施貴寶 (BMY) 2007 Q2 法說會逐字稿

Greetings, ladies and gentlemen, and welcome to the ZymoGenetics second-quarter 2007 financial results conference call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (OPERATOR INSTRUCTIONS). As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Dr. Bruce Carter. Thank you. Dr. Carter, you may begin.

Thank you. Good morning and thank you for joining us today. Before we begin, I must tell you that we will be making forward-looking statements during this conference call. They do represent our best view of the future, but the future is, of course, difficult to predict and we have tried to lay out the risks and uncertainties of our business in our SEC filings and please consult these filings.

Let me update you on our recombinant Thrombin program, which continues to forward as anticipated on the regulatory front. We're very pleased to report that all required pre-approval inspections of our facilities of third-party manufacturers and of our clinical science has been completed by the FDA to the best of our knowledge and we are not aware of any findings that could potentially delay approval.

The BLA review process seems to be moving along well. We continue to be very optimistic regarding approval of recombinant Thrombin by our due date of October the 18th, but obviously we cannot guarantee the outcome.

We believe that recombinant Thrombin is on the right side of history. Every time a recombinant protein has been introduced in the marketplace, it has rapidly displaced proteins derived from blood or tissue, whether from animal or human sources. There are no exceptions to this -- no exceptions. We believe that once hospitals switch to recombinant Thrombin, they will never return to Thrombin from animal blood or pooled human blood. And of course, our collaboration with Bayer is to assign to affect this switch as rapidly as possible. And we believe that by adding the Bayer hospital-based sales force to our own, we will have the largest homeostasis sales force in the hospital segment.

Bayer will copromote recombinant Thrombin for three years in United States. This will allow us to attack the market aggressively, capitalizing on the advantages of our product and converting as many hospitals as soon as possible to recombinant Thrombin. Through Bayer, we access an additional 70 experienced hospital-based sales representatives and 25 additional MSLs to support the recombinant Thrombin launch.

Hiring of our own MSLs is complete and all regional sales directors positions are filled. And we are making good progress hiring 48 experienced sales representatives and those we have hired so far have significant operating room experience. We will, therefore, have at launch not only what is viewed as the clearly superior product, but we will have the largest sales force in the homeostasis market promoting it and supporting it. And we believe that this will result in our rapid taking of a dominant share of the Thrombin market. It is important to remember, however, that recombinant Thrombin is only one part of the story at ZymoGenetics.

Our pipeline of other product candidates in clinical development holds a great deal of promise and it is not in our opinion given the attention or the value it deserves.

Doug Williams, who has recently taken on the role of President here at ZymoGenetics, is going to give you an update on the progress we are making with our pipeline. Over to you, Doug.

Thank you, Bruce and good morning, everyone. In the second quarter, we made significant progress with our development pipeline and I will spend the next few minutes covering some of the highlights.

Our clinical group is continuing to focus on activities that will support the commercialization efforts of recombinant Thrombin. I'm pleased to say that a peer reviewed manuscript of our Phase III trial will be published today in the August issue of the Journal of the American College of Surgeons.

During the second quarter, we completed patient treatment in a Phase II study of recombinant Thrombin administered as a spray in burn settings. We plan to present those findings in a medical meeting next spring in support of the commercialization efforts.

Also during the second quarter, we initiated a recombinant Thrombin Phase IIIb clinical trial. This is an open-label, multi-site study in which approximately 200 patients undergoing spinal or vascular surgery will be treated with recombinant Thrombin. That trial is designed to provide data that will further demonstrate the safety advantages of our product.

Moving on to Atacicept, I would like to begin with an update on our lupus program. Over the past quarter, we've been in active discussions with the FDA and the European Medicines Agency, together with our partner Merck Serono, regarding the phase II/III protocols that could serve as registrational trials if we meet the agreed-upon endpoints. There are two proposed studies -- one in lupus nephritis and one in general lupus. So far, the feedback we have received has been positive. As part of the process to reach final trial designs, we applied for special protocol assessments with the FDA. We continue to believe that we will be able to initiate both of these studies later this year.

In rheumatoid arthritis, Merck Serono is conducting a Phase II trial in patients whose disease didn't respond adequately to TNF inhibitors. The stated goal has been to complete enrollment by the end of the year. However, so far, the study has not enrolled as quickly as anticipated. Merck Serono is currently reevaluating the timeline for the study and it's likely that patient enrollment will continue beyond the end of the year.

