Enzo Biochem Inc (ENZ) 2004 Q1 法說會逐字稿

Good morning and welcome to the Enzo Biochem Inc. fiscal 2004 first-quarter operating results conference call. Except for historical information, the matters discussed on this conference call may be considered forward-looking statements within the meaning of section 27 A of the securities act of 1933 and as amended in section 21 E of the Securities Exchange Act of 1934 as amended. Such statements include decorations regarding the intents, beliefs or current expectations of the Company and its management. Investors are cautioned that any such forward looking statements are not guarantees of future performance and involve a number of risk and uncertainties that could materially affect actual results. The Company disclaims any obligations to update any forward looking statements as a result of developments occurring after the date of this conference call.

All participants have been placed on the listen only mode.

I will now turn the floor over to your host -- Mr. Barry Weiner. Mr. Weiner, the floor is yours.

Thank you. Good morning and thank you for joining us and welcome to the conference call for the first-quarter fiscal 2004.

This presentation will take on a little different approach from our previous ones. I will first present a review of the financial results and some of the achievements that the Company has had during the last quarter. We will then turn our focus to a presentation of some of the strategic initiatives that each of our three divisions is undertaking and then I will deliver some final remarks.

With me today is Dr. Dean Engelhardt -- Executive Vice President and Director of Research who will speak about Enzo Therapeutics and Mr. David Goldberg -- Senior Vice President of Enzo Clinical Labs who will discuss that division.

Our release concerning the results for the three months ended October 31, 2003 -- the first-quarter of fiscal 2004 -- was distributed late yesterday. I trust you have seen it.

The first-quarter was a pivotal quarter for Enzo in that we began the implementation of a comprehensive program, shifting the Company's Life Science marketing efforts direct to customer sales. And Clinical Labs moved to extend its sales reach as well into new geographic territories in New Jersey and expanded its marketing group and in-house testing menu while it remained focused on its core clientele.

And our Therapeutics group was extremely busy -- achieving approval to proceed into the next phase of the clinical trough for the treatment of HIV, completing the enrollment of the patients that are necessary to finish a Phase II double-blind study for the treatment of Crohn's Disease, identifying sites for a Phase II double-blind study for the treatment of hepatitis B virus and, most importantly, beginning to process for the first trial utilizing our new platform featuring gluco (indiscernible) theromide (ph) a small molecule believed to have an impact on human immune modulation.

First let's take a look at our financial performance for the quarter.

Total revenues for the quarter amounted to 10.3 million, as compared to 17.4 million in the period in the prior year. The revenue decline was primarily impacted by a decrease in research products' shift from the Life Sciences division offset by an increase in revenue from the Clinical Laboratory operation.

The results reflect the absence of shipments of research products by Enzo Life Sciences to a single customer -- Affymetrix -- that accounted for an initially strong order flow in the year ago fiscal first-quarter. As we have previously announced, we have terminated their nonexclusive contract with us and entered into a legal action regarding this contract, concerning the microwave array market.

Our Life Science revenues for the first fiscal quarter were comparable to the fourth quarter of fiscal year 2003 as we indicated in our year end conference call. As we move forward with the marketing programs which I will discuss in a bit we remain optimistic that on a sequential basis this revenue number will strengthen.

The Company's gross profit margins for the first-quarter declined by 6.8 percent to 73.7 percent from 80.5 percent as compared to last year's same quarter.

We experienced a significant revenue decline this quarter it yet we showed only a 1 cent share loss for the quarter as compared to a 12 cent profit in the prior year. In the quarter, most importantly, was cash flow positive. Expenses at Enzo Biochem pretty much remained in line with year ago levels, R&D expenses were up slightly, SG&A declined, our expenditures for legal increased by roughly 20 percent to $1 million.

This is a necessity, we believe, because in order to protect our proprietary positions we view a critical variable. We view it as an investment since we're confident that not only is it important but that it will also pay off when these matters are adjudicated.

