Good afternoon everyone and welcome to the AcelRx Pharmaceuticals’ First Quarter 2013 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Following management’s prepared remarks, we will hold a question-and-answer session. (Operator Instructions) As a reminder, this conference is being recorded today, May 08, 2013. I would now like to turn the conference call over to Mr. Jim Welch, Vice President and Chief Financial Officer. Sir, please go ahead.

Thank you, Jimmy and good afternoon and welcome to today’s call. This is Jim Welch. Joining me on the call today is Richard King, AcelRx’s President and CEO. Earlier today, AcelRx initiated its first quarter 2013 financial results which we’ll discuss in more detail on this call. In addition, we would like to provide you with a corporate update and a review of our current development programs for the Sufentanil NanoTab Patient-Controlled Analgesia System that is being evaluated for the treatment of moderate to severe post-operative acute pain in the hospital and for ARX-04, a Sufentanil NanoTab product for treating short-term acute pain. The financial results press release has been posted on our website at, www.acelrx.com. Also a replay of this conference call will be available later today on the Investors page of our website. Please keep in mind that the risk and uncertainties involved in the company’s business may affect the matters referred to in forward-looking statements made by management during today’s call. As a result, the company’s performance may differ from those expressed in or indicated by such forward-looking statements which are qualified in their entirety by the cautionary statements contained in this press release and the company’s Securities and Exchange Commission filing. I will now turn the call over to Richard King for a company overview.

Thanks, Jim and welcome everybody to this afternoon’s call. We continue to make timely and successful progress in our clinical development programs at AcelRx and I am pleased to provide you with an updates on those programs today. As you are aware, we have successfully completed two out of three planned Phase 3 studies for our lead products, the Sufentanil NanoTab PCA system or as we call it, the NanoTab System. We have announced topline results for these studies and have begun to present these results as well as more details from these studies at major medical meetings. Our goal in this effort is clear: To begin process of commercial readiness for the market and for AcelRx as we educate anesthesiologists, surgeons, nurses and other relevant hospital staff on the clinical profile of the NanoTab system. Last week at the annual meeting of the American Society of Regional Anaesthesia and Pain Medicine or ASRA in Boston we presented a total of five posters related to the NanoTab System that included important new data analysis on our Phase 3 head-to-head study comparing the NanoTab system to the current standard of care IV PCA or intravenous patient controlled analgesia with morphine. This week we are presenting two posters related to the NanoTab System at the International Anesthesia Research Society Meeting in San Diego and further posters at the American Pain Society Annual Meeting in New Orleans. So in early March of this year, we announced positive topline results from the first of two pivotal placebo controlled Phase 3 clinical trials for our NanoTab System; a study conducted in patients calling major open abdominal surgery. Our second pivotal placebo controlled Phase 3 study in patients after major orthopaedic surgery completed enrolments in early April and we expect to announce topline results in this…

Thank you, Richard, and good afternoon, everyone. AcelRx reported a net loss for the first quarter of 2013 of $12.8 million or $0.34 per share compared to a net loss of $7.1 million or $0.36 per share for the first quarter of 2012. Common shares used in calculating basic and diluted earnings per share were $37.1 million in the first quarter of 2013 compared to $19.6 million in the period one year ago. During the first quarter of 2013, AcelRx recognized revenue of $940,000 compared to $329,000 in the first quarter of 2012. This revenue results from reimbursement for work completed under research grant from the U.S. Army Medical Research & Material Command or USAMRMC for the development of ARX-04, a sufentanil NanoTab for the treatment of moderate to severe acute pain. Research and development expenses for the quarter ended March 31, 2013 totaled $9.3 million compared to $4.8 million for the quarter ended March 31, 2012. The increase was primarily due to the expense associated with the Phase 3 clinical studies of the sufentanil NanoTabs PCA system, AcelRx lead product candidate for the treatment of post-operative pain and the Phase 2 study expenses for the single dose sufentanil NanoTabs product candidate ARX-04. General and administrative expenses were relatively flat at $2.2 million for the first quarter of 2013 compared to $2.1 million in the first quarter of 2012. Other income and expense included $1.8 million non-cash charge in the first quarter of 2013 resulting from the liability accounting related to the one issued in connection with the PIPE financing completed in June of 2012. The primary determinant of this charge is an increasing stock price during the first quarter of 2013 and its resulting impact on the Black-Scholes valuation of these warrants. As of March 31, 2013, AcelRx had…

