OPKO Health Inc (OPK) 2018 Q4 法說會逐字稿

Welcome to the OPKO Health, Inc. Business Update Conference Call. (Operator Instructions) As a reminder, this conference is being recorded, Wednesday, February 27, 2019. I would now like to turn the call over to Miriam Miller. Please go ahead, ma'am.

Thank you, operator. Good afternoon. This is Miriam Miller with LHA. Thank you for -- all for joining today's call.

I'd like to remind you that any statements made during this call by management, other than statements of historical facts, will be considered forward-looking and, as such, will be subject to risks and uncertainties that could materially affect the company's expected results. Those forward-looking statements include, without limitation, the various risks described in the company's annual report on Form 10-K for the year ended December 31, 2018, and subsequent quarterly reports on Form 10-Q. Importantly, this conference call contains time-sensitive information that is accurate only as of the date of the live broadcast, February 27, 2019.

Except as required by law, OPKO undertakes no obligation to revise or update any forward-looking statement to reflect events or circumstances after the date of this call.

Before we begin, let me review the format for today. Dr. Phillip Frost, Chairman and Chief Executive Officer, will open the call; followed by Steve Rubin, OPKO's Executive Vice President, who will provide an update on the company's various business and clinical programs. After that, Adam Logal, OPKO's Chief Financial Officer, will review the company's fourth quarter and fiscal year 2018 financial performance. Dr. Frost will provide closing remarks, and then we'll open the call to questions.

Now let me turn the call over to Dr. Frost.

Thank you very much. I'd like to open the call by highlighting a few topics that I think are important. First, I'll mention BioReference Laboratories, our diagnostics unit. And the important story here, I believe, is the new people that are present in this business. Dr. Jon Cohen has joined the company, following Dr. Geoffrey Monk not too long ago. And between the 2 of them, I think we will have an unparalleled leadership group to drive the business forward in a way that is very important as this business is in a state of, I think, rapid evolution. I think we have the right team in place to deal with it.

Next, I'll mention the 4Kscore test. As you know, we recently received a negative LCD from the CMS contractor, Novitas. To say the least, we were disappointed but more than that, we were surprised because we had been interacting with Novitas in a way that led us to believe that we were responding to their queries. In any case, we will make every effort to reverse this decision and in the meantime, we're working on a submission package for FDA approval of the product.

It's a great product, it's a great test, and we just finished a 2-day meeting of a greatly expanded sales force, and they left fully convinced that this test is so important to the men who are suspected of having prostate cancer or of developing prostate cancer will be a commercial success and continue to grow going forward. For the moment, we'll rely on other payers and cash sales as well as foreign sales.

And in this regard, I'll mention the tiny country of Israel, which started distributing the product not too long ago, and the growth has been dramatic. And their projections are, if all goes well, to have a number of tests used by the end of this year, representing a significant portion of the sales that we achieved in America, quite dramatic.

Finally, I'll mention RAYALDEE. This is a great product and as you know, it's the only one to raise the 25-hydroxy vitamin D levels in the blood, while at the same time, lowering parathyroid hormone levels, all this in chronic kidney disease patients. So again, here's a product that we're very optimistic on and we have important new papers that are about to be published that will highlight the unique features of this product and we think will provide the impetus for growth of the product.

Because of our optimism, we're in the midst of greatly expanding the sales force that will tell the story to the nephrologists who are the main prescribers of the product. And finally, and Steve Rubin will expand on this, we're engaged in clinical trials that will expand the indications for the product and result in its distribution in other countries. Steve?

Thank you, Phil, and good afternoon, everyone. 2018 was an eventful year as were the first couple months of 2019. We've seen a number of successes during that time. 2018 saw improved quarter-over-quarter sales for RAYALDEE, and we also completed enrollment in trials for Type 2 diabetes and obesity, and growth hormone deficiency. Through the efforts of our partner, Vifor Fresenius, RAYALDEE was approved in Canada and we initiated additional clinical trials, including the Phase II clinical trial for higher dose RAYALDEE to treat stage 5 CKD that will expand the breadth of RAYALDEE indications.

