Niagen Bioscience Inc (NAGE) 2016 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by and welcome to the ChromaDex Corporation's fourth-quarter and year-end 2016 earnings conference call. My name is Chelsea and I will be the conference operator today. At this time, all participants are in a listen-only mode, and as a reminder, this conference call is being recorded.

On Thursday afternoon, ChromaDex issued a news release announcing the Company's financial results what year end 2016 and filed their Form 10-K. If you have not reviewed this information, both are available within the Investor Relations section of ChromaDex's website at ChromaDex.com, and the Form 10-K is also available on the SEC's website.

I would now like to turn the conference call over to Andrew Johnson, Director of Investor Relations. Please go ahead.

Thank you Chelsea. Good afternoon and welcome to ChromaDex Corporation's fourth-quarter and year-end 2016 results conference call. With us today are ChromaDex's Founder and Chief Executive Officer, Frank Jaksch, and Chief Financial Officer Tom Varvaro.

Today's conference call may include forward-looking statements, including statements related to ChromaDex's research and development and clinical trial plans, future financial results, business development opportunities, future cash needs, ChromaDex's operating performance in the future, future investor interest and analyst coverage of ChromaDex, the markets ChromaDex's products will address, and the expected revenue growth of ChromaDex's products that are subject to risks and uncertainties relating to ChromaDex's future business prospects and opportunities as well as anticipated results of operations. Forward-looking statements represent only the Company's estimates on the date of this conference call and are not intended to give any assurance as to actual future results.

Because forward-looking statements relate to matters that have not yet occurred, these statements are inherently subject to risks and uncertainties. Many factors could cause ChromaDex's actual activities or results to differ materially from these activities and results anticipated in forward-looking statements. These risk factors include those contained in ChromaDex's annual report on Form 10-K most recently filed with the SEC. Please note that the Company assumes no obligation to update any forward-looking statements after the date of this conference call to conform with the forward-looking statements, actual results, or changes in its expectations.

In addition, certain of the financial information presented in this call references non-GAAP financial measures. The Company's earnings release, which was issued Thursday afternoon and is available on the Company's website, presents reconciliations to the appropriate GAAP measures and an explanation of why the Company believes such non-GAAP financial measures are useful to investors.

Finally this conference call is being recorded via webcast. The webcast will be available at the Investor Relations section of our website at www.ChromaDex.com.

With that, it is now my pleasure to turn over the call to Frank Jaksch's and Tom Varvaro.

Thank you Andrew.

2016 was an eventful year with significant business and corporate developments key milestones, revenue growth, and of course some challenges. Despite some challenges we had with customer disruption and litigation, we generated 29% revenue growth in Q4, and revenue growth in 2016 was 22%, driven primarily by 34% ingredient growth. Yet we've only scratched the surface of the opportunities we have with NIAGEN.

On the corporate side, in April, we successfully executed a reverse split. Most investors expect stocks to decline during the reverse period. However, ChromaDex ended up after completing the reverse split period, which was a very good outcome for the Company. We successfully uplisted our shares to NASDAQ in April, and many of our shareholders, employees, and executive team were excited to see ChromaDex recognized when we rang the opening bell at NASDAQ in early May. The NASDAQ listing also allowed us to be added to several key Russell indices, including the Russell 2000.

Of course, our public market success has also led to some unintended consequences shortly after our NASDAQ listing. Despite these challenges, we remain focused on hitting our objectives and growing the Company.

We have also seen significant increase in institutional ownership since we were listed on NASDAQ, and that's a trend that we hope to continue in 2017.

As we continue to grow, we are well-positioned to attract the type of talent that we need to continue to expand the Company and, in 2016, we have added very talented and experienced people in several key senior positions at ChromaDex. Will Black joined the Company as Vice President of Sales and Marketing; Rayda Rider joined the Company as Director of Ingredient Sales; and Breah Ostendorf joined the Company as Director of Marketing. So, we've added several key positions, primarily in the sales and marketing roles, within the Company. A lot of that is going to be focused on nicotinamide riboside. And as we start to get more attention towards PR related to both hopefully NIAGEN as well as to ChromaDex, we're going to continue to expand those roles based on the needs of the Company as we continue to move forward.

