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Edited Transcript of ACOR earnings conference call or presentation 1-Aug-19 8:30pm GMT

Q2 2019 Acorda Therapeutics Inc Earnings Call

HAWTHORNE Aug 7, 2019 (Thomson StreetEvents) -- Edited Transcript of Acorda Therapeutics Inc earnings conference call or presentation Thursday, August 1, 2019 at 8:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* David Lawrence

Acorda Therapeutics, Inc. - CTO, Chief of Business Operations & Principal Accounting Officer

* Felicia Vonella

Acorda Therapeutics, Inc. - Executive Director of IR

* Lauren M. Sabella

Acorda Therapeutics, Inc. - Chief Commercial Officer

* Ron Cohen

Acorda Therapeutics, Inc. - Founder, CEO, President & Director

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Conference Call Participants

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* Charles Cliff Duncan

Cantor Fitzgerald & Co., Research Division - Senior Analyst

* Edward Patrick White

H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst

* Matthew Cornell Biegler

Oppenheimer & Co. Inc., Research Division - Associate

* Matthew Thomas Holt

JP Morgan Chase & Co, Research Division - Analyst

* Michael Jonathan Yee

Jefferies LLC, Research Division - Equity Analyst

* Paul Andrew Matteis

Stifel, Nicolaus & Company, Incorporated, Research Division - Co-Head of the Biotech Team, MD & Senior Analyst

* Philip M. Nadeau

Cowen and Company, LLC, Research Division - MD and Senior Research Analyst

* Salveen Jaswal Richter

Goldman Sachs Group Inc., Research Division - VP

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Presentation

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Operator [1]

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Welcome to the Acorda Therapeutics Second Quarter 2019 Updates. (Operator Instructions) Please be advised that this call is being taped at the company's request. I will now introduce your host for today's call, Felicia Vonella, Vice President of Investor Relations at Acorda. Please go ahead.

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Felicia Vonella, Acorda Therapeutics, Inc. - Executive Director of IR [2]

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Thank you, Chris. Good afternoon, everyone. Before we begin, let me remind you all that our presentation will contain forward-looking statements. Detailed disclosures can be found in our SEC filings, which are public, and we encourage you to check those filings.

 

I will now pass the call over to our CEO, Ron Cohen. Ron?

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Ron Cohen, Acorda Therapeutics, Inc. - Founder, CEO, President & Director [3]

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Thanks, Felicia. Good afternoon, everyone. We made substantial progress on the INBRIJA launch during the second quarter, and we're seeing encouraging signs that our efforts are gaining traction. We said last quarter that we believe it would take 2 to 3 additional quarters or into the fourth quarter this year before we would have a strong sense of the trajectory of the launch, and this remains the case. Today, we import -- we reported INBRIJA net revenue for the quarter of $3 million.

 

A key driver of this launch is gaining formulary access in an environment where the vast majority of payers are not covering new products in this space out of the gate. And I'm pleased to report that we completed our first major contract, this one with Express Scripts, and we're already beginning to see increases in access.

 

We also achieved formulary status with several regional plans, and we expect that we're going to do so with additional major players -- major payers in the near future. Lauren Sabella, our Chief Commercial Officer, will follow my opening comments with additional details and analysis of the launch.

 

In late July, we announced that the EMA's Committee for Medicinal Products for Human Use or CHMP issued a positive opinion, recommending INBRIJA's approval by the European Commission. The EC will now consider the CHMP's opinion and its decision on granting marketing authorization for INBRIJA in Europe, and we look forward to the EC's final decision later this year. We're currently evaluating partnering opportunities to commercialize INBRIJA in Europe.

 

Moving to AMPYRA. We reported second quarter AMPYRA net revenue of $44 million. We've been pleased that branded sales have remained higher than our internal projections. And we expect that 2019 AMPYRA revenue will be greater than $140 million. That said, we do expect continued erosion of AMPYRA revenue over time.

 

I'll now pass the call over to Lauren. Lauren?

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Lauren M. Sabella, Acorda Therapeutics, Inc. - Chief Commercial Officer [4]

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Thanks, Ron, and good afternoon, everyone. Through July, 4,500 prescription requests have been received and over 1,900 patients have received their first prescriptions. The total number of cartons dispensed were greater than 6,200. More than 1,250 physicians have prescribed INBRIJA.

 

During our first quarter call in April, we mentioned the importance of [segment A] doctors, which includes all the movement disorder specialists and high-prescribing neurologists who see the largest number of patients. Since then, we've seen increased prescribing within the segment from 21% to 37% of these physicians. Additionally, approximately 70% of these segment A physicians have prescribed for more than one patient. I'll discuss the importance of this progress in more detail in the coming slides.

