Keryx Biopharmaceuticals' (KERX) CEO Ron Bentsur on Q1 2014 Results - Earnings Call Transcript

Call Start: 08:00

Call End: 08:36

Keryx Biopharmaceuticals (NASDAQ:KERX)

Q1 2014 Earnings Conference Call

May 8, 2014 08:00 AM ET

Executives

Amy Sullivan - VP, Corporate Development

Ron Bentsur - CEO

James Oliviero - CFO

Greg Madison - COO

Analysts

Matt Kaplan - Ladenburg Thalmann

Corey Kasimov - JP Morgan

Mike King - JMP Securities

Joe Pantginis - Roth Capital

Mario Corso - Mizuho Securities

Stephen Willey - Stifel

Graig Suvannavejh - MLV

Operator

Greetings and welcome to the Keryx Biopharmaceuticals Investor Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host Amy Sullivan, Vice President of Corporate Development and Public Affairs for Keryx Biopharmaceuticals Inc. Thank you, you may begin.

Amy Sullivan

Thank you, Christine. This is Amy Sullivan, VP of Corporate Development and Public Affairs at Keryx. Good morning and welcome to the Keryx Biopharmaceuticals conference call to discuss our first quarter 2014 financial results and the progress that we have made to prepare for the commercialization of Zerenex, pending potential approval on the PDUFA action goal date which is June 7th.

Before we beginning the call, please be advised that various remarks that we make about our future expectations, plans and prospects constitute forward-looking statements for purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. Keryx cautions that these forward-looking statements are subject to risks and uncertainties that may cause our actual results to differ materially from those indicated.

We encourage you to review all of the risk factors associated with our business as filed in our 2013 10-K and subsequent SEC filing. This conference call is being recorded for audio rebroadcast on Keryx’s website at www.keryx.com, where it will be available for the next 15 days. All participants on this call will be in listen-only mode.

The agenda for our call will be as follows; Ron Bentsur, our Chief Executive Officer will have update on the NDA process; James Oliviero, our Chief Financial Officer will provide a brief overview of our financial results for the first quarter; Greg Madison, our Chief Operating Officer will provide an update on our launch preparation; and finally Ron will provide a general business update and then open the call for Q&A.

I will now turn the call over to Ron.

Ron Bentsur

Thank you, Amy, and good morning to those of you that have joined us on the call. Before we dive into the call, let me first update you on the progress on the review of the NDA which I’m sure is top of mind for all of you. With just about a month ago until our PDUFA action goal date, we remain in active dialogue with the FDA over the course of the review, we have answered a number of clarification questions and concluded a new analysis and submitted additional data including drug-drug interaction data and more recently CMC related data.

At this point, there is still some outstanding CMC issues that we don’t believe are plant related. We’re working to resolve these issues quickly, but as we’re all aware there are no guarantees. I’ll now turn the call over to James.

James Oliviero

Thanks, Ron, and good morning to those of you who joined us for the call. We began 2014 with two infusions of cash. In January we completed an underwritten public offering of common stock which provided us with net proceeds of approximately $107.6 million, and in February we received a $10 million milestone payment from Japan Tobacco and Torii Pharmaceutical, our Japanese partner related to their marketing approval of ferric citrate in Japan. We ended the first quarter with cash, cash equivalent, short term investments and interest receivable of $155.1 million as compared to $55.7 million at December 31, 2013.

We reported a net loss for the first quarter ended March 31, 2014, of $13.5 million or $0.15 per share compared to a net loss of $2.1 million or $0.03 per share for the first quarter of 2013. In January 2014, we recorded license revenue of $10 million for the milestone payment received from our Japanese partner for Zerenex JT - Torii as discussed earlier. For the first quarter 2014, other research and development expenses increased by $9.3 million, as compared to the first quarter of 2013, related to the Company’s Zerenex program, including costs associated with the manufacturing of pre-launch inventory and capacity expansion and the preparation and submission of our marketing authorization application to the European Medicines Agency.

The three months ended March 31, 2014, also included a $2 million onetime milestone payment to the license of Zerenex related to the JT - Torii’s achievement of the Japanese marketing approval milestone in January 2014. Other general and administrative expenses during the first quarter of 2014 increased by $3.2 million, as compared to the first quarter of 2013, primarily related to pre-commercial activities related to Zerenex. The net loss for the first quarter ended March 31, 2014, included $2.6 million of non-cash compensation expense related to equity incentive grants.

