Enzo Biochem Inc (ENZ) 2015 Q2 法說會逐字稿

Good morning and welcome to the Enzo Biochem, Inc. second-quarter 2015 operating results conference call. I will now read the Company's safe harbor statement.

Except for historical information, the matters discussed in this news release may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934 as amended.

Such statements, including declarations regarding the intent, beliefs, or current expectations of the Company and its management, including those related to cash flow, gross margin, revenues, and expenses, are dependent on a number of factors outside of the control of the Company, including, inter alia, the market for the Company's products and services; cost of goods and services; other expenses; government regulations; litigations; and general business conditions. See risk factors in the Company's Form 10-K for the fiscal year ended July 31, 2014.

Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties that could materially affect actual results. The Company disclaims any obligations to update any forward-looking statement as a result of developments occurring after the date of this press release.

During this conference call, the Company may refer to the EBITDA, a non-GAAP measure. EBITDA is not and should not be considered an alternative to net loss, loss from operations, or any other measure for determining operating performance. The Company has provided a reconciliation of the difference to GAAP on its website, www.Enzo.com, and in the press release issued last night.

Our speaker today is Barry Weiner, President. At this time, all participants have been placed on a listen-only mode and the floor will be open for questions and comments following the presentation.

I would now like to turn the floor over to our host. Mr. Weiner, the floor is yours.

Thank you. Good morning and thank you for joining us today. With me is Jim O'Brien, our Senior Vice President of Finance, and David Goldberg, our Vice President of Corporate Development.

Our press release regarding the fiscal year 2015 second-quarter results was distributed last night and is available on Enzo.com if you have not seen it. Let me begin my remarks by providing you with some financial highlights for the quarter that ended January 31, 2015.

Total revenues increased 1% over the prior year, despite currency impacts at life sciences and reduced licensing fees in royalties. The clinical laboratory saw increased revenues by 6% year-over-year to $14.7 million, despite adverse weather experienced in January as we experienced throughout the Northeast. The effects of the weather also were experienced in February, but we are now seeing an increase in activity as the weather improves here.

Life sciences product revenue was lower by roughly $300,000 as the segment was impacted by weak currencies in Europe, particularly the euro and Swiss franc. Licensing fees and royalties were also lower by about $400,000 from the prior year. Nevertheless, both the clinical lab and life science segments showed positive EBITDA, which underscores our success in building a strong, efficient operating platform upon which we will grow.

Turning to the operations specifically, I will update the progress being made on several core strategic programs. For one thing, we continue our program to transform Enzo into a provider of higher-margin products and services. In so doing, we are seeing operating synergies as the Company's lab and life sciences units evolve into an integrated operating entity.

Underpinning this strategy is the developing and commercialization of our proprietary platform technologies into products that address the rapidly changing healthcare field. This is becoming increasingly clear in the direction of our operating results, on which I will have more to say shortly, as well as in the press release distributed earlier this morning announcing the approval by the New York State Department of Health regarding the first product from our new FlowScript platform.

This approval of our HPV E6/E7 RNA expression assay is a milestone for Enzo, since in less than two years we have been able to take an idea from concept to product and open a new channel to the $1 billion-plus cervical cancer testing market. This resulted from the efforts of our translational diagnostics group, which consists of research professionals experienced in product development; optimization and assay validation, among other core competencies; working closely with key industry leaders across the clinical and scientific spectrum to produce an assay that can more effectively monitor higher risk cervical cancer patients.

We presented this product at an international conference on lower genital tract pathology in Rome last week and it received a very enthusiastic reaction.

The FlowScript assay will be launched forthwith through Enzo's clinical lab for marketing to physicians and other clinical laboratories. Additionally, Enzo life sciences will soon market relevant reagents to other companies. The assay examines the levels of two oncogenes that are up-regulated, or turned on, at a relatively high level in cells having a greater chance of progression to cancer.

It has been reported that more than 70% of HPV high risk, positive infections spontaneously regress and thus do not progress toward cancer. Our assay can provide physicians with a tool to aid them in identifying those patients where the regression rate might be less and the probability greater. Importantly, too, we created an assay t with less hands-on time than other expression-based assays, and one where we have reduced the tendency to get variable results depending on the test's operator, which has been an issue with certain flow-based tests.

The assay can also be performed on a variety of sample collection types. It makes it applicable to a very broad range of specimens.