As I mentioned, importantly, cash flow continued positive in the fiscal first-quarter. And cash and marketable securities compared to the same period one year ago increased by over $5 million to 7.3 percent.

Working capital was a solid $97 million and our cash position including cash and cash equivalents or (ph) marketable securities 78.6 million for providing the Company with very strong liquidity. Our balance sheet in other words is in excellent shape with no debt and roughly $109 million of equity.

Not many companies in our industry can show such an excellent financial position and one where cash continues to be generated despite our Company's broad ongoing product development efforts, our expanding marketing programs, and sales staff growth.

We first would like to start with a review of Enzo Clinical Labs quarterly performance and I would like to have David Goldberg deliver some comments on that area.

Thank you, Barry, and good morning. Enzo Clinical Labs had a good first fiscal quarter. Our revenues rose by 8 percent to $7.5 million while gross margins approached 70 percent. We continue to produce margins that are at the highest end of our peer group. We are consistently able to accomplish this in a time of downward pressure on reimbursements on third party pay orders, because we can take advantage of the excellent financial condition of Enzo Biochem.

With the Company's positive cash flow and strong debt free balance sheet, our management has been able to negotiate favorable terms for the purchase of laboratory testing equipment, reagents, and supplies. Another factor to consider here is our constant review of our in-house testing menu. We developed a program more than a year ago whereby we consistently analyzed these specific laboratory assays that we performed (indiscernible) against those that we sent to outside reference laboratories (indiscernible) decision if you will.

When our volume passes a given threshold (indiscernible) an outside lab into our own facility. Even though we may be decreasing the volume of what we sent out we are still able to receive competitive pricing for the reasons I eluded to before. In this way we're able to enjoy the best of both worlds.

During this quarter, Enzo Clinical Labs pushed forward with its renewed and continuing focus on our core clientele with office-based position in the New York metropolitan area. As I will comment on in a moment we have just completed a successful initiative in the marketing we carry out directed towards them.

These clients -- while more demanding than many others -- also afford Enzo the highest profit position and we will continue to make the strategic decisions necessary to grow in this area.

Operating profits at the labs for the quarter continue to be satisfactory, despite increased expenses in our marketing laboratory information and logistics department as we continue to beef up our infrastructure. And most significantly, we have just recently completed a successful campaign, whereby we added a number of highly experienced senior personnel to our sales and marketing.

We're very optimistic that these individuals who've spent the bulk of their careers marketing to that core office-based position clientele that we covet will allow us to make further increase in the top and bottom line numbers.

As we look towards the future of Enzo Clinical Labs, we believe we are positioned well to continue in our important role as part of the Enzo Biochem Family of Companies. As Barry has indicated to you previously, Enzo Clinical Labs allows Enzo Biochem to continue to gain real world experience in a high-volume 24/7 healthcare business. This experience is valuable not only as we look forward to potential diagnostic and therapeutic ventures but also to Enzo Life Sciences as well.

The Clinical Lab industry is a sales driven one. We have enjoyed the success that we have at the labs due in no small part to the experienced sales and marketing group we have assembled. As we move forward we will continue to add to this group as opportunities present themselves.

We believe this approach is the one that will generate the highest returns for our shareholders. Barry.

Thanks, David. The lab issue provides infrastructure for Enzo as well as giving the Company a source of cash flow. Enzo Clinical Labs has been a valuable aid in helping the therapeutic's group with patient monitoring and debt analysis and, as we move forward, we believe with this enhanced marketing capability, we have some very optimistic issues in front of us.

We look forward to announcing improvements in our results, transmission, specimen, tracking, billing capabilities to name a few -- all of which are designed to augment and to expand our commitment to building this business.

I'd like to now turn to the Life Sciences division. As we indicated in our last conference call in October, we are in the midst of a substantial expansion of our marketing efforts there as well. We have been able to attract a large number of experienced candidates for direct sales positions and expect to cover the majority of U.S. with our own employees shortly.

