Cerus Corp (CERS) 2010 Q4 法說會逐字稿

Good day, ladies and gentlemen. Welcome to the Cerus corporation fourth quarter and year end 2010 results. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session, with instructions following at that time. (Operator Instructions). As a reminder, this conference is being recorded. And now I would like to turn the call over to Kevin Green, Chief Accounting Officer. Please begin, sir.

Thank you, operator, and good afternoon. I would like to thank everyone for joining us today. With me on the call are Claes Glassell, Cerus's President and CEO, and Larry Corash, our Chief Medical Officer. Cerus issued a press released today, announcing Cerus's financial results for the fourth quarter and year ended December 31, 2010, and describing the Company's recent business highlights. You can access a copy of this announcement on the Company's website, www.cerus.com.

I would like to remind you that during this call we will be making forward-looking statements, including statements about forecasts of revenue and annual growth rate, commercialization progress and timing of tenders, regulatory and governmental processes, the size and timing of red blood cell trials, research and development activities, sales, operating expenses, gross margins, use of cash, finances, and business prospects. The Company's actual results may differ materially from those suggested by forward-looking statements the Company will be making, and the Company assumes no obligation to update guidance or other forward-looking statements. I call your attention to the disclosure in the Company's SEC filings, in particular Cerus's quarterly report for the fiscal period ended September 30, 2010, on Form 10-Q including, the sections entitled Risk Factors. This call will be archived temporarily on the Company's website and will not be updated during that time.

And now, it is my pleasure to introduce Claes Glassell, President and CEO of Cerus Corporation.

Thank you Kevin.

Today I would like to focus on three core areas. First, fourth quarter sales and how these compare to our guidance. Second, our revenue outlook for 2011. And finally, an update on our development pipeline, including our red blood cell program and recent orphan designation for INTERCEPT plasma in the United States.

Our Q4 2010 total revenue was $6.5 million, bringing us to $23.1 million for the full year. This represents 29% growth compared to 2009. This growth rate is meaningful, as we grew INTERCEPT sales despite troubled EU economies, and also without significant penetration in Europe's largest markets; UK, Germany and France. Our foundation of customers in [EMEA] has continued to expand, and drivers for future growth are in place.

Our previous forecast of 35% to 40% total annual revenue growth contemplated several new plasma orders that did not close in 2010, but which remained good prospects for 2011. After delays in adoption occurred for varying reasons, these pending sales were not necessarily reflected in our Q1 revenue. For example, a plasma tender of significant size was originally expected last year, but continues to remain open and may not be awarded until made to late 2011. On the other hand, the Institute of Transfusion Medicine at the University Hospital in [Main], Germany, signed a plasma contract with us in January and has already begun routine production, become the first blood center in Germany to adopt INTERCEPT plasma. The [Gianna] Center represents between $500,000 to $1 million in annual business for Cerus.

We continue to believe that INTERCEPT platelets and plasma have strong sales potential this year in Europe, CIS and the Middle East. Our annual revenues forecasts are compiled from bottom up analysis of each sales territory, working with our own sales team and also our distribution partners. However, we remain limited in our ability to control the specific timing of regulatory approvals, tenders and new contracts, all of which continue to have a significant impact on our sales recognition each quarter. With this in mind, we expect total revenue growth of at least 20% in 2011. This forecast is heavily weighted toward ongoing purchases from our existing customer base where we have a high degree of stability. It also includes more conservative assumptions about our acquisition of new customers and our are ability to penetrate EU geographical area. Specific projections aside, we will continue to do our utmost to accelerate adoption and maximize market expansion in 2011 and beyond.

France continues to be a key market for INTERCEPT. We have recently been informed that a tender will be issued around the April/May time frame. This is slightly later than the March timing that had already been communicated to us. However, our current understanding remains that a pathogen inactivation tender will be awarded in the fourth quarter of 2011. We also continue to closely watch the international dialogue regarding XMRV and the increasing European emergence of mosquito-borne viruses such as dengue, chikungunya and West Nile. The threat of transfusion transmission of these agents could be an important catalyst for adoption of pathogen inactivation. But our 2011 projections do not assume any sudden changes in demand versus the steady incremental growth we've seen in recent quarters.