As Phil noted, we appointed a new leadership team at BRL, our BioReference Labs, with Geoff Monk now serving as President and Dr. Jon Cohen joining us as Executive Chairman. Both gentlemen have deep expertise and extensive relevant experience in the management and growth of lab services, and we are very pleased that they chose to join BRL. Through its Genpath oncology diagnostics division, BRL forged a collaboration with the National Cancer Institute to participate in the institute's precision medical clinical trial known as MCI-MATCH. In this trial, patients are assigned to receive treatment based on the genetic changes found in their tumors through genomic sequencing and other tests. We are pleased to be selected for this collaboration as it puts our Genpath oncology diagnostics on the cutting edge of genetically-based cancer therapy development. GeneDx reached another high-impact milestone in June, with the announced completion of 100,000 additional individual exome sequences, representing one of the largest cohorts of sequenced exomes by an independent clinical laboratory in the world. GeneDx has now surpassed the 140,000 exome mark. This work is important because the information we gather from the body of sequences can be used to help diagnose and, therefore, better manage disease, more specifically, identifying variations in genes that may lead to a variety of neurological metabolic disorders. GeneDx's R&D program continues to launch many new tests and has about 40 tests slated to launch this year alone, which will enable GeneDx to enter a number of new clinical markets.

Most recently, we announced the FDA approval of our point-of-care Sangia total PSA test with the Claros 1 analyzer. There are 25 million PSA tests performed in the United States annually, so this approval represents a significant market opportunity. We believe there are many advantages, both to patients and to physicians in offering test results right at the point-of-care.

Further, with the momentum of this approval, we will continue our work to expand the test menu on this technology platform. We're also taking steps to obtain CLIA waiver for the test and analyzer, which would permit the test to be performed by most medical office personnel with minimal training and are planning for scale-up of our manufacturing capacity during 2019, as necessary for commercial launch.

2018 was also a year for challenges. Phil already noted the Novitas decision regarding our 4Kscore test, and we are evaluating options to appeal the decision and undertake other steps with the centers for Medicare and Medicaid services to have 4Kscore covered for Medicare patients. We will keep you apprised of our progress as our path forward is clarified.

As you also know, in late December, we and Dr. Frost settled the relevant actions brought against us in an SEC complaint, each without admitting or denying any of the allegations. The settlement ends what would have been an expensive, contentious and time-consuming litigation that would continue to negatively impact the wellbeing of the company and the focus of our employees and management. We are pleased to put this behind us so we can continue our work unimpeded by this unfortunate turn of events.

And as a final topic, in February, we successfully raised $200 million through the issuance of 4.5% convertible senior notes due 2025. Adam will cover this in greater detail, but this financing provides OPKO with sufficient funding to accelerate our research and development efforts, yet still provides us with the ability to reinvest in our commercial activities.

I will now go into a bit more detailed overview of our programs. Looking at specific diagnostics products. As you know, our 4Kscore blood test gives a man with elevated PSA levels a personalized prediction of his chance of having or developing an aggressive form of prostate cancer. For 2018, we processed over 79,000 tests, representing a 4% increase compared with 2017. 4Kscore tests performed in the fourth quarter increased by almost 6% from Q3 2018 to 19,500 tests, although this represented a 5% decrease from the comparable quarter in 2017. Tests processed from urologists, where we are now primarily focusing our sales efforts, grew 12% in 2018 compared to 2017. We intend to submit the 4Kscore test to the FDA for approval or clearance during the second quarter.

I think everyone on this call understands the importance of 4Kscore and believes in the need for this test. To restate its credentials, 4Kscore tests has been ordered by more than 12,000 practicing physicians worldwide, with over 200,000 tests ordered. The test has been extensively studied in more than 25,000 patients with results presented in 18 peer-reviewed scientific publications. Results of 5 new studies covering the 4Kscore test were presented in American Urological Association's 2018 Annual Meeting, including a study demonstrating the test's ability to stratify risk of prostate cancer mortality in men with elevated PSA.

For pharmaceuticals, turning now to that portion of our business, let me start with RAYALDEE, the first and only therapy approved by the FDA that both raises 25-hydroxy vitamin D and lowers parathyroid hormone levels in patients with chronic kidney disease with a safety profile similar to placebo. We are continuing to build sales momentum, and we have seen a growth of 250% in total prescriptions for 2018 versus 2017. Total prescriptions of RAYALDEE in Q4, as reported by IQVIA, increased 21% compared with Q3. New patients increased 12% in Q4 versus Q3. Since launch, there have been a total of approximately 7,500 patients on RAYALDEE.

