Cerus Corp (CERS) 2011 Q4 法說會逐字稿

Good day, ladies and gentlemen, and welcome to Cerus Corporation Fourth Quarter 2011 Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session and instructions will be given at that time.

(Operator Instructions)

I would now like to hand the conference over to Ms. Lainie Corten. Ma'am, you may begin.

Thank you, and good afternoon. I would like to thank everyone for joining us today. With me on the call are Obi Greenman, Cerus' President and Chief Executive Officer; Kevin Green, our Chief Accounting Officer; and Dr. Larry Corash, our Chief Medical Officer. Cerus issued a press release today announcing Cerus' financial results for the fourth quarter and year ended December 31, 2011, and describing the Company's recent business highlights. You can access a copy of this announcement on the Company website at cerus.com.

I would like to remind you that during this call, we'll be making forward-looking statements, including statements about forecasts of revenue and annual growth rate, commercialization progress, regulatory and government processes, the scope and timing of red cell trials and other clinical development activities, research and development activities; prospects for CE mark registration and other regulatory approval, sales, operating expenses, gross margins, use of cash, finances, and business prospects. The Company's actual results may differ materially from those suggested by the 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' quarterly report for the fiscal period ended September 30, 2011, on Form 10-Q, including the sections entitled Risk Factors. This call will be archived temporarily on our website, and will not be updated during that time. On today's call, we'll begin with the Company's financial results from Kevin, followed by Larry, who will give an update on our development program. We'll conclude our prepared remarks with commentary from Obi, who will review the recent quarter's achievements. Now it's my pleasure to introduce Kevin Green, Cerus' Chief Accounting Officer.

Thank you, Lainie. 2011 marked our sixth consecutive year of sales growth, with a 41% year-over-year increase in product revenue. Since we began selling INTERCEPT in 2006, we've achieved nearly 60% compound annual growth rate in reported product revenues. Q4 2011 was our best quarter ever, as growth and demand for both illuminators and disposable kits was driven by the recently announced contracts in France and in Russia.

Total revenue for the year was $33 million, an increase of 43% from 2010. Product revenue represented $30.6 million, while US Department of Defense support for the red blood cell program provided $2.4 million in 2011, compared to the $1.4 million received in 2010. INTERCEPT disposable kit demand for 2011 was up 38% year-over-year, consistent with prior periods, represented more than 85% of product revenue. Total revenue for the fourth quarter was $10.4 million, up 61% year-over-year. We recorded product revenue of $9.9 million during Q4, a 66% year-over-year increase. Government grant revenue was approximately $0.5 million in both Q4 2011 and 2010.

For 2012, we are providing guidance on product revenue rather than total revenue, because we don't currently expect meaningful US Department of Defense grant support. We're projecting full-year product revenue in the range of $34 million to $36 million, representing approximately 20% to 25% growth on a constant-currency basis. On average, we expect the Euro to be weaker against the dollar than it was in 2011. While a weaker Euro would affect our reported top line, we have an effective natural hedge, and limited economic exposure, since we source the majority of our inventory in Euros and maintain our commercial sales force and many back-office functions in Euro-denominated countries.

I'd like to spend a few moments on gross margins from product sales. In 2011, our gross margins were affected by intermittent production levels. This led to periods of disproportionate overhead absorption and contractual penalties imposed by suppliers for orders below minimum-purchase requirements. In addition, during the second half of the year, we experienced higher than normal scrap rates for certain components, which we believe was an anomaly. Going forward, we expect production levels to increase and become more consistent, which should lead to more stable gross margins. For context, over the past several years we have had relatively consistent pricing for our products.

I'd like to turn now to our operating expenses, an area that we continue to manage tightly relative to our top-line revenue growth. Total operating expenses for 2011 were $30.4 million, up from $27 million during 2010. The increase in operating expense during 2011 was driven largely by development activities for our red blood cell program, as we prepare to initiate a Phase III clinical trial for acute anemia. We expect operating expenses to modestly increase, particularly R&D costs, as we run the Phase III clinical trial for acute anemia in the EU, and as we initiate other clinical activities for our red blood cell program. Net loss for 2011 was $17 million, or $0.35 per share, compared to $16.9 million, or $0.42 per share in the prior year.

