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Executives

G. Michael Freeman - Associate Vice President of Investor Relations & Corporate Communications

Adam C. Derbyshire - Chief Financial Officer, Principal Accounting Officer and Executive Vice President of Finance & Administration

Carolyn J. Logan - Chief Executive Officer, President, Director and Member of Pricing Committee

William P. Forbes - Chief Development Officer and Executive Vice President of Research & Development

Analysts

Annabel Samimy - Stifel, Nicolaus & Co., Inc., Research Division

Michael Faerm - Crédit Suisse AG, Research Division

Gary Nachman - Susquehanna Financial Group, LLLP, Research Division

David G. Buck - The Buckingham Research Group Incorporated

David Amsellem - Piper Jaffray Companies, Research Division

Gregory B. Gilbert - BofA Merrill Lynch, Research Division

Ami Fadia - UBS Investment Bank, Research Division

Irina Rivkind - Cantor Fitzgerald & Co., Research Division

Michael Kallai Tong - Wells Fargo Securities, LLC, Research Division

Jason M. Gerberry - Leerink Swann LLC, Research Division

Tim Lugo - William Blair & Company L.L.C., Research Division

Salix Pharmaceuticals (SLXP) Q3 2012 Earnings Call November 7, 2012 5:00 PM ET

Operator

Good afternoon, my name is Allie, and I will be your conference operator today. At this time, I would like to welcome everyone to the Salix Pharmaceuticals Third Quarter 2012 Earnings Conference Call. [Operator Instructions] Thank you. I would now like to turn the conference over to your host, Michael Freeman. Mr. Freeman, you may begin your conference.

G. Michael Freeman

Good afternoon. Thank you for joining us today. I am Mike Freeman, Associate Vice President of Investor Relations and Corporate Communications for Salix Pharmaceuticals. With me today are Carolyn Logan, President and Chief Executive Officer; Adam Derbyshire, Executive Vice President and Chief Financial Officer; and Bill Forbes, Executive Vice President, Medical and Research and Development, and Chief Development Officer.

Adam will begin the presentation with a review of the financial results for the third quarter of 2012. Carolyn then will review operations to complete the formal segment of today’s call. At the conclusion of each comments, management will respond to appropriate questions.

Various remarks that management might make during this conference call about future expectations, plans and prospects for the company constitute forward-looking statements for purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results might differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in our press releases and SEC filings, including our Form 10-K for 2011. Specifically, the information in this conference call related to projections, development plans and other forward-looking statements is subject to this Safe Harbor.

I now will turn the call over to Adam.

Adam C. Derbyshire

Thank you, Mike. Total product revenue was $185.1 million for the third quarter of 2012, a 27% increase compared to $146.2 million for the third quarter of 2011. Total product revenue for the first 9 months of 2012 was $537.3 million, a 39% increase compared to $385.3 million for the first 9 months of 2011.

XIFAXAN revenue for the third quarter of 2012 was $137.9 million, a 43% increase compared to $96.7 million for the third quarter of 2011.

XIFAXAN revenue for the first 9 months of 2012 was $367.5 million, a 39% increase compared to $264.4 million for the first 9 months of 2011. APRISO revenue for the third quarter of 2012 was $19.7 million, a 31% increase compared to $15 million for the third quarter of 2011. The combined revenue contribution of our most recently introduced products, RELISTOR, SOLESTA and DEFLUX, totaled $12.1 million for the third quarter of 2012.

Total cost of products sold was $26.5 million for the third quarter of 2012 and $93.9 million for the first 9 months of 2012, compared to $24.1 million for the third quarter of 2011 and $67.9 million for the first 9 months of 2011.

Gross margin on total product revenue was 85.7% for the third quarter of 2012 compared to 83.5% for the third quarter of 2011, and 82.5% for the first 9 months of 2012 compared to 82.4% for the first 9 months of 2011.

Research and development expenses were $32.8 million for the third quarter of 2012 and $86.7 million for the first 9 months of 2012, compared to $24.8 million and $85.3 million, respectively, for the prior year periods.

The increase in research and development expenses for 2012 compared to 2011 is due primarily to increased expenses related to our Phase III retreatment study of rifaximin for irritable bowel syndrome with diarrhea.

Selling, general and administrative expenses were $61.5 million for the third quarter of 2012 compared to $41.4 million for the prior year period, and $187.3 million for the first 9 months of 2012 compared to $132.8 million for the prior year period.

The increase in selling, general and administrative expenses for 2012 compared to 2011 is due primarily to increased personnel costs related to our sales force expansion in 2012 and increased marketing expenses related to SOLESTA and XIFAXAN550 for hepatic encephalopathy.

The company reported GAAP net income of $16.5 million or $0.26 per share, fully diluted, for the third quarter of 2012, and $46.4 million or $0.73 per share, fully diluted, for the 9-month period ended September 30, 2012.

Net income on a non-GAAP basis, excluding the loss on extinguishment of debt and noncash adjustments related to the repurchase of a portion of our 2028 Notes in March of 2012, the intangible asset impairment charge and the change in acquisition-related contingent consideration that occurred in September 2012, the difference between income taxes paid and income taxes expensed and noncash depreciation, amortization, stock-based compensation and convertible debt interest expense was $59.7 million or $0.95 per share, fully diluted, for the 3-month period ended September 30, 2012, and $154.5 million or $2.43 per share, fully diluted, for the 9-month period ended September 30, 2012.

We believe these non-GAAP measures might provide investors additional relevant information, in part for purposes of historical comparison. In addition, we use these non-GAAP measures to analyze our performance in more detail and with better historical comparability. However, you should be aware that non-GAAP measures are not superior to nor a substitute for the comparable GAAP measures. We have provided in the press release issued earlier this afternoon a reconciliation of these measures to the most closely related GAAP measures.

Cash and cash equivalents were $775.9 million as of September 30, 2012. XIFAXAN550 continued to perform well during the third quarter of 2012. During the quarter, our XIFAXAN prescription business, comprised of XIFAXAN 200-milligram tablets and XIFAXAN 550-milligram tablets, demonstrated impressive growth on a milligram basis of 20% compared to third quarter of 2011.

APRISO also demonstrated strong prescription year-over-year growth of 24% for the third quarter of 2012 compared to the third quarter of 2011. RELISTOR prescriptions increased 89% year-over-year for the third quarter of 2012 compared to the third quarter of 2011. We continue to believe total company product revenue for 2012 will be approximately $735 million, representing 30% -- 36% growth over 2011 revenue.

