Depomed's (DEPO) CEO Jim Schoeneck on Q4 2015 Results - Earnings Call Transcript

| About: Depomed Inc. (DEPO)

Depomed, Inc. (NASDAQ:DEPO)

Q4 2015 Results Earnings Conference Call

February 22, 2016 04:30 PM ET

Executives

Christopher Keenan - VP, Investor Relations

Jim Schoeneck - President and CEO

August Moretti - SVP and CFO

Matt Gosling - SVP and General Counsel

Scott Shively - Chief Commercial Officer

Jack Anders - VP, Finance

Analysts

Randall Stanicky - RBC Capital

Scott Henry - ROTH Capital

Neil Shelton - Morgan Stanley

Ami Fadia - UBS

Ken Trbovich - Janney

David Amsellem - Piper Jaffray

Jason Butler - JMP Securities

Irina Koffler - Mizuho

Chiara Russo - Cantor Fitzgerald

Operator

Good afternoon and welcome to the Depomed's Fourth Quarter and Year-end Fiscal 2015 Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions]. After today's presentation, there will be an opportunity to ask questions. [Operator Instructions]. Please note this event is being recorded.

I would now like to turn the conference over to Christopher Keenan, Vice President of Investor Relations. Please go ahead.

Christopher Keenan

Thank you, operator. Good afternoon, and welcome to our investor conference call to discuss the fourth quarter and full year 2015 financial results announced earlier today. The press release covering our earnings for this period is now available on the Investors page of our website at depomed.com. With me today are Jim Schoeneck, President and Chief Executive Officer of Depomed; August Moretti, Senior Vice President and Chief Financial Officer; Matt Gosling, Senior Vice President and General Counsel; Scott Shively, Chief Commercial Officer; Srini Rao, Chief Medical Officer; and Jack Anders, Vice President of Finance.

I would like to remind you that the matters discussed on this call contain forward-looking statements that involve risks and uncertainties, including those relating to commercialization of NUCYNTA, NUCYNTA ER, Gralise, Cambia, Lazanda and Zipsor, the company’s financial outlook for 2016, development, plans and expectations for cebranopadol and other statements that are not historical facts. Actual results may differ materially from the results predicted and recorded results should not be considered an indication of future performance. These and other risks are more fully described in the Risk Factors section and other sections of our quarterly reports on Form 10-Q and Annual Report on Form 10-K for the year ended December 31, 2015 that we expect to file later this week with the SEC.

Depomed disclaims any obligation to update or revise any forward-looking statements made on this call, as a result of new information or future developments. Depomed’s policy is to only provide financial guidance and guidance on corporate goals for the current fiscal year and to provide, update or reconfirm its guidance only by issuing a press release or filing updated guidance with the SEC in a publicly accessible document. References to current cash, cash equivalents and investments are based on the balances as of December 31, 2015. All guidance, including that related to the company’s expected total product revenues, operating expenses, adjusted non-GAAP earnings and non-adjusted EBITDA is as of today, February 22, 2016.

I'll now turn the call over to Jim Schoeneck.

Jim Schoeneck

Thank you, Chris and thank you all for joining us today. I'll start by reviewing our 2015 business achievements followed by some top line financial results, progress made on our NUCYNTA growth initiatives and finally steps we've taken to create additional shareholder value. Augie Moretti our CFO will then discuss our financial results and guidance before I provide closing comments and open the call to questions.

2015 was an exceptional and transformational year for Depomed, as the successful execution of our growth strategy now positions us as a leading pain and neurology focused company. We believe that we have one of the most highly differentiated pain portfolios in the U.S. and are poised to deliver results for many years.

Highlights of the year include; acquiring the U.S. rights to the NUCYNTA franchise from Janssen Pharmaceuticals, re-launching the products in June and demonstrating clear year-over-year growth in prescription volumes and market share under our ownership, securing a $575 million debt facility from Deerfield and Pharmakon to finance the closing of the NUCYNTA acquisition, allowing for a non-dilutive approach to funding this important deal. Settling our ANDA Litigation against Watson Laboratories surrounding Zipsor, securing marketing exclusivity for Zipsor until March 24, 2022; settling our appeal of the Gralise ANDA win over Actavis, ensuring market exclusivity for release until 2024.

Then late last year, acquiring cebranopadol from Grünenthal, a novel, first-in-class, late-stage analgesic in development for moderate to severe chronic nociceptive and neuropathic pain. And then earlier this month, announcing a favorable Markman claim construction ruling in the ongoing patent infringement case against the three NUCYNTA ANDA filers with Depomed prevailing on all disputed claims.

Turning to the financial results, we finished 2015 on very strong footing, as we reported another record quarter with outstanding top and bottom line results. We continue to build on our exceptional growth with a full year record sales of $342 million up 200% over the prior year and surpassing $111 million in quarterly product sales, an increase of 228% compared to the fourth quarter of 2014. This top line growth was led by our flagship NUCYNTA franchise and supported by solid performance across the rest of the portfolio. In December, we achieved all time record high monthly prescription volumes from NUCYNTA ER, Gralise, Cambia and Lazanda. These results reflect the focus, dedication and enthusiasm of our exceptional sales force, who are just now hitting their stride in selling our full line of products.

Full year and fourth quarter bottom line results were also strong. We achieved full year non-GAAP adjusted earnings of $48 million or $0.70 a share, an increase of approximately 200% compared to the full year 2014. Non-GAAP adjusted EBITDA for the full year was a $111 million. For the fourth quarter we achieved non-GAAP adjusted earnings of $0.16 a share and non-GAAP adjusted EBITDA of $39 million. Non-GAAP adjusted earnings for the full year and the fourth quarter both include non-cash reductions of $10 million or $0.13 a share related to the tax treatment of the cebranopadol transaction. We generated $60 million of cash in the quarter with a $25 million payment to Grünenthal for cebranopadol licensing fee made just before year end. And that gave us a yearend cash balance of $210 million.

In the three quarters since we closed the NUCYNTA acquisition we have produced over a $114 million in adjusted EBITDA. which annualizes to over a $157 million and we've increased cash by a $167 million before the cebranopadol upfront payment. This significant operating cash generation provides us with financial flexibility to pay down debt and to pursue additional acquisitions all with the goal of continuing to create substantial value for shareholders.

