Precigen Inc (PGEN) 2015 Q1 法說會逐字稿

Good day, and welcome to the Intrexon first-quarter 2015 financial results conference call and webcast.

(Operator Instructions)

Please note this event is being recorded.

I would now like to turn the conference call over to Mr. Christopher Basta, Vice President of Investor Relations. Mr. Basta, the floor is yours, sir.

Thank you, operator.

Good afternoon, I'm Chris Basta, Vice President of Investor Relations for Intrexon. Welcome to our first-quarter 2015 earnings conference call. Joining me on the call today are Mr. Randal Kirk, Chairman and Chief Executive Officer, and Mr. Krish Krishnan, Chief Operating Officer.

During this conference call, we will make various forward-looking statements within the meaning of the Safe Harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements with respect to revenues, earnings, performance, strategies, prospects, and other aspects of the business of Intrexon Corporation are based on current expectations, are subject to risks and uncertainties.

A number of factors could cause actual results or outcomes to differ materially from those indicated by such forward-looking statements. Please read the Safe Harbor statement contained in the earnings press release, which was released earlier today, and is also available on our website under the investors link, as well as Intrexon's most recent SEC filings, for a more complete description.

The press release references, and our discussion this afternoon may reference, certain non-GAAP financial measures, including adjusted EBITDA, earnings per share, and pro forma adjusted EBITDA earnings per share. Reconciliations to GAAP measures are contained in the earnings press release as well on the Investor section on our website at www.DNA.com.

Now, I would like to turn the call over to Krish Krishnan, our Chief Operating Officer. Krish, the floor is yours.

Thank you. Good afternoon, everyone, and thanks for joining the call today.

RJ and I are pleased with Intrexon's performance in the first quarter of 2015. We've continued to make solid progress against our strategic and operational objectives, and worked to further establish industrial leadership across all our sectors.

Within the health sector, as you may be aware, we're working in a number of including cell and gene therapies, for cancer, orphan genetic disorders, blindness, infectious disease, tissue repair, as well as in the biology-mediated production of APIs. The opportunity to make a difference in patients' lives through our gene and cell therapy approaches is one we're fully vested in, and together with our collaborators, we are positioned to have a number of programs entering the clinic over the next 6 to 12 months. We look forward to sharing data around these efforts when they become available.

Our Immuno-oncology program, focussing on adoptive T-cell therapies, has continued to build momentum this year. In March, we entered into an exclusive collaboration and license agreement to develop and commercialize CAR-T therapies with the biopharmaceutical business of Merck KGaA. Utilizing Intrexon's RheoSwitch platform and proprietary suite of technologies to engineer T-cells, this collaboration aims to develop leading edge CAR-T products that empower the immune system in a regulated manner.

More, recently we signed a CRADA with the National Cancer Institute. Through the CRADA, Intrexon and the NCI entered to develop RheoSwitch-controlled, IL-12 cancer therapy for the treatment of patients with solid tumor malignancies. The ability to direct and control IL-12 via gene therapy poses tremendous promise, and we're pleased to be working with one of the pioneers in immunotherapy, Dr. Steve Rosenberg, to bring this combined approach to the clinic.

We've also completed two acquisitions during the first quarter. The first is ActoGeniX, a clinical stage biopharmaceutical company, with a unique ability to locally deliver a range of therapeutic molecules through engineered microbes in an oral pill. We have begun efforts to partner the two clinical stage programs that are now within our new ActoBiotics division, and are pleased with the interest we've seen to date in these and their other pre-clinical programs.

The second acquisition is Exemplar Genetics, which is developing custom miniature swine research models of human disease, that may enable better predictive efficacy in the generation of new therapeutics and medical devices. Insufficient animal research models create a significant barriers to progress in the discovery of mechanisms and treatment, particularly in therapeutic development for genetic diseases, and orphan indications, which currently have no clear path for evaluation, or as in most cases, an insufficient patient population.

In the environment sector, we executed an exclusive channel collaboration with FuturaGene Group, a wholly owned subsidiary of Suzano Papel, the second largest producer of eucalyptus bulbs in the world. The goal of this collaboration is to develop unique attributes in significant plant species, namely increased biomass in eucalyptus and poplar trees.

With respect to our efforts in energy, we expect our mechanical bioconversion platform to reach pilot stage by year end. As a reminder, our first commercial target is isobutanol, a valuable drop in fuel to the existing energy infrastructure.