 

We also emphasized last quarter the need to gain insurance access as a main lever to drive the prescribing of INBRIJA. As Ron pointed out, INBRIJA became preferred on the Express Scripts National Preferred basic and high-performance commercial national formularies and also on the nonpreferred status for their Medicare Part D plans, improving access for members with Parkinson's disease. Several key regional accounts have also added INBRIJA.

 

With these formulary wins, INBRIJA is now available without the need for a medical exception for approximately 51% of commercial and 18% of Medicare plan lives. We are also in late-stage discussions with other key payers and do expect to have additional agreements for formulary placement in the near future.

 

In June, we extended our 1-month free trial program from a pilot to all commercially insured patients nationwide. This free trial program is in addition to the samples that we have distributed to physicians' offices. We expect that as more patients actually experience INBRIJA, physicians will benefit from the increased feedback.

 

During the quarter, we also reduced average dispense time from 30 to 13 days due to improved insurance coverage and continuous improvement in our HUB processes. We're working to decrease this time further as we gain expanded managed care coverage.

 

It is important to keep in mind that unlike most other therapies, INBRIJA is for on-demand use. Therefore, different patients will use the product at different frequencies depending on their needs. This will be reflected in the value of an individual prescription as prescriptions can vary from 1 to 5 boxes per month. As a reminder, the total addressable market for people with Parkinson's that have OFF periods is about 350,000.

 

We have further analyzed this market based on primary and secondary research to characterize 3 different segments. The high OFF burden segment represents approximately 70,000 patients who experience 4 or more OFF periods per day. The moderate OFF burden segment represents approximately 120,000 patients who experience 2 to 3 OFF periods per day. And the low OFF burden segment represents approximately 160,000 patients who experience one or fewer OFF periods per day. This is important for INBRIJA as utilization will be dictated by the OFF period burden each person experiences.

 

On the following slide, we will share how our data currently fits into these segments. We're sharing this data to give you a perspective on the underlying value of the prescriptions that have been reported to date and to help you with your forecast models. The graph on this slide represents INBRIJA utilization by patients who received their first dispense in March, which was the first month drug was available in the channel. This is a cohort of 75 patients whose utilization was tracked through July.

 

The low-burden segment that's shaded here in gray consists of the lowest utilizers of INBRIJA based on how often they have refilled their prescriptions since March. This segment represents approximately 60% of patients who received a prescription but only comprises approximately 25% of the cartons that have been dispensed. The moderate burden segment that you see here shaded in blue represents approximately 20% of patients and approximately 25% of the cartons dispensed. The high burden segment shaded in green represents only about 20% of all patients with a dispensed prescription. However, it's approximately 50% of the cartons dispensed between March and July.

 

In this next graph, we added the April and May cohorts, which comprised 291 and 476 patients, respectively. Note that the utilization by segment has been consistent across all 3 cohorts. High segment patients are estimated to use between 3 and 4 doses per day; moderate patients, 1 to 2 doses per day; and in low segment patients, less than 1 dose per day.

 

So in summary, early launch data suggests that about half of INBRIJA utilization will be driven by patients in the high burden segment. As a reminder, patients within this segment are primarily seen by movement disorder specialists, and we have seen significantly increased prescribing among these specialists. This segment will serve as a major catalyst for INBRIJA's growth and long-term value.

 

As we noted in our April call, we expect the launch will require 1 or 2 additional quarters to establish its trajectory. We are encouraged by the progress we've made in reimbursement and in optimizing the fulfillment process as well as the continued positive feedback from both prescribers and patients. These are consistent with all of our market research, which supports our conviction that INBRIJA will become a standard of care in Parkinson's disease.

 

I will now turn the call back over to Ron.

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Ron Cohen, Acorda Therapeutics, Inc. - Founder, CEO, President & Director [5]

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Thanks, Lauren. Moving to the financial summary for the second quarter 2019. This table outlines the key financials. Our cash and cash equivalents balance at the end of the quarter was $297 million. We continue to believe that we can become cash flow positive without raising additional capital based on our long-term projections.

 

So highlighting our focus for the remainder of 2019 and beyond. First and foremost will be to ensure a successful launch of INBRIJA so that as many people with Parkinson's who may appropriately benefit can do so. We believe that the progress we made in the second quarter puts us on track for an upswing in trajectory between now and the end of the year.

 

With our recent positive opinion from the CHMP on INBRIJA's MAA, we're looking forward to the EC's decision by the end of the year. And we're continuing to discuss collaborations on ex U.S. commercialization with potential partners both in Europe and Japan. The approval of INBRIJA has provided validation of the ARCUS technology platform, and we're now applying that platform to develop therapies for additional uses. Our most advanced program is for treatment of acute migraine. And finally, not least, we'll maintain our focus on controlling expenses and deploying resources to maximize shareholder value.

