NanoString Technologies Inc (NSTG) 2017 Q3 法說會逐字稿

Good day, ladies and gentlemen, and welcome to NanoString Technologies Third Quarter 2017 Financial Results Conference Call. (Operator Instructions) And as a reminder, this conference is being recorded.

I'd now like to introduce your host for today's conference, Doug Farrell, Vice President of Corporate Communications and Investor Relations. Sir?

Thank you, operator. Good afternoon, everyone. On the call with me today is Brad Gray, our President and CEO; and Jim Johnson, our CFO. Earlier today, we released our financial results for the third quarter of 2017, and a copy of the press release can be found on our homepage at nanostring.com.

During this call, we will make a number of statements that are forward-looking, including statements about financial projections, existing and future collaborations, future business growth, trends and related factors, prospects for expanding and penetrating addressable markets, interactions with third-party payers, the timing and outcome of any related reimbursement decisions and our strategic focus and objectives and development status, as well as anticipated success in recent planned launches of products. Forward-looking statements are subject to risks and uncertainties, many of which are beyond our control, including the risks and uncertainties described from time to time in our SEC filings. Our results may differ materially from those projected on today's call and we undertake no obligation to update these forward-looking statements.

I want to remind everybody we'll be attending the Canaccord health care conference next week and look forward to seeing many of you there.

With that, I'd like to turn the call over to Brad.

Good afternoon, and thank you for joining us today. Our third quarter results were disappointing to both our investors as well as our employees. NanoString is currently transforming from a small-scale single platform company to a fully scaled company with multiple technology platforms. This transition requires that we continue to execute on our existing nCounter commercial opportunity, while in parallel, advancing highly differentiator pipeline programs which are expected to drive growth beginning with the launch of our Digital Spatial Profiling platform in late 2018.

While we are excited about both our nCounter platform and pipeline opportunities, our first priority is to stabilize our business in the near term and return to growth over the course of 2018. We believe that we understand the key factors driving the recent volatility in our performance and have taken action to resolve them.

I'm going to focus most of my prepared remarks today on our assessment of these factors and our plans for returning predictability and growth to our nCounter business. I'll close with a brief progress report on our strategic objectives before turning the call over to Jim to review our detailed operating results for the third quarter.

Let me start by briefly recapping our Q3 performance. Our product and service revenue was 19 -- was $16.9 million, down 12% year-on-year. Our academic business was a primary source of weakness for both instruments and consumables. Our biopharma business was relatively strong and would have grown at a double-digit rate, but for a decline of approximately $1 million year-over-year in consumable revenue from a single customer.

Instrument revenue was $4.4 million, down 36%, with reduced SPRINT sales to academic customers playing an important role as multiple instrument orders slipped into Q4.

Total consumable revenue was $10.7 million, down 6% as growth in Prosigna was offset by weakness in life sciences consumables. Panel revenue was approximately flat, while Custom CodeSet revenue decreased approximately 25% year-on-year.

Over the last few weeks, we completed a thorough situational analysis of business trends in the third quarter, including dozens of interviews with customers. When we speak to our customers, they highlight 3 distinctive features of nCounter. The first is speed, the ability to go from sample to publishable insight in days instead of weeks. The second is simplicity. They can run the system and analyze their data on their own without an army of bioinformaticians. The third is content. They love our predesigned panels that target the biology that matters most.

Academic researchers are publishing nCounter-based research at a healthy pace, with over 1,700 peer-reviewed papers to date. Biopharma companies, large and small, have embraced our technology and many have made it their platform of choice for gene expression profiling, particularly in areas such as immuno-oncology, where we believe we are a clear leader.

However, our Q3 performance does not reflect the satisfaction of our customers or the strength of demand for our technology. So what is happening? Based on our analysis, we have identified 3 key factors that we believe impacted our performance. These factors are: one, challenges in our commercial execution; two, the impact of SPRINT on our business; and three, some evolving market dynamics. Through a confluence of circumstances, they combined to substantially impact performance during Q3. We believe that all of these factors are manageable and we have already taken steps to address each issue.

Let me start with the challenges in our commercial execution. As a reminder, we identified the need to improve commercial execution early in 2017 and took decisive steps to address these issues, including the appointment of an industry veteran to lead our commercial operations, the hiring of new inside and field-based reps dedicated to consumables and a substantial increase in marketing activity.