Thank you, Jim. Before we answer questions, I would like to summarize our major goals and potential milestones looking at over the coming months. We are beginning to form a picture of the value of our NanoTab system and the management of acute moderate to severe post operative pain in the hospital. In this picture we see a product which not only manages moderate to severe pain effectively over 48 to 72 hours, but provides early pain control to a better level than IV delivered pain medication. We are seeing a product with an adverse event profile that is similar to placebo treated patients except [routine], but with a reduced incidence of some marginal effects by oxygen desaturation events. We are seeing a product which produces enhanced patient global assessment, a method of pain control compared to the goal standard used today for post operative pain. We are seeing a product which enhances nurse and patient satisfaction and even care during use. And we are seeing this from a product intrinsically designed to eliminate the risk of programming hours, a product that frees the patient from an IV connection to an infusion pump and thus enables patient to ambulate more easily. We expect to continue to further refine the NanoTab system profile later this quarter, when we unblind and report results from our final Phase 3 study at double blind placebo controlled pivotal studies evaluating performance of the NanoTab systems in the treatment of moderate to severe post-operative pain in patient following the orthopedic surgery. We plan to submit our new drug applications to the FDA once we have all of our phase 3 data in the third quarter of 2013. A filing in the EU will be sometime after the US submission. We plan to present full data from all phase 3 studies for the NanoTab System at major medical meetings in 2013 and 2014 with a goal of raising awareness of the profile of the NanoTab System to physicians, surgeons, nurses and pharmacists both in the US and Europe. Our business objective for AcelRx is an ex-US licensing agreement and we believe the availability of a Phase 3 data package will be important to these partnering discussions. We will continue to engage in discussions with essential partners regarding ex-US commercial lives to the Sufentanil NanoTab System. We also plan to present the phase 2 data for ARX-04 to the FDA and to the USA NRMC later this year with a view to defining a phase 3 program for this product. The coming months we are busy at AcelRx with the announces of additional clinical results, a preparation filing of our NDA, accounting and building infrastructure to support to commercial introduction of the NanoTab System in the US and ex-US partner in discussion. With that, I would like to open the call for questions. Jamie, we're ready for the first question.

At this time, we will begin the question-and-answer session. (Operator Instructions) Our first question comes from Louise Chen from Guggenheim. Please go ahead with your question.

First question I have was if you could talk more about the time difference it takes to set up a morphine pump versus your Sufentanil NanoTab product and then also what kind of launch trajectory are you expecting for ARX-01 if it's approved? Would this be a fast launch or a slow uptick to the hospital product? And then lastly aside from post-operative pain management, where also are you seeing interest for ARX-01 for example I think you would mentioned a burn victim that can't IVs so just kind of curious what the larger markets opportunity may be? Thank you.

As we can't address all of those; one thing is always worthwhile and modern day technology and I can't touch in that context of developing modern technology is the ability to look at the whole variety of different things on sites such as YouTube. And you can actually go and look at on YouTube setting up a IV PCA pumps, it's always worthwhile doing (inaudible). In those videos you will see the challenge firstly of bringing together the pump which often installed because it relatively lies in a central supply area or in a biomedical engineering location to the flow where [therapy] is initiated, you got to achieve that first. You need a tubing set and you also need the syringes of morphine to be traced from (inaudible). Nurses then have to program the IV PCA pump for the drug, the concentration, the lockout time and (inaudible) infusion rate at about seven or eight different parameters in total which they have to program into the pump. In many cases that programming is not straight forward and again that’s where that YouTube reference that I made is often helpful to see it in action, and because of the nature of the mix programming errors that have been seen with IV PCA most hospitals in the US now require a second nurse either to check the first nurse programming step by step, or to actually independently reprogram the machine with their own programming steps and the machine will only go forward if both sets of programming actually coincide. So two nurses are required not a single nurse, and then the (inaudible) bedside tubing sets have to be flushed ready to hookup to the patient the IV has to be made legitimate and active and then finally the patient don’t have to use…

Our next question comes from David Amsellem from Piper Jaffray.