We're pleased to share with you that Intrexon Energy Partners has signed an agreement with one of the nation's largest natural gas transport, storage, and processing companies to pursue commercialization of our methane bioconversion facilities. This company brings significant engineering and construction management to our projects, also has the capacity to build, own, and operate these facilities on a tolling basis. We look forward to sharing more with you in the near future.

Moving on to the food sector, we recently completed the acquisition of Okanagan Specialty Fruits, the pioneering agriculture company behind the Arctic apple, the world's first non-browning apple, without the use of any flavor-altering chemical or antioxidant additives. OSF has responsibly harnessed the power of technology to produce wholesome nutritious food that is more appetizing and convenient, and benefits across the entire supply chain. This approach is well aligned with our strategy in the food sector.

On the financial front, during the first Q, our revenue totalled $33.8 million, an increase of 331% over the first quarter of 2014, net income was $27.1 million, or $0.26 per share. Our adjusted EBITDA was a loss of $11.3 million, or $0.11 per basic share. Cash consideration received for research and development services, otherwise known as cost recovery, in the first quarter covered 50% of the cash operating expenses, exclusive of the operating expense of the majority-owned consolidated subsidiaries.

Of note, the Merck Serono agreement is expected to become effective in the second quarter, following regulatory approval, and accordingly, our first-quarter financial results exclude any impact of this agreement.

In summary, we continue to strive to conserve shareholder capital, while continuing to build a significant portfolio of back-end economics from a variety of products across multiple industries and sectors.

Thank you. We now will open the call for Q&A.

(Operator Instructions)

The first question we have comes from Keith Markey with Griffin Securities. Please go ahead.

Thank you for taking my question. One simple one, I'm not familiar with the sizes of the pilot plants for gas production and biomass conversions, and I was just wondering what is the size of the pilot plant for such a project?

Hi, Keith, it is RJ, I'm not sure either, so I'll have to get back to you on that.

Okay. Thanks.

The news, the real news is, the pilot plant, which is ongoing now, is under construction. The real news today is that we actually have, we've formed a relationship with a major gas company, that we'll build when we both agree to do so, at their own expense, our first demo plant.

Right. Okay. I assume that -- I was trying to use the pilot plant as sort of a guess as to what scale I need to start to think about. Thank you.

Keith, I'll get back to you shortly. We just don't want to state the wrong number.

Okay. Thanks. Also, if I understand this correctly, you've issued some Ziopharm stock that you owned to shareholders, correct?

Yes, today we're announcing that we're declaring a dividend of all of the Ziopharm shares that are held by Intrexon.

That is a very intriguing idea. I just was wondering, there's been speculation throughout the investment community from time to time, that you might actually at some point acquire Ziopharm. I gather that this would rule out any idea of acquiring the company. Is that reasonable to think that way?

No. It doesn't rule it out. So according to all the lawyers, and, first of all, let me preface this by saying we have no ongoing discussions with Ziopharm concerning merger, but obviously, given the significant economics that we share, it's a prospect that could at some point be attractive in the future. But it's also the case that there are other parties for whom a Ziopharm acquisition might be very attractive in the future, as well. In either case, our dividending these shares to our shareholders actually would simplify any such transaction.

That makes sense. And then one last question, similar, along a similar vein. I was wondering if you would anticipate similar distributions of other collaborators' stock, if and when their shares appreciate significantly, as Ziopharm's has?

Yes, we would always consider it. So let me say about that, that we fundamentally recognize that one of our main objectives is to make money for our shareholders, and so we are always going to be looking for opportunities to do that. But that said, I don't want to say that this is our -- that this is going to be a practice that we will always follow, when shares appreciate.

So let me give you an example, just as a way of distinction. The shares that we have in our joint venture with Sun Pharma, in opthalmic disease are really 50% of the economics of that deal, and it's really through the share ownership that we have the strategic interest in those programs. So that was not the case, here.

In the case of Ziopharm, look, we as explained in the press release, we acquired those shares in lieu of cash up front and milestone cash payments for the technology access fee, and also milestones, and we almost purchased some shares, almost $50 million worth of shares since 2011. And these shares really, at the present time, exist collaterally to our strategic interests. So our strategic interest really relates to our ability to harvest, as Krish mentioned, the back-end economics that are in that deal.

We have very significant back-end economics in everything that Ziopharm is doing. We're very excited about these, and while we think that the shares are actually likely, in my opinion, to continue to appreciate, it is a very tax-efficient structure for us, and we can get into that later, but I will say -- by the way, with regard to tax efficiency, let me say, consult your tax advisor, and we'll have further details out about this, around the distribution date.