In retrospect, we underestimated these challenges and the actions taken earlier this year will take time to become fully effective. Q3 is always a challenging quarter as the academic sector tends to slow down in July and August, meaning the vast majority of commercial activity needs to happen in the last 30 days of the quarter. This year, the substantial pace of change within our commercial organization may have increased our execution risk in Q3.

In July, we began a leadership transition from our former commercial leader to our new Senior Vice President of Sales and Marketing, Chad Brown. Simultaneously, we were absorbing and training the wave of new sales reps who had been hired during the second quarter. Our results indicate while these changes should improve commercial execution in the long run, the actions may have temporarily reduced effectiveness during Q3.

We believe that these transitional challenges are largely behind us. Chad has created new leadership positions for inside sales and consumables sales and filled these roles with dynamic individuals recruited from industry leaders like Illumina and Qiagen. Our lead generation efforts are accelerating, and we entered Q4 with the largest instrument funnel in company history.

In addition, our investment in dedicated field-based consumable reps is showing results. We're encouraged by the fact that consumable sales in North American territories with field-based consumable reps substantially outperformed sales in those territories without consumable reps during the third quarter. Other leading indicators of consumable growth, such as the number and size of quotes issued, are also increasing. Overall, we expect commercial execution to improve in Q4 and to help support growth in 2018.

The second factor is the impact of the low-cost SPRINT profiler which first launched in July 2015 and quickly grew to account of -- for 40% to 50% of instruments sold. It has accelerated the growth in our installed base and helped penetrate many institutions where researchers had no previous access to nCounter. While each SPRINT system on average has lower consumable pull-through than our historical installed base, we believe that the increased number of potential systems will more than compensate.

While the strategy is sound, SPRINT has reduced our visibility on the timing of instrument-relevant revenue relative to our MAX and FLEX instruments. By targeting individual researchers with less certain funding and new customers outside our core oncology business, the instrument sales cycle has lengthened and our visibility has decreased. This increases the risk that SPRINT orders slip beyond the quarter for which they are forecasted, as happened in Q3. We're encouraged that many of these instrument orders will close in October, making last month the strongest October on record for instrument orders.

That being said, we need to apply our recent insights to increase our forecasting accuracy going forward. This reduces our near-term revenue outlook relative to previous expectations. Longer-term, our initiative to increase the size of the SPRINT sales funnel and broaden its appeal by developing panels outside oncology should revitalize SPRINT growth.

Finally, let me address some evolving market dynamics that are impacting our consumable trends. As a reminder, we sell life science consumables in 2 primary formats. The majority of our consumable revenue comes from carefully curated panels that are catalog products that are sold at attractive prices and appeal to broad segments of researchers. A good example is our PanCancer Immune Profiling Panel, our #1 selling product, which has been purchased by more than 400 customers worldwide. The balance of our life science consumable revenue comes from Custom CodeSets that are designed to a customer's specifications and priced at a premium relative to our panels.

Since nCounter launched in 2009, it's coexisted along other -- alongside other gene expression platforms, including RNA-seq, an alternate approach to profiling gene expression that runs on sequencing technology and can cover all the genes in the transcriptome. Virtually all of our customers have access to RNA-seq and use it for experiments in which they are trying to identify which genes are biological-important. In these cases, researchers are willing to accept a more labor-intensive workflow, complex bioinformatics and slow turnaround times.

Most customers think of nCounter and RNA-seq as complementary approaches. Many prefer nCounter for large experiments focused on known biology when speed from sample to insight is important or when they look to translate their insights into a diagnostic test. In fact, many of our custom-built code sets and diagnostic signatures were designed to profile sets of genes that were first identified using RNA-seq.

Recently, a new market dynamic has emerged. As the cost of whole-transcriptome RNA-seq has come down, there are some lower-volume applications for which it is similar cost to ordering a premium-priced Custom CodeSet for use in nCounter. Some of our existing customers have shifted experiments that would have been performed on nCounter to RNA-seq. This market dynamic appears to be primarily impacting our older or Custom CodeSet portion of our business. Our panel products, including our PanCancer panels for use in oncology and immuno-oncology research remain as popular as ever, with significant repeat business.

