King Pharmaceuticals, Inc. Q1 2008 Earnings Call Transcript

King Pharmaceuticals, Inc. (KG)

Q1 FY08 Earnings Call

May 08, 2008, 11:00 AM ET

Executives

James E. Green - EVP, Corporate Affairs

Brian A. Markison - Chairman, President and CEO

Joseph Squicciarino - CFO

Eric G. Carter - Chief Science Officer

Analysts

Donald Ellis - Thomas Weisel Partners

Gregory Gilbert - Merrill Lynch

Ian Sanderson - Cowen And Company

Robert Hazlett - Bank of Montreal

Presentation

Operator

Good morning. Thank you for joining today's King Pharmaceuticals First Quarter 2008 Financial Results. Please welcome James Green, Executive Vice President of Corporate Affairs of King Pharmaceuticals.

James E. Green - Executive Vice President, Corporate Affairs

Good morning. Thank you for joining us today to discuss our financial results for the first quarter ended March 31, 2008. Joining me today are Brian Markison, Chairman, President, and Chief Executive Officer of King; Joe Squicciarino, our Chief Financial Officer; and other members of our management team.

Additionally, I will note that today's call is copyrighted material of King Pharmaceuticals and no portion of this call may be rebroadcast, published, or otherwise disseminated without the company's prior expressed written consent. Also, reports and discussions during this conference call may contain forward-looking statements that reflect management's current view of future events and operations, including, but not limited to, statements pertaining to expectations regarding our product development pipeline, our plan to maximize potential of our existing products, our future financial results, and our strategy for long-term growth.

Forward-looking statements involve certain significant risks and uncertainties, and actual results may differ materially. Certain factors that may cause actual results to differ materially from the forward-looking statements are discussed in the company's press release issued this morning, May 8th, 2008, and in the Risk Factors section and other sections of the company's Form 10-K for the year ended December 31, 2007, which is on file with the SEC. King does not undertake to publicly update or revise any of its forward-looking statements even if experience or future changes show that the indicated results or events will not be realized.

Under Generally Accepted Accounting Principles known as GAAP, net earnings and diluted earnings per share include special items. In addition to our financial results determined in accordance with GAAP, King provides its net earnings and diluted earnings per share results excluding special items. These non-GAAP financial measures exclude special items, which our management considers to be those items that do not relate to the company's ongoing underlying business, are non-recurring or are not generally predictable. Examples of these are listed in the 'About Special Items' section of our press release issued this morning. We believe the identification of special items enhances the analysis of our company's ongoing underlying business and of our company's financial results when comparing results to those of a previous or subsequent like period. However, it should be noted that the determination of whether to classify an item as a special item involves judgments by our management. The specifics of special items affecting the first quarter and a reconciliation of non-GAAP financial measures to GAAP can be found in this morning's press release.

And now, with that I'll turn the call over to Brian Markison, Chairman, President and Chief Executive Officer of King.

Brian A. Markison - Chairman, President and Chief Executive Officer

Good morning, ladies and gentlemen. Thank you for joining us today. Our company has made significant progress and we are off to a great start in 2008. I'm particularly pleased with the strong performance of THROMBIN-JMI. Our hospital team is meeting the challenge of multiple new competitors and we are very proud of their performance thus far. This is a reflection of the well-established and unsurpassed efficacy and safety profile of THROMBIN-JMI. Additionally, our company is focused on the successful execution of our strategy for long-term growth, which includes the submission of up to three new drug applications by the end of this year.

Importantly, our portfolio of pay medicines continues to advance to a very exciting stage. Our partner, Pain Therapeutics, expects to submit an NDA for REMOXY before the end of the second quarter of this year. And we along with Acura Pharmaceuticals expect to report topline results from the pivotal Phase III clinical trial evaluating ACUROX tablets by July and submit that NDA before the end of this year.

Monday's FDA Advisory Committee meeting strengthened our belief that the technologies and programs we are advancing will better meet the needs of patients and practitioners who are seeking the long and short-acting opioid formulations that resist common methods of abuse. The issue of misuse, abuse and diversion of opioid analgesics is recognized as a significant public health problem. The focus has been on long-acting opioids. However, short-acting opioids are of equal concern. This was reaffirmed at Monday's Advisory Committee meeting, which strongly encouraged the further development of technologies and formulations that resist common methods of abuse and address a significant unmet medical need. Given this, we believe that the market will invariably shift the formulations that resist or deter abuse. REMOXY and ACUROX represent significant opportunities to participate in this evolving market.