Now I would like to turn from our commercial programs to our development programs. The INTERCEPT Blood System for red cells has critical importance, both to Cerus and to the transfusion medicine community. Our current customers are acutely aware that even if they are already pathogen inactivating their platelet and plasma inventories, their red cell components remain vulnerable. In addition to their desire to offer protection for all transfusions, blood centers also see the potential for additional cost offsets that can only be realized in the context of pathogen inactivation for all three components. This has been powerful motivations for major blood services like the EFS and Frankfort Red Cross to partner with Cerus for INTERCEPT red cell development.

For Cerus, the INTERCEPT red cell program is designed to allow us to introduce an additional product into the markets in which pathogen inactivation has already been established. It also represents an opportunity three fold the size of the platelet and plasma market, totaling approximately $1.6 billion annually in Europe and the Middle East, and over $4.7 billion worldwide. For these reasons we were determined not to allow funding limitations to delay ongoing progress toward Phase III trials. We completed the recent $21 million financing in order to facilitate the trial we believe will be necessary for our initial European red cell approval.

Finally, a few words on our recent announcements of [58] orphan drug designation for INTERCEPT plasma. This is significant for us because it signals our intention to explore new options for US product approval and to look beyond our previous focus exclusively on the platelet program. Also, though thrombotic thrombocytopenic purpura, or TTP, affects only about 3,500 US patients per year, this indication nevertheless has an estimated market potential of over $50 million. This subset of the total plasma opportunity in the US is very significant in comparison to many of the national plasma markets in Europe, with the exception of Germany. We also will continue to pursue broad approval of INTERCEPT platelets in the US.

So now, I will turn the call over to Larry to provide further detail regarding all of our clinical development programs. Larry?

Thank you, Claes.

As Claes mentioned, red blood cells are the most frequently transfused blood component. Over 90% of red cell transfusions are for short-term support of acute anemia in patients during surgical procedures or treatment of trauma. The remainder of red cell transfusion is administered in support of patients with chronic anemia due to genetic red cell disorders, including sickle cell anemia and thalassemia. We plan to conduct clinical trials for both indications, acute and chronic anemia.

We expect to initiate the Phase III trial for the acute anemia indication before the end of 2011. We anticipate this trial to involve approximately 200 cardiovascular surgery patients in four to six European centers. A trial of this type can be performed relatively rapidly, depending on the rate of patient enrollment, as patients receive transfusion support only for up to seven days with an additional 21 days of post transfusion safety surveillance.

In contrast, we expect the chronic anemia trial to take longer than the acute anemia trial, even though the number of patients is likely to be significantly smaller. We estimate that the chronic trial will enroll approximately 75 patients at five European sites, but these patients will remain on study for 12 months, using a two-period crossover design with six months in each treatment period.

Therefore, our preferred regulatory strategy is to file an initial CE mark application for the acute anemia indication, using data from the trial we expect to start this year. This should allow us to enter the market as rapidly as possible with an indication appropriate for the vast majority of red cell transfusions. In parallel with market launch, we plan to complete the chronic anemia trial and file an additional CE mark application for this indication. Similar to our experience with European approvals for our platelet and plasma products, we expect that regulatory authorities such as France's AFSSAPS, Germany's PAI and Switzerland's Swiss Medic will require separate regulatory applications to approve the use of INTERCEPT red cells. Further, some may require submission of both acute and chronic trial data to grant the in country approvals.

Initial preparation for the red cell trials be a began last year, when we implemented the INTERCEPT red cell system in two European blood centers; The Frankfort Red Cross and the French national transfusion service in Alsace. Both centers are currently conducting process validation studies to support the acute anemia trial, and both will be study sites.

Now, I would like to provide a few remarks about the recently announced FDA orphan drug designation for INTERCEPT plasma. TTP is a rare life threatening blood disorder, which if untreated, has a mortality of over 90%. Treatment with therapeutic plasma exchange, which involves transfusion with large volumes of plasma, results in remakes rates of 80% to 90%. There are no drugs approved specifically for treatment of TTP, and episodes are associated with significant morbidity from the formation of platelet aggregates that restrict blood flow to critical organs such as brain, kidneys and heart. Intensive therapeutic plasma exchange is the primary therapeutic option for these patients. Over the course of treatment a patient may receive in excess of 40 liters of plasma, representing exposure to plasma units from over 200 blood donors. TTP patients may receive multiple courses of treatment, as the relapse rate is approximately 30% following the initial episode.

