Cerus Corp (CERS) 2012 Q4 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Cerus Corporation Fourth Quarter 2012 Results Conference Call. At this time, participants are in a listen-only mode. Later we will conduct a question-and-answer session. (Operator Instructions). As a reminder, today's conference call is being recorded. I would now like to turn the conference over to your host, Ms. Lainie Corten, Investor Relations for Cerus. Please go ahead.

Thank you, Operator, 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 Financial Officer; Dr. Larry Corash, our Chief Medical Officer; and Carol Moore, our Senior Vice President of Regulatory Affairs, Quality and Clinical.

Cerus issued a press release today announcing our financial results for the fourth quarter and the year ended December 31st, 2012, 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 will be making forward-looking statements, including forecasts of revenue, annual growth rate and gross margins, and statements about operating expenses, product demand , commercialization progress, regulatory and governmental processes, the scope and timing of clinical trials, and other research and development activities and the reporting of results from such activities, the timing of USregulatory submissions or approval, potential synergies between platelet and plasma regulatory submissions and launch planning activities, potential reactions to recent USregulatory developments, sales, use of cash, finances, business prospects, and the effect of currency fluctuation.

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' quarterly report for the fiscal period ended September 30th, 2012 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.

And now it is my pleasure to introduce Obi Greenman, Cerus' Chief Executive Officer.

Thank you, Lainie. This week has been one of significant progress for Cerus. The culmination of 10 years of efforts to generate the safety and efficacy clinical database to warrant the FDA agreement to proceed with a PMA filing for INTERCEPT platelet. In addition, we are proud to announce the first of four PMA modules for INTERCEPT plasma is being submitted today.

Beyond these seminal FDA-related events, 2012 was a year of major achievements for Cerus as we continued to execute on sales growth while advancing our clinical development pipeline.

This afternoon we reported 2012 annual product revenue of $36.7 million, coming in above our guidance of $34 million to $36 million. This represents approximately 30% year-over-year growth in revenue on a constant currency basis, exceeding our estimate of 20% to 25%. 2012 is our seventh consecutive year of revenue growth, and we have maintained a compound annual growth rate at over 50% since 2006.

I believe it is significant that we were able to achieve this revenue target even with the continued economic distress in many European countries. It is also important to note that we achieved this without significant new conversion of major markets like France, Germany and the UK, which all remain as possible revenue inflection points in 2013 and beyond. We believe that the recent progress with the FDA may further catalyze the possibility of these major markets converting to INTERCEPT in the 12 to 24 month time frame.

In 2012 we improved our gross margins over margins reported in 2011. And with a disciplined approach to operating expenses in cash management, we ended 2012 with slightly more cash than we had at the end of 2011.

To provide some more color on our recent positive discussions with the FDA, I will now turn the call over to Dr. Larry Corash to explain the evolution of data that lead to this important development for the company.

Thank you, Obi. Agreement to proceed forward with a PMA application is an important event in product development. Those who have followed the Cerus story for an extended time will appreciate just how pivotal an achievement this represents for the INTERCEPT platelet program.

In 2001, we completed the Phase 3 Sprint trial, which included 645 patients enrolled across 12 USsites, supported with 4,719 platelet transfusions. The trial's primary end point was designed to assess the haemostatic efficacy of INTERCEPT platelets compared to conventional platelets for prevention and control of bleeding due to low platelet counts. The protocol also included multiple secondary end points for additional measures of both efficacy and safety.

The Sprint trial met the primary efficacy end point. INTERCEPT platelets were shown to be equivalent to conventional platelets according to a rigorous assessment of bleeding. However, upon submission of the clinical module to FDA in 2002, the FDA expressed concern regarding potential safety signals for several types of infrequent adverse events, including the important pulmonary event of acute lung injury.

Data from the Sprint trial were used to support EU regulatory registrations. However prior to launching the INTERCEPT platelet system in Europe, and in response to FDA's concerns, Cerus sponsored an independent blinded review of pulmonary adverse events reported in the Sprint trial.

A panel of external pulmonary experts reviewed the primary medical records of all Sprint patients with pulmonary adverse events and concluded that there was no difference in the frequency of acute lung injury events. The review was submitted to FDA. However, it did not fully address FDA's concerns. And the agency requested that the frequency of pulmonary adverse events in patients supported with INTERCEPT platelets be confirmed in a second prospective clinical trial.