We now believe we'll be able to generate adjusted net income of approximately $200 million or $3.13 per share, fully diluted on the non-GAAP basis described earlier for the full year ending December 31, 2012.

The current annualized run rates based on dollarizing August 2012 prescription data for XIFAXAN, MOVIPREP/OSMOPREP, APRISO, RELISTOR U.S. and our other products are approximately $495 million, $108 million, $87 million, $32 million and $48 million, respectively.

In line with the full year 2012 guidance provided above, for the fourth quarter of 2012, we anticipate total company product revenue should be approximately $198 million and adjusted net income should be approximately $46 million or $0.72 per share, fully diluted on a non-GAAP basis described earlier.

I now will turn the call over to Carolyn Logan, our President and CEO.

Carolyn J. Logan

Thank you, Adam. Our third quarter growth was driven primarily by XIFAXAN550, APRISO and RELISTOR. XIFAXAN continues to grow sequentially with prescriptions on a milligram basis, increasing 5% for the third quarter of 2012 compared to the second quarter of 2012.

APRISO also continued to exceed the company's expectations during the quarter. APRISO prescriptions increased 4% during the third quarter of 2012 compared to the second quarter of 2012. RELISTOR prescriptions increased 18% during the third quarter of 2012 compared to the second quarter of 2012.

During the third quarter, our sales force continued launching SOLESTA, our first-in-class, biocompatible tissue bulking agent for the treatment of fecal incontinence or FI. FI is estimated to affect approximately 15% of people in the United States over the age of 50, and it is the leading reason for admission to assisted living facilities in the United States. Physicians and patients have shown significant interest in the use of SOLESTA as an alternative to more invasive treatment options in the treatment of fecal incontinence.

In early November, the Centers for Medicare and Medicaid Services, or CMS, assigned SOLESTA a unique HCPCS code of L8605 for reimbursement purposes. This new code will facilitate separate reimbursement for SOLESTA across the multiple settings of care. SOLESTA will be billed under the new code L8605, which is Injectable Bulking Agent, Anal Canal, effective January 1, 2013.

On July 27, 2012, the company received from the FDA a Complete Response Letter, or CRL, requesting additional clinical data for our supplemental New Drug Application for RELISTOR, which is methylnaltrexone bromide, injection for subcutaneous use for the treatment of opioid-induced constipation, or OIC, in adult patients with chronic, non-cancer pain. On October 5, 2012, Salix conducted an end-of-review meeting with the FDA's Division of Gastroenterology and Inborn Errors Products to better understand the contents of the letter.

The division has expressed a concern that there be a risk associated with the chronic use of mu-opioid antagonists in patients that are taking opioids for chronic pain. In order to understand this potential risk, the division has communicated that a very large, well controlled chronic administration trial will have to be conducted to assess the safety of any mu-opioid antagonist prior to market approval for the treatment of patients with OIC who are taking opioids for chronic, non-cancer pain.

Salix has held discussions with the division and has expressed the view that the post-marketing, clinical and preclinical data currently available for RELISTOR adequately demonstrate an appropriate and expected safety profile sufficient to permit the approval of the current sNDA.

The company plans to continue to work with the FDA to generate a reasonable path forward that can be agreed upon by both parties for the further development and regulatory review of RELISTOR. While it is not possible to definitively determine the duration of our discussions with the FDA regarding this matter, at this time, we anticipate a path forward could be reached with the FDA during 2013.

Opioid-induced constipation is a debilitating and unmet medical need that occurs as a consequence of opioid use in some patients that are taking opioids for chronic pain. Currently, there are no FDA-approved therapies for OIC in chronic, non-cancer pain patients.

Before changing our plans for development of RELISTOR, we intend to make every effort to gain approval for the expanded use of RELISTOR to extend the benefit that RELISTOR has provided to relieving OIC in advanced-illness patients since 2008 to meet the unmet medical need of OIC in patients with chronic, non-cancer pain.

Based on the information discussed above, we reassessed the value of the indefinite, lived intangible asset related to the chronic, non-cancer pain indication and recorded a noncash charge to earnings of $41.6 million in the 3-month period ended September 30, 2012.

We also reassessed the fair value of the contingent consideration related to RELISTOR and recorded a $33 million decrease in the contingent consideration that resulted in a corresponding increase to earnings in the 3-month period ended September 30, 2012.

In respect of the currently approved subcutaneous formulation of RELISTOR for OIC in patients with advanced illness who are receiving palliative care, physician feedback indicates a significant need in the marketplace for a treatment that targets the underlying cause of OIC without impacting opioid-mediated analgesic effects on the central nervous system. RELISTOR does this by displacing opioid binding in tissues in the gastrointestinal tract.

Since we introduced RELISTOR in April of 2011, an increasing number of physicians have begun to treat their patients with advanced illness who are receiving palliative care with RELISTOR as a solution to OIC when response to laxative treatment has not been sufficient.

In early November, the Centers for Medicare and Medicaid Services, also known an CMS, assigned RELISTOR a unique Healthcare Common Procedure Coding System, which is a HCPCS code of J2212 for reimbursement purposes.

We initially estimated peak-year sales of RELISTOR for advanced illness could reach approximately $50 million. Based on RELISTOR's performance over the past 18 months, we are increasing our estimate of peak-year sales to approximately $100 million for this indication.

We continue to anticipate an action by the FDA by the end of the first quarter of 2013 on our NDA for Crofelemer 125-milligram tablets for the proposed indication of the control and symptomatic relief of diarrhea in patients with human immunodeficiency virus, or HIV, and acquired immune deficiency syndrome, or AIDS, who are on anti-retroviral therapy.

Both the FDA and Salix are continuing to work collaboratively to progress this important product through its full review. To date, this collaboration has resulted in substantial progress in handling topics important to crofelemer, as well as future botanical products in general.

The primary focus of our collaboration is the production and control of the crofelemer active pharmaceutical ingredient in order to ensure compliance with the manufacturing and product quality requirements of the Federal Food, Drug & Cosmetic Act. Both Salix and the FDA are committed to a robust level of cooperation and data exchange with the goal of providing crofelemer to patients suffering from the very important unmet need of the indication for which we are seeking approval.

Our effort to date has advanced both the chemical and the regulatory science methods available to ensure the quality and clinical usefulness of crofelemer, and potentially, other products that are of botanical origin.