I'm pleased to report that the NUCYNTA re-launch is exceeding our expectations. Fourth quarter net sales for NUCYNTA were $68 million up 55% over the approximately $44 million generated by Janssen in the fourth quarter of 2014. Fourth quarter total NUCYNTA ER prescriptions reached an all time high of about 87,000 and during December achieved an all time weekly and monthly high surpassing the October 2012 records established by Janssen.

The cornerstone to our NUCYNTA growth strategy is the implementation of our four pillars of growth; promotion, positioning, patient access and proper dosing. We've already seen the initial signs of success on the promotion front as the expanded reach of our sales force is gaining traction with high prescribers and influential thought leaders in the pain space. This is evidenced by the increasing number of new prescribers as well as increased prescriptions from existing prescribers. In addition more physicians are prescribing both brands, both immediate release and long acting NUCYNTA.

In less than seven months our sales and marketing team executed over 900 speaker programs educating over 10,000 healthcare professionals. Our sales force continues to target approximately 10,000 sales calls per week and is rolling out new marketing material aimed at highlighting NUCYNTA's dual mechanism of action. Last month our 300 person strong sales team gathered for a national sales meeting. They are committed, energized and unwavering in their desire to grow the portfolio. Their 2015 efforts translated into the success with the recent all time prescription highs. They also recognize that there's plenty of room for growth. The meeting gave us an opportunity to strengthen their successful playbook with an enhanced set of tools, including new digital and printed marketing materials needed to help take them to the next level.

We're also rolling out new customized managed care resources tailored for each physician. And finally we've added 24 additional voices to our NYCYNTA sales effort. Starting in February our Lazanda sales team is now also selling NUCYNTA and NUCYNTA ER. Progress has also been made in product positioning, the second pillar of NUCYNTA growth. The key pieces to this success are the product differentiation and product identification of target patients. As the only FDA approved product that addresses both nociceptive and neuropathic pain, NUCYNTA ER's dual mechanism of action message is resonating well with the medical community.

One of the things that Depomed continues to do well is identification of the target patient. In the case of NUCYNTA ER the patient is one with chronic lower back pain and as of this month painful diabetic neuropathy. Many of these patients report both nociceptive and neuropathic pain. The national sales meeting allowed us to roll out initiatives to reinforce the current chronic lower back pain messaging and for the first time provides specific material to our reps describing the painful DPN patient.

The third pillar is patient access. In 2016 NUCYNTA continued to have strong formulary access. This includes NUCYNTA ER retaining the preferred position on the Express Scripts and CVS Caremark National Formularies which together represent over 50 million lives. As we've discussed before, United Health Care Commercial moved NUCYNTA ER in front of Oxycontin on its formulary last July and as of January 2016 all Tennessee BlueCross BlueShield plans and Health Exchange plans have NUCYNTA and NUCYNTA ER as Tier II preferred.

Proper dosing makes up the final pillar of our NUCYNTA strategy. Our goal is to achieve a more favorable patient and physician experience by optimizing titration dosage. The disconnect between the average dose of approximately 400 milligrams per day of NUCYNTA ER used by patients in the clinical trials for lower back pain versus the average dose in the market place of between 200 and 250 milligrams presents us with a key messaging opportunity. While we recognize the higher end of the dosing spectrum may not be achieved, we are communicating the ideas behind proper titration. We expect to see these results grow slowly and the ongoing efforts pay off for years to come.

We continue to believe that by executing on the four pillars of strategy for NUCYNTA that NUCYNTA will grow to become a blockbuster with over $1 billion in annual revenue before the end of exclusivity. While the strategy is focused on NUCYNTA ER, it's also important to note that NUCYNTA IR has shown a favorable trends in prescription volumes. When we acquired NUCYNTA, the IR prescription volume was negative 9% year-over-year. Since then we have stabilized this downward trend with the December NUCYNTA IR scripts flat compared to the prior year for the first time since 2012. Going forward we believe that NUCYNTA IR prescriptions can grow as we target appropriate specialists.

We're pleased to see that the rest of our product portfolio is also performing. In 2015 release prescriptions grew 13% versus the prior year, Cambia prescriptions were up 28% and Lazanda bottle volume was up 139%. And we believe we have lots of room to grow in 2016. Considering that almost half of our sales force joined the company at the time of the NUCYNTA acquisition, they're just now getting comfortable selling all the products in their bag. This bag combined with the new tools and messaging that have been recently rolled out, should help us drive even more growth.

On the business development front our team is at its busiest ever with respect to evaluating opportunities, keeping our foot on the gas. While we will consider late-stage development compounds, we will continue to focus on marketed outsets with lengthy periods of exclusivity in the areas of pain, neurology and adjacencies. We believe that our transaction track record and strong financial position with the $210 million in cash puts us in a good position to acquire additional assets. As you will hear from Augie, our financial strength also affords us the flexibility to pay down our debt.

A great example of the laser focus of our BD efforts is the recent acquisition of cebranopadol which we acquired from Grünenthal. Cebranopadol has been studied in 16 Phase 1, four Phase 2A and three Phase 2B trials in painful diabetic neuropathy, osteoarthritis and chronic lower back pain. In addition a human abuse potential study and a respiratory depression study are both complete. In total cebranopadol has been studied in over 2,000 patients worldwide. We believe that cebranopadol's unique pharmacology and differentiated properties have the potential to change the future treatment of pain.

We're already initiating a scientific communication program for cebranopadol that centers on the presentation of clinical data at appropriate scientific congresses and medical and scientific publications. We plan to go deeper into cebranopadol at our Analyst and Investor Day which is scheduled for March 23rd in New York City. These are the exciting and transformational times at Depomed and we thank you for your interest.

And with that, I will turn the call over to Augie to discuss our finances and guidance.

August Moretti

Thank you, Jim. Today I’ll cover three areas; first, I will review a few of the highlights of our fourth quarter results; second, I'll discuss the accounting for the cebranopadol acquisition that closed in mid-December; and third, I'll provide our guidance for 2016. I want to mention at the outset that with respect to our fourth quarter and full year results and our 2016 guidance, I will be discussing certain GAAP measurements as well as certain non-GAAP measurements, which we expect to continue to present in future periods. Please refer to today's press release for an explanation of our non-GAAP financial measures and tables that reconcile the company's non-GAAP adjusted earnings per share and non-GAAP adjusted EBITDA.

As Jim just outlined the fourth quarter was an exceptionally strong one for Depomed both in terms of cash flow and product revenue. As of December 31, 2015, cash, cash equivalents and marketable securities were $210 million, which represents a quarterly increase of $35 million. Keep in mind that we used $25 million as partial payment for cebranopadol in December and if we had not used the funds to acquire cebra, the Q4 entries in cash would have been $60 million.