We've achieved several other important key milestones for NR in 2016. We received notification of GRAS status from the FDA in August of 2016. Our first human clinical study results were published in the prestigious journal Nature Communications in October 2016. Results from three studies, including our first human clinical trial, have been collectively published in this manuscript. A team of researchers headed by Doctor Charles Brenner at the University of Iowa demonstrated that NIAGEN nicotinamide riboside increases production of a metabolite responsible for cellular energy production called NAD. And that data was reported in both mice and humans, which indicate that single doses of NIAGEN can elevate the co-enzyme NAD in the blood by as much as 2.7-fold.

In the first in human clinical trial, which involved dosing of 12 healthy adult subjects, the group showed that blood cell NAD increased with single 100 milligrams, 300 milligrams, and 1 gram doses of NIAGEN. Average maximal increases in blood NAD were approximately 30% at the 100 milligram dose and 50% at the higher doses. Increases in blood NAD tend to be sustained for longer times at higher doses.

We started our second human trial, our clinical human trial, on NR and we are now in the final stage of that study as the last participant is now on study. Study results will help define the effective dose range of nicotinamide riboside in humans when taken daily over eight weeks. The second human trial should build upon the results of our first human trial, which demonstrated a single dose of NIAGEN was not only safe but also effectively raised NAD in humans. The results of that study constitute a significant milestone as it showed the first time that an increase of NAD in humans has been demonstrated through rinar supplementation.

In 2016, we made significant progress on our first drug development opportunity for nicotinamide riboside. We completed a pre-IND meeting with the US FDA on November 1, 2016. During the meeting, ChromaDex and the FDA discussed a developmental plan for nicotinamide riboside for treating Cockayne Syndrome, which is a rare pediatric orphan disease that results in a significantly shortened lifespan in affected children.

We continue to expand our proprietary ingredient portfolio with the addition of AnthOrigin, which is a naturally extracted anthocyanins product, which we added to our portfolio of other industry-leading health and wellness ingredients.

In May of 2015, you may remember we entered into an exclusive worldwide license and supply agreement for Suntava Purple Corn. We are now using and cultivating Suntava Purple Corn to use in the production of AnthOrigin. We are using its anthocyanins-rich in this case purple husk versus the kernel used in most of the traditional varietals or other products that might be out in the market.

Implied by its name, AnthOrigin delivers high content anthocyanins and other healthy polyphenols from US origin non-GMO purple corn husk that has been extracted using proprietary solvent-free water extraction technology.

There were numerous other peer-reviewed published studies in various prestigious journals such as Science, Nature, and Cell Metabolism in 2016. I'm not going to take the time right now to review all of those studies on the call today, but many of these publications have started to capture the attention of media. And again, that's a trend that we expect -- that we were looking for in 2016 and something that we also expect which I'll talk more about 2017.

ChromaDex opened a state-of-the-art research and development center in Longmont, Colorado, which is an important milestone for us to continue our leadership in the identification and development of our novel ingredient portfolio, including several new NAD metabolites. This 10,000 square-foot research and development center in Longmont, with nearly $1 million invested to renovate the space into a state-of-the-art facility, includes multiple laboratories supporting the discovery and development of novel molecules and compounds to add to ChromaDex's proprietary ingredient portfolio while also allowing for the expansion of ChromaDex's analytical service offering at our laboratory facility in Boulder, Colorado.

With that, I'll turn the call over to Tom Varvaro to discuss the Q4 and 2016 financial results. After Tom completes his review of the financials, I'll discuss our plans for 2017. Tom?

Thank you, Frank, and good afternoon everyone.

For the three months ended December 31, 2016, Q4 2016, ChromaDex reported record net sales of $5.6 million, an increase of 29% as compared to $4.4 million for the quarter ended January 2, 2016, Q4 2015. The ingredients segment generated net sales of $3.3 million during Q4 2016, an increase of 42%, as compared to $2.3 million for Q4 2015. The core standards and service segment posted a 21% growth as it generated net sales of $2.3 million for Q4 2016 as compared to $1.9 million for Q4 2015.