On February 21, 2012, the company initiated TARGET 3, a Phase III study to evaluate the efficacy and safety of repeat treatment with rifaximin 550-milligram TID, or 3x a day, for 14 days in subjects with irritable bowel syndrome with diarrhea who respond to an initial treatment course with rifaximin 550-milligram TID for 14 days.

During the third quarter, we continued to enroll a number of subjects sufficient to randomize approximately 800 subjects, that would be 400 subjects per treatment group, into the double blind retreatment phase of the study.

We initiated patient enrollment in TARGET 3 during the first half of 2012, and we currently anticipate securing a FDA decision regarding approvability during the first half of 2014.

We continue to strengthen our intellectual property relating to rifaximin for the treatment of IBS-D. A method of treatment patent regarding XIFAXAN550 for the treatment of IBS-D should issue November 13, 2012, and should provide protection until 2029.

In August, Salix entered into an exclusive agreement with Alfa Wassermann by which we licensed rights in the United States and Canada to an extended intestinal release, EIR, formulation of rifaximin for gastrointestinal and respiratory indications, including Crohn's disease. The EIR formulation of rifaximin has been designed to provide an efficient delivery of rifaximin by releasing the active drug following passage through the stomach in order to provide a homogenous distribution of rifaximin in the intestinal tract.

This EIR formulation of rifaximin will be studied for its potential to target difficult to treat diseases of the intestinal tract such as Crohn's disease. We intend to initiate 2 Phase III trials during the first half of 2013 with the goal of securing FDA approval to market EIR rifaximin for the treatment of Crohn's disease.

We received the rights to EIR formulation rifaximin products as part of a restructuring of long-standing arrangements between Alfa Wassermann and Salix for the development and commercialization of rifaximin products in the United States and Canada for gastrointestinal and respiratory indications.

The restructuring does not affect arrangements for the rifaximin products currently approved in the Salix territory, nor for any product for treatment of irritable bowel syndrome that might be approved in the future.

Under the new arrangements, Salix has provided Alfa Wassermann with rights to obtain a license to develop and commercialize outside the United States and Canada for gastrointestinal and respiratory indications, formulations of rifaximin currently being developed by Salix and other new formulations of rifaximin that Salix may develop in the future.

During the third quarter of 2012, the company also continued to make progress in the development of budesonide foam, a new formulation of rifaximin and LUMACAN. We anticipate completing patient enrollment in our 2 budesonide foam Phase III trials by the end of 2012.

Currently, we are targeting submission of the NDA for budesonide foam for the treatment of moderate ulcerative proctitis or proctosigmoiditis during the third quarter of 2013. Regarding our next generation formulation of rifaximin, our pharmacokinetic study to assist in the characterization of 3 prototype tablet formulations progressed during the third quarter of 2012, and currently, we intend to move forward with the initiation of a clinical trial in the first half of 2013.

Work continued to progress on the development of LUMACAN oral formulation prototypes. During the third quarter, we initiated an exploratory study designed to evaluate fluorescence kinetics of LUMACAN following enema administration for precancerous and cancerous lesions, in respect of the quality, onset and offset of fluorescence following administration of the enema. If the enema administration is successful, we intend to proceed to orally administer test formulations. We believe that LUMACAN, if approved, has the potential to significantly improve earlier detection and diagnosis of colon cancer.

During the third quarter, we received a paragraph IV notification from Lupin Limited stating that Lupin had filed an ANDA application to seek approval to market a generic version of APRISO. The notification letter asserted non-infringement and invalidity of the company's Orange Book-listed U.S. patent number 6,551,620.

On September 7, 2012, Salix and Dr. Falk Pharma filed a patent infringement complaint against Lupin. The filing of this suit imposes an automatic 30-month stay of approval of Lupin's ANDA. We have full confidence in, and continue to evaluate our intellectual property protecting APRISO, and we intend to vigorously enforce our intellectual property rights.

Salix is built on a tremendous history of success, including the approval of 8 New Drug Applications, the acquisition/licensing of 16 products and the establishment of a top-ranked specialty sales force, all since 2000.

Our core business remains strong and continues to grow. Our portfolio of marketed products is complemented by our impressive pipeline of product candidates in development that should drive additional revenue growth over the long term as they are commercialized.

Additionally, the company continues to actively pursue additional business development opportunities to expand and broaden our product portfolio. We are extremely pleased with the success we have achieved to date, and we believe the company is well-positioned to continue to succeed in our mission of being the leading specialty pharmaceutical company, licensing, developing and marketing innovative products to health care professionals to prevent or treat gastrointestinal disorders.

This completes my comments. And I'd like to thank you for your participation in today's call. So now, I will turn the call back over to the operator to begin the question-and-answer session.

Question-and-Answer Session

Operator

[Operator Instructions] Your first question comes from Annabel Samimy.

Annabel Samimy - Stifel, Nicolaus & Co., Inc., Research Division

I guess, I've got several here. I guess, I'm not even sure where I should start. But maybe we can start on the good news, which is XIFAXAN did very well. Can you give us a little bit more color around where the penetration was? Are you already seeing more penetration into the HE population? Are you seeing increased days of therapy? Can you give us a little sense of the dynamics there?

Carolyn J. Logan

We have continued to promote XIFAXAN heavily for the HE indication. So you see growth in all of those areas. We're getting -- we've broken our all-time highs, not only in prescriptions, a number of milligrams, but also in riders. And we look at the number of riders for the products that we have because generally, increased prescriptions, or in our case increased milligrams, follow increase riders. So more and more physicians are adopting the drug for HE patients. We still have a lot of work to do. There's still a lot of opportunity for growth because of course, patients, we know that about 64% of them are not currently being treated. We have recently premiered a documentary. It's around disease state, because we realized if physicians learn to watch for overt HE and talk to caregivers and family members that their patients who have chronic liver disease, cirrhotic patients, that many of them may be having these overt episodes and the physician may not be aware of it. Of course, if the patient is taken to the emergency room, then our goal is to not only have the patient on XIFAXAN550 in the hospital but for them to go home on it. Our reimbursement, I think we're getting that message across much more effectively. We have a big effort, and we had to have a big effort around that for some time now. But it just takes a while for people to get really comfortable and have confidence in it. We've talked many times about the helpline that we provide, certainly provides a lot of help to patients and caregivers. So we think all of those things are coming together to just drive really good growth with XIFAXAN, not only for third quarter, but we would expect that type of growth to continue so...