The cash increase is principally the result of our non-GAAP earnings but a portion of the cash increase is the result of timing associated with our payment on sales rebates related to NUCYNTA, our royalty payments to Grünenthal and our interest payments on our convertible debt.

With regard to sales rebates related to NUCYNTA, some of the managed care and government contracts for NUCYNTA are still under Janssen's contracts. From a process perspective Janssen initially pays these rebates on our behalf and then we reimburse Janssen after Janssen bills us. This intermediary step causes a delay in the timing of when Depomed has a cash outlay for the NUCYNTA sales rebate on these contracts, we expect most of these contracts to transition to Depomed in 2016, so the dollar magnitude of this timing delay should decrease as we proceed through 2016.

With regard to Grünenthal royalties, we pay Grünenthal royalties on net sales of NUCYNTA and NUCYNTA ER in the first and third quarter of the year. The approved royalty is reflected in approved liabilities on the balance sheet and you will see an increase in that account from Q3 to year end of approximately $10 million, a portion of which is the increase in the Grünenthal royalty payable. Likewise the interest payable on our convertible debt is paid twice per year in the first and third quarter and is reflected in interest payment which increased approximately $2 million from Q3 to year end.

In the nine months after the closing of the NUCYNTA acquisition we have increased cash, cash equivalents and marketable securities by approximately $142 million, but for the December payment of $25 million to Grünenthal for cebra, this would have been $167 million. As we have stated several times since the closing of the NUCYNTA transaction, our intent is to prepay a $100 million of our secured debt in the second quarter of 2016, unless we redeploy the capital for an acquisition.

Now let's take a look at the income statement, total product revenue for the quarter ended December 31, 2015 was a record $111 million, representing a year-over-year product revenue growth of 228%. Putting this into perspective, total product revenue for Q4 2013 was $19 million and for Q4 2014 was $34 million. Days on hand at wholesalers increased slightly from the end of Q3 to the end of Q4 and are just a few days over three weeks for all products except Zipsor and Lazanda. In the case of Zipsor, we introduced a new 120 pill bottle and the Q4 results reflect an increase of approximately 10 days on hand with the wholesalers. In the case of Lazanda, days on hand at wholesalers reduced significantly and shipments were substantially below prescription demand for the quarter. Based on our experience over the last three years, we expect the days on hand at wholesalers will be reduced in Q1 2016 and accordingly shipments of our products in Q1 could be less than prescription demand.

For the fourth quarter NUCYNTA sales were $68 million, an increase of 5% from the previous quarter, prescriptions for the NUCYNTA franchise for the quarter were over 219,000, ER prescriptions were up 9% over Q3 and as Jim mentioned we have reversed the decline in IR prescriptions. The Q4 results further solidified NUCYNTA as Depomed's largest product franchise. That said the rest of our products also delivered strong performances in the fourth quarter.

Gralise fourth quarter net sales were a record $22 million an increase of 20% compared to the fourth quarter of 2014. The 2015 increase reflects prescription growth and price increases, demand was strong with total prescriptions for the fourth quarter of 85,000 up 7% compared with the same period last year. In December prescriptions reached an all time high of over 29,000. Cambia which we acquired in December 2013 and re-launched in February 2014, had record fourth quarter net sales of $8.2 million, an increase of 30% compared to the fourth quarter of 2014. Total prescriptions in Q4 of 36,000 were up 20% compared to the same period last year. In December prescriptions reached an all time high of over 13,000.

Lazanda though which we acquired in late July 2013 and re-launched in October 2013 had fourth quarter net sales of $5.2 million, an increase of 96% compared to fourth quarter 2014. Total bottles for the full year were over 71,000, an increase of 138% over 2014, We reached an all time high volume of over 7,000 bottles in December. Lazanda sales were slightly down from Q3 2015 levels, primarily as a result of reduction in days on hand with wholesalers.

Now let's look at expense levels. GAAP selling, general and administrative expenses were $58.3 million for the fourth quarter of 2015. These expenses include $8.2 million associated with the company's evaluation, consideration and defense of the unsolicited proposal from Horizon. Excluding stock based compensation, contingent consideration and the one-time expenses associated with Horizon, non-GAAP SG&A expenses were $45.6 million for the fourth quarter of 2015. GAAP and non-GAAP research and development expenses were $6.3 million for the fourth quarter of 2015. This amount includes costs associated with pediatric trials at NUCYNTA, Cambia and Zipsor.

Fourth quarter non-GAAP adjusted earnings were approximately $11 million or $0.16 per share. As we discussed in our press release the accounting for the cebranopadol transaction had a negative effect on non-GAAP adjusted earnings of $0.13 per share. So I'm going to spend a little time to talking about the accounting for cebranopadol. In the fourth quarter of 2015 we recognized $55 million of acquired in-process R&D expense and a non-cash gain on a settlement of $30 million related to our December acquisition of the U.S. and Canadian rights to cebranopadol from Grünenthal. The consideration we paid, included a release of patent litigation against Endo for which Grünenthal was responsible in damages, a limited covenant not to sue and $25 million in cash.

For accounting purposes, we were required to perform a probability weighted analysis on the release and the covenant not to sue, which resulted in a valuation of approximately $30 million. This evaluation involved significant estimates and if we had proceeded with the litigation, the outcome could have been materially different. For accounting purposes, we were required to increase the total value of our consideration by this amount and we reported $55 million of acquired in-process R&D expense offset by a $30 million gain on settlement.

The net income statement effect in the fourth quarter 2015 related due to the transaction was $25 million which is consistent with the cash payment we made. On a tax basis the company recognized $30 million gain on settlement of the Endo litigation as taxable income in the fourth quarter, however the $55 million in acquired in-process R&D expense will be amortized over 15 years from the date of acquisition. The recognition of the $30 million gain on settlement in its entirety with minimal expense offset in 2015 on a tax basis can be a factor reducing the expected the tax benefit for 2015 by $10 million and correspondingly reduce non-GAAP adjusted earnings by $10 million or $0.13 per share for the fourth quarter and full year of 2015.

Now turning to 2016 guidance, guidance for the year is based on our current budget, our budget is based on a large number of assumptions and there are significant uncertainties in estimated future product revenues and operating expenses. This is particularly true on the revenue side for our largest revenue products NUCYNTA and NUCYNTA ER and on the expense side for the R&D expenses related to the development of cebranopadol and our ongoing pediatric studies. For a more complete discussion on the relevant risks relating to our guidance, I'll direct you to the risk factor section of our annual report on Form 10-K that we expect to file later this week.