Sorry, I joined late, so you may have already addressed this but you alluded to refinements to the NanoTab devices. I was wondering if you could provide specific on what additional refinements are needed for your filings?

Actually none; and so we did between the studies that we, the first two studies which were the head-to-head study and the abdominal study, we obviously learned during that study period with device in the hands of nurses and patients for over 72 hours of couple of areas of change irrelevant. I think we talked about this before that the indicator lights, for example, the signal whether a dose is available or not, whether the device is does have it or not, we were told by patients that those were very, very bright lights and that they requested reduced intensive lights which we have done and put in place before we implemented the last study. Similarly as well, we move the system cut off time by 48 hour cut off, 72 hour cut off, we saw in patient use over 48 hours, the battery operating for the system was comfortably lightening way, way beyond in 72 hours and that’s where we were comfortable having a system which would operate 72 hours in the hands of the patients. So we changed the software to be able to manage that. A couple of screen order changes that we also implemented. Other than that, we're pretty much done with device related changes; a couple of minor tweaks in holding programming as we deep out some of the software but that’s pretty much done, so and that was already in the orthopaedic studies that we will be reporting results on late this quarter.

Okay, that’s helpful. And then my second question is a commercial related question. It's likely that you will be competing with the IONSYS system. So I wanted to get your thoughts on how you plan to position ARX-01 versus IONSYS what you think are the key point for differentiation there?

Okay, a great question David, so a couple of things first I would say, we share same view as the IONSYS folks but IV PCA is a technology which requires replacement by a newer technology, a more 21st century technology and that’s something which I think we share very much in common. And I think that two players are going up to that particular opportunity will be depend ultimately on patient care. Secondly, I would say we want to position ourselves against IONSYS per se and we will position ourselves clearly against IV PCA that’s where the market opportunity is and David for that matter other all forms of managing postoperative payments while we see patient control having advanced (inaudible) opioid or non-opioid therapy. And in terms of the relevant differences there are for once, firstly the indication and IONSYS is going to be indicated, I am sorry was indicated at the time of approval for the maintenance of postoperative pain and for the creation of postoperative pain, I will come back to the reason for that; we are looking for indication which will be for the creation, sorry the postoperative pain in management I should say, the creation of postoperative pain reduction and management. The reason for the difference is that pushing things through the skin, pushing drugs through the skin is difficult and it takes a while to build up concentrations of fentanyl in the plasma for the IONSYS system whereas delivery to the sublingual rounds creates rapid availability of drug in the plasma and also record transport to the brain. So we don't need to provide the patients with breakthrough pain medication support for the first three hours of use which is need to IONSYS. Secondly, sorry you want to ask a question there?

Yeah, just sort of one last one if I may, just on manufacturing of the device, so if you can just comment on commercial scale readiness regarding the device piece?

Yes I can, so we have, we are able at to the moment to produce controllers in the rate of around 1000 per month at the currently installed capacity; we can repeat lines to produce up to the 5000 to 6000 per month that we are anticipating but we will be producing post an approval point; but it would be relatively straight forward and these are manually built controllers which obviously once installed in a hospital available for used by patients on a repeated basis, once they get cleaned after the (inaudible) use. So we see a modest number of devices maybe 40,000, 50,000 in total being required in the US at peak, roughly in line with where the number of IV PCA that we see being available today.

Our next question comes from John Newman from JMP Securities.

I actually had two questions. The first one is maybe for both Richard and (inaudible) in terms of the approach that you will be taking for pricing of this product, is there a way that you can do some background work on the specific hospitals that you are looking at before you speak with them such that you may in certain cases actually be able to present the Sufentanil product to them as something that could potentially be even lower cost than their current morphine supply; I also wondered how you are thinking about pricing the product versus IONSYS and I have second question which I will hold. Thanks.

