Unidentified Analyst: Hey guys, thanks for taking my question. I just had a couple questions on the 495 patent challenge from eVenus [ph]. So I was just wondering if you guys could give us some latest kind of thinking you guys have in terms of where some of the more likely scenarios that could play out and what actions, kind of market actions eVenus could take in the meantime, based on the ruling and just wanted to confirm, is the expectation that the ruling from the judge still comes in July, or is there any kind of change on that front?
Frank Lee: Thanks for the question. Just a little bit of background and so we do expect the ruling on the first patent litigation sometime by end of June and so that’s consistent with what we said before and just to remind, we’ve got a number of other patents that will need to be litigated. In addition, of course, eVenus will need to get their product approved and eventually decide to launch the product at some point. So there are a number of things ahead, but let me turn it over to Christian to provide some additional color here.
Christian Pedetti: Yeah, thanks. As Frank said, there really isn’t an update since we talked to you all at the end of February on the 495 trial. We still expect it to read out by July 1, which is when the 30 month stay is up. So we look forward to the court’s opinion being issued before then. And as Frank mentioned, and as we’ve reiterated, and we actually put a little detail in our release, we continue to produce new IP around EXPAREL Orange Book listed patents, and those are additional hurdles that eVenus would need to get through in order to eventually launch a product. So it’s in our release, but we did just have in March, three additional Orange Book listed patents, two method of use and another composition of matter and those are in addition to the other ones after 495.
So there are quite a few, a few patents that we still need to get through, but as I said, we’re looking forward to getting resolution to 495 here in short order, and then we’ll continue to produce new IP and they will continue to have to work through our other patents that are all on the Orange Book here.
Unidentified Analyst: Great, thank you. And then just one more on you mentioned the EXPAREL gross margin was within the full year guidance range. I was wondering if you give a little bit more granular detail about how margins are progressing among the various facilities, for example, the one in the UK versus in San Diego.
Frank Lee: Yeah, thanks for that, Hardik. I think overall we’re progressing well. We haven’t really broken it down specifically by site. As you know, the 200 liter facility is coming in — is going to come online later on this year. I don’t know, Charlie, if you want to say a few words about margins.
Charles Reinhart: No, listen. In the long term, the improvement in gross margins is going to be driven by two major factors for EXPAREL. One is the manufacturing equipment the vial is manufactured on. So the 200 liter is generally less expensive than the 45s, but probably even more importantly is the total volume. So we’re focused on expanding top line and driving volume and so that margins can follow.
Operator: Your next questions come from the line of Gary Nachman – Raymond James. Please go ahead.
Gary Nachman: Great. Good afternoon, Frank. First, talk more about your progress with the modernization of the commercial organization. Do you think you’ll have most of that in place by mid-year as you prepare for no pay next year? I think that’s been the target. So what big hires still need to take place? And then how aggressive do you plan on being with the share buyback? How is that contemplated with the convert coming due next year and you have to maintain a certain amount of cash for that. So maybe talk through that as well.
Frank Lee: Great. Thanks for the questions, Gary. First, on the commercial organization, as I mentioned earlier, we’re making very good progress on modernizing and bolstering the commercial, medical and market access organizations. At a high level, we’ve talked about plans and we’re making good progress on plans to hire a chief commercial officer, and that’s on track. In addition, we’re expanding the number of folks in our field, reimbursement management team, payer team, as well as market access strategy and operations. So those are all things that are on track. In addition, we’re looking very carefully at the broader commercial organization, including bolstering our resourcing of our marketing teams and medical teams. So those things are right on track and again, supported by reallocating our resources away from certain areas of the company and investing them here where we believe it’s going to make a difference here for our NOPAIN launch.
So that’s a comment on our commercial organization, and I’d characterize it as we’re making good progress. And largely speaking, we expect that to be in place sometime in the second half of the year. With respect to share buyback, let me turn it to Charlie here. I’ll just say that it really does underscore our confidence in our growth outlook and it’s an attractive investment given the value that we believe is ahead. So, Charlie, let me turn it over to you.
Charles Reinhart: Thank you, Frank and Gary, thanks for the question. So listen, as you point out, that we have a business that’s operationally cash flow positive. We generate cash every year. We just reported having roughly $326 million on the balance sheet. As you point out, we do need a certain amount of money on the balance sheet to repay the $400 million of August 25 notes next year. And so we’re going to balance priorities and we’re not going to make any commitments about whether we, when we’re going to spend the $150 million, that we’re going to use it opportunistically as we think benefits our shareholders, and we will balance all of the needs from a cash flow perspective over time.
Gary Nachman: All right, great. Actually, maybe one follow up for Frank, just what are the next steps for 201? You seem pretty excited about the data you’ve seen there so far. Following the Phase 1, what comes next? What sort of resources will you put behind it? Charlie mentioned before you are investing a little bit in pipeline. So I’m curious, is that something that could start this year or will you likely wait until to see how things unfold next year? Thanks.
