Amy Sullivan – VP, IR
Bill Heiden – President and CEO
Frank Thomas – COO
Matt McKinsey – Robert W. Baird
Eun Yang – Jefferies
Carol Werther – Summer Street Research
David Friedman – Morgan Stanley
Joseph Schwartz – Leerink Swannshort
AMAG Pharmaceuticals, Inc. (AMAG) Q2 2012 Earnings Call July 26, 2012 8:00 AM ET
Good afternoon my name is Tiffney and I will be your conference operator today. At this time I would like to welcome everyone to the AMAG Pharmaceuticals second quarter financial results call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks there will be a question-and-answer session. (Operator Instructions). Thank you. Amy Sullivan, Vice President of Investor Relations, you may begin your conference.
Thank you Tiffney. Good morning. I would like to welcome you to the AMAG Pharmaceuticals second quarter 2012 financial results conference call. Before proceeding with this call, please be reminded that any statements we make during the course of this conference call that are other than historical facts are forward-looking statements made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. We want to emphasize that these forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those discussed in such forward-looking statements. Please refer to our recent filings with the SEC for a full review of the risks and uncertainties associated with our business.
Let me quickly run through the agenda for this call. Bill Heiden, our President and CEO will review our strategy including our expansion initiative, discuss the business highlights for the quarter and provide an update on our commercial progress with Feraheme. Frank Thomas, our Chief Operating Officer will review our financial performance for the quarter and update the financial guidance for 2012. Bill will provide some closing remarks and then we'll open the call for Q&A. Scott Holmes; our Chief Accounting Officer is also with us this morning and will be available during Q&A. I'll now turn the call over to Bill.
Thank you, Amy. I'd also like to welcome all of you to the call here today. I joined AMAG in May and I've now had a couple of months to dig into the business. As you hear this morning, our core business is solid and growing and we are ready to continue to build. This slide depicts our business strategy to develop a multi-product specialty pharmaceutical company will build up our strong base in dark blue, a strong commercial footprint in two very attractive segments, hematology and hospital, in green, a very strong balance sheet and an experienced management team that knows how to execute. As we build, there are four key drivers of growth of Feraheme, shown here in light blue.
First, continue to gain share in the US CKD IDA market. Second, to expand the label to include IDA regardless of underlying cause doubling the market opportunity for Feraheme. Three, international expansion of Feraheme. We've already had success here with recent approvals in Canada and the EU where Takeda is our partner and plans to launch by year-end 2012. And fourth, market expansion. Taking share from the oral iron market which is an enormous opportunity for future growth of Feraheme. And in orange, you can see that we plan to add additional marketed products to leverage our strong base. We'll be adding products to our portfolio that are commercial staged leverage our current call points and have sales upside.
So, let's talk about the quarter. In terms of quarterly highlights, we had many successes this quarter. First is continued growth of Feraheme in the US with record provider demand more than 28,000 grams and growth in all segments.
In terms of international, we had European approval which triggered a $15 million milestone and Takeda's launch in the EU by year-end will trigger an additional $15 milestone and provide future royalty revenues for AMAG.
In terms of label expansion, in July we reported positive data from the IDA 301 study, the second of the two Phase III studies evaluating Feraheme with the treatment of IDA in the broad patient population who have failed oral iron. And we plan to submit that SNDA by the end of the year.
If you just step aside and mention that this morning there was good news on the competitive front, Luitpold announced that they've received a third negative response from the FDA. A non-approval regarding some manufacturing issues. The press release also alludes to some clinical questions and so while we are prepared for and all competitors, it looks like this particular competitor has been delayed at a minimum.
Returning to the quarterly highlights. In terms of our base business, our base business is growing and we will expand the portfolio through an aggressive business development initiative which is underway at AMAG. And finally, speaking about the numbers and the focus of today's call, I'm pleased to announce that based upon the Feraheme sales trends of the first and second quarter, we are refining and modestly increasing our topline financial guidance for Feraheme product revenue to arrange a $55 to $58 million which would represent more than 10% increase over 2011. Frank will dive into the details of our financial performance in a bit, but at a very high level, our revenues and expense trajectories are both heading in the right direction.