The falling cost of sequencing is something we've anticipated and prepared for. We're pursuing 3 initiatives that will address this dynamic. First, we're making some tactical adjustments to our discounting policies related to Custom CodeSets that should allow our reps to win more of these projects; second, we are leveraging our strengthened and expanding consumable sales channel to protect our base and win back business, a strategy that is already yielding promising results; most importantly, we're increasing our focus on introducing high-volume consumable applications where our competitive advantages are most pronounced. The most important of these are the carefully-curated research panels that capitalize on our simple workflow and turnkey bioinformatics.

New products, such as our IO 360 panel and our neurology panels are off to a strong start. And we plan to launch multiple panels spanning a variety of applications and disciplines over the next 2 quarters. Separately, we have expanded our PlexSet offering, targeting experiments with large numbers of samples and low numbers of genes that have traditionally been won on quantitative PCR and which are not practical for sequencing technologies. We expect that over time, panels and PlexSet will maintain the vitality of our consumable pull-through and come to represent the lion's share of our consumable revenue.

In summary, we believe we have a clear understanding of the trends in our business. Our Q3 performance reflects the confluence of circumstances and we believe the underlying business fundamentals are stronger than our Q3 performance indicates. We have taken decisive action to improve commercial execution and strengthen our product offerings, which we believe will stabilize the business in Q4 and return us to growth over the course of 2018.

I'll close with an update on our longer-term strategic priorities, focusing on our diagnostic programs and advancing pipeline technologies. During Q3, Prosigna revenue increased by 47% over the prior year. And the number of active Prosigna sites increased to 69 labs worldwide. Most of our revenue continues to be driven by Prosigna adoption outside the U.S., where we are steadily increasing patient access to Prosigna through engagement with national and regional payers.

Within the U.S., along with other providers of multi-analyte tests, we face an unexpected challenge from the updated clinical lab fee schedule from the Centers for Medicare and Medicaid Services, or CMS. In late September, CMS published a preliminary determination of a crosswalk, the reimbursement of Prosigna under the CPT code for [pologard], which, if implemented, would substantially reduce the reimbursement for Prosigna in 2018.

This decision was contrary to the recommendation of the advisory panel reviewing the decision. We have taken advantage of the comment period to meet with the CMS staff and to formally comment on the proposed policy. We're encouraged by our discussions and look forward to reaching a successful revolution -- resolution to this issue.

I'd also like to share some developments on our ongoing biopharma collaborations. First, Celgene has completed enrollment in the ROBUST trial and is now following those patients toward an event-driven primary analysis. We continue to expect that we'll be in a position to file a PMA for an nCounter-based test for REVLIMID in diffuse large B-cell lymphoma in 2018.

Meanwhile, the lymphoma subtyping test and algorithm, which is the basis for our Celgene collaboration, will be the subject of 11 different studies being presented at the American Society of Hematology Annual Meeting in December, demonstrating the assay's growing use in biomarker research.

Turning to our Merck collaboration. In late October, we were notified by Merck of their decision to no longer support the development and commercialization of our Tumor Inflammation Signature, or TIS, as a companion diagnostic or complementary diagnostic for KEYTRUDA. We understand from Merck that the decision was based on Merck's interim analysis of data from its Phase II basket trial, KEYNOTE-158, and its conclusion that TIS was not required to select patients for KEYTRUDA in those tumor types.

The impact of this decision is that we no longer expect our current collaboration to yield a PMA filing for TIS for these indications. This is obviously disappointing to our team, but we do not believe that this represents the end of our work with Merck or our development of TIS as a diagnostic. Our relationship with Merck and our shared interest in TIS remains strong.

In parallel to coordinating with Merck to wrap up our existing collaboration over the next few months, we look forward to ongoing discussions on potential future research collaboration activities to determine the potential utility of immune-related gene expression signatures in various cancer types. While we have not reached any agreement on potential future collaboration, our dialogue with Merck remains constructive and dynamic.

Meanwhile, we're continuing to extend our leadership in the field of immuno-oncology through engagement with other researchers and biopharma companies. Under the more open approach that we described in our last call, we have executed 9 pilot studies related to our Tumor Inflammation Signature, helping expand the number of diagnostic pilot studies to 61 different studies with 36 companies, the fastest expansion in our biopharma pilot program in any single quarter.

Sales of our PanCancer Immune Profiling Panel were up 14% in Q3 and are up 22% year-to-date. In parallel, biopharma and academic researchers have responded positively to the launch of our new IO 360 panel, a powerful tool that provides researchers with a 360-degree view of the tumor, the microenvironment and the immune response. It began shipping in late September and has already become the focus of a number of new potential collaborations.