Merck Serono continues to plan for initiation of two other Phase II studies of Atacicept between now and the end of the year, one in RA patients who have not been previously treated with TNF inhibitors and one in patients with relapsing remitting multiple sclerosis.

Our Interleukin 21 program is moving forward on several fronts in several types of cancer. In melanoma, we've begun a collaboration with the National Cancer Institute of Canada to conduct a Phase II study of IL-21 in previously untreated metastatic melanoma patients. We will be administering a dose of 50 micrograms per kilo compared to the 39 microgram dose used in Novo Nordisk's ongoing Phase II melanoma trial. This study is designed to see if a higher dose is both tolerable and can improve upon the anti-tumor activity we have seen at 30 micrograms. We expect to begin treating patients this quarter.

In our Phase I/II renal cell carcinoma study in combination with Nexavar, we are enrolling patients in the final cohort of the Phase I part of the study and we plan to begin enrolling patients in the Phase II part later this year. Novo Nordisk also began a Phase I study in combination with Sutent during the second quarter.

In our study combining IL-21 with Rituxan, we completed the dose escalation part of the study and started the expansion cohort in which we expect to enroll 12 to 15 lymphoma patients. We plan to complete enrollment this quarter and report data from the study at the ASH meeting in December.

PEG-interferon lambda is our novel interferon-like molecule being tested initially as a potential treatment for Hepatitis C. The rationale for the development of this molecule is that we believe interferon lambda will have comparable efficacy but better tolerability than interferon alpha.

We completed dosing of normal subjects in a Phase Ia trial this quarter and data analysis is underway. We plan to present results from this study in the fourth quarter.

Also during the fourth quarter, we are planning to initiate a Phase Ib study in which we will treat patients with chronic hepatitis C who have relapsed after prior treatment with pegylated interferon Alpha and ribavirin. We're currently in the midst of discussions with the FDA reviewers regarding the design of this study. Our goal in the study will be to see antiviral activity with fewer side effects than what would be expected with interferon alpha.

Our newest development candidate is Interleukin 17RC, a novel cytokine receptor that was identified by ZymoGenetics and is being developed as a potential treatment for inflammatory diseases. I am very excited about the prospects, given the growing realization of the importance of IL-17 in promoting inflammatory responses.

ZymoGenetics and Merck Serono recently entered into an agreement to codevelop IL-17RC and co-commercialize it in the U.S. Merck Serono will pay a majority of R&D costs, pay development milestones and royalties and have ex-U.S. rights. We're currently projecting an IND filing for this in late 2008.

In summary, our pipeline is in good shape. We're moving forward according to plan, and we are on the verge of several new product candidates like IL-17RC moving into clinical development.

I will now turn the microphone over to Jim for a discussion of our second-quarter financial results.

Thanks, Doug. I'm just going to take a few moments to comment on the financial results for the quarter.

Our revenues were $4.2 million compared to $8.1 million a year ago. Similar to last quarter, the decrease was due to anticipated reductions in option and license fee revenue. Our option license agreement with Novo Nordisk expired in November 2006 and it had provided $1.9 million of revenue per quarter over its six-year term. Additionally, we had $1.5 million of revenue in the prior-year period from our Factor 13 license with Novo Nordisk.

We did complete two significant revenue generating transactions in the second quarter this year, namely the Bayer deal and the IL-17RC collaboration, but they had limited revenue impact. Both transactions were completed in late June and revenue recognition will be spread over periods ranging from five years in the case of the Bayer transaction to ten years for the IL-17RC transaction.

R&D expense totaled $32 million for the quarter, which is about the same as in the second quarter of 2006. The cost of the recombinant Thrombin program decreased due to completion of the pivotal Phase III clinical trial program, but this was offset by slight increases in several other programs. We continue to expect higher R&D expense for the remainder of the year, primarily in the third quarter due to commercial product manufacturing costs, which will be expensed as R&D to the extent they are incurred prior to FDA approval.

Selling, general and administrative expense for the quarter increased to $10.1 million compared to $8.3 million in the second quarter of 2006. Most of this increase was driven by preparations for the launch of recombinant Thrombin later this year. SG&A expense will continue to increase on a quarterly basis throughout the remainder of this year as we hire the rest of our field force and complete various marketing activities in support of the launch of recombinant Thrombin.