So, let's jump into Feraheme's commercial opportunity and our most recent performance. The US iron market opportunity is big and here you see that our current indication in blue is really just the tip of the iceberg for Feraheme. Dark blue represents the current annual IVR market for chronic kidney disease or CKD and patients with IDA, iron deficiency anemia and this represents about $200 million Feraheme opportunity. And the light blue is the market expansion opportunity that we have today which includes all current patients on oral iron therapy, many of whom are struggling or stop taking altogether these products to help resolve their iron deficiency.
The orange areas represent the future opportunity for Feraheme with the broader all iron deficiency label. The dark orange is that broad market for patients currently treated with IV irons which in dollars represents another $200 million opportunity for Feraheme and the lighter orange on the broader IDA patients including all those patients have been put on oral iron therapy.
If you can see there's plenty of opportunity for AMAG with Feraheme. First by taking share from other IV irons today in patients with CKD and soon with a broader label in patients with broad IDA and then by expanding the number of patients that are treated with IV iron essentially taking share from oral iron.
Anemia is a symptomatic problem. These patients feel horrible and we're eager to ensure that physicians and patients are fully aware that Feraheme is an attractive option to treat anemia and could help these patients feel better. It's important to note, we have the highest share of voice in the IV iron market and I'm convinced that the continued effectiveness of our commercial team will drive Feraheme to become the market leader.
So now, let's get into the Feraheme performance for the quarter. First, I want to focus on physician demand. This is obviously the leading indicator for our ex-factory sales numbers. As you can clearly see in the bar chart on the upper right, we had significant growth in physician demand in Q2 versus the first quarter notes are those are shown in the two green bars, also had nice growth versus Q2 from a year ago. And we achieve this growth in grams in a total IV iron market was actually slightly down versus the same quarter a year ago and flat versus Q1 of this year.
And another important indicator is shown on the bottom of the chart. The number of customers buying Feraheme also continues to grow. Where we now have nearly 800 customers weekly buying in Q1 which is a 100 more customers on a weekly basis than we had a year ago. You may ask what's driving this performance. I was in the field last week working with our sales team, meeting with some of the new physician prescribes at Feraheme and I thought for myself that our sales force is more focused more energized and have the tools and product message to win in this market like never before. So Q2 saw a continuing strong performance for Feraheme and now let's break that down and look at the two primary segments that we operate in the oncology hematology segment and the hospital segment.
First, the hematology oncology segment which makes up about a quarter of the non-dialysis IV iron market and this is an area of significant focus for our commercial efforts because these are the key referral sites for patients with CKD IDA and in the future of the same referral sites for other IDA patients that could be treated with Feraheme with the broader label. It's interesting to note that despite the box warnings on their labels the older dextran are still the current market leader in the hemog space because they're the only IV irons who have a broader label. We believe that Ferhame's profile makes a very attractive choice for the hemog office. Our goal is to continue to build share in this segment and solidify Feraheme as the IV iron of choice for these key treaters of anemia. And we did very well in the second quarter in this segment building on the outstanding results of Q1 and achieving a 15% increase in demand over the same quarter from a year ago. The market having grown in only 3.5% over that same period.
The second segment is the larger hospital segment which accounts for about two thirds of the non- dialysis IV iron market. Hospitals use IV irons in both outpatient and inpatient settings to treat CKD. Our commercial efforts in this segment focus primarily on hospitals with large outpatient and (inaudible) clinics where the reimbursement dynamics and Feraheme's product attributes are most attractive. You can see on the bottom right chart, that Feraheme volume and market share are both trending positively in a market segment that actually contracted by more than 5% as compared to the second quarter of 2011. So those of the very positive in market demand sales.
Now let's talk about our ex-factory sales. Feraheme net sales for the quarter were $14.1 million dollars, a 10% increase versus same quarter a year ago. And by the way we compare versus same quarter a year ago as there tends to be a fairly predictable quarterly change in the IV iron market. And so this is the best indicator of our true performance. We also did see nice growth versus Q1. There were no significant changes in wholesale inventories. In fact they were slightly lower than Q1 and Q1 a year ago.
So volume demand is up. Ex-factory sales are growing. And underpinning these positive trends are a new stability and now positive trends in our net selling price. As you may or may not be aware, Feraheme experienced pretty significant price erosion in 2010 and 2011 seen here in this graph. This year we stopped the price decline. And as previously mentioned, we actually took our first price increase ever in Q1 of this year.