But that said, we're really pleased -- it was really opportunistic, Keith, in that the shares are not the way that we enjoy our strategic interest at Ziopharm, so they have really become a financial asset. It's precisely because we think that they're going to continue to appreciate. Given our tax analysis, we see a terrific opportunity at this time to distribute these shares to Intrexon shareholders in a very efficient way. The actual tax payment for the company will be trivial, and the tax effect, we think to our shareholders, for qualified shareholders, will be highly advantageous.

If we waited until they appreciate further, that may no longer be true. So we thought that this was just an opportune time to do that, and that's why we're doing it. Really what I'm saying is, we'll always analyze this on a case-by-case basis.

Thank you very much for the detailed discussion on that. Thank you.

Next, we have Andrew D'Silva of Merriman Capital.

Thank you for taking my call; I just have a quick couple of questions for you all. First off, it is just a rev rec question with Merck. Are you recognizing up front milestone payments on a net basis, or will you be recognizing on a gross paid basis and end up paying Ziopharm out of your cost of goods?

We'll have to get back to you on that. I'm not sure how the GAAP accountants are going to treat that.

Okay.

I would mention, though, there is nothing in the first quarter, which is what we're talking about here today, that has anything to do with this. You'll see this in the second quarter, so we'll get back to you with our thoughts about that as they develop.

Thank you. And then with Trans Ova, can you maybe explain a little bit better to me? I know you're pretty much working with the female side of the market, predominantly. Am I correct in understanding the female side is substantially smaller than the male side, and that the main objective here is just to bridge the gap between the two sides, utilizing your technology, and if so, maybe elaborate a little bit on how that is possible?

First of all, the Trans Ova group is the largest producer in the United States of bovine embryos of either sex, so it is not really limited to females. But I think what you're thinking about is our joint venture with OvaScience, which as one component includes its application to animal husbandry. The reason we found that so compelling is because, if you think about it, bovine semen in the United States is a $1 billion per year market. And the reason for that is that semen is actually quite plentiful and cheap to get.

But if you follow the science behind OvaScience and the work that we're doing with them in our ECC, toward OvaTure, there is a natural -- there is a natural adjunct application in animal husbandry, because if you could level the playing field to some extent, you could introduce the prospect of frankly proceeding, as you say, from the female side. There are many species -- think about dairy cows, for example, there are many species for which, if you were proceeding from the egg side of the equation rather than from the spermatogonial side, you would have a tremendous advantage.

So the point is, look, there is no market today for eggs, but there is a $1 billion market for just bovine, and obviously, this is applicable to many species, bovine semen. So we're very excited about the application of this technology. But this is only one aspect of the technology that we have available for us, that we are applying at Trans Ova Group today.

Okay. Got it. And I guess, sticking with the technology platforms that you have going right now, you acquired the ActoBiotics platform. I know there is a couple therapies that will hit clinical trials this year, but as far as the technology goes, is it somewhat similar to RheoSwitch in that it is an oral, and that it can modify gene expression? And then maybe elaborate on its importance to you, and what applications or ECCs you're currently working with, do you expect could utilize it?

Thanks. We're very excited about this platform. So this was developed by a company called ActoGeniX in Belgium, and that team is now part of Intrexon, and welcome to them if they're on the call. But we're very happy with this transaction, because this is an entire platform based on -- have we publicized what the organism is?

We have.

So this is an engineered L lactis, which has been engineered in a number of ways. The first thing is, that in order to be grown, relies on a metabolite that is not present in nature. So therefore, the engineered organism is incapable of replication, once it is in the environment.

So it gives you the opportunity to deliver protein therapeutics whether these would be mAbs or other therapeutic proteins, into the lower GI, in an organism that continuously expresses them, and would be delivered to the patient in the form of a pill. The pill would simply contain the dessicated engineered bacterium itself.

So the two clinical, and they have already been in the clinic, by the way, the two clinical programs, the one is TFF, I think, and the other is Anti-TNF-Alpha, has that not been disclosed before? So if you think about it, Anti-TNF-Alpha as a motif, I think, in pharma, is probably the number one, the number one therapeutic motif in terms of revenue. I think that Anti-TNF agents do something like $20 billion a year, cumulatively. Something like that.