In addition to these exciting development programs, we also plan to submit an NDA for CORVUE, our internally developed next-generation pharmacologic stress-imaging agent by December 2008. This NDA will be supported by robust clinical data that demonstrate efficacy as well as improved safety over standard therapy.

With respect to our ongoing business development activities, we are aggressively evaluating many opportunities, particularly in the neuroscience, hospital and acute care specialty-driven markets. Accordingly, I look forward to sharing many exciting developments with you in the months ahead.

Now, I would like to turn the call over to Joe Squicciarino, our Chief Financial Officer, for the purpose of reviewing the financial results for the first quarter.

Joseph Squicciarino - Chief Financial Officer

Thank you, Brian, and good morning everyone. Revenues for the first quarter totaled $432 million. Net revenue from our Branded Pharmaceuticals segment totaled $369 million during the quarter compared to $449 million in Q1 of last year. This decrease was primarily due to the market entry of the first generic substitute for ALTACE in December 2007. We expect ALTACE net sales to significantly decrease during the remainder of the year. Our total revenues during the first quarter also include $43 million from our Meridian Auto-Injector business and Adenoscan scan royalties of $19 million.

Our gross margin was approximately 79% in the first quarter. We continue to expect a full-year gross margin of 75%, primarily as a result of the anticipated decrease in ALTACE net sales during the reminder of the year.

Total selling, general and administrative expense, excluding special items and our co-promotion fee for ALTACE was $109 million in the first quarter of this year. This compares favorably with SG&A expense of $121 million during the first quarter of 2007 and $126 million during the fourth quarter of last year. As a result of planned marketing and sales force investments, our first quarter SG&A expense was higher than the level we expect for each of the remaining quarters this year. As previously stated, we have taken the steps necessary to realize SG&A cost savings of $75 million to $90 million this year when compared to last year, and we are currently on track to achieve these savings.

Depreciation and amortization, excluding special items, totaled $69 million [ph] in the first quarter of 2008. Approximately $30 million of this amount is associated with intangibles related to ALTACE, which were fully amortized during the first quarter. Accordingly, we expect depreciation and amortization to reach approximately $31 million in each of the remaining quarters of 2008.

Research and development expense equaled $29 million during the first quarter. With the anticipated achievement of development and regulatory milestones related to both REMOXY and ACUROX later this year, we continue to expect R&D expense in 2008 to be in the range of approximately $175 million to $180 million. Our effective tax rate for the first quarter was approximately 34%.

Moving to earnings per share, for the first quarter GAAP EPS was $0.36, while EPS excluding special items was $0.37. Cash flow from continuing operations for the first quarter totaled $100 million and we are on track to meet this year's cash flow from operations forecast of $400 million to $450 million. As of March 31, 2008, our investments in debt securities was approximately $589 million, which reflects cumulative unrealized holding losses of $28 million. We believe these losses are temporary and have recorded them and accumulated other comprehensive income in the equity section of our balance sheet.

Since the end of the first quarter of this year, we have liquidated an additional $93 million of investments in debt securities through issue recalls and successful options. Note that since we experienced our first sale of option on February 11th of this year, we have liquidated nearly $250 million or over 30% of our investment in debt securities. Also as of March 31, 2008, our unrestricted cash and cash equivalents totaled $827 million. We plan to use our cash to fund our planned business development activities and our investments in R&D, which include the ongoing development of REMOXY and ACUROX that are vitally important components of our strategy for long-term growth.

Now, I'd like to turn the call back over to the operator for question-and-answer session. Operator?

Question and Answer

Operator

Thank you, Mr. Squicciarino. [Operator Instructions]. And our first question comes from Donald Ellis from Thomas Weisel Partners. Please go ahead.

Donald Ellis - Thomas Weisel Partners

Thank you, and good morning. First question is regarding SKELAXIN. Year-over-year prescriptions were down about 8.5%, but the revenue reported was up about 3.5%. How much of that was stocking versus price increase?

Brian A. Markison - Chairman, President and Chief Executive Officer

Hi, this is Brian. We are getting that exact information to you right now.