As we have indicated, our HPV E6/E7 assay is the first product that has been developed from the FlowScript platform. Industry sources currently estimate the global flow cytometry market to be in excess of $3 billion. We believe that our platform may be able to open this procedure to a use of a wider array of analytes or clinical specimens. For example, our work on examining the levels of expression of these specific oncogenes suggests it could lead to the development of other tests that measure genetic activity, as opposed to identifying the mere presence of the genes themselves for such analytes as markers of the immune state of an individual or specific cancers.

In this manner, we are able to examine both the phenotype and the genotype of a sample simultaneously with analyzing each and every cell in that sample. Moreover, the platform design is flexible enough to easily adapt to the study of new biomarkers. This will ensure that Enzo will be able to adapt to this new and changing environment in healthcare diagnostics.

On a broader scale, our FlowScript platform fits into the overarching development of a strategy that we are employing that uses our technology to create platforms that will lead to products that will help indentify biological analytes. Many of our core products are utilized in precisely this manner, whether examining the function of a given gene, the quantity of a protein, the functioning of an organelle, or the presence of a particular infectious agent.

A key asset at Enzo, which is evidenced by our FlowScript achievement, has been our ability to take a product idea from conception, move it to the earliest prototypes through the various stages of the development process, and, not least, deal with issues such as how to get adequately reimbursed for performing tests based on these products. Our key platforms are primarily targeted at the molecular diagnostics market, which is the fastest-growing sector of the clinical market. It is estimated to be growing at approximately 10% a year.

It is also a market that despite increasing demand, improving utility remains under constant downward pricing pressure from third-party payers. These forces have resulted in challenges that have caused tension between diagnostic suppliers and their laboratory customers. One where the suppliers apparently are not willing or able to reduce their pricing, despite the reduction in reimbursement that the lab customers are experiencing in their margins.

It is this setting that is generating opportunity for us at Enzo. We are pleased with the relatively rapid approval of FlowScript and are optimistic that we will see additional approvals for other proprietary assays as well in the near future.

Let me illustrate our strategy further with a bit of a discussion on our other key platform, AmpiProbe. The technology on which it is based evolved from a multiyear research and development program involving both Enzo Clinical Labs and Enzo Life Sciences. AmpiProbe is a target amplification platform that will allow a simpler, less costly, and more convenient way to amplify and detect nucleic acids or genetic material in a variety of sample forms.

We believe that with AmpiProbe -- which is now undergoing validation for New York State approval, and once received we expect to as well submit for CE Mark and, ultimately, FDA clearance -- we have a product line that can address the market's growing and changing needs. Assays developed using this technology should allow for substantial savings to patients, labs, and subsequently, insurance providers.

Additionally, because of our experience in the clinical lab space, we will assure that products emanating from this platform will be formatted in a way that allows them to fit into our customers' regular workflow. And because these products allow multiple tests to run from a single clinical specimen, they will increase convenience to the ordering physician and their patients and will reduce the need for patients to return for additional visits if you have indiscriminate diagnostic results.

Our platforms should provide clinical laboratories with the opportunity to materially improve their margins. Clinical labs will be able to obtain Enzo's cost-effective reagents produced under a tight quality control to validate their own assets on any number of open platforms. Alternatively, they will be able to utilize the reference services of our clinical laboratory.

Our goal in the development of products and services using this novel technology is to reduce the price of performing such tests to the level where laboratories can offer them, whether developing them in-house or utilizing Enzo as a reference laboratory, at more acceptable profit margins. This would make molecular testing a profit center for many small- to medium-sized academic and commercial laboratories that now run such tests at a loss or do not run them at all. We believe that opening up such testing to small- and medium-sized labs, whether hospital branded or commercial, will allow the prompt expansion of their test menus without the need for potentially onerous capital commitments.

Nor will this availability be lost on third-party commercial payers, who are seeing their costs increase along with the increasing proliferation of molecular diagnostic testing. These organizations are keenly aware of the importance of molecular diagnostics and the vital clinical and treatment decisions that derive from them. We are engaging some of the largest commercial payers as a core strategy since we believe that we -- as we introduce new products to the marketplace they will recognize their value in the economics of their offering.

Our approach to the market will allow us to capitalize on the successful development of a range of products based on these technology platforms for analyzing an increasing number of diseases, a development that is only possible because of the nature of our coordinated infrastructure. Our translational teams are working at developing an extensive pipeline of products and services based on both AmpiProbe and the FlowScript platforms, including panels for both infectious and sexually-transmitted diseases related to women's health, general infectious diseases and those potentially related to cancer, and those that are both diagnostic and prognostic. Our first women's health infectious disease panel will contain more than 10 different organisms commonly linked to women's health issues.