For instance, last week, we announced a collaboration with the NSABP foundation, an academic research organization that is supported by the National Cancer Institute and industry, and which will use our IO 360 panel to analyze NSABP's bio bank of more than 2,500 tumor samples in order to characterize the immuno phenotypes of colorectal cancer. This is an important step in identifying cancer patients who will benefit from current immunotherapies and future combinations, and we're honored to partner with NSABP.

This collaboration is part of our continuing leadership in the field of immuno-oncology, which will be on display next week at the Society of Immunotherapy for Cancer conference, where we'll have a record 15 abstracts being presented, including 5 abstracts highlighting our IO 360 panel.

Finally, during the third quarter, we made progress in advancing our portfolio of new technology platforms. We are now just 1 year away from the planned launch of our Digital Spatial Profiling platform. We are continuing to develop the market by engaging customers in our technology access program and presenting data at major meetings. At the SITC meeting next week, we'll present 3 DSP abstracts, building on the 10 abstracts presented to date.

Our expanded technology access program now includes more than 25 projects, including 14 with biopharma companies and 12 with academic and government researchers. We have leading pharma companies and one of the nation's premier cancer centers that have come back to do follow-on projects, which we believe is a great sign that researchers find DSP data valuable and a leading indicator of strong demand for this well-differentiated technology.

We've also made great progress on our Hyb & Seq program during the third quarter. On August 8, we announced that we had entered into a development collaboration with Lam Research to accelerate the development of Hyb & Seq. Under the terms of this agreement, Lam will provide up to $50 million to fund the development of Hyb & Seq in return for a royalty on sales and an equity interest in NanoString. Critically, NanoString retains the full commercial rights to Hyb & Seq, leaving us the option to commercialize this powerful clinical sequencer on our own or in partnership with a strategic partner.

I'm pleased to tell you that our Lam Research collaboration is off to a fantastic start. The teams have great chemistry and the speed with which technical synergies have been identified has exceeded expectations. It's clear that Lam's expertise in nanoscale manufacturing and advanced engineering are going to be invaluable in optimizing what we believe will be a disruptive technology. The team is expanding quickly and the progress remains on track. Our next major progress report is planned for AGBT 2018 in February.

In September, we presented exciting proof of principle work in liquid biopsy at the AGBT Precision Health meeting in Scottsdale, Arizona. Hyb & Seq's simple workflow has the potential to initiate the sequencing of self-read DNA in a liquid biopsy sample in about an hour. The sequencing of circulating self-read DNA from blood is a promising noninvasive tool for clinical oncology, and this rapidly-growing market is estimated to be a $17 billion annual opportunity by 2025.

The launch of these new instrument platforms will significantly expand our total addressable market and also provide revenue streams that have durable competitive advantage. These pipeline programs are expected to become major revenue drivers in 2019 and beyond.

With that, I'd like to hand the call over to Jim to report financial results and update guidance.

Thanks, Brad. Total revenue for the quarter was $27 million, up 13% versus the third quarter of 2016.

Total product and service revenue was $16.9 million, 12% lower year-over-year. Foreign exchange rate fluctuations impacted product and service revenue positively by approximately 1 percentage point.

Instrument revenue was $4.4 million, 36% lower than in the third quarter of 2016, and most of the decline related to the academic and government market segment.

Total consumable pull-through for the quarter was $10.7 million, down 6% year-over-year and below our historical benchmark of $100,000 per system on an annualized basis.

Life science's consumable revenue, which is the largest component of system pull-through, was lower than anticipated at $9 million, down 12% compared to the third quarter of 2016. The softness was across all customer segments, however biopharma was relatively strong except for the purchases by one major customer that declined by approximately $1 million versus the prior year.

Prosigna IVD revenue is the other component of pull-through and it was $1.7 million for the quarter, up 47% year-over-year, with ex-U.S. markets continuing to generate the majority of sales.

We recorded $10.1 million of collaboration revenue for the quarter compared to $4.8 million in the third quarter of 2016. The increase largely resulted from a reduction in the scope of future regulatory activities for the esophageal cancer indication in our Merck collaboration. This change resulted in an increase in the project completion percentage as of September 30. Additionally, we began to generate revenue from our new Hyb & Seq collaboration with Lam Research.