Enzo has committed to attend a significant number of tradeshows, meetings. We are becoming exhibitors and delegates at various scientific seminars. And in addition we're finalizing a comprehensive program that will target key decision-makers at the major genetic centers around the world. This program includes such items as strategic and placed advertisements in some of the leading trade publications and application at so-called white papers where our customers -- some of whom are leaders in their fields -- publish technique oriented articles that we feel other scientists will use as references.

While we believe our strategy is leading us in the right direction we know that it will take some time for our revenues to recover. Additionally while I cannot tell you with certainty when we will once again achieve these levels we have had in the early part of this fiscal year, what I can tell you is that the response from our users has been excellent. We have spent a considerable effort, already, in contacting end uses of our products and continue to ascertain the research product needs and directions as they move forward.

And we are committed to providing them with the most comprehensive systems and products to aid in their research efforts.

Additionally, many of our customers have expressed excitement over the new systems we will be introducing this year. We are about to launch a line of products that will allow researchers to substantially increase the amount of high-quality DNA that they would use in their research. One would why is this important? If you talk to scientists in the field of genomic analysis, one of their major concern is the amount of material necessary for completing genetic analysis experiments.

Very often, these researchers are working with minute amounts of tissue, especially when they are working with a tissue that is not available in high abundance or one that has been microdissected. This second instant is of particular importance since there has been major strides recently made in the field of microdissection. As a point of information microdissection is a procedure using a very precise series of tools capable of segregating out as small as a single cell.

There is, therefore, a growing need for these scientists to be able to utilize methods for amplifying their target materials.

There are currently on a market commercially available kits made by a number of other companies but many of them have significant technical limitations. Most of these kits utilize so-called random primers which cannot address high sensitivity applications that are sought after by the marketplace. Random primers are sequences of DNA that are used to jumpstart the amplification process where subsequent (indiscernible) reaction completes the synthesis of the final product used in an experiment. It is widely believed in the scientific community that the use of these primers generates an inferior final product that adversely affects the results of a genetic experiment.

This drawback is intensified as multiple rounds of amplification are employed, therefore compounding the formation of a poor quality and product.

Enzo, by contrast, has achieved a major technical milestone like overcoming many of these limitations. Our scientists have developed a unique methodology whereby random primers are not employed. This allows researchers to proceed with a number of amplification rounds with the assurance that integrity of the final product used in the genetic analysis experiment is extremely high.

Consequently, this improved method complements the use of state of the art microdissection techniques.

Our business development efforts (indiscernible) have verified that large pharmaceutical companies may reap the benefits of our product, because it could allow them to conserve their rear samples used in drug discovery, validation, and clinical trials. We will be introducing these important new line extensions to our BioArray line during the next quarter.

Enzo Life Sciences is also planning to introduce new additions to its Genebene (ph) line of products for glass slide spotted arrays and thus, proprietary technology is leading to a comprehensive product offering of labeling alternatives, which will allow Enzo to capture a larger share of the genetic analysis research market.

As we bring out our new products, we believe that the expanded marketing infrastructure we're creating will allow us to more successfully capture market share. Additionally since many of these products are complementary to ones already in our catalog they will be sold to the same customers providing a synergistic effect to our sales and marketing efforts.

We are committed to transforming our Life Sciences division. We are fortunate that we have a portfolio of novel technologies and products that are being developed to aid the genomics marketplace. We are focusing and investing resources to understand new markets and emerging technology and to develop technologies that address these markets. Our product portfolio is being transformed into one that is highly focused on the highest potential business and we're stepping up our activity, looking at in licensing, out licensing and collaborations as vehicles to produce incrementals in this revenue and we're looking at programs to better leverage our extremely encompassing intellectual property estate.