The scientific and regulatory consulting segment net sales decreased 40% from $0.2 million for Q4 2015 to $0.1 million for Q4 2016 primarily due to a further emphasis on intercompany work supporting our ingredients segment.

Gross margin for the quarter was 41% versus 37% or Q4 2015.

The net loss attributable to common stockholders for Q4 2016 was $2.1 million, or $0.06 per share, as compared to a net loss of $1.4 million, or $0.4 per share, for Q4 2015.

EBITDA adjusted for non-cash charges associated with share-based compensation, which is a non-GAAP measure, for Q4 2016 was negative $1.8 million compared to adjusted EBITDA of negative $0.8 million for Q4 2015.

For the year ended December 31, 2016, fiscal year 2016, ChromaDex reported record net sales of $26.8 million, an increase of 22% as compared to $22 million for the year ended January 2, 2016, or fiscal year 2015. The ingredients segment generated net sales of $16.8 million during the year of 2016, an increase of 34%, compared to $12.5 million for fiscal year 2015.

The core standards in service segment posted an 11% growth as it generated net sales of $9.4 million for fiscal year 2016 as compared to $8.4 million for fiscal year 2015. Our scientific and regulatory consulting segment net sales decreased 37% from $1.1 million for fiscal year 2015 to $0.7 million for fiscal year 2016, again primarily due to our further emphasis on intercompany work supporting our ingredients segment.

Gross margin the year was 44% for 2016 versus 39% for fiscal year 2015.

The net loss attributable to common stockholders for fiscal year 2016 was $2.9 million, or $0.08 per share, as compared to a net loss of $2.8 million, or $0.08 per share, for fiscal year 2015. EBITDA adjusted for non-cash charges associated with share-based compensation, which is a non-GAAP measure, for the fiscal year 2016 was $0.9 million compared to adjusted EBITDA of $0.2 million for fiscal year 2015.

I next want to highlight some of the expenses incurred in 2016 that were discussed in our recent annual report filed with the SEC on Form 10-K. The Company incurred $2.5 million in research and development expenses for fiscal year 2016, an increase of 183% as compared to $0.9 million for fiscal year 2015. These charges include human clinical trial fees and new ingredient development costs. As revenue and available financial resources continue to grow, the Company plans to continue to increase research and development efforts with a continued focus on the ingredients segment.

For fiscal year 2016, our patent maintenance expense increased to approximately $652,000 as compared to approximately $371,000 for 2015. As we continue to enhance our patent portfolio for our ingredients segment, we expect these expenses will continue to increase.

Cash on hand at the end of the year was $1.6 million, and we also recently established a $5 million credit facility with Bridge Bank.

With that, I will now turn the call back to Frank so he can provide you with our 2017 highlights.

Thanks, Tom. 2016 saw continued growth in the number of published research studies as well as subsequent media attention regarding NR and NAD, along with their importance in healthy aging. In fact, since the launch of NIAGEN, there has been more than 60 published studies involving NR. During the same time, there were nearly 500 studies that have been published referencing NAD and aging.

All indications point to 2017 being both a pivotal and validating year for ChromaDex as preclinical and clinical research continue to publish, business development becomes realized, and pharmaceutical clinical trials again. We believe positive data from both human and animal studies will deepen the validation of NIAGEN's safety, function, applications, and efficacy, and become a primary driver in ChromaDex striking business development deals and substantial revenue opportunities with large consumer product companies.

On Wednesday, Fast Company published an article, "The Business of Fasting", which highlights the importance of NAD. Referring to what the author wrote, which is a quote of the most promising dietary supplement may be NR. I would encourage you to read the article when you have a chance. As more research publishes and as more clinical data validating benefits of NR becomes available, we expect media attention to continue to increase as anything related to healthy aging that is backed by science will continue to be a very hot topic.

To support the education of the general public on these new but growing areas of interest, we are helping to develop and curate an educational website, www.aboutnr.com, which is devoted entirely to the education on topics of NR and NAD. With the help of many of the world's foremost research authorities on these topics, we believe the site will become the scientifically validated information hub for NR and NAD education.

As I highlighted in my February letter to shareholders, there are currently 12 human studies on nicotinamide riboside that are in various phases that can be found on clinicaltrials.gov. I'm only going to highlight a few today on the call.