Based on extensive exposure to donor plasma, TTP patients are clearly at heightened risk for transfusion transmitted diseases. The potential level of this risk is illustrated by recent data reported by the American Red Cross, which has shown that up to one in 285 healthy asymptomatic blood donors was infected with dengue during the Puerto Rico epidemic, and that plasma from these donors was infectious. The orphan drug designation is an important step toward making INTERCEPT plasma available to a particularly vulnerable US patient population.

In 2004, we completed a Phase III study of 35 TTP patients in which almost three thousand units of INTERCEPT plasma were transfused to 17 patients in the test arm. The results were published in the journal Transfusion in 2006, supporting the conclusion that the primary endpoints of the trial were met, with a comparable proportion of patients in the test and control groups achieving remission within 30 days after the first plasma therapeutic exchange. In addition, all secondary efficacy endpoints -- comparing time to first remix, number of TPE treatments, plasma exchange volume and relapse rates -- were also met.

In Europe, INTERCEPT plasma is currently approved for use in all indications of plasma for transfusion, including treatment of TTP. European blood centers have collected data on the treatment of 20 TTP patients thus far, and the results are consistent with the efficacy profile demonstrated in the US trial.

Orphan drugs are required to establish safety and efficacy prior to approval, and our next step will be to initiate a dialogue with the FDA to determine the requirements for approval of INTERCEPT plasma to treat TTP. We will provide updates as we determine the scope of work required to submit this application, which we anticipate will be a progressive discussion with FDA over several meetings.

I would like to conclude with a short update regarding the US platelet program. We now have a meeting scheduled with FDA to review data we have again generated to assess the incidence of safety events in a representative patient population receiving frequent transfusions of conventional platelets. These data were drawn from a large stem cell transplant database, including thousands of patients treated over a nine year period, and are critical to refining estimates of the trial size required to assess the study endpoints proposed during the 2009 Blood Products Advisory Committee meeting. We believe this [U2] discussion with FDA will be a step forward toward reaching agreement with the agency on study design to complete licensure, but caution that additional meetings may be necessary to fully determine the pathway for US approval.

Kevin will now review the financial results.

Thank you, Larry.

As Claes mentioned earlier, 2010 was our fifth consecutive year of sales growth. Taking over product sales and marketing from Baxter in 2006, we have achieved a compound annual growth rate of over 60%. Total revenue for the year was $23.1 million, up 29% from last year. Product revenue represented $21.7 million, also up 29%. US Department of Defense support for the red blood cell system provided $1.4 million in 2010, compared to the $1.2 million received in 2009. We expect to receive Department of Defense funding throughout 2011, allowing us to expedite development efforts of our red blood cell program.

Total revenue for the fourth quarter was $6.5 million, up 18% year-over-year. We recorded product revenue of $6 million during Q4 of 2010, a 14% year-over-year increase. Consistent with the product mix over the past several quarters, revenue from disposable kits represented approximately 85% of product revenues. Government grant revenue was $496,000 in Q4, up from $246,000 in Q4 of 2009.

Now turning to gross margins. Gross margins on product sales for the year were 44%, compared to 25% for 2009. For the fourth quarter gross margins on product sales were 39%. Our margins in Q4 were somewhat lower than prior quarters as a result of a nonroutine $230,000 charge. This charge impacted margins by approximately 4%. Despite this nonroutine charge, the overall trend of our gross margins has improved as a result of close management of inventory levels and lower per unit costs of products sold in 2010 compared to 2009. We expect our the gross margins on product sales will continue to trend favorably from 2010 levels.

I would like to turn now to our operating expenses. Total operating expenses for 2010 were $27 million, compared to $29.2 million in 2009. As you may recall, in March of 2009 we initiated a restructuring plan, which was fully implemented by the end of the year. As such, our 2010 operating expenses reflect the full benefit of that plan. As a result of the effect of that restructuring plan, the 29% growth on our top line and our improved margins, our net losses narrowed during 2010 to $16.9 million,or $0.42 per share, compared to $24.1 million and $0.69 per share in 2009.

Total operating expenses for Q4 of 2010 were $7.6 million, up from $6.7 million in 2009. During Q4 of 2010 we recognized approximately $200,000 of net transaction costs associated with our acquisition of certain BioOne assets. Looking ahead to 2011, we expect our research and development spending to modestly increase as we ramp up preclinical activities in preparation for our red cell clinical trial.