In short, we're making intelligent and measured investments to build our marketing, research, and manufacturing resources and to transform our wealth of technology into commercial reality. These efforts in our Life Science divisions are not diminishing our activity in applying our innovative technologies into the clinical diagnostics market.

We have received a notice of allowance for a patent protecting the proprietary aspects of our unique approach in the development of a diagnostic platform and we continue to beta test our platform with positive results and hope to be able to speak about our technological and commercial progress in the very near future.

This platform, as you may recall, utilizes isothermal non PCR based amplification to produce sufficient DNA, so that a diagnosis -- say on bacterial specimens -- may be made in an hour or so instead of several days. We're committed to exploring this technology because of the changing face of the diagnostics marketplace.

If you follow this market, you may be aware of the myriad of challenges that this field has undergone recently. What appears to have emerged is a segment of the diagnostic marketplace that is placing an increasing emphasis on molecular testing.

It is estimated that the growth rate for gene based assays is at least several times the rate of conventional tests. We have seen this in our own clinical lab, moreover, the type reimbursement environment that was discussed earlier is driving this industry not only to develop more cost-effective techniques but those that have substantial enhancements as well.

Because development costs are high and appropriate regulatory approval's a hurdle the environment favors companies that develop platforms, rather than individual products. Since these development costs can be amortized over a number of like products rather than being allocated only to one. As a point in reference, this is the tact we have taken in our Therapeutics program with respect to our immune modulation products. As Dean will discuss shortly we have several products utilizing the same basic platform permanently in clinical trials.

Our diagnostic platform fits a similar bill. We envision our technology to be utilized for a number of different infectious agents, sample types and assays. As we proceed with refinement of our diagnostics platform, we realize that the development and the opportunities of this particular approach are many.

Moreover, the adoption of any one single molecular-based assay can be slowed not only by payment issues but by clinician issues as well. The physicians are not convinced about the benefits of a given test -- they simply will not order it. Our experience in platform development allows us to acquire technology to multiple targets rather than a single one. In this way we believe we have positioned our Company in the best possible position to take advantage of specific diagnostic opportunities in front of us and we are moving forward aggressively.

Turning for a moment to Enzo Therapeutics, I will touch briefly on some of the exciting activities in the division and leave most of the comments to Dean.

Our potential new therapeutic products remain the greatest value drivers to our Company. The Company's work in therapeutics has proved extremely well. Our Phase II double-blind study of our proprietary immune regulation medicine for Crohn's Disease is completely enrolled and progressing. (indiscernible) patient is treated for 15 weeks and their progress followed for another 12 weeks we would expect to have the early indication sometime during the first quarter of next year, allowing time for the data to be collected and evaluated.

The Phase I/II study of the Stealth Vector HGTV43 gene construct as we announced recently will get underway soon at the New York Presbyterian Hospital. Training of the staff is underway and it is our expectation that this clinical trial will be initiated shortly after the new year.

The objective of this study will be to expand the number of engineered cells containing anti-HIV genes in order to achieve a therapeutic effect -- mainly increasing resistance to HIV.

The Phase I trial at the University of California in San Francisco demonstrated the safety of HGTV43 and the ability of the engineered cells to survive and function in vivo. It also showed that anti-HIV-1 genes could successfully be inserted into stem cells and that the engineered stem cells were able to survive and produce CD4+ cell progeny containing functioning antisense genes for as long as four years to date.

It is noteworthy, too, that of the subjects in the trial none has encountered a treatment related (indiscernible) serious event and that they continue to function well into their everyday routines which might otherwise may not have been the case.

The sad fact is that HIV infection has taken on new growth in the United States and it does continue to be a major problem worldwide with limited long-term options. Hard or highly active antiviral therapy, cocktails produced inhibitors have limited effectiveness but an increasing number of patients with long-term infections are becoming resistant to these drugs. We're hopeful that our approach will result in a much-needed option in the treatment of HIV infection.