I would like to turn to a little more detailed discussion of our second-quarter financial results now. As we reported yesterday, net revenues for the January 31, 2015, quarter were $23.1 million versus the prior year of $22.9 million, up about $200,000. Service revenues at clinical labs were a second-quarter record of $14.7 million versus $13.8 million in 2014. That's up about $900,000, or 6%.

This revenue is achieved as a result of the ongoing shift of our business mix to higher-value molecular testing and despite what we estimate to be $300,000 in lost revenue due to the severe winter weather in the Northeast in January. Additionally, gross margins at the lab improved to 37%. That's 400 basis points over the same period in the prior year.

Product sales at life sciences were $7.7 million. This is versus $8.1 million last year. This reflects a decrease of about $300,000, which is virtually the result of the weakness of the euro and Swiss franc.

Royalty income, which is separate from product revenues, was reduced by about $400,000 due to lower sales of covered products. Despite these factors, life sciences' operating income was in excess of $1.3 million, which was unchanged from last year, reflecting the continuing drive to both higher-margin products and improving operational efficiencies.

Companywide gross margins improved to $10 million from $9.8 million a year ago, an increase of approximately 3%, and gross profit remained at a solid 43%, despite the currency and royalty impact I just referred to. Operating expenses for the quarter, which included $2.8 million of legal costs, an increase of $1.3 million from the year ago, rose 2%. For the second quarter the earnings per share loss was unchanged at $0.09 per share and our operating loss rose about $300,000 to about $3.9 million.

For the six months, revenues increased to $47.9 million, a 2% increase, with gross margins up by 3% to about $21 million. Gross profit improved by 100 basis points to 44%. Legal expenses rose 83% to $5.3 million and our operating loss was about $7 million, up from $6.6 million in 2014.

As noted earlier, both the clinical lab and the life sciences segments reported positive EBITDA for the quarter. On a consolidated basis, Enzo would have reported near breakeven even EBITDA results, but for much higher legal costs, which is intrinsic to our determination to protect our patent estate and the foreign currency effects.

I would refer you to the tables that were attached to last night's press release, which includes reconciliation tables to GAAP to non-GAAP net income and loss, and EBITDA to adjusted EBITDA. Our balance sheet remains satisfactory. Cash on hand at quarter's end stood at $15.3 million, while working capital was $14.3 million.

Cash flow used in operations during the quarter was $3.7 million and, excluding legal, would have been a positive $300,000. Sequentially, it is interesting to note that positive cash flow from operations from labs and life sciences was $1.5 million for the quarter and $2.6 million for the six-month period. Our financial position remains sufficiently healthy to allow us to continue to invest in growing the business and engaging in product development towards further expansion.

Our revolving credit line balance was $3 million, unchanged from the beginning of this fiscal year. This vehicle provides additional low-cost financial flexibility to support our growth initiatives.

As for legal expenses, these represent an important investment as we continue to seek to protect and obtain fair value for our intellectual property. These expenses represent the costs associated with numerous depositions and other expenses in the 11 Delaware cases, as well as costs associated with our remaining New York litigations. Most of the Delaware-related deposition activity has wrapped up, but there remains ongoing pretrial activity as we move towards what we hope will be favorable outcomes.

Additionally, we are still awaiting a decision from the US Court of Appeals regarding the $60 million-plus judgment awarded in a jury trial regarding our patent infringement case against life technologies. We are hopeful that this case will be resolved favorably in the coming months.

Before I end my remarks and open the call to questions, I would like to take this opportunity to add just a few other comments about our business strategy. As evidenced by our FlowScript advancements, as well as the internal progress we have made on AmpiProbe, Enzo is utilizing our proprietary technology to increase the availability of products and services to the marketplace in a manner that not only allows labs to increase their menus, but will also allow them to do so at acceptable margins.

The continuing third-party reimbursement pressure that laboratory providers have and will continue to endure has become an opportunity for Enzo to offer solutions that can easily be folded into most current lab operations. We continue to expand our intellectual property estate, which underscores this technology portfolio that has been built up over our more than three decades history of our company and today remains one of our core assets.

