Exelixis Inc (EXEL) 2003 Q1 法說會逐字稿

Good afternoon. My name is Chris (ph) and I will be your conference facilitator today. At this time, I would like to welcome everyone to the Q1 Financial Results and Outlook Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer period. If you would like to ask a question during this time, simply press star, then the number one, on your telephone keypad.

If you would like to withdraw your question, press the pound key. Thank you.

Ms. Green, you may begin.

Thank you and good afternoon. Thanks for joining Exelixis management team on our first quarter 2003 financial results conference call. Participating on this call are George Scangos, President and Chief Executive Officer, Glen Sato, Senior Vice President and Chief Financial Officer and General Counsel, Geoff Duyk, Chief Scientific Officer and President of Research and Development, and Christine Ball (ph) , Senior Director of Finance.

Following this introduction, George will provide perspective on the quarter. Glen will review the company's financial the company's financial performance for the quarter and provide guidance for the second quarter of 2003, and then George will provide additional commentary. Then we'll open up the call for questions.

Please be advised that the following discussions review certain statements that are forward-looking, including, without limitation, answers to questions at the end of the formal remarks. These statements are only predictions and are based on our current expectations. Forward-looking statements involve risks and uncertainties. Our actual results and the timing of events could differ materially from those anticipated in forward-looking statements as a result of many factors. These include our ability to enter into new collaborations, continue existing collaborations, and receive milestones and royalties derived from future products developed from research efforts under collaborative agreements, the weight of book, if any, and licensing contract revenues, the timing and level of expenses associated with the growth of proprietary programs, the ability successfully to identify and develop compounds against proprietary cancer targets, the announcement and timing of investments in manufacturing, and clinical development of our Rebeccamycin analogue, which is currently in phase II clinical studies, and the timing of the filing for and investment in our proprietary small-molecule INDs.

This and other risk factors are discussed under risk factors in our quarterly report on form 10-Q and other SEC reports. We expressly disclaim any obligation or undertaking to release publicly any updates in this vision (ph) to any forward-looking statements contained herein to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances in which any such statements are based.

Now, I'll turn the call over to George Scangos.

Well, thank you Jane, and welcome, everybody, to the call, I'm happy to be here and be able to report that we had a relatively strong first quarter. We exceeded our expectations with respect to managing our expenses and our revenues were in line with what we projected.

Recently, all our internal and collaborative R&D programs made excellent progress. We continue to believe we're on the right track and we have the right strategy to design and build a sustainable business with our proscum bets (ph) in high value areas of the country, like -- a company like building and sustaining a pipeline of interesting clinical compounds and to fulfill our obligations for our collaborations, and, of course, while we do all that we have to manage our caps.

We can expect to continue this year to execute on our technical, financial and strategic goals for the year. Company is in sound financial shape, but is always keeping an eye out for opportunities where we can save costs and increase our cash balance. And before I go into detail on the programs the company [Inaudible] and the progress I'll turn it over to Glen, who will review the financial performance for the quarter and update the guidance.

Thank you, George. I'll start with an overview of our financial performance for the first quarter of 2003, which I believe was quite positive and affirming the strong current financial position of the company. As Jane indicated, I'll then finish by providing guidance for the second quarter of the year.

As in the past, we are reporting with both including and excluding non-cash charges at this continued operation, that is on a GAAP and non-GAAP basis. References to non-cash charges include stock compensation of pez (ph) and amortization of intangibles. Our reason for reporting non-GAAP figures is that management and the financial community today have reviewed our financial performance based on the non-GAAP figures.

With respect to net loss for the quarter of 2000 -- the first quarter of 2003, including non-cash charges under GAAP we reported a net loss of 23.1 million dollars, or 39 cents per share, compared to a net loss of 18.4 million dollars, or 33 cents per share in the first quarter of 2002.

In the first quarter of 2003, we reported a non-GAAP net loss which excludes non-cash charges and gives continued operations of approximately 22.4 million dollars, or 38 cents per share. This compares to a non-GAAP net loss of approximately 17 million dollars, or 31 cents per share in the first quarter of 2002.

At March 31, our cash, restricted cash, cash equivalents and short term investments totaled approximately 203.9 million dollars, compared to 222 million dollars at the end of December in 2002.

