Hyperion Therapeutics' CEO Discusses Q4 2013 Results - Earnings Call Transcript

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 |  About: Hyperion Therapeutics (HPTX)
by: SA Transcripts

Operator

Good morning, ladies and gentlemen, and welcome to Hyperion Therapeutics’ Fourth Quarter and Year End 2013 Financial Results Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. (Operator Instructions) As a reminder, today’s conference is being recorded.

I’d now like to turn the call over to your host, Ms. Myesha Edwards, Associate Director of Corporate Communications and Investor Relations.

Myesha Edwards - Associate Director, Corporate Communications and Investor Relations

Thank you, Ben. Welcome to our fourth quarter and year end 2013 financial results call. Leading today’s call is Don Santel, our Chief Executive Officer. Also joining us on the call today are Jeff Farrow, our Chief Financial Officer; Christine Nash, our Chief Commercial Officer; and Bruce Scharschmidt, our Chief Medical Officer.

Before turning the call over to Don, I remind you that we will be making forward-looking statements. Our actual results may differ materially from the results described in particular with respect to our financial forecast, our commercial, clinical and regulatory timelines and our commercial expectations. References to what we expect, believe, intend, plans, estimate or other statements referring to future events or results are intended to identify these statements as forward-looking. We encourage you to review our press release, the risk factors in our most recent quarterly report on Form 10-Q and our 10-K expected to be filed on or about March 7. During this call, we will be discussing adjusted or non-GAAP financial measures. For reconciliation of these adjusted financial measures to the corresponding GAAP measures, please see today’s press release, which is posted on the Hyperion website at www.hyperiontx.com.

With that, I will now turn the call over to Don.

Don Santel - Chief Executive Officer

Thanks, Myesha. Good afternoon, everyone and thank you for joining us on the call. It’s my pleasure to recap 2013, which was a transformational year for the company, most notably marked by having two commercialized products for an ultra-rare disease and by the advancement of another program poised to enter Phase 3 testing for a larger orphan market.

Let me highlight briefly our accomplishments over the year. In the first quarter, we received FDA approval for and launched RAVICTI, the first therapeutic alternative in 17 years for the treatment of urea cycle disorders, or UCD in patients two years and older. Subsequent to approval, we received orphan drug exclusivity, which will prevent genericization of RAVICTI for UCD in the United States until 2020. Also in 2013, we were issued a method of use patent related to the use of RAVICTI for the treatment of UCD that provides an additional barrier to generic entry in the United States until 2032.

Earlier this month, another patent issued that contains method claims that we believe provide an additional layer of protection for RAVICTI until 2029. In the second quarter, we acquired worldwide rights to BUPHENYL, another brand of medication for the chronic treatment of UCD from Ucyclyd Pharma, a subsidiary of Valeant Pharmaceuticals. This acquisition provided us with our second commercial product and enabled us to offer another treatment option to UCD community. With the acquisition, we assumed a number of ex-U.S. distribution agreements for BUPHENYL extending on our commercial footprint internationally.

In our first year as a commercial company with partial year sales for both RAVICTI and BUPHENYL, we have reported net revenue of $42.2 million, an impressive run rate for this ultra orphan patient population. Importantly, we have been strategic in our approach to commercialization maintaining a small field force with efficient operations that we anticipate will continue to support a profitable UCD franchise. The fourth quarter is the second quarter in a row of positive cash flow from operations, which demonstrates the efficiency of the UCD business.

In addition to the progress in the commercial front, we made important progress in development in 2013 specifically related to our efforts in advancing towards a Phase 3 trial in hepatic encephalopathy, or HE, a complication of advanced liver disease. In September, we submitted the FDA, a package that outlined our planned approach for measuring HE events in our pivotal clinical trial of glycerol phenylbutyrate. In the fourth quarter, we had interactions with the FDA on our submission and believe we are tracking toward initiation of our Phase 3 trial for HE by year end 2014 or early 2015. We are excited about our HE program and its potential to address a growing market.

With that, I will turn the call over to Christine to provide a commercial update. Christine?