It has been at the heart of a number of products we have developed over the years, but the fact that we have initiated legal actions against various companies for infringement of our patents and the substantial verdict handed down by the jury in Connecticut, as well as other settlements we announced last year, attests, we believe, to the value of this asset.

To sum up, we are continuing to drive Enzo to become an integrated diagnostics and service provider using proprietary technology to address the dynamic, challenging, and evolving healthcare market. We are accomplishing this while employing key potentially disruptive platforms as a cornerstone of business strategy to meet the challenges of the changing laboratory economic environment.

These platforms, it should be noted, have utility beyond human clinical diagnostics. As an example, the increased sensitivity of our AmpiProbe platform that it has demonstrated may have utility in such areas as biodefense, where it is critical to be able to identify minute quantities of a specific biological agent, while simultaneously being able to discriminate against nonthreatening forms of these organisms.

There may also be applications in the agricultural field to test for safety of food and water, and there may even be utility for such products in the veterinary diagnostics market, where the improved sensitivity from such tests that could lead to smaller sample volume needed to perform them, maybe even more important given the difficulty at time of obtaining animal specimens. Finally, we will be introducing products to the market in a bifurcated distribution model using our global life sciences sales and distribution teams and the national reach of our clinical laboratory to provide products and services.

I believe that I can comfortably state that few healthcare companies have the core competencies we possess in both the quality of manufacturing of molecular products as well as in their complex and demanding use in clinical services. Our development efforts continue to progress towards additional validations and further regulatory approvals that will allow us to make future product introductions into this marketplace. It's interesting, and I think it's important to note, that the aggressive refocusing of the Company that has taken place over the last several years is enabling us now to introduce novel, timely products to the market.

I would at this time like to open the floor for questions.

(Operator Instructions) Bill Bonello, Craig-Hallum.

Thanks for the color, especially on the new product offerings. I'm wondering if you can just speak a bit to your expectations for investments over the course of 2015.

Obviously, you're making some really nice progress on growth in the clinical lab and significant gross margin expansion, but in terms of that showing up in profitability, obviously it's all getting reinvested in the legal and the new product development. So I guess I'm just curious how you see that playing out over the course of this year and into the future; what your thoughts about being able to actually deliver bottom-line profit would be.

We have been operating on a relatively measured budget in terms of investing in the new product activity that we have been engaged in. I think for the investment we have made, we have been able to generate very interesting new platforms that have material economic benefit to the laboratory industry and fulfill a very needed solution in terms of lower-cost solutions to match the lower cost reimbursement environment that is pursuing and engaging the whole industry.

We believe we need to make much greater investment as we move forward. We believe the platforms predicate an investment in terms of the development of multiples of products to meet the marketplace. Our goal has been to utilize the capital that we have been internally generating over the past few years and not issue very dilutive financings to fill the cash coffers to build these product lines in the research and development area.

We are hopeful that we will be achieving financial returns from our intellectual property estate. If and when that happens, a portion of those funds will be devoted to driving the further product development in a more aggressive fashion. We are exploring partnerships with entities that we believe will help to develop many of the products, particularly in areas that are outside of our traditional human health area, though there are areas in the human health area we are interested in partnering.

And so we're looking forward to not only financial investment to drive those products, but also the investment of enlarged or enhanced operational organizations to support our activities in these areas.

So we do recognize a need to invest more intensely. We believe over the next year we have the opportunity to bring in capital, and I hope it will be significant capital, in a non-dilutive fashion such that it will help to drive our business lines and business model. But we absolutely see a potential here in terms of our platforms, AmpiProbe and FlowScript, and there are actually others that will be merging behind it to make a very special impact in the marketplace, an impact that we think will be helpful to our industry in terms of providing low-cost solutions. And we see that starting to unfold over the next year.

Okay, that's helpful. And just one follow-up from your answer. You did talk about the potential for partnerships and, historically, you have talked about the possibility that maybe other large diagnostic players could be interested in AmpiProbe technology, perhaps licensing it to develop new products or using it in their own lab, etc.

Where are we at on that front? I think -- is that the kind of thing that is way off in the future? Could we actually see any news in the next couple of quarters on that front?

We have active dialogue ongoing on many fronts and the answer to your question is, yes, it could be apparent within the next few quarters. I can't really comment too much on the specifics, but it is an active program in terms of attempting to promote and accelerate the growth of our product development activities.

Okay, thanks a lot.

(Operator Instructions) Norman Hale, Stifel.