We are also moving forward and are planning for a double blind study of the HTH 99 -- our medicine for hepatitis B virus, associated chronic hepatitis B. We have identified sites where we expect the trial would be conducted. We have been engaged in a process of manufacturing material for this particular trial. Before we launch the test there are a variety of manufacturing protocols that must be completed and they are all in process.

Finally, we have filed an application in Israel for a Phase I study of one of our newest platforms discussed in October at the American Association for the study of liver disease's study and annual meeting in Boston. Specifically it involves utilization of the molecule (indiscernible) in treating people with chronic hepatitis C infection. It is our belief that this new platform offers a significant potential for the treatment of hepatitis C and may provide us with yet another treatment of modality for this disease.

I think on that note I'd like to turn this over to Dr. Engelhardt for some comments on specifics of what is going on in the therapeutic area.

Thanks, Barry. Actually, I was interested in your comments about the Life Sciences. And, I would like to make two quick points before I go on to my presentation.

No. 1, we have an amplification system which we've just introduced that gives an amplification of an initial messenger RNA by in excess of 10,000 to sometimes up to 100,000 fold and what this means is we can now assay the number of messenger RNAs and the type of messenger RNAs in as little as 10 cells and of course our goal is to get to one cell and we have every expectation to reach that. When you do a messenger analysis in a tissue block, you may have 100,000 cells and each one of those cells is slightly different. And you will get an amalgam -- you will get a guess as to what any individual cell is doing and since the cell is the center of activity of life, you really want to know what is happening in the cell that is of interest to you.

So I believe we have made a very very important germinal advance in introducing this product in that it will now allow us to look at individual cells or into small group of cells and hopefully soon individual cells and what messenger RNA activity is taking place and how you can change that with development and with testing of medicine. So I think this is an extremely important advance that we just introduced.

And very proud of Enzo's scientific staff that has done the work to do that.

The second -- Barry mentioned two amplifications and you have to distinguish them. They're quite separate.

Second amplification -- the amplification is very much like PCR, the famous amplification of DNA. Our amplification -- we will amplify a single gene over a millionfold and up to 10 millionfold. Again, starting with a tiny amount of DNA, we can amplify the DNA up to the point where we have (indiscernible) metric in measurable amounts and we do this faster, cheaper, and more specifically than PCR because of our new isothermal systems. So we have two different amplifications -- both of them are terribly important. Both of them have tremendous commercial advantages and will contribute going forward.

Let me move onto therapeutics. We have two platforms in therapeutics that are in clinical trials right now. The first platform is gene transfer. We are putting new genes into cells and then putting those cells back into our subjects in the clinical trial. The genes that we're putting back into the humans -- human beings are genes that in this case block the growth of HIV-1 virus. Or HIV-1.

These genes we're putting into the blood stem cells and these are the parent of all the blood cells, all the white blood cells -- actually all the red blood cells, too, and what we're finding is that when we put these genes in they survive. In three of our subjects, now, we're over four years and these genes are still there and still functioning. And the cells that have these genes, therefore, have anti HIV and anti (indiscernible) RNA present which has been shown to block HIV growth.

We now are starting Phase I/II trial at Cornell Wilde (ph) Medical Center and the purpose of this trial is to increase the number of these cells. We're using two new techniques which are both known to increase in grafting of cells brought in from the outside and also to increase the proportion of stem cells brought in from the outside. And our expectation for this clinical trial is to get enough P4 or CD4+ cells which are the target cells for HIV infection resistant -- containing these resistant genes that will be able to reproduce an immune system within the immune system being reproduced from HIV resistant cells. And we're very optimistic about this trial and as Barry said, we're going to initiate this trial early next week, next month -- excuse me -- and we're going to move forward as quickly and expeditiously as possible.

A second general platform -- so gene transfer is a general platform, we're not limited to HIV. We have other candidates that are identified that we will move ahead with in due time.