We recorded $5 million of stock-based compensation expense in total for the quarter. $3.3 million was reflected as R&D expense and $1.7 million was included in SG&A. And our financial outlook for the full year has improved with the completion of the Bayer transaction. We now expect net cash usage for the full year of 60 to $80 million, which assumes we will receive an additional $40 million milestone payment from Bayer upon U.S. approval. We're now anticipating a lower net loss for the year in the range of $2.15 to $2.40 per share, taking into account somewhere in the range of 5 to $8 million of revenue that's expected to be recorded under the Bayer agreement.

We ended the second quarter with about $197 million of cash and investments, but this excludes the $30 million upfront payment from Bayer that was received in the third quarter. With this cash balance and what we expect to bring in from Bayer, including the $40 million milestone payment due upon U.S. approval, we should end the year with nearly $200 million. This will give us sufficient cash to take us well through the recombinant Thrombin launch and into 2009. Now I will turn things back over to Bruce.

I think we're now ready to answer any questions that you might have for us.

(OPERATOR INSTRUCTIONS). Mr. Birchenough, Lehman Brothers.

A couple of questions ahead of the PDUFA date for rhThrombin. Just wondering if you can describe what you see as the-low hanging fruit in terms of surgery types where they are most amenable to a surgical hemostat and whether you can quantify that market opportunity. Secondarily, just wondering if you've had an updated thoughts on pricing and potential for bundling with Bayer products. And then finally, just wondering whether your MSLs are in a position that they can start arranging to get an audience with PNT committee members post an assumed approval.

The first question was with respect to low-hanging fruit. As we've said, we always have thought that the major players here are going to be where we did our clinical trials. They're going to be in the vascular surgery, they're going to be the orthopedic surgeons, and also we believe that we will be able to move into the plastic surgery.

With respect to bundling, we believe that we have a strong hospital-based sales force. They really will be just selling essentially two products. And I've forgotten the last question.

Just how you can line yourself up for getting a jump on discussions with PNT committee members.

Good morning. This is Mike Dwyer, Senior Vice President for Sales and Marketing. These are some outstanding questions. We currently have our six medical science liaisons out there now, probably targeting the top 20 to 30 accounts from coast to coast, and developing key opinion leader relationships.

We also expect to have our first wave of salespeople fully trained and out in the middle of September, also developing these relationships with the pharmacy and therapeutics committee groups, as well, so we can determine where that goes.

As far as your bundling and your pricing question goes, the beauty of the relationship that we have with our Bayer colleagues is they've got a significant partnership in many of these large cardiothoracic institutions, teaching institutions, throughout the United States with their current products. And we are hoping to leverage that relationship in PNT as well as surgeons to make rapid penetration in the area.

Thanks for taking the questions.

Mr. Harr, Morgan Stanley.

Good morning. I had a couple of questions. First off, I just wanted to get an idea of maybe how having Bayer as a partner is changing the way you guys approach this drug commercially, and what your thoughts are on marketing a drug against a bovine competitor when your partner actually has a bovine drug in its portfolio.

Yes, that's very interesting. I think that as you know, our partner has had an enormous amounts of concerns with trasylol, and they are very, very sensitive to the issue and they are very educated with respect to that issue. And they are actually out there, at the moment selling trasylol, because there is no alternative, but they are developing a recombinant version. So we believe that the story will go quite well together.

Okay. In other regards, how are they approaching the way you are just going after this marketplace? You're targeting more hospitals, the same number of hospitals. The message changing at all? Or is it pretty consistent with what you guys have given us all along?

Thus far, I would say that there's a certain consistency. One of the things that is very interesting for us is we had a two-day meeting the Bayer last week and it's interesting just how enthusiastic they are, both about creating a market in Europe where none exists and also in the market here. They are pretty -- they are very dynamic, which we are pleased to see.

And what are the issues with the rheumatoid arthritis trial for Ataci IG? Is this just -- there's competition for TNF failures or are there reasons why enrollment is going a little slower than you had anticipated?