Annabel Samimy - Stifel, Nicolaus & Co., Inc., Research Division

Do you have an average duration of therapy now?

William P. Forbes

We don't, Annabel. And we will be conducting that awareness trial and usage survey that we do approximately every 10 months or so. And so we'll have an update. Just based on the feedback, though, from the field, we do believe that the duration of therapy is increasing.

Annabel Samimy - Stifel, Nicolaus & Co., Inc., Research Division

Okay. Now I guess I want to move over to RELISTOR, which is probably the more sensitive topic. Clearly, we don't necessarily have a path for the FDA-cited risk and long-term usage. Is there something specific they are pointing to in terms of what the risk of new opioid antagonists were? Or is it just a general theoretical risk that they want to address? Can you just give us a little color there?

William P. Forbes

Annabel, this is Bill Forbes. Yes, let me try to step through this, and I'll -- I'm going to try to give you some details around it so that maybe we can try to handle most of the questions that might be coming up later in this call right here, if possible. So the focus that starts to surface is the possibility of whether or not withdrawal or low-grade withdrawal might actually lead to a cardiovascular event. So the difficulty that we have is that the program that was submitted never was set up to determine outcome on cardiovascular events. I've often mentioned that there's a lot of safety data available to us. And from previous times when I've talked on this, there's over 4,000 patients that are on some dose of methylnaltrexone, whether that's IV, oral or subcu [subcutaneous]. And there's another over 1,000 patients on placebo. So with all of that information, when we start to hone in specifically on the chronic pain indication, what we know we have are, across the safety database within that indication, are 8 total -- I'm sorry, 7 total patients with 8 events in total. So 7 patients have a cardiovascular event. One of the things that we do is we ask the cardiologist to adjudicate these as an independent expert that's skilled in this. And what he comes up with are essentially 3 solid cardiovascular events. And that's over 667 patient exposure years on methylnaltrexone. So with all of that exposure, there are 3 events. Of those 3 events, one of the patients has an MI [myocardial infarction], but after consulting with that patient's cardiologist, the patient is put back on RELISTOR and has no further sequel [ph] or incidents with the RELISTOR related to his cardiac condition. Two of the other patients ended up off drug for 2 days and 13 days before they had the actual event. So those are the 3 events that essentially meet the definition of a cardiovascular event. And when we start to look at withdrawal, one of the things that was very difficult for us is as you know, this is a peripherally acting mu-opioid receptor antagonist. And that is one of the strengths of it. And it's one of the reasons why when a 48-week study is conducted in patients, they are using the product 4 to 5x a week because they obviously don't get overt withdrawal using the product. So when we look at the event that would be indicative of withdrawal, we saw very few events overall. And in fact, fewer -- from an incidents perspective, there were fewer events of withdrawal listed in our database than what you see in many of the opioid package inserts. And so obviously, we were feeling pretty good about the data that had been accumulated specifically on chronic pain. We've even stepped back further and taken a look more broadly across those 5,000 patients I mentioned earlier, the 1,000 on placebo and the 4,000 on any dose of methylnaltrexone in any trial, and obviously, they weren't adjudicated for cardiovascular events. But when we look across all of that data and take a very hard end point of mortality within -- on or within 30 days of using study medication, there are actually fewer events from a rate perspective in the patient population taking methylnaltrexone than there is in the placebo group. Now we continue to drill into that data because they're going to be some limitations, it's across populations and so forth. But I will say that, overall, we feel very strongly that methylnaltrexone is not only very effective, but it's also the signal, that the agency says that we need additional information on it. I think we can all agree that the program that was designed, implemented and executed never went after cardiovascular events. And because of that -- you asked earlier, is this a hypothetical risk? It is something that the agency obviously has -- at least the division, has drawn a very hard line in the sand on right now. And we're using every means possible to try to come to a better solution than the one that's in front of us currently.

Annabel Samimy - Stifel, Nicolaus & Co., Inc., Research Division

Okay. So does this mean that the oral filing is definitely for sure on hold even though it's a much lower dose? And -- I mean, I would think that suggests that given the charges that you took with regard to RELISTOR. So is it -- and on top of that, when you consider the trial that you might have to do, are you trying to negotiate providing them the data? Or are you trying to negotiate a different type of trial, like maybe they are looking for an enriched trial and that would be extremely large and unattainable for you? So just a little bit of clarity there, please.

William P. Forbes

Yes, I think, the simple answers to those questions. One is, yes, for right now, we need to solve this issue with the subcu before we can give any guidance going forward with the oral. So this is -- this, right now, is something that is front and center and something that needs to be dealt with. And we're continuing to work not only with the division but with the FDA more broadly. And we'll try to affect something that is doable. The question about enriched population, of course that would be nice if we were dealing with a situation where we thought we could even do that. But the problem that we have is enriched populations tend to be very acutely sick patients, and -- patients with acute coronary syndrome and so forth. And then, what usually happens, as you know, is that they have to be on -- in this case, they'd have to be on a chronic opioid, and then they'd have to need RELISTOR. So the questions that we've asked in the division are, is this even possible? And that's really, I think to try to enrich beyond what we have right now, to me, is just not doable. Annabel, with respect to the charges, both the impairment charge and the change in contingent consideration are related to the subcu for the chronic non-cancer pain, not related to the oral opportunity.

Operator

And your next question comes from Michael Faerm.

Michael Faerm - Crédit Suisse AG, Research Division

My question is regarding the XIFAXAN revenues. When I look at the demand and also -- the prescription demand and also the price increases you've taken in the last year, that implies a sales level for the quarter in the mid-120s. I'm wondering what happened in the quarter that led to the results, whether it was something like stocking or changes in rebate and/or what else it might have been.

William P. Forbes

You're exactly right, Michael. What happened was in the first and second quarter, we shipped very little of the 200-milligram. And believe it or not, with all the price increases and the lack of promotion, the lack of sampling, the 200-milligram is still running at $50 million annualized. So the inventory of the 200-milligram was getting down very low. So there was a buy-in, if you will, of the 200-milligram, which caused the XIFAXAN number to be a bit above demand.

Michael Faerm - Crédit Suisse AG, Research Division

Could you quantify how much of the reported sales number was due to inventory?

William P. Forbes

I would say about $10 million. And again, this is all on the 200-milligram, and because the inventories out there was so thin that -- especially in the institutional setting. Right now, the latest data shows that 36% of all the 200-milligram business is in the institutional environment.