Donald Ellis - Thomas Weisel Partners

Okay. I’ve got some follow-up questions. Regarding Amrex [ph] what you're seeing out there in the marketplace regarding that competitive threat from Amrex?

Brian A. Markison - Chairman, President and Chief Executive Officer

Well, what we were seeing is a much more competitive market in terms of share of voice than we had been seeing over previous years. Not too long ago, SKELAXIN was the only branded muscle relaxant in the marketplace and now we've got a couple of more entrants and we're seeing this share of voice. So it's got a meaningful impact in terms of our ability to out-shout the competition. And we have earlier answer to your question. Joe?

Joseph Squicciarino - Chief Financial Officer

Good morning, Donald. As far as stocking goes, we had a slight uptick, it was about a little more than half a week in inventory out in the trade, but it's still right at about half a month. So that was not a significant factor, and we did get a better system price versus last year.

Donald Ellis - Thomas Weisel Partners

Okay. The next question regarding the FDA advisory panel on Monday with Purdue, one of the consultants made a comment that 90%... 97% of the overdoses were due to taking the Oral [ph] as suppose to crushing the Oral and then using injectable. Doesn’t that make you guys a lot more bullish on your ACUROX product versus the REMOXY product?

Brian A. Markison - Chairman, President and Chief Executive Officer

I think there was a lot going on at that advisory panel, and I think we all learned a lot about what the FDA and what the advisers are hoping to see from industry. We're very equally bullish on both. We think we are on the right track and we remain on track as we've said earlier to file the NDA for REMOXY before the end of the second half and ACUROX by the end of the year. So we're bullish about both.

Donald Ellis - Thomas Weisel Partners

Okay. If it is correct on those numbers, I mean ACUROX, which solved that problem of overdosing on the Oral whereas REMOXY wouldn't solve that problem, is that correct?

Brian A. Markison - Chairman, President and Chief Executive Officer

Well, remember, we have not with our partner disclosed really the plethora of data that we have on the formulation. So all I’d say is we are on track to file our NDA and we remain optimistic about both formulations.

Donald Ellis - Thomas Weisel Partners

Great. Thank you for taking the questions.

Operator

And our next question comes from Greg Gilbert from Merrill Lynch. Please go ahead.

Gregory Gilbert - Merrill Lynch

Thanks. Brian, once filed, do you and Pain expect a priority review for REMOXY, and if so can you talk about your commercial plans as they apply to '08?

Brian A. Markison - Chairman, President and Chief Executive Officer

Well, I think the priority review is something that we would certainly hope for. Again, it's going to depend on how the FDA uses the submission as much as anything else and what else is the FDA looking at. Now, the commercial plan that you... the question you ask about 2008, do you mean right now or do you mean when we launch for REMOXY?

Gregory Gilbert - Merrill Lynch

I don't mean to pin it down to '08, but what do you need to do from a cost expansion standpoint, whether it's speed on the street or launch meanings, if you can just give us some context around that, whether it's '08 or early '09, that isn't so important?

Brian A. Markison - Chairman, President and Chief Executive Officer

Well, I think it's a great question, and we're going to answer that. Number one, we need to add resource but not too much. I think we're looking at a very modest level of resource addition here. And again remember, we restructured the company with REMOXY in mind and ACUROX in mind at the end of the fourth… third and fourth quarter of last year when we lost exclusivity on ALTACE. So, the footprint we have right now we're very comfortable with, and we think that a modest expansion will be required and that's what we are planning for. And I am not going to dimensionalize modest at this time.

Gregory Gilbert - Merrill Lynch

Hey, Joe, can you update us on channel inventory levels for the other key products in the quarter versus last quarter?

Joseph Squicciarino - Chief Financial Officer

We're in a really good play. We've seen very little movements from the fourth quarter, and I don't mind sharing with you that we are for SKELAXIN, THROMBIN, as… first SKELAXIN and THROMBIN we are at about half a month, slightly below that. We did see an uptick in ALTACE, but that is well below a month and that increase is based on the current uptick from the wholesalers and it's also reflective of course of the decline in sales. So we are in very good shape as far as that goes.

Gregory Gilbert - Merrill Lynch

And if your… your inventory date on THROMBIN as good as it would be, if there were retail dispensed product?

Joseph Squicciarino - Chief Financial Officer

That question always exists. We monitor our usage as best we can and we certainly know we ship. And the pull-through is still pretty consistent. So we are comfortable with our THROMBIN inventory levels.