I’ll now turn the call over to Greg for an update on our pre-launch work for Zerenex.

Greg Madison

Great. Thanks, James. Through Keryx we are focused to bring products to market that can provide unique and meaningful advantage to patients with renal disease and their healthcare providers. The renal community is in underserved patient population. We’re hopeful that Zerenex will provide a new option for patients with elevated phosphorous levels. It’s a pleasure update all of you today on the progress we’re making in preparation to a potential launch of Zerenex.

As a reminder, we’re planning for launch late in the third quarter pending FDA approval. While there is a lot of work to do, we have made a great deal of progress. With that said, we only have one shot at launch and we’re going to do this right.

So when you think about the major components of a launch, there are four keys areas. Key opinion leader development, marketing, sales, and market access. Let me walk you through each of these and fill you on the work that we’re doing to ensure a successful launch. The first component is ensuring the key opinion leaders are engaged. We have a strong experienced payor access team in place that has been gathering feedback from key opinion leaders. Through activity such as advisory boards, we’re getting a good sense of how these KOLs think about Zerenex and how they see it fitting to the treatment paradigm in their practices.

National Kidney Foundation had a Spring Clinical Meeting in late April and it was a great meeting for us. We believe that the nephrology community is very excited about the potential for Zerenex, which is evidenced by the number of posters and presentations related to Zenerex at the Congress.

In addition to the data demonstrating the clinical profile of the drug, the potential pharmacoeconomic benefits were covered by three posters; one that looked at potential benefits of reduced IV iron and ESA using dialysis patients, another that compared the potential savings in hospitalization costs; and third that evaluated the pure cost savings, as well as the potential ancillary savings through a net budget impact model.

All of these analysis showed a statically significant cost savings in Zerenex treated patients. Any approval, if even a fraction of these savings are realized by dialysis organizations could give us a real competitive advantage in the marketplace.

Along with several data presentations and a Keryx sponsored symposia, the meeting also give us the opportunity to host an advisory board with KOLs and hear from them their thinking about Zerenex in light of the data presented in the meeting. The insights from this group including our feedback on patient needs will inform our brand strategy.

On the marketing front, we are in the midst of developing our brand plan. This is basically our playbook and it is quite comprehensive. It includes developing our core positioning, the brand identity and key promotional messages. These elements will form the foundation of our promotional campaign. This process starts with positioning where we’ll look at the brand attributes, the competitive landscape and key market trends to establish three or four positioning concepts that truly differentiate Zerenex and fulfill a need in the marketplace.

We then conduct extensive market research because at the end of the day, we want to go with a concept that will resonate faster with our customers. After market research we will take any feedback and make any necessary adjustments. But even then this isn’t finished, as we’ll have to take another close look once we have a final label and see if there are any other adjustments that need to be made. At that point, we can finalize materials and submit them down to the office of Prescription Drug Promotion or OPDP for review, which is a process that can take up to 45 days to receive feedback.

This final feedback is critical and at this point, we will all of our launch materials, send them off production and get them in the hands of our sales team. Speaking of sales, sales and marketing absolutely go hand-in-hand. Unless you’ve done it before, it’s actually easy to underestimate the work that goes into getting a sale force fully prepared and up and running. Things like accessing the targets and allowing territories who can determine your appropriate size of the sales force, the development of sales training tools, the actual hiring to any of the sales teams and putting the necessary infrastructure and systems in place to analyze the progress. The commercial operations team which we now had in place is responsible for ensuring that everything is running smoothly and our sales roughly have all the tools they need to be efficient and effective in this roles.

If you have the best sales and marketing, but patients don’t have access to your drug, you will not have a successful launch. We have a talented experienced care access team in place, that understands this pale landscape. This team knows which plans both in the commercial side and Medicare side have a majority of dialysis patients is now among other things putting together a calendar of upcoming P&T committees so we can determine which plans will cover us on Day 1 and those that will roll out later in the launch.

Additionally, we’ll be looking at optimal positioning on the formularies and also establishing patient assistance programs, all of which will help us to crystallize our pricing and contracting strategy. As we think about the commercial launch, we will focus on nephrologists who are seeing high volumes of patients in our high prescribers possibly binders.