ChromaDex's second study currently running at KGK is a 140-participant trial that will evaluate the effects of repeated doses of NIAGEN and NAD metabolite concentrations in blood, urine, and muscle in healthy adults. This study will evaluate the impact of three dose levels o NIAGEN compared to placebo. The recruitment and dosing portions of this trial are currently in the final stages as the last participant is currently on study.

The other study I'd like to highlight is the University of Colorado Boulder trial which is assessing the efficacy of supplementation with NR for improving physiological function, mainly focused on vascular, motor, and cognitive function in healthy middle-aged older adults. This trial is being completed and the manuscript summarizing the study is being prepared for submission to a peer-reviewed published journal.

In February, we announced that University of Iowa's researchers have published an animal study on NR in the prestigious Journal of International Association for the study of pain revealing NR as an effective tool for relieving chemotherapeutic induced peripheral neuropathy pre, during, and post treatment with a common anticancer agent called paclitaxel. As the American Society of Clinical Oncology has issued a position paper that there is an unmet need for treatments that alleviate chemotherapeutic induced peripheral neuropathy, I believe this has a huge potential to be a very significant business opportunity for NIAGEN. We are currently collaborating with the University of Iowa on filing an IND for the treatment of chemotherapeutic induced peripheral neuropathy with NR, which is required to start an NIH-funded clinical trial.

The number of studies of NIAGEN showing positive effects are approaching an inflection point where peer-reviewed published clinical data are likely to result in additional commercial opportunities for NIAGEN. We've been actively engage with numerous large multinational consumer product companies with respect to commercial opportunities for NIAGEN being included and/or featured in a number of branded consumer products within extremely large product categories.

I'm convinced more than ever that ChromaDex has an extraordinary opportunity to create substantial shareholder value with our patented NIAGEN nicotinamide riboside. I believe a new vitamin or an ingredient of this magnitude is the type of opportunity that doesn't come along very often. All of the important pieces of the puzzle are systematically falling into place, which will allow NIAGEN to become the next blockbuster ingredient.

On behalf of ChromaDex's management, Board of Directors, and employees, I want to personally thank you for your continued support.

Now let me turn the call back over to the operator for questions. Thank you.

(Operator Instructions). Ram Selvaraju, Rodman & Renshaw.

Hi. Thanks very much for taking my questions. I have just one catalyst related question and a number of financially related things. The catalyst question I had was with respect to the ongoing clinical study, which I believe, in your press release, you indicated was over 50% enrolled. Could you just refresh my memory as to when you anticipate reporting top line data from this study, and what, if this data is positive, would it point to as the appropriate next steps in clinical development, please?

It's Frank. Sorry, guys. I'm managing this call from -- I'm on the road this week, so trying to handle as many questions as I can here but -- so the answer to your question is that we have last patient on study right now. We're expecting the last patient to be off study sometime over the next few weeks, which has us with the study completed probably in early April, sometime in early April and that, timing-wise, we'd still need to do some blood work, analytical work, on the blood samples as they come. And I think we'll follow the same path that we did on our first clinical trials that, once we get an initial statistical read on the data, we would put out some sort of a topline result as soon as we have that available. We have to assume it's going to take a few months to get the blood data and the statistical data read through. So I'm hopeful that we'll be able to be in position to have a topline result coming out probably by June or July, but the exact timing of that is going to be predicated based on the timing of when we are going to be able to have the samples, the final samples, analyzed.

I hope that answered -- I mean did that answer the bulk of your questions?

Well, the bulk. And I just wanted to know because, as I understand it, this is effectively to determine what the optimum concentration of NR is in enhancing NAD concentrations. So, what I wanted to know is, once you have that information, would you then be in position to proceed to more direct efficacy oriented proof of concept clinical studies?

There are several of those already ongoing. The one I had mentioned on the call is related to Colorado. That study is not really a PK/PD related dosing study. That one is driven more towards an actual therapeutic endpoint. And when that one is completed, and that was at the manuscript stage.