 

Operator, we will now take questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Your first question comes from Cory Kasimov with JPMorgan.

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Matthew Thomas Holt, JP Morgan Chase & Co, Research Division - Analyst [2]

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This is Matthew on for Cory. So for my first one, just wondering if you can help us understand or better understand the impact of the free trial program and what that conversion rate has been so far to paid scripts?

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Ron Cohen, Acorda Therapeutics, Inc. - Founder, CEO, President & Director [3]

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I'm going to let Lauren take that.

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Lauren M. Sabella, Acorda Therapeutics, Inc. - Chief Commercial Officer [4]

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Yes. So right now, we've just rolled out the free trial program nationally at the end of June. So it's really only started. And so we really, at this point in time, don't have any information to share with you regarding the conversion rates from that free trial program to a paid prescription.

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Matthew Thomas Holt, JP Morgan Chase & Co, Research Division - Analyst [5]

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Got it. And then I guess for my last question, and I think you've talked about this before. But we've seen a few other launches in the space that docs -- where docs tend to prescribe a new drug to only 1 or 2 of their patients and then wait a few months before offering it more broadly. Just curious if you're seeing a similar trend. And if so, how long docs are waiting before they prescribe beyond the first 1 or 2 patients?

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Lauren M. Sabella, Acorda Therapeutics, Inc. - Chief Commercial Officer [6]

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Yes. That's -- it's a very interesting point and one that we have also seen. So we have also seen that there's a dynamic that's been created that we actually didn't fully anticipate upfront. And that is that even early adopters are now waiting until access opens before they start to write for the product.

 

I can tell you that I've been out there in the field. I've been out there talking to physicians. And those that have prescribed, they are telling us they're going to prescribe more. And as a matter of fact, those physicians that have prescribed in the highest segment of physicians, which is about 37% of those high docs, 70% of them have prescribed to more than one patient. So they see the value of the product, but they don't want to be in a position where it's a heavy burden to get patients to drug. So they are waiting for the access to open before they open up their prescribing. So we agree with what you have seen.

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Operator [7]

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Your next question is from Paul Matteis with Stifel.

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Paul Andrew Matteis, Stifel, Nicolaus & Company, Incorporated, Research Division - Co-Head of the Biotech Team, MD & Senior Analyst [8]

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I know it's early, but I was wondering if you could speak to what you're seeing in terms of the refill rate among early adopters. And then maybe to date, could you give a little bit more color on reimbursement? How -- through what channel are most scripts being reimbursed? What are you seeing in the Part D segment? And how much do you think of your target market is ultimately going to be Part D?

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Lauren M. Sabella, Acorda Therapeutics, Inc. - Chief Commercial Officer [9]

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So I'm going to start with the last question first, and that is right now, we're seeing a pretty even split in terms of the prescriptions between both the Medicare patients and the commercial patients. And that's in term -- and that is both in terms of what's being written and what's being filled. So that's where we are currently.

 

Access is a bit easier in the commercial space right now. Approximately 51% of commercially insured lives are unencumbered for access while right now, that's only 18% of Medicare Part D lives. We expected that. It's early in the launch phase. And over time, we expect that we'll have better access in Medicare Part D.

 

That being said, even with those access restrictions, as I've just said, 50% of the PRF and 50% of the dispensed prescriptions are in the Medicare Part D space. Could you repeat your first question?

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Paul Andrew Matteis, Stifel, Nicolaus & Company, Incorporated, Research Division - Co-Head of the Biotech Team, MD & Senior Analyst [10]

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Absolutely. I'm curious what you're seeing with refill rates. Again, I know it's early, but maybe you could at least comment on some of the earlier starts from the March time frame and how refill rates are tracking now and relative to your expectations?

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Ron Cohen, Acorda Therapeutics, Inc. - Founder, CEO, President & Director [11]

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Yes. Paul, this is Ron. I'll take that. It's essentially -- it's too early to really comment on refill rates. And that's because of what we showed -- what Lauren showed in the presentation with the segmentation in this market, where it really depends on the prescriptions and who's getting them, right?

 

So if you're in that upper 20% of disease burden or OFF burden, you're accounting for 50% of the scripts -- 50% of the boxes that are being dispensed. And it's too early to tell how that dynamic is working. In other words, when a physician prescribes, is the physician prescribing for 1, 2, 3 or 4, 5 boxes? And then how many of that boxes are being used by that given patient in a month versus over 2 months or versus over 3 months? And then what does that mean with respect to refilling behavior?

 

It's a pretty broad range of variety of prescriptions. And that was the point we really wanted to get across was that you can't look at this market as one prescription fits all. It really is that, that top 20%, those are worth 4x or 5x what the lower percent is, if not more.