Due to the low frequency of acute lung injury, the design of a study powered for these events proved to be extremely challenging. A statistically valid comparison for this safety end point requires a very large number of patients,beyond what Cerus believes logistically feasible.

Over a period of six years, Cerus presented a number of potential trial designs to FDA to address their concerns. But we were unable to reach a mutually acceptable design.

In parallel with FDA discussions, following the launch of INTERCEPT platelets in Europe, we initiated a post-marketing haemovigilance program to obtain safety data in routine use. In addition, we carefully monitored the safety surveillance data collected by independent haemovigilance programs conducted by regulatory authorities in France and Switzerland. During the years these data were being collected, Cerus continued to discuss with the FDA the possibility that European haemovigilance data could satisfy their concerns and enable us to move forward without conducting an additional safety study.

This week, after 10 years of experience and more than one million INTERCEPT platelet transfusions in Europe, we reviewed with FDA the aggregate haemovigilance data obtained by EU regulatory authorities for over 130,000 INTERCEPT platelet transfusions in France and Switzerland. This included a recent presentation by Swiss Medic for 62,500 INTERCEPT platelet transfusions over two years, in which they showed a reduction in severe adverse events, including respiratory events, after national adoption of INTERCEPT platelets.

In consideration of this body of haemovigilance data, in conjunction with the prior USdata and EU randomized clinical data, FDA agreed that the combined data were sufficient to file a PMA for INTERCEPT platelets without conducting another prospective clinical trial. Also we will be working with FDA to define a Phase 4 post-marketing study plan which will be included in our PMA submission.

Now I would like to turn the call over to Carol Moore, who will provide you with further comments about our FDA progress, as well as an update on our other development programs.

Thank you, Larry. As Obi and Larry has already explained, we met with FDA on Tuesday. This meeting resulted in agreement on the steps required for a USsubmission for INTERCEPT platelets. It is too soon to provide a timing estimate for the PMA filing or approval , but I can share with you what those steps will be.

Our next step with the FDA will be to submit a proposed PMA shell exactly as we did for the INTERCEPT files in the PMA last year. As with the plasma PMA, we will propose a sequence of modules that will allow us to begin with the data we have on hand and conclude with the topics for which we may need additional time to assemble information. The FDA review of the shell proposal has a 30-day clock. And once we reach agreement, we will have a defined series of modules and timing for the INTERCEPT platelet PMA process.

There are elements within the PMA filing where considerable overlap exists between data worth submitting for the INTERCEPT plasma and the data required for the platelet submission. For example, both products use the same active compound, so the toxicology information submitted regarding amotosalen will be substantially the same across both applications. Likewise, the treatments used very similar disposable kits manufactured by the same supplier and the same elimination device is used for both processes. As we move forward, we will be thinking of ways to leverage the synergy between INTERCEPT platelets and plasma and streamline the assembly and review of the PMA submissions, where possible.

Speaking of our USplasma application, Module one has been fully assembled and is packed and now on our loading dock waiting for pick up for shipment to the FDA. As a reminder, there is a 90-day interval between each module submission and the final 180-day review following the submission of the final module. We continue to expect a review decision or completion of the review as early as the second half of 2014.

I'd like to conclude my comments with an update on our INTERCEPT red cell development program. Our USPhase 2 red cell trial, a recovery and survival study and healthy volunteers using the final commercial processing set, is fully enrolled. We expect the last patient will complete the second period of the crossover study over the summer, putting us in a position to report data in Q4.

In Europe, we are continuing to work through the steps necessary to secure final regulatory and site approvals in both the Phase 3 acute and chronic anemia studies. The acute anemia trial initiation is pending upon final authorization from German authorities, expected later this quarter. The chronic anemia study has received approval from the Italian Ministry of Health, but still requires completion of final ethical committee requirement.

And now I would like to turn the call over to Kevin.

Thank you, Carol. As we reported earlier today, revenue for Q4 was $10.5 million, culminating in full year product revenue of $36.7 million.

