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#<UNK>, let me hit your Xiaflex questions and then I will go to <UNK> on the pricing question and the moving parts in 2017.
Look, I think on Xiaflex, we had a very good first quarter.
We had growth of about 21% when you're looking at the US.
And as we laid out in our presentation and my comments, our expectation for the full year is product growth should be somewhere in the mid to high teens range.
Right.
Now, clearly we are working to accelerate the product, but that is a view of where our best current thinking is.
So if you take a look at the 21% and the full-= year at mid to high teens, there will be a slight moderation as we head into the next few quarters.
But this is still going to be well within the strong double-digit growth profile that we predicted for the product.
<UNK>, your question on the price and the pressure, when we look at the Qualitest portfolio, which had served us well for so many years, as I said before, it is a mature portfolio, which is subject to more than normal competition.
We were very strong in pain; a big portion of our portfolio is directed towards pain.
It's not quite the barrier that it once was, and as a result, the pricing pressure that we saw was about 80% tied to legacy Qualitest and about 20% tied to legacy Par.
And then let me start on your 2017 question, and I'll ask <UNK> to jump in.
So let's take the following view on 2017, so let's talk about what's changed since we last put in our expectations for 2017.
So the three main changes have been a resetting of expectations for our Qualitest base business; the delay in the 505(b)(2) program, as we talked about, which is going out of 2016 but will be impacting positively 2017 and 2018, for that matter; and then we talked about V Gel, which we fully expected to be genericized as we headed into 2017.
It just happened much earlier than we expected, and we do have authorized generic as an option for us to use going into 2017.
So the real major downward revision there is the impact of the Qualitest base business.
Now, there are other moving parts that will impact what our final guidance in 2017 is though, right.
We will have to take a view on exactly how BELBUCA is going to do.
It all depends on where the inflection point is going to be.
Obviously, tailwinds behind Xiaflex will continue to grow.
We will know more by the middle of this year in terms of what's happening with OPANA.
We have a July 29th PDUFA date for our ADF relabeling request with the FDA.
And we will also know more in terms of some of the other pipeline launches and other programs that <UNK>'s pursuing in the Par business and exactly where they will fall in 2017.
Right.
So those are some of the real moving parts we have.
We've also signaled that we expect to increase our R&D spend, particularly behind the Xiaflex pipeline, and to the extent that <UNK> has new ideas from an R&D standpoint we will try very hard to meet any additional funding requirements in the Par pipeline as well.
So those are some of the moving parts.
I don't know, <UNK>, whether there's anything else that you would point to.
I think the only other thing is the strong growth we've been seeing in the injectables portfolio.
We continue to see that momentum into 2017.
It's just understanding where our exit is in 2016 before we make that final call.
Sure.
So let me just comment on the overall status of mesh, and then I'll let <UNK> talk about the financial aspect.
So as we talked about in our fourth-quarter call, we took a new approach to how we're dealing with the tail, which is that we took steps to resolve the higher-quality claims, which is what led to an increase in accrual that we announced in the fourth-quarter call.
Since then, the situation has not changed.
There is alleged potential for another 8,000 cases in the tail that we disclosed, but we were also very to quick to point out the expectation is that a large proportion of those cases could be of lower quality.
We don't have all the facts around them.
We also point to the fact that there is a potential fraudulent scheme that is running through many of these cases, which we are investigating currently.
As we pointed out before, these are typically the types of things you see at the tail end of a mass start situation.
We can't give you a precise projection of what the end date is, but we have confidence that we're seeing the real tail here.
Maybe <UNK>, you can talk about the cash expectations in 2016.
Sure.
At the end of first quarter, we will have a total product liability accrual of about $1.9 billion on the balance sheet.
You'll see that in our 10-Q, which will be issued in the very near future.
Of that $1.9 billion, the amount of restricted cash or cash that's already been put into qualified settlement funds was about $0.5 billion, which leaves a residual of $1.4 billion on a gross basis to be paid.
We'd expect of that remaining $1.4 billion, about $750 million on a gross basis to be paid between ---+ for the rest of 2016.