Gross margin on product and service revenue for the quarter was 57% compared to 58% in the third quarter of 2016. Gross margin was slightly lower in 2017, primarily due to changes in consumable product mix and a reserve for slow-moving inventory. R&D expense was $11.4 million for the quarter, up 30% over the third quarter of the prior year. The increase was driven primarily by increased investment in new technology and product development programs, in particular, Digital Spatial Profiling and Hyb & Seq.

SG&A expense was up 18% year-over-year to $18.4 million for the quarter, and the increase largely reflects added staffing to support the company's growth, most of which went towards the scale-up of our sales and marketing effort.

Stock-based compensation expense was $3.1 million compared to $2.2 million for the third quarter of 2016. Our net loss increased to $11.4 million or $0.45 per share from $10.1 million or $0.51 per share for the third quarter of last year. We ended the quarter with approximately $90 million of cash and investments.

So now I'll turn to an update of our 2017 financial guidance. Based on our lower-than-expected third quarter results, together with our current fourth quarter outlook, we're reducing our guidance for total product and service revenue to $68 million to $71 million. Previously, it was $81 million to $85 million.

We now expect Prosigna revenues to be at or slightly below the low end of our previously-provided range of $7 million to $8 million. The implied Q4 guidance for product and service revenue is comparable to last quarter at the low end of the range and comparable to Q4 of 2016 at the high end.

We're lowering our total revenue guidance to a range of $109 million to $112 million for the year, which corresponds to revenue growth of 26% to 29% versus 2016. Our previous guidance was for $114 million to $118 million in total revenue and the decrease reflects the reduction in product and service revenue, partially offset by an increase in collaboration revenue from approximately $33 million to approximately $41 million. This increase reflects acceleration of revenue recognition under the Merck collaboration due to lower forecasted future costs related to regulatory activities as well as our updated outlook for our collaborations for Celgene and Lam Research.

We're reducing our guidance for gross margin on product and service revenue to approximately 56% for the year in light of our revised revenue guidance. Previously, we had expected gross margin in the range of 57% to 58%.

We're reducing our operating expense guidance to $119 million to $121 million for the year to reflect the impact of cost control measures. Previously, we guided to $123 million to $126 million for the year.

We expect stock-based composition expense near the high end of our previous guidance range of approximately $10 million to $11 million.

As a result of changes to both revenue and operating expense guidance, we now expect our GAAP operating loss for the year to be lower in the range of $38 million to $41 million from the previous $42 million to $46 million.

We continue to expect interest and other expense to be approximately $6 million for the year, and our GAAP net loss for the year is also expected to be lower at $44 million to $47 million compared to $48 million to $52 million previously. On a per share basis, we're now expecting a net loss of $1.86 to $1.99 per share compared to the previous $2.03 to $2.20 per share.

There's no change to expected capital expenditures at $4 million to $5 million for the year.

So with that, I'll turn it back over to Brad to wrap up.

Thanks, Jim. In summary, we've experienced growing pains as we transform from a single-platform company to a large-scale enterprise with multiple platforms. We understand the factors that have increased the volatility of our business over the last several quarters, and we're laser-focused on returning our core business to growth.

Our nCounter platform has a strong value proposition and offers unique capabilities. And we believe that our investment in new consumable panels and expanded commercial channel will return us to growth in 2018. In the meantime, we continue to advance our portfolio of novel technology platforms that should be important growth catalysts beginning next year.

I look forward to updating you on our continued progress.

Operator, we're ready for any questions.

(Operator Instructions) Our first question comes from Doug Schenkel with Cowen.

This is Adam on for Doug. You got a pretty material cut to your product and service revenue guidance for the year, even considering the miss in Q3. Could you provide any more color on what your Q4 guidance embeds in terms of an improvement in number of maybe instrument placements or pull-through relative to last quarter, or maybe Q4 of last year?