Turning to cash, we ended the year with cash and marketable securities of $25.8 million, compared to $30 million at the end of 2010, and $15.2 million at September 30. During the fourth quarter, we drew down $2.3 million from our revolving credit facility. We also raised $9.7 million in net proceeds from the issuance of common stock under our at-the-market, or ATM, agreement. This quarter, we raised an additional $9.1 million in net proceeds from the ATM, substantially exhausting the $20 million facility. Without the effect of these financings, cash used during Q4 was just over a million dollars. Looking ahead, we expect cash used for operations to average approximately $3.5 million per quarter in 2012. Now, I would like to turn the call over to Larry.

Thank you, Kevin. Today, I'll focus on recent progress and future plans for our INTERCEPT red cell program, starting with the United States and then moving to Europe. Our recent discussions with FDA have been extremely productive. We are currently making final preparations for the submission of our Phase III chronic anemia trial protocol to the FDA under a special protocol assessment, or SPA. When we announced last quarter that the protocol would be evaluated under an SPA, we also indicated that we would have an additional discussion with FDA about the trial size and end points prior to finalizing the clinical design.

Based on this dialogue, we plan to propose a trial of just under 400 patients with end points designed to assess both efficacy and safety of the treated red cells. We expect to propose that the efficacy end point of hemoglobin usage will be assessed in 82 patients in a cross-over design with the safety end point of immunogenicity requiring assessment of at least 300 additional patients receiving either INTERCEPT or control red cell components. We plan to submit the trial protocol this quarter, which would start the clock on the SPA process. Timing to complete the process can be variable, depending on how long FDA takes to complete their review, and how long Cerus may take to respond to questions. We're using a rough estimate of approximately 120 days as an average SPA time line from submission to a final protocol.

As you'll recall from last quarter, we were also asked by FDA to generate additional in vitro data for INTERCEPT red cells using the new guidance criteria for blood components. This requires a 60-unit paired study, which we will conduct in parallel with the SPA review process. Also, we'll need to complete an additional Phase I recovery and survival study, confirming that the specific processing conditions, plans for the Phase III trial in the United States, result in in vivo red cell quality, similar to that in our last Phase I trial. We believe that the process changes are minor, and expect a similarly successful result from the next Phase I trial.

To summarize our plans for INTERCEPT red cells in the United States, we expect to complete the following three objectives -- initiate the SPA process, conduct the 60-unit in vitro study, and perform the Phase I trial prior to initiating the Phase III study.

Turning to red cells in Europe, we now plan to accelerate our clinical development program to allow pursuit of an earlier approval for the indication of INTERCEPT red cells for support of chronic anemia. Previously, we had planned to use data from the US Phase III trial for chronic anemia, as the basis for both our US and EU regulatory submissions. However, we now believe that a CE mark for the chronic anemia indication could be supported with a smaller, faster trial performed in Europe. Data from such a trial could be available significantly earlier than the results of the study we are discussing with FDA.

We now plan to propose an approximately 50-patient trial of INTERCEPT red cells for treatment of fallocemia patients in Europe. We've already begun discussions with several potential clinical sites with large populations of fallocemia patients, and are targeting to begin this study in late 2012 or early 2013. While we expect that some countries will require an even broader clinical experience prior to regulatory approvals, we believe that the data generated from this study will build the strong foundation for the launch of INTERCEPT red cells.

Finally, I'd like to provide a status update regarding the Phase III acute anemia study. On our last call, I indicated that we were about to submit the Clinical Trial Application, or CTA, to regulatory authorities in France and Germany. The CTA was submitted in the fourth quarter. The review process was expected to take up to 90 days, with a longer time frame expected if we received questions from regulators that required Cerus to submit responses for further review. This has indeed been the case, and we are currently submitting responses to the questions. We are also initiating a process validation study in response to these questions from the regulatory authorities for data generated with the final clinical materials.

Providing these responses extends the review period, but during this time, we will continue working with the clinical sites to finish process validations and training in parallel with the regulatory review. We expect that it will take several more months to complete the CTA review process. Therefore, we estimate we will initiate the trial this summer, and still expect this 50-patient study to take approximately 12 months from initiation to completion. 2012 will be a busy year for the clinical and regulatory teams. We're taking the critical steps to move this program forward and showing our customers tangible progress towards bringing red cell pathogen inactivation to market in both Europe and the United States. Now, I would like to turn the call over to Obi.