Question on AmpiProbe. I know it's been a long haul here to -- well, since you guys submitted for approval. What's your best guess in terms of when that product will get final approval?

I can't specifically say when the final approval will come, because it's not in our control. This has been a very active, evolving program. The products within the AmpiProbe system having evolved. I am optimistic we will start to see these approvals start to emerge.

I think the FlowScript approval was very encouraging to us, because it started to show a flow of the products. We have, over the last year or so, been working to validate a number of products and we have been waiting for approvals.

I think the FlowScript was a milestone for us and I'm optimistic you will start to see the approvals emerge on AmpiProbe as well. I believe once you see the first one emerge I suspect you will start to see a flow of products come through the system.

Barry, once you do get approval for AmpiProbe, what would be the anticipated timing and terms of being able to manufacture the product and to actually start to generate revenues from the product?

Fairly immediate, in a very short amount of time. We are manufacturing these products on a routine basis for our reagents business, so we would anticipate being able to start to move these products out with -- in a very short timeframe.

On FlowScript, which obviously is an exciting item for the Company, you have conditional approval for that. When do you expect to start generating revenues from that product?

We expect to start generating revenues in the very near future. The product will be offered via our life sciences entity as reagents for people to purchase, and we will begin to provide the service at our clinical lab in a relatively short time frame.

Okay. And do you have any idea, let's say -- obviously you got to ramp up the sales and there's a lot of educational items necessary to get some widespread adoption of the product. But let's say a year from now, what sort of parameters do you think this thing could be producing, like a low end, high end in terms of the revenue potential for the product?

The product has utility within our own clinical laboratory in terms of our own market share, which is a regional marketplace, and I think it is used as an adjunct in HPV testing for cervical cancer prediction. The market for HPV testing is quite significant. Actually I will let David Goldberg respond to that; that is an area that he has been working on rather intensively.

The HPV market alone is several hundred million dollars in the United States, and so if you were even to take a percentage of that market where the -- where abnormal HPV is seen and be able to test with FlowScript, which indicates -- it's an indicator of potential progression of cervical cancer, it could be a material percentage of that several hundred million dollar market, which would be the total available market.

Certainly, because we have the ability to both market it for products as well as we will be marketing it as a service, we will be able to provide optionality to those who wish to offer this test to their particular customer base. Whether they send specimens to our clinical laboratory or purchase the products will be up to them. So it could be -- there is a significant market and we certainly will make every effort to attempt to go after it.

The physicians that you would be targeting on this would be the oncologist and the gynecologist, is that correct?

That's correct. It would be mostly the gynecologist as well as the gynecological oncologist.

Okay, okay, got you. Have you had any discussions with physicians in those fields? And if so, what was your feedback from them?

Feedback was very positive. You know, anything that you can give to a physician to help manage patients is something that they appreciate.

As you may or may not know, more than 70% of positive HPV high-risk patients actually spontaneously regress. And so to be able to offer something that may be helpful in managing that 70% of the population, or trying to figure out who that 70% is or isn't, is actually something that they welcome. And it has been -- we have had very positive feedback from them. I've had discussions myself with some of the key opinion leaders in the New York area and I'm actually very excited about this.

Excellent. And as far as FlowScript, as far as additional indications beyond this original one that you guys have the approval on, have you targeted which areas you intend to pursue or --? Where were you going to take this subsequent to this initial approval?

Well, we've got several products in development at various stages. We're looking at -- without getting into too many specifics, are looking at various markers of immune state, immune competency. We also believe that there may be some applicability of the platform and products we develop from there for drug discovery.

Remember, what you are looking at is you are looking at being able to take a cell population and look at the RNA expression for each and every cell in a sample. So there's a wide variety of potential uses and we are exploring a number of them at this point.

There will also be some cancer markers targeted. So it means the markets that seem to have what I would call immediate interest and demand are, as David commented, the areas of immune competence and the area of cancer.

Okay. Obviously, there's definitely some excitement here. Would you guys be pursuing or potentially be pursuing partnerships with some other companies relative to some of these other indications?

Yes, these are all very interesting, novel approaches to the challenge of healthcare diagnostics. Flow cytometry has been a conventional methodology which is well-established. What we have done is defined and devised a very unique approach to improving the processes to be able to obtain a result or a sample efficiently and effectively.

This is novel. This is something which we believe will take a technology platform, which is a staid and basic platform that has been used in the science world, and giving it a supercharge in some respects. In giving it a capability that will make it much easier to use in some respects and open up new potential opportunities.