And then so our study is outside of just the -- we are doing the same three doses that we did in the first study over eight weeks -- 100 milligrams, 300 milligrams, and 1 gram. So that is a piece of it. The PK/PD side of this study is important but we are also collecting tissue in this, so we are doing muscle punches and we are going to be collecting data that -- we should be getting data from our own trial. That will give some indication of a therapeutic benefit but we will be able to report more on that later.

Okay. That's very helpful. And then I just had a couple of quick things for Tom, if I may. Could you comment, Tom, on the cost of goods recorded in the fourth quarter and whether you expect any significant improvements in gross margin during the course of 2017, whether you expect the gross margin to remain the same as what we've seen over the course of the second half of 2016?

And then also with respect to selling and marketing versus R&D, obviously it was mentioned that you expect to allocate more funding to R&D going forward, but, on a relative basis, it seems as though there was significantly more allocated to R&D versus selling and marketing in the fourth quarter. And I just wanted to know whether you expect that to be a trend that persists going forward? Thank you.

Okay. I'll start with the R&D question first. And yes, we believe that the trend towards more emphasis on R&D will continue going forward. From a sales and marketing standpoint, we are obviously going to continue to do some initiatives around the ingredients segment, particularly NR and NIAGEN, but the real cost factors are going to come from the R&D component.

And then the first part of your question regarding margins, are you are talking about the Company margins overall or just the ingredients segment?

Well, this with the overall because the cost of sales as reported in your income statement is across all the divisions of the Company, right?

Yes. There are margins by segments as well, but we expect to, as certain segments grow, the core segments, the services and standards, as those continue to grow, we should see margin improvements in that segment as well as ingredients. As the ingredients segment continues to grow and we continue to move larger volumes of ingredients across all the ingredients, as to be expected, the Company does expect to see further margin improvements. Whether those happen early through 2017 or into 2018 or 2019, it's hard to say at this point.

Okay. And then could you give me a bit more color around the G&A expenses in the fourth quarter? Because it looks like there was a bit of a jump there, and I just wanted to know whether that's something you anticipate is likely to persist in future quarters at the same level or if this was atypically high in the fourth quarter? And if so, for what reason?

I think we mentioned in our earnings release that we had some higher than expected legal costs, and we had those throughout 2016, and we expect that our legal costs are going to be higher moving into 2017 as well.

Okay. And then, Frank, I just wanted to know whether you could comment on Will Black's joining the Company and its relation, if any, to the long-standing relationship that ChromaDex has enjoyed with DSM, if there's any readthrough we can get from that?

Well ,I can comment on it. Will joined the ChromaDex team in May of 2016, and yes, he joined from DSM. And that's how we had originally met Will, was through our relationship with DSM. But I don't have anything else really to comment besides that.

Okay. Thank you.

Todd Hobert, Hobert Enterprises.

Good job. Frank, my questions are mainly for you. First, can I assume that you cannot answer any questions regarding the lawsuit?

That's correct. I mean, our position is that we're not going to comment on matters related to litigation, so I think that's a fair assessment.

Okay. Fair enough. I happen to expect your fourth-quarter revenues to be lower than they actually were due to the fact that Elysium was not going to be purchasing any NIAGEN. Can you please tell me how they were so high?

That's a good point. That's a good question. I mean we did have a strong performance, even with the absence of a large customer in the fourth quarter. And look, that goes to the strength of where we are with the growth of the business and the fact that we're not a single customer, although, last year, we had one customer that was driving some growth in the earlier Q1 and Q2. The growth of NIAGEN in our ingredient business and all of our business continue to be robust regardless of that, that issue, so the business is capable of growing without just having reliance on that one customer, and you saw signs of that in Q4.

Okay. I do know that we picked up an analyst, and I still feel as so the Company is tremendously undervalued between the orphan drug, the revenues that the Company has and the multiples that our comps have, the potential growth of NR. I personally think NR, when it is proven to work, is worth a minimum of $2 billion. Do you have any thoughts on how to get a more accurate pricing of our stock at the current time?

Todd, that's a good point. I mean, the management team and my personal belief is that, even if you look at us compared to our peer group, based on the results that we just reported, the Company is significantly undervalued compared to our peer group. And we're not even trading fairly based on the multiple of revenue that we just released for 2016, let alone on a looking-forward basis. So that's one piece of it.