Thank you, Larry. I am proud of the progress Cerus was able to deliver in 2011, and feel that it has positioned us well for 2012 and beyond. The successful deployment of INTERCEPT in Switzerland and more broadly in France this past year has been hugely validating to national blood services around the globe. We are thus encouraged by the prospects for INTERCEPT to ultimately be embraced as the definitive safeguard for transfused blood components. We exceeded our 2011 revenue guidance by delivering 43% total revenue growth this past year, finishing with a strong fourth quarter, including major contracts awarded to INTERCEPT in both France and Russia.

We have also meaningfully advanced our red blood cell program, and plan to initiate three clinical studies this year that we expect to provide the foundation for a European CE mark approval, and commencement of a pivotal clinical study in the US. We also ended this year with a strong cash position of $25.8 million. Together with an additional $9.1 million in net proceeds this year, we now have the ability to more aggressively execute on our red cell clinical development program in Europe.

With each new customer, and in fact with each additional INTERCEPT transfusion, we are advancing towards making INTERCEPT the standard of care in transfusion medicine. As national transfusion services evaluate how best to safeguard their blood component production, INTERCEPT is becoming the de facto state of the art, with a five-year track record of safety and operational ease of use. We believe that the momentum from our growing established base of customers will continue to be the most instrumental part of our marketing strategy.

At the end of 2012, we are looking to be in an even stronger position, and I would like to take this opportunity to share our four major goals for this year. First, as Kevin mentioned, we are providing guidance to deliver $34 million to $36 million in product sales, representing 20% to 25% revenue growth in constant currency. We see this growth coming primarily from our current markets in Europe, CIS, and the Middle East. This growth, however, does not anticipate any major policy decisions related to pathogen inactivation in the larger European markets of France, Germany, and the UK, or elsewhere, for that matter.

Second, we also plan to continue the expansion of the global INTERCEPT market through regulatory approvals and new distribution agreements. We have already announced some progress towards this goal in the first quarter, including the appointment of a Chief Business Officer to enable active pursuit of new business partnerships in regions such as Asia, North America, and South America. More recently, we also announced approval of INTERCEPT platelet and plasma systems in Israel.

Our third goal is to initiate both the acute and chronic anemia Phase III red cell trials in Europe. Our clinical development plan should enable class 3 CE mark registration for both acute and chronic red cell transfusion. Moreover, by including fallocemia and sickle cell patients in our initial product launch, we are able to engage in an important physician and patient advocacy network that is concerned not only with blood safety, but also with transforming the care for these patients. We believe this will lead to a more successful launch, and are truly excited about this opportunity. Finally, we intend to submit our proposed US chronic Phase III protocol to the FDA under an SPA this quarter.

Our success in achieving consistent sales growth since setting up our commercial operations in Europe in 2006 illustrates that our customers have grown to rely on Cerus as a dependable partner, with a proven technology. Our track record has positioned Cerus as the clear leader in the field of pathogen activation, and now, bringing INTERCEPT red cells to market in both Europe and the United States are events that we can truly begin to see on the horizon. At the end of 2012, Cerus will be a different Company than it is today, with a larger, established customer base and a robust Phase III clinical development pipeline. We will be further along on our path to transforming global blood safety. Operator, I would like now to open the call for questions.

(Operator Instructions)

Scott Gleason, Stevens.

Obi and Kevin, thank you for taking my questions.

Hi, Scott. Thank you.

Just when we look at the guidance for 2012, it seems especially conservative on a couple of fronts. I guess when we look at the known commodities of kind of a full year of implementation in Switzerland, the French tender. It's hard, I guess, especially looking at the quarterly run rate in the fourth quarter to kind of reconcile where you guys were guiding. I guess can you walk us through maybe some of the underlying assumptions in terms of what you are counting, and maybe what you aren't counting in terms of the 2012 outlook, and how we should kind of think about the guidance range?

Yes, okay. I think as we look at our business, the strongest indicator of the health of our business is the growth in intercept disposable kit demand. From a constant-currency perspective, we believe that 20% to 25% growth is a strong, is strong guidance. I think we are looking at sort of where the business will come from in 2012, and fundamentally, we are a little bit concerned about the issues in the Euro zone, and certainly the impact of the FX rate on our top line sales in dollars. I think what your question sort of gets to also, though, is looking at the situation in France, and our contract with the French EFS, that basically the way we look at this is that we saw a strong pick-up in demand from EFS for plasma kits in Q4 as they ramped up their production in anticipation of transitioning from methylene blue in March.