Christine Nash - Chief Commercial Officer

Thanks Don. Our commercial progress in RAVICTI uptake was better than we expected in our launch year due to our success in rapidly securing broad reimbursement coverage and making RAVICTI available to patients eagerly seeking an alternative to sodium phenylbutyrate, the previous standard of care. As Don mentioned, total net sales for our UCD portfolio in 2013 were $42.2 million, $31.2 million of which were from RAVICTI. For the fourth quarter specifically total net sales for our UCD portfolio were $18.6 million, which includes $200,000 deduction for copay assistance. RAVICTI sales were $14.3 million or 46% increase over third quarter 2013. This increase reflects a stronger than anticipated referral rate in Q4. In addition, December sales were particularly strong as some patients received their early January refills in advance of the New Year’s holiday.

BUPHENYL sales in the fourth quarter were $4.5 million, $2.3 million of which came from the U.S. market. As expected Q4 BUPHENYL sales were lower than Q3 as U.S. patients continued to transition from BUPHENYL to RAVICTI. Additionally, our Q4 stocking orders ex-U.S. were smaller than those we fulfilled in Q3. The bulk stock purchases by our EU distributor are typically lumpy. We expect the next significant order will occur in Q2 2014.

As I have done in the past let me provide you with additional detail on how we are doing in the various UCD market segments. We completed the transition of 77 U.S. RAVICTI clinical trial patients to commercial drug programs in Q3 of 2013. Since then our sales and marketing efforts have been primarily focused on facilitating the transition of eligible patients who were on BUPHENYL at the time of RAVICTI’s launch. We estimate there were approximately 525 patients in the U.S. on BUPHENYL when RAVICTI was made available. Our market research indicates that almost 45% of these patients who have seen their physicians since March have elected to switch to RAVICTI.

As a reminder on average UCD patients see their physicians only one to two times per year. We continue to grow the RAVICTI opportunity through uptake in phenylbutyrate naïve patients which includes newly diagnosed patients and diagnosed patients not previously on BUPHENYL. We estimate there were approximately 525 patients diagnosed but not on BUPHENYL at the time RAVICTI was launched and that approximately 35 new patients in the U.S. go on to approve treatments each year. We continue to be pleased at how RAVICTI has been embraced by this population which currently represents approximately 20% of our new scripts to-date.

Product awareness and experience with RAVICTI continues to expand with UCD community. During the quarter 23 physicians wrote their first RAVICTI prescription and we have now received at least one prescription for more than 80% of our target accounts. We estimate that the healthcare providers at these institutions care for almost 90% of the patients being treated for UCD with an FDA approved medication. As a reminder we achieved outstanding reimbursement coverage for RAVICTI within months of its launch. Today we estimate that approximately 95% of privately insured and 94% of Medicaid insured lives in the U.S. have coverage for RAVICTI. Patient copay requirements remain low with approximately 67% of our patients paying $10 or less per month for their RAVICTI prescription, 95% paying $100 or less and no patient paying more than $250. Since launch to our knowledge no patient had had to go without access to RAVICTI due to financial burden.

Looking at fourth quarter RAVICTI revenue in more detail approximately 9% of sales were from new prescriptions and 91% came from refill orders. In calendar year 2013 approximately 53% of paid prescriptions were covered by private insurers, 35% by Medicaid and 12% by Medicare and TRICARE. 26% of RAVICTI volume was reimbursed by Medicaid. As a reminder, based on historic BUPHENYL data, we believe the volume of RAVICTI reimbursed by Medicaid will increase to approximately 40% over time not taking into account any impact of the Affordable Care Act. Importantly, the rate of discontinuations for RAVICTI has less than 10% consistent with our experience in the clinical trial setting.

Turning now to BUPHENYL, approximately 40% of BUPHENYL volume sold in the U.S. in Q4 was in the powder form. Generic incursion into the BUPHENYL powder market appears to have stabilized with approximately 50% of the sodium phenylbutyrate powder volume in the U.S. being sold as generic. This is consistent with what we reported in Q3. Interestingly, data indicates that approximately 40% of claims for BUPHENYL powder are now reimbursed by Medicaid versus 60% at the time of RAVICTI’s launch. This suggests that the transition from branded to generic BUPHENYL is skewed towards Medicaid patients. We have seen no impact of the generic powder on BUPHENYL tablet sales or on RAVICTI and we are not aware of any physician writing a prescription requesting generic BUPHENYL. Ex-U.S. sales of BUPHENYL remained strong in Q4, particularly in Canada as well as in the EU, where the impact of case-masked generic sodium phenylbutyrate has been minimal to-date.