Analyst coverage -- you're right. We are actively, since we've up listed to NASDAQ we've been having more meetings regarding potential analyst coverage. And we're hopeful that we're going to have additional analysts starting to cover the story. We appreciate the coverage that Ram at Rodman gives us, and we're expecting additional coverage to follow, and we believe that will be helpful as well. Does that cover it?

That covers that, but now the big picture of NR, even though it's definitely mentally satisfying to see these revenues at the current time, but these are actually coming from small potatoes. In your earnings report, I believe I can quote you referred to dealing with "large multinational companies". So, the value that I'm talking about in our having is coming from these potential players. Can you -- I know that these companies take a long time. Can you tell us what companies those are? And could you tell us how far along you are with them and, most importantly, when you potentially see -- even though it's a forward-looking statement -- you converting them into revenues?

That's a good question, Todd. I mean, yes, we have been messaging that we've been working on business development activity with larger companies, Fortune 500 type companies. And no, I can't specifically comment on names for you. I wish I could but, unfortunately, I can't, as you probably expected me to answer.

I was hoping.

I'm sure it's worth the ask, right? We've been working on several of those deals for a long time. And like we've been saying, if you go back to when we had originally launched NIAGEN, NIAGEN was launched essentially just over three years ago. And it's still very early in the science, although we're finally getting to 2017, as I outlined in my letter and also just discussed on the call, peer review published finance has definitely been a big driver for what's been going on over the past three years. A lot of it has been preclinical work, animal studies and such. We have a lot of clinical data that we've been highlighting the importance of that because it's a big deal for us because that's what's going to take it over the hump in terms of what we need. The missing element is published human data for getting these things across the finish line. It's one of the big -- that's why it's a big inflection point. So just as we talked about on the call and even during one of the questions, the clinical data that's coming, even though some of that they not be published, under NDAs, we've been able to share certain data with these key clients and we're moving these business developments as quickly as we can considering that we're dealing with large companies. But the access to additional clinical data has us in a position that we're very optimistic that we're going to have some form of a deal in 2017. I'm not going to get specific in terms of the exact timing of that because I don't want to set an expectation that -- when exactly that's going to happen, but things are coming together rather nicely on all of those fronts right now.

And your comment about the revenue, yes, revenue is small right now, and we've been hearing a lot of commentary since the results. We published the results yesterday about profitability, and profitability right now is not the primary motivation. The primary motivation is to try to drive the deals that we need to do to -- R&D, patent, investing in our patent portfolio, continuing to spend money. And out in the community that we're talking to, including some of the meetings that I've been working on today, we're getting a very positive response from the fact that our business model is able to generate cash and we're able to use that cash efficiently to reinvest it back in research to really drive these types of opportunities. And can we catch a little bit of static, if you will, from some investors that point to that as being a negative? It's not a negative. This is the best way that we should spend our money.

R&D is the best thing we can do to drive nicotinamide riboside and we're in a lucky position. Unlike a lot of our peer group that have to continue to raise money to do that, we're lucky to have a cash or revenue generating business that helps offset some of those R&D costs. And I think that's an incredibly valuable asset in developing these things. I think that was a long-winded answer to your question but --

Well, that was great because you answered my next question, because I actually have personally taken eight calls about how could you have higher revenues and bigger losses? And I was going to ask you to answer that question so I could stop answering that question, and you just answered it. So (multiple speakers)

And a piece of it, by the way, goes back to the earlier questions as ,well, as, look we have had an increase of legal costs over the past year. Some of it is related to some of these matters that we have to deal -- unfortunately, we have to deal with right now. And some of it relates to the issues that we're having with that one customer. So, those things all wrapped up -- I mean, all in all things turn out pretty well for the year considering what we have with NR. We have to protect NR as much as we can.

Understood. No more questions. Thank you.

Anthony [Golo], Private Investor.

Frank, thank you for taking my call. First, I want to congratulate you and the company on the remarkable progress that has been made. To be totally candid with you, I was in the camp of constantly looking for earnings and earnings, and I've switched. I concur with the approach vis-a-vis R&D. I honestly think that is the path that's going to really make the Company.