Michael Faerm - Crédit Suisse AG, Research Division

And does that sort of lead you to a point now, where, going forward, sales will sort of track demand? Or could we expect inventory movements in either direction?

William P. Forbes

Yes, they will. But I have to tell you, if you look at the weekly data for October, we're having a tremendous month for XIFAXAN. And for total milligrams, if you compare that to March, it looks like we'll probably be up 18% over March. We'll be up about 15% over August, and August was the strongest month in the quarter. So we're looking at an extremely robust October for XIFAXAN. So, yes, I would expect it to be in line with demand.

Michael Faerm - Crédit Suisse AG, Research Division

And just one other follow-up on sales. Could you tell us what the sales were for some of the products that were not released? Purgatives, RELISTOR, SOLESTA and DEFLUX?

William P. Forbes

Sure. For the purgatives, it was $13.3 million. For DEFLUX -- for RELISTOR, it was $4.9 million. For DEFLUX, it was -- just trying to add these numbers up, it was roughly $7 million. And then for SOLESTA, $600,000.

Michael Faerm - Crédit Suisse AG, Research Division

And just one last question. Were there any inventory movements on purgative that led to that relatively low number?

William P. Forbes

Yes, certainly demand was well north of $13 million, so inventory levels definitely came down. Again, it's mainly related to MOVIPREP and the size of the kit.

Operator

The next question comes from Gary Nachman.

Gary Nachman - Susquehanna Financial Group, LLLP, Research Division

First on RELISTOR. Bill, that detail is very helpful. But I just wanted to clarify. Those CV events, was that all in the subcu? Did you have any in the oral study? Is that something that you could mention to us?

William P. Forbes

Yes, we had no events in the oral study. I think we've presented that publicly at DDW and subsequent to that. But the events that I was mentioning, specifically, were in the chronic pain indication. And those were in -- primarily most of those came from that long-term 48-week study in those patients.

Gary Nachman - Susquehanna Financial Group, LLLP, Research Division

Okay. And then, if you would end up doing a study, what's the scope in terms of size and duration, so we should think about if you have an early read on that? And should we assume if it's robust that it would likely be in the oral as opposed to the subcu?

Carolyn J. Logan

We are -- Gary, this is Carolyn. We are still having discussions with the FDA. And so we really don't want to comment on that. It would, one, be premature. And we don't want to have any preconceived ideas at the agency before we have a chance to fully vet all our ideas and thoughts with them.

William P. Forbes

But if we do find a reasonable path forward during 2013, it will require, with the oral, that is, it will require additional clinical work.

Gary Nachman - Susquehanna Financial Group, LLLP, Research Division

Okay. And one last one on RELISTOR. Any risk to the subcu currently being used for cancer being pulled from the market? That doesn't seem to be the case. But did they make that point clear in your meetings that they're comfortable with the palliative carriers?

William P. Forbes

So -- I think many of you are probably familiar with the posting that they put on their post-marketing surveillance evaluation website, where they list information for drugs that are on the market. And there are certain criteria such as the drug had to be approved for 18 months or be used in 10,000 individuals. This is all part of the doc [ph] and the safety oversight and the FDA trying to be more transparent. But in there, they had put out a notice that some withdrawal has been reported for RELISTOR. We recently, in the last few days, received from the GI Division a new label that has that included in the post-marketing section of the updated label. So we are updating the label currently with the division. And so they have not mentioned anything about pulling it from the market. They've sent us a new label, which really that's, I think from a substantive [ph] point of view, that's the only thing that comes to mind that has been included in that label is the mention of withdraw as far as post marketing reports.

Carolyn J. Logan

The other changes are primarily just formatting changes.

William P. Forbes

Formatting, yes. Formatting and clarification around delivery of information that's already in the label.

Gary Nachman - Susquehanna Financial Group, LLLP, Research Division

Okay. And then, just a couple of more. So, Carolyn, you got an L-Code for SOLESTA. Is there a process that you can try to get a J-Code down the road? And based on what you're seeing so far, how should we think about the ramp into next year? And then on XIFAXAN IBS, when should we expect to see data next year?

Carolyn J. Logan

I'll let Dr. Forbes answer the when you should expect to see data on IBS later. On SOLESTA, internally, when we modeled the Oceana to acquire it, we actually modeled getting a separate L-Code. Earlier, a few months back when CMS gave a preliminary read, they offered us a bundled L-Code, bundled with DEFLUX. That would have been very problematic for us and very difficult to get physicians to understand that. So we went back. We had private meetings, public meetings, lots of correspondence. We worked extensively with CMS. And evidently, they did agree with some of the points we made because they did give us a separate L-Code. I guess, in a perfect world, if we could have had our pick, we would have chosen a J-Code or a Q-code, which is just like a J-Code for all practical purposes. However, our next choice was a separate L-Code. And for training purposes, promotional purposes, everything internally, we prepared both paths. We prepared the training and materials around the J-Code, as well as around a separate independent L-Code. So we don't intend to have another year of uncertainty of what our code is. We are going to take the L-Code that we've been assigned and run with it because it does provide certainty to our offices, or it will, starting January 1. We'll continue to use a miscellaneous J-Code through the end of this year. But in January 1, 2013, that's when the L-Code goes active. And so we are not unhappy with it. We are ready to go forward with it. We do feel like that the endgame will be the same. As I mentioned, when we said we thought peak year will be around $500 million, that was the model in which the L-Code scenario was used. So nothing has changed on that. But as we've stated previously, getting an L-Code means the first couple of years will be a little slower. So we anticipate 2013 to be slow and steady, starting slower in the beginning of the year, as we have people out working with the coders in the offices to show them how to process the claims. Only half of the patients, or about half, are Medicare and would be affected by this. The other half are just commercial insurance. So we are -- we're okay with this.

William P. Forbes

And, Gary, you may know this under the L-Code environment versus the J-Code, you can provide physicians with the volume-based discount program to assist them with the acquisition process. And in many instances, that can be a better value proposition than the ASP plus 6% environment, which is the J-Code environment. And also, keep in mind, in that environment, there's talk of changing that from ASP plus 6% to ASP plus 3%. So we feel good about getting the separate L-Code in operating in that environment.

Carolyn J. Logan

Especially since Obama was just reelected. And the -- what was your IBS question again?

Gary Nachman - Susquehanna Financial Group, LLLP, Research Division

Just the timing of data next year.