In summary, the RAVICTI launch continues to go well as we have successfully transitioned our clinical trial patients and those BUPHENYL patients most in need of an alternative UCD treatment and have also made headway penetrating the phenylbutyrate-naïve patient segment. We have built a strong foundation of reimbursement in operational excellence, which will continue to leverage in 2014 as we pursue our goal of making RAVICTI, a standard of care in treating UCD. Our team continues to emphasize the importance of tight ammonia control and the efficacy and tolerability benefits of RAVICTI offers in pursuit of that goal.

As we have outlined previously, we expect a slower, but steady adoption curve as we seek to both capture the remaining share of the existing market and expand the market through uptake in patients, not previously on BUPHENYL. While RAVICTI offers steady growth, we anticipate continued contraction of the BUPHENYL business, primarily through RAVICTI conversions and to a lesser extent from generic competition in the U.S. and abroad. Consistent with what we have said since launch, we plan to provide 2014 revenue guidance on our next call.

Now, I’d like to turn the call over to Bruce for development updates.

Bruce Scharschmidt - Chief Medical Officer

Thanks, Christine. We are pleased with the information, which continues to emerge from our UCD clinical trials. We and our investigators have three poster presentations at the upcoming March meeting of the Society for Inherited Metabolic Disorders, which includes information pertaining to patient experiences with BUPHENYL as compared with RAVICTI. In addition, a manuscript describing our pooled short and long-term pediatric data was recently accepted for publication in Molecular Genetics and Metabolism. We are also pleased that our Phase 2 HE results just appeared in Hepatology, a journal of the American Association for the Study of Liver Diseases. As many of you know, the randomized double-blind placebo-controlled trial met its primary endpoint. That is significantly fewer patients, randomized to glycerol phenylbutyrate experienced HE events as compared with placebo. The study also met additional key endpoints in putting time to first HE event, total HE events and symptomatic days.

Among the subgroup of patients not taking Rifaximin at baseline, a highly significant approximately 70% reduction in risk of an HE event and the approximately 75% reduction in total HE events compares favorably to that reported in the Rifaximin pivotal study. There was no difference in the proportion of patients with events or total events among patients taking Rifaximin at baseline, which we believe the skew towards the sickest patient group, although there was evidence of incremental benefit in terms of hospitalizations. We anticipate that the Phase 3 study will consist of a 24-week randomized double-blind treatment period followed by a 24-week open-label safety extension. Pharmacoeconomics represent an important consideration and we’ll be addressing not only patients with events in hospitalizations, but also of total events and total hospitalizations.

As Don mentioned, we are also satisfied with the progress and our dialogue with FDA, particularly in regard to modifying and operationalizing the West Haven for identifying HE events. While there is more work to be done as it relates from corporate and caregiver input and we continue to project the steady start later this year or early next.

Finally, we would like to thank the patients who participated in our HE study, as well as the steering committee, which included doctors Don Rockey, John Vierling, Robert Brown, Marwan Ghabril and Parvez Mantry.

With that, I will turn the call over to Jeff for a financial update.

Jeff Farrow - Chief Financial Officer

Thanks, Bruce. As both Don and Christine outlined, this has been a terrific year for Hyperion. And I am pleased to provide the financial update for the fourth quarter and full year 2013 and then move on to our 2014 financial outlook. Today, we reported net GAAP income of $16.6 million or $0.80 per diluted share for the fiscal year compared to a net loss of $32.3 million or a net loss of $4.45 per share for the same period in 2012. As a reminder, 2013 included a non-cash, non-recurring gain of $31.2 million in the second quarter from the acquisition of BUPHENYL.

