, the company has a history okay, and now all of it is great. And I think act show me, okay you have been talking about oxy product for long time and never come to fruition, get there, okay it's on us to prove its liability and obviously we are working on that. I can tell you for someone’s who’s been around this company 10 years, I know what we said before and I know what we are saying now and I wasn’t responsible for what I said before, but I can tell you now but we are not making this up, but we are getting very, very close.

It’s almost planned and it’s almost set up here and I mean we are really taking this down the line. But I think that’s part of it. You know the part of it is because of the history of the company there is frankly too many shares outstanding, given the stage of the company at the moment. That can be rectified at a point in future and that certainly goes with the company and your third points about larger interest or institutional interest, we are working on that and we have got more calls from institutions in the last months than quite some time. I think I can announce to you that we will be presenting at the Rodman Conference in September, which has to do with increasing the exposure of the company. So we are beginning that process.

Unidentified Analyst

Jerry you talk about increasing the exposure of the company, which obviously I think is a good thing and all the shareholders, would agree. Why are we not utilizing our PR system there and more effectively, I think. I know when you guys like to keep stuff secret for competitive reasons and you only like to put out a few yards as they real substance to them, but it would seem that if we could really increase the exposure via the PR system, because always things are on the horizon and they are coming to fruition.

Jerry Treppel

Well, I don't want to put the talk before the horse. But having being an analyst for so long, particularly some companies, I'm very big proponent of don't allow the markets itself unless you have something to say. Okay. And I only felt comfortable in that position of saying, okay, I feel confident enough that we can deliver on what we say. So that we can go out there and start talking to people on a consistent basis, and we are going to do that. But we've had to feel comfortable that we could deliver. I don't want to say things and then say by the way it didn't happen.

Nasrat Hakim

And that's the future, but Mark if I may give the answer this in short and Jerry did a great job with that. In my opinion I know just stating a simple opinion here. I think Elite has exceptional technology as I said it's the better ever seen in this field. I do believe though, Elite did not manage their R&D technology properly. We started with a great technology, we went different avenues with it and we never bought it to fruition.

The technology itself is sound, we haven't change it much for years. But it’s how we managed it in the 2000s and 95 and 2002 was the issue. In order for Elite to survive eventually they start making products. So now we are measured on our earnings. We are an R&D company; if Elite did not have the manufacturing capability and they were only an R&D facility with this great technology, the stock will be 10 times higher than it is today, that’s my personal opinion.

When you start measuring an R&D facility with a superior technology that could bring in oxy twice a day with naltrexone to the market in a short period of time that could bring oxy once a day that could go into other avenues such as Embeda working on morphine sulfate and other opioids. If we look at that and look at the market that it could generate the stock will be in a different place. Unfortunately we are sitting here listening to our earnings of a million and two and even when we bring Mikah’s products and we bring in millions of dollars more, if you guys are happy with that I will consider myself a failure.

I does not come here to have an R&D start a manufacturing company that’s producing $20 million, $30 million a year. I was working for a company that’s making billions of dollars per year. My annual budget was the price of a lead times 10. I am here for our R&D superior technology and this is the primary focus of my heart and soul and that’s my commitment to the stockholders. The stock is not going to move on quarter’s earnings next quarter when we give you $1 million or 1.2 million or a quarter extra for 1.5 million. We are going to get the clinical trials done, we are going to prove this technology once and for all and if we can’t shame on us.

Unidentified Analyst

Just to be clear that was not a forecast.

Nasrat Hakim

No this was my personal opinion.

Operator

(Operator Instructions). We will take our next question from the line of [Matthew Davis]. Your line is live.

Unidentified Analyst

Just I want to give quick thanks to Jerry for the last couple of years, obviously a lot of work had to be done to keep this company going afloat and develop a revenue base to keep it to get it to this point. Listening to the call today, it's obvious there is a lot of confidence in the room and from the recent press releases and last conference call. A lot of confidence in the [Elite] list of product. Perhaps if Mr. Nasrat if you could give us an idea of what some of the things that lend to that confidence that you guys see that maybe, you and all those folks out there, why you know that the product works, why do you believe in it? Is it because of the things you see in the laboratory, the things you see in the studies from your experience? If you can give some of that type of information to help folks, including myself understand why are these products are going to work and why you are so confident?