For the quarter ending March 31, 2003 total revenues were approximately 12.3 million dollars, compared to 11.5 million dollars for the same period in 2002. The increase from 2002 to 2003 was driven primarily by revenue from our corporate collaborations with Smithkline-Beecham, that's GSK, partially offset by the reduction in revenues from the conclusion of our pharmaceutical relationship in February of 2002.

With respect to R&D costs, research and development expenses for the first quarter of 2003 were 30.3 million dollars, including stock compensation in excess of 200,000 dollars, compared to 26.2 million dollars including stock compensation of 500,000 dollars for the corresponding period of 2002. The increase in the quarter from 2002 levels was driven primarily by an increase in profit (ph) activities related to advancing our clinical and pre-clinical development programs.

These activities included completion of regulatory toxicology testing of XL 784 and successfully filing the IND application at the end of the quarter for this molecule, advancing a new series of development candidates and back-up compound into free clinical testing in anticipation of filing addition IND applications, manufacturing the growth compounds to support pre-clinical studies, building additional infrastructure in clinical development to support a standing clinical pipeline and completion of the manufacturing of XL 119, our Rebeccamycin analogue to support initiation of registration trials late in 2003.

With respect to G&A costs, our general and administrative expenses for the first quarter of 2003 totaled approximately $5.2 million, including stock compensation in excess of $200,000, compared to $4.7 million, including stock compensation in excess of $300,000 for the second period in 2002.

With respect to Artemis, as we discussed in last quarter's conference call, we intend to split off the colone-based (ph) Artemis pharmaceuticals business. We are making progress in seeking independent funding for this business and are hopeful of consummating this transaction in the second quarter. Approximately $1 million of expenses that were originally expected to be incurred in the first quarter of 2003 related to the split-off are now expected to be incurred in the second quarter due to the time they have to finalize this [Inaudible] .

Finally, with respect to 2003 guidance for the second quarter. Our expectations are that compared to the first quarter our revenues will increase in the range of 3 to 8 percent. We expect our operating expenses, excluding non-cash charges, to increase by 6 to 11 percent during the same period as we continue to focus our efforts on pre-clinical and clinical activity. These activities will include initiating phase one safety trials for XL 784, advancing develop for candidates to replace pre-clinical testing of the goal (ph) filing additional INDs, advancing XL 119 into registration trials and continuing support of our newest (ph) in collaboration. Fits in with our financial management strategies, the company will continue to review its worldwide operating expenses throughout the remainder of the year since [Inaudible] its research and development goals and meeting with tax [Inaudible] objectives for the year.

Let me now turn the call back over to George.

Thanks, Glen.

So let's take a look and review to what we accomplished in the first quarter. Certainly highlighted the quarter with the filing of our first IND for our proprietary small molecule anti-cancer compound XL 784. The IND is active and we're on track to initiate phase one trials in the second quarter of this year. Filing of the IND for 784 was a significant achievement for the company. Out of the high level of efficiency and professionalism demonstrated by the higher clinical development group and higher development group. In pre-clinical studies 784 showed significant anti-tumor activity, hence the range of [Inaudible] and had a safety profile appropriate for support of phase one studies. Clinical plans include initiating phase one person man (ph) studies to be conducted in healthy volunteers.

While we continue to explore the therapeutic utilities that compounded in various animal models of the disease, including cardiovascular disease. Phase one trial will be conducted at a single center and is designed to facilitate escalation study to measure safety, conoco conetics (ph) , biological activity of 784 following oral administration. Third party manufacturer is supplying the drug product to be used in the clinical trail and we're short of having an adequate [Inaudible] . 784 is, of course, of significant interest to us because of its pre-clinical characteristics and because it's our first proprietary IND. Probably (ph) the first of what we expect to be many interesting, novel, targeted therapies that are emerging from our discovery pipeline.

As you know, our goal extends beyond the single compound or single platform in the program. It's to build a broad and deep pharmaceutical portfolio by advancing several, many promising pre-clinical programs, filing a series of INDs, and managing a diverse clinical pipeline, and we really believe we're on track to achieve that goal. Rebeccamycin, XL 119, which is what we call our Rebeccamycin analogue. This is the anti-cancer compound we licensed from BMS and that has been the subject of exploratory phase II trials conducted by the NCI. We're currently in discussions with the FDA concerning trial designs for a pivotal program that could lead to registration of the compound as a treatment for [Inaudible] . Those discussions are progressing, we're on track to be able to implement the next development sometime after the mid-year point.