And I just have a couple of very quick questions for you. In terms of -- as our trials become more validated, do you foresee us negotiating maybe with some major food or beverage companies to consider NIAGEN as an additive? And that might be also applied in the nutritional snack bars. So, thank you again. I appreciate your work.

Thanks Anthony. I appreciate your support as a shareholder. And yes, I mean, the short answer there is we've been talking about this for a little bit here or there, but we are actively working on business development. The food and beverage category is an active target for us. As you know, we, in 2016, in August of 2016, we achieved GRAS status from the FDA, which was an important milestone for us. And that sort of opened the door for us to amplify those discussions that we're having with these various groups that we're having those discussions with.

So, food is -- NIAGEN is a platform ingredient and, as a platform ingredient, we have a lot of shots on this. Food and beverage is going to be very much an active target. It's very fertile ground for us with this story, largely because of the nutrient need. And if you look at ingredients or the types of ingredients that are fortified into foods, you have to have a good nutritional need story there -- vitamin D or calcium for bones or omega-3 fatty acids for heart and brain. And those are the types of large-picture stuff that gets picked up in food, and we have that story here as well.

So, as you know, working with a larger food companies, there's not very many of them and they are not exactly the fastest to move, but it's actually amazing that we have the level of interest that we've had at such an early stage. And although they are moving slowly, things are moving in the right direction with those guys.

Thank you very much.

Matt Dhane, Tieton Capital Management.

I was curious. You talked about your public relations strategy. When would you expect to have that fully rolled out and how impactful could that be on 2017?

Well, you are starting to see signs of it. We started -- really only started actively developing a PR campaign for the Company last year. And with recent hires, we've started building that out. We're trying to create uniform messaging for what it is that we want to go out and talk about. We announced the launch of this website about NR.com, which is a piece of that strategy. We want to have all of the block and tackle in place so that it warrants us starting to really go push to invest in a big PR campaign. And that's largely going to be around the NIAGEN story, the nicotinamide riboside story, to try to build awareness at the consumer level to this through some sort of a PR campaign to drive media attention to nutrients. And science is ultimately the big underlier of what drives that and drives awareness at the level of media. And the higher the level of science, the more they will pick up on it. Human clinical studies is going to be a key part of that program. We are starting to dial it up. We are starting to get more attention to it. And it's going in the right direction right now. In 2017, the additional clinical data is going to be a big point for us. We've known this data was coming. It's always trying to determine when the access to the peer-reviewed published data is going to be the valuable part of helping drive that type of a message. But ultimately, that's the one piece that's missing right now, is that the human data, and with the two studies that we have on the horizon, we can at least start planning around those. And we are getting more advanced notice, by the way, of other science coming from our collaborators. And if you'll notice, we've been actively putting press releases out about peer-reviewed published data as it becomes available and we're starting to now do outreach on a PR level to start to drive attention to that science as well. But that's kind of the core of where we're that with it.

Okay. So really to think about it, whenever some of the human studies really roll out here later this year, that, frankly, that's going to be the chance and the opportunity to really go full-court press and you're just waiting for some of that data to roll out?

Yes, it's the smart thing to do because I don't want to come out with -- it's a stronger story with human data. Mouse data may get you a little bit of a nibble here or there. Even then, it's hard to get attention. It's surprising the level of attention we've gotten, just like this Fast Company piece that got picked up this week. That had an impact. It had a fairly decent sized impact, and that's the type of stuff we want to see coming.

Great. Thank you.

Thank you. And I'm showing no further questions at this time. I would now like to turn the call back to Frank Jaksch for any closing remarks.

So, just to wrap it up, I'd like to thank all of the long-term shareholders, a lot of the guys that I talk to on a regular base that I know are on this phone call. We appreciate your support and your patience. And look, we're developing something that's big here and it takes time to do that. But look, the good news which we've been talking about is that I think 2017 has always been stacking up to be a catalyst or an inflection point year for us. And we as a management team are excited about 2017, and I hope that all of you are equally as excited about what we're doing here because we have something that's really truly special with NIAGEN and we want to do the best we can with it. So thanks, everyone.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program and you may all disconnect. Everyone have a great day.