Year-over-year 2012 product revenue represents an increase of approximately 20%, as reported in USdollars, or almost 30% when compared in Euros. Driving this growth was increased demand for INTERCEPT disposable kits, up 28% year-over-year. Relatively consistent with prior periods, disposable kits represented more than 90% of product revenue.

For 2013, we are projecting full year product revenue in the range of $41 million to $43 million, representing approximately 16% to 21% growth on a constant currency basis. Consistent with our approach to 2012 revenue guidance, we are basing this estimate on continued progress from a mix of new customers and incremental adoption from existing customers, such as a platelet customer beginning to use the plasma system.

Given the concentration in decision making in many of the largest European markets and the difficulty in predicting when those markets may adopt INTERCEPT, we have excluded potential revenue in those major markets from our guidance. This leaves substantial upside if and when those markets convert.

Another area where we have seen progress is around our gross margins. Our gross margins during the fourth quarter were 51%, up sequentially from 47% in Q3. We anticipate some continued quarterly volatility with our gross margins but expect that margins will trend in the mid 40s at planned annual production levels, improving with increased levels of kit production to meet the anticipated growing demand.

Turning now to operating expenses. Total operating expenses for Q4 2012 were $9 million compared to $7.6 million during the same period of 2011, and $8.2 million sequentially from Q3.

For the full year 2012, operating expenses were $33.5 million compared to $30.4 million incurred in 2011. We expect operating expenses to increase in 2013, driven preliminary's by increased research and development activities.

When looking at our bottom line, net loss for Q4 was $1.7 million compared to $7.7 million during Q4 2011.

For the full year 2012, net losses narrowed to $15.9 million from $17 million in 2011. The majority of this change was due to the assumed difference in the valuation of our outstanding warrants for each respective period. Operationally, higher revenues, improved gross margins on product revenue, and relatively close management of operating expenses all lead to the improvement in our bottom line.

We ended the year strong with cash of $26.7 million and access to the remainder of our $7 million revolving line of credit. Tight management of working capital was instrumental to ending the year, with relatively little cash used for operations.

And now I would like to turn the call over to Obi for some concluding remarks.

Thank you, Kevin. The great news this week about a pathway for INTERCEPT platelets in the UScomes at a very opportune time, given the inherent synergys with the INTERCEPT plasma launch. We are now revising our INTERCEPT plasma launch plans to incorporate the future launch of INTERCEPT platelets, which we expect can largely be supported with the same sales, marketing and commercial support team that we will build out to support the plasma launch.

The USmarket is very concentrated, with approximately 15 customers representing almost 80% of the annual blood component production. This market dynamic may have profound implications on our future operating margins.

Looking ahead to 2013, we will continue to provide updates on our US regulatory process as we complete the plasma PMA, prepare for our first platelet PMA module, and refine our plans for USlaunches.

We also expect another active year in our growing EMEA markets, including updates on key markets like Germany, Russia and the CIS, South Africa and Latin America, all of which may benefit from today's announcement. Finally, initiation of both Phase 3 red cell trials for European approval has expected to take place in the near term. And we plan to report data from the USPhase 2 trial in Q4.

We believe 2013 will be a pivotal year for Cerus with continued revenue growth and major advances in our development programs.

Operator, please open the call for questions.

(Operator Instructions)Our first question comes from Jeremy Feffer of Cantor Fitzgerald. Please go ahead.

Hi, thank you for taking my questions. Yes, it has been a good week for you. I recognize you are not giving specific timelines right now because a lot is still up in the air, but is it reasonable to at least think this is probably a 2015 approval?

Jeremy, I think it really is going to be dependent on our receiving the final agreed upon schedule with the FDA. I think it is premature to even estimate when the timing might be. I think the best thing we can say is really to look at what happened with regard to the PMA shell for plasma and try to make your estimates from there.

That's fair. And I just want to make sure I understood your last comments, Obi. Are you saying you would, depending on the platelet timeline, you would hold back the plasma launch to try and have it coincide with platelets?

I am not saying that. I am just saying that you are launching a product to the same customers. There is a lot of interest about INTERCEPT platelets in the United States just as a function of the ongoing concerns about bacterial contamination risk for platelets. And I think the ideal scenario is to have the launch in close proximity -- the launch is in close proximity to one another.