With that said, total revenues are expected to be $485 million to $525 million. We expect total product revenues to be approximately the same, as we are not anticipating any milestone revenue or any significant royalty revenue in 2016. COGS for NUCYNTA and NUCYNTA ER will be approximately 25% for 2016 reflecting manufacturing costs and the royalties on net sales owed to Grünenthal. Average COGS on our other products are expected to be approximately 10% of net sales for 2016.

Non-GAAP SG&A expense that is GAAP minus stock compensation for 2016, is expected to be a $180 million to a $195 million. SG&A expense reflects a full year of sales and marketing expense for NUCYNTA and the expenses of the NUCYNTA ANDA litigation that we assumed in connection with the acquisition. These expenses will be slightly front end loaded during the year. Non-GAAP research and development expenses, again GAAP minus stock compensation, are expected to be $30 million to $40 million. These expenses include the cebra development program as well as pediatric studies for NUCYNTA, Cambia and Zipsor. We expect R&D expenses to be somewhat backend loaded during the year.

Interest expense for the year is expected to be $80 million, in addition if we prepay the $100 million of our secured debt we will incur a $5 million prepayment penalty. Interest expense reflects the cash and non-cash interest expense on the convertible debt for the full year and the impact of reduced interest payments on our secured debt as a result of expected prepayment of a $100 million of secured debt in early April 2016.

Non-GAAP adjusted earnings are expected to be $95 million to a $115 million, adjusted EBITDA is expected to be a $175 million to $205 million. As we looked at various analysts' models, it came to our attention that the analysts are using a wide range of shares in their per share calculations. In our non-GAAP adjusted earnings per share calculations, we are using our average total shares outstanding in each quarter; the treasury method with respect to our outstanding options and RSUs and the if converted method with respect to our convertible debt. While we're not giving specific EPS guidance based on our current capitalization in share price we believe modeling approximately 84 million shares for our non-GAAP adjusted earnings per share calculations in fiscal year 2016 would be appropriate.

Finally just a quick comment on non-GAAP financial measures. Non-GAAP adjusted earnings are not based on any standardized methodology prescribed by GAAP and represent GAAP net income adjusted to exclude amortization and IP R&D related to product acquisitions, stock based compensation expenses related to our defenses of Horizon's hostile takeover bid, non-cash interest expense related to debt and to adjust the income tax provision to reflect the estimated amounts payable or receivable in cash.

Adjusted EBITDA is not based on any standardized methodology prescribed by GAAP and represents GAAP net income adjusted to exclude interest income, interest expense, amortization and IP R&D related to product acquisitions, stock based compensation expense, expenses related to our defense of Horizon's hostile takeover bid, depreciation, taxes and transaction costs associated with product acquisitions. Non-GAAP financial measures used by Depomed maybe calculated differently from and therefore may not be comparable to non-GAAP measures used by other companies.

That concludes the financial discussion. I’ll now turn the call back over to Jim.

Jim Schoeneck

Thanks, Augie. Our financial performance was just the one part of the exceptional year that we had in 2015. We secured and financed $1 billion acquisition, seamlessly integrated and re-launched NUCYNTA and tripled our revenues and profits. This success was driven by our incredibly dedicated team of employees. What I witnessed throughout last year was a true commitment to see Depomed succeed and thrive. I could not be prouder the way our sales force and our home office stayed focused on our mission and goals as we work together to build the great company. And to our shareholders, we remain steadfast in our commitment to creating value and I thank you for your [levering] support.

And with that, operator we'll open the call to questions.

Question-and-Answer Session

Operator

Thank you. [Operator Instructions]. Our first question is from Randall Stanicky at RBC Capital.

Randall Stanicky

Jim, just to set off on NUCYNTA, just sort of what you're thinking about the growth cadence correctly here given its your most important growth driver. If we look at the 3Q to 4Q growth of 5% that you detailed, can you help us understand from the moving parts -- the script growth versus the gross connect the inventory levels and then importantly the flow through of the previous 44% price increase as well as the 9.9% increase from December that would be helpful?

Jim Schoeneck

Yes, Randall, there is a lot there. I'll start and I'll let Augie jump in on some of this. I think the easiest one is the last one which is really there really is no real effect of the 9.9% yet, because at the time when you take that 9.9% weighing the quarter, there is also an accounting adjustment for future returns that basically offset any benefit we got from that in the fourth quarter. As we mentioned before in terms of the 44% price increase we took in April, we believe that at this point through the end of the year we had received about half the benefit of that. There are some resets on some of our managed care contracts that will roll over -- rolled over as of January 1 and we'll see some more the benefit of that 44% starting in our next quarter as we report back in May. In terms of the scripts, I mean you've got the script data and as Augie mentioned, the days on hand at wholesalers went up really slightly, but I just it was a day or two or Augie you may want to comment further on that?

August Moretti

The increase in days on hand at wholesalers was approximately three days.

Jim Schoeneck

Okay. Well three days, okay.

Randall Stanicky

Is there a way that you could help us as we look at 2016, help us think about the price versus the volumes split? I mean, obviously this has been a re-launch product, the script growth has been solid. But how do we think about that as we think about 2016?

Jim Schoeneck

Yes, Randall. As we came out at the end last year we were up about 20% year-over-year in ER scripts and had flattened out IR scripts. As we would keep going in the year we would expect that the ER would accelerate from there and grow faster than the 20%. As I mentioned during some of my remarks, we really are adjusting the benefit of everybody, really starting to kick-in on and we've got some new materials that are out there, some new programming elements that are there. I think importantly the customized tool that I mentioned on the managed care side will give the reps the ability to go in and address the exact audience -- the exact patient coverage that that physician has and how that plays through their patients. So we'd expect that and we would expect to get some growth out of the IR as well. So I mean it really is a volume story with the price component to it, is the way I would think about it.

Randall Stanicky

Okay and let me follow-up with one more question on the business development front. I mean you guys have talked about BD for several quarters now and obviously there is a payment coming from the Deerfield perspective that I think most of us are thinking you're going to take advantage of. How much flexibility does that leave you to do deals over the near-term and then how should we be thinking about where that that interest is in terms of how much capacity you have to bring on additional on market products?