Pricing and reimbursement are complicated in this marketplace and the key takeaways from this slide are twofold. One AMAG has been able to achieve impressive quarterly dollar sales growth in the first half of this year in spite of a declining net per gram revenue and second, we've turned the corner and expect to see increasing demand now coupled with a stable and modestly increasing net revenue per gram leading to enhanced financial performance.
So in summary, a good quarter for Feraheme sales and the future looks bright. So with that, I'll turn the call over to Frank to review our financials.
Thanks Bill. In the past year we have made significant changes to AMAG's cost structure and commercial focus which is translated into the positive financial performance that we are reporting today. The second quarter results reflect a number of steps to clean up our balance sheet and to drive the company towards profitability. These steps have resulted in some one-time charges this quarter. However they have also set us up to move forward with a lower cost base and a more predictable cost structure for the company.
Let's spend a few minutes on the financial results for the second quarter. I'd summarize the results of the quarter as follows. First, continued solid growth in Feraheme sales up 10% over the prior year coupled with the recognition of $15 million milestone from Takeda which resulted in record revenues of 31 million for the quarter. While this milestone was recognized completely in the current quarter, we still expect an additional $18 million from upcoming international launches in Canada and Europe. Because the remaining 18 million in milestones relate to commercialization, the recognition of those into revenue will be spread into future periods rather than taken upfront in the quarter that they achieved.
Feraheme sales for the quarter track very nicely against our plan. And the growth was particularly noteworthy given that we implemented the first increase for Feraheme since launch. While the price increase didn’t have a big impact on the Q2 results, it is an important step in our long-term pricing strategy to grow the Feraheme brand, not just in terms of grams but also in terms of dollars. For Q3 and beyond, we'll have the full benefit of the price increase to measure or progress.
Cost of products sold in the quarter was 3.2 million or approximately 22% of net product sales. Now this is higher than our original guidance for 2012 of 14 to 18%. But as many of you know, we announced the decision in June to move completely to an outsourced manufacturing strategy and divest our Cambridge Massachusetts manufacturing site. This decision resulted in certain charges in the current period cost of goods sold, related to idle capacity in the plant and accelerated depreciation. These charges totaling, 1.4 million were classified as COGS in the second quarter. Without these items, COGS would have been about 13% of net sales. Now I expect that we will incur similar charges in the third quarter of this year as we continue the process of shutting down and divesting the facility. But beginning in 2013, I foresee our COGS as the percentage of net sales to be back in line or below our previous guidance range of 14 to 18%.
Our operating expenses are down by approximately 30% compared to just one year ago. You can see that we have significant improvements on both the R&D and SG&A lines. These favorable trends are due to the completion of the IVA Phase III trials and the effect of the headcount restructuring that we implemented late last year. We expect to see continued improvement in 2013 as we realized the full benefit of the cost reduction efforts put in place last month and as we complete the SNDA submission.
We ended the quarter on a very strong financial position with 207 million of cash and investments and have since received the $15 million milestone payment from Takeda in early July. Which brings us to our guidance for 2012 shown on slide 13.
Let me summarize the new guidance which includes a few important updates today. In 2012, we now expect Feraheme sales in the US to be between 55 and $58 million narrowing our previous range and up slightly from the 53 to 57 million. This reflects our results reported for the first half of the year and our expected increase in non-dialysis CKD provider demand of greater than 15% for 2012 over 2011. While we expect to continue to take share in the second half of the year, our assumptions for the second half of the year reflect the seasonality of the IV iron market which tends to be stronger in the first half of the year versus the second half of the calendar year. As I mentioned, the divestiture of the Cambridge facility results in some onetime charges in 2012, mostly in the second and the third quarter. So you'll note the impact of these charges reflected in our updated COGS guidance of 20 to 24% of net Feraheme sales for the 2012 calendar year. It's important to note that a good portion of these charges are non-cash and that they will be non-recurring in 2013 and beyond.
We still anticipate between 90 and 95 million in total operating expenses consistent with our previous guidance despite the fact that we now have restructuring charges included in operating expenses this year but we are still not increasing our expense guidance. So we should exit the year at a lower expense run rate than originally planned.
Once again, I would like to reiterate our plan to manage the business to achieve cash flow breakeven in 2012 including the $33 million in milestones. We recognize the importance of preserving our cash balance as this is the key asset of the company while we continue to drive topline growth for Feraheme and seek to expand our commercial product portfolio.
With that, I'll turn the call back over to Bill for some closing remarks.