With any launch there’s a natural evolution of progression that occurs of each individual doctor from trial to adoption to efficacy. So in thinking about the potential launch trajectory for Zerenex, the curve will be impacted by the typical evolution I just described, as well as the timing of pair coverage especially in the age of Medicare Part D. As with most launches, we would expect to start up gradually and over time build steady momentum. Favorable coverage decisions and additional data publications could help fuel such growth.

So while we have a great deal to accomplish in a short period of time, we have hired an exceptional team who have all done this before. With a majority of the key infrastructure now in place, I’m confident that all these important aspects of launch are on track for a potential late third quarter launch. I’ll look forward to updating on our progress.

And with that I’ll turn the call back over to, Ron.

Ron Bentsur

Thank you, Greg. Looking on the other aspects of our business, along with the very important work Greg and his team are doing to prepare us for the potential U.S. launch of Zerenex, we’re also working diligently on other important aspects of Keryx’s growth, geographic expansion and potential indication extension for Zerenex.

First, let’s talk about geographic expansion. We are very pleased in the first quarter that our Japanese partner, Japan Tobacco and Torii Pharmaceutical received manufacturing and marketing approval of ferric citrate in Japan, with the improvement of hyperphosphatemia in patients with chronic kidney disease, including both dialysis and non-dialysis dependent CKD.

In Japan, the product will be marketed as Riona and the launch in Japan is planned for next week. So going forward we will have an additional source of revenue, as we will be receiving royalties on net sales of Riona in Japan.

We also made progress in the first quarter in Europe, where our MAA was submitted and validated by the European medicines agency. The MAA seeks accrual of Zerenex as a treatment for hyperphosphatemia in patients with both dialysis and non-dialysis chronic kidney disease.

The review is ongoing and if reviewed on a standard timeline, we would expect the decisions by the EMA in mid-2015. On the clinical development side, at the National Kidney Foundation Conference the efficacy and safety data from our Phase 2 trial of Zerenex in non-dialysis dependent CKD patients was presented at the Late Breaking Oral Session. The data from this trial support entering Phase 3 in the U.S. for the treatment of iron deficiency anemia and pre-dialysis chronic kidney disease patients. We have now substantially finalized the trial design for a Phase 3 study to evaluate Zerenex for this new indication and plan to initiate this trial in the third quarter.

In addition, we have commenced a small pilot study in Israel, evaluating the dosing of Zerenex when given without food. We expect this pilot study will provide us with valuable information that can be used in potentially expanding the indication for Zerenex outside of chronic kidney disease for example as a potential treatment for iron deficiency anemia and inflammatory bowel disease patients.

Let me close the scripted portion of the call with brief remarks and then we’ll open it up for Q&A. The transformation that Keryx has undergone the past few months is impressive. We’re growing from a pure development organization towards an integrated commercial company and are pleased to say that we’ve been able to attract a very talented pool of employees to join us and we believe that the collective experience of the team bodes well for this important transition.

With that I’ll ask the operator to open the call for questions.

Question-And-Answer Session

Operator

Thank you. We will now be conducting a question-and-answer session. (Operator Instructions). Thank you. Our first question comes from the line of Matt Kaplan with Ladenburg Thalmann. Please proceed with your question.

Matt Kaplan - Ladenburg Thalmann

A question with respect to the commercial plans and organization, I guess. Could you comment a little bit on the structure of the sales team in terms of the number of sales folks that you plan to hire and to detail the product. And then secondly I guess the pharmacoeconomic data that we presented in (indiscernible) especially the impact on hospitalizations and reduction in hospitalization costs, could you talk a little bit about how that is being received? I guess in your conversations with KOLs and potential payers at this point.

Greg Madison

This is Greg and thanks for the question there. To talk about the first from a commercial strategy standpoint, we’re in the ballpark range of 50 or so representatives that we’re looking at right now. We’re fine tuning that adjustment as I mentioned in the prepared comments. So that can shift slightly but that’s a good number to start with. And that will allow us to cover those high prescribing nephrologists that we talked about that are writers [ph] a phosphate binders and get the good coverage we need.

As far as to your second question on the hospitalization data presented at the NKF, the interactions we had with KOLs at the post presentation the reduction was quite positive, means the 24% reduction in hospitalizations for Zerenex and they actually dollarize that figure using average Medicare costs in the poster and the feedback was great. So I think people are seeing that there’s a potential clinical benefit here and I think the pharmacoeconomic benefits that we presented at that meeting are just driving further and further interest in that potential demand.