August Moretti

So Randall I think, we have quite a bit of capacity. Just to briefly review the terms of the loan payment. For instance the loan agreement allows us, if we were to acquire a new asset or allows us to provide a new lender first lean on the assets of the acquired, the newly acquired assets. There are no limitations on our ability. No consent requirements to make an EBITDA positive acquisition. We have the ability to issue convertible debt without limitation and I think there is a very fair amount of flexibility there. I think in terms of how much capacity, I think it is dependent upon the cash flow characteristics of the asset that we would buy. But I think given the cash generation that we've seen and the fact that we do intend to pay down the $100 million in April, I think the balance sheet is in very good shape and is able to support continued acquisition at a fairly high level.

Jim Schoeneck

And Randall, I will just throw in a piece and as Augie has mentioned that it is a prepay choice that we have in April for those that may not be familiar with it. In the first half the principal payment is not due till the third anniversary of that debt.

Randall Stanicky

Okay, just one more quick if I can squeeze it in, you are looking for assets, you're competing against companies that very well tax rates, do you need to address your tax rate and is that putting you at some level of a disadvantage in terms of some of the opportunities that are out there?

Jim Schoeneck

As we said, we continue to look for, if there was an opportunity to be more tax eventful. We only want to do it as we said if there is a strategic piece with that and actually it will be an asset or it could be something on geography but we would definitely want more than just doing it for solely tax purposes. Certainly, it does come into our calculus in terms of how we think about things but at this point in time it hasn't hampered and hopefully it won't going forward and hopefully we can do something about the tax piece. But again we'll be very particular in terms of when and how we do that

Randall Stanicky

Okay, great. Thanks guys.

Operator

The next question is from Scott Henry of ROTH Capital.

Scott Henry

Thank you and good afternoon. I'm going to start -- I am going to hit the NUCYNTA question from a little bit of a different angle, I don't know, if it would be helpful or not. But if I think about the revenue per script in fourth quarter of '15 and now I think about revenue per script throughout 2016, what would you expect the delta to be on that? I'm just trying to get an idea of how much pricing, I should think about when I think about 2016, obviously the volume we can make our own assumption.

Jim Schoeneck

Yes, so on the price piece stand, I will let Augie jump in as he wants to here. On the 44% price increase, we would expect to get about another 10% on that as we get into '16, just so some of the resets that take place. Then we would expect to also get some benefit of the 9.9% price increase, that we took in early December.

Scott Henry

So sequential growth of -- it sounds like towards 20%.

Jim Schoeneck

Well you won't get the full 9.9%, there's some resets on that so you only get a part of that to start with as well. So, take some portion of that plus the 10% and that's I think a pretty good range on the price.

Scott Henry

Okay, fair enough and helpful. Other question, your January prescription data, Jim, it just looked a too little weak, not just within Depomed. Is there any thoughts, is that noise? Is that co-pay three setting? Just I want to get your thoughts on that January.

Jim Schoeneck

I think, I mean some of its the co-pay resets that come into place every year now, I think you've got more people that are on high deductible plans than you've ever had before, I think that certainly plays in as well and we've seen some of that around the healthcare exchange discussions that are going on. I'll say that some -- one of the areas that we're strongest on the NUCYNTA IR side is actually up in the Northeast and a couple of storms that have come through up there, certainly have not helped. Now those are regular January, February phenomenon, so I'm not trying to put it broadly on that. But just when you look at the month of January we did have that big one hit that I think definitely affected things in one of our stronger areas on the NUCYNTA IR side.

Scott Henry

Okay. In shifting below the line, it certainly gets harder and harder to kind of decipher through the numbers below the line. Fundamentally everything looks great. But Augie I guess it will be helpful -- I feel like, if I can have a couple of more pieces to the puzzle. Historically I have GAAP, R&D and SG&A including stock comps, now we're going to excluding guidance, excluding stock comp. I mean could you give me some parameters on what stock comp should be for SG&A and R&D in 2016?

Jack Anders

Scott, I think -- this is Jack here. I think you have to take a look at our Q4 stock comp numbers and assume a slight uptick from that Q4 run rate, I think that's probably the best the fair estimate.

Scott Henry

And is the bulk of that in SG&A?

Jack Anders

The bulk of it is in SG&A. There is a small component in R&D and those pieces will be outlined in our 10-K and I think you might be able to get there by looking at the GAAP to non-GAAP reconciliation.

Scott Henry

Okay and speaking of stock comp, 4.5 million I believe in Q4, I think that was an uptick from prior quarters. It sounds like that 4.5 million will continue at that higher rates, could you talk to why that uptick? Is there some accounting reasons for that?

Jack Anders

A piece of that is in terms of when the stock options are granted or restrictive shares and that has a piece of it, as well as some of the underlying assumptions around forfeiture rates. We did see a slight uptick around all those in Q4.

Jim Schoeneck

Scott, one of the things to consider in the back half of the year is with the acquisition of NUCYNTA, the total number of employees in the company went from about 300 to 500 and so we had some initial stock option grants for those people in the second half of the year as well.

Scott Henry

Okay, that makes sense. And just very quick question, so interest expense, should we be modeling in $85 million and will that $5 million in prepayment, will you book that as a recurring type of event? I mean is that factored into your non-GAAP adjusted earnings?

August Moretti

It's figured into the non-GAAP adjusted earnings, but it’s not clear the categorization of that. I believe it'll be interest expense but there's an argument that it would.

Jack Anders

Could be looked as a gain on -- as a loss on early extinguishment of the debt that may be pulled out of interest expense in its own line item.

Scott Henry

Okay, and the final question, shares outstanding 84 million for 2016, it was 81 million in Q4 so we're adding 3 million on. Why is that? Is that a function of the accounting again or is there something different in there?

Jack Anders

It’s probably a function of just additional options being granted as well as options being exercised. We obviously have our own -- we do have RSUs out there. So it's just generally an uptick when compared to where we are in 2015.

Scott Henry

Okay, it seems like kind of a big delta for just normal recurring options that but I guess it is. Thank you for taking the questions.

Jim Schoeneck

Thanks Scott.

Operator

The next question is from David Risinger of Morgan Stanley.

Neil Shelton

Hi, this is Neil Shelton on for David Risinger. Just two quick questions. One can you guys just provide a framework for cash flow in 2016 including operating cash flow and planned uses of cash? And then secondly can you discuss key formulary decisions to watch for NUCYNTA later this year? And also maybe a bit on the competitive outlook concerning we do have a couple of new launches coming into the opioid space. Thank you.