Thanks Frank. So I'll conclude with a quick review of some upcoming milestones to watch for. On the clinical regulatory front, we'll be submitting our SNDA for a broad IDA label for Feraheme in the fourth quarter of this year and you can watch for publications and presentations of the key data from our two IVA trials at upcoming scientific meetings through the end of the year.
On a commercial side, we'll continue to drive growth at Feraheme through the four areas of opportunity I discussed in my opening remarks and also enthusiastic about the upcoming international launches of Feraheme or Rienso as it's known in Europe.
From the business development, we expect to be announcing results from our ongoing business development initiatives to expand the AMAG product portfolio. We've identified some attractive product opportunities which are now at various stages of diligence on negotiation.
And finally, we will continue to focus on delivering a financial guidance that we updated today through continued topline sales growth and aggressive management of operating expenses. And with that, I will conclude our prepared remarks and we can now open up the call for question-and-answer. Operator ?
(Operator Instructions). Your first question comes from the line of Matt McKinsey with Robert W. Baird. Your line is open.
Matt McKinsey – Robert W. Baird
Just two quick ones. I notice that Bill I think you talked about the iron market contracting a little bit since Q2'11. Can you just give me a little bit of color on why you think that's happening and then you also mentioned growing the market so how you might be able to do that. And then secondly just on the favorable impact you guys got, $600,000 in Q2, about $500,000 I think Q1, can you give a little more color on that and do you expect to have those favorable impacts the rest of the year?
Just with respect to the impact of returns, when we launched the product we had batches that had two expiry and so had to estimate what we thought a reasonable returns rate was for the product. We're just now seeing the impact of those first batches completing their timeframe when they can be returned and the actual returns rate so far has been quite a bit lower than what was estimated at launch. So we see the impact of that a little bit in Q1. Those were the first set of batches we see getting in Q2 and we will see some additional impact in Q3.
At that point I think we will have enough data to then be able to estimate what we think a reasonable return rate will be going forward and will likely adjust our future return reserve at that point of time. So what you see, the impact of the first two quarters is primarily related to batches that have completed the return window and we now have actual return data versus the original estimates and we’ve had favorable variances there.
So the other two questions I think you asked, the first was regarding the market. As I mentioned the Oncology-Hematology segment actually grew slightly, is up about 3.5%. The hospital market contracted about 5%. So there was a very small decline in terms of the market size and I don't think it's a big enough movement, one way or the other to really comment. I don't think there was any trend or any element within the market that's changing. Again it just looks like we may have had a little shift from the hospital market over into the Oncology-Hematology segment and again a very slight decline in the market size.
Your last question was regarding how we intend to grow the market and I've gone through some of these numbers previously but let me just walk you through some of the market research we've done which is really very interesting. Based on physician market research where physicians indicate that a third of their patients fail on oral irons and that's for our take probably an underestimate but let's just take the number, a third of the 4 million patients that are in oral irons fail and 80% of the time they tell the patient to keep trying and oral iron is difficult to take if not impossible. Clinically it's not the most effective way to increase iron. Iron is not absorbed orally very well and so for a lot of reasons a convenient IV Iron like Feraheme, two very brief injections over a week is a very nice way to resolve the problem of anemia and I think it's a question of education. I think it's a question of educating the referring physicians about the new advances that have been made in IV Iron. I think it's a question of educating patients who are on oral iron to make them aware that there is an alternative and there are ways to do that cost-effectively. For example physician education programs, community education programs where referring physicians are educated not about necessarily a brand but about new advances in IV Iron and I think that alone could really open up this market and help those many patients out there who are still suffering from anemia with products such as Feraheme which offer a nice alternative to the difficult oral irons.
Your next question comes from the line of Eun Yang with Jefferies. Your line is open.
Eun Yang – Jefferies
You mentioned that there was a price increase in the second quarter. So can you tell us what the price increase was and also you mentioned that in this year (inaudible) number to discount to Feraheme. So can you let us know what the growth net adjustment was exiting second quarter?
Eun, the price increase that we implemented was a 5% price increase on the WAC [ph]. Now in certain circumstances some of that was given back to certain customer segments. So we didn’t realize the full impact of that but it happened during the quarter. So it affected a portion of the revenue during the quarter. The impact I think was relatively small for Q2 but going forward we'll have the full impact of that starting in Q3 and we will continue to evaluate the future pricing actions as we work through and measure our progress here.