Okay, that makes sense. And then one other, Kevin, if we think about 2013 on the cost side -- gross margin, obviously, you had a nice steady quarter-to-quarter improvement throughout 2012. What is a gross -- a logical or reasonable gross margin run rate we should think about in 2013?

Sure, Jeremy. Mid40s is an annualized margin number that we think is attainable. We do expect quarterly lumpiness.

Okay, That's helpful. I will jump back in queue. Thank you.

Thank you, Jeremy.

Our next question comes from Zarak Khurshid of Wedbush Securities. Please go ahead.

Great. Thanks for taking the question, guys. Congratulations on the exciting progress. Just curious, is there any reason why the platelet timing of submission would not play out at a similar pace as the FDA process around plasma?

I will defer to Carol on this. We tried to elude to this in the script, where there is a lot of similarities, but absent having through that agreement on the shell, we are reluctant to give specific timing. Carol, do you have any additional comments on that?

Only to add that it is a modular submission and modules are submitted about 90 days apart. What we need to decide is how many modules to support this application with. And then we will be in a better position to determine then the sequence. And then as we said earlier, 180 days after the last module is submitted for them to provide you a complete review letter. Those are the parameters that the PMA schedule incorporates. I think it is dependent on us now to figure out what the modules are composed of and how many modules there will be.

Understood. Thank you for that. And then if you could, could you maybe talk about costs around this new path forward on platelets? Does this increase the spend at all for 2013?

Again, it is sort of very new news, so -- and I think that we have increased the burn a little bit this year as it relates to the PMA submission for plasma. What we really need to look at is what the incremental burden might be for doing that for platelets, as well. We don't think that will be that substantial. But also we look at our launch planning activities and need to factor that in. Right now, we are just comfortable with the comments that Kevin made on the call, in that there will be some modest increase of cash burn going forward in 2013, relative to 2012.

Kevin, do you have anything additional?

I think it is tempered also by top line revenue growth. We are not sure what impact, if any, this news will have on our current markets. We will expect to monitor that and see how it plays out.

Further to Kevin's comments, this is a very meaningful event globally for the National Blood Services. Because a PMA submission pathway is something that means -- is meaningful to them. As I mentioned in prior calls, an FDA approval of any product is a strong validation around the globe, both with customers and with regulators.

So reading between the lines, it sounds like this may have some positive implications for France and their adoption of platelets?

We definitely think they will be taking this into consideration. Really what this is a testimony around the FDA's belief that we are now able to start the PMA submission pathway.

Larry, I don't know if you want to comment on your perspective on this?

No, but I think that the FDA's conclusion that further clinical trials are not required will send a signal to people that the data package is at least sufficient for the submission.

And a couple other questions just on the Phase 4 study. How involved would that be? And would that be limiting the addressable market, assuming everything goes according to plan?

Well, I think that Phase 4 commitments can go on as the product is being rolled out and implemented. It has two benefits. Number one, of course, it responds to FDA's concerns to gather additional data. But in addition, it will provide available information, based on our experience in Europe, for publications that we think will further support, and potentially there are opportunities to even extend label claims, if one does certain types of Phase 4 studies. I think these are things we will look at and negotiate with FDA, in terms of duration and scope of study, and we will have a better assessment of that in the coming months.

Got it. Should we expect any panel meetings around platelets?

I think it is too soon to say. As you know, each of the FDA divisions like to usetheir advisory panels when they feel they have a question that helps them think about issues. But we certainly don't know what [CDER] is thinking, at this point, about that -- about using a [B-pak].

Got it, thanks.

Thanks, Zarak.

Our next question comes from Josh Jennings of Cowen & Co. Please go ahead.

Thanks for taking the questions. Kevin, congrats on the appointment, and Carol, on the promotion.

Thank you.

And also on this -- opening up this PMA channel. First on the PMA submission for platelets, can you just talk about exactly what are you submitting? And just to review, I know Dr. Corash went over this on the call -- but is the Sprint trial data going to be included as long as the long-term vigilance data that you presented the FDA this week or last week?

Larry, do you handle that?