August Moretti

Neil we have never kind of pointed towards free cash flow but obviously you've got our EBITDA numbers and you know what the -- in the principal component there is the interest charge against that to get to free cash flow.

Neil Shelton

I guess more specifically if you can kind of provide me with maybe like -- kind of like how we should expect cash flow to evolve over the course of the year?

August Moretti

I would say that first as we indicated in the discussion today on the call, first quarter is a heavy cash use quarter for us because that is the quarter we pay the Grünenthal royalties and arrears and we pay the interest on our convertible debt. It's also the quarter in which we pay employee bonuses. So Q1 would typically be the weakest cash flow quarter and it would strengthen as we go through the year. Again in terms of your Grünenthal and the convertible debt interest that again that will come in quarter three, but Q1 should be on the light side but it should strengthen as we get out of Q1.

Jim Schoeneck

And in terms of the other two pieces of your question Neil, in terms of the coverage, we don't expect any big things during the course of the year. I think most of it happened as of January 1. We've been able to retain positions, I mentioned earlier in my comments about the Tennessee BlueCross BlueShield and that's a big one. That's a very tightly controlled BlueCross BlueShield plan. We've also recently had a win with the employee -- the federal employee program. So the federal employee benefit program has moved Oxycontin back to Tier III. NUCYNTA, NUCYNTA ER stay at Tier II. The reason that that one is important as that you have got copays, attritional copays with the Tier II in that plan but most of the variance of that federal employees plan have actually got coinsurance which can be anywhere from 45% to 60% of the cost of the drug. So it's certainly going to get much more expensive for people to be on Oxycontin in that federal employees plan. So that's what I frankly just found out about today in terms of that win and that's effective as of first quarter.

Neil Shelton

Got it, thank you.

Operator

The next question is from Ami Fadia at UBS.

Ami Fadia

Hi, thanks for the question, a couple of questions. Firstly just on Lazanda, you mentioned that there was an inventory draw down in the quarter. Could you quantify that and do you see that reversing into first quarter?

Jim Schoeneck

In terms of days on hand two months ago.

Scott Shively

I think from a quantity perspective it's probably about a drawn down of about 10 days, however Lazanda given that it's a smaller amount of quantity of prescriptions and bottles that go out the doorstep fluctuates a little bit as the demand fluctuates. And then the second part of the question was?

Jim Schoeneck

Do you expect it to reverse or let it continue?

Scott Shively

You know no clarity yet. I mean as I said that Lazanda is a product that does fluctuate quite a bit given where the demand is.

Jim Schoeneck

I mean one of the things in general, one of things happened over the last year in Lazanda is the number of bottles per prescription have gone up. So if you're simply watching prescriptions you get kind of one level of demand but on the bottles, the bottles have actually gone from about 10.5 bottles per script and this is eight sprays per bottle which can be eight doses or be four doses because you can take one per nostril, it's gone up to about 15. So that's part of where you see the big delta between the bottle increase and why we talk about that rather than simply looking at per scripts.

Ami Fadia

Got it, second question was just on your interest expense guidance, you said $80 million does that include non-cash that gets adjusted out of for you non-GAAP numbers?

August Moretti

Yes.

Ami Fadia

Okay. And then lastly just sort of on your revenue guidance in how you're thinking about top lines for the next 12 months. How are you thinking about balancing between NUCYNTA growth which is extremely important for the next year but also maintaining your base business growth?

Jim Schoeneck

So I mean one of the things that we've done from the beginning of the sales force expansion is we have two different types of reps within that sales force. We have one group that focuses primarily on pain specialists. They're selling NUCYNTA and NUCYNTA ER and that is by far the largest part of their bonus consideration, their incentive compensation. And then behind that they have a smaller amount on Gralise and Zipsor. There is a second group that's about a third of that total group that sells NUCYNTA and NUCYNTA ER, but also Gralise and Cambia. They really are primary carriers of Gralise and their bonus incentive comp is split about equally between the three. So that's part of the way we do that. We got one group that's focused much more on NUCYNTA and NUCYNTA ER and the other that's more focused -- that's more balanced between them, really offering support to NUCYNTA, NUCYNTA ER, but really carrying the primary weight for Gralise and there is the sole one selling Cambia.

Ami Fadia

Got it. If I may squeeze one last one in. There is a bit of a variability in how people are thinking about tax rate for '16, if you could give us some visibility there?

August Moretti

I think that the closest approximation would be something in the mid-teens. There are a lot of moving pieces in looking at the effective tax rate for next year, in particular the variability and the R&D expense and the associated credits, R&D tax credits. And we -- I think for internal for approximating purposes I think the best estimation is current mid-teens as a cash tax rate on their non-GAAP earnings.

Operator

Our next question is from Ken Trbovich at Janney.

Ken Trbovich

Just a couple of quick ones. On the Lazanda sales force now making calls for NUCYNTA, NUCYNTA ER, is there some sense you can give us as to how many sort of unique physicians this might represent relative to the existing sales force targets or is this really more sort of a support role like you've mentioned earlier with the other sales force split?

Jim Schoeneck

I think it's really more of a support role. I mean that group has a total of about 2,000 doctors in their universe, but in terms of unique, I can't give you the number that's unique because there is some overlap between who they call on and who the general sales force calls on. So I don't know -- just don't know the number Ken.

Ken Trbovich

No problem. And then follow-up on some of the questions regarding clarity on the sort of non-GAAP number for R&D and SG&A. Specifically you've mentioned Augie I guess that it's excluding stock compensation, but does it include or exclude the in-process R&D charge that you're going to take as of $3.5 million to $4 million a year?

August Moretti

There isn't any IP R&D charge in those numbers.

Jack Anders

And Ken we took for GAAP purposes, we took the entire IP R&D amount in our GAAP financials in its entirety in Q4 of 2015.

Ken Trbovich

Got it. Except that in the press release, you've got the statement saying, it will be amortized over 15 years from the date of acquisition.

August Moretti

That's the tax -- on the tax side.

Ken Trbovich

On the tax side not the expense side.

Jim Schoeneck

Yes.

Ken Trbovich

Okay. And then last question just with regard to the SG&A, I know you've mentioned the Endo litigation and the fact that there is probably sort of a front end loaded component to this. Can you give us a sense as to what you guys are thinking that Endo litigation expense might look like? And then for example if that was deferred, there is a huge spread here in that R&D spend, I am just wondering, how much of its specifically to cebra?