Okay. So obviously John at this stage we’re still a ways away from pricing the product. I really don’t have any idea what IONSYS is going to do from a pricing standpoint, so I can't really speculate on their pricing strategies. In terms of IV PCA though, you can gather costs of IV PCA, you can do it on a hospital by hospital basis. For example, buy three, four syringes of morphine from the pump manufacturers, and you can see prices for these in pricing catalogues available online, and hospitals are paying $150 or more for two days of supply of morphine for infusion pumps in the hospital and certainly when we went to do our pricing research in P&T Committees, the P&T Committees comfortably gave us a pricing range of about $150 to $300 for our two day cartridge. So I can see this and that’s before we can start to talk about our pump and infusion sets and what other else than the IV PCA product and the cost associated with those. So I can see it being directly competitive to IV PCA on a cost basis. That's when it gives us comfortable margins that we can work with as a business and provide the benefits that we talked about of the pain control and tolerability associated with non-invasive delivery, pre-program delivery that avoids these medication errors that are common with IV PCA and we can do that at a price equivalent to IV PCA based on convenience to hospital assessment. So we feel pretty good about that and to get to that point, but still have to come to a conclusion as to where is the ultimate price point for this product which we’ll do based on all the base in-house and then as we get closer to the market launch time.

Okay; one additional question. You mentioned that nurses are sort of the gatekeepers as you call them, I am wondering if you are planning to sort of reach out to that group at some of the medical meetings that they specifically attend, if you can effectively let them experience the product, give them a demonstration as to how it works and really try to sort of reach out to them with it that you have in hand now, so that they are very clearly aware that this product is something that interesting to them and could be helpful?

That’s a good question and the answer to question is yes. This year (inaudible) exact numbers, I believe it's four nursing conferences where we will be submitting data in the form of abstracts and also be presenting posters at different nursing meetings, Anesthesia Nursing Meetings, Perioperative Nursing Meetings, these occur the year and we will be reaching up to them in that format through the concept this year. And then as we move into getting close to launch obviously we will be doing a lot more work with Nursing Associations of Nursing Groups to ensure that we have some familiar asset with NanoTab System can offer to them and to their patients.

Our next question comes from Randall Stanicky from Canaccord Genuity. Please go ahead with your question.

Just a couple, first on ARX-04, what's the next step relative to funding decisions with DOD and then end of phase 2 meeting with FDA?

Thanks, Randall. So the next step is in relation to the FDA are the primary ones. What we have to do is to go to an end of Phase 2 meeting with the agency, share with them the data from the ARX-04 Phase 2 study, propose, have a commentary back from the agency on what Phase 3 program might look like before we submit that program into an outline that can be [possible and valid]. With that in mind and before we get to that, we will also obviously share the data with the Department of Defense. This is a program ARX-04 funded by the Department of Defense specifically with the wounded soldier on the battlefield in mind trying to find an alternative to intramuscular injections with morphine. So we will share the data with them and then we will talk about Phase 3 (inaudible). And once we have protocol that is defined by the agency we are going to have same program discussion with them around, how to fund that program moving forward, but that goes [a very fashion], they occur in tandem in many respects between the DOD and the FDA.

If we are thinking about timing to get into Phase 3, should we will be thinking about early next year then, that is the rough time?

I think that would be the earliest and clearly with the DOD and sequester related challenges that are out there right now funding decisions are taking longer than one might ordinarily think too. So I think at the earliest we should be thinking about the need some time last in the first half of next year, but we are thinking along first in the line in that regard.

Okay. And then with ARX-01, just thinking about the European filing, what do you need to do to make that happen and what will be the timing of that? And then I guess, as you are talking to partners if you decide to hold off for whatever reason, is that something that would move ahead with yourself?