Until those discussions are completed and we fully designed the pivotal program, we're going to refrain from providing detail about endpoints, the number of patients, duration of the trial, because we simply don't have those answers with any certainty until we get agreement with the FDA.

We'll develop 119 as a potential treatment for bile duct tumors, and the response rate and durability of those responses in those patients who receive 119 have been encouraging. Some of the data from that phase II trial were presented at the Cancer Conference in February of this year, and we anticipate that additional data will be presented by the key investigator on this study at a poster session at the upcoming ASCO meeting later this month.

So we continue to be encouraged by the potential of XL 119 as a promising cancer therapy. Over 400 patients have been given the compound, the safety profile remains acceptable. Based on the phase II results to date, we believe and the investigators believe that the compound certainly deserves further development, especially since there's no current standard therapy for these rapidly progressing tumors.

Supply of the compound that is being manufactured by a third party is sufficient to support our initial clinical trials, as well as any additional phase II trials that the NPI (ph) may choose to initiate. So Rebeccamycin clinical plan is on track, and we hope to be able to share more information with all of you about the next steps in a couple of months.

In addition to those two compounds, we have multiple other programs that are progressing through pre-clinical development. We're excited about this collection of compounds and their potential for their treatment of cancer and other proliferative diseases. We're on track to file additional INDs. If all goes well, we could file an additional IND at the end of this year. We have a lot of work to do to achieve that goal, and things have to goal. If everything doesn't go well, if we encounter any tox issues or something like that, then the timeframe could be extended somewhat. But we're on track so far.

And we're encouraged. We remain confident at generating a steady stream of these clinical compounds that will make a bona fide developmental portfolio. And as the year progresses, we'll share more information about these compounds and keep you appraised of our progress towards filing additional INDs. Our stated goal is two a year, and we believe we're on track to meet that goal.

All of our corporate partnerships are progressing well and remain on track. BMS continues to be an excellent and very supportive partner. The relationship has been very productive and collaborative, and we continue to meet the goals of that partnership. Just recently, we received another milestone in that relationship, following the completion of a draft in which BMS and Exelixis both selected targets from the pool that we had generated.

We continue to successfully deliver high throughput assets to Bayer and that relationship also continues to go well. Those assays are being incorporated into their insecticide screening programs, and there are interesting compounds coming out of that.

Combinatorial chemistry group continues to deliver high quality library-store (ph) partners, and as we indicated in our press release, these relationships are important contributors now to our revenue base.

And finally, our relationship with GSK is taking shape just as we had hoped and anticipated. We've had several meetings with them to discuss research stage and pre-clinical programs and these meetings have been highly collaborative and resulted in clear strategic direction for the program. We're feeling good about our ability to meet our partner obligations to GSK and to all of our other partners and we believe that our partners are very happy with the progress that we've made in those collaborations.

In terms of future partnerships, we all not that this partnership environment that we have today is in a more challenging [Inaudible] than a few years ago. Despite that there are (ph) additional concepts to do additional things (ph) are really quite good.

We're engaged in a lot of different discussions. All of this represents viable options for the company and are consistent with our strategies. We have a lot of assets that are available through partnering and are unencumbered by any of our existing partnerships and they don't interfere with moving our own proprietary programs forward.

While we can't put in exact timeframes in consummating any additional deals, we're confident of our future transactions and we'll meet our strategic goals for the year. At the same time we're also exploring opportunities in the M&A arena. We feel that we're very good time (ph) , for obvious reasons, I think, the pressures that are effecting the biotech industry and as we've previously discussed, our interests really fall into three areas, facility, compounds and cash.

One would have to be, especially in drug discovery, so that we can advance more compounds forward in parallel and generate more value more quickly. There's a lot of inexpensive technology available these days and we're looking at how is that. Ideally, this capacity could come with some cash so we could acquire what we need to increase our output (ph) while managing our burn rate.

There are several interesting options there. Similarly, it's our goal to fuel our pipeline with interesting compounds. From our own R&D efforts and [Inaudible] that we could analyze. Not really an alternative I guess. In addition, we could end-license. We would consider our opportunity, especially if they do (ph) gave us some cash.