William P. Forbes

Yes, I think the best I can do for you right now is probably second half of next year, we hope to be able to release at least the top line results from the double-blind portion.

Operator

And your next question comes from David Buck.

David G. Buck - The Buckingham Research Group Incorporated

If I could just have a quick follow-up on RELISTOR. Was the issue with not being able to come to an agreement on the subcu just a lack of wanting to have any additional trial work? Or are you trying to get more of a sense of like the duration being shorter, number of patients being shorter? I guess the question is have you given in to some type of additional clinical work to be done? Or is that still an open question on the subcu? And then, if I look at 2013, Carolyn, you talked about the billion dollars being a target that wouldn't be hit, but being close for next year. Can you talk a little bit about, I guess, how we get there with some of the numbers we're seeing on RELISTOR this quarter and SOLESTA? It looks like sort of the newer products are going to be a little bit longer to ramp up.

William P. Forbes

Yes, I guess I'll start with the RELISTOR as far as not being able to come to an agreement. As I mentioned earlier, really, whether or not the trial that's being requested is even doable, given the very low rate already, as I said, there were only, in the data that we have across 667 patient exposure, there's only 3 events that endured the adjudication of a cardiologist that knows how to do that. So when you start to look at those types of event rates and then try to establish and rule out what might be a potential increase, trying to get that much data still requires a number of events to be had and the time that it would take, the number of patients you'd have to enroll. And then, again, the types of patients that we need again have to be on chronic opioids, have to need RELISTOR and have to be at high risk. So I think all of those things combine to a huge question mark for us right now whether or not it's doable. And we're working as best we can with the division. And we've offered up to them shorter-term studies to further assess the information that we believe is available, but perhaps, more robustly, if you look at dosing and response from a blood pressure and heart rate perspective, but they've held firm on the need for outcome data. So until there's a path that is cleared to move forward, I think at this point, we're just going to continue to exhaust all avenues to try to make sure that the data that we have, we believe it's important to meet these unmet needs. So I wouldn't say that we've ruled out getting more clinical data. It's just that what we need to be able to get has to be doable.

Adam C. Derbyshire

And, David, I'll handle your question about the billion-dollar revenue in -- certainly in 2013. Yes, we made the statement after receiving the CRL that we wouldn't hit a billion, but we would certainly get close because when we provided that guidance at that point in time, we didn't have DEFLUX and we didn't have SOLESTA. But if you look at our run rate right now, it's $770 million. And we clearly expect that to grow further. We're seeing exceptional growth for XIFAXAN on the weekly data in October. The fourth quarter and the month of December have always been the largest, always the largest month, always the largest quarter for XIFAXAN. We're seeing tremendous growth with APRISO. The purgatives are actually starting to tick up a little bit for us right now, which has been nice. And obviously, we expect further growth, just over an 18-month period. We've gone from a run rate of $10 million to $32 million on RELISTOR. And we would expect to have increased growth on SOLESTA. So for sitting here at a run rate right now of $770 million, if you just put a 20% growth rate on that, and we're not even at the growth rate at year-end, that gets you to $925 million. A 25% growth rate gets you to $960 million. So we are certainly approaching that billion-dollar mark.

David G. Buck - The Buckingham Research Group Incorporated

That's helpful. And if I could speak on just one more, Adam. For the stock compensation expense, it was excluded as part of the non-GAAP. Can you just give a sense of -- in the SG&A and R&D, is that all that's excluded in the reconciliation such as stock comp?

Adam C. Derbyshire

Other than depreciation.

David G. Buck - The Buckingham Research Group Incorporated

So depreciation is in there as well?

Adam C. Derbyshire

Yes.

Operator

Your next question comes from David Amsellem.

David Amsellem - Piper Jaffray Companies, Research Division

I want to switch gears and ask a question about rifaximin in Crohn's. Maybe you could talk about the potential design of the Phase III programs. And also, specifically, the inclusion criteria, are patients going to be biologic naïve? Are we going to see concomitant background 5-ASAs or oral corticosteroid like Entocort? And also, how long would these studies be? How should we expect that?

William P. Forbes

This is Bill again, David. Right now, where we're at in the regulatory process is that we've held a meeting with the FDA and we've gotten their input. Our hope is to be able to, within the next month or so, hold 3 additional meetings in Europe. I don't know if we can get all 3 in, but it's obvious it's going to take perhaps more than a month, but by the time January ends certainly, so we can get input also from some health authorities over in Europe. So I can talk a little bit about the design right now, but obviously, we're very interested in induction of remissions. So those are more short-term studies, the 3 months. But the program will allow for patients to get repeat therapy. It will allow for patients to stay on longer term in an open label study. So those are some of the thoughts that we have right now. So we'll take patients that are exacerbated in Crohn's and try to bring them into remission. And then of course, we're going to need a maintenance program as well, and that will follow up from the induction programs. So I would -- right now, pending some additional input from over in Europe, I would expect to see our program rollout like that in really 2 stages versus induction of remission and then maintenance of remission.

David Amsellem - Piper Jaffray Companies, Research Division

Okay. And then switching gears to the gross margin. You had a decent-size uptick. And I guess, give us a sense of what's going on there, what drove the better margins and how we should think about gross margins in 4Q and into 2013.

William P. Forbes

Yes, it's mainly related to the product mix. So the more XIFAXAN, that's a function of overall revenue, are higher -- the higher the margins. We do, every third quarter, revisit our gross to net. So we did have some small tweaks that were favorable to gross to net to help margins as well. But the majority of it had to do with the product mix and XIFAXAN being such a large part of the revenue equation.

David Amsellem - Piper Jaffray Companies, Research Division

Okay. And then one last question, just on RELISTOR, and this is more of a theoretical. And then let's assume that you get to some sort of understanding with the FDA, and the assumption is that the FDA is going to also want additional work on the oral. Would you just be inclined to discontinue further development of the subcu and then just focus your additional work on the oral? How should we think about that?

Carolyn J. Logan

Well, our hope would be that we will be able to work out something and get the indication for the subcu in the near time frame. Because patients need this drug. It's an unmet medical need. We don't believe there is a signal. And so we -- we're not willing to give up on that yet. But if we are not able to move the agency to something that would allow us to have that in a rather short time frame, then we will focus our efforts just on oral. I don't know, Bill, do you have anything to add to that?

William P. Forbes

Yes, I think that covers it.

Operator

Your next question comes from Greg Gilbert.