 

So we're still tracking all that. And as we get more numbers and more time, more importantly, so that we actually get some confidence in the refill rates over time, we're going to be able to present more of that. But right now, it's too early to really comment on it.

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Paul Andrew Matteis, Stifel, Nicolaus & Company, Incorporated, Research Division - Co-Head of the Biotech Team, MD & Senior Analyst [12]

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Ron, if I can just ask one quick follow-up on one of your comments. Are you surprised that a greater chunk of the early adopters aren't more towards the severe end of the spectrum? It seems like usually, that's how most drug launches go.

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Ron Cohen, Acorda Therapeutics, Inc. - Founder, CEO, President & Director [13]

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Yes. So the point here is -- and actually, we're pleased to see that it's across the range. I've been out on rides as well, and I've talked to a quite a number of the docs. And what we're -- it really depends on the doctor you're talking to, right?

 

So there's some doctors who are absolutely in that mold, where they'll start out with the more severe. There are other doctors who actually have told me point blank, "I think this could be even better for my earlier-stage patients who are active and working. And when they have an OFF, it's even more disruptive to them." So we're going to continue to get a feel of this -- as the launch progresses, we get more and more people on drug.

 

So yes, I wouldn't say that -- I'm not surprised with the reality of it. I'm pleasantly surprised that there are quite a few docs that see it the way we do. And the way we've always seen it is exactly that. It -- that someone who is relatively early in their Parkinson's disease course but still has OFF periods and is still very active in life because they're younger and they have all kinds of activities, including employment, that the burden of even one OFF a week sometimes can be terrible for them, depending on where it happens and when. And so everyone who has these OFF periods potentially could you use the help that INBRIJA will offer. And if there is a surprise to me, it's that quite a number of docs I've talked to recognize that upfront.

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Lauren M. Sabella, Acorda Therapeutics, Inc. - Chief Commercial Officer [14]

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Right. And if I can just add something to that. I mean one of the things, however, we are targeting more to penetrate more deeply in terms of calls into the physicians who see the largest number of patients, and that's the movement disorder doctors. And just by virtue of the number of patients they see, they do see a higher proportion of those very severe patients that would have more OFFs and that would be in that segment of 70,000 patients.

 

So over time, when you just kind of do the math, when you start getting those physicians on board and they really start writing and adopting the product, you would anticipate that there would be a higher volume of their patients that would be more severe.

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Ron Cohen, Acorda Therapeutics, Inc. - Founder, CEO, President & Director [15]

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Right. Absolutely right.

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Operator [16]

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Your next question is from Salveen Richter with Goldman Sachs.

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Salveen Jaswal Richter, Goldman Sachs Group Inc., Research Division - VP [17]

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Can you just comment on the gating factors here with regard to formulary access and the rate at which you expect to get additional access to come on board?

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Lauren M. Sabella, Acorda Therapeutics, Inc. - Chief Commercial Officer [18]

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Yes. Well, we are really pleased with the first large win that we had, which is ESI. And as we mentioned, we've also had some significant regional wins. We also have the ability -- although not on formulary, the drug is available in the Veterans Administration that has a large number of Parkinson's patients. And it's available without criteria, which means that they do have to fill out an exception form, but it's not an arduous process. So we have that on board at this point.

 

We are very close to several other very large payers, which will tip the scales in terms of having more patients with access than not. So we are right on track and actually, a little ahead of what we anticipated in terms of managed care access this early in the launch.

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Salveen Jaswal Richter, Goldman Sachs Group Inc., Research Division - VP [19]

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And just a follow-up here. You've talked in the past about hitting the target 2,000 high-volume prescribers. How do you -- I guess maybe just help us understand the time period to get access to that target group.

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Lauren M. Sabella, Acorda Therapeutics, Inc. - Chief Commercial Officer [20]

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So we're pleased with where we get -- so again, so there's about 1,200 physicians that are really -- 1,200 to 1,500 that are really important physicians. And of that group, currently, 37% have written for the product, and 70% of them have written for the product for more than one patient.

 

So we do have some work to do to get to the next group, but that also gives us more opportunity because we still have another 60% of those physicians to get -- to start prescribing. And a lot of these are the physicians that we talked about earlier. They're waiting until the access opens. So that's where we are in terms of the reach of those most important physicians.

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Ron Cohen, Acorda Therapeutics, Inc. - Founder, CEO, President & Director [21]

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Right. And I'll just add that beginning with our call last quarter where we said it was going to take a few quarters, we -- this is what we were anticipating, that there's a process involved, which means that you have to address the managed care issues and get on formulary and get the burden of prescribing off the table. So you don't have medical exceptions, you don't have peer to peers and you get that off the table.