They all have very significant side effects, and very significant heightened cancer risks, because they're ingested IV, or sub-Q, but in any event, they are systemically circulated. What this technology, and the lead clinical program, provides the ability to express, the Anti-TNF-Alpha [FESV] during transit through the lower GI. So, for example, as an intervention, as a therapeutic to address irritable bowel disease, this looks to us to be quite compelling.

So these programs were pretty advanced. I said, they both have been in the clinic. But what really gets us excited about this platform is that we are weekly coming up with more ideas, more ways to use this platform, and not merely even in human therapeutics.

We see applications in animal health. We see applications in consumer, so we're very, very excited about this platform. Most people in the past, including some of the work we've done, it is conceivable that you could engineer a micro-organism -- first, let me just mention, why would you want to do that anyway?

Why would you want to engineer a micro-organism or to express some metabolite or protein? Well, it is because they're really cheap. You're talking about as compared to another way of delivering a protein therapeutic, several logs, actually something like a 4-log improvement in COGS. So it is absolutely -- so in certain applications, which is why we're thinking about consumer, and animal health, and animal nutrition, we see this technology can actually be enabling, could actually enable you to use proteins to do things that everyone else had previously thought would just simply be cost-prohibitive.

We think this platform is fantastic. It dovetails very nicely with Intrexon, because obviously we can greatly facilitate the genetic engineering, on this platform, to do a great deal with it. But thanks for the question. I personally am just absolutely thrilled with this technology.

I can hear that in your voice. Is there a possibility, I know this is probably a ways down the road, but a possibility for that to correlate over to IBS, or there's three different variations at IBS-C and IBSC-D, I think IBS-CD, is that possibility that ActoBiotics platform could offer solutions to those platforms?

Absolutely. The team there was always focussing on pretty much -- I won't say all -- but many GI diseases, both orphan and common. And that was the focus of the Company. But another aspect that they have demonstrated in their partnership, for example, with STALLERGENES, which is quite interesting, which is that they've shown that this is a very interesting approach to introduce tolerization, so you could think of in terms of allergy, anti-allergy to be specific.

You can think in terms of allergy and other applications, that would be promoted by tolerization. So other indications, I should say. It is quite compelling.

And just the last question, as far as your ECC pipeline goes, in the past, you've stated the queue was filling up but larger companies, obviously Merck came in recently. Do you still believe that's true as far as the overall pipeline, it's still filling up more and more with larger maybe more cash-rich companies?

Yes, it is.

Okay. All right. Thank you very much. That's all I have.

Next, we have Tycho Peterson at JPMorgan.

It's [Dave Esson] for Tycho. So first of all here, on the energy agreement, congratulations. Can you help us think through -- I know you don't want to get into so many sort of numbers here, but can you help us think through time lines and just a broad framework for the agreement, and whether this is the right template you see in place for similar agreements in the future with other energy companies?

Yes, so the timeline I'm not at liberty to discuss, other than to say that we expect to complete the pilot plant by year-end. But with regard to your second question, which is the one that I care most about, even prior to you asking it, and that is, I think what you're really saying, is this consistent with the business model that we have discussed around this energy program? And the answer is, it absolutely is.

Okay.

In other words, I think what you're really saying is, is this replicable around the world in a way that is consistent with our business model, IE, in which the people who have the gas and the facilities will build these facilities under tolling arrangements, so that we will buy gas from them, own the organism and own all of the output, and the answer is yes.

Got it. And then in terms of your CAR-T programs, I know you have said in the past you have five therapies that you expect to enter the clinic with MD Anderson in 2015. How does the Merck collaboration play into this? Will Merck get a first right to pick two of those candidates? Is that the right way to think about it?

Yes it is. And the two is minimal. They actually have the opportunity to pick more, so -- and I mean I think the agreement is actually -- the agreement is on file, so you can take a look at that. But basically, they will be soon electing two, or more, and then as we proceed, either they can elect more, or we can take them targets.

You should think about this in terms of target exclusivity, however. So it is entirely possible you could see a number of therapeutics, clinical candidates actually in the clinic and parallel against the same target, and that is part of what we achieved with the relationship that we have with MD Anderson, is an ability to rapidly do the translational medicine, to sort that out, so that by the time we really expand the clinical trial to a pivotal trial, we really have a lot of confidence in the ones that we're expanding.

But then if we come up with one that they don't initially elect, then we have the right to develop that. They have an opt-in up to a certain stage of development, and they'll pay a little bit of a price for not having elected it initially, and then thereafter we'll be free to prosecute it ourselves, if they didn't opt in at that time.

