Ready to begin? Good morning, and thank you for being here at our full year report presentation for the year 2018. Let me state one thing which we think is nice, should be taken as a good thing. Cosmo's got now three approved products that comes from the same MMX technology. We started with LIALDA, then we went further with Uceris, and now finally AEMCOLO, our new antibiotic, has been approved, and we are quite proud of this achievement. We've been trying to understand if there are actually companies that have three or more products approved with the very same technology, and we haven't been able to find a peer. Let's walk you through what happened in 2018, which has been a very busy year. You know that in November, finally the FDA approved our new antibiotic, AEMCOLO.
That actually was a very smooth dialogue with the agency and a very smooth interaction. Everything worked well. The drug was approved exactly within the stated timeline, as I said, the process was very smooth. Everything went very well. Now AEMCOLO enjoys marketing exclusivity until 2028 with its QIDP, which stands for Qualified Infectious Disease Product Designation, and New Chemical Entity, NCE designation. In the meantime, Dr. Falk Pharma has received approval through the European decentralized procedure for Relafalk, now it's got marketing authorization granted in Germany, United Kingdom, Spain, Denmark, Greece, Finland, Hungary, Norway, Portugal, Poland, Sweden, and Bulgaria. They're launching in a few months in Germany, and the other countries will follow at the beginning of 2020. Our phase II proof of concept is progressing, in IBS-D. The trial is open and ongoing in Belgium, Italy, Spain, and Germany.
In the meantime, we're setting the stage for further expansions in other indications. The franchise of LIALDA has grown in Japan and has grown in the European Union. Even more importantly, that of CORTIMENT, Uceris, is quickly growing all over the world. Now CORTIMENT, which is the brand name of Uceris under our licensee, Ferring, is approved in 61 countries, has been launching in 38, and it's under registration in 18. You know that in the meantime, generics were launched in the U.S. both for LIALDA and Uceris. We will walk you through afterwards on what's going to happen in respect of our expected revenues. Eleview gross sales in the U.S. were close to EUR 11 million, and the net sales after the royalty to Olympus were EUR 7.5 million. We've sold 23,500 units in the course of 2018.
We've signed an exclusive distribution agreement with FUJIFILM to expand the franchise of Eleview, beyond Europe and South Africa to Southeast Asia, Middle East, Africa, Australia, and New Zealand. We've licensed Eleview, Methylene Blue, AEMCOLO, and Colotag for Canada to Pharmascience. We've cashed in a milestone and we'll earn nice royalties. Pharmascience has made regulatory submission for Methylene Blue MMX, and Eleview, approval is expected in the third quarter of 2019. It will be very nice if we could get around August the approval of Methylene Blue MMX in Canada. We've licensed Methylene Blue and Eleview for Japan and South Korea to EA Pharma. We received an upfront payment. EA Pharma is a very large player in the gastrointestinal field. We had a Pre-NDA meeting for remimazolam with the FDA. Submission of the NDA was expected by the end of this quarter.
I think it will be moved one week or 10 days from now, so it's expected to be within the first half of April because there's been a delay in providing us with certain information that was required within the NDA package. Our associate, Cassiopea, of which we continue owing 45%, has communicated a sequence of very good news, including the success of the phase III clinical trial for the acne drug, Winlevi. You have probably seen the news very recently released about also the successful Study 27 for the use of Winlevi over 12 months. We communicated also the successful phase II clinical trial interim analysis of Breezula at six months for the treatment of androgenetic alopecia, and the full phase II data for Breezula should be released in a matter of days. It is very important, though, that you consider the following.
I'm opening a bracket here, this is the right point in which to open a bracket. The phase III of Breezula will be on a six-month treatment, and we have already published the results of the six months phase II treatment. You should assume that that is going to be the reference point. It's not going to be the full year because the phase III will be on a shorter time frame. In order to try to figure out whether the phase III of Breezula will be successful or not, you have to consider that we already have the data of the six months of the phase II. You have to take that into consideration.
Because the data of the phase II were extremely good, we have no reason to doubt that the phase III of Breezula will follow along the lines of the phase II data. As of the 27th of March 2019, our stake in Cassiopea is worth EUR 184 million compared to EUR 134 million at 31st of December 2017. In November, we placed EUR 175 million convertible bond due 2023. We've been raising net proceeds of EUR 163 million. The annual coupon is EUR 2.5 million. Maturity is five years. We believe that we have raised capital at very favorable conditions overall. I assume that there will be questions afterwards also about the convertible bond. One of the things that I may say in this respect is that probably everyone will remember that towards the end of last year, there were growing concerns about the state of the financial markets.
There was wide expectation of some sort of crisis that fortunately didn't materialize right now. We were kind of thinking that if the conditions would have changed, it would have been more difficult for Cosmo to access the capital, and we thought that the conditions were convenient. Therefore, when we had to decide whether to go for the bond on just hold, fearing that the market conditions may deteriorate, we thought that it was a good idea to raise the capital at that point in time. Important feature for us was the fact that we are entitled to reimburse the bond if we do elect to do so using up to 2.4 million Cosmo shares, which is a feature that's normally reserved to much larger issues.
That has been object of very tough negotiations with banks that placed the bond. This was just especially crafted for the company to reduce its overall risk. We believe that therefore, we do have a very significant firepower to very attractive terms. Let's talk about the disappointments. Methylene Blue was not approved by the NDA, notwithstanding the special protocol agreement and notwithstanding the excellent trial results. We decided to step into the dispute resolution process, first, because we were hopeful that the FDA might have changed his idea, and this is exactly what the dispute resolution process is for, but not only for that reason.
The essential reason why we entered into the dispute resolution process was because there was the absolute need for us to clarify the issues that were raised in the complete response letter so that we could identify a path forward in order to do eventually a second trial if the dispute resolution process wouldn't have been successful. The outcome is exactly as envisaged, although disappointingly. We haven't been able to obtain the approval of the drug, but we have been able to clarify the issues to an extent where we know now that what we need to do in order to present a second trial and try to execute it very quickly and smoothly. I wouldn't want you to think that it has been a waste of time to go through the dispute resolution process.
To the contrary, this has been essential in order to understand how to craft a second trial. However disappointed we might be, and we are extremely disappointed. We thought that everything was really clearly set in the special protocol agreement. It looks like the FDA can sort of do more or less what they like because they simply disapplied the special protocol agreement and they said, "Well, you know what? It's true. We agreed that a single trial would have been sufficient, but now we've changed our mind. We just think that you should do another one because we want to see more confirmation. Methylene Blue will be used by millions of people.