Yes, the Sprint data is our pivotal Phase 3 USclinical trial. It will also include, and FDA has already seen clinical trial reports for our Phase 3 Euro Spread trial that was conducted in Europe, and also a trial we did in Europe looking at transfusion of platelet components to work for six and seven days. Those are all part of the package. As are the both the Cerus' haemovigilant studies, the haemovigilance studies that have been conducted by the French Medicinal Authority, and also Swiss medic, and then a number of independent observational trials conducted in Switzerland by the Swiss Red Cross, in Germany by various blood centers, and in Sweden by other blood centers, and also nine years of experience in Belgium with Mont-Godinne Blood Center. So all of this will become part of the package.

Carol, you want to amplify?

No, I think that's what we should expect.

That's what we discussed with FDA. And that's what they would like to see.

Great. Can you give us any color on what got us over the hump -- or got you over the hump with the FDA, in terms of looking at the Sprint trial and the historic concerns about acute respiratory distress syndrome -- I know with such a low number, historically, in that data set. Was it the overwhelming body of evidence that is coming out of Europe? Or was there something else?

I think it is the data from Europe and particularly the data coming from regulatory authority haemovigilance programs. In France, haemovigilance is mandatory. All transfusions are reported, and they look at all adverse events in the first 24 hours after each transfusion. And the same is true in Switzerland. This is a very large body of data that we will never be able to achieve in a clinical trial setting. We are looking at more than 130,000 monitored transfusions.

Great. And have you had any recent discussions with USblood thinners about this PMAchannel opening up? Or there was some positive sentiment that -- the sentiment had shifted to positive, in terms of a channel potentially opening up. And have any of these US blood centers communicated their enthusiasm or optimism for INTERCEPT in the US,for platelet indication?

Quickly, we have actually been talking to a number of blood thinners about plasma and trying to get an understanding of how that product might be received and the operational considerations. Always in the context of those discussions, and we talked about 70% of the USblood supply in the last couple months, there has been a lot of enthusiasm about the possibility of platelet pathogen activation. That being said, this is the first we talked with anyone about the outcome of the meeting with the FDA on Tuesday. We have yet to have a discussion about the PMA pathway for platelets with anyone prior to this call.

I would add that, starting in July, there were a series of meetings on how to deal with bacterial contamination of platelet components and the observations that the current interventions have not resolved that problem. And a number of key opinion leaders from the transfusion medicine community have spoken out saying that pathogen inactivation would appear to be a reasonable step to take. They have been watching the European data. I think there is an appreciation. And the AABB standards now include the statement that pathogen inactivation or pathogen reduction can serve as a modality to meet their requirements for measures to limit the risk of bacterial contamination.

Excellent. And Kevin quickly, just in Q4, were there any revenue recognition issues that pushed revenues out into Q1? My understanding is you did receive that $700,000 benefit from Q3 getting pushed to Q4. Was there anything in Q4?

There was not. Q4 benefits from that $700,000.

And then just on guidance for 2013, if you look at the one-time contribution from the benefit you received in France with plant shutdowns, is there anyway to give an apples-to-apples impact in 2012? And then if you normalize that, where is the 16% to 21% growth guidance for 2013 would fall?

I can't speak to normalizing per the bump we received in early 2012 from the EFS plasma adoption. What we are looking at, as Kevin eluded to, is steady growth from existing customers and from new customers, roughly split 50/50. I think the guidance that we provided today, 16% to 21% in constant currency reflects that. I think we now have a history of giving guidance and meeting it. And we feel comfortable with these numbers.

Great, thanks a lot, guys. Congrats.

Thanks a lot. Appreciate it.

Our next question comes from [Klaus von Stutterheim], private investor. Please go ahead.

It is for Kevin. I think you sort of answered the question already. I was going to ask about expected cash burn for 2013.

Yes, Klaus, we are not giving formal guidance on cash burn. I think it is a function of top line revenue growth, and then getting the red cell programs, as well as the USplasma PMA process completed. And now there will be some incremental spend for USplatelets. We will continue to titrate our operating expense.

Great news, by the way.

Great, thank you.

(Operator Instructions). Our next question comes from George Zavoico of MLV and Company. Please go ahead.

Thank you. Hi, everyone. Larry, especially to you, congratulations. You waited a long time. You can go and have a couple glasses of champagne. This is absolutely fantastic, huge news.

Thanks.

Congratulations to everyone, a team effort for all of you.