Net loss for Q4 was $2.6 million,or $0.06 per share, compared to $4.9 million or $0.13 per share in the prior year. Similar to the full year results, the improvement in Q4 2010 net loss is also attributable to top line growth and improved gross margins as well as noncash gains recognized during Q4 when mark to marketing the value of our outstanding warrants.

Turning to cash. We ended the year with cash and marketable securities with $39 million, compared to $19.9 million at the end of 2009. The recently completed public offering provided us with gross proceeds of $21 million. This financing strengthens our balance sheet and allows us to advance clinical development for our red blood cell program.

Finally, we have recently amended our growth capital credit facility. Under the amendment we extended the availability of the second $5 million tranche, which may be drawn down prior to September 30 of this year at our option. We are pleased to have negotiated this extension, which we communicated earlier today in an 8-K filing with the Securities and Exchange Commission, and to have strengthened our relationship with this lender.

Now, I will turn the call back over to Claes.

Thank you, Kevin. In conclusion, we are proud to have achieved strong growth for INTERCEPT [Blood System] plasma throughout 2010. Our recent financing has strengthened our balance sheet and allowed us to move forward into Phase III trials for red cells in Europe. And finally, we entered 2011 with prospects for development progress in the US in both our platelet and plasma programs.

Operator, I would now like to open the call for questions.

Thank you, sir. (Operator Instructions). The first question is from Chris Raymond of Robert W. Baird. Your line is open.

Hi, guys. This is Blake Arnold calling in for Chris Raymond. Thanks for taking my questions. Had a couple of questions related to the 2011 guidance. You said in your prepared remarks you conservatively anticipate 20% revenue growth this year, and I'm sure you are aware that street estimates are projecting growth well above that number, within the range of 70% year-on-year. So could you maybe go into a bit more detail on what the assumptions are behind that guidance? Are there specific regions that you are no longer expecting conversions in, or maybe is there competitive pressure assumed? And than also what would need to go right for you to beat that 20% number? Just trying to understand how conservative that guidance is. Thanks.

Let me start, Blake, by saying when we did the guidance we basically started by looking at existing customers and did a bottom-up analysis of those, including some of our distributors. And on top of that we'velooked at all of the new prospects that we are working with now, and we basically assigned probabilities to those. And we tried to be very conservative in areas where we don't have a lot of visibility on exact timing of decisions. For to us reach this guidance, I think that we have given ourselves a very high probability that we will do it. But it's not that we can -- we can't tell you that it explicitly calls out a specific center that it won't happen in 2011. It is more about the probabilities of a number of different things, and we end up -- we chose to end up on the low end of that simply because of the lack of transparently in the individual decisions.

And in terms of your question, what can happen to make this look better, I think there are a number of the opportunities that we are pursuing right that in the aggregator certainly would bring us in much higher than the 20%. Our own targets, our own ambition level is higher than that. It just came down to what we want to guide to and be very, very conservative and comfortable that we can get to it. I don't know if that answers your question specifically, but I tried to give you more of a general sense of how we approached this.

Yes, that's help., thanks.

Thank you. Our next question from Caroline Corner of McNicoll, Lewis & Vlak. Your are line is open.

Just a quick question regarding gross margin to start with. Given that the revenue growth is attributed mostly to the existing customers, should we expect to see gross margins going forward in the 50% range like we saw in the last two quarters, or where do you think they going to they are going to shake out?

So I think if you look at margins on product revenue, and you strip out the effect of government grants, we expect our margins to continue to improve. I think they will be hovering around the 50% range. But beyond that it depends on volume.

Okay. Very good, thanks. And then when you -- when Larry was talking about the red blood cell program, the time line he was talking about for the acute trial, could we expect to see CE marks for red blood cells as early as the end of 2013, by that timeline? Is that a reasonable estimate, or where are you thinking it is?

I think the more reasonable [is probably] sometime in late -- that we have file the application, and then the review process to get the final approval probably takes another nine months or so. I think it is more realistic to expect something towards the end of 2014 for CE marks.

Okay. Very good, thanks. And finally, are there any updates regarding our work with XMRV with regard to chronic fatigue or prostate cancer or anything like that?