I think just going forward, the guidance that we sort of have been given from EFS is that they would optimally like to be at some place under 50% market share for INTERCEPT. We were a little over that as of the end of Q4, and really, the overall market share is a function of how well the EFS is -- has their Bordeaux facility for SD plasma up and running. If that's operationally in a good position, then they could increase the overall market share for SD plasma. I may actually turn it over to Larry, because he's been monitoring the situation in France, specifically around this plasma situation, and he might be able to provide a little bit more color.

I think, Scott, going forward, we don't get immediate updates on the state of the productivity of that SD plasma facility. But it is the sole source for all SD plasma in France, and we know that it has been up and down in terms of its production capacity. We have seen terrific success in the INTERCEPT plasma sites in France implementing and coming up to full scale and beyond the assumed capacity for those sites in producing INTERCEPT plasma.

We see that as a very positive experience and we believe that the distributed capacity of our technology gives the French tremendous elasticity and a redundancy in their ability to meet the demands for plasma supply, and we will just have to see how the mix of products works out going forward. But we have been very successful, and they have been very successful, in the adoption and implementation of this technology.

Okay, and I guess maybe these questions are more for Kevin. I guess when we look at the guidance and we look at the assessment that the US government grant for your red cell -- with the US military is not going to persist through 2012, I guess how conservative is that assumption? Is that what your assessment is that likely will happen? Then I guess when we think about the currency assumption you guys are using for your guidance, can you give us the Euro-to-dollar conversion rate you guys are assuming?

Sure. The first part of your question on the US Department of Defense grant, we have no visibility really into the federal budget process. Right now, what we know is that we are still operating under an existing award, the existing 2011 award, but that was largely used up at the end of the year, with a little bit that will trickle in, in Q1. Beyond that, we're not aware of any additional federal grants that are available to the red cell program, and until we have that visibility, we're guiding not to consider any grant revenue. As far as the exchange rate, we use a blend of rates from EUR1.25 to EUR1.35, and we're not sure, of course, where the Euro is going to go, but at today's rate at EUR1.34, we believe there's more downside than upside.

Okay. Kevin, I guess if we look at the ATM facility that you guys tapped in the quarter, can you talk a little bit about how many shares you guys added to the fully diluted share count, and what price point those shares were at?

Yes, so our policy has been to give specifics on share count in our SEC filings, which we're planning on getting on file on Friday, so we're not in a position really to talk about that outside of our policy. You can do the math on the average price over the quarter and I think going forward, we largely finished off that facility in Q1.

Okay, and I guess when we think about the margins in the quarter, Kevin, can you maybe give us a little more granularity on kind of what some of the issues you guys saw and you didn't think were sustainable going forward, and where we should kind of forecast margins, I guess, being throughout 2012, in your assessment?

Okay. Yes, so as you'll recall in the first part of 2011, we had a pretty dramatic increase in our inventory. That was largely in anticipation of the French tender. We wanted to make sure that we had sufficient inventory to supply that tender, and so our inventories almost doubled in Q1 and Q2 2011 from the end of 2010. Of course, as that tender was announced and awarded to Cerus, we used that inventory and monetized it and sold it down. What that means, and what that has the effect of is intermittent production for INTERCEPT disposable kits, and when we have periods of low production, the kits that are rolling off the assembly line are disproportionately burdened by overhead.

In addition, in those periods of low production, we have certain contractual minimum purchase requirements from some of our suppliers, and we have contractual penalties that are incurred, which we take directly to the P&L, and that affects margins. Looking forward into 2012, we largely expect inventory production to be on more of a maintenance mode and more consistent, which should allow for fewer contractual penalties and more consistent margins, probably in the mid-40%s.

Okay, and Kevin, at what correlated run rate or what volume run rate do you guys get more to kind of a 60% type margin profile?

At 60% margins, we're going to likely be in the $100-million-a-year range.

Okay, all right. Thanks for taking my questions, guys.

Thanks, Scott.

Chris Raymond, Robert W. Baird.