It is a real team effort.

A couple questions, with USmarket now possibly opening up in 2015, what are you thinking in terms of manufacturing capacity for all of the disposable kits? USis a huge market and could open up rapidly, considering the new AABB guidelines and the B-pak concerns.

As you know, George, we currently manufacture out of a facility in France that is now owned by Fresenius, but formally, Fenwal. That plant has a lot of extra capacity right now and should be able to manage through increased demand over the next several years. We are also actively looking at other manufacturing opportunities throughout the globe. It is evident we need to have some sort of manufacturing capacity in Asia, ultimately to manufacture a product for the Japanese Red Cross, when and if that product is ever approved or deployed there.

I think what we really need to do is look at all of the different alternatives before us and factor in demand growth over the next several years. I think it is a function of making sure that we have the right strategy and then making sure that we can manufacture to the specifications of the various blood services that might choose to deploy this technology.

The sizes of the Japanese disposable kits are a little smaller. Is that correct?

Yes, they have a smaller platelet dose. And so there will have to be some modification to the existing INTERCEPT set.

It seems to me, relying -- well, apart from having different specifications, it seems to me that having redundancy in manufacturing would be a good thing anyway.

Indeed. That's part of our strategy for this year.

And a question for Larry and Carol, in terms of -- you were talking about the Phase 4, how different is that than what you might put in place and call haemovigilance anyway? What is the difference between the two?

Well, I think that it will be more structured in that we are going to be monitoring for specific safety events we know FDA has concern around, which will be focused on the pulmonary system. It will be certainly highly structured. And we will use a control group, because we believe that that's important. It will be more than one might do for passive types of haemovigilance, but more inline with the type of active haemovigilance data we have been able to collect in some of the European countries.

I see. Okay. And would this be on the scale, do you think, of what the FDA might have been asking you to do a few years ago, in terms of number of patients?

I think that one could certainly start from that point and consider that a reasonable approach.

So this is just going to be confirmation of what you have already provided them, just from haemovigilance studies conducted -- or haemovigilance, not studies, but just haemovigliance from Europe then, in a way?

We believe the data should be consistent. We think that the data coming out of Switzerland and France, in particular, for the end point of acute lung injury, which requires mechanical ventilation and assistance, is something clinicians do not miss in the first 24 hours after a transfusion. We think that we will see similar types of data, but we have to do the study.

Great. Well, thank you. And again, congratulations.

Thanks, George.

Our next question comes from Chris Raymond of Robert W. Baird. Please go ahead.

Yes, hi, thanks, guys. This is Blake in for Chris. Thanks for taking my question, and let me add my congrats on the great news. Can you remind us how big the USmarket is for platelets relative to Europe?

It is roughly about the same. And we don't have the latest data, because there is an annual survey that comes out every couple of years. I think it was supposed to be published at the end of 2012. And we are sort of waiting for it right now and we will provide it to you as soon as we have it. The most recent numbers were from 2009, is that right? And I think the numbers were around 2.4 million platelet doses a year from that. And of that about 90% are (inaudible) platelets.

Great. And then shifting gears here for a moment, sorry if I may have missed this, but could you remind us or tell us the breakdown between kit sales and eliminators in Q4?

Sure, Blake. Disposable kits were more than 90%.

Great.

Just over 90%.

And then so with your 2013 guidance, are we to assume there is any assumption embedded for additional illuminator sales in some of these newer geographies. Or is this all (inaudible)?

We expect that as new customers come online, they will needy illumination devices, and that the product mix will be roughly the same as what we experienced in the current quarter, and in fact, in prior quarters.

Great, thank you.

Thanks, Blake.

You have a follow-up from Zarak Khurshid of Wedbush Securities. Please go ahead.

Thanks for taking the follow-up, guys. Just curious for 2012, what was the split between platelets and plasma?

Roughly two-thirds platelets and one-third plasma.

Excellent. Thank you.

Thanks.

I'm showing no further questions at this time, and I would like to turn the conference back over to Mr. Obi Greenman for any closing remarks.

Thank you all for joining us today. We look forward to updating you again on our next call in late April. Thanks.

Ladies and gentlemen, this does conclude today's conference. You may all disconnect and have a wonderful day.