Geoffrey C. Porges - Sanford C. Bernstein & Co., LLC., Research Division
I'd like to ask a question, Helen, just to hear your accent a little bit more, but unfortunately, I'll have to ask in a couple of accounting questions. Could you just remind us of when we should expect to see full cost of goods for Kyprolis, and what range we should be anticipating? And secondly, without sort of inducing you to give premature guidance, it looks as though by the end of the year, you'll be probably at the high end of your guidance for R&D and low end of the guidance for SG&A. And just could you confirm whether we're on the right track there? And then lastly, you've had -- you sort of pretty much absorbed all the incremental SG&A you need for these launches. Is this where we should be sort of basing ourselves as we think forward? Or was there only a partial quarter and will there be another step-up at the end of the year?
Okay, good. Matt, I'll ask you to take all of those.
In your best Scottish accent, right.
Matthew K. Fust, CFO
So first, on the cost of goods question, it's not yet possible to specify over how many quarters we will be moving from the current cost of goods, which is below what we expect will be steady state -- toward a more steady-state level. We do expect it will occur over the course of several quarters. And our expectation is that we would see typical gross margin, as you'd expect, from a small molecule therapeutic as we hit steady state. With regard to R&D and SG&A guidance, first, in the context of the research and development expense, you have now flowing through the R&D expense line 3 Phase III trials, ASPIRE, FOCUS and ENDEAVOR, as it is ramping up enrollment. ASPIRE and FOCUS, obviously, already fully enrolled. So we're moving on to looking at the ENDEAVOR enrollment and then on into the frontline trial as we head into the beginning of next year, being partly offset by a reduction in Nexavar research and development expenses, which is -- we've got early in the year, we expect should be 10% to 15% lower in 2012 than in 2013. On the selling and general and administrative front, I think probably the best thing to point you to is the increase in SG&A expense guidance that we've offered on our second quarter earnings call that was intended to reflect for the 2012, but in particular, in the second half of 2012, the increment in selling and marketing costs associated with the U.S. commercial launch in support for Kyprolis. So I think as we look at run rates in the third and fourth quarter of this year, that should give a good launching-off point for what we expect will be the bulk of the U.S. commercial infrastructure support.