Nasrat Hakim

I will give only two simple little examples and I'll try my best to simplify it as much as I can. When I joined the company or before I even joined the company, I’ve had the opportunity to have a close relationship with Elite. So I looked at some of the data and presentations that they have. Elite developed a once-a-day anti abuse, actually once-a-day oxy and made the (inaudible), put them on stability for three years and the data after three years was rock solid Using the same technology that we could actually go to the market with.

Furthermore they took that same once-a-day tablet and ran clinical trials on 19 people and they ran it against a competitor and our results were better at least according to my analysis and I am knowledgeable in this area, were better than the competitors and we presented all of that data to an expert that we have here yesterday to help us with the filing.

So when I see that it has been proven first in manufacturing on a large scale, and second on stability over time of up to three years and third on a human trial, it is self evident that the technology works.

Okay; second the issue came that hey that the twice-a-day may have a better market for that. So that technology was also developed, they placed on stability. We had six months stability on the latest slots with the API and that data is also rock solid.

Our (inaudible) polymers are the same story, and the beauty of this technology is it has two separate beats, and each one of them functions independently, but when inter mixed cannot be separated and both of them separately have been proven to work in the human trials of 19 people on stability and in manufacturing.

This is why I am wondering why hasn’t this been done in the past and that’s why I said earlier that, I don’t think historically when the data was generated in the early 2000, the R&D folks that were working on this took the necessary business risk and both went to the market instead scientist sometimes like to play around more and add more examinations and look at more bio studies and examine more data and we ended up where we are at.

I truly believe in this technology and that is why I merged my company in it and became a part of it.

Unidentified Analyst

Well this may seem pretty obvious that you said and we do believe in it and that’s a reassuring things for shareholders as well.

Jerry Treppel

In my initial comments this is Jerry Treppel again, we have a lot of data, the problem has been is that it wasn’t organized in a professional or sophisticated manner. I am trying to think of the best way to explain this , because when the gentlemen came yesterday basically what he was doing was just going through a check list. Have you done A,B,C,D because I know this is what the FDA is going to want to see.

So we found that we are going ABC, but A is over there and B is someplace else and C in a different room and G, D we didn’t do but we know we should do, so not that it’s hard but we need to do it and more than anything else that’s what was missing. The process itself is actually quite good but to file an NDA what the FDA want to see is a highly organized logical presentation of the data, and that's really what we're going to work on going forward. We people are the best in the country at understanding what is it that the FDA is wanted to understand from us. That’s what we are doing now, which is basically going down a check list.

Unidentified Analyst

Again I appreciate your answer there and it's pretty obviously you guys are very confident in the future here. Just one last question in terms it almost (inaudible) comparison for the last wondering your response. In the last conference call you guys noted that you are looking to market, these additional products, it could be TAGI, it could be someone else. So just curious where that is and what kind of - we are just thinking where that is in the process.

Nasrat Hakim

We are actively engaged in the endeavor. As a matter of fact, Jerry, myself and Chris visited one of the vendors and just today I visited another to discuss the opportunity. So we're definitely actively doing that. We are a company that may own the (inaudible) and have a facility to make them, but the sales and marketing group is not here. So definitely, we are pursuing that and as I said, we have talked to two entities and make sure they have an appointment to talk to the third one.

Jerry Treppel

Yeah, there’s lots of interest in marketing these products, and the good news is that Nasrat knows everybody. Then it comes to down to is the company selecting the best deal for itself.

Jerry Treppel

Tom anybody else on the line.

Operator

We have no further questions in queue at this time gentlemen.

Jerry Treppel

Okay. So I guess we'll wrap it up. We'll have our next investor call at the latest when we file our Q in November that’s when our next Q is due. If anything significant happens prior to that we will certainly schedule a call to discuss that when it happens. So thank you for calling in everybody we really truly appreciate your interest in Elite and we will be in touch with you in the future. Thanks a lot.

Operator

Thank you very much ladies and gentlemen this does conclude today’s conference call. You may disconnect your phone lines at this time, and have a wonderful day. Thank you for your participation.

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