So we are preparing the electronic submission of our NDA specifically because of the conversion process to MAA plan structure is simplified significantly with that structure. So, we have built and are building velocity and allowed rapid conversion to having MAA. There are some -- and the NDA submission will be primarily the drug products so they are manufacturing the cartridge with some reference to the device technology in the May, the approval will be for the drug cartridge unlike the US where the approval will be for the drug and the cartridge delivered through the device. In Europe the product that will be approved will be the drug in the cartridge. The device itself will actually be CE marked and will travel a parallel path across Europe to achieve that CE marking, but it will also have to have some language duration to be able to accommodate all the various European languages. So that is work that has to be done still and we will look at that work as we clarify exactly which languages and what languages (inaudible) device over the coming months and to look towards and beyond the NDA to an MAA filing and one of those filing might need CE marking on the devices in the multiple languages they are in. So the second part of the question, we will be pushing forward with that filing actually department. We have talked about it. We haven't made a definitive conclusion but it’s something that we feel we could manage, but we haven't made a decision as to whether we would be pushing that partner for naturally definitive terms yet.

And Richard, what would be the timing on that, if either your partner were to file, are we again looking at first half of next year?

Yeah, I think the fastest time that we should go would be -- is in the first half of next year is about the right time. So I think we would not be able to be accelerated beyond that point, but I think that we can leave it in first half of next year assuming everything kind of lined up and part of the equation like that were.

So my final question. Just given obviously it's been lot of positive data that’s been coming from you guys and you talked about the Halo affect of the pipeline. At what point or what's the gating factor as you think about pushing forward on the other two programs?

(Inaudible) and the availability of funds to move those programs forward and ideally that money would be available to us in the form of partnerships. I think that that would be the appropriate program which would put those programs in to Phase 3. We know what phase program looks like and we're also conscious, for example ARX-02. We're going to build the commercial capability inside the hospital setting. It's clear that ARX-02 (inaudible) is a community base product. So it doesn't align with our commercial intent as a hospital focused company but it certainly has significant attraction as the solo touch to a (inaudible) with pain for cancer patients and we see it has a lot of traction to partners and we would wait for that moment before we start to moving forward.

And our next question comes from Corey Davis from Jefferies. Please go ahead with your question.

Thanks. Just curious about any anecdotal feedback that you received from the ASRA meeting and what did among all of the stuff that you showed there, what did they find most impressive or most surprising? I want you to answer that first.

Okay. I think we certainly had a lot of very positive commentary back from physicians attending the meeting. We also have with satellite symposium at the meeting itself while attended and good feedback from folks who attended that meeting. The most surprising thing people think that an IV delivered medication to be go straight into a brain must be faster and (inaudible) effects, pain reducing effects, there is something that goes under the tongue. And I think everybody expected to see that we control pain as well as IV PCA with morphine get over the kind of 48 hours but the fact that we could show that we brought pain down faster in that first four, six hours than an IV delivered medication, I think it was surprising to people. I think many people step up and realize well that would be important, I didn’t get control of pain, early post-surgery, I’ve got a much more comfortable patient than I am managing over the kind of 48 32 hours that I have got control of them and the that interest was I think peak by that particularly

And you kind of touched on this a little bit, but how high would you say wearing a severe product is right now still in the very early stages, I mean it sounds like you have a great plan for all the number of medical conferences coming out, but I am just trying to engage how much awareness you can and need to create prior to approval and launch?

That is good question, I say we are still, we are quite in the very early stages, but I think we still early stages. However the challenge for a company which is the size of AcelRx while you are doing your clinical development work simultaneously reach out and to put – dropped in front of physicians and nurses, and there’s a lot of searching actually (inaudible) nurses who are managing patients in the hospital . So I think we’ve got our ways to go, but I think we are making very, very good headways, and every time we do talk to physicians and nurses about this program that is powered by this clinical profile we are finding really warm and positive reactions which I think is encouraging for spread with that meet or (inaudible) or understanding in front of every anesthesiologist, surgeon and nurse in the country and one by one different medicinal understanding. So I do feel we are starting to go ahead of [thinking] and we want to comminute to propel that (inaudible).