 

Then you have to go and get all those physicians to understand that it's -- as it were safe to go back in the water, right, that now it's safe for them to prescribe because it's not going to be an undue burden on the office. And then once they start doing that and they get the positive feedback loops, which is, one, in fact, they're not being overburdened with medical exceptions; and number two, the patients then come back, which takes a few months, right, to come back to the office and give them positive reports on their experience with INBRIJA, now there's a positive feedback loop where they are encouraged to prescribe for more and more of their patients.

 

So all of that takes time. It's a cycle. We recognize it upfront. The only thing that, as Lauren said, that was somewhat surprising to us was the degree to which the prescribers really have been conditioned, at least in this space, to just wait. Just wait at -- just the right out of the gate. They decide they're going to wait because they know it's going to be a burden, and they're going to wait for you to address the managed care issues. But other than that, it's rolling out the way we expected in terms of the process and the steps in the process.

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Lauren M. Sabella, Acorda Therapeutics, Inc. - Chief Commercial Officer [22]

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And I'll just add one other thing. In the first quarter, we had mentioned that 21% of those top physicians had put pen to paper. And now we're up to 37%. So we are chipping away. Even though they're waiting for access, they're starting to write. So it's important -- we watch that metric very, very carefully.

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Operator [23]

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Your next question is from Phil Nadeau with Cowen & Company.

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Philip M. Nadeau, Cowen and Company, LLC, Research Division - MD and Senior Research Analyst [24]

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First, on insurance access. In the answer to the prior question, you suggested that it's less than 50% of covered lives have access today. Could you give us some quantification of what proportion of the high segment patients do have insurance access today? And where do you think that could be by the end of the year?

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Lauren M. Sabella, Acorda Therapeutics, Inc. - Chief Commercial Officer [25]

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Yes. Unfortunately, it doesn't get segmented that way. The way that this works is that it's basically the number of insured lives by plan. And then based on how you get formulary access, you make that determination. So we don't have an ability to get into that level of segmentation in terms of lives covered.

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Philip M. Nadeau, Cowen and Company, LLC, Research Division - MD and Senior Research Analyst [26]

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How about just generally proportion of lives covered that have access?

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Ron Cohen, Acorda Therapeutics, Inc. - Founder, CEO, President & Director [27]

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Just by way of reminder, we now have good access for about 51% of the commercial lives, and it's about 18% on Medicare Part D. Based on the discussions we're having with the -- some of the remaining major payers now, we believe that's going to open up in the near future, that we will be making significant inroads there in the near future.

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Philip M. Nadeau, Cowen and Company, LLC, Research Division - MD and Senior Research Analyst [28]

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Perfect. That's helpful. And on the free drug program, how does the free trial program differ from the free samples? And what's the duration of INBRIJA free product that both give to patients?

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Lauren M. Sabella, Acorda Therapeutics, Inc. - Chief Commercial Officer [29]

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Okay. So the sample program is actually a sample that gets shipped directly to the physician's office, and that is 16 doses per carton. And so the physician has the opportunity to actually give that out to the patient after they've trained them in the office. Or one of the things that we're hearing that we think is fantastic is they're having patients come in an OFF state, and they're training them on the inhaler and administering the actual INBRIJA sample right then and there. And the physician is watching the impact of the drug on the patient. And some of the stories we've heard have been actually quite remarkable. So that's really been exciting to hear. So that's the one type of sample.

 

What we've done also, again, partly to mitigate the issue with the time to fill of the prescriptions, is we've rolled out the free trial program. What this is, is an ability for commercial-only patients -- because this is not allowed in the Medicare Part D space -- to be able to on the same prescription form as the doctor's filling out, all you have to do is check a box. And if he checks that box, the patient gets from a different specialty pharmacy that's not counted in the IQVIA data a 60-carton -- a 60-dose carton, excuse me.

I'm sorry. It's 30 doses, 60-capsule carton of INBRIJA. And they have that in hand now while the insurance process is taking place. So the doctors like this because if they train the patients, they talk to them about the drug, the patient gets the drug within a couple of days. And they think that makes a big difference versus they talk to the patient about the drug, they train them. And even though we give them additional training, information with videos, et cetera, when the patient has to wait 30 days before they get the medication, it can be an issue. So we've shortened the time to fill. But even beyond that, we've given out this free trial program to augment the ability for the patient and physician to trial the medication.

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Ron Cohen, Acorda Therapeutics, Inc. - Founder, CEO, President & Director [30]

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Right. And just to make sure that we reemphasize. So we started out with a 30-day process. And we've gotten that down to 13 days at this point. And we expect we're going to whittle it down even further, which is pretty much what we did with AMPYRA.