A second platform that we're working with is an equally exciting platform in which we've managed to turn off the production of individual immune responses. There are a number of immune responses -- I don't know the exact number in any individual. But it can be upped to hundreds of thousands of individual immune responses. We can go in like a razor, like a laser -- we can go in and turn off one or a limited number of these immune responses without generally suppressing overall immune activity in the experimental animals and we're now testing to see if we can do the same in humans.

This makes this platform -- which I call immune regulation -- this makes this platform a general platform to manage any immune mediated disorder, including immune-mediated diseases, autoimmune diseases, diseases that result from viral infections even issues as -- for example Graft versus Host response when there is a transplant, there's an immune response which can be managed at least in experimental animals by this general platform.

We've been working in this area now a couple of years and we have -- one of our study medicines in Phase II clinical trial and we've closed enrollment on that trial, meaning all the patients that we had projected that we were going to put into the trial have been put into the trial. So now the trial is up and running full force and as Barry mentioned, we anticipate to have preliminary data on this trial out during the first quarter of next calendar year.

And we're very optimistic -- this trial, by the way, is managing an immune mediated disorder called Crohn's Disease, which is an inflammatory bowel disorder. The cause is not quite well -- is not quite perfectly understood but it has something to do with an immune mediated attack caused by either the contents of the gut or by the body itself.

This attack is on the lining of the alimentary canal, that can be anywhere from your mouth down to the other side and the attack is fairly substantial. It can leave -- it can produce lesions that will go all the way through this site of the alimentary canal that is under attack. Will cause bleeding, will cause diarrhea, will cause extreme discomfort and may actually lead to having to have certain portions of the bowel removed.

So it is an extremely serious medical condition. And we have finished the Phase I open label trial and reported the results. In that trial, we had seven out of our 10 patients at the endpoint, we're showing the clinical effect and during the course of the trial, the other three patients -- or subjects, excuse me - showed clinical effect so we're very optimistic about this trial as it goes forward.

We also have a Phase II trial. We have completed a Phase II trial using the same immune regulatory strategy to manage HBV -- hepatitis B virus -- associated with chronic active hepatitis. Again this is an immune attack correlated with the infection by HBV -- an immune attack on the liver. And it can result in liver failure and it is associated with liver cancer. We have stopped -- we have trial sites identified and we have been going through the process of bringing the manufacturing of our trial medicines of our study drug into Enzo so that we will have better control over the price, the cost and the accessibility of this medicine and I can say over the recent past we have in fact improved the manufacturing cycle saving -- resulting in a tenfold -- tenfold -- saving in the cost of our cost of goods that we project will be extremely manageable even for use in Third World countries and we're very pleased with that. We're now the process of setting up manufacturing with our new manufacturing device.

As soon as our manufacturing is up and running, we will initiate -- we will move back into the cycle leading to the double-blind Phase II trial at multi-sites. The sites have been identified at this point. In preclinical trial, not only do we have Graft versus Host using immune regulation data -- these are data that are published -- we also have data on (indiscernible) carcinoma and the management which is also has an immune mediated component and leading to the promulgation of the cancer.

And we also have ulcerative colitis on our scope as one of the products we want to develop into an immune-regulated product. And interestingly enough, while we have a clinical trial on gene transfer with HIV, HIV is also a candidate for immune regulation, since there is a substantial literature that verifies that HIV is in part an immune mediated disorder -- HIV infection and progression to AIDS is in part an immune mediated disorder.

Most interestingly, we have recently initiated development of products in the third area, not in gene transfer, and not in immune regulation. This area I am calling immune potentiation. We have discovered in patients and this is how I reported in the literature -- we have discovered in patients with Gauche's (ph) Syndrome that in fact, if they are also infected with HCV -- hepatitis C virus -- the HCV associated hepatitis is minimized and the minimization is correlated pretty closely with Gauche's Disease. Gauche's Disease is characterized by the absence of an enzyme that leads to the accumulation of an intermediate metabolite called glucosealcyromite (ph) which is a lipid. It is usually found in the membrane of cells in muscles and liver. It also turns out to be a secondary messenger, which potentiates one of the early phases of the immune response and acts as a -- like a general driving immune responses in one or another particular direction which is why I'm calling this an immune potentiation strategy.