Gregory Gilbert - Merrill Lynch

Great. And lastly for Brian, can you provide any update on the possibility of the SKELAXIN settlement with Endo? Thanks.

Brian A. Markison - Chairman, President and Chief Executive Officer

No, no update. Just what I've said previously is... which is we are open to that notion if the opportunity should present itself.

Gregory Gilbert - Merrill Lynch

Thanks very much.

Operator

And our next question comes from Ian Sanderson from Cowen and Company. Please go ahead.

Ian Sanderson - Cowen And Company

Good morning. Thanks for taking the question. Coming out of the Advisory Committee meeting on Monday, it appeared that one of the things lacking certainly for Purdue is supporting data for the abuse-resistant claim. Do you... have you generated such data for REMOXY or might you generate those data, and would such data be presented this year?

Brian A. Markison - Chairman, President and Chief Executive Officer

I think it's a great question. I'm trying to figure out how to answer your question without breaching too much. I’m going to turn it over to Eric Carter, our Chief Science Officer.

Eric G. Carter - Chief Science Officer

Yes. Hi, Ian. Obviously this is a key question, and clearly we have a significant amount of clinical data that we believe will well support our application. The issue of getting an abuse deterrent or abuse resistant claim actually is likely to depend on being able to demonstrate benefits once the product is abused… excuse me, once the product is approved in the marketplace and therefore are able to be compared against other products over a longish period of time. So, in other words, although we have a significant basis on... based on clinical studies to support our application, we will plan most likely following discussions on this with the agency to do some studies following approval to address that particular problem.

Ian Sanderson - Cowen And Company

Okay. And so, is your planning at this point to have sort of that implicit claim of abuse resistant by talking about the tamper resistance of the formulation?

Eric G. Carter - Chief Science Officer

The agency has made it abundantly clear to all of us that in order to get an explicit claim, they will require these longer-term epidemiological type of studies.

Ian Sanderson - Cowen And Company

Okay. And if I could follow-up just on the R&D spending trends for the balance of the year, the guidance would presume a fairly significant acceleration in the second half of the year, and can you tell us what that might be applied to?

Joseph Squicciarino - Chief Financial Officer

Sure, Ian. We eluded to this on the last call that we had. Included in that range of $175 million to $180 million this year are what I'll characterize as fairly significant milestone payments that we'll be making to both Acura and PTI.

Ian Sanderson - Cowen And Company

Okay. Thank you.

Brian A. Markison - Chairman, President and Chief Executive Officer

You're welcome.

Operator

And our next question comes from Kim Seth from Goldman Sachs. Please go ahead.

Unidentified Analyst - Goldman Sachs

Thanks for taking the question. Just a couple of product questions and then a gross margin question. On REMOXY, it seems like one of the big focus is... and also actually coming out of the second day of the Advisory Committee that a risk map… risk mitigation strategy was very important to the committee. Have you talk much about… or could you provide any insight on how you thought about that or if you feeling you need to take some modifications to your plan or do you think you're ready on the risk map front?

Eric G. Carter - Chief Science Officer

Hi, Ken. Thanks. This is Eric Carter, the CSO. Yes, we've spent an awful lot of time in coming up with what we believe to be a state-of-the-art risk map that addresses the multidimensional aspects of mitigating risks and… for these medicines. And we believe that although this will be discussed clearly with FDA during the review process, we believe that the plan that we’ve put in is very comprehensive, multidimensional and hopefully meets all of our stated objectives.

Unidentified Analyst - Goldman Sachs

Okay, thanks. And on THROMBIN-JMI, there's been a lot of concern about potential pricing pressure. And I was wondering if you could just sort of give us a better idea what you're seeing and maybe get some sense of what you expect moving forward on that?

Brian A. Markison - Chairman, President and Chief Executive Officer

Yes, I think if there is going to be a lot of pricing pressures, then clearly we have a significant advantage because our cost of good structure. And I don't know if this was picked up recently, but I believe it became public yesterday, that ZymoGenetics received a letter from CBER, which is a violative advertising and promotional labeling letter, where… I'll just read you a little bit from this letter. It’s promotional material [inaudible] within the meaning of the medical zone. So, clearly Zymo has been put on notice, and I'm not quite sure what their story is going to be given the enormous track record of safety and efficacy we have with THROMBIN-JMI.