We have also increased the number of health care providers who prescribe RAYALDEE. As of Q4, over 1,700 prescribers have written RAYALDEE, of which over 200 were new prescribers. We ended 2018 with RAYALDEE being available to over 80% of the overall insured population, with over 60% unrestricted coverage of the Medicare population. Overall, we continue to see progress in adoption, the reimbursement and awareness of RAYALDEE. Our sales team continues to demonstrate impact, and our market penetration continues to grow.

Regarding our clinical development programs. We remain focused on progressing a diversified portfolio, addressing several indications with significant unmet medical need in large markets. We have a robust pipeline of product candidates at varying stages of development, which provide opportunities for creating both near- and long-term value for our shareholders.

Starting with our work in renal, our partner, Vifor Fresenius, remains on track to file a Market Authorization Application for the European Medicines Agency later this year as a treatment for SHPT and CKD patients. In September, we initiated a global Phase II trial with a higher-strength RAYALDEE in patients with stage 5 CKD and vitamin D insufficiency who require regular dialysis. Cost of this study will be shared with our development partners, Vifor Fresenius and Japan Tobacco. The first cohort of approximately 44 patients will be treated for 26 weeks in a randomized, open-label fashion with either RAYALDEE or placebo to identify the appropriate dosing to be studied in a second cohort. Initial data readout for this first cohort is expected this year.

The second cohort of more than 200 patients will be treated for 26 weeks in a randomized, double-blind fashion with 1 of 3 different doses of RAYALDEE or placebo. The primary efficacy endpoint will be correction of vitamin D insufficiency and control of SHPT. Patients will then be treated with RAYALDEE for another 26 weeks in an open-label extension.

Turning to our metabolic and endocrinology pipeline. We have several late-stage programs underway or nearing initiation. As you know, our Long-acting Human Growth Hormone products, Somatrogon or hGH-CTP, is partnered with Pfizer for worldwide commercialization. We were pleased to announce in August that we completed enrollment in our global Phase III study in growth hormone deficient children. Pediatric indications represent more than 80% of the hGH market. This is a pivotal, non-inferiority study comparing for a 12-month period, a single weekly injection of Somatrogon with daily injections of GENOTROPIN. This 228-patient study uses the pen device and formulation intended for commercial launch. We're hopeful that the outcomes will support a dosing change from daily to weekly administration, and positively impact the quality of life for children with growth hormone deficiency. With a 12-month primary endpoint, as mentioned, we expect to report top line results from this study in Q4 of this year.

We've recently completed enrollment in the 44-patient Phase II study evaluating the effect of hGH-CTP on the safety and growth of pediatric patients in Japan. The study compares once-weekly hGH-CTP with a once-daily GHD product and is required for future Somatrogon submission to the Japanese regulatory authorities.

Turning to our work with OPK88004, a selective androgen receptor modulator that has the ability to service an agonist, resulting in increased anabolic effects such as increased lean body mass and physical function and decreased fat mass, and as an antagonist to androgen receptors in the prostate. These promising clinical data suggests that OPK88004 can be used for the treatment of a number of symptoms such as frailty, decreased physical function and quality-of-life parameters associated with aging and low testosterone levels.

In a press release on January 31, we announced that we are suspending the BPH trial, as it was originally designed, due to variability in measuring changes of prostate volume and transient increases in liver enzymes observed in several men at these higher doses. The liver enzyme levels resolved after the drug was withdrawn.

Based on the positive anabolic effects of OPK88004 observed in a 420-patient study in aging males, we are planning a Phase II clinical study to assess the drug in prostate cancer patients treated with androgen deprivation therapy, or ADT. ADT lowers testosterone to castration levels, resulting in a number of side effects as it decreases lean body mass, physical function, bone quality and increases in body fat, frailty and hot flashes. The diminished quality of life results in approximately 1/3 of men treated with ADT stopping treatment within 6 months of initiation.

Because of OPK88004's selective androgen activity, it may be well suited to treat the severe side effects associated with ADT in men with prostate cancer. Approximately 1 million men are receiving ADT therapy in the United States.

In mid-June, we reported that enrollment was complete in our Phase IIb dose-escalation trial for our once-weekly GLP-1 glucagon dual-agonist oxyntomodulin for the treatment of Type 2 diabetes and obesity. This study includes 115 type 2 diabetics at 35 clinical sites in the U.S. and was designed to assess a dosing regimen that is expected to improve weight loss and glucose control, and to demonstrate an acceptable safety profile as the drug candidate is prepared to advance in the Phase III studies. We completed this study earlier this month and we expect to report the findings from this study in March of this year.