So I can't obviously tell you any specifics about any of these discussions but I think it's to understand that we believe this is a real opportunity for us [Inaudible] future.

So the goals for 2003 are intact -- while it's still relatively early in the year, we're confident of our ability to execute on our goals for 2003. The goals are clear. We'll advance XL 119, we work back (ph) [Inaudible] . We need to move XL 784 into clinical development to phase I. And we need to move additional pre-clinical compounds forward with the goal of finding additional R&D.

We have to meet all of our partner obligations and we have to establish additional corporate partnerships which will have a direct impact, obviously, on our revenues. So [Inaudible] these goals.

So, I think, In sum, we had a great quarter. We're still very confident about the year and very confident about the future of the company and we're feeling really good [Inaudible] .

So let me comment now on Glen. I think everybody saw his announcement yesterday. And I'd just like to take the opportunity to publicly acknowledge the contribution that Glen has made for the company. Glen has been a great CFO, a wonderful colleague. We'll certainly miss Glen as he moves on. I do think the opportunity Glen has at PDL is a great one for him personally and I completely understand his decision to accept that opportunity and appreciate the professional manner in which he's gone through this transition.

So [Inaudible] leaves Exelixis in great shape. Our financial condition is sound, our system of financial controls is operating. A lot of that is due to Glen and so we'd just like to say thanks to Glen and wish him all the best and I'm sure he'll do very well at PDL. At the same time, we're actively recruiting a CFO and are looking for seasoned executives. This is an opportunity for us &&&&&&&& scangos: And I'm sure he'll do very well as CEO (ph) . At the same time, we're actively recruiting a CFO and are looking for a seasoned executive. It's an opportunity for us, I think, to bring in someone of very high calabur. The company should be an attractive place to come work and I'm confident that we'll be able to bring in a very top-quality CFO. That search is ongoing and our goal is to both maximize the quality of the person we bring in and minimize the time it takes to do that. So it's very high in priority, I think, for us now. And I believe, you know, that transition will be fairly straightforward and we're very happy to have Christine Ball (ph) , who's our controller and senior director of finance who's here on the call, will be a key asset during this transition. She's the person to make sure that our numbers are right anyway and she'll be a resource now for all the investors and analysts. So I'd like to wish Glen the very best in his new position.

Thanks, George.

Let me take just a minute to say its really been a privilege and a pleasure to work with you and the rest of the team here. I really want to thank the investors who supported us and continue to support us and I'm surprised (ph) that I really only the highest regard for the quality of the team that's here and all of the employees. I really know that this is a great situation and that my successor will inherit not only a great team but also a situation in which the financial reporting and function are going to be operational and will transition smoothly. I really believe that this is an exciting company and has a very bright future and I really just want to take a quick minute to acknowledge the tremendous support you and the other employees at Exelixis have given me here.

Thanks very much.

Thanks, Glen.

And now I think we can open up the call for questions.

At this time I would like to remind everyone that in order to ask a question, please press star, then the number one on your telephone keypad. We'll pause for just a moment to compile our Q&A roster.

Your first question comes from Bret Holley of CIBC World Markets.

Hi everyone. Congratulations on moving 784 into the clinic this quarter.

I was just wondering about -- you talked about M&A and you talked about the possibility of analyzing some compounds and I was wondering, were you looking for earlier stage compounds, later stage compounds focused on cancer or other therapeutic areas possibly?

Yes, well the -- certainly focused on cancer. I mean that's where we have expertise in pre-clinical development and clinical development and where we are in a very strong position to evaluate the data on a compound. As you know, I mean, there are a lot of compounds available for licensing and only a small subset of them are in compound two (ph) , that we this are interesting anyway and we need to be working in an area where we have expertise.

We are looking for compounds that are later stage on our own. We are plenty of early stage compounds. You know, 784 is the first [Inaudible] in generally the first of what we [Inaudible] IND as we move forward in the foreseeable future. We don't need more compound at that stage. If we could find an interesting compound later that would provide value in itself, provide a way to build the organization, give us just a more solid jumpstart, I would say a jumpstart on a more solid, clinical pipeline, that would be of interest.

So when you say jumpstart the organization, you mean hire more medical staff? You feel like that needs to be built (ph) out to a little bit more of the company?