Colonoscopies are done by the millions. Therefore, we just think it's more appropriate if we do a second trial." Our simple answer to this is that whatever they have told us, they actually could have told us before. Because the real money that the company spent and the real time that the company wasted was to negotiate a special protocol agreement, which has turned out to be basically useless. The company had spent, back in 2014, close to two years to negotiate the protocol and spent money to do that. We thought that we were on a very safe spot. Things turned out to be different. This is what happens sometimes in life.
It's important that you understand that in front of the CRL, the complete response letter, we couldn't have possibly said, "Okay, let's start another trial," because there were so many things that needed to be clarified that we absolutely had to go through that process. I'm glad that we did it. Now we think that we're in a condition where we can present the new protocol and try to start the new trial as quick as possible. In February 2019, we have filed the marketing authorization application within the European Medicines Agency. This is under review and approval is expected by the beginning of next year. Financial review, I would pass now the word to the CFO, Niall, and I'll go back with you after this is finished. Thank you.
Thank you, Alex. In 2018, we had revenues of EUR 65.6 million. This compares to EUR 67.2 million last year. I'll give you some more detail in a moment in terms of the product and the product revenues. Our operating cost increased by EUR 5.4 million, up to EUR 82.2 million. There are two aspects to this. In our Aries Inc. operating costs, they increased to EUR 33.7 million from EUR 30.3 million. About EUR 18.2 million of this is personnel expenses and EUR 15.5 million are other costs, sales, marketing, promotion, market research and so on.
Our R&D costs increased to EUR 10.4 million due to clinical trial costs expense to P&L. Our operating loss for the period was EUR 16.6 million versus EUR 9.6 last year. In terms of our net financial income, we had EUR 4.6 million of income this year. This compares to net financial expenses of EUR 16.9 last year.
The main reason for this is a net FX gain in the current year of EUR 5 million, compared to an FX loss of EUR 18.4 in 2017. This is mainly related to the movement in the euro-dollar rate over the period and our U.S. dollar holdings. With a loss after tax of EUR 18.1 million compared to a loss after tax of EUR 32.5 million last year. This is our income statement on slide number 14. Some more detail now on the revenue. Uceris, there was a generic launch during 2018. We saw Bausch also launched an authorized generic during the year. The combined revenue of the authorized and branded product fell by 28% to $96.7 million. Our total income fell by 32% to $17.5. Our royalty percentage dropped from 12% - 6% effective Q4.
This obviously is going to impact into 2019 when we see the full year impact of that generic in the market. CORTIMENT, on the other hand, net sales there grew by 12%. Our income was EUR 3.9 million versus EUR 4.4 last year. Last year included a milestone of EUR 1 million that did not reoccur in 2018, but our manufacturing income and royalty income is up. LIALDA, we had a reduction here of EUR 4.5 million.
This relates to the launch of a generic in the U.S. You can see here our U.S. drop in revenue was partially offset by substantial increases in Japan and European Union. Eleview, we had net income of EUR 6.8 million. This is a big increase on FY 2017. In terms of license fees, upfront milestones in generic, we had EUR 5.7 million in upfront fees and milestones, compared to EUR 1.5 million last year.
Our generic and other was up 12.5%. In terms of operating expenses, our COGS is pretty much flat year-over-year. As we mentioned earlier, R&D is up as a result of increased clinical trial costs. SG&A has increased as a result of the U.S. organization and the full year impact of the hires we made in 2017. Importantly, following the setback with Methylene Blue, we've reviewed our U.S. cost structure. We've taken steps in Q1 to reduce that cost base. We anticipate costs of EUR 15 million in 2019 versus 2018. The annualized impact of the action we've taken will be in the order of EUR 20 million -EUR 25 million. Our loss before tax, EUR 17.5 million, and loss after tax of EUR 18.1 million. In terms of our balance sheet, it's shown here on slide number 20.
Here's the detail of non-current assets and current assets from the previous slide. In terms of the main assets, we hold cash and investment in funds and bonds of EUR 375.8 million compared to EUR 247.2 million. Obviously, the proceeds of the convertible bond issue are in here. Our investment in Cassiopea, as Alex has mentioned, is carried at EUR 130.4 million on our balance sheet. The market value is EUR 184.5 million as of 27th March .
We've current and non-current tax assets of EUR 17 million, trade receivable and inventory EUR 16.7 million, and other investments of EUR 15.5 million. We've got intangibles of EUR 35.6 million on our balance sheet. Of that, EUR 21.6 million are capitalized development costs. You can see here on slide 23 the analysis by project. We also have EUR 10 million capitalized for the brimonidine license, and we're carrying patent and rights of EUR 3.9 million.
In terms of our cash position, as I mentioned, we're holding EUR 375.8 million in cash and investments in funds and bonds. You'll see here that we've taken down substantially our U.S. dollar holding, and we've taken out that FX risk throughout the course of 2018. This is also in line with us reducing the cost structure in the U.S. and less requirement for dollars going forward to fund that operation. On the liability side of the balance sheet, this year we've got the liability component of the convertible bond. That's EUR 158.2 million in total, including some other small borrowings. We have current and deferred tax liability to EUR 7.9 million. Trade payables EUR 8.8 million, other liability to EUR 5.9 million, giving total liabilities of EUR 180.8 million. Our equity position is EUR 444.9 million at 31 December .
In terms of our cash flow for the period, we've a net cash outflow from operating activities of EUR 10.2 million. We had investments capital expenditure of EUR 1.9 million, investments in intangible assets EUR 7.8 million. Net outflows in relation to investing activities of EUR 64.9 million. Cash flow from investing activities an outflow of EUR 71.8 million. In terms of cash flows and financing activities, we're purchasing treasury shares. We spent EUR 18.4 million in 2018 on treasury shares. The net proceeds from the issue of the convertible bond were EUR 163.5 million. Over the period we had a net increase in cash and cash equivalent of EUR 62.5 million. I'll hand back to Alex for the 2019 outlook and main priorities.
Thanks, Niall. Let's see how 2019 is going to look like. The near-term catalysts are the following. We're expecting the release of the full phase II results of Breezula. These are the results on the 12-month treatment. As I said, keep in mind that in July we released the results of the six-month treatment and that the phase III will be modeled on a six-month treatment as well. The reference point for investor and analyst to make assumption on the success of the drug, potential success of the drug in a phase III needs to be modeled upon the results of the six-month phase II and not the full-year phase II. These are going to be very important.