Got it. And in terms of the ZIOP special dividend, RJ, I know you mentioned on the call that at some point in the future you might consider the option of buying them out. If that was the case, why give up ownership of those shares at this point, if you expect them to appreciate down the line, and consider them a potential target?

Yes, it's a really good question. We had significant conversations with lawyers about this, securities lawyers, and I will say, including some of your own colleagues, by the way, bankers, I will say that this really does simplify our ability to do that, in the case in which we wish to do so.

Got it. Okay. And then one final--

It makes for a cleaner deal. It would be absolutely clear that all the shares that are out there could vote in a transaction, for example. Okay? In other words, there are complication if you were to proceed with the situation that we are currently, that wouldn't exist post-dividend.

Okay. And then one final one for me. I know you have said at the beginning of the year that you expect to recognize revenue from environmental and consumer this year. How are you tracking in terms offer that goal, and where should we -- what are the sort of the external developments that investors can track in terms of progress towards that?

Yes, that's a really good question. So I was going to -- I was hoping somebody would ask me, since I've been using a grade card scheme to relate how we think things are going. And so, let me put it in that context.

For the year-to-date I would give us a good solid B, maybe even a B-plus, but not an A, and here is why. We think in health, we are totally smoking red hot, is A, right? In energy, it is an A. In food, it's an A, but consumer and environment continue to lag. These sectors, we have a lot of things we want to do in these sectors.

Maybe because we've just been so busy with health and energy and food, I mean, frankly when I read this press release, my first thought was, no wonder I'm so tired. We have been pretty busy, although we're having a lot of fun. So with all that said, it could be the fact that we were distracted on these other matters, because in both environment and consumer are lagging, we're making some progress.

You saw the deal with Suzano Papel in eucalyptus, and the deals that we've signed are making good progress, and we actually have in-house number of projects that are tracking very well experimentally, but let me say that I don't think -- we haven't issued press release on this, and I doubt we will, but we have a head of consumer that will be joining us in the very near future. I think partly by leadership and partly through properly resourcing those efforts, we'll see both environment and consumer growing nicely in the near future.

Got it. Thanks.

Next we have Peter Lawson, investor.

Hi, RJ, just back on the distribution of Ziopharm shares. Did you get any pressure from Merck or any others to do that distribution?

I don't think I'm going to comment on that. You know me, Peter, so it is not like we would respond to that kind of thing anyway, but I think I understand what you're saying. Does this distribution suit some people better than others? And I think, I think you can use your own imagination to answer that question. But I can tell you that our rationale is exactly the one I described, and it is not responsive to any external suggestion.

And are there trigger points for other ECCs where you would potentially redistribute the shares back?

I'm sorry, I didn't hear the first part of the question. Are there others in which we may do this?

And the trigger points that would do this?

Like I said, we would always assess them on a case by case basis. I gave an example, Peter, to explain a case in which we probably would not do it, right? So I mean think about for example, like I said, the Sun Pharma JV, I think there is a buy-sell provision in that, so we might find ourselves on either side of that transaction sometime, on that clause or whatever it is, section of the agreement, someday.

But be that as it may, it wouldn't be our idea to distribute that to our shareholders for the same reasons. I am not saying we would never do it, I'm just saying the reasons would be very, very different from the ones that are present here in the Ziopharm distribution. Ziopharm is a very interesting case.

I mean, the first thing I would observe is look, this was our first ECC, we really took -- it was a bit of an experiment. We committed to -- we took the stock instead of cash. We even bought some stock. And now we think this is a very capably managed company, in my personal view, definitely intrinsically worth more than its market valuation.

We think, again, my personal opinion, I think it is very likely to appreciate. And given our projected profitability for 2015, and the size of this dividend, as measured in dollars today, it was a very tax-efficient opportunity for us to get these shares over to our shareholders, and it appealed principally because our strategic interest in the Ziopharm ECC is a very, very large number, measured in percentage of operating profits, plus ability to participate in license revenues.

Given that our strategic interest is more or less the same, the shares simply became a financial asset. And, look, we're not -- Intrexon is not an investment fund, right? So we definitely -- it is opportunistic. We took the opportunity to make the decision to dividend those shares out to our shareholders, so what I'm really saying is what I said before, we will always assess these on a case-by-case businesses.

We'll always look for tax efficiency, we'll look strategic interest. As you know, we intend on growing Intrexon to become a very large company, and I think we're executing very well. And we fundamentally recognize that our job to make our shareholders money. So this is consistent.

Thank you. Just sticking with Ziopharm. Is there any additional -- any data coming out of ASCO for the ZIOP or MD Anderson CAR-T cell play?

I'm going to defer on that. Dr. Cooper would be the person to query on that score. I can tell you that both their team and our team, and we have a lot of people working on this, are flat out on quite a number of programs, and we're very, very excited about the prospects here. But as far as timing on data, Dr. Cooper would be the person to ask.

And then just finally just if you look across the entire portfolio, when is the first Intrexon product that gets commercialized using Intrexon technology?

It depends on what you mean by Intrexon technology.

Such as the vector -- not acquired products but more so technology that's generated to generate one of your products?

Okay. In that case, I would say the most likely candidates would be the APIs. We have several API projects which are designed to either help an incumbent lower its COGS, or to help a generic company have a first to file capability, and we continue to engage an increasing number of companies on both of those kinds of opportunities.

And if you make -- if you make an API in a cell line, you don't actually need it. If it meets the USP specs, you don't actually need an FDA approval. If you think about, some of these APIs do $1 billion plus worth of revenues, so we have back-end economics on all those. I would expect, if your definition of Intrexon technology are things that we developed from scratch inside of Intrexon without an acquisition, then I think those will probably be the first revenue -- product revenue items.

Could you take a stab at when you think that would happen? Is that 2016 or 2017 event?

Yes.

2016 or 2017?

I'm sorry, was there another question?

No, would it be a 2016 event or a 2017 event?

I think I'd rather just let our numbers do our talking, rather than getting ahead of ourselves. In this particular area, you should bear in mind, I mean especially with first to file generics, they have a -- once they're geared up and ready to go, then they have some patent litigation to do, usually. So who knows when it really turns into product revenue, or maybe they end up becoming authorized generic, or what have you. It is really impossible for us to predict how long that timeline plays out.

Sometimes it is short, sometimes it is longer. But I can tell you that we're very pleased with our progress, and we're definitely in the money on several of these, in terms of production values. So it's really a function of external -- I am not trying to be coy. What I'm really trying to tell you is that the answer to your question is subject to external events over which we at Intrexon have no control.

Okay. Can I just clarify one thing? So you're -- the desired dividend in your mind, or a view within Intrexon, is that you distribute it back to shareholders, and that can potentially free you up to acquire, because you worried that with a large stake in one of your partners, that would remove voting rights, so it would prevent an acquisition? Is that the right way to think about this?

No, not quite. So perhaps I was too subtle. No, we got a question on this call that related to whether our dividending these shares meant that we are foreclosing the possibility of ever acquiring Ziopharm, and the answer to that is absolutely not.

In fact, it would just be the other way around. It actually would simplify that process, in the event we would actually be interested and squared off to do that. But the reasons for the dividend are those that I've stated twice, and I think are detailed actually in the press release.

Thank you.

At this time, it looks like we'll go ahead and conclude our question-and-answer session. I would now like to turn the conference call over to management for any closing remarks. Gentlemen?

Thank you. I'll be very brief today. So I will just say, as I indicated earlier, Krishnan and I are pleased with the execution of our team, year to date. We think that 2015 is going to be a wonderful year for our Company and we couldn't be -- well, I guess we could be, as I already mentioned, there are a couple of areas we're working on. But I will say we're very pleased. We're very pleased.

We think that Intrexon is a unique company. I saw this actually in an SEC document -- has our proxy statement been files, yet? It has. In our proxy statement, you'll see that our compensation committee, in their search with working with one of the best top consultants in the land, tries to find what our peer group was, and fortunately, we have such an extraordinary Board that they were comfortable saying, Intrexon doesn't have a peer group.

And, believe me, we don't mean that in an arrogant way. In fact, I think we're very humble and as my dad used to say, that I should be, I have a lot to be humble about. We do think we're a unique company, and I think the events you see recorded in the press release, and in our Q here, are beginning to really show that this is turning into the sort of company that we have had in mind, and so we're very pleased about this. We have a very clear vision, and we're executing very well. So I would just like to thank all of our team members for their diligence, and thank our shareholders for their support.

And we thank you, sir, and to the rest of the management team, for your time today. The conference call is now concluded. Again, we thank you all for attending today's presentation. At this time, you may disconnect your lines. Thank you, and have a great day, everyone.