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At this time, I would like to turn the call over to you Jonah Shacknai, Chairman and Chief Executive Officer of Medicis. Please, go ahead, sir.Jonah Shacknai Thank you very much, everyone, for joining us this afternoon. With me here at Medicis headquarters is the senior management team, and at the end of our narrative, they’ll be happy to join me in answering any questions that financial analysts may have of the company. Again, we appreciate your time this day. In terms of financial highlights, for the three months ended June 30, 2012, Medicis reported revenues of approximately $196.6 million and non-GAAP cash EPS of $0.52 per diluted share. This compares favorably to our previously published guidance range of $185 million to $195 million in revenues and $0.37 to $0.47 per diluted share, again in non-GAAP cash EPS. We have been closely monitoring SOLODYN and ZIANA prescription trends since the launch of our alternate fulfillment initiative. While reportable prescriptions for these brands were predicted to decline, the anticipated recovery has happened later than forecasted. Reportable prescription trends continued to decline into the third quarter, until quite recently, when prescriptions began to increase again. Overall, in-channel inventory on hand was reduced, but not to the levels originally anticipated, which had a corresponding positive effect on our second-quarter results. We expect the reductions in inventory purchases to persist in the third quarter, as wholesale and retail customers continue to adjust inventory levels. This will have an impact in the third quarter on recorded revenues, and the updated financial guidance for the remainder of 2012 provided in today's press release includes these expectations. The objective of obtaining an improved average selling price per prescription is being achieved, and we believe will continue, both from the alternate fulfillment program and its progeny and the support we are receiving from physicians in working through various types of managed care preventative measures.
We have observed an increase in weekly profitable prescriptions, and the unprofitable prescriptions are now less costly to the company. Again, these were objectives when the program was initiated. We are expecting these trends to continue and our updated financial guidance for the remainder of 2012 provided in today's press release includes these expectations.Gross profit margins were approximately 89%. Selling, general, and administrative expenses were approximately 5139% of revenues. This includes expenses associated with the previously announced addition of the number of sales representatives, increased promotional expenses, and professional fees related to the previously announced Federal Trade Commission investigation. In light of the company's revised guidance, we are pursuing necessary cost-cutting measures to streamline our processes and workflow within the company. R&D expenses for the quarter were approximately were $23.3 million. This includes an $8 million purchase of R&D associated with payments to Medicis partners. We continue to execute on the managed care strategy of securing new multi-year contracts, which we believe is a significant strategic investment and greatly reduces the coverage risk associated with our therapeutic brands. The company remains well-positioned with total coverage and access to SOLODYN for approximately 65% of the insurable commercial lives in the United States. Revenues from the acne products category were approximately $93.1 million. Average selling prices during the second quarter for SOLODYN and ZIANA on a prescription basis were approximately $330 and $215 respectively. This compares favorably with our previously announced ASP expectations. During the third quarter, we expected adjusted ASPs based on reportable prescriptions of approximately $320 to $340 for SOLODYN and approximately $200 to $220 for ZIANA. The company is forecasting growth in profitable SOLODYN and ZIANA prescriptions and growth in ZYCLARA prescriptions to achieve our updated guidance objectives. Read the rest of this transcript for free on seekingalpha.com