Just a couple quick ones. With respect to the plasma situation in France, can you -- are you getting any signals that maybe any other countries are following the EFF lead with respect to methylene blue?

Well, today no regulators in those other countries that are predominantly methylene blue have taken action. I mean, there's certainly a discussion that's under way, and the situation in Belgium, specifically, where they are evaluating other options to methylene blue, but they haven't taken a decision yet. I think just to remind you, Chris, so it's basically Spain, Belgium, and sort of in eastern Europe and Russia, CIS, they're also some pretty meaningful market share. They have premium meaningful market share there.

I think outside of France, the place that we've sort of seen the most movement toward INTERCEPT has been in eastern Europe and Russia thus far, but it isn't as a function of the regulatory review process, or the regulators in those countries. It's more a function of the customer is looking at the situation in France and saying, well, if AFSSAPS pulled the product, then we should be concerned.

Okay, and then last quarter you guys kind of alluded to the five new centers that, as a result of this transition from methylene blue to INTERCEPT, could be in a position to have some spill-over, I guess. That's my word, probably not yours, into the platelet area. Is there any update you can give there? Are you seeing any sort of spill-over effect?

Well, so I think the upside is these sites are new sites, and so they haven't been processing INTERCEPT platelets. I think just to remind you also, that the contractual minimums for the recent contract with the EFS, our contractual arrange would anticipate a growth to up to 20% of the platelet market in France, but since the last call, we haven't seen any new centers coming online for platelets. I think just fundamentally, the way we look at these markets is once a customer adopts for platelets or plasma, it makes it a lot easier for them to implement the technology for the other component, like we're seeing in Switzerland, for example, where they're starting to evaluate plasma, and that will be something that we look to try and ramp the adoption of intercept plasma in Switzerland in 2012.

Then if you don't mind me sort of circling back on US, you guys talked a little bit last quarter about the TTP plasma program in the US. If you already talked about this, I apologize, but is there an update? Where do things stand? I think you were -- go ahead.

We are in discussions with the agencies about all three products. I think that we've chose to focus the discussion of this call on the red cell program, because we have had the most recent discussions with the agency around the red cell program, and it's really focused around this SPA protocol submission. We do have some calls scheduled with the agency for both platelets and plasma in the coming months, and I think once we have an update from them, we'll provide it.

Then, if you don't mind one more question, you guys last quarter gave a 10% quarter-on-quarter sequential kick growth number. We got the annual number. Can you guys give us maybe a sequential number for Q4?

You've got the annual number for kit demand, Kevin.

Yes, so it's roughly 20%, Chris, but I'll look at my notes and get back to you offline with the specific number, okay?

Great, thanks.

Thanks, Chris.

Zarak Khurshid, Wedbush Securities.

Hi Zarak.

Good afternoon, everybody. Thanks for taking the questions. Just dove-tailing on some of the prior questions a little bit. In terms of just your guidance, and what's factored in there, how should we think about additional business from Germany?

As I mentioned on the call, we didn't -- we don't anticipate any kind of policy decision coming out of Germany for pathogen activation of platelets or plasma in 2012. I think we do -- we are spending a lot of time and effort as a Company in Germany, and have so for several years now. So there are a number of centers that are sort of in-process with getting their marketing authorizations and to remind you, that's basically the products are approved on a center-by-center basis in Germany, as sort of a biologic by the [Polyrelic] Institute.

That process is still under way, and our perspective is that these customers wouldn't be taking on these regulatory burdens if they didn't believe that they ultimately were going to implement the technology. I think you'll see sort of onesies, twosies in Germany in 2012, but I really wouldn't expect any major revenue growth coming out of Germany in 2012, because there's still larger centers that need to come on line before that would happen. I think we're also working through reimbursement in Germany as a way of trying to get incremental reimbursement for INTERCEPT.

That's helpful. With respect to the illuminators placed in Russia, do you have any visibility into their consumable utilization, and if you could comment generally on the overall commitment to pathogen inactivation in eastern Europe, that would be great? Thanks.

We really don't have great visibility. We do have a Cerus employee in Russia who works with our distributor there. We have a little bit more visibility than we did in the past. At the same time, as I think you recall through the illuminator purchases are done under a federal tender process, and then the budgets for the disposable sets come from the regional governments. I think we are seeing a little bit better productivity out of the sites that have illuminators to date, but I can't give you any sort of specifics on sort of where that business will grow to. There was another part of your question that I forgot.