Matt Kaplan - Ladenburg Thalmann

And then a couple of questions for Ron. In terms of the CKD non-dialysis dependent CKD Phase 3, could you - you’re I guess close to finalizing the Phase 3 design. Have your thoughts changed in terms of what’s going to take that in terms of size of that study and things like that? Could you give us any detail or update?

Ron Bentsur

No the thoughts really haven’t changed. We talked about it a little bit I think on the last call and fundamentally the design has not changed. We’re still talking about hemoglobin as an end point for iron deficiency anemia, we’re still talking about a three month treatment period with up to three month safety follow up and patient size of around 175, maybe 200 patients, something like that. So nothing really has changed on that front.

Matt Kaplan - Ladenburg Thalmann

And then just, could you give us some more detail you made in your opening statement, some comments in terms of your interactions and your dialog with the FDA and the NDA review about CMC related issues. Can you touch on that a little bit, what you’re referring too?

Ron Bentsur

Yes, I mean at this point obviously I can’t go on to specifics. It’s a live dialog with the FDA, it’s extremely sensitive. These are issues that we need to address and hopefully we can address them quickly. But I have to say that there are no guarantees on this front.

Operator

Thank you. Our next question comes from the line of Corey Kasimov with JP Morgan. Please proceed with your question.

Corey Kasimov - JP Morgan

Ron first of all a follow up on the CMC issues that you mentioned; you guys aren’t planning to launch the product even it’s approved in early June into what sounds like September. So it’s about three months. Safe to assume if there is a delay, you have to submit more data and it’s pushed back a few months that doesn’t really impact launch timing very much.

Ron Bentsur

Yes, so the plans from the launch from the get go was late third quarter. Obviously we certainly don’t -- we hope that there won’t be a delay that goes without saying. But if there happens to be a slight delay, hopefully that would not impact the launch.

Corey Kasimov - JP Morgan

Okay, and then with the bundle now out to at least 2024, just thinking about our models longer term, how -- what should we be assuming in your opinion about gross demand?

Ron Bentsur

I will ask Greg to address that.

Greg Madison

Yes, Cory, we haven’t really disclosed, I think what we should be thinking out there. What I would say with the bundle moving out, what it clearly does for us, it gives us a little bit more clarity and a little bit longer of a runway. So instead of having the reimbursement dynamics potentially change to 18 months in the launch, were enough to change our contracting strategy. What we developed as the get go will probably allow us to kind of build on that momentum from a long-term basis. So I think, I will just kind of stop there and not give into any specifics on actual gross to net numbers and things like that at this time.

Operator

Our next question comes from the line of Mike King with JMP Securities; please proceed with your questions.

Mike King - JMP Securities

Good morning guys, thanks for taking the questions. I think the [indiscernible] the CMC comment but Ron, can you run us through again what your formal remarks were with respect to the CMC. I recall you said, you made a comment about generating additional data and maybe I misheard that, but if you generated additional data and submit that additional data, is there any assurance that that won’t be seen as a major amendment and be viewed as a perhaps a Type II response to the NDA.

Ron Bentsur

During the review process, today if they have asked us to generate more data, not just on the CMC front but also on the drug-to-drug interaction front, we have submitted that data to both CMC and drug-to-drug interaction, we believe satisfactorily. There are still some outstanding CMC issues as far as we understand. And again we can provide no assurance that we can resolve those in timely fashion. Obviously that is our goal, and that’s what we’re hoping for. But we cannot provide any assurance on that front. As of right now we don’t have -- as far as we can tell, we do need to generate any more data. However, still some clarification issues that are required, and again we hope to resolve those, and whether or not those will require us to generate more data, remains to be seen, you don't know.

Mike King - JMP Securities

Right, well, I guess certainly looking at my concern would be whether this would -- whether the update would take that additional data as a reason to postpone the PDUFA.

Ron Bentsur

We don't know obviously, we’re hoping that we can resolve this in timely fashion. We do know, it’s to be determined.

Mike King - JMP Securities

Who is the API supplier for JT-Torii? And is it the same supplier for Torii, as for you?

Ron Bentsur

Yes, it’s the same supplier. And as I said before, we do not believe that this is plant related. I know that’s an issue that’s come up recently with some other companies.

Mike King - JMP Securities

Right, okay. Let me just ask a different question then, has the price been set in Japan, yet, and if so, was there any comment that you can provide for us on the -- what the pricing is in Japan?