So in closing, 2018 and the first part of 2019 has been a busy period for us with both successes and challenges, yet we affirm our commitment to our business model and our product pipeline. We have advanced multiple products across our diverse portfolio and continued to see increases in sales and performance indicators for RAYALDEE. We are pleased to have received the FDA approval for Claros 1, and we applaud our partner, Vifor Fresenius, for their work to secure approval for RAYALDEE in Canada. And we look forward to the global expansion of the RAYALDEE franchise in partnership with Japan Tobacco and Vifor Fresenius. We are pleased to announce completion of enrollment in both our pediatric hGH and diabetes programs. These milestones represent significant progress in our development of these therapeutics.

We are advancing a robust clinical development program that addresses several large markets. We expect to make meaningful progress with these programs and to achieve several important milestones.

And with that overview, let me turn the call over to Adam for a discussion of our fourth quarter and full year financial performance.

Thank you, Steve. During the last few months, we've strengthened our balance sheet through 2 separate financing transactions. In November, we completed a $93 million equity offering with Dr. Frost, Dr. Hsiao and our other long-term investors, which resulted in our ending cash balance at $96.5 million.

Additionally, on February 5, we completed the $200 million convertible debt offering. In connection with the closing of the convertible debt offering, we terminated the $60 million unsecured line of credit with Dr. Frost. These financing transactions have provided us with the flexibility to accelerate our R&D efforts while providing us with the ability to reinvest into our commercial activities. As Steve mentioned, we are expanding our commercial organization for RAYALDEE to accelerate the growth rates for that line of business.

In addition, the R&D initiatives Steve mentioned had been competing for available funds, and those financings provide us with the ability to accelerate those programs.

Overall, our financial performance during the fourth quarter came in slightly below our own expectations as a result of the challenging quarter for the lab industry overall as well as some nonrecurring, noncash impairments we recorded. Overall, our net loss during the fourth quarter of 2018 decreased to $76.1 million or $0.13 per share compared to a net loss of $217.9 million or $0.39 per share for the comparable period of 2017. Our revenues improved to $221.9 million for the fourth quarter of 2018 compared to $161 million for the 2017 period.

Moving to cost and expenses. We continued to invest in our R&D projects where we incurred $33.3 million for the fourth quarter of 2018 compared to $34.2 million for the 2017 period. In addition, during the fourth quarter of 2018, we recorded a noncash impairment charge for our goodwill and in-process research and development programs of $21.8 million. These charges principally relate to our API business, which lost a significant customer during the fourth quarter as well as the suspension of our BPH clinical trial for our SARM, which Steve discussed.

Moving to our lab business. Revenue from services increased to $183.1 million compared to $119.4 million for the comparable period of 2017. As a reminder, the 2017 period included $73.3 million of revenue adjustments. Overall, reimbursement within our lab business continues to be challenging within our esoteric testing business, including GeneDx where denial rates are increasing as payers increase preauthorization requirements. Our payer team is identifying ways for us to prevent those denials in the first instance, and our billing team is working diligently on improving our overall appeal success rates. Continuing to improve our cause to serve remains an important focus as we will see another year of reimbursement headwinds, led by the impact of PAMA.

Regarding our pharmaceutical division's performance, we recognized $6 million of revenue related to the sales of RAYALDEE during the quarter. We saw the impact of improved payer coverage at access, including expanded Medicare coverage that has impacted our gross to net revenue calculations. Going forward, we anticipate our net revenue to remain between 50% and 55% of gross revenues, which reflects an increase in our estimated sales returns and allowances.

Total pharmaceutical product revenue for the quarter was $25.4 million compared to $33.8 million for the 2017 period. The fourth quarter of 2017 included the recognition of all RAYALDEE shipped from launch through the end of 2017, which was $9.1 million. Revenue related to the transfer of intellectual property for the fourth quarter was $13.4 million compared to $7.8 million for the 2017 period.

Looking forward to the first quarter of 2019, we expect revenue from services to be between $175 million and $190 million. This anticipated decrease is principally the result of our continuing reimbursement decline with the range reflecting various volume expectations.

Turning to product revenues. For the first quarter, we expect them to come in between $25 million and $28 million, including RAYALDEE revenues between $6.7 million and $7.5 million, while revenues from the transfer of intellectual property are expected to be between $15 million and $20 million.

Looking at anticipated expenses for the first quarter. We expect costs and expenses to be between $280 million and $290 million, including research and development expense of $33 million to $38 million.