Sure. So I'll take that. And Jim, you can add some color, fill in the blanks. Obviously, we described 3 major challenges to our current business that we experienced in Q3 around execution, around the impact of our low-cost SPRINT profiler, both on instrument revenue and consumable pull-through and the emerging market dynamic in our Custom CodeSet business. If you look at our Q4 guidance, what you're really seeing is that we're working to stabilize the business in the quarter -- in the current quarter. The bottom end of the guidance range is effectively flat sequentially from Q3, really assuming that many of the same trends that we're experiencing are slow to resolve over the weeks ahead in this quarter. And the top end of the guidance range is basically flat year-on-year compared to last year's Q4, sort of indicating that we make some recovery in the current trends, but that things take time to resolve and stabilize. As I described, given our experience on the instrument side of things with an experience that SPRINT instruments are slower to close than our MAX and FLEX instruments, we've begun to apply that observation into our forecasting methodology, and that is embedded and part of our Q4 guidance. In addition, I think we are continuing to assume consumable pull-through on par with what we've experienced so far this year, which is more in the $80,000 to $90,000 per system range, again in totality, including Prosigna, compared to our historical benchmark of $100,000 per system per year. So I think we're viewing and managing Q4 as a period of stabilization on our way back to being able to guide to growth over the course of 2018.

Okay, great. And perhaps my second question, related to the first. You noted, as you mentioned, the instrument funnel is bigger than it's ever been, but that SPRINT instruments have these lengthened sales cycles and increased uncertainty of revenue compared to your other instruments. Acknowledging that you just outlined a pretty comprehensive sales strategy, could you provide any specifics on the steps you're taking to ensure that instruments in that funnel will actually be converted to revenue?

Sure. So the way we're revitalizing instrument growth really starts with recapturing the slipped systems from Q3, which I think we -- the team has done a good job of making progress on in the month of October. And we take that as a promising sign that, indeed, the deceleration in instrument revenue that we saw in Q3 was a consequence of the way we're -- the experience of execution and the SPRINT dynamic rather than something competitive. The second thing we need to do is, of course, increase -- improve our sales execution really through steps that we've already taken over the course of this year. You'll remember than when we took the step to expand our sales channel to include dedicated consumable reps, we thought that one of the benefits of that would be able to allow our incumbent reps to spend a larger fraction of their time focusing on closing instruments -- cultivating and closing instrument opportunities, and that's going to be -- continue to become more effective as these new sales reps become more seasoned in their roles. The third thing that we're doing is continuing to develop applications, specifically panels, that appeal to the types of customers that we're targeting with SPRINT. In some cases, these are new oncology panels, like the IO 360; and in other cases, they're new non-oncology panels, like the neurology panel that we've launched and the PlexSet application that we've launched, that really broaden the appeal of the SPRINT platform and make it just as compelling to a non-oncology customer as it has been to an oncology customer. So those are the main tactics. Some of those are going to happen sooner rather than later in terms of commercial execution improvements. Others will take time, like the introduction of non-oncology panels.

(Operator Instructions) Our next question comes from Catherine Schulte with Baird.

Can you just quantify the dollar impact that you think was from instruments just slipping into the fourth quarter?

Yes, I think when we guided for our instrument -- or total revenue back in August, we had visibility to the instrument portion of that revenue over time. When we preannounced our revenue, we characterized the miss as -- which is about $3 million to $3.5 million at our midpoint, as about half instruments and half consumables. So that would suggest that the instrument miss was about $1.5 million. Really, we would characterize that almost entirely as a slip. Now some of that will slip into the fourth quarter and be recaptured. A portion has been recaptured in October. Some of those slips, we believe could go into subsequent quarters. So -- but virtually none of it was lost to competition or fell out of the funnel. So I guess in that sense, I'd characterize the slip itself as $1.5 million approximately. But I would not want to mischaracterize it as all being captured in the month of October. Really, a portion was, and a portion really remains out there to be captured. And that -- the uncertainty of the timeline of when and how we capture that slip is embedded in the guidance that we gave today for Q4.

Okay, that's helpful. And then one of your AMP corporate workshops talks about using a blood-based signature for lung cancer and sarcoma tests. Can you just elaborate on what that's referring to?

Yes. I believe that workshop is going to feature some of our customers at the company onco site who are developing a lab-developed test for the indications you describe using our nCounter Elements platform. nCounter Element is a general-purpose reagent traditionally, and it is being used by a few commercial and even more kind of academic clinical labs to develop lab-developed tests. And that's an audience who is -- that the AMP meeting really speaks to.

Thank you. I'm showing no further questions in queue, so I'd like to turn the call back over for closing remarks.

Thanks very much, operator. If you did miss any portion of the call, there will be a replay up within the next couple of hours. You can access that by dialing (855) 859-2056. Please use the passcode 88331168. And with that, thank you for joining us today.

Thank you. Ladies and gentlemen, that does conclude today's conference. Thank you for your participation. You may all disconnect, and have a wonderful day.