Ron Bentsur

You might disagree, the price has been set in Japan and it’s a premium price, similar to what you see for the market leader over there which is [indiscernible] at this time and the Japanese team is preparing for launch later this month.

Mike King - JMP Securities

Greg, can you be more specific on the prices, price per day, price per pill, and how does it work out?

James Oliviero

Yes, Mike, it’s James, so if it’s converted into U.S. dollars, I think it’s about $1 per pill.

Mike King - JMP Securities

And that compares to [indiscernible] you're saying?

James Oliviero

I mean, if you convert it into -- those things are a lot less in Japan, it’s about -- here but if you convert it into what that would be here in the U.S., it’s similar pricing to the premium pricing you did here in the U.S. as well, so it’s comparable in that factor. What’s most important is, they are on par with the premium priced Fosrenol in Japan. So that was their goal, and they are happy to stay with you.

Operator

Our next question comes from the line of Joe Pantginis with Roth Capital. Please proceed with your question.

Joe Pantginis - Roth Capital

A lot of moving parts on financials, let me just focus on one other aspect. You are obviously putting in a lot of personnel and infrastructure and a lot of background activities in U.S., and you are talking about [indiscernible] filing as well. So maybe I can just transition that into a business development question, what your views are in Europe and ex-U.S.?

Greg Madison

Joe, this is Greg. As Ron said in the prepared remarks, we got the filing accepted, so we're kind of on the clock at this point in time, and we are currently undergoing kind of the market assessment of the European dialysis in CKD opportunity, to understand the patient population of reimbursement dynamics overall, so that we can make an internal decision of whether or not we’d like to attack potentially Europe on our own or look to partner that asset with somebody externally. Bottom line is that we’re undergoing the analysis now, be ready in a couple of months and we’re going to make the decision that will test drive both the company and the shareholder value in our business.

Joe Pantginis - Roth Capital

While you have been making those assessments would you say that there has been any ongoing discussions with the potential partners should you go that route?

Ron Bentsur

There are interested parties that have been ongoing discussions, so, but we have not made any final decisions yet and we’re still in our early stages of those discussions.

Operator

Our next question comes from the line of Mario Corso with Mizuho. Please proceed with your question.

Mario Corso - Mizuho Securities

A couple of things, just again to think about the CMC issues and the impact, I mean it sounds to me like these issues again maybe worst case push things out 90 days or so, but that’s in line with your launch planning. Can you say kind of relatedly is it safe to assume that labelling discussions have begun and that safety and efficacy fines are moving forward for approval there? And then secondarily I was wondering if maybe you could comment a little bit on how you see the general or specific Zerenex formulary process in the dialysis. And as I think there is some investor perception of maybe that’s dialysis is an impenetrable area.

Ron Bentsur

[Technical Difficulty] we’re in active dialog with the FDA right now and again we just can’t go into specifics right now but suffice to say that there is active dialog with the agency.

Greg Madison

This is Greg, I’ll handle the payer access question. Right now we are looking at the payer marketplace and a very good opportunity with the product such as the potential differentiated clinical benefits and pharmacoeconomic benefits that we do expect to get on the formularies of commercial and

[Technical Difficulty]

There have been injectable drugs that have had to do pilot programs to getting mass conversion, this is a different type of marketplace where each individual nephrologist will make their own clinical decisions but they can be influenced in some ways by those dialysis organizations you mentioned. So that being said we’re very interested in looking at the opportunities with dialysis companies that may want to approach us and do exactly what you said which is maybe conduct a pilot study, evaluate the clinical benefits and pharmacoeconomic benefits of this drug in their own patient population to make a determination of how things look "in the real world". That is not mutually exclusive from all the other aspects that we talked about from a launch perspective. So in other words it is not necessarily a gating item where we have to pilot before we can move forward, we fully expect that we can do this on a parallel path.

Mario Corso - Mizuho Securities

And what’s the stage of development discussion -- I am sorry about these potential pilots.

Ron Bentsur

Right now I’ll qualify it as early to mid-stage right now. I’ve personally been on board about 12 weeks, so we’ve already started some of those discussions and as I mentioned before, I think the poster presentations that we discussed earlier at the NKF meeting, certainly fuelled additional interests. So we’re in active dialog with a couple of folks.

