Question-and-Answer Session
Operator
(Operator Instructions). And your first question comes from the line of Angela Larson from SIG. Please proceed.
Angela Larson
Good morning and thanks for taking the question. I was hoping if you could give us the little more color on some of the items that might go into making the commercial partnership, specifically he will be doing the manufacturing and covering cost of the manufacturing and what are you intent to market or to fully just out-license and let someone else market?
John Flavin
Thanks Angela. In response to your question, we envision the structure of the transaction having upfront fees as well as milestones and regulatory accomplishments in the CAP and even follow on indications. So, milestone fees coming into the company and then we would look for down streaming recurring revenues in the form of net royalties coming into the company. We believe we're in a strong position to achieve this goal given the strong results we've seen again the dwindling competitive landscape and the value preposition Cethromycin brings to address emerging resistance in the community based space. If you look at the overall aspects of the cost of the program, our intent is to rely on our partner to bear those costs and that's why we would structure the transaction in a milestone on a royalty based approach. So, we'll be relying on our partner's sales and marketing infrastructure, and they would be bearing the cost associated with bringing the product to the marketplace.
As you know, we have worked with our own manufacturing operations for DSM and Cardinal Health, which is now called Catalent. These will likely be the manufacturers as we move through the process. We would expect again that the overall cost to carry forward into the market would be borne by the partner, however, but in terms of the operations, we would expect that those commercial manufacturing groups will be responsible to make and then bring Cethromycin to the market.
Angela Larson
That's very helpful. And, as you look at your R&D activities ongoing outside of the CAP indication as well as the other products and development, if finances were not the issue, would R&D continue at the level we saw in 2007, or is it something that could accelerate given the scope of the programs you're looking at?
John Flavin
No. I think that if you look at what we saw in 2007, the pro finance of R&D cost were made up of Cethromycin clinical trials. And, as you know, we had a heavy program underway, which consisted of the two pivotal programs and the Thorough QT study, which made up in the end a heavy overall R&D expense. I would not expect, even the finances were not the issue. I don't expect that the R&D component would rise to that level in the current year.
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