With that, I'll turn the call back to Dr. Frost for any final comments.

I don't have any other comments, and we'll open the floor for questions, if there are any.

(Operator Instructions) And our first question is from the line of Maury Raycroft from Jefferies.

First question is on RAYALDEE. So at the beginning of the call, you mentioned that there are some new publications that could be coming out soon. Can you provide any general preview as to what you expect in those publications and when we could see them?

I'll let our expert in vitamin D, Charlie Bishop, respond.

All right, thanks for the question. We have a paper that's been accepted for publication in the American Journal of Nephrology, which is entitled Rationale for Increasing the Serum Total 25D Target in CKD. The paper shows for the first time with prospective data that the serum total 25D or vitamin D target is not where the clinical practice guidelines have placed it at 30 nanograms per mil. Rather, it's substantially higher, and that means that the standard of care, which is used to correct vitamin D insufficiency in CKD patients is completely unable to reach that target. 90% of CKD patients are treated with nutritional vitamin D and our data, which will be coming out very shortly, showed that nutritional vitamin D simply cannot reach that level. RAYALDEE, on the other hand, is the ideal therapy for raising serum total 25D levels. It makes sense that if you want to increase the vitamin D levels in the blood, you give 25-hydroxy D, and that's the active in RAYALDEE. We can raise serum total 25D easily to the level that our data show is required in order to control elevated PTH.

Got it, that's very helpful. And will these publications -- I assume they're going to be used to some extent while marketing. Could some of the data or potentially even the reference be added to the label for RAYALDEE?

That's a great question. So accompanying this particular publication, which was scheduled to come out in February but is delayed because there's going to be a cover editorial by an independent author, and we're waiting for that editorial to be drafted. Both the paper and the editorial will be used in our promotional efforts and we're preparing for that right now. And there's a possibility that we might be able to get clarifications in our label as well.

Got it, okay. And also for RAYALDEE, you mentioned that you just started recruiting for the Phase II in hemodialysis patients with that SHPT. And you have the ongoing Phase IV in CKD and VDI with SHPT. So first, I'm wondering how important is that Phase IV that's ongoing? And when could we expect an update from that trial? And then for both the Phase II and the Phase IV, can you provide any more context in how the data could be used for commercial efforts?

Yes, great questions. So we do have a Phase IV study ongoing that's comparing RAYALDEE to commonly used treatment regimens in the United States as well as in Europe. The data will help us from a promotional standpoint, provided that they turn out positively, which we expect. They also will help us with our pending filing in Europe with -- for RAYALDEE as a treatment for secondary hyperparathyroidism in Stage III, Stage IV CKD. The European filing requires a comparison against immediate release calcifediol, which that is one of the comparative arms in this Phase IV study. We're confident from the early data that the results will be very good. Our timeline for finishing this study will be later this year. This is an open-label study, so we're able to track the data as we go.

With regard to the dialysis study that's ongoing, the medical textbooks teach that RAYALDEE can't possibly work in a patient that doesn't have a functional kidney. But our data from Phase III trials in Stage III and Stage IV CKD show that the PTH lowering response with RAYALDEE is identical in Stage III and Stage IV and is independent of EGFR. The rationale for this is that RAYALDEE gets activated outside the kidney, and our package insert allows for that possibility. So we're going to be very excited to report later this year, the results from our ongoing dialysis study.

Any other questions?

Indeed. Our next question is from the line of Yale Jen from Laidlaw & Company.

And first, adding that I appreciate that you provide the first quarter '19 guidance, so that's very helpful for modeling purpose. But would you be able to provide a little bit more longer-term sort of projection for the full year 2019 in terms how do you see the top line as well as the operating expenses on annualized basis?

So we obviously gave Q1 guidance. We'll continue to provide updates as the year progresses. I think there is some uncertainty for us on the overall outlook, just given the 4K reimbursement challenges and headwinds that we're facing. In addition that we -- some -- the way the lab industry has been kind of pretty choppy in the fourth quarter. We're starting to see some rebound here in the first quarter but obviously, based on the guidance I provided, it was -- we are expecting to come in lower than prior year. So I think as we think about the year, we want to get some more time behind us. From an OpEx perspective, we do think the lab business will continue to pull out efficiencies as we did in 2018. And Geoff and the team there are very focused on any challenges that we have on the top line that have to be addressed through the operating expense lines.