Steve, this is Doug. I think some of the issues we ran into early on were really some issues related to some study entry criteria that we've modified as a result of sort of the slow accrual at the outset. We've added some additional sites as a result of that. And so I'm hoping that the accrual will begin to pick up as we both modify the protocol with a bit of a tweak as well as increase the number of sites.

Right now I can't give you a clear estimate of what the timeline is going to look like for completing the study, but I don't think it really relates to competition for patients per se.

And one last question. Just in terms of recognition of this milestone for approval, could you just remind us the period over which you plan to amortize this?

This is Jim Johnson, Steve. Are you talking about the money that we have received from Bayer?

No, the $40 million for approval. Sorry.

Okay.

Do you recognize that right away or do you amortize that over a period?

No, it will need to be spread over the five-year period as well, so essentially, there will be a -- assuming it's received in October, there will be about a four-month catch-up, and then the remainder will be amortized over the remainder of the five-year period.

Great, thank you.

Mr. Miller, Biotech Stock.

Good morning. The Phase III trial that you have, the Phase IIIb trial that you've opened up for r-Thrombin, can give me a little background on the motivations for opening that trial?

This is Doug. Yes, I think the driver is really to expand our experience as much as anything else with the product to put in the hands of surgeons and really ask the same questions we asked in the Phase III study, which is really related to efficacy, safety, and immunogenicity of the product. So it's really just building on the experience and doing so in sort of the real world, if you will.

Okay. Was this motivated by some of the -- by any early feedback you were getting from the FDA about perhaps not getting a general surgery label or is this more marketing related?

This is really not related to any correspondence whatsoever with the FDA. I would hate to have you cast it in an inappropriate light. It's really just part and parcel of what we plan to do all along to sort of increase our data set as we move out into the marketplace by providing the product in advance of approval and really starting to get some real world experience with it. So I want to make it very clear that this has nothing to do with any interactions with the FDA.

That's why I asked the questions just to make sure that it doesn't.

I hope that was clear.

Yes, that was very clear. Thank you. Can you talk about the -- on the Atacicept trial, what label modifications did you -- or entry criteria modifications -- did you make that were there that you had to make to get the enrollment back on track?

Yes, I think I would prefer not to talk about the specific entry criteria except to say that they were subtle tweak in laboratory parameters that were resulting in excluding patients early on and we made a minor modification that allowed us to basically get a reduction in the number of screened failures. So it was a fairly straightforward lab parameter that was hanging us up.

Okay, great. Thanks for the answers. I appreciate it.

Mr. Li, Stanford Group.

Good morning. A two-part question. First part on the Phase IIIb study of the Thrombin, what's the timeline like? Are you going to report results along the ongoing study?

We're hoping to complete the study by the end of the year, in 2008. So it will run for a period of time post launch as well.

Okay. Is this also going to -- related to label extension or --? Can we see that from that point too?

You are very faint. It's hard to hear your question. I think you were asking about label expansion.

Right.

And I think we're planning to launch with the 5000 unit vial to be followed by a 20,000 unit vial and a spray kit, which will give sort of the complete product line with co-packaging as well. And that's really the only product presentations that we currently have.

We have some label expansion ideas. We're looking at things like flowable versions that could come along later, but for the initial launch period, it will be the 5,000 unit, 20,000 unit and spray kit co-packaged with Thrombin. So basically a mirror image, if you will, of the existing Thrombin JMI line in terms of product presentations, but with a few improvements in terms of convenience for the surgical staff in terms of using the product.

Okay. The second question related to Atacicept. Can you give us the potential size and timeline of the upcoming two studies, Phase II and III studies?

Again, our hope is to work through the FDA process with the agency as expeditiously as possible. Obviously we're trying to dovetail that with the feedback that we have gotten from the EMEA as well, and I think that we will be able to do that.

We've had good interactions with both regulatory bodies and the goal would be to initiate those studies before the end of the year.

Okay. So we should expect results sometime in '08 or '09?

I'm sorry, I missed the question.

So should we expect the -- you initiate by year-end, then we should expect the results in 2008 and 2009?

No, it would be later than that. Given the duration of treatment in a lupus protocol, you are looking at 12 months of treatment and then follow-up. So it would be later than that.

Okay. Got it. Thank you very much.

Mr. DeGeeter, Oppenheimer.