Mario Corso - Mizuho Securities

My last question is just for James, just on accounting basis. For the Japanese royalties, what’s the recognition for that? Is it delayed by a quarter or how are we going to see that in the P&L?

James Oliviero

That’s a good question. We’re still establishing our policy on that because we are looking to see if we can get the estimates early enough to include in our financials in the same quarter if the net sales are recognized on the JP side. So when we know that we’ll set the policy and we can certainly be in touch on that. So it’s still to be determined whether it’s in the same quarter or if its one quarter lag based on the reporting to us.

Mario Corso - Mizuho Securities

Then you should have the policy by the end of -- by the next earnings update, right?

James Oliviero

Yes.

Operator

Our next question comes from the line of Stephen Willey with Stifel. Please proceed with your question.

Stephen Willey - Stifel

I guess I know you’ve been manufacturing some prelaunch inventory here and presumably that’s been done at risk so just kind of wondering, in light of some of the CMC feedback you are getting from FDA, if there is a chance that we might see some kind of write-off there just with respect to some of this initially manufacture material?

Unidentified Company Representative

I can’t say that the probability there is zero on that but again these are issues that we’re trying to sort out and we’re going to do obviously everything in our power to resolve them quickly, so these will not be gating items. But again going back to what I said before in the prepared remarks, there are no guarantees but we are going to do everything within our disposal to resolve these issues.

Unidentified Company Representative

And one comment, Steve, from a financial standpoint, there is no write-offs and this is all expense prior to approval, so there is no actual financial write-offs into this expense as it’s manufactured.

Stephen Willey - Stifel

Understood, and can you quantify the amount of [Technical Difficulty]?

Ron Bentsur

As we have said previously, a significant amount of the increase in research and development over the last couple of quarters is related to that prelaunch inventory. We haven’t gotten into the exact specifics on how much, but it is a great deal of the increase over the last few quarters.

Stephen Willey - Stifel

Okay and then just on the drug-drug interaction from which I think was also mentioned as an item of interest, is that just essentially kind of standardized stuff for which the box kind of wasn’t fully checked in the application process or was that an additional request by FDA

[Technical Difficulty]

Unidentified Company Representative

[Technical Difficulty]

Operator

Thank you. Ladies and gentlemen, due to time constrains our final question will come from the line of Graig Suvannavejh with MLV. Please proceed with your questions.

Graig Suvannavejh - MLV

Good morning gentlemen, thanks for taking my questions. I have just two. On the last call you were asked to kind of characterize your interactions with FDA and you said I think “I’m not doing anything alarming.” You know from my perspective and so maybe if you can just characterize, I don’t know if you want to characterize its alarming now, but when was kind of this change in kind of the feedback with FDA -- when does it transpire that kind of leads you to kind of where you are currently?

Ron Bentsur

For us, it’s also related to timing. We’re a month away from the PDUFA so everything becomes kind of more sensitive, more critical just in terms of timing and being able to fulfil clarification request and so on in timely fashion. I am not going to call alarming of course but again these are things that are to be determined and we believe that we’re going to make some good headways on those things, but there are no guarantees. There are no guarantees, we’re months away and this is a review process and it’s impossible for us to predict what’s going to happen over the next 30 days. But we do believe that these are things that we can address.

Graig Suvannavejh - MLV

Okay. Thank you for that and maybe I’ll a question just on your recent press release on opening at the Boston office. Just give us a sense of how we should think about that operations there in terms of the numbers of people, the organization just any comment you can do to make will be great? Thanks.

Greg Madison

Sure this is Greg, yes, we have announced the opening of the Boston office and I think as we had mentioned potentially on the earlier calls, we selected Boston as kind of an operational hub due to the really the talented people that reside up there, the exceptional talent fold that's there, it’s very-very easy to drop people and to build a necessary infrastructure in order to go from a developmental stage company towards a commercial stage company. So as you look at total numbers there, [indiscernible] people thus far in Boston on our way to copy around 40 or so will reside up in Boston just so have a headquarter based down here in New York, and then pending approval we’ll start to build out our field sales team later on in the third quarter.

Operator

Ladies and gentlemen, we have reached the end of the question-and-answer session in with that the conclusion of today’s call. You may disconnect your lines at this time. Thank you for you participation today and have a wonderful day.

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Keryx Biopharmaceuticals (KERX): Q1 EPS of -$0.15 misses by $0.05. Revenue of $10M (+42.9% Y/Y) beats by $0.09M.