Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Robert Gilliam with UBS.
Robert Gilliam - UBS Securities
I just have a couple of questions. First, I was wondering if you could address business wins in 4Q, or potentially RFP activity?
Dr. Fredric N. Eshelman
We’d like to reserve that for the fourth quarter call, which I think is February the 7th -- Craig, what’s the date? Yes, that’s right, so we’ll be glad to comment at that time.
Robert Gilliam - UBS Securities
Okay, just moving on to a couple of other things, I think you mentioned there was a bad debt issue in 4Q07. I was wondering if you could just give us a little bit more color and elaborate on that.
Daniel G. Darazsdi
We’ve identified a potential risk with one of our client projects and we’ve determined that it’s appropriate at this time to take a reserve for that risk. I won’t go into the client detail but it was isolated, principally the largest one being a Brazilian or Latin America client but that’s about all the detail I think is appropriate.
Robert Gilliam - UBS Securities
Okay, and you think that’s just going to impact 4Q07 and won’t impact --
Daniel G. Darazsdi
Yes, it’s just a one-time reserve that we think is appropriate from an AR viewpoint.
Robert Gilliam - UBS Securities
Okay. I guess just one final question on the compound partnering program; obviously it looks like you are including the $25 million potential payment in 4Q08 and I guess given historical approval rates, I guess what was the deciding factor in determining to include that in 2008 guidance? It looks like you put that there’s no probability weighting. I was just wondering, is there anything specific about the package you put together that gives you increased confidence? I was hoping you could just give us a little color on that.
Dr. Fredric N. Eshelman
Well, I think the fact that the submission went in in ’07 and therefore theoretically the filing will occur very early in ’08, in January specifically. That would essentially give us almost a 12-month run-rate for the initial approval. Given the usual PDUFA dates and so forth, we thought that was a reasonable assumption. Obviously we have seen the data and I’m not going to try to comment on behalf of Takeda but as far as we are concerned, it was a very good NDA. Anything can happen, as you know, but we certainly did not see any red flags.
If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!- To read the full transcript on Seeking Alpha, click here »