Okay, that's very helpful. I appreciate it. In terms of time line for the CLIA waiver for the Claros PSA test, is there any timeline in terms of how that may be completed or been approved, I guess?

It's a little -- it's too early for me to answer that. So we're going to have our pre-submission discussion with FDA shortly, which will give us a bit of insight but it's a little premature for me to answer that now.

In addition, FDA is actually just finalizing their guidance in terms of CLIA waiver.

Okay, that's very helpful. And maybe the last question here is that the -- in terms of submitting 4K for FDA approval, first of all, have you guys spoke with the agency regarding whether there's any -- would be -- would there be any sort of study needed? And longer term, if you get approved, how would you see that potentially benefit on the sort of commercial side in terms of the commercial outlook?

I can answer the FDA question. This is the Jane Hsiao. So we have been working with FDA about requirement for 4Kscore tests reviewed and approved by FDA. So guidance has been provided to us. And over the last year to 12 -- to 18 months, we've been working on diligently to generate the data, both from the laboratory performance requirement to field clinical studies. So we are at the end of completing all those and that's why we feel comfortable that submission to agencies is going to happen shortly.

And there's no -- is there any sort of clinical study will be needed -- additional clinical study will be needed? Or you can just submit or do you have sort of complete in the near future and to submit the package?

Indeed. There's additional clinical studies, basically more from the performance aspect and which were done. And so this just gives you some example of the type of clinical study FDA asks for. They want us to do it in the clinic and showing that the 4K, together with the standard of care for diagnosing prostate cancer is consistent with what our plan. And you had to do it at the 4K at the various level of PSA at the different level and things like that. So we know -- we complete all those tests.

And from the commercial value of it truly, Yale, it is -- we think it will add value there even though the clinical laboratory review is quite rigorous, especially New York State licenses and the like. But still remains in a perimeter around an FDA approval. And additionally, it is one of those items that Novitas cited continually in their draft reports -- or draft coverage determination. So we think it will be very useful for us to have it.

So could you theoretically also resubmit to the Novitas once you get the -- if ever you get FDA approval instead of just a CLIA lab status?

Of course. It will be something obviously new, important information that they themselves have indicated as important.

Any other questions?

Indeed. (Operator Instructions) Our next question is from the line of Mike Petusky from Barrington Research.

A few questions. Earlier, there was a comment you guys would be greatly expanding the RAYALDEE sales force. I guess, what's the current number of sales reps on RAYALDEE? And then what's the guideline for how much you're expanding them?

Yes. We currently have 64 sales reps and 6 managers that are in place. We've expanded right now by about 20%, and we're considering the timing of doing additional expansion.

So it's 20% off of 64? Or 64...

Yes. So currently, we have plans for mid-70s of sales reps to be in place in the field in April, and we're moving forward with evaluation of whether or not to move forward with additional people or what the timing is for that this year.

Okay. And then moving on to BRL. Adam, do you have the, like, segment margins there, EBITDA margins, op margins, anything like that for the quarter?

Yes. So Mike, we haven't filed our K. We'll file our K by the end of the week. So I haven't -- I'm kind of limited to what we put out in the press release.

Do you by any chance -- since the K is not going to be filed tonight, is there -- do you have any ability to fill in like G&A for the quarter or CapEx for the quarter or anything like that?

Yes. I mean, G&A is consistent with last quarter, so I don't -- there wouldn't be any surprises within there.

Okay. CapEx?

CapEx, marginally down.

Okay. The stock comp, do you have any recollection of that one?

Yes, again, it's consistent with last quarter. There weren't meaningful changes there.

Okay, all right. And forgive me, Adam, I may have missed this. I briefly was off the call for about 30 seconds and it sounded like you may have been answering this. But are you guys essentially -- the expectation given the reimbursement headwinds at BRL, are you guys essentially expecting kind of a down revenue year for '19?

So I think we're not -- I don't want to get ahead of ourselves. I do think that Q1 is particularly challenging and uncertain. Coming off the year-end volumes that we saw, we've been bullish on volume potentials and it remain that way. I think we'll get to have a better sense of the reimbursement environment over these next couple of weeks. And in May, we should be able to provide a broader outlook, Mike.

(Operator Instructions)

Well, if there are no other questions, I want to thank all our participants today, and we look forward to greeting you at the call to commemorate the end of the first quarter.

Thank you.

Thanks.

Ladies and gentlemen, that does conclude your conference call for today. We thank you for your participation and ask that you please disconnect your lines.