Unidentified Analyst - Goldman Sachs

Thanks. Interesting. Finally, I guess gross margins, is there any greater breakout or some sense that you can give on the how the different products track or where they’re heading, little bit of a breakout within the pharmaceutical group at least?

Thomas R. McDaniel - Executive Vice President, Chief Financial Officer and Treasurer

Sure, Kim. I'm not going to get into the specifics of our individual products, although I will come back to THROMBIN-JMI and just remind you that a year ago we embarked upon a competitive contracting strategy to shore up our position on the hospital formularies, and we have… that has been very successful and served as well to date. There was a little bit of price that had to go with that, but not much, and THROMBIN, now to come back to your more specific question, is still… it still has a very nice gross profit margin for the company.

I'll answer your question just in the total sense as far as our gross profit margin for the first quarter and what we anticipate for the rest of the year. We came in, in the quarter, as you saw, at about 79%. We're still forecasting that for the total year we’ll come in at about 75%. And the single largest factor driving that of course will be the significant decline from here on in our… in ALTACE sales. So we're still comfortable with the 75% margin for the year.

Unidentified Analyst - Goldman Sachs

Great. Thanks for taking the question.

Thomas R. McDaniel - Executive Vice President, Chief Financial Officer and Treasurer

Sure.

Operator

And our next question comes from Hudson Boie [ph] from Wachovia Capital Management. Please go ahead.

Unidentified Analyst - Wachovia Capital Markets

Thanks for taking the questions. Just regarding the R&D and the milestones on REMOXY and ACUROX, can you be a little bit more specific about how large those milestones are?

Brian A. Markison - Chairman, President and Chief Executive Officer

Thank you for your question, Hudson. What we have not disclosed nor will we disclose these specifics around the exact dollar amounts there, but I will say this. Given the fact that we're going to be filing, we're going to… have this filing very soon, you would anticipate that any licensing deal at those milestones… there is a good chance that milestones would be attached to acceptance to file as well as an approval, perhaps you can think about it that way. So unfortunately, we're not going to get into the details of the exact dollar amounts of those milestones, but they do pertain to both PTI and Acura.

Unidentified Analyst - Wachovia Capital Markets

Okay, and just one more question. Do you recognize any revenue for the ALTACE tablets in Q1? And also can you tell us what the Sonata Q1 sales were?

Brian A. Markison - Chairman, President and Chief Executive Officer

Sure. Sonata first-quarter sales came in at $17 million. Unfortunately, the level of sales for the tablets were very low. To date we have shipped less than $2 million. And we are prudently reserving for returns against that gross sales number.

Unidentified Analyst - Wachovia Capital Markets

Okay. Thanks a lot.

Operator

And our next question comes from Bert Hazlett from the Bank of Montreal. Please go ahead.

Robert Hazlett - Bank of Montreal

Thanks. Thanks for taking the question. Regarding the Advisory Panel meeting on Monday, is it your expectation that the Purdue abuse-resistant product will be on the market ahead of you and if so do you do plan on them pulling the existing product... Oxycon product off the market ahead of time? And then secondly, back to the trials, following up on Ian's question, there was a notion that additional trials might be necessary or might be required to demonstrate the tamper-resistant features and/or the characteristics of the tamper-resistant feature prior to approval. Are you comfortable that all the additional tamper-resistant work will be necessary to post approval? Thanks.

Brian A. Markison - Chairman, President and Chief Executive Officer

Okay. Let me try to take it in pieces. I think starting with Purdue’s product, it's hard for me to speculate what's going to happen next, I think the Advisory Committee clearly didn't go their way. And quite frankly it's now up to the agency and Purdue to figure out what that path is going to be. I think they're going to be required to do more work but I really do not have any further insight into this and that will be revealed over time. I think what Dr. Carter mentioned a little bit ago in response to Ian's question one of the differences is that we do have clinical information that will be a part of our submission that was not in evidence on Monday at the Advisory Committee. So that's very clear. Number two, I don't think our work will ever be done given the marketplace and the unmet need in terms of surveillance and follow-up and clinical trials with regard to abuse deterrents. So, I think, A, we are committed to the field, B, we feel strongly about our technology, C, we have additional information in humans in clinical studies that are going to be part of the NDA and again we remain on track and that is really all I can really surmise from all of that.