And as you can see, we understand this also has brought an applicability to directing those immune mediated disorders that are responsive to this medication. We have, again, animal model studies. Many reported in Boston recently at the meeting that Barry referred to. Studies for example on a model of (indiscernible) hepatitis B induced in mice.

We managed to decrease or dominate the (indiscernible) failure, acute hepatic failure brought on in experimental animal model. We also have, of course, a model of Crohn's Disease -- experimental allergic colitis which we blocked by treatment -- pretreatment and on current treatment with GC, glucosealcyromite (ph) and finally and unusually, the thing that has us quite interested, there is a model of Type II diabetes. The mice are called OB-OB (ph) mice. They have a particular mutation that makes them to be grossly overweight -- OB, therefore, stands for obese. And we have found that by treatment with our potentiating molecule, we have eliminated the intolerance of glucose which is in a way characteristic -- let me say that again.

If a person has Type II diabetes and they take a large dose of glucose, they go through a period where glucose in the blood is increased and it's not handled very well. A normal person doesn't have this problem. The OB-OB mice also have a glucose intolerance and we have eliminated this glucose intolerance by treating -- treatment with GC. So we have, we think, a third general platform immune potentiation which has just recently come up. These data are all within the year and we're very excited to move forward and we have an application in now for approval to move forward in human subjects in the management of hepatitis C virus associated with chronic active hepatitis and we're in the middle of the approval process for this product.

In general, I want to make this point. These are all extremely good products and what we're doing and continuing to do is to increase our pipeline with products and move them through the pipeline as quickly as possible. We now have two and, hopefully, within a reasonable period of time, three products in a Phase II trial. We have many products that are lined up and ready to go for Phase I, based on our animal model studies and the GC has only enriched our product line.

I think we have an extremely viable developmental company here which has a good chance of coming up with many different therapeutic products -- all of them novel, all of them general and all of them capable of making Enzo the central company in the formation of a new type of medicine.

Thank you, Dean. As you can see, there is a rather full pipeline in the therapeutic area and the work that has transpired there has really been extraordinary.

Turning to matters of corporate oversight, I should note that at the annual meeting next month Stan Worshovsky (ph) will not be standing for reelection as a director. It is with regret that Stan will not stand for reelection. This became due to the New York Stock Exchange rules that were just approved. Stan has been immensely helpful in the time he served on the Board and he has made significant contribution. We consider him not only a colleague and fellow Board member but a friend as well. We're truly sorry to lose his insight on the Board but we hope to work with him in other capacities.

In conclusion, I'd like to thank you for joining with us in this teleconference. I hope you have found it informative. As you can see, we have taken some dramatic steps in both our Life Sciences and Clinical Lab divisions to further expand and improve our marketing programs. We've built a company with a very solid foundation. Today, we are bringing in more talent to support our expansion, our pipeline is expanding dramatically. We have a number of proven valuable technologies and we continue to innovate. And we have a strong target of unserved markets that we think we can produce products that will be beneficial.

From our remarks, you know, we're highly optimistic regarding our Company's potential. We're very focused on achieving our goals. We want to thank all of the shareholders that have been extraordinary supporters to us. And we look forward to the annual meeting which is coming up in January to continue our dialogue and have more interesting news to report. Thank you and have a good day.

A replay of this broadcast will be available until Sunday, December 28th, at 12 midnight. You may access this replay by dialing 1-877-519-4471. The pin number is 4368231. International callers can dial 1-973-341-3080 and use the same pin number. This replay is also available over the Internet at www.Vcall.com. This concludes today's teleconference. You may disconnect your lines at this time and have a wonderful day.