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Operator [31]

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Your next question is from Michael Yee with Jefferies.

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Michael Jonathan Yee, Jefferies LLC, Research Division - Equity Analyst [32]

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Congrats on the progress. Two questions. One, I guess, is any clarity you can talk to regarding trying to convert your interpretation of what the third-party data is showing versus, I guess, reported sales and whether or not you think it's fairly accurate. I think maybe you've made a comment about that before, Ron. And then related to that, any estimate on what you think gross-to-net is looking at? And then I had a follow-up.

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Lauren M. Sabella, Acorda Therapeutics, Inc. - Chief Commercial Officer [33]

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So we're not discussing gross-to-net. What I can tell you is right now, the IQVIA data is tracking very closely to our internal metrics. What may change over time is as more channels come on board for INBRIJA, such as the VA, that may change that dynamic. But for right now, it's pretty much in line with our internal numbers.

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Michael Jonathan Yee, Jefferies LLC, Research Division - Equity Analyst [34]

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Okay. That's helpful. And then a separate question, I think, for Ron is much more bigger picture. And I think if you take a step back, I think given where the current stock price is, Ron, I think a lot of the questions are certainly around the launch, which I'm sure you're getting that sense from all these questions. But I think other questions relate to capital structure and balance sheet and cash burn and all that, which we need to model out, and debt.

 

Can you make a comment as to your confidence level regarding no plans at all to finance certainly through the capital markets or equity markets? And to what extent you feel confident that there's no need to raise capital or that you can get capital through other forms of nondilutive financing?

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Ron Cohen, Acorda Therapeutics, Inc. - Founder, CEO, President & Director [35]

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Great. So yes, we have the debt, $345 million convertible debt that's due, I believe, in June of 2021. So it's about 2 years from now. We're obviously well aware of it, and we're already in the planning stages for various ways that we can address that, and we will address that in due course.

 

With respect to cash, as I mentioned in the presentation, we are keeping a very close eye on expenses. We always do, but even more and making sure that we're making every dollar count. And based on our long-term projections for INBRIJA and the launch and where we believe it's going to go and to a certain extent, obviously, to AMPYRA, which is doing better than we had thought, we believe that we can maintain cash flow -- or we can get to cash flow positivity based on those projections for INBRIJA, so that we would not need to raise cash in order to get to that cash flow positive inflection point on INBRIJA.

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Michael Jonathan Yee, Jefferies LLC, Research Division - Equity Analyst [36]

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Okay. And sorry for the one last follow-up, but you made a comment how AMPYRA definitely is doing better. That was certainly a huge positive swing factor in the quarter, so that's great. I mean is there anything to say as to what happened there? I mean I think looking at this model, it's actually up quarter-over-quarter. But I'm just surprised pleasantly that the sales are still so well [in spite] of many generics. Is there something going on in there that we're not appreciating or what?

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Ron Cohen, Acorda Therapeutics, Inc. - Founder, CEO, President & Director [37]

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Well, I can't comment on what you're appreciating or not, Michael. Our view is that we spent a good number of years launching and maintaining that product and building the brand value. And if I had to boil it down, I would say we cared about the patient. We cared about the community. We supported that entire community and the patients to a very high degree as we went through that selling process for INBRIJA -- or excuse me, as we marketed AMPYRA. And there is residual brand loyalty from that. People came to trust the brand to believe that it was doing good things for the patients, and I think we're benefiting from that on an ongoing way.

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Operator [38]

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Your next question is from Charles Duncan with Cantor.

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Charles Cliff Duncan, Cantor Fitzgerald & Co., Research Division - Senior Analyst [39]

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Congrats on the albeit early traction that you're seeing with INBRIJA. I had a quick question probably for Lauren regarding formulary access [yet] this year versus -- we've heard a little bit of some of the companies wondering about the impact of seasonality, and those seem to be countervailing kind of issues. I'm wondering if those are 2 things that you're considering and what their impact may be. And your thoughts on continuing to get traction over the course of the rest of the year.

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Ron Cohen, Acorda Therapeutics, Inc. - Founder, CEO, President & Director [40]

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Charles, can you clarify just a little bit what you mean by the seasonality versus -- crosscurrent with what?

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Charles Cliff Duncan, Cantor Fitzgerald & Co., Research Division - Senior Analyst [41]

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With formulary access additions. I mean that would seem to be a positive and would trigger more prescribing because of the access. But seasonality, being third quarter, people going on vacations, et cetera, are those big impacts for that relative to formulary access?

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Lauren M. Sabella, Acorda Therapeutics, Inc. - Chief Commercial Officer [42]

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Yes. Again, it's really hard to determine from a seasonality perspective whether there's any impact when you're this early in the launch trajectory. And we're just getting the major managed care wins in place now. So I think that would be hard to say. I will say that the fourth quarter, we will have more managed care formularies in place. And we do anticipate that we should see an uptick in the trajectory of the brand.