Most of questions have been answered here. I just wanted to get a little more clarity on this enrollment question for the RA study. Doug, do you have enough experience yet to know whether the tweak in entry criteria has, in fact changed the rate of enrollment or is it too soon to get some color on that?

I think it's a little soon to know, but we have added a number of additional sites as an additional way to boost the accrual. I'm comfortable that this probably will have an impact on the accrual rate from where we were. I just can't give you a clear sense of the trajectory just yet. And hopefully we will be able to do that certainly within the next couple of months.

I mean, I guess we're looking even under the prior timeline, probably mid next year, third quarter to see that data. Does this slip into '09 before we actually see the first proof of concept here from a Phase II in Ataci?

I can't say with certainty at this point, Kevin. I think we have to see what happens as far as the increase in the number of sites and the change and hopefully that will get us closer to being back on track, but I think it's safe to say that we have lost some time on this study.

I mean ultimately where I'm going with here is to try to get an appreciation -- are we going to see any proof of concept data around any of these programs in '08, whether it be Ataci, IL-21? Doesn't -- I mean it looks like we may well be into '09 before we get some clinically relevant data around any of these programs. I mean am I --?

I think for IL-21 you will see data in '08. And certainly for interferon lambda you will as well, in terms of initial look at antiviral activity and tolerability, which is really the linchpin of that program in terms of moving it forward. So I think for two of the programs, I think for Atacicept, given the duration of treatment in these studies, and the start time for the studies, 2008 probably will not be a year where we will see much in the way of clinical data. Again, it will be a big year for accrual and for study initiations, but not necessarily for data as far as Atacicept itself.

For IL-21, you'll see some data at the NCI EORTC meeting in November of this year in San Francisco, which will be the Phase I portion of the Phase I/II study with Nexavar. And then the final portion of the study, really the Phase II portion, you'll see data in 2008.

That's helpful and just can you give me your thinking at the moment with regard to IL-29? As you move into Phase II with that, do you think you can do a straight combo with -- is it going to be a combo with ribavirin? Do you think you need to step back here and see where some of the orals begin to fall out before you push aggressively forward with a clinical program? How do you think about that given the moving landscape in hindsight?

I think you're quite right that the landscape is definitely moving and it's a little difficult right now to pick the lead horse. There's certainly a lot of enthusiasm around the direct antivirals. But I think given current circumstances, the path forward right now in the short-term does involve looking at the combination with ribavirin. And that would be part of the next study that we would initiate, is to look at single agent and then to follow that up with the combination with ribavirin.

But I think it's safe to say that this is a program that we will look to find a partner on given the complexity and the dynamic marketplace around Hepatitis C. I think it's a prudent thing for us to do to basically position this drug, if you will, as an agent with antiviral activity and a better tolerability profile with -- than Interferon alpha, assuming that comes true, and then find a partner that has experience in this development area to really facilitate the movement of the compound through the later stages of development.

Okay. And last question -- this may be retreading over old material, but on Thrombin, do you anticipate or what distinctions do you anticipate having on your label relative to the [Armerex] product?

Certainly we will not have any of the requisite labeling associated with plasma source products, so they will have the current warning label that you see on Evicel, which talks about the risks associated with infectious agent transmission. And we'll also have some advantages related to simply the product presentation, in the sense that ours is a room temperature, lyothelized, reconstitute it when you need it as opposed to a frozen vial that has a 30-day inventory dating on it.

So we think from a labeling perspective, we will have a pretty clean label, if you will, from the perspective of immunogenicity versus king, from the perspective of infectious agent transmission with Armerex, and we think we'll have a superior product presentation just from the standpoint of the nurses and the OR staff liking the way it's presented to them.

Thanks so much. It's very helpful.

Mr. Lee, Brown Advisory.

I have a question regarding funding future development plans. Maybe it's too early to ask this, but are you working on any new formulation or maybe modification of the sequence to improve maybe the clinical performance? The reason I'm asking is, insulin, if you like at insulin, people have done new things to insulin to make it better or working differently.

Yes, we understand that, especially in so much as we spun out of Novo Nordisk, but we have no plans to change Thrombin itself. It's simply our plans in discovery and development would be related to the presentation of Thrombin or the combination of Thrombin with other things.

Okay. Given that Thrombin is not currently -- does not have patent protection under composition matter, what do you see potential competition from [that] generic?