I'm very hopeful that they will be very nice data, it's important that investors understand that the data that you have to look at in order to craft the phase III trial are the six-month results which have been already published. This product is very important because you have to keep in mind that although Cassiopea is owned only 45% by Cosmo because of the existing agreement, the development work is actually done by Cosmo. Cassiopea has got a very small, lean, clean organization exactly for the purpose of keeping the overhead as low as possible. The work that's been done there is done by the Cosmo development team.
I think that investors should appreciate that when you look at the results of Winlevi and you look at the results of Breezula and you actually look at the results of the whole Cassiopea portfolio, these actually happen thanks to the Cosmo clinical development team and R&D team. We see these products as if they're ours, although we only have a 45% stake in the company. We're very proud and very happy of that. It's nice that Cassiopea has been able to deliver so far also on the Winlevi side and on the Breezula side and hopefully conclude what had to be delivered also with this full phase II data. The remimazolam NDA filing, as I said, is on the go. We will have to pay high on EUR 7.5 million as agreed in the license agreement upon filing.
We're very much looking forward this filing to occur, as I said, in the very next days. We have released the news that we have called for an R&D day here in Zurich on the 8th of May. There will be significant announcements that we intend to do. They will clearly be anticipated by press releases as soon as the events materializes, but we will be in a condition by the 8th of May to tell you a lot about what's going on and a lot about our future progress. I'm just sorry that for compliance reason, I cannot really walk you through right now about what is going to happen, but it will be pretty soon, the 8th of May. Another important step, as I said, for the reason that Cassiopea it continues to be essential part of Cosmo. We are expecting the NDA filing soon.
Soon means, I think, the beginning of June because the filing is subject to a Pre-NDA meeting which is now scheduled for the 6th of May if I'm correct. Normally, the NDA filing takes place 30 days after the Pre-NDA meeting. You should expect a Winlevi NDA filing by the beginning of June. This is what we have scheduled. Of course, we're expecting by year-end to be able to tell you about the AEMCOLO IBS-D phase II results, which is going to be another significant catalyst. We intend to talk a lot more about AEMCOLO in the context of our R&D day. That's going to be the venue where you will have more substantial information on what exactly is going on there. We see Cosmo as a sum of parts. From our standpoint, this is basically a message of confidence.
We think that Cosmo should be seen as a series of assets that can be independently managed if necessary. I think that if you go just through the list of the assets, this continues to be a very compelling list. We have cash, bond, and investments for more than EUR 375 million. Our investment in Cassiopea is worth EUR 184 million. We have the LIALDA, mesalamine, series core to main franchise. We have AEMCOLO, which is going to be a very significant product. We have remimazolam on the go. Eleview is being sold in the United States. The Methylene Blue franchise continue. It's just, again, disappointing that we will have to do a second trial, but this is what we need to do to keep the value of the asset, which we believe is going to be a very significant asset nonetheless. We continue having our contract manufacturing business.
There's an undisclosed pipeline on which we will be telling you much more at the R&D day, and we have investment in the other companies. These are our 2019 estimates. We expect that we will be able to continue to reducing our operating loss. Our program and our plan is to be back to profitability in 2020. The reason why we're not back in profitability in 2019 is because Methylene Blue has not been approved, unfortunately. I just want to point out two items, which I think are worth mentioning. When you see the operating loss of 2018, the actual, and you see a loss of EUR 17 million there, I just would like you to know that because of the IFRS, this loss also contains, for accounting reason, a cost of EUR 9 million, which is an ESOP expense that actually will not materialize.
It's just something that needs to be taken into account. For the very same reason, the projected guidance that's giving an operating loss of around EUR 12 million for 2019 contains an ESOP and stock option expense of EUR 7 million. If you look at the real operating loss, this ESOP expense actually is not a monetary disbursement. It's just something that you need to account for, again, for accounting reason. It's important that this is taken in consideration when looking at what's going to be our operating loss. Clearly this 2019 expected operating loss doesn't account for, again, the expected loss in Cassiopea, which is clearly offset by the increase and hopefully significant increase in the share price.
Cassiopea doesn't have any revenue. Everybody continues spending money. We should expect that there's going to be another loss in Cassiopea in 2019, as Cassiopea has already announced. Simply, as we usually do, we just make clear that the share of results of Cassiopea are not included into this guidance. Our key priorities for 2019 are the launch of AEMCOLO, to file remimazolam NDA in the U.S., to progress our product pipeline on which, as I said, we will tell more at our R&D day. The restructuring of our U.S. organization. Niall has anticipated that we are restructuring Aries to the bone. We will achieve a significant cost saving. We're completely rethinking the mission of Aries, and this is an ongoing process.
We expect that we will be able to reach an agreement with the FDA for the new confirmatory phase III trial for Methylene Blue, and possibly start the trial. Right now, we are in the process of drafting the new protocol and determining the sample size with our biostatistician. This is something that we plan to do within this year. Our final slide here, try to recap the way we think. The company is financially solid and has got plenty of opportunities, especially if you compare the current market cap of the company with the list of parts that actually compose Cosmo's business. We look at the future with optimism. Absolutely. We've been optimistic, and we continue to be optimistic. This is why we've been purchasing own shares in these last months. Now we currently approximately own 2% of the issued shares.
These are purchases that have been done in the open market within the limits that are set to us for our daily trading, which is 20% of the daily volumes. We intend to continue to do so because we think that the share price is really attractive. We hope that we will be able to see you all at our R&D day on the 8th of March, and we'll be happy to answer to any question you may have. Thank you so much. Please.
Hi. I have first some questions on Aries and then on AEMCOLO. What are the plans with Aries going forward? Because there are no really synergies between the commercialization of Eleview and AEMCOLO. Do you consider to out-license commercialization of AEMCOLO or still do it by yourself or sell it? Just on AEMCOLO, first, when do you consider to publish the scientific data? Do you consider to conduct the phase III trial by yourself, or maybe with a partner?
Okay, thank you. Well, this question touches several issues in the meantime. The plan that we had for Aries was to go public upon the launch of Methylene Blue. This has not occurred, and therefore we're perfectly aware of the fact that without Methylene Blue for quite some time, Aries doesn't fulfill any more the original plans for which it was crafted. If Methylene Blue would have been approved, then we would have been able to leverage substantially on the buildup that we had made in the previous months. Unfortunately, as I said, the non-approval of Methylene Blue was unexpected, and therefore, we immediately took measures while we were going through the dispute resolution process. These are already reflected in the expected savings that we will generate in this year, which clearly assume that the organization will be completely restructured.
We're not thinking any more of a listing of Aries, clearly, because we don't think that having AEMCOLO and remimazolam together without Methylene Blue make any more sense in the perspective of an independent listing. We have scrapped that plan. We're restructuring the business and going forward. We expect actually to launch AEMCOLO on our own, but in such a fashion that we will be able, I think, to achieve substantial savings. We will tell you more about this at the R&D Day. I just don't want to be premature on this because we're preparing a plan that I would like to show and explain to investors in a fully-fledged mode.
Yes, the idea is that AEMCOLO, we're pursuing this by ourselves, absolutely, but that Aries will be given a totally different scope, and it will be mainly a company that will provide services in the U.S. to the overall organization, but not anymore being a company that has the intention of going standalone. I don't know if this answers partially because there were many questions. You were also asking about scientific data publication. You were referring to the AEMCOLO, I guess, or which data? Yeah. That's ongoing. Publications are being assembled and we're expecting publication to go out soon.
The phase III trial in IBD, do you consider-
The phase III trial on IBD, well, we believe that we have all the knowledge that's needed to do it by ourselves. There's actually no specific plan to partner with someone in the U.S.
Okay.
Not at this stage.
Okay, thanks.
Not at this stage because I may say that the creation of value there within the IBS and the other indications that we have in mind is actually ongoing. Even if partnering maybe could be an option, it's going to be, I think, an option when we have a more clear data there that are deemed to significantly increase the value of the asset.
For question, line one.
Mr. Della Chà, thank you for your comment. I heard and I saw the word optimism quite often. I am being a shareholder with your company over many years, and of course, I am quite disappointed with the outcome of FDA. What I am missing is, in a way, a critical dispute of the management of Cosmo with the outcome of FDA. When I look back over the last year, many milestones, forecasts were not kept. I ask you whether you depend on competent consultants which assist you in filing the process with FDA, and if you really have learned the lesson. I think when I look especially at the outcome of 2019 and 2020, and you look with optimism into the future, those issues are very critical parts.
Excuse me, are very?
Critical.
I am not sure I understand exactly what is the question. I can tell you that the company has been using very competent consultants within the FDA process, and we thought we had everything we needed when we entered into the special protocol agreement. Frankly speaking, maybe we could have continued to pursue the legal route. As a lawyer myself, I think that I should be aware that litigation doesn't necessarily bring the results that you wish. Litigation may be very expensive and may leave you with nothing. I have been told in my previous experience that a bad settlement is always better than a good case because you don't know how the good case is going to end up.
I don't think that it would have been a good idea for us to go and litigate against the FDA, maybe in court by saying that they were not respecting the Special Protocol Agreement. This is the fact. I think that we have to be practical and pragmatic. If there's anything that the Swiss environment has taught me over the years is to try to be as pragmatic as possible and even more pragmatic than I would normally want to be here. The fact is that we thought we had gathered the information that we needed in the dispute resolution process. Now at this point, it becomes to us much faster to start a new trial and do it because we think we know what was needed rather than continue the litigation.
When I look at things in retrospective, I think that every one of us make mistakes, and of course, we do mistakes as well. If I have to look retrospectively at what we have done that we shouldn't have done, maybe we shouldn't have built Aries the way we did, being overly confident on the FDA approval. This is clearly something that we did. It is also true that if Methylene Blue would have been approved, then we would have seen it booming. Booming because everything was already there. You know the U.S. people have a tendency to build the army before the war, right? Maybe they use the army, maybe they don't use it, but if the war comes, the army is already there. This is exactly what the Aries case was.
Everything was being set in order to be able to launch Methylene Blue as effectively as possible, as soon as it would have been approved. This is why the non-approval was worse than a cold shower. It was completely unexpected. Yes, I can blame consultants that were there even before I joined the company, and they said, "Yeah, this is good. You're going to be very protected." Consultants should have told us, "Hey, actually, it's very risky to go with a Special Protocol Agreement because the FDA may just disapply it." Just do two trials. Frankly speaking, this is the whole irony in this situation, because if we would have done two trials, it would have taken us basically the same time, we would have basically spent the same money, and we would have basically employed the same time. Why didn't we do that?
That's because the FDA told us that a single trial was sufficient. It's very ironic. If there's anything that we need to learn from this lesson, is that we shouldn't trust the FDA, we shouldn't trust too much the advisors, and we shouldn't have gone for a single trial. I agree with you. Well, I'm happy to take all the part of the blame that you want me to take for this. The reality is that you said you're a long-term shareholder. I am as well. I am as well. It's important for you to know that the disappointment is completely shared. I share exactly the same disappointment. I can tell you that I believe that the company has really done its best, because it's a company that continues to be run by a small number of people with small management team.
We try to keep overheads under control as much as possible. We've been actually, I believe, very prudent. We thought we had a very good plan there. The single trial. The results of the single trial are solid. The minimum P value that was required was 0.05. We reached 0.01. The FDA has said in writing, I can assure you, that the trial that we did is impeccable. They don't have anything to say. The trial is perfect. No deviation from the protocol. All endpoints met. They simply said, "You know what? I thought about it. I just feel more confident if we do a second trial." We said, "You agreed on one." "Yes. Still, I think you should do two." Yes, you are totally right. It's not fair, but the alternative that we had was to sue the FDA in court.
I don't think that this was a viable alternative. If you want to blame me for this decision, yes, this is my decision, not to sue the FDA in court. I think that we would have no chances there. I think that if I would have sued the FDA in court, the things would have turned really nasty. They have not raised any question on safety and any question on manufacturing, which are the two issues that can destroy a drug. Because if you have an issue on safety or if you have an issue on manufacturing, that can just kill the drug. I can bet that if I would have sued the FDA in court, they would have immediately raised issues on safety. I can bet.
They would have done whatever they could to discredit the company, just to show that they're the big guys that always do better. This all would have happened in front of a U.S. judge. Sorry. If you want me to blame for something, it's exactly for this decision, which has been taken just a couple of weeks ago, not to pursue any more the dispute resolution route. Swiss pragmatism. Hey, these are the information that we needed to have. Let's go for a second trial. Yes, we've lost a lot of time. We've lost a lot of money. We still have a product that's viable. We still have a product that the very same FDA says is going to be taken by millions of people. Let's be pragmatic. Let's do the trial.
What is even more important for me is that investors and shareholders and loyal, faithful shareholders should not think that we've been wasting time here. When we received the CRL, the complete response letter, the issues that were raised didn't make any sense at all. If we would have needed to take those into account, we wouldn't have known how to do a second trial. It was just, "Hey, we need to throw the drug into the dustbin because the commands that are doing, it's just not making a second trial viable." Now, the situation is completely different. We haven't spent a lot. We've hired a very good regulatory attorney firm in Washington. I think that they have been very helpful in helping us go through a smooth process.
The quality of the interaction with the FDA has significantly increased during the dispute resolution process. Now we think we know how to proceed with a second trial. You see, it's not even that one can say that the FDA, for whatever reason, is angry with Cosmo because you have seen we got an antibiotic approved, which actually I think has even got that higher potential in terms of sales than Methylene Blue. That was a seamless process. No issues. They've always been very nice to us, very good interaction. You see, we don't have a problem with the FDA if we can get an antibiotic approved. I urge you all to do something if you haven't done it, which I think is very telling.
Because what I think the market doesn't know, or maybe it does, is that immediately upon the approval of AEMCOLO, the very same FDA issued a press release. I don't know how many of you have seen the press release, but the FDA has issued a press release. If you go on Google and you type AEMCOLO FDA, first thing that you will see is the press release that the FDA issued. The press release. Well, actually, this doesn't happen very frequently, I can tell you. It doesn't happen very frequently. Very seldom the FDA issues press releases, and the press release even contains a statement on the importance of AEMCOLO. The statement is done by the director of the office for antimicrobial drugs.
You go there, you look, and you read the FDA press release about the potential of AEMCOLO, about the size of the market, and you start making your own thinking there. It's very simple. Google AEMCOLO FDA. Again, we didn't have a problem with the FDA. It has just been a very unfortunate situation with the medical imaging division. I may say that this situation was also, I believe, triggered by the fact that this division normally has to do with diagnostic drugs, and Methylene Blue is not a diagnostic drug. Methylene Blue is not a drug that heals a disease, and it's not a diagnostic drug because it doesn't actually tell you whether something is something or something else, which is a diagnostic. It simply helps you to see better.
It's just a contrast agent which is deployed through a different route and in a different manner. I think that probably they had some issues in completely understanding also the mechanism of action of the drug. I believe, as I said, that these issues have been successfully discussed in the dispute resolution process. I'm looking with, as I said, with optimism to the new interaction. I would like to make clear that at least for me, this is the optimism of reason, is not the optimism per se.
Right. About the revaluation app. Thank you for those answers. Just on Methylene Blue, looking forward, could you give us a little bit the timelines of the second trial, what you think, when will it start, duration? Maybe also a little bit on the trial itself. Will it be different than the first one? Where are the difference that you expect? Of course, it's probably something you will also address on May 8th.
Sure. You need to take what I'm going to tell you with some degree of precaution because you know that when you try to figure out timings here, the level of imprecision is extraordinarily high. I would be more than happy if we could have an agreement with the FDA by year-end on the new trial, therefore do the trial next year. This is what I figure out, it won't take more than a year to get the trial done. Then, of course, you will need to start again the process. You would then know that if the FDA agrees by year-end on the new protocol, we can execute it successfully in the course of the following years, if the trial is successful, there shouldn't be much hopefully, much questions left whether the drug will be approved or not.
I think that this is a timeline that we have in mind, we will do our best to try to pursue it. In terms of what the trial will aim at, I can give you the following information. I think now it's absolutely clear with the FDA because there's been extensive exchange of written materials and letters. It is well understood that what Methylene Blue does is finding lesions. Methylene Blue is not an intelligent drug that is uptaken only by adenomas and not by the rest. It's simply a contrast agent. Methylene Blue finds lesions, because you find more lesions, thanks to Methylene Blue, you end up finding more adenomas. This is the sequence.
What is now absolutely clear also confirmed by more than excellent trial data is that Methylene Blue MMX is incredibly effective in finding more non-polypoid lesions, which are the flat lesion. When a lesion is protruding like this polypoid lesion with the shape of a polyp, everybody can see it. You don't need to be an expert endoscopist. You don't need even to be an endoscopist to recognize a polypoid lesion. The issue that you have is the flat lesion. Methylene Blue MMX is statistically highly significant in finding more non-polypoid lesions, which are the lesions that you normally miss, which are the lesions that because you have missed, turn into cancers. This has been now, I believe, very well understood, we're foreseeing a trial that will now concentrate on the detection of non-polypoid lesion where we have shown superiority in every possible context.
Actually, this is exactly also what chromoendoscopy does, which is the precursor of our drug. It finds more non-polypoid lesions. We believe that this is where we will concentrate our attention coherently with the discussion that's been ongoing with the FDA so far. When in the press release, we mention the different endpoint, is because not necessarily this will be now strictly related to the adenoma detection rate. We think that we can concentrate on the non-polypoid lesion detection rate, which is the one that also gives immediately a very clear clinical benefit.
If I may, two more questions because there's a lot of questions here in the room. On Uceris, there's also litigation going there from Valeant, where they're appealing the decision for the generics. When do you expect the appeal decision? Also, are you entitled to triple damages on that one? Then my final question is, you're a war chest, more or less. Do you see opportunities there to buy other products to enhance also your R&D pipeline?
In respect of the first question, I don't have any specific news. The litigation is ongoing. I prefer to continue calling them Valeant, although they've changed the name. Bausch, I don't think that they have been a good partner to us. I don't think that the drug has been promoted properly first, as you have seen, we had an arbitration panel that had a different opinion on that, although the results are in front of everyone. They're managing the litigation. I hope that they'll do their best to preserve the franchise.
In respect of the acquisition of the new products, I think it's important that we spend together some time at the R&D day, where we will tell you what we have been doing. Then I guess you'll be able to get an answer to that question according to and depending on what we'll be telling you on the R&D day.
I have a question on the bond. I'm not agreeing with you that it's a cheap financing. It was a very expensive financing. The shareholder lost EUR 500 million. For you to raise EUR 160 million in cash, this is very expensive. Who made you advise that this has to be a convertible bond? Why didn't you access the market with a straight bond? Why didn't you sell straight shares? I think the market impact would have been massively less than this. Who advised you on this bond? It's a very complicated structure.
I can tell you who advised us. Actually, it was a consortium of three banks. It was Credit Suisse, Jefferies, and Berenberg. That was, we thought, very originally crafted. The company was looking for protection in the worst possible downside situation, meaning a black swan situation. This is why the feature on which we had been working extensively was to make sure that we could have a possibility of redeeming the bond with the issuance of shares. We thought, so turning the bond into what's called a quasi-mandatory convertible. I'm not sure how much of the downturn in the share price, if you're referring to that, to the loss of value, actually has been generated by the bond. I said that because I'm a shareholder myself.
I know this pretty well, and I know the impact of this on my portfolio, trust me. I'm just trying to figure out whether we can, for sure, say that the negative impact that we have had on the share price has been generated just by the convertible bond or by a series of, yes, that's true. We are aware that actually, the short selling was, I think, 580,000 or 530,000 shares and not in excess of that. This is the information that we have from Credit Suisse, and I assume that the information is reliable. That is just a limited amount, and I can tell you that as you have seen, we have repurchased more than 2% of the share capital of the company, which amounts to a little more than 300,000 shares.
Which means that out of those shares that have been sold by the short sellers, more than 300,000 have been repurchased by us. What I can't understand and what I don't know is if we have a sort of rolling short selling. Credit Suisse says that this is not happening, that the people that want to do the short now, they're just keeping their position, and I don't know whether it's correct or not. I can tell you that I've met with several investors in London, just to give you a different perspective, and very recently, and they told me that they had been selling Cosmo shares. This was prior to the release that we will do the second trial, actually. They said, "Well, what we don't like is uncertainty, so we will be purchaser again once this Methylene Blue issue is resolved.
So far, in these months, because of the uncertainty, we've been selling shares. I don't know if the sale has been generated just by the bond or simply by shareholders that were willing to sell. I frankly do not know.
Somebody has to do the lending, and I learned it was the main shareholder who did the lending.
This is correct because this was a feature that was expressly requested by the banks, and this was a decision of the main shareholder. At the very end of the negotiation process, there was the alternative whether to launch the bond with the share lending facility or not to launch the bond at all. The main shareholders took the decision that he was providing the lending in order to make the issuance of the bond possible. I guess, again, I'm sorry that I find myself in this kind of a difficult situation because if we would be on the 8th of May, it would be pretty clear why we have done that. I'm sorry that I have to keep you in this lull for a little more. I am sure that it will sound reasonable to you once you will have the full picture.
Maybe you could elaborate a little bit more about what kind of black swan you really envisaged.
Excuse me, what kind of?
Black swan you envisaged. I mean, your company is cash flow positive if you're closing down Aries. You could have closed Aries and you're immediately cash flow positive, so there's absolutely no need for financing. You still have EUR 150 million-EUR 200 million cash. I don't know. I haven't seen any company in November, December preparing for a black swan and issuing billions of convertible bonds. It absolutely makes no sense to finance before you announce a deal, a possible deal. To me, I haven't seen that in 20 years. I wonder who advised you.
No, we said who advised us actually for the bond. Just to be clear, because Cosmo is a small company and we've got a small management team, all decisions are taken unanimously. If the issue is who decided to issue the bond, the answer is we all did because we all thought it was a good idea. Again, I'm sorry that I will have to ask you just to wait a couple of weeks more and then put everything into a context. I think, I hope, that you will agree that at least raising money made sense. In respect of shutting down Aries, you see, we decided that we would have pursued and necessarily pursued the dispute resolution process. There are cases in which the dispute resolution process has proven successful.
We were even more hopeful that it would have been successful because we were relying on a Special Protocol Agreement. You see, to close Aries immediately in the aftermath of the complete response letter, where we were still thinking that we would have been able to sort out the issues to the dispute resolution process, would have been, I guess, not advisable because if we would have been successful, then it would have been back on track just with the delay of a few months. Because it has costed us so dearly to build up such an organization, I think that it would have been premature to wipe it out immediately in the aftermath of the complete response letter. We had to clarify a lot of issues before looking at whether that was really the case, because what we did in Aries was investment.
It's not the Complete Response Letter that allows the idea that you have to write off all the investment all of a sudden. There's a lot of shareholders' money there and want to make sure that we can preserve what has been done in proper ways and strike out what is not necessary anymore.
Alex, they should have warned you. I mean, Credit Suisse should have warned you. Since you're not an expert on convertible bonds, they should have warned you. If you take some hedge funds on the book, that the hedge funds only have one goal, to immediately short the shares they take out of the lending because to cover their position.
I mean, they should have warned you and say, "Listen, there is 1 million shares flowing into the market within three days." You maybe should have called some investors to be ready to take up some shares. Now, since you are waiting for the investor state to send, to give us some goodies, it would be a strong signal to the market if you would come up and say, "Hey, we buy back up to 10% of the shares." Then the short seller would come out of the bush and would run after the accepted stock. You need one day the shares to cover the convertible in a couple of years. If you have the opinion that today the price is low, then it's a good opportunity to present just a buyback program.
Look-
I mean, the market will be happy to see that you bought 2% discreetly in the market. If you can give a strong signal that you think the price is right at the moment, buy up to 10% and you will be fine and everybody will be happy.
I think this is a good suggestion, and we will certainly think about it. Just to answer to the question, yes, we were told that that would have happened, but we were also told, and again, I think this follows up the discussions that we were having just a few minutes ago that this would have been a temporary effect, which would have lasted only no more than 10 days. I can tell you that this was exactly what all the banks said, and we trusted that this was the case. This is why I was asking myself, and we were asking ourselves whether actually the consistent drop wasn't generated up just by sellers for other reason other than purely short sellers because of the bond. I don't have an answer to that. The reason why we've been doing this purchase discreetly, I will tell you.
First of all, because you know that as market maker, we're not allowed to make purchases on more than 20% of the daily volumes. You're sure. I'm going to answer to this unless we announce it, which we haven't done. As market makers, we can't buy more than 20%. Actually, even though we can potentially buy 20%, that doesn't mean that we're actually able to enter into the transaction or catch the opportunities. A lot of trades are done without us having the opportunity to intercept the purchase. In respect of the buyback, you are right, but frankly speaking, we didn't issue the bond for speculative reason. We issued the bond because of the program that we have in mind that we want to fulfill, which I hope that the shareholders will like and appreciate.
I think that it would have looked, upon all the information that I've gathered, tremendously opportunistic, if not really purely speculative, if profiting from the slide of the share, I would have immediately communicated share buyback because a lot of people would have then thought, because I know that this has happened pretty frequently on the market, that you have companies that do issue convertible bond, they do allow the share lending, and the share price drops, and then they use the proceeds of the bond to buy back shares. This is not Cosmo. Cosmo is an industrial company. I think it would have looked pretty strange if we would have done that. Everybody would have thought, "Hey, these guys are Cosmo. What is this? Are they becoming financial speculators or what?" This has never been our intention. I hope you understand what I'm saying.
In this context, in March, that may be a different story. We will give it certainly a lot of thinking. I hope you understand why I don't think that that would have been a good idea in that context. We would have looked as sharks, and I think that would have been terrible.
If you announce that you are intending to buy back within two years, 10% of the shares doesn't mean you have to buy them back. If you have a better idea, every shareholder is more than happy if you invest the money in such a company or in such a project.
This is very.
You don't have to buy back 10%, but you can announce it. You will see that's a nice reaction to the short sellers.