Gregory B. Gilbert - BofA Merrill Lynch, Research Division

Bill, for the next-generation rifaximin, can you tell us what you've learned so far about the different formulations you're looking at? And what population you'll pursue once you pick formulation? And the second question is for Carolyn and maybe Bill. Curious to get your interest on the IBS-C space and are there any attractive licensing-partnering opportunities over the near to immediate term in that area?

William P. Forbes

Greg, I'll take your first question on the next-generation formulation for rifaximin. We're just -- we're very close to having a meeting right now. That's on the calendar with the GI division. And our thoughts right now is that we will move into more of a chronic liver disease population, looking at prevention of decompensation of liver disease. And so really one of the targets that we're most interested in is that it's been popping up in the literature, are these patients that have been hospitalized recently that have compromised livers. When they leave the hospital, they have a strong tendency to come right back into the hospital. In fact, probably, from the data that we've seen in the literature, the data that we have access to and the data that we've been provided from other sources and talking to our huge [ph] source [ph] of opinion leaders, it seems like it's somewhere in the range of 25% or 30% of these patients come right back into the hospital within 30 days. So we think that there's a tremendous opportunity to impact those patients long term, maybe more of a primary prevention as opposed to hepatic encephalopathy with the 500 milligram or more, where the dosing only occurs in those patients that have hepatic encephalopathy. Now what we're looking for is preventing their first bout of AG, as well as esophageal variceal bleeding and spontaneous bacterial peritonitis and so forth. I think there's a great opportunity for us to impact health care in that realm. And so that's what we're looking for. And right now what we know of the formulations that we have, the prototypes, they have worked extremely well. They're allowing us to go ahead, have this meeting with the agency and move into the clinic as fast as we can. So...

Carolyn J. Logan

And, Greg, on your question about our interest in IBS-C or chronic idiopathic constipation, we are a GI-focused company. So, yes, we do have an interest there. That is becoming -- it has the potential to become a very crowded market, so we continue to look at assets in that space. But we obviously have not done a deal yet because we have not found what we believe is the right opportunity for us. But, yes, we -- anything in the GI space is of interest to us.

Operator

Your next question comes from Ami Fadia.

Ami Fadia - UBS Investment Bank, Research Division

I have 2 questions. One is a follow-up on RELISTOR. Could you give us a sense of what are the specific next steps with respect to your interaction with the FDA? Are you planning to go back with any additional data? Or is this conversation that's going to go back and forth? Sometimes I could have used it to potentially take this to an AdCom, and I'm wondering if that's a potential option for you from here. The second question is on business development. You said that you're actually evaluating opportunities. Could you tell us what types of opportunities they might be? Are they early stage, late stage, end market? Any color there would be helpful.

Carolyn J. Logan

I'll take the business development question first. We really don't look at a lot of very early stage. That's just -- that hasn't been our business model. And so far, there have been lots of later stage opportunities or, in the occasion of InKine and Oceana, even small company opportunities with already approved products. So our sweet spot is late stage, looking at late-stage products. So the majority of what we're looking at now are more product oriented versus company and also, later-stage assets, not anything that's extremely early, with the exception of things that we've just done internally. Obviously, next-generation rifaximin had to do some Phase I work and Phase II, but that's a compound we know well. For external purposes, it's later-stage assets.

William P. Forbes

And the follow-up for certain next steps and, I mean, I think it's a great question. I understand why you asked it. And I hope you understand, I don't want to necessarily get into step-by-step what we anticipate doing next. I think I've tried to handle that by saying that we're going to try to use every opportunity in front of us to impact the situation in a positive way that we can move forward. We'll, of course, use all the data. We'll bring all the data to bear on, and we already have, though. And I think, going forward, obviously, there's a number of things that could happen. But I prefer not to talk about them right now and maybe address them in follow-up in the next call when we have a chance to tell you where we got with all of that.

Ami Fadia - UBS Investment Bank, Research Division

Can I ask one other question, if that's okay?

Carolyn J. Logan

Sure.

Ami Fadia - UBS Investment Bank, Research Division

Just on R&D. Could you maybe, you're obviously not giving out guidance for '13 today, but qualitatively lay out for us some of the activities that would be ramping down and ramping up? And maybe give us a directional sense of how R&D expenses would move into next year?

William P. Forbes

Yes, what we said is that we would expect R&D to be up on an absolute basis. But as a percentage of sales, we would expect it to come down and get some leverage in R&D. Obviously, what's ramping up for 2013 would be the retreatment study for IBS. A lot of the post-marketing commitments and requirements for HE budesonide foam, we expect to complete enrollment by the end of this year. So that will be ramping down in the 2013 time frame. EIR for Crohn's Disease will be ramping up in 2013, depending on how we work with FDA on coming up with a reasonable path on RELISTOR. Depending on the timing of that, RELISTOR could have an impact for R&D in 2013. And then, obviously, Lumacan will be continuing to ramp in 2013 R&D year as well.

Operator

Your next question comes from Irina Rivkind.

Irina Rivkind - Cantor Fitzgerald & Co., Research Division

I have 2 also. The first is on SOLESTA. Just wondering if you could help us understand. Of the physicians that you've been training and working with there, supposedly, the colorectal surgeons were going to be much more comfortable with doing the procedure and the gastroenterologist would need more help. So of the product that you've sold, how is it breaking out between the colorectal surgeons and the gastroenterologists? And how do you expect the trend to evolve? And the second question is on RELISTOR. Just looking at some other companies developing products in the space, mu-opioid antagonists. They've had to do one-year long, open-label safety trials at about 1,200 to 1,400 patients. So I mean, why would the FDA let you guys off the hook and not force you to do the same thing?

William P. Forbes

I'll comment on your SOLESTA question. I don't have the numbers in front of me. I think in the early launch of SOLESTA, it's probably more colorectal surgeons that were utilizing it. Although, over time, it will be the gastroenterology community because they are doing the majority of the treatment of these patients. I mean, of the 1.5 million that are actively treated right now, about 1.2 million are seeing a gastroenterologist versus a colorectal surgeon. So we would expect over time that, that will be heavily weighted in the gastroenterology practice.