And then about $600 million $650 million into 2017, or the residual of that $1.3 billion balance.
So that's where we stand from a cash call basis.
As we talked about earlier, we did receive the federal tax refund that we pointed to earlier this year; that came in early April.
We continue to look at ways to provide a shield around future liabilities.
It's an active investigation, we have issued subpoenas in the case.
And are also working with the judge in the NDL case, as well as other parts of the law enforcement infrastructure in the country.
So we really can't comment more on it.
So let me just talk about briefly about V Gel and Frova, and I will pass it on to <UNK>.
With respect to Voltaren Gel, we have pointed to, in the materials for today's call, the relative impact on the rebasing of our 2016 guidance.
We are not going to discuss market's expectations anymore, just other than to say there's a single competitor on the market.
And we are effectively defending the branded product at a level that we would expect to do.
With respect to Frova, yes we do have a new competitor, that is Glenmark, and currently Par has also launched our authorized generic.
So that is also in the market.
Maybe you can address the other question.
Sure, in terms of the consortiums, the cycling, I think you had that exactly right.
So they are staggered, so each consortium has a different timeframe that we bid against.
So it's not like you come in, in Q1 and have to deal with 3 of the consortiums.
Reddo does not actually put out bids; their expedition is that there going to be guaranteed best pricing.
So their style is a little bit different as opposed to the one-stop program or the [weedbad] program or even the ECONDISC program.
Regarding rophirs, that is exactly what it is.
So after you go through the consortium bid cycle, that does not mean that you are still not exposed for rophirs.
That being said, we defend against rophirs and we have our fair share of wins.
You have your fair share of losses, and at the end of the day, I think on a go-forward basis, this is an area that we're fairly strong in, in terms of at lease to protect ourselves from the legacy Par standpoint.
And we are, in essence, right-sizing the Qualitest business legacy side in order to be able to defend against rophirs on a go-forward basis.
Okay.
Thanks.
Look, it's a strategic question.
One of the things that our Company has benefited from over the course of the last three years since my arrival, when we really started to transform the business, is in fact the diversity of the business.
Right.
So the generics business, especially with the addition of Par, despite the rebasing that we are taking, is a highly diversified business with multiple growth drivers.
And we've also taken the steps to build critical mass in our branded business.
But I have been also open that from a forward-looking standpoint, at a certain point in time when we have critical mass in both our branded business, as well as our generics business, these can be both two very viable standalone businesses.
So from a strategic standpoint, we remain open to thinking about creative ways of creating that shareholder value.
But as I pointed to earlier in my comments, our primary focus right now is operational execution.
We have a full plate in Par in terms of restructuring that needs to be done, progress on the pipeline, as well as in the branded business growing Xiaflex and growing the BELBUCA and investing in the pipeline.
But certainly, we keep all strategic options open to us as we think about the future.
Thank you, and I want to thank all of you for your attention today.
There have been a lot of very good questions.
And we've talked a lot about the different factors that have impacted our 2016 guidance, as well as other financial updates.
But what I hope that you will take away from this call today is that despite the rebasing of our 2016 guidance, Endo is a fundamentally different and stronger business than it was in 2013.
And it is also a more compelling investment and growth story.
In 2013 we had two primary and declining assets at that time and a very fragmented base of business across healthcare solutions divided in pharmaceuticals.
You fast-forward to today, we've rebuilt our branded portfolio and pipeline with the acquisition of Auxilium and particularly Xiaflex.
We divested non-core businesses.
We've achieved scale and differentiation in our generics portfolio with the addition of Par, and frankly, that is what the future is going to be about.
Particularly, as we see the rebasing of our legacy Qualitest business.
We established an international structure and footprint for growth and expansion.
We narrowed the mesh tail, and we have built a business generating significant EBITDA, even after this rebasing, and free cash flow that we expect to grow going forward.
So no one likes to rebase guidance more than I.
But we have now reset our business so that we can move forward and effectively drive growth and value.
And we thank you for your continued support.
Thank you very much.