Okay, and this is kind of an immaterial question, but of the $1.2 million last time on the grant is secondly spread evenly over the next three quarters or they come in one fresh year quarter as a result of a milestone type event?

I will say it’s going to be more spread out over the course of the balance of the grants. There are a few things that we have it’s going to be a lot effort getting the documents ready for the Phase II meeting with the FDA which is going to be more towards the latter part of that. But like I said generally speaking activities is going on over the course of all three of the remaining quarters.

(Operator Instructions) our next question comes from Mario Corso from Mizuho.

A couple of things I wanted to ask about, at the ASRA meeting I think it was mentioned in one of the presentations verbally that the dozing intervals was very long for Sufentanil and I was hoping you could talk about that for a minute. And then also in terms of the morphine head to head data, I know its not going to be on the label initially but maybe you could talk a little bit how that's going to be useful with the hospital formularies. Thank you.

So yes dozing intervals first, average redosing interval was seen is in the 80 to 90 minute range for Sufentanil NanoTab patients. It’s in the 30 to 40 minute range for IV PCA morphine treated patients. So with effectively doubling and a little bit more perhaps the time periods between doses, which means the patients don't have to go to sleep, they don’t stay on top of that pain all the time. The other part of that is as you can imagine during the course of treatment, during the two days in hospital patients will fall asleep and they will get behind on their pain medication. When they wake up they will wake up often in quite a bit of pain and then try to scramble to get and control again. So in some respect we think of our onset issues that demonstrated different IV PCA and faster onsets as being kind of single event is when they first get put on to therapy, that’s the time when you worry about. It actually repeats itself through multiple cycles in that post-operative period and so again our ability to rapidly get control of the patients pain might be 3, 4, 5 event idea for a single patient over the course of two or three days as they sleep and wake up and have detached (inaudible). But that usually [coincides] with the dosing interval and the second question on the head-to-head data was, remind me again Mario?

I know it's not a label study but you are going to get news (inaudible) hospital, correct?

Yes. You are right. We don’t see labeling for the single head-to-head studies we completed. We will work with the FDA to look at the second study which we think would produce the same results. Could be use to support labeling but regardless of that, the [PNT] committee that review products for inclusion on the formulary require you to share with them all of your data and so that head-to-head study will be presented to [PNT] committee as part of the full dossier material and they certainly will have access to that (inaudible) of course in the published world as well.

And we do have a follow-up question from Corey Davis from Jefferies.

I should ask this first, but you got one more trial to go how surprised would you be if the ortho study doesn’t work, or if it co-technically works other places in the data that could be disappointing from a labelling and commercial perspective?

How surprise it could be. It's difficult to kind of handicap these things. Every single study is a launch in itself. It’s (inaudible) to say study A is more or less (inaudible) than study B every time you put a patient to study you’ve won a risk. But I would say that just thinking about the desire of this study for a moment (inaudible) study. We have a lot of patients in the studies, you always worry when you have small and that strange results can happen because of just the sheer inter-patient variability in terms of the (inaudible) to plain medication. We view to some of that by having larger studies. This is the largest of the three studies that we have, and so that gives you some encouragement but this will be a surprise, if you would see a strange results. To the second part of your question, what could constitute strange results? It’s difficult to mention from an efficacy standpoint it either kind of does or doesn’t demonstrate difference to placebo, and remember this is placebo treated patients, a lot of these patients have knee replacement, that’s difficult to control pain it becomes a placebo we know it’s a (inaudible) manageable to control that pain. But efficacy is coming, you do it or you don’t. The P value key value is 0.05 and (inaudible) greater or lesser than that. The safety side of things is the one where or tolerability side of things, we could see something surprising come up. Remember in our first study, abdominal surgery study we saw adverse event profile that was done as a placebo and the only separation point was [itching]. We’d love to see that but may be might not add (inaudible) study or the combined set of abdominal and orthopedic patient adverse event that would be relevant in the label, we’ have to see on that side.

The magnitude of the separation from placebo doesn't really matter for this type of study?