This is a very fair point, and I thank you very much for raising. What I can tell you for sure is that in the future, we definitely need to have more advice from Swiss investors than banks. Put it that way, if there's a lesson that we have learned the hard way is that we will get more advice from Swiss investors than investment banks. That's a Swiss pragmatism. Yes. Of course. You're right.
After issuing the bond, Cosmo said that the proceeds might be used to finance some project in U.S. also, that Aries can have another project, another product to sell. Is it fair to say that you're closing in on a deal that you might announce on the Research Day? What, can you give an update on this? Are you still looking for an in-licensing or takeover?
Clearly, we're working on something. Of course, I need to be very careful here not to look like that I'm trying to manipulate the expectations or whatever. The money was raised with a very precise purpose. We didn't want to touch our cash because that was already available. We wanted to have more to do what we were intending to do, I'll tell you more on the 8th of May. We're clearly, as I think. Those are kind of delicate statements. In the statements about calling the R&D Day, I wanted to point out that we've been working relentlessly and silently to get certain things done. This is why we want to put them into the right context. I hope that when we will be illustrating the new strategy, a lot of things will become clear.
I think Cosmo has never been doing, to my knowledge, anything reckless and certainly will not begin now.
[audio distortion]
A little more than that. This is not going to be just ideas. I think you will see, I hope that you will like it. What I can tell you is that the whole team has really been working like crazy to get it done. I'm really thankful because we have a lot of fantastic people that really put all their heart and their efforts into this. At least you know that as a shareholder myself, I share exactly the same disappointment, and I'm working to make a change. Any suggestion is frankly welcome. I really appreciate what Bernard has been saying. We will really give it very careful thoughts. Absolutely.
Another clarification on the timeline of the refiling of AEMCOLO and launch. If I understood you right, you are expecting to launch 2022 now, or maybe end 2021, 2022 in the U.S.?
AEMCOLO?
No, the MMX, sorry. The Methylene Blue.
The Methylene Blue. Well, yes. Assuming that everything is successful, as I said, end of this year, the agreement on the new protocol. Next year to execute the study. That will also depend very much on the sample size, because clearly you understand if we can keep it a small size, that is going to be much faster. Not just cheaper, but faster. Actually, it is not an issue of money for us, it is an issue of time. Ideally, by the end of 2020, we should have the data on the new release from the second trial. You have one year regulatory submission. It is more important for investors to know that if there is an agreement with the FDA on the second trial, and that second trial is successful, that means that you really have no obstacle to the registration.
One question to the Chief Financial Officer. Do you pay negative interest on your huge cash balances?
Interest on this. We're looking for a solution for that. Right now, it's about EUR 0.04 negative . Only up to about a month ago, they weren't charging us. That's changing now. On the other hand, if we're holding U.S. dollars, we had the FX risk. Our key priority was to eliminate that risk.
Maybe we also have one in the line.
Please.
Do we have that connected?
The first question from the phone comes from Henrietta Rumberger from AWP. Please go ahead.
Yes, thank you for taking my question. Good morning. It's just a quick one on Methylene, and maybe you could just comment on what exactly the FDA didn't like about the results you showed them. The other one is in terms of the generics you mentioned. What exactly are we to expect in terms of sales development in the course of this year and then next year? Thank you.
Okay. About the first question, all I can tell you is that, and even more ironically, there is nothing that the FDA didn't like in the trial that we did. Just to be clear on this point, during the first meeting that we had after the complete response letter, we asked the FDA if they would stand by the SPA or they would rescind it, because they also have the option to rescind the SPA if they think that for whatever reason, the SPA shouldn't be there anymore. They answered us that they stood by the SPA, and so the SPA was completely fine for them, and they had no question whatsoever on the outcome of the trial. If I should summarize what the FDA's been saying, it's the following.
Well, you know that normally the regulatory pathway for approval of a drug is that you need to have two pivotal studies. Why you need to have two? Because the second one is the confirmation of the first one. You're normally not allowed to register a drug with a single trial, because the single trial may have happened by sheer chance. They say, "Well, you got to do a second one so that we're sure that the results that you have seen in the first one are not just by pure chance." This is fair enough. These two trials, they don't even need to have the same endpoints or be identical trial. They could be very different. AEMCOLO is a perfect example. We had two trials, two pivotal trials for registration. One was a superiority versus placebo, the other one was non-inferiority versus Cipro.
This is the way that normally drugs are registered. If you look at Winlevi, the acne drug of Cassiopea, there we have an SPA in place, a special protocol agreement, but we have two trials. This is the rule. Now, you can also, in exceptional cases, you can have drugs registered with a single trial. What is required is that you need to have a single trial, and then what the FDA calls confirmatory evidence. You need to have some additional confirmatory evidence that shows that what happens into the trial is not, again, sheer chance. For us, the confirmatory evidence was adamantly clear. We had more than 30 years of experience in chromoendoscopy, where dyes were administered through a rectal route and sprayed on the walls of the colon to highlight the detection of non-polypoid lesion.
This is exactly the confirmatory evidence for us. The FDA, however this may sound weird, but certainly frustrating, they then said, "Well, you know what? Because you're administering the dye through a rectal route in chromoendoscopy, we cannot consider that confirmatory evidence." We said, "You should have told me this five years ago. Why are you telling me this now?" It's questionable whether this is correct. It's the same dye that's been delivered through a rectal route. I'm simply putting the dye into a tablet and I'm administering it orally, but the effect that I want to produce and the mechanism of action is exactly the same. They questioned that. They said, "You know what? I'm not sure that because you're delivering the dye directly, this is really confirmatory evidence.
You have one single trial, which is excellent, but I don't see the confirmatory evidence, so please do another one." Put it that way, it's very simple if you wish. It's also very disappointing because it was clear from the onset that our, call it this way, predicate confirmatory evidence, what has been done in the prior 30 years, and we actually were leveraging on that experience. Because of the way chromoendoscopy was administered, we said, "Let's put it into a tablet. It's going to do the same effect, but it's going to be much easier." The FDA questioned that chromoendoscopy was sufficient as confirmatory evidence, so they said, "Your trial that you've done is perfect.
You just do another one so we get the confirmation that we need." They said, "We need this confirmation because Methylene Blue is going to be taken by millions and millions of people. We just don't feel comfortable now that you will go with a single trial." Of course, we could have said, "Yes, but this is exactly what you had agreed upon in the SPA," and it would have been a vicious circle. We decided to interrupt the vicious circle, and we said, "Yeah, now we know enough. We can go for the second trial." We didn't say thank you. Sorry, the second question was about the generic sales impact?
Exactly. They have impacted already 2018.