Matt Gosling

The Endo litigation is right about Ken, we are probably talking in a $3 million range in the first four or seven months of the year. So the expenses will go away.

August Moretti

And Ken we said in the past that again there is a range on the cebra development expense that will be a function of how quickly we can get the work done, but the closest approximation for cebra is approximately $10 million of that R&D spend will be cebra related?

Operator

Next question is from David Amsellem at Piper Jaffray.

David Amsellem

So just a couple, just a question just on the commercial landscape for NUCYNTA ER. What are your high level thoughts on the potential impact of Belbuca or do you look at that as not having any impact at all? I mean Endo didn't have a lot more reps calling on a lot of the same people that you guys call on. That's question number one. Number two is, any thoughts on the need to further expand the sales organization from the 277? And then last question is just in terms of the acquisitions, just within the broader CNS space I mean can you talk about therapeutic adjacencies beyond pain and migraine that you'd potentially be interested in or that will be attractive to you? Thanks.

Jim Schoeneck

Thanks, David. I'm going to ask Scott Shively, our Chief Commercial Officer to answer the first one and that's on the Belbuca question.

Scott Shively

Hey David, so there is bupre high dose approval and impending launch. We look at it as initially a product that's more of a niche player because it's a buccal film that's not going to [eat] so much in the broader overall marketplace and it's got the nature of the product itself. So, definitely we are going to be watching them but we aren't that concerned with it. We are the major player in the market.

Jim Schoeneck

David, I think of the other things to that question and it really is a volatile piece, Schedule 3 you would be able to be called in. There is a piece of having explain, how to use it to the patient that's a bit different than just taking a pill. And so that will be one of the [things] to watch, the development autopsy how broadly it will get used. I know that, there's been something started about kind of instead of hydrocodone now that's been off schedule, I'm just not sure that's what's going to happen. I think that's our broad opinion on it. And then in terms of the sales -- number of sales reps, I think for 2016 we are properly sized. One of the things that we see is that to really secure this market long-term, we need to make sure that we've got the people at the top of the influence pyramid firmly in our camp and I think we're just really developing that now with the pain specialists and with the neurologists that see a lot of pain. Some of the key people on the IR side like some of the orthopods and rheumatologists. So we're really focused around those specialty audiences and driving along with some of the primary care that we call. The expansion would really be a -- a further step would really be more primary care. And so with that -- I think once we get market share built up some more, then we would look to do that, whether we would do it directly or do it through a co-promote really remains to be seen. And we'll continue to look at that on what the timing might be should we do that and what the best method may be. And then finally on the adjacencies question, so we look at things -- on one end we look at the things like addiction therapy which is really a bit outside of the traditional CNS side, but one that we certainly see would be one where we could take expertise we have and some relationships we have to be able to play there. And then on the other side, there's drugs that we may look at for rheumatology and orthopedics now that we're in those two specialties within particular NUCYNTA IR. So I think those are the areas that when we talk about adjacencies that's really what we're talking about.

David Amsellem

Okay, thank you.

Operator

The next question is from Jason Butler with JMP Securities.

Jason Butler

Just a couple of quick ones on NUCYNTA. When you think about the target prescribers that you have set out to focus on when you deploy the new sales -- or the full sales force, can you talk about what percentage of prescribers you're targeting that haven't -- hadn't written a prescription that are now writing NUCYNTA prescriptions?

Jim Schoeneck

Scott do you have any sense on that one

Scott Shively

The number of prescribers actually is up rather significantly both for NUCYNTA ER and NUCYNTA IR, NUCYNTA since we launched it. Our targets were -- we targeted largely high prescribing high decile long active opioid prescribers for NUCYNTA ER and mid oncology prescribed NUCYNTA already. So I don't think there is a lot of new -- brand new prescribers who really have not prescribed anything, but we've pretty good [docs] since launch in the numbers.

Jim Schoeneck

Well I am trying to remember [max] growth. I think broadly on the numbers Jason and these are like -- I'm going to do this, since this is very dangerous but it's somewhere around 8,000 or so prescribers of the long acting. That sound about right, Scott?

Scott Shively

Yes. Just got the numbers here. our NUCYNTA ER prescribers are up 16% since launch and the IR prescribers are 5% since launch and what's also interesting is the number of docs writing both ER and IR, is up to 18% since launch which is a pretty nice progress.

Jim Schoeneck

And just to get a sense how about how many people are prescribing the ER?

Scott Shively

Over 13,000 -- 13,300 plus.

Jason Butler

Okay, great, helpful. And then another focus you had when you initiated the re-launch with the dose and getting up to the right dose. Can you just talk about what you're seeing now in the marketplace? And then does this 2016 guidance assume any increase in average dose versus 2015?

Jim Schoeneck

Yes. Let me take the second part first, Jason. It's a very slight, I mean, we're talking about low to mid single-digit increase because of the dosing level. We think this will be a long-term build. It's not going to be it just will happen short-term, it's in your long-term build and because of the additional prescribers as Scott mentioned and the expansion of the number of patients that is going to confound anybody trying to look at like an average dose, because people are going to start off with the 50 milligram twice a day and then build up to the 100 milligram from there. What I'd actually do is look at the raw numbers of prescriptions on something like the 150 and eventually the 200. I think that’s probably a better comparison than trying to do a weighted, because as long as we are increasing the number of patients on the drug as we are right now it's going to be a bit of confounding factor because of people coming in at the lower doses.

Scott Shively

I'll just say that we forecasted that they are going to increase moving up the sales, we might get this as a follow on in terms of [mixed breaks] thus far.

Jason Butler

Okay great, yes, helpful, thanks for taking the questions.

Operator

The next question is from Irina Koffler at Mizuho.

Irina Koffler

Hi, thanks for taking the question. So I wanted to explore your guidance range on revenue. Could you just speak to you know what you view as your most volatile product? What could really get you to the upper end of the range? What would keep you at the lower end of the range? That's the first question. And then the second question is, could you go through this balance sheet item you have for accounts payable and accrued liabilities? And just to discuss what the components are that's in there, I noticed it's gone up significantly since 2014, thanks.