Well it does, but we haven't assumed the affect size that we calculated the pairing of the study on. The affect side is really the ratio of the scale of the effect compared to the scale of the 95% (inaudible) that go around the affect. But so again larger studies tend to acquire smaller affect side to show significance and that’s kind of the way in which we’ve approached this whole (inaudible) study.

Now that is kind of where I was going is that, could you have something that was easily statistically (inaudible) but be criticized as not as clinically relevant because of the smaller difference from placebo?

So I am assuming if it’s a smaller difference to placebo, it’s not necessarily but (inaudible) suddenly done something different in this study compared to what we have done in the other just because you got a much higher placebo response than you did in the other studies is the only conclusion you would come to. So we could be criticized because the placebo group had a better response than we saw in other studies. I don't know that it would cause advanced review, I think as long as the magnitude of effect that we saw on pain control in the active was similar to the other studies I'm not sure if the placebo was a bit better responder that it would to have any criticism that would be [manageable].

Our next question comes from Ed Arce with MLV.

Just one early and we may have pressed upon this in the previous discussions, but just wondering if you could lay out for us what you are expecting in terms of the label indication and perhaps [RIMS] and you know beyond that if you want to call it a stretch, what you would hope to see?

In label?

Yes.

If it were stretched so what we anticipate is an indication for the management of moderate to severe acute pain in the hospital setting. And so that's defining the utilization for the products specifically by reference to the hospital but that also then applied to lot of your RIMS related thoughts. One big part of the RIMS will be to ensure that the product may get from our manufacturing site at least the C2 part of it from our manufacturing site to the hospital with no leakage from the distribution channel that I think will be one of the RIMS elements. And then I think the second RIMS element will be to instill the product phase in the hospital and (inaudible) on the device, that we are tracking for the NanoTab cartridge and so on and so forth. So I think Jim is going to focus on those two areas specifically. The label, I think where we expect to be is the two placebo-controlled studies forming the basis of efficacy commentary and safety and tolerability commentary in the label, no reference to the head-to-head study. If I had my moments of dreamland, I suppose maybe one or two of the points but we're talking about, which might be clinically meaningful from head-to-head study might make the way in to the label, but I think at this stage, the sensible function is placebo-controlled material only in the label itself.

And our final question comes from Mario Corso from Mizuho. Please go ahead with your question.

I just wanted to ask a follow-up on one of the prior questions, then we had placebo study that we're waiting for. In terms of the design, isn’t it such a low likelihood of not separating from placebo because of the design. Because in theory, if you think about the morphine study for example, with the dosing interval as long as you talked about, if the patient wasn’t achieving enough pain relief, then they would dose more frequently, right. So in theory, you could have the same effect size in two different studies but you might just be dosing more frequently to the patient would keep dosing until they have got the effect size that you need, I mean is that the right way to think about the design there?

I fairly think that the feasible way to think about. We know the design is exactly the same design by the removal of the word of domino surgery and the replacement of orthopaedic surgery specific full total hip or knee replacement. We know that knees are very, very painful for patients post replacements, so anybody that’s been treated with the placebo NanoTab is going to struggle to find a way to control that pain and really, you are wanting the placebo group (inaudible) to struggle to do that where as the active group you are wanting to show the active, wanted to actually provide some effects. So I think everything is kind of stacked with. The design is good one we know that we programmed that from the abdominal surgery study. We know the patient population is kind of in pain from both the knowledge of what means are amongst head to head study. But strange things happen, I mean again until we unblind that data set, we won’t know then we will know. In the meantime, we are comfortable and confident in what we’ve seen so far with the Sufentanil NanoTab and also with the design that we are putting in place with the study, that perhaps been in place of a study between case robust and solid design that it does successfully allow you to differentiate between active and placebo if there is an active effect.

And gentleman at this time I am showing no additional questions. I would like to turn the conference call back to over for any closing remarks.

Thanks Jamie and thank everyone for joining us on the call today. Great questions we appreciate them. If you have any additional questions you would like to ask, please feel free to contact either Jim Welch or myself. In the meantime have the great evening everybody, thanks.