For the fourth quarter, we reported net GAAP income of $500,000 or net income of $0.02 per diluted share compared with a net loss of $8.3 million or net loss of $0.50 per diluted share for the same period of 2012. Adjusted net income for the three months ended December 31, 2013 was $4.1 million or $0.19 per diluted share compared with an adjusted net loss of $7.9 million or a net loss of $0.48 per diluted share for the corresponding period in the prior year. Our total fourth quarter GAAP net revenue was $18.6 million and included $14.3 million in net sales from RAVICTI and $4.5 million in net sales from BUPHENYL offset slightly by $200,000 in copayment assistance for both the products.

Given the strength of sales in December due to some patients receiving their early January refills prior to New Year’s holiday and given that February is a short month, some of our patients may refill only two times in the first quarter of 2014. As such, we want to manage expectations for the first quarter of 2014. With that said, we do expect any quarterly rebalancing to fully occur in the first quarter and the revenue rate to resume its pace by second quarter. As a reminder, we do recognize RAVICTI revenue using a sell-through method given the early stage of this product’s introduction. This means we book revenue when the drug is received by the patient following separate from the specialty pharmacy. For BUPHENYL, we recognize revenue using the sell-in method, which means that we recognize revenue when the drug is received by the distributor. We can use this method of revenue recognition as BUPHENYL has a more established sales history.

From an operating expense perspective, GAAP research and development expenses for the fourth quarter of 2013 and 2012 were flat at $3.1 million. GAAP selling, general and administration expenses for the fourth quarter 2013 were $10.1 million compared to $4.8 million for the same period in 2012. The increase was primarily due to an increase in expenses related to the launch and commercialization of RAVICTI as well as new hires and increases in consulting fees. Due to our follow-on offering in March of 2013 in our cash flows from operations, we ended the year with a strong balance sheet. Cash, cash equivalents and investments at the end of the year were $118.1 million, which represents an increase of $9.5 million from the third quarter of 2013.

Based upon our current plan, we continue to believe our cash is sufficient to support our operations through our planned pivotal trial for hepatic encephalopathy. However, should the business development opportunity arise, we will likely need additional cash resources as we expand our platform. In addition, we anticipate the near-term future GAAP quarters may not be profitable as we ramp up research and development spend, including investments related to the regulatory activities associated with seeking approval outside the United States, as well as planned activities associated with preparing for and executing on our Phase 3 program in HE. Cost of sales were $2.8 million and $6.7 million for the quarter and full year respectively. Total adjusted operating expenses for the quarter and full year were $12 million and $41.5 million respectively in line with our expectations and previously provided guidance.

Moving on to outlook for 2014 operating expense, we anticipate operating expenses for the year, excluding amortization of the BUPHENYL intangible asset and stock compensation, we will be in the range of $52 million to $64 million. In addition, we expect non-cash amortization expense and stock-based compensation expenses to be approximately $4 million to $5 million and $7.5 million to $8 million respectively.

With that, I will turn the call over to Don for some closing remarks. Don?

Don Santel - Chief Executive Officer

Thank you, Jeff. In closing, I’d like to acknowledge the many people who have made our progress possible, our dedicated employees and investors, the treating physicians, and most importantly, our UCD patients and their families. Looking forward into 2014, we’ve got a number of goals that we set continue our momentum and prepare organization for the next stage of growth. First and foremost, we’ll continue to support UCD patients and expand penetration of RAVICTI in the U.S. market.

Additionally, we’re looking to expand the geographic availability of RAVICTI by pursuing ex-U.S. market approvals. We plan to file an MAA in Europe in the first half of this year. In addition, we plan to initiate additional post-marketing studies. Secondly, we anticipate working through our interactions with the FDA to allow for the initiation of our pivotal Phase 3 program in HE. We expect the first patient to be enrolled late this year or early next. And lastly, we’ll be looking to build shareholder value through end licensing or M&A activity that will give us opportunities to expand our pipeline. I look forward to keeping you apprised of our progress.

We’d now like to open the call to questions. Operator?

Question-and-Answer Session

Operator

(Operator Instructions) Our first question comes from the line of Joseph Schwartz of Leerink Swann. Your line is open. Please go ahead.

Joseph Schwartz – Leerink Swann

Great, thanks very much. I was wondering if you could just talk a little bit more about your interactions with the FDA to-date and the next steps, things that you think you might need to accomplish with them before you will be in a position to start the Phase 3 in HE?