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Ron Cohen, Acorda Therapeutics, Inc. - Founder, CEO, President & Director [43]

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Yes. And I'll just add, I agree. And based on our prior experience and obviously observations across product categories, the summer months do tend to have some slack in them because patients go on vacations and the doctors go on vacations, among other things.

 

It's too early for us to say for this particular launch because we're in a launch phase. I think if we were talking about AMPYRA or another drug that had been out there for a few years and you could establish a year-over-year, season-over-season pattern, which we did with AMPYRA, we could comment more in a more informed way.

 

But you do have all these crosscurrents going where it's a launch. We're getting on formularies. It is the summer months. We don't know in a launch scenario how much of an influence that has or not. I think what we can say is, as Lauren pointed out, by the time we get out of this summer, which is you're getting into September and beyond, all of that will work its way through, right? So we expect that we're going to be on our way to having significantly more formulary access, and we'll be done with the summer season so we won't be asking the question.

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Charles Cliff Duncan, Cantor Fitzgerald & Co., Research Division - Senior Analyst [44]

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Right. Maybe it would be helpful if more sell-siders and investors went on vacation as well. They could recharge and rethink. A quick follow-up to that, regarding the ex-U. S. partnering efforts, I know that it takes two to tango. But when you think about European partners versus Japan partners, would it be your preference to have a couple of different partners? And would you anticipate that prior to launch -- or excuse me, prior to approval or after approval?

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Ron Cohen, Acorda Therapeutics, Inc. - Founder, CEO, President & Director [45]

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Are you talking about a couple of different partners separate for Japan and EU or a couple of partners for the EU, Charles?

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Charles Cliff Duncan, Cantor Fitzgerald & Co., Research Division - Senior Analyst [46]

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Really separate for the 2 different geographies.

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Ron Cohen, Acorda Therapeutics, Inc. - Founder, CEO, President & Director [47]

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Yes. Where -- you have to explore the market and see what -- where the interest is coming from and what the nature of it is and what's the value that's being placed on it. So I don't know that we're being doctrinaire about it. If we have a deal that we like that encompasses both from one party, there's nothing that says we wouldn't take that versus doing 2 separate parties. And we're having conversations across the board.

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Operator [48]

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Your next question comes from Raghuram Selvaraju with H.C. Wainwright & Co.

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Edward Patrick White, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [49]

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This is Edward for Ram. Appreciate you taking the questions. And just looking at dalfampridine, I'm just wondering how many generics are on the market now. And then if you're looking at any inventory buydowns going forward, I know you mentioned that in your last call as well, and whether you've worked through the majority of the inventory you purchased that you previously had mentioned on the last call.

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Ron Cohen, Acorda Therapeutics, Inc. - Founder, CEO, President & Director [50]

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Yes. I believe there are 4 generics on the market. Is that right? It's 4 and then we have an authorized generic with Mylan, so that's 5 total, including the authorized generic. And Dave, do you want to talk about the inventory?

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David Lawrence, Acorda Therapeutics, Inc. - CTO, Chief of Business Operations & Principal Accounting Officer [51]

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Yes. Sure. So we are working through the inventory. I think we -- our statement last quarter was that we wouldn't be ordering anymore in 2019 and that still holds, but we are going through the inventory faster than expected.

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Edward Patrick White, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [52]

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Okay. Excellent. And then just one follow-up on INBRIJA. I know you talked a lot about a lot of these physicians waiting to fill access, and that seems to be a lot of the headwind that you're currently seeing at least early on in this launch. But just from a scientific perspective, I was wondering if there's any concerns around physicians using INBRIJA and wondering whether this would accelerate the time line to the carbidopa/levodopa nonresponses [added] from these patients?

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Ron Cohen, Acorda Therapeutics, Inc. - Founder, CEO, President & Director [53]

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Yes. So there is a myth, a mythology that has grown up in the field, and it dates back for historical reasons because L-dopa has been around since the '60s that said, that if you give L-dopa chronically, that it actually accelerates the degeneration in the brain and that it accelerates the -- or it compresses the time course to severity of the disease. This has been debunked in one paper after another. And actually, there were a couple of papers recently where they pretty much put the nail in the coffin of the whole thing. I believe it was in -- there was an editorial in JAMA that summarized all that. So it's just definitively not true.

 

However, there are certain neurologists who grew up in that era who absorbed that mythology and who retain some of that. So for those docs, fortunately, certainly with the -- sort of at the more recent generations of doctors and the MD -- and the movement disorder specialists are not nearly as prone to that. But when we encounter it, we have the papers and we have the scientific literature to back it up. And we go through that education process.