No, I think, you know, it -- the first time you go through all of this stuff, it's a learning experience. It's not necessary for any of the individuals. The individuals we have are all experienced and have been through this before but for the organization. So, you know, we've used both end licensing and partnerships in the past to help build a company and I think that's an aspect that often not appreciated in terms of what you can bring into the company. So if we bring in compounds that are more advanced and we take them through the clinic, then that's a good thing for the organization and it makes it that much easier when our own compounds get there. So that's what I meant.

But we of course won't -- we're not here to spend money practicing, so the compound has to have intrinsic value, and it has to be indric (ph) in its own right. And that's the most important characteristic.

Thanks. Great. Thanks. I'll hop back in the queue. Thanks.

Your next question comes from David Witzke with Morgan Stanley.

Yes. Thank you. Regarding the upcoming ASCO poster session for the Rebeccamycin analogue, will we see new or more data, in particular regarding efficacy, than was shown in Paris?

Yes. To be sure and answer that question. There will be additional efficacy data at the ASCO poster meeting.

Anything more on that?

Well, no. We actually know what data will be presented there, but those aren't our data. Those are the investigators' data, and so we're not really free to comment on them. And I'm sorry, I know that's somewhat unsatisfying, but until we get our own clinical data, which we'll begin to do very soon now, we have to respect the investigators who've done the trial.

No, I understand [Inaudible] to that. And I guess a question, how many candidates are currently in IND enabling studies that would be in the running for a late '03 or early '04 filing, and then what type of programs?

Yes. Depending on where you want to draw that line, two or three.

Two or three.

And the programs they derive from?

They're all cancer.

And is it -- I'm more detail -- is it the kinase programs, the P 53? Is it any?

This is Geoff. David, all of the targets that are in the late stages queue are kinases, but they come out of a variety of programs, cell [Inaudible] proliferation, antiogenesis. So they are representative of the underlying research platform.

OK. And just a final quick question regarding the revenues. If we could get a breakout on the contribution of, say, PDL and the GSK and BMS?

We normally don't break that out because the guidance is given and you can back into that number if you'd like by virtue of amortizing over the term of the research the revenue figures that have been publicly discussed with respect to the funding of the deal. But I think particularly with respect to the GSK, we're sensitive to the amount of revenues that they're giving us. Because this whole package has not been disclosed, just pieces of it.

OK. Thank you.

OK.

Your next question comes from Jeff Zekauskas with J.P. Morgan.

Hi, good afternoon.

Can you ballpark the costs of the Rebeccamycin trials that you've planned?

Yes, but of course, the costs are dependent on the trial design and the number of patients and the end points and how long we have to follow the patients. So we have a ballpark figure, but it's only a ballpark figure right now. So we'll be able to know that more precisely once we get the design of the trial nailed.

Well, what I mean is that when you look at your possible trial designs, sort of what are the low level of costs and what are the high level of costs.

Yes, we haven't really -- I'd really wait, Jeff, until we know what the trial is going to be before we speculate on that. And we have a lot of discussions coming up. We have expert panels, we have discussions with the FDA, we have a lot of activities coming up in the near future that will allow us to go through and design what we believe is a thoughtful trial that will minimize the expense and fud (ph) , also maximize chances for approval.

And so, until we do that I'd rather not speculate...

All things being equal, do you expect to partner with Rebeccamycin?

I think we will pursue all options and obviously to the extent that you partner something you might reduce the burn, but you give up some of the upside in the future so it's always a tradeoff. And, whether or not that tradeoff is worth it often depends on the specifics rather than a general strategic question. So certainly we are entertaining that we're -- we haven't made a decision yet.

And, I guess lastly, does the Dow AgriSciences include partnership end this July? I'm just not sure.

Yes, it's currently scheduled to expire in July, yes.

And, all things being equal, would it be renewed or not renewed?

We have discussions ongoing right now. It's not a material financial amount under the relationship so it really comes down to a matter of what work will be done and whether or not it makes sense from a business standpoint going forward from there.

OK, thank you very much.

Your next question comes from Aaron Schwimmer with Goldman Sachs.

Hi, thanks for letting me ask a question. With regards to your next IND or potential next IND in '03, can you give us any color as to the target? Is it similar to the 784 target or is it a different mechanism?