So there a lot of -- still I think a lot of work going into trying to make sure that these connections are more I guess confirmed by a lot of independent research groups. We expect that this issue will continue to be controversial until there are -- somebody will be able to develop assays that are universally accepted and used, and until such time I think there will still be a controversy around this and [dengue fever]. The point we are trying to make is that XMRV is just an example of a new pathogen, and if is correlated with disease, anybody who uses INTERCEPT would basically protect their patients from exposure to XMRV or any other emerging new pathogen.

Okay.

This is Larry Corash. I would just like to emphasize that we have done studies to show that both in the platelet system and in the red brood cell system we inactivate XMRV, and we actually have approved product claims for other retroviruses like HTLV-1 and HTLV-2 and HIV-1 and HIV-2 showing efficacy in the platelet and plasma systems. So we feel that we have done a lot of work to demonstrate the efficacy of our technology.

Okay. Very good. And then my last question, you had an increase on the SG&A line this year. Should we to see a similar increase next year as your -- are you increasing your sales rep count in Europe over the next 12 to 18 months?

Larry, why don't you handle that.

Okay, yes. I think you can expect to see some very modest SG&A growth, but largely the customer base in Europe is finite, and we feel that more or less we have lot the sales force fairly well built out.

So we should expect to see a little bit of leverage then from the people already on the ground?

Absolutely.

Great. Thanks for taking my call.

Okay, Caroline, thanks.

Thank you. The next question is from Bret Reiss of Janney Montgomery. Your line is open.

Good afternoon, gentlemen.

Hi, Brett.

Hi, Brett.

Patents. The key patents the Company relies on as barriers to competition, can you give us some sense as to when these patents expire?

Claes, you want me to take [that one]?

So the patent for S-59, which is the chemical that we use in our platelets and plasma system, has patents that begin expiring in 2013 and in some years beyond that. Depends on the country. In addition to that we have patents covering the compound absorption device, and we also have patents covering our UVA light box that extend into the late 20-teens. And there's also -- patents actually are in place for the composition of the plastics that is used in our kits. Those patents are not ours, but they are certainly covering those as well. So our general belief is that it is very hard to just the copy the chemical without having the whole system being copied, and therefore we think we have patent protections lasting several years.

Okay. And a related -- yes, I'm sorry, did I cut somebody off?

No, I was just going to say, for the red cell system, we have actually modified the system, so that has allowed us to file for patents relatively recently. So there we expect to have patent coverage extending well into the 2020s.

Okay. And this is sort of a related question to the patent question. I'm sure the Company is as frustrated as shareholders that the ramp up in sales, caused by a lot of things not in your control, has not gone more quickly. When you look over your shoulder at any potential competitors looming, do you see anybody kind of catching up to us, or are we still ahead of any close competitors?

I think, Brett, on -- you can look to individual components and individual competitors. When we enter into this [scene], there was already established technologies available for inactivation for plasma. We actually think that we are gaining market share and have a good opportunity to continue to gain market share, and that is based on the clinical experience with your product versus the competition. So -- also, we're also expanding the existing market for inactivation of plasma, and thereby also gaining share.

For platelets there has been a system on the market for the last several years. They have a lower CE mark approval. They call it Class 2, which means that they don't require clinical data, and that also makes it for them difficult and to date impossible to actually get in-country approvals in three countries such as France, Germany and Switzerland. So until [the time] they have a positive clinical data, we don't see them as being a big threat in the key markets. But they are there so -- but they have been there for several years and haven't really made much headway as far as we know.

Finally for red cells we believe that we are far ahead of anybody else who is in the development stage. So for that program I don't think that there is a competitive technology that has been able provide any kind of compelling data has had both clinical efficacy as well as sufficient and robust pathogen inactivation.

That's all good to hear. Do you have a range of what you think the cash burn rate will be in 2011?

I think we are expecting it to be roughly the same rate per quarter as it was in 2010. We expect growing sales, and we expect some improvement on margins. That will help us make some more money in gross profits. But we are also increasing some of our spend on the red cell program, which will to some extent offset that, so we expect to be in about the same ballpark.

What was the rate in 2010?

So we have been burning, Bret, about $2.5 million to $3 million a quarter.

Okay. This is a question from one of my shareholders, and he asks me to ask you if new considerations under the FDA section 510(k) or premarket notification have affected your time horizon, and if so, how?