Yes, just kind of the -- given the competitive environment there, what is your sense for the commitment to pathogen inactivation in eastern Europe?

I think it's interesting in that for companies like the brick countries, specifically Russia in this case, they definitely look at pathogen inactivation as a way to sort of leapfrog the current blood safety paradigm in other developed countries. So as they're looking at implementing new testing measures, I think they are very sensitized around the fact that ultimately they could implement pathogen inactivation, and really have the safest blood components possible, so that's their mindset. You see that in a lot of the major academic blood centers in Russia.

That's helpful. As we think about kind of the break-out between illuminators and consumable sales, can you actually break out those numbers for the fourth quarter and the full year?

Kevin, would you handle that?

Yes, so what we've said is generally they're at 85% of our total revenues, 85%, or just over 85%, are disposables. That's been pretty consistent, Zarak, throughout the past few years. Of course, there's periods of spikes of illuminator demand. Certainly Q4 was such a period, where illuminators represented roughly 18% to 19%, rather than the more normalized 15%.

Perfect. Thanks, guys.

Thanks, Zarak.

Caroline Corner, MLV.

Hi guys, thanks for taking my call. Just a couple questions left for me. First of all, in your comments about plasma in France, I was just wondering if you're seeing any evidence, or as you look into Belgium based on that line of questioning, are you looking, are you seeing any evidence of Terumo Caridian selling their technologies into the Belgian market?

No, we're not. I think the real challenge for the Terumo Caridian Mirasol product for plasma is that they really have a lack of clinical data. As you may recall, when the French were looking at replacing methylene blue in the market, they sort of once again did a very rigorous review of the INTERCEPT product, and the AFSSAPS, the French regulators, had to be convinced yet again that even after many years of use in France, that they weren't going to have a problem with INTERCEPT plasma. I think that's sort of the case for other regulatory bodies in Europe in that they are looking at our long sort of safety experience in Europe, and that goes into the decision-making process.

I think that for Terumo Caridian's Mirasol product for plasma, just given the absence of true Phase III clinical data, and sort of the lack of team of vigilance experience with the product, that it's unlikely that we would see that as a competitive, a real competitive threat in those markets. I think solvent detergent plasma from Octapharma is a much stronger competitor.

Okay, thanks. Then thanks for all the updates on the red cell programs. If you were to partner around the red cell programs in the US, where do you think those conversations would really kind of start picking up? Would it be after the 60-unit study and the Phase I study as well, or what are your thoughts there as you look forward and try to figure that out?

In general, I think having clarity around what the size and scope of the Phase III chronic study in the US would be required so that a partner would understand sort of what the commitment is to get that product approved. I think in general, we're looking at partnering for the red cell program on a global basis. We would be hard pressed to give away one of our most valuable assets, which would be the US rights to INTERCEPT red cells for something that would be -- it would have to be a pretty attractive opportunity for us.

I think we've also historically now can demonstrate that we can go into a market and build our own sales force, like we did in Europe, to service the market in the United States. It wouldn't be -- I think we've discussed this before, Caroline, but roughly four major blood centers represent 80% of the business in the United States, and I think that being able to -- the SG&A footprint you would need for that wouldn't be that large.

Thanks. That's all I had, thank you.

Thanks, Caroline.

Thank you.

(Operator Instructions)

Klaus von Stutterheim, Deutsche Bank.

Hi. Can we talk about cash burn and need for financing or no need for financing in the foreseeable future?

Sure. Kevin why don't you handle that?

Yes, so are you looking for guidance on what our projected cash burn is for 2012?

Right, and whether you think there's a need for financing in 2012.

Well, with the use of the ATM in both Q4 and Q1, we're excited to really advance the red cell program meaningfully in Europe. We expect our quarterly cash burn to be roughly $3.5 million. We're comfortable with where we're at.

Okay, thanks.

Thank you.

Thank you. I'm showing no further questions at this time.

Great. Well, thank you all for joining us today. We look forward to updating you on our first quarter conference call in early May. Thank you.

Ladies and gentlemen, thank you for participating in today's conference. This concludes our program for today. You may all disconnect, and have a wonderful day.