Don Santel

Sure, Joe. Thanks for the question. Bruce Scharschmidt, our Chief Medical Officer, will respond.

Bruce Scharschmidt

Hi, Joe. So we’ve characterized the interactions as really quite positive, as Don mentioned, we were encouraged by the feedback regarding the modification of the West Haven identifying HE events. I alluded in the script to the incorporation of the caregiver. From a medical standpoint, as you would appreciate, unless the patient lands in the hospital, physicians depend a lot on input from the family to decide whether a patient is experiencing HE. And so it goes in a clinical trial, the investigator requires an input from caregiver. This has really been baked into our plan from the start. If you were at the Salix Advisory Panel Meeting in February of 2010, recall the FDA expressed concern about the adjudication of end points where the input is from the caregiver. So at the same time, we’ve been working on the HE rating instrument, a modification of the West Haven, we’ve also been working on caregiver input. The steps that remain to be done include making sure that the language is something that’s familiar to a layperson, that it can be effectively operationalized. Reaching conclusions on a final protocol and all of that we anticipate – continue to anticipate will enable Phase 3 start getting enrollment later this year, early next year. Recall this is the division we have worked with for quite a while in getting the drug approved for the UCD indication.

Joseph Schwartz - Leerink Swann

Right. And then how are you thinking that you will need to train the sites in order to capture the detailed data. It seems like it’s going to be pretty important in order to capture everything as precisely as possible as well and so, then, do you think there will be any extra training required in order to ensure that now the investigators will capture all the information that you’ve worked so hard to try to operationalize correctly?

Bruce Scharschmidt

No, we don’t think so, I mean, site training is always critical and we spend a lot of time doing that for all of our trials, including the HE Phase 2. I think one point we may have discussed before which is important is that the grading really focuses on what physicians use and practice. The direction we are taking is consistent with current professional guidance that focuses on disorientation to time, to place, to person, level of consciousness. Having visited scores of sites worldwide, this is what physicians actually use. So, absolutely training is important. But we’re really quite happy with the instrument we’re headed towards in terms of its utility in Phase 3.

Joseph Schwartz - Leerink Swann

Okay, great. And then, may be one on UCD while I have you, Bruce. And would you be able to give us a sense of what kinds of additional post-marketing studies you envision there?

Bruce Scharschmidt

Sure. We may have talked about that briefly before. But as it pertains to urea cycle disorders, one of our post-marketing requirements and actually a huge opportunity and need for the field is the study of patients under the age of two. All of our investigators realize that’s currently sort of a blind spot in terms of how patients fare early in life. We’re still looking to reach closure with FDA on the design, but we anticipate that will be started later this year. And we’re certainly seeing a lot of enthusiasm for that. We anticipate that will be largely a U.S. study, may also recall that one of our post-marketing requirements has to do with treating phenylbutyrate-naïve patients. The vast majority of patients in our trials had switched from BUPHENYL. Again, waiting to finalize that with the FDA, but we see that as an opportunity to begin to engage European physicians and assimilate all the information pertaining to standard of care. And the interaction not only with U.S., but with European metabolic geneticists has been very good and really along the lines that we had with all the folks in U.S.

Joseph Schwartz - Leerink Swann

Excellent. Thank you for taking my questions.

Bruce Scharschmidt

Sure.

Don Santel

Thanks, Joe.

Operator

Thank you. Our next question comes from the line of Phil Nadeau of Cowen and Company. Your line is open. Please go ahead.

Phil Nadeau – Cowen and Company

Good afternoon. Thanks for taking my questions, as well. Jeff, I wanted to follow-up on your comments about Q4 versus Q1 a little bit more, just so I understand the trends. Just give us a sense for how much of Q4 was due to maybe somebody stocking in an extra vial versus – or an extra bottle versus how much you think that could be done in Q1?

Jeff Farrow

Actually, the behavior asking about is probably better addressed by Christine Nash, our Chief Commercial Officer, Phil. So, let me turn it over to Christine. If Jeff needs to add anything at the end, he will.