Our goal, in some respects, is to take flow cytometry and move it into more mainstream diagnostic utility. And that is, in a sense, broadening an existing market. So we are very excited about it.

And what we have done in AmpiProbe is somewhat similar. We've taken a very traditional standard, goal-based performance technology of PCR and we've taken a totally unique platform view of it and created a platform that is extremely more sensitive, but not -- but sensitivity that will be applied in the area of reducing cost.

And so we are looking at the market, not from the perspective of saying this is the best technology, this is a new technology. We are looking at the market and saying how do we take these standard-of-care technologies, which are gold standards in the industry, and how do we provide them to customers and laboratories in the marketplace in a way where they can make money using them, rather than continuously being up against the wall of reduced reimbursements and high product costs?

It's a very different attitude and approach which we have been embarking on and the two platforms that we have started with, which are the DNA amplification platform and the flow cytometry platform, are really just the beginning of what I think will be a standardized approach for producing lower cost, higher efficiency tests that will be beneficial not only to the clinical labs but to patients, doctors, and providers as well.

It's definitely exciting stuff. On a relative basis, compared to the existing products that you guys are selling, will the margins be higher? Do you anticipate the margins to be higher on the FlowScript products relative to the products that you are currently manufacturing and selling?

I will let Jim O'Brien address that.

We believe that this will provide certainly a higher margin opportunity for the Company, no question about it.

Okay, that's good. That's the direction we want to go. Excellent. Well, this is exciting stuff.

Barry, back to the topic of the litigation, there's so many things out there that you guys are working on. It's got to be mind-boggling to keep up with everything. But can you give us any kind of -- and I know timelines are tough to give because in the legal world -- my dad was a patent attorney and I understand how things work in that area.

Can you give me just sort of a rough timeline in terms of each of the items that are currently pending, when we might expect to hear something definitive in terms of where we are at?

I can do my best. The case against Life Tech Applera, which is in the appeal process, is due any day for a response. Historically, the rule of thumb that had been suggested to me that decisions on appeal will take place approximately 90 days post oral hearing. Our oral hearing was in early December, so we are in the zone right now and certainly within the next month or two I would expect to hear on that particular issue.

In terms of our cases in Delaware, as you are aware, there are 11 cases in Delaware. We just completed the first phase of discovery on those 11 cases, an enormous task. As you can see from the legal expenditures for the last six months, we've been investing significantly in that.

What is necessary going forward in those cases are experts and expert testimony development. Subsequent to that will motion practice, and then there will be trials. We believe within 12 months we should be getting to a point where we will start to see trials scheduled. Again, I can't vouch for that schedule, but that is the preliminary layout in front of us in the Delaware cases.

In New York, we have the case against Roche specifically. From my understanding, discovery is scheduled to conclude sometime in the summer. And subsequent to that, we will then go through the motion practice and hopefully have a trial set as well. So that's very top-line perspective on the cases.

Okay. And I understand the difficulty, because there's so many moving parts on these things, but it just -- we just want to know generally where we are at. What is the status on the -- you had an out-of-court settlement with Perkin-Elmer; where is the status there?

That case has been settled. At this point in time, it is engaged in a dialogue over fee disbursements. Once that is done, the case will be concluded.

Do you expect that sometime in the relatively near future?

Again, I can't comment how that will process, but I'm hopeful that it will be moved along rather expeditiously.

All right, sounds good. If you guys can finally get paid on the things, the Life Tech deal for example; we get the money on that that would dovetail perfectly into the ramping up of FlowScript and potentially, when AmpiProbe is approved, give us the capital to really forge ahead with gusto on sales. Giving you guys the working capital to be able to dramatically improve revenues and a lot of good things will come from that, obviously.

Yes, we absolutely agree. I would like to offer if there are any other questions; I thank you for all of your really very substantive questions. Any other questions?

Sir, there appear to be no further questions at this time.

Thank you again for joining us this morning. We look forward to reporting our third quarter in June. We anticipate this quarter to be a very active quarter and one which hopefully will provide a lot of the answers to some of the questions that have been asked today. Thank you for joining us.

A replay of this broadcast will be available until Friday, March 27, at 12 midnight. You may access this replay by dialing 1-800-585-8367. The PIN number is 2925694. This replay will also be available over the Internet at www.Enzo.com.

This concludes today's teleconference. You may now disconnect your lines at this time and have a wonderful day.