We are actually not covered by that regulation, believe it or not. We are regulated by [CEBR], and it is not the 510(k) pathway forward. So the short answer is I don't think that particular regulation has affected us.

Okay. Now, you mentioned that you have this meeting with the FDA scheduled. What date is it scheduled.

We don't really want to give exact dates, so we said it is a Q2 meeting. We don't want to have people focusing on an individual date. Any kind of updates from that meeting, we will certainly inform the market about that.

Okay. I mean my birthday is July 23. Before or after? Over or under?Okay. I just thought I would give it a shot.

Yes, well --

I'm sorry.

July 23 is in Q3.

Okay. Oh, okay. So it's before. The nonroutine charge of $232,000. What was that?

Brett, it has to do with a minimum commitment that we have with one of the suppliers, and we chose to conserve cash and record a penalty rather than ramp up inventory unnecessarily.

Okay.

For that particular component.

All right. I thank you for your answers, and I will drop back in queue. Thank you.

Thanks, Brett.

Our next question is from Klaus von Stutterheim of Deutsche bank. Your line is open.

Yes, hi. I seem to remember at one point that you said that the last financing would be enough to take you to profitability, or at least break even. Number one, do I remember that correctly, and number two, if I do remember it correctly, is it still true?

Kevin, why don't you handle that.

Yes. So, you do remember that correctly. We have gone on record as saying that the last financing would allow us sufficient cash to move the red cell program forward and reach profitability. I think it is still true. Depends what other events occur in markets, depends how quickly we are able to move in the US for plasma a indication.

Okay, thanks.

Thank you. (Operator Instructions). Your next question is from [Frank Buresi] from Stifel Nicolaus.

Good afternoon.

Hi, Frank.

Hi. Hi, Kevin. The 20% sales growth. That assumes you will get nothing from this French tender, is that correct? Or?

It actually -- as I said before in an earlier question, actually we haven't called out specific events and given some events zero and others 100% probability. We would rather plug in -- so on the French tender we have plugged in a, I would say, conservative probability on that, but we haven't discounted it totally.

Okay. Because they are not -- you are talking about that being awarded like in the fourth quarter, right?

Right.

Okay.

Right, that's information we have been given, that it is going to be awarded in the fourth quarter.

Okay. And what -- now the -- and you have this -- that is the key to the profitability, correct? I mean there is more potential there than -- I mean, say next year, than anything else on the horizon, isn't there?

Well, there are actually two components to this tender. So the French currently are already fully adopted on pathogen activation for plasma, and that business is split three ways. So they provide some in-house inactivation, which covers roughly 50% of their overall demand. The remainder of that is split between a competitor of ours and us, and we hold the minority stake there. The understanding is they would like to consolidate the 50% that they are currently sourcing outside, so it will be a competitive tender between us and our competitor on that part. In addition to that, they are currently using our system for a few regions for platelets, and then we expect that they will, at a bare minimum, those regions going forward for platelets. But the big question on platelets is if they will start adopting platelets in new regions, and such case, how many regions will be started up, and that is the part that we don't have any real visibility on right now.

So on plasma there is a business that's -- we have a chance to expand our business by grabbing market share. For platelet it is more a question of whether they will roll out, and in such case, what speed they will [be at].

Okay. Okay. And then besides this tender, what are the main catalysts you guys see coming in the next, say, six to 12 months?

So we mentioned on the previous call that we had received and responded to a tender from the Irish blood center. We are still waiting to hear back from them about if they are going to go forward, and in such case, the timing of that. We also have new customers that we are working with in several countries that we expect to begin adoption. And then also I think that it's -- we are growing our business now in Spain. We mentioned on the last call that we had began supplying into Portugal [blood] centers. We expect them to ramp up. So there are a number of different drivers in place. We also mentioned the Middle East and further expansion into the CIS territory, so --And also we got the rights back in Asia from our partner, [and so] we began to market in Asia ourselves into several of the countries which are outside of China and Japan, and we think that there is real interest there, so we can see some real growth there as well.

Okay, great. Well, thanks a lot.

All right, Frank.

Thank you.

Thank you. I'm showing no further questions or comments at this time. I would like to turn the call over to Claes Glassell for any closing remarks.

Thank you for joining us today. We look forward to updating you on our first quarter conference call in April. Thank you.

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the program. You may now disconnect, and have a wonderful day.