Christine Nash

Hi, Phil. So, in terms of what we saw in Q4, couple of things to think about on a forward going basis, one if you look at the number of calendar days between obviously Q4 and Q1, you’ve got a short quarter coming up. So that’s what we were guiding to in terms of the short month of February, 92 days in Q4, 90 days in Q1, obviously with the holiday falling on the first of the New Year, we had patients who will do – would have been due on the first, might have been due on the second, getting their refills on the 29th, 30th, and 31st of December. So, you think about how you balance between the two quarters on a forward going basis in terms of looking at the trajectory of the business. And I also commented in my script, we had a very strong Q4 in terms of our referral rate so, we think we kind of shifted the shape of the adoption curve a bit versus what we had anticipated so we are – we’re talking about a slower referral rate as we move into 2014 in a steady rate of adoption as we talked about with patients coming in for their annual or semiannual appointments.

Phil Nadeau – Cowen and Company

Okay. For some other orphan disorder companies we’ve seen in the past, Q1 is inordinately soft. And they blame that typically on insurance resets where patients who have new insurance starting on January 1 have to go through new pre-op procedures and that can push out the receipt of a scrip or a dose or two as well – a refill or two as well. Is that something that you expect? Is that something that could also impact RAVICTI, or is your reimbursement such that you don’t think there’s going to be an issue at all?

Christine Nash

We certainly feel very good that about what we’ve been able to do with regard to reimbursement. We did an outreach effort in Q4 of last year to our call center to help to make sure that we had patients ready to go when their deductibles, copayments, reset at Q1, and also they went through any insurance changes. So that should have a very minor impact on our Q1.

Phil Nadeau – Cowen and Company

Okay. And Christine, in your prepared remarks, I apologize. I think I missed something. You said – you were talking about the proportion of BUPHENYL patients who either have come back to see their physician or have switched to RAVICTI. I just missed the figure that you gave in your prepared remarks?

Christine Nash

Sure, Phil. So, for patients who have come in since RAVICTI was launched on March 1st, and this is obviously through the end of Q4. We estimate that almost 45% of them and made a decision to switch from BUPHENYL to RAVICTI. Now, bear in mind that patients typically see their patients – their physician, pardon me – one to two times per year so, we haven’t seen all of the – we don’t believe that all the patients have yet gone into clinic as of the end of the calendar year.

Don Santel

Phil, you might recall, that’s a number is improved overtime when we first reported about 30%, second time, it reported at about 40%. And so, now you see an improvement here and who knows what the rate will be in the future, but I think it speaks to the increasing comfort among physicians, as well as patients telling others about their positive experiences with RAVICTI.

Phil Nadeau – Cowen and Company

Yes, that is – that’s encouraging. And Bruce, one last one for you, in your prepared remarks, you alluded to the fact that the effect of RAVICTI in those patients on Rifaximin at baseline was somewhat less in the Phase 2 trial. What’s your strategy for handling that in Phase 3? Are you – do you still plan to allow Rifaximin patients into Phase 3? Will you stratify or will you limit the enrollment, kind of what’s your strategy for dealing with that in the pivotal study?

Bruce Scharschmidt

Although, certainly stratify, that will be one of the most important things we’ll stratify enrollment, but we also anticipate we’ll be stratifying for the – for severely ill patients, child disease and say account disproportionately to adverse events. I think one thing we did in Phase 2, we will not do in Phase 3 and Phase 2 we’ve required – we put an extra requirement on the Rifaximin patients. Recall that our enrollment was done concomitant with the line so, we were getting early adapters, the sick group, to begin with. But beyond that, we required they had been on Rifaximin for at least a month and failed. So we got a very skewed population at Phase 2, and it’s not just a supposition. We know that based on the ammonia values. You can find those in Table 2 in hepatology. So in Phase 3, we’ll be taking all comers, including Rifaximin, no special requirements. We anticipate that the Rifaximin population will be much more representative of what’s out there and if I were to guess expected the Rifaximin patients in the future will more closely resemble the Lactulose patients of the past.

Phil Nadeau – Cowen and Company

Okay, that’s very helpful. Thank you.

Bruce Scharschmidt

Sure.

Don Santel

Thanks, Phil.

Operator

Thank you. (Operator Instructions) Our next question comes from the line of Liisa Bayko of JMP Securities. Your line is open. Please go ahead.