In terms of gross to net, the gross to net overall is up from Q1 to about 36%. We're really trying to get away from gross to net as a measure of progress on pricing because it's really the price per gram that we realize that I think is most important. So even though gross to net may have gone up what we saw is that the effective price per gram stabilized in Q2 versus Q1 and with the impact of the price increase we're expecting that that will start to grow in the second half of the year. So even though gross to net may have gone up slightly what's important to note is that the amount of revenue we're recognizing per gram is stabilizing this quarter and should start to grow in the third quarter.
Eun Yang – Jefferies
I have one more question. Bill mentioned that you said this morning (inaudible) response from the FDA for IDA. When I look at your press release you've said that a response letter was related to their Shelly New York manufacturing facility but the press release indicates that there is no issues from the FDA regarding clinical data but I think Bill mentioned there could be some issues, if I hold you correctly and can you clarify what that was?
Sure, we know what you know. And so I can just quote from the press release which says that the company believes it has adequately responded to all of the clinical questions concerning the product raised by the FDA during the current review period. So apparently there were questions, it sounds like the company believes that those have been answered adequately but obviously doesn’t know until the final decision is made by the FDA.
Your next question comes from the line of Carol Werther with Summer Street Research. Your line is open.
Carol Werther – Summer Street Research
So when you launched for the broader IDA do you anticipate you will need to add more sales reps and how much do you think that might increase your sales and marketing costs?
So today we call on about 3,000 core treaters of IV Iron and those are the same treatment sites whether it be IDA with CKD or just a broader IDA and so we do not believe that we will need to significantly increase our commercial footprint because these are the same treaters that today treat CKD patients that tomorrow also treat IDA patients and so the answer is we do not need to increase the size of our commercial footprint in order to exploit the IDA opportunity.
I think when we start talking about the market expansion initiative and looking at the oral iron market we will need to somehow reach a broader referral network but that's likely going to be through alternative means again whether that be educational programs with physicians or other types of promotional outreach, it will not be with an AMAG owned sales force and so we do not foresee a significant increase in our commercial footprint in order to capitalize both on the broader label as well as the market expansion opportunity versus oral irons.
Carol Werther – Summer Street Research
Can you comment on where you were for your plans for in-licensing other products?
So I can't comment specifically. As I mentioned when I came onboard that became a very high priority for the company and we have identified several opportunities. Those opportunities are in various stages, some in negotiations, some in diligence and we are very confident that we will be able to complement the portfolio with additional commercial products that leverage our call points and so it's a very active program but I can't at this point disclose any particular products or really give any kind of expectation in terms of dates because at this point those are uncertain but I've said before I think this is a matter of weeks, months, not years, in terms of our ability to close the transaction and put additional products into the into the portfolio.
Carol Werther – Summer Street Research
And my last question, have you booked the $3 million for the launch in Canada or not?
We have not. Once the first commercial sale occurs in Canada we will be able to realize it and it will happen we expect in the second half of this year.
Just to be clear that's a $3 million milestone for the launch in Canada. Just to run through the milestones again it was a $15 million milestone which we have received based on EU approval. There is a pending $15 million approval on the first launch in Europe and then a final $3 million milestone based on launch in Canada and obviously there are future milestones as well.
(Operator Instructions). Your next question comes from the line of Geoff Meacham with JP Morgan. Your line is open.
Hi, this is actually Jom Shiam [ph] for Geoff Meacham. My question is in regard to the European launch. If you could just provide some color and just curious if the market is as robust as here in the states and if you could touch on the reimbursement issues possibly.
This is Bill. The market in Europe is a quite bit smaller in terms of dollars or euros in Europe and we don't have a lot of detail on the European market other than we know the market is $130 million today. There is a relatively new product that's injected for product, which is a higher priced IV Iron in the market but the majority of the market is driven by the older lower-priced IV irons and so I think there is a nice opportunity in Europe in terms of volume of patients on IV Iron and we have great confidence in our partner Takeda who I think will position Feraheme as the spearhead product that it is in the marketplace and we will be able to grab a nice share in the market. But today what we know is that again its $130 million but I think volumes are likely similar to the U.S. but today at a lower price point.
And if I could a follow-up question in the States about the hospital market and penetration more into the formularies and how that's going?