Yeah. We don't expect things to change. If you have seen the slide on the guidance, I think that's going to be sufficiently precise because it's not foreseen that other generics will enter either in the LIALDA franchise or the Uceris franchise. We expect that the sales will be more or less the same.
Yeah, we're modeling in a further decline because you see the full year impact of the Uceris generic into next year. That's in the guidance.
If you've seen, the guidance is projecting for 2019, a 10% decrease in overall volumes. You have it here, basically.
Okay.
You see, I think this tells you see the royalty would go from EUR 15 -EUR 10. The product's marketing will go from EUR 28 -EUR 26. This is roughly the impact that you see in the decline of the overall revenues that will go from EUR 66 -EUR 60 in what we believe is a worst-case scenario.
Okay. Thank you.
Thank you. There is another question?
The next question comes from the line of Christian Glennie from Stifel. Please go ahead. Mr. Glennie, your line is open. Please go ahead.
Hi. Good morning. Sorry, I was on mute. Thanks for taking the questions. Just first one is on AEMCOLO in the U.S., just to confirm in terms of potential timings of launch there, and what sort of sales force is behind that in the U.S.
The launch of AEMCOLO is projected around June, for the reasons that we'll explain at the R&D day, we'll also have the information on how the sales effort will be deployed.
Okay. Thank you. Then a couple just on R&D expectations. Obviously, 2019, this is probably the key trials or the main trials don't necessarily get fully underway, but what is your expectation around the cost of the additional MMX trial and the phase III IBS-D for AEMCOLO?
Well, I think the MMX trial will probably be around EUR 10 million, I think that the phase III of IBS-D will be less than EUR 20 million.
Okay. Thank you. Then just finally on IBS-D, the data, the timing there, and the likely format, is that a press release with initial results and then a follow-up with a scientific conference?
Yeah. Exactly. We hope that we will be able to deliver the data by year-end.
Okay. Thank you.
Thank you.
Okay. I have some more specific questions on Methylene Blue on this new trial. You said that the issues have been resolved. For example, you said that Methylene Blue one issue in the CRL letter was that Methylene Blue stains 83% of the colon. How do you intend to address this issue? Do you know now what FDA meant by this? Another question, for example, there was the issue with classification that Methylene Blue is not the diagnostic device, but a visual enhancer. How did you solve this issue?
I think that the last one is the most important one. I think that it has been clarified that we don't detect adenomas per se. We never actually claimed this, but for whatever reason that I cannot fathom, the FDA believed that Methylene Blue MMX was somehow selective in being picked up only by adenomas, and therefore they were wondering what the mechanism of action was. I think that it was clarified in a satisfactory way that actually we had never, ever claimed that. We're simply a contrast agent that enhances the overall vision and that therefore this makes possible the overall increase in lesion detection and as a function of this, an increase in the adenoma detection rate.
In fact, if you look at the data of the trial on how more effective methylene blue is in detecting lesion and in detecting non-polypoid lesion, you clearly understand that the increase in the adenoma detection rate is an effect of being able to detect more lesions. I don't think that this is anymore under question, which is why we hope that we'll be able to shift now the attention in the next trial on the detection of non-polypoid lesion. As I was explaining, it's exactly the same thing as in AEMCOLO. You don't need to have two identical trials, pivotal trials, to have a registration. In the case of AEMCOLO, they had very different endpoints and still the drug got its registration because the clinical program was agreed upon with the FDA.
Will you file at the same division?
Yes, of course.
Mm-hmm.
It may not be ideal, but that's the division for medical imaging products, and, right or wrong, methylene blue is deemed to be a medical imaging product.
Okay. Will you need to detect miss rate? If yes, how do you consider to do this?
Well, if you end up detecting more lesions in the blue arm than you would detect in the white arm, that clearly shows that there's a miss rate in the white arm that is reduced in the blue arm.
Usually when you do colonoscopy and trials, but you have kind of tandem colonoscopy. First you go with the device, with blue lamp, let's say.
Yes. You understand, yeah, but this is something that you can do with device, but you cannot do with methylene blue because methylene blue takes hours and hours to interact. In case of colonoscopy device, you can do the tandem colonoscopy because you basically do the colonoscopy first without the device, then you do it with the device, but the scope is always inside the patient. This is why you can do tandem colonoscopy. You cannot do tandem colonoscopy for methylene blue. Actually, there were ethical reasons that were raised during the discussion of the original protocol because in order to do a tandem colonoscopy, you would've needed to expose a patient to two subsequent colonoscopy in a very short timeframe. This frankly, was not doable because colonoscopy is actually considered a dangerous procedure. You have to sedate the patient.
You have to go inside the patient with the scope, with the risk of perforation, you cannot really perform it tandem.
You can exclude that this will be kind of issue. This is clarified at the end?
I exclude because now we have a landmark protocol, which is the protocol that we had agreed in the special protocol agreement that the FDA says it stands for. I think that all the main features that were agreed upon in the original trial to protect the blind and to make sure that everything was done coherently will also remain in the second trial.
Okay.
That's clearly an experience that won't be wasted.
Out of interest, what was this Methylene Blue stained 83% of the colon?
No, this was an example that I made to you in a discussion that we had. One of the issues that the FDA raised in the complete response letter that fortunately is not an issue anymore, is that they were wondering why Methylene Blue stained only, they said, 83% of the regions of the colons. We just clarified, first of all, that this was a fantastic result because given the fact that all patients have different bowel movements, they might have drinked or not the different quantities of prep, they might or might have not taken the tablets at the same moment during the day. The fact that there was such a uniformity that 83% of the regions of the colon were stained was actually a fantastic result. Besides, nowhere in the protocol it was stated that it should have been stained more or less than that amount.
That was simply a statistical data that was asking for compliance reason, but had no impact whatsoever neither on the detection, nor on the outcome, nor on the results on the individual endpoints.
Yes, the FDA, they must have had a reason to state this.
Well, you see, this is the problem.
What was the reason?
The geniuses have decided to go to work for the FDA. Maybe some of them are not 100% geniuses. As the people that work for Cosmo actually, or that work for the Swiss banks, I'm not sure that every single one is a genius. Not necessarily the one who asked the 83% question is a genius. I still don't understand it.
Okay. I was just asking because now all the issues should be clarified, and this was one of these issues.
Yes, please take my words with some grain of salt. I said that I believe we know now the path forward. I haven't said yet that the FDA agrees on the new protocol. I said that we believe we know how to present the new protocol now. The agreement of the FDA will come hopefully subsequently, right?
Okay. Thank you.
We are done? Thank you so much. Thank you.
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