 

So -- and by the way, it's something that some patients have heard as well and have absorbed and get concerned about. So there's -- I wouldn't call it a major theme. It's a minor theme, and it's one of the themes that you deal with in the launch and you educate through it.

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Operator [54]

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Your next question comes from Jay Olson with Oppenheimer.

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Matthew Cornell Biegler, Oppenheimer & Co. Inc., Research Division - Associate [55]

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This is Matt on for Jay. We were wondering if any recent events may have impacted your view of the INBRIJA market opportunity, such as the recent failure of Intec's XR formulation for levodopa or maybe Neurocrine's recent NDA filing for opicapone. Appreciate any color there.

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Ron Cohen, Acorda Therapeutics, Inc. - Founder, CEO, President & Director [56]

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Yes. No, not at all. Those events are not related to the opportunity for INBRIJA. And the reason is that INBRIJA is an on-demand therapy. It is an adjunct to anything that the patient is taking as chronic maintenance therapy. So 70% or more of patients are taking a levodopa/carbidopa of some kind. And then a number of them, depending on severity and how many OFF periods they're having and so on, will have additional drugs with other mechanisms added, whether it's a COMT or an MAOI or sometimes a dopamine agonist.

 

The most severe patients wind up sometimes taking 2, 3 or more different drugs in an effort to compensate. And of course, they wind up very often with the adverse events that are associated with drug-drug interactions and polypharmacy. So you wind up increasingly having a very frustrating challenge if you are the physician trying to balance out, getting control of the symptoms all -- most of the day or all of the day against the side effects, including overdoing it and giving the patient dyskinesias, which is involuntary motions, that can be extremely disruptive.

 

So INBRIJA, if you think about it, actually fits very nicely into this whole paradigm because one of the major issues for this disease is that giving drugs through the gut is not an ideal situation. The gut in Parkinson's is compromised. It's slowed down. Absorption is not great. Some of the drugs, notably L-dopa itself, are not really very well absorbed in the gut, and they're susceptible to food effects.

 

So you put it all together -- and yes, L-dopa is a great drug when it gets in. But as you go through time with the disease, it gets in less and less predictably. So whatever they're taking, whether it's L-dopa plus opicapone or entacapone or any of the other drugs that are available, if they are having breakthrough OFF periods, they're still candidates for INBRIJA. And that is the messaging that goes out there.

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Matthew Cornell Biegler, Oppenheimer & Co. Inc., Research Division - Associate [57]

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Got it. That's really helpful. And then just one more quick one, if I may. If there's any anecdotal feedback that you wouldn't mind telling us that you're seeing from patients or caregivers, just on the user-friendliness of the INBRIJA device, like the instructional video, educational patient support that you're providing, anything there would be great.

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Ron Cohen, Acorda Therapeutics, Inc. - Founder, CEO, President & Director [58]

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So I'll start and then I'll turn it to Lauren. We're getting rave reviews on the materials that we are providing. The video as well is a huge hit. Some doctors have asked for more of them so they can have them in the office and so on. And the patients all get them when they get a prescription.

 

In terms of user-friendliness, we're getting pretty much what we saw in the clinical trials, which is in the entire clinical program, just -- I'm going to ask for a reminding -- how many, out of 900-plus, how many dropped out because they couldn't use it? 2. 2 patients out of over 900 dropped out of the trials because they couldn't use it. And we're not hearing significant issues with user-friendliness or the ability to use it. So that tracks the clinical trials.

 

In terms of anecdotes, well, with the understanding that anecdote is anecdote, we're hearing remarkable stories coming from the field, and they're really gratifying from -- I -- some of it I can't repeat totally, I have to stay on label. But we're hearing from patients some phenomenal stories about how this has helped them in a way that nothing else has. Lauren?

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Lauren M. Sabella, Acorda Therapeutics, Inc. - Chief Commercial Officer [59]

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Yes. And I'll go back to what I had mentioned earlier. The fact that the samples are in the office, some of these stories that we're hearing are actually from the doctors, where they're sitting there and watching the patient turn back on in front of their eyes. That's something that you just don't see with many -- with most medications in the market. So that's having a major impact as well.

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Operator [60]

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This concludes the Q&A period for today's call. I will now turn things back over to the presenters for any closing remarks.

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Ron Cohen, Acorda Therapeutics, Inc. - Founder, CEO, President & Director [61]

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All right. Well, thank you for joining us, everyone, and we look forward to updating you next quarter. Have a great weekend.

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Lauren M. Sabella, Acorda Therapeutics, Inc. - Chief Commercial Officer [62]

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Thank you.

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Operator [63]

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This concludes today's conference call, and you may now disconnect.