Jim Schoeneck

Okay. Why don't I take the first piece of it and then I'll let the finance guys jump in on the second. I think the -- I think it's really proportional to the size of the assets and where we are in the inflection curve. And so it really is NUCYNTA and NUCYNTA ER, that's going to be the biggest flux in terms of the guidance both the potential for upside and the potential for the lower side of that range. As you think about it we are -- we have got about 20% year-over-year on volume right now on ER, we're flat but it come up to 9% decline on IR. So that really is the biggest piece of it. The Lazanda, Cambia and Zipsor are all relatively small. We've said that Zipsor is definitely the bottom product in the bag. It basically is a reminder call now in the part of the sales force that's selling it, which is not even all of them. And then on Gralise, Gralise has been very steady, so I think that's in a fairly tight range. So I think it really is more fluctuation around the NUCYNTA and NUCYNTA ER. And I mean the one that could surprise depending on what else happens in the marketplace could be Lazanda. And I would say surprise more for the upside than the downside just depending on what might happen in the marketplace with competition.

August Moretti

Jack do you want to?

Jack Anders

On the accounts payable and the accrued liabilities, I mean there is a lot of items in there. As I said they will be even more clearly broken out in our 10-K but obviously we have items like our sales rebates and Augie mentioned the timing of NUCYNTA rebates and when we actually have the cash outlay. Also in there obviously are accrued royalties and as well as just general APs and other items that flow in there.

August Moretti

And I would say that that account is going to be a relatively large number as we move through the year reflecting the increase in our revenues. So again we'll always be paying rebates and arrears. We already have this situation with Grünenthal on the royalty piece where you're going to have that account filled twice a year until we actually pay it out. But I think when you see the 10-K you can look at the rebates and returns number which is a separate line item and it's essentially a quarter of sales. And it's been that way now for since the acquisition of NUCYNTA.

Jack Anders

It's kind of tough to look at it from the end of 2014 to the end of [2015] because if you look at it at the end of 2014 it doesn’t have any of those NUCYNTA accrued sales discounts in there and when you're looking at the end of 2015 it looks like there's a pretty big jump from yearend to yearend but it’s not really apples to apples.

Jim Schoeneck

And the one -- the part of that rebate line that builds the most is actually the returns piece because you're looking at trying to estimate what returns may come in on products that have sometimes three and four year shelf life. So as we get into two, three, four years of shipping on that, that is the number that bills but yet there's very little that comes off until you reach the return periods which can be two to three years out. So Irina, thank you. I don't know if you're still there, I hope you are. If you aren't, thanks.

Irina Koffler

And my follow up was, if you do get that big return at some point, so how is that going to be treated? Thank you.

Jim Schoeneck

Well it's not as really a big return it's that you've got more and more product that you've shipped out into the pipeline and so that comes through gradually as well, even if it’s a small percentage it just builds up as you ship more over a number of years, as you bring products on board. Essentially on the full return side right now we've only got nine months of product that we shipped that we're liable for the return on NUCYNTA and if that's a three year shelf life, as we continue to ship over this next year that amount builds before you get any returns that actually come in against it.

August Moretti

So taking the return reserve as a reduction to net sales and it correspondingly builds on the balance sheet until you actually resolve the returns.

Irina Koffler

Okay, thank you.

Operator

The next question is from Chiara Russo at Cantor Fitzgerald.

Chiara Russo

Probably pretty quick, I just wanted to touch on something I know Augie you said that, you said 2016 your sales force is properly sized. And I was just curious as sort of what type of metrics you look at in terms of assessing your sales force capacity and at what point do you say all right our pain specialists are saturated and how quickly do you go ahead and pull the trigger on expanding out from more of the specialist to the primary cares?

Jim Schoeneck

Yes, Chiara it was me, it was actually Jim, not Augie, an answer on the sales force side. But we have used for our last couple of expansions including for NUCYNTA, ZS Associates who I think are the undisputed leader in the industry that all of the top companies use as well. And you put that into -- you work with them to basically build up the models and basically use an optimization model. And so you then pick what point of the curve you want to go to in terms of return. We went fairly far out on the curve for this first couple of years of NUCYNTA, because what we didn't want to do is size it and then have to resize it within the first year because of the disruption of physician relationships. And so we're very purposeful in terms of doing that and taking it to the size that we did. In terms of the next piece of it, we do that analysis periodically again with them to basically look at where we are. Some of that's on how share is building among the specialists. But right now on NUCYNTA ER for example we are at 1.75% share, so we would like to see it get pass that point before we would do an expansion. I won't give you an exact number where but we want to see a bit more build before we do that. I think we have a lot of growth from where we are right now without having to put the additional expense on it. And as we saw with NUCYNTA and we can actually implement it. We've hired our first reps on NUCYNTA in late April, early May, and some in mid-May and then had them off selling by the third week of June. So we can turn it with the territories and everything else in about a three-month period.

Chiara Russo

Okay that's good to know. And I know I think you've touched on this very early in the call that you had about 900 speaker programs in 2015, do you expect to have the same amount for 2016 or do you expect that to grow obviously have a little bit more, you have the full year this time around?

Jim Schoeneck

Yes. That was really from call it July on and summer's typically not the biggest. But I will let Scott answer that.

Scott Shively

So we obviously just launched in June that’s a two quarter period, so yes there will be more in this year and more diverse in nature as well. We think we'll get a pretty good return on this investment because the medical -- for the educational piece of this coupled with the follow-up by our sales force is a pretty attractive force.

Chiara Russo

And my last question obviously I actually get a lot questions around the NUCYNTA Endo stuff. Obviously you co-payed it in March, how are you guys feeling the preparations are going and is there still enough to dialog to Actavis and if the potential for settlement still on table?

Jim Schoeneck

Well since Matt is here, I going to turn it over to Matt.

Matt Gosling

Yes, Chiara, definitely we feel very, very good about the case going into trial next month. Beyond that obviously we're not going to comment specifically on any sessions we are having. We have in the past and kind of will continue to. We'll get settlements when they kind of make sense for the company and when they are within merits. So we'll see if anything evolves there.

Operator

This concludes our question-and-answer session. I would like to turn the conference back to -- Mr. Schoeneck, you can make some closing remarks. Thank you.

Jim Schoeneck

Great, great, thank you. I want to thank you all for your continued interest in the company. I think as we head into this year, we really are in a terrific position. We have made such a transformation over the last 18 months. We've got the people on board and now experienced in their positions in the field and I think we're really ready to truly be able to make a difference in the marketplace. And it really comes to back our mission which is really to provide value to patients and to families of people with pain and CNS diseases and then to provide value to the providers and payers as well and in addition to you the shareholders.

And we want to thank you for your staying with us and look forward to updating you as the year goes on.

Operator

The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!