Carolyn J. Logan

And the gastros do know that in the training effort, the colorectal surgeons are very comfortable sometimes watching a video and signing off and going ahead and starting treatment. Whereas gastroenterologists are more likely to want someone to come into their office the first time they administer it to be proctored and to have somebody there with them in case they have questions as they're doing the procedure. But then, in most cases, after they've done the procedure, they remark on how simple it was and that maybe they didn't need someone there after all. But of course, that's part of our training effort, and we're pleased to do that. I'm sure Bill may have something he wants to say about your question about what other companies are doing. But it's very difficult for us to comment on that because we don't know if they had conversations with the agency and were told what they're doing is what they need to do, or if they are proceeding along that line, thinking they covered all their basis. It's just very hard for us to comment on that because we don't know what other companies interacting with the FDA, what types of discussions they've had. So, Bill, I don't know if you...

William P. Forbes

I think that's very helpful for Carolyn to have already said that because I think that's probably the most important thing from our perspective. We can't comment on anybody else's development program. But what I will continue to say is the 1,000 patients on placebo, 4,000 on drug with post marketing information, with everything that we can bring to bear and a very, very sick population in the original approval advanced illness, which the FDA's reviews are on fda.gov. And with all of that data coming to bear and also the ability to go into insurance databases and take a look at what's out there, I can just tell you that 1,200 to 1,400 patients is not where this conversation started. And so I understand what you're saying about other companies. But oftentimes, as we have our interactions and as they do reviews, as they learn things or as new things come up, obviously, those are the types of things that we have to address that the agency brings to bear within our review. And that's what happened here. And I think I've covered the data as best I can to give you a flavor of why this has been a situation where we just have not -- we just have to agree to disagree with the division on it.

Operator

Your next question comes from Michael Tong.

Michael Kallai Tong - Wells Fargo Securities, LLC, Research Division

A couple of questions. Actually, I think it was Adam who said, currently, about 64% of AG patients aren't treated. I was wondering if you have comparative data from, say, last year or 2 years ago and see how that progression has gone. The reason I asked the question is just wondering whether the growth of XIFAXAN's primarily from increased penetration in HE, or an even quicker acceleration in off-label use in other treatment or other disease areas.

William P. Forbes

No, we believe the uptake for XIFAXAN is related to HE. And I don't -- we don't have the data as to where this untreated population resided, say, 2 or 3 years ago because this is something that we recently, within the last year, have learned and understood about the patient population that roughly 2/3 of them are going untreated. So I don't -- I have nothing to compare that to. But clearly, with the promotional efforts that Carolyn spoke of earlier, everything that we're seeing put the growth of XIFAXAN as HE related.

Michael Kallai Tong - Wells Fargo Securities, LLC, Research Division

Okay. And just a follow-up back on sort of gross margin and OpEx perspective. So should we, based on your earlier commentary, should we expect gross margin to normalize back to more like the first half of 2012 levels for Q4? And directionally, how would you see R&D and SG&A going in the fourth quarter relative to the third quarter?

William P. Forbes

Yes, I would expect gross margins for the entire year to be in the 80% -- certainly above 82%. Probably, 82.5% or a little higher. So it won't go back to the 81% level or the 80% level that it did in the first and second quarter. And in terms of R&D, we're expecting an uptick in R&D and SG&A of roughly about $5 million to $6 million for each in the fourth quarter.

Operator

Our next question comes from Jason Gerberry.

Jason M. Gerberry - Leerink Swann LLC, Research Division

Just a couple on SOLESTA, I'll ask upfront. First, on the coding determination, could you comment at all in terms of maybe how that diverts, if at all, intentionally, maybe to training offices instead of in terms of reimbursement versus turning the docs on how to do the procedure and just promoting to the docs? Then my second question is if you can help us, maybe give us a framework in terms of kind of how aggressive your sampling SOLESTA early on, giving it all away for free evaluation, and when we can maybe expect that to pull back and maybe we can see some uptick in the numbers?

Carolyn J. Logan

During third quarter, we distributed approximately 225 evaluation kits. And so I would imagine, at least through the first quarter of next year, if not through midyear, we will probably still be active with evaluation units. As far as -- you make a really good point about selling time versus training people how to code. Our representatives will be trained on the coding, but we have a service, PAREXEL, that everybody goes through, all the offices goes through PAREXEL. It's called a hub, to help with reimbursement. We will continue that service. And then our national accounts group, as well as we have some people that are specialized in coding, coding specialists, if you will, will work with the bigger practices in the major markets. So we do not foresee our territory managers, our sales representatives that are responsible for promoting the products, spending a great deal of time on the coding issue. They know how to line the offices up with people that will spend additional time with them if the office needs it.

Jason M. Gerberry - Leerink Swann LLC, Research Division

And if I could squeeze one in. Could you just give the revenue split on XIFAXAN 200 mgs versus 550?

William P. Forbes

Yes, for the run rate, it's about $51 million for annualized run rate, $51 million for the 200 milligram, and roughly $443 million for the 550.

Operator

Your next question comes from Tim Lugo.

Tim Lugo - William Blair & Company L.L.C., Research Division

Just a quick one. Is there any update on the bioequivalence requirements needed for generic XIFAXAN HE? I believe a couple of quarters ago, you mentioned talking with the FDA and possibly having some changes around those requirements.

Adam C. Derbyshire

No, there's no update.

Tim Lugo - William Blair & Company L.L.C., Research Division

Have you been able to meet with the FDA regarding that? Or is that on the docket any time soon?

William P. Forbes

This is Bill again. No, we have not met with them. And right now, I don't believe we have a calendared event to do that.

Carolyn J. Logan

I think we submitted some information, right?

William P. Forbes

Yes, we have. Yes, we submitted information.

Carolyn J. Logan

We submitted information, waiting to hear back from them on that, but there's been no update.

Tim Lugo - William Blair & Company L.L.C., Research Division

And maybe a broad question regarding the fiscal cliff. Does that play at all into your business planning for 2013?

Carolyn J. Logan

No, not really. It really will have minimal to no impact on us in 2013. 2014 is when we would expect, I guess, probably about 15 million, anticipated to be somewhere around 15 million or 20 million more patients coming into the system. So there may be some uptick there. This year started with us having to help with the doughnut hole, so that will continue, but...

Operator

And there are no further questions at this time. I would like to turn things back over to Ms. Carolyn Logan for closing remarks.

Carolyn J. Logan

Really, I think all that's left to say is just I'd like to thank everyone for joining us today. And as always, we look forward to speaking with you on our next call. Thank you. Have a good evening, everyone.

Operator

Ladies and gentlemen, thank you for joining tonight's conference call. This does conclude the presentation. You may now disconnect.

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