So you can see in our hospital segment that we are gaining share. We had nice volume growth and nice share growth in the hospital segment. That's a relatively new focus for our sales team. We realigned about two months ago. We realigned our sales forces and continued our focus on Oncology-Hematology but also shifted a bit more of our time now to the hospital segment and so I think these are pretty impressive numbers given the fact that we've only been out there for a couple of months. I want to go through the list of formulary acceptances that we've had. We've had a number of formulary wins. As you probably know formulation can take anywhere from three to six months and so we do have pending formulary acceptances.
So this is a segment that we expect to see continued growth and just one last comment on the hospital segment, which is that there is a separation, there is an in-patient segment and an out-patient segment and Feraheme really shines in in the out-patient segment and I think we'll continue to see nice growth there. On an in-patient basis I don't know that that the Feraheme product proposition is ever going to make a significant impact in the in-patient but we will focus our efforts on the out-patient work and you can see in the share numbers we're making good progress.
Your next question comes from the line of David Friedman with Morgan Stanley. Your line is open.
David Friedman – Morgan Stanley
Actually on the hospital segment, does getting a broad IDA label give you a fresh chance to go at some hospital formularies that either haven’t adopted the drug or had previously specifically chosen not to adopt the drug and then do you also have any sense as to where iron is typically given for non CKD IDAs. They are typically given in the in-patient setting versus the out-patient setting.
To answer your first question yes, I do believe that the broader label is going to provide a nice opportunity for us in some hospitals. It doesn’t happen all the time but you can imagine in some hospitals, just for simplicity sake they want to carry one iron and they want to carry one iron that has a broad label, just so they can use that across their broad spectrum of patients who suffer from iron deficiency anemia and so in those cases the broad IDA labels absolutely going to help us because Feraheme is a product that they in the future can use across their broad patient population. So yes, I think that is going to provide a nice opportunity in the hospital segment.
In terms of where patients are treated, it's a little bit more challenging question. When a patient is in-patient they may be started on IV iron and depending on how long they stay in the hospital they may complete their IV iron treatment in the hospital. There also instances where a patient begins their IV Iron treatment as an in-patient and finishes that treatment as an out-patient. Probably the most interesting segment is that the pure out-patient play where a hospital's IV Infusion Center is basically the communities IV Iron referral site, physicians in the community who identify patients who have IDA with CKD are referring those patients into that particular out-patient hospital setting for their IV Iron and so their complete iron treatment is done in an outpatient setting and that's really a nice opportunity for the Feraheme to capitalize on it. I would say those are kind of patients that we really focus on.
Your last question comes from the line of Joseph Schwartz with Leerink Swannshort. Your line is open.
Joseph Schwartz – Leerink Swannshort
I was wondering since other IDA encompasses many different patient types are there unique factors that you think distinguish any of them and might contribute to quicker or slower adoption in any of the patient segments?
That's an interesting question. We view all of these as a really interesting opportunity and I guess I'm fresh from looking at the results from our 302 and 301 trials where the results were so compelling across all of the various patient types whether it be patients referred in from (inaudible), the gastroenterologist, the oncology patients. So I think all of these patients could benefit from Feraheme. Obviously the Feraheme convenience story really plays well with patients who receive two brief injections over about a week and so that's a nice story.
Maybe the only differentiator might be that some of these referring physicians might actually elect to treat patients and the example might be gastroenterologist who do administer IV drugs in their offices and so these physicians might become an especially important audience for us, because they actually do treat patients in their office with IV infusion drugs and so that might be one differentiator. I hope that helps.
This is Frank. If I could just add, I think the decision of which iron to use is often made by the site where the IV iron is administered. So for example in the Hematology-Oncology office, if that physician is often making the decision of which iron to use and they are going to give referrals of these different patients, so as we become a market leader in that segment and continue to take share it will only help us when the broad IDA label is obtained.
There are no further questions in queue at this time. I would now like to turn the call back over to Bill Heiden, AMAG CEO.
Great. Thank you very much and I want to thank you all again for your time today. We are really pleased to have had a very, very good quarter and it's another strong quarter. Following our first quarter results we've got strong Feraheme revenues that are growing, obvious continued aggressive operating expense management and I believe that our core business is sound and we are indeed ready to add additional products to our portfolio which will leverage our commercial footprint and drive us to profitability. And with that we'll close the call. Thank you again.
This concludes today's conference call. You may now disconnect.