Liisa Bayko – JMP Securities

Hey, you guys, and congratulations on a good quarter.

Don Santel

Thank you, Liisa.

Liisa Bayko – JMP Securities

I wanted to ask sort of a strategic question. You’ve mentioned about possibly needing to brief up your cash position and should you be acquisitive and – or have – see any business development opportunities, what kind of business development opportunities are sort of – would meet your criteria? Just I’m trying to think about if you were to do something with this via the commercial stage product or via orphan?

Don Santel

We certainly as we think we’ve built up an expertise in the commercial efficiencies of orphan. It certainly would not have to be an ultra-orphan sort of call like we enjoy right now with urea cycle disorders where six reps cover the country. The other expertise we built up through Christine’s organization that we’re extremely proud of it, I think an exquisite payer function. And we understand during high stakes presentations with payers, be a public of product. How to put force the value proposition and that certainly is something that’s common to all orphan areas as it relates to therapeutics. Obviously, we have an expertise in hepatology, thanks largely to Dr. Scharschmidt’s significant experience in the field over many decades. We certainly do find a number of people come to us with those sorts of options. As we look at them not all of them are orphan, but heart certainly lies with our – with the orphan area. As it relates to commercial assets, we’ve certainly look at some. We’ll continue to in the future.

As you would expect, a lot of those are little overwrought in terms of option situations. And pure cash options or stock options, whatever form they take, things that are little overwrought our less interest to us, we have tried to focus our energies on things where there are some sort of development arbitrage, if you will, or regulatory arbitrage things that have been perhaps mishandled in the past where we think we’ve got an edge on how to improve programs going forward. We certainly want to see proof of principle for whatever comes next if we get the pipeline a little bit enhanced relative to where it is today. You might see us go a little bit earlier stage. But for now, when we do something look forward to be Phase 2 proof of principle or later and I would give an edge to orphan over something broader in say hepatology for whatever comes next. Again, we can never say when something’s going to occur, if something will occur. I’m encouraged by the deal flow we have got right now and the things that we are working on, but in my experience we don’t know they’re done until the ink is dry and that’s when the street will find out.

Liisa Bayko – JMP Securities

Fair enough. With respect to RAVICTI in other territories, you mentioned filing the MAA this year. That will obviously be a 2015 event. But in the meantime, are there any other geographic territories that you might pursue?

Christine Nash

Liisa, this is Christine. We’ve been looking carefully at our ex-U.S. market as you know, we inherited a number of distribution agreements around the world, EU, Canada, select territories throughout Asia, as example – when we acquired BUPHENYL from Medicis. We are in the process right now of identifying what markets make sense to pursue from a regulatory signing strategy versus those that they make more sense to pursue via a named patient approach and you could expect to hear more from us on that in the coming quarters this year that one thing I will highlight is because (indiscernible) has an existing price in the EU marketplace and many other geographies around the world, we anticipate that the RAVICTI opportunity will be tethered. And as a reminder for example, the RAVICTI price – sorry the BUPHENYL price in the European Union is approximately a third of what the BUPHENYL price here is in U.S. So, we have – or it’s been a quite cautious in guiding to substantial upside force in the ex-U.S. markets.

Liisa Bayko - JMP Securities

Okay, good. And then, sort of just one technical question, can you remind us what BUPHENYL ex-U.S. sales were? Thanks.

Christine Nash

They historically have run $8 million. And I’m trying to recall this year, to be honest what the total run rate, Jeff, do you have that figure available?

Jeff Farrow

So for BUPHENYL ex-U.S. sales for Q4 was about $2.1 million.

Liisa Bayko – JMP Securities

Okay, wonderful.

Don Santel

Thanks, Liisa.

Operator

Thank you. And with no further questions in queue, I’d like to turn the conference back over to Mr. Don Santel, CEO for closing remarks.

Don Santel - Chief Executive Officer

I want to thank everyone for joining us today. We’re obviously extremely pleased with our results from 2013. And we look forward to keeping you apprised of our progress throughout the rest of the year. Thanks very much for joining us.

Operator

Ladies and gentlemen, thank you for your participation in today’s conference. This does conclude the program and you may all disconnect. Have a great rest of your day.

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