It's a different mechanism. 784 targets the soft-surface protease. The next compound probably the kinase. It's a different target, it's a -- it's [Inaudible] receptor target, it kind of is. It's one of the compounds that we have termed spectrum-selective. Receptor target in kinases, which, if you screen the existing kinase inhibitors, none of them are truly specific and the more applications may actually hit more than one kinase, and the fact that they hit more than one is responsible for every target they're [Inaudible] .

So we have deliberately developed a series of compounds now, some of which are very specific, some of which tar -- hit several small number of targeted kinases in order to increase the efficacy. And we believe we've got some insight into which kinases we want to inhibit and which ones we want to avoid inhibiting to avoid toxicity. And so far, that's been borne out in the pharmacology and safety studies that we've done.

So, it's one of those spectrum selective RTK inhibitors that is the subject of the next one.

So does spectrum-selective mean it's one of your more selective RTK inhibitors? Or...

No, that means it's selected against a spectrum of RTK.

OK. And...

On a narrow spectrum. And we're not talking 50, we're talking more than one.

...And what does -- does GSK have any access to 784 following your new potential phase II trials or is it just...

Well, yes, they do, but they don't have to make that decision until phase IIA.

And if you assume that the phase one trials are safe and tolerable, what do you perceive for the possible phase two setup for . . .

You know, I think it's really to early to [Inaudible] . We are exploring a number of potential [Inaudible] and, you know, as we've said, the -- one of the indications we're pursuing is cardiovascular. If this compound has utility in cardiovascular disease, then the potential market size of that is huge and we would probably develop it in that direction and it's for that reason that we're doing the phase one in healthy volunteers but we don't have the results of those cardiovascular pharmacology studies yet, so we don't know if that's a viable development group.

So when we got those data then we'll know. If those data are negative and there are a number of opportunities inside cancer to take that forward and then we are also still in the process of identifying which two entypes (ph) we'd want to take that forward.

Now GSK has access across -- for multi-indications or is it just -- or is it -- are they specific indications?

The field of GSK, which I've believe we've disclosed, right, is certain areas of cancer. Certain areas of cancer we're working on with BMS. And the areas and the targets that come out of our relationship with BMS are not part of the GSK agreement but other areas of cancer are and we've had to be circumspect about defining what areas of cancer are in each of those in order to protect the proprietary concerns of each of those partners and then vascular biology and inflamation are covered under the GSK collaboration.

Thank you.

OK.

You have a follow-up question from Jeff Zekauskas J.P. Morgan.

Hi, George. This is Karen Zucavich (ph) .

Can you tell me if you're still aggressively working on the DNA damage the pendicina (ph) , the DMK1 (ph) ?

Yes. Unfortunate name for that one but, yes, we are still aggressively working on that one and they're still moving forward.

Can you describe with what type of DNA damage it effectively kills cells, where it causes eposodes (ph) ?

I think any fiber (ph) down to further the radiation induced or induced by various feticoctic (ph) agents it presumably would synergies with and presumably would act, particularly in the context of either P53 deficiency or activation of another ontagene (ph) which is associated with an alteration (ph) in G2 (ph) . So there's no difference whether it's radiation or non-radiation.

And I wanted to ask about the chemical collaborations that you signed in 2002. How long will they continue? This is, I guess, fee per compound. Do they sort of go on indefinitely or how long will those collaborations . . .

Karen, they have different terms and so part of it is, you know, depending on the specific agreement, some of the partners have shorter terms than others. You know, I think -- I guess maybe the way I would characterize it is, at least, through the rest of this year, we feel pretty confident about all of the agreements remaining in place and moving forward.

OK.

And I think the thing to remember there too is that it should be relatively straightforward for us to sign additional collaborations of that nature. Should we do so, we're trying to balance the number we have and managing them and delivering on them with our own proprietary program developer. As those expire, it should be relatively straightforward to either extend them or bring on a new one.

OK. Thank you very much.

At this time, sir, there are no further questions. Do you have any closing remarks?

Well, let me thank everybody for your attention and we're -- I guess to sum up we're really feeling pretty good here. I think I'm feeling better about the company than I have in a long time for its prospects. The projects really are moving forward well, and collaborations are going well. Discussion is going well. So far, we're very optimistic about the year and our future. And thank everybody for your attention.

That concludes today's conference call. You may now disconnect.