Robert Hazlett - Bank of Montreal

Okay. And just... I guess what I'm trying to drive at is if Purdue is required to do more work, do you think that that additional work will apply to you or do you really think you will have enough going into the application to answer all the questions that were brought up at the panel meeting?

Eric G. Carter - Chief Science Officer

Hi, this is Eric Carter. A fair question. One of the objectives of the Advisory Committee meeting was to try to set some standards in terms of what would constitute... what was referred to as tamper-resistance and although the Committee actually never at least to my hearing, never came up with these particular standards they established a fairly high bar relative to demonstrating the tamper-resistance product. We believe that we have carried out a large portfolio of studies that address all of the possible common methods of abuse and that we will be presenting these data within the NDA submission. So, to summarize my answer there are no fixed standards debate but we have a comprehensive portfolio of studies that we believe address all of the key issues that were discussed at the Advisory Committee.

Robert Hazlett - Bank of Montreal

Thanks, that's helpful. Just one other follow-up. Is... you've now had two major efforts in tamper-resistant opioids. Is this something where we should look for you to pursue additional technologies, or do you feel that you're comfortable with the deals that you've done, and you plan to move forward with these formulations, organic is there something more broad that you might be pursuing beyond this?

Brian A. Markison - Chairman, President and Chief Executive Officer

No, REMOXY with pain therapeutics is really the first one of a series of potential products and it should be viewed as a platform in the long-acting opiod space. At Acura... ACUROX with our partner Acura Pharmaceuticals is also the first one out and what will also be a platform. So, with regard to the opioids, I think we are fairly well covered especially in this space. And we're always open to looking at new opportunities within the space. They would have to be incrementally beneficial in our mind but more importantly, our business development efforts are looking to capitalize on this infrastructure now and expand within neuro as well. So, we are looking at other opportunities in the neurospace and again we also remain opportunistic about resistant development efforts.

Robert Hazlett - Bank of Montreal

Thanks for the answers. I appreciate it.

Operator

And our next question comes from Greg Gilbert from Merrill Lynch. Please go ahead.

Gregory Gilbert - Merrill Lynch

Thanks. A couple of follow-ups. How do you expect Adenoscan to do against the new CV and a sales product and what are their responsibilities, with respect to detailing Adenoscan under your agreement with them?

Brian A. Markison - Chairman, President and Chief Executive Officer

Okay. Well, their responsibilities now are to give us some minimum royalty, which is an agreement that we reached with them a little while ago. And that guaranteed minimum royalty is $40 million, but I forgot, Jim, do you remember the exact length of time for that.

James E. Green - Executive Vice President, Corporate Affairs

It's three years.

Brian A. Markison - Chairman, President and Chief Executive Officer

It's three… for the next three years. From June... starting from June of this year it's three 12-month periods of $40 million minimum. Okay. So that's one. Number two, based on the Phase III data that we've seen for Coreview [ph] we think should it be approved, it will compete very well.

Gregory Gilbert - Merrill Lynch

And then just another subject, I wanted to cover real quick, on THROMBIN again, to what extent to the slow uptake of the competitive products be guided by just a process of them needing to meet with formulary committees and such, and have you lost any major customers? Thanks.

Brian A. Markison - Chairman, President and Chief Executive Officer

We think that the issue of getting through the formulary committee is real. We think that it is a process, it’s not an overnight conversion by any means and what I've said months-and-months-and-months and maybe even years ago is that this will be an account-by-account fight to the finish. The number of customers that have converted to them, we rate in less than one handful but again that's information that changes daily. So I really don't want to go on about it. I'm sure they've got different numbers and that's not that meaningful. I think what's most meaningful are what are our sales, what are they're sales. And also I want to know what they are going to do now that they've got this violation letter from CBER about misbranding their product and the safety profile, because the only reason they were talking about it... hospitals was because of an alleged safety benefit from the lower incidence of antibodies which the FDA has now told them is meaningless.

Gregory Gilbert - Merrill Lynch

Thanks for the color.

Operator

Well, now we've released our... now we reached our allotted time for questions. So, I would now like to turn the call over to James Green.

James E. Green - Executive Vice President, Corporate Affairs

I want to thank everyone for joining us today. We appreciate your interest in King Pharmaceuticals and we look forward to talking with you again when we report our earnings for the second quarter of 2008. Have a good day.

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