We believe that our patents are on the production of recombinant Thrombin and we believe that the only way you can make recombinant Thrombin is through our patents. It's interesting that we have not seen any sign of anybody developing recombinant Thrombin nor do we expect to do so. So we believe that our patents can effectively keep everybody out.

Okay, all right, thanks.

(OPERATOR INSTRUCTIONS). Mr. Tenthoff, Piper Jaffray.

A lot of my questions have been answered, but maybe just two things -- kind of teasing in a little bit more respect to the new hires for the Thrombin sales force. Can you just give us a little bit more color on what these people have been doing in the past? Have they been selling directly to hospitals, things along those lines. Also, is there any update on the status of the Factor 13 program, which was partnered out to Novo?

Let me hand over to Mike Dwyer to answer the question about the sales.

Thanks, Bruce. That's a great question. I've been very excited. I've spent the last probably two months scouring the United States trying to find the right people. Let me give you a flavor for the sorts of folks we've been able to hire.

Our six regional sales directors have a combination of over 55 years of hospital, surgical sales management experience. That's actually -- what I mean by that is they've been managing sales forces, calling on the surgery or calling specifically in the hospitals in the homeostasis area, so that's quite a wealth of experience in sales management. In addition to that, they probably have another seven years of actually just selling and carrying the bag.

The types of salespeople that we have been able to attract to ZymoGenetics in the past few weeks has been outstanding. They come from pretty much all walks of life. Many of them have significant surgical experience, selling sutures, diagnostic equipment, devices into the area. We've got four O/R nurses who also have surgical sales experience on the team.

I think of the 17 to 18 offers we currently have accepted, we've got over 170 years of surgical sales experience. So we're getting exactly the right folks we wanted that have been calling on these key major hospitals that will give us a quick entry into the marketplace.

That's helpful.

Let me pass it back to Bruce.

With respect to Factor 13, we are in discussions with Novo Nordisk right now. We'd probably be in a much better position in a month's time to actually tell you precisely where we are as that program goes through perhaps changes.

Great. Thank you.

Mr. [Bassuroff], ABS.

Hello, how you doing? My question is more on the investment side. It seems like recently, the stock has really gone down a lot and I'm wondering if there's any kind of scare or news that has come out or anybody knows about why there would be such a drop. Because I've been following the Company and everything seems to be pretty positive and seems to be moving forward.

It's extremely frustrating. It's frustrating, I'm sure, for investors; it's frustrating for management; and it's frustrating for employees because really this last year, we've made great progress on the recombinant Thrombin. We now have a partner who is extremely enthusiastic to help us build this market in the United States and then unusually, agree that they would step out, leaving us in a more profitable position. So we don't really understand it. We would love to know why. We do think this is a great opportunity for investors to earn a part of this Company. And my own view, speaking simply personally, this is a business where the chickens come home to roost. If you hype things up and you don't deliver, the stock price will eventually show that, but if you do deliver, the stock price will eventually reflect the success you're having. So we're very optimistic about success. We're very optimistic about recombinant Thrombin. And as Doug said, we believe that we have in our pipeline some very interesting candidates -- very novel candidates; so we're somewhat mystified.

Okay. Is there anything that you feel all the dates are intact that when you're going to come out? Because the other thing I've noticed in tracking your Company and in your stock is that there seems to be a lot of movement after the October date as far as interest in your Company.

I have to say I don't know any of that. I couldn't comment therefore.

Okay. All right. That's basically my concerns because we have looked at it and it's driven me crazy over the last year as far as why the drastic movement in the last -- I would say in the last month.

You know, it's very frustrating. We have a clinical trial that works about as well as you can expect unless you're living in the realm of fantasy; the stock starts to go down. We announced this deal with Bayer and the stock I think ended the day lower. It's mystifying.

It's mystifying to our investors also. All right, thank you.

There are no further questions at this time. I would like to turn the floor back over to management for closing comments.

Well again I would like to thank you all for being on the phone this morning. As I have just indicated, things are going well here. We are very confident about recombinant Thrombin. We are very pleased not only to have Bayer but to see the attitude that Bayer has shown, and we are pretty confident about the success in recombinant Thrombin.

So thank you all and we look forward to talking to you again. I think in September we will come and visit people on the West Coast, on the East Coast and we will go on a grand European tour as well. Thank you very much.

Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation.