Insulet Corp (PODD) 2007 Q3 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the third-quarter 2007 Insulet Corporation earnings conference call. My name is Shaquanna and I will be your coordinator for today. (Operator Instructions).

I would now like to turn the call over to your host for today, Mr. Duane DeSisto, CEO of Insulet. Please proceed

Thank you, operator. Good morning, everyone, and welcome. Thanks for joining us for our third-quarter 2007 call. We will be making forward-looking statements about various aspects of our business, so please refer to our 10-Q and S-1 for a full discussion of our risk factors.

The third quarter was one of continued progress on several critical initiative for Insulet. I'm very pleased with our results. The customer growth we demonstrated in Q3 puts us on track to exceed our revenue goal for this year. We signed a key agreement with Flextronics that positions us to reach our manufacturing goals for next year.

The insulin infusion therapy market for Type 1 diabetes is a $4.3 billion opportunity for Insulet and is significantly underpenetrated. With more than 30% sequential growth in our customer base this quarter and over 150% growth year to date, we certainly see strong demand for OmniPod.

At the end of Q3, there were approximately 3200 customers using our innovative product, which we believe reflects the unmet need for better insulin management solutions. 75% of all our customers continue to have never been on an insulin pump therapy before.

We're working hard to meet this demand and expand the availability of OmniPod. By the end of the third quarter, the Insulet salesforce, consisting of 15 sales reps and two key account managers, covered approximately 35 states.

Our precursor to opening new sales territories is getting OmniPod covered by the managed care companies. We now have signed contracts with insurance companies that cover over 137 million lives, up from 96 million lives in our last quarterly call. Payors like our pay-as-you-go prices pricing model.

Increasingly, insurance providers are requiring independent third-party validation of a company's product and service quality standards in order to approve it for reimbursement. So we are extremely pleased to be awarded national accreditation from the Community Health Accreditation Program, or CHAP, for achieving the organization's standard of excellence. CHAP is an independent, nonprofit national accrediting body that is the leader in improving the quality of home- and community-based health-care organizations in the United States. We expect that Insulet's CHAP accreditation will enable us to sign even more managed care contracts and allow more people with insulin-dependent diabetes to gain access to the OmniPod.

Of course, the other factor in meeting the increased demand for OmniPod is expanding our manufacturing capacity. In Q3, we made great strides in our strategy to increase volume and reduce per-unit production costs. Our manufacturing output grew to 45,000 pods per month by the end of the quarter, up 50% or 15,000 pods per month for the end of the second quarter.

And most importantly, we entered into a key agreement with Flextronics to expand our manufacturing capacity significantly further. When we last spoke, we had begun to receive the first commercial chassis subassemblies from Flextronics. Our amended agreement with them expands the scope of the services to be provided to include the production of the OmniPod device itself. This expansion in manufacturing capacity positions Insulet to reach our goal of producing 200,000 OmniPods per month by the end of 2008.

With that, I'll now turn the call over to Carsten to review the financial results in more detail.

Thank you, Duane. In the third quarter of 2007, we recorded sales of $3.8 million, up from $0.9 million in the third quarter of last year. On a sequential basis, revenue rose 18% from $3.2 million in the second quarter of 2007. At the end of the third quarter of 2007, approximately 3200 customers were using the OmniPod system, up from 2450 customers at the end of the second quarter, a 31% increase. In the first nine months of 2007, the number of customers using the OmniPod system increased by approximately 2000 patients compared to the end of 2006.

In the same period as revenue increased 312% from third quarter 2006 to third quarter 2007, our cost of revenue increased only 73%, a reflection of the significant leverage in our model.

Turning to operating expenses, operating expenses were $10.8 million in the third quarter of 2007, up from $6.1 million in the third quarter of 2006. The majority of this increase was related to increased sales and marketing expenses as we continue to build our sales and marketing infrastructure. Operating expenses were up 24% from $8.7 million in the second quarter of this year.

We reported a net loss of $13.6 million in the third quarter of 2007 compared with a net loss of $9.4 million for the third quarter of last year and a net loss of $12.7 million for the second quarter of this year. The net loss in the third quarter was impacted by a $1 million charge associated with the impairment of fixed assets as we are continuously looking for ways in which we can upgrade our manufacturing process to drive down the per-unit costs.

As of September 2007, Insulet's cash totaled $104.2 million, including the net proceeds of $113.4 million from the Company's initial public offering in May, compared to $33.2 million at the end of 2006.

As you know, we recently completed a secondary offering of our stock. Certain shareholders sold 4,898,398 shares, and the underwriters have notified us of the partial exercise of the overallotment option with respect to 459,759 shares of common stock. Upon the closing of the sale of these shares, we received net proceeds of approximately $9.2 million.

Moving to guidance, we are increasing our revenue guidance from approximately $10 million to $12 million for the year and now expect revenue to be approximately $13 million for the full year 2007. We anticipate that our quarterly net losses for the remainder of 2007 and into 2008 will continue to increase as a result of our ongoing investment in sales and marketing infrastructure and manufacturing capacity expansion.

With that, I will turn the call back to Duane for some closing remarks.

Thanks, Carsten. You may be aware that yesterday was World Diabetes Day, a global awareness campaign organized by the World Health Organization and the International Diabetes Federation. Every day at Insulet, we continue to be focused on making diabetes a smaller part of people's lives.

Despite the demonstrated clinical benefits of CSII therapy, only 23% of Type 1 diabetes patients use insulin pumps due to complicated, costly and inconvenient conventional pump technology. We continue to demonstrate that OmniPod can break down these barriers to CSII therapy. The simplicity of our innovative product's design, particularly the lack of tubing and automated, virtually painless cannula insertion, makes it an extremely attractive pump option for patients.

The strong demand for OmniPod continues to grow. By executing on our sales and marketing and manufacturing goals, we are succeeding in making it more broadly available, thereby tapping the enormous market potential that we see for Insulet and our shareholders. I'm very proud of our growth and achievements in Q3. We have the plans in place to support further demand and expand the use of the insulin pump therapy among people with insulin-dependent diabetes and improve their lives.

And with that, operator, we're ready to open the line for questions.

(Operator Instructions). Paul Choi, Merrill Lynch.

Maybe if we could start with the Flextronics agreement, if you could maybe give us a little color on where do they currently stand in terms of the process for ramping up and assuming a full manufacturing process of the pod? And maybe what are sort of the two or three key steps in that ramp-up to get to that 200,000 number exiting next year?

I think, look, the first step is the chassis subassembly line, and we're projecting by the end of this year we'll be able to make in excess of 55,000 pods per month. We will probably be at that rate by the end of November and obviously into December. So the first step is ramping up the chassis subassembly line, and we, I think as we have articulated, is one chassis subassembly line makes approximately 25,000 chassis. We've already gone to a second shift and we are in the process of expanding the number of lines that we have over there. So that's step one.

Step two, with regards to the automation of the process, all the equipment has already been ordered. We have the original prototype fixturing that we used in Bedford over in Asia, so they are practicing on that. So they get an understanding of how it operates. And then, as part of the agreement with Flextronics, they are going to send their engineering guys to Wright Industries when the equipment is completed and we're going to build the equipment in Nashville, Tennessee. We're going to assemble it. We're going to qualify it. The Flex engineers will be present for all of that. They will operate the equipment there, they will go through that qualification process, and then we will tear it down and we'll move it over to Asia. That whole time period takes approximately 12 months, which kind of puts us in the back half of next year, is when we should have that complete capability over in Asia.

Great. And then, in terms of the agreement with Flextronics, will there be any inclusion on the PDM side, or will it be strictly pod assembly?

The agreement right now is on the pod assembly. The PDM for us is -- it's so straightforward that we probably will end up moving it over there. We really haven't talked to Flex about that. It is really straightforward. It looks similar to a blood glucose meter. It's a few circuit boards that are put inside a plastic housing. So, obviously, the cost driver in everything we're doing is the pod itself. But the PDM obviously is an option for us.

And then on the insurance side, and this will be my last one, can you maybe give us an update on who sort of the big ones are that are still outstanding at this point, what they are sort of asking for in terms of the approval process for instituting coverage with that particular big insurer?

Sure. Paul, I don't want to mention the names because what we find out is if they get played, we lose leverage in this whole process very, very quickly. So we mentioned one at one point in time, and they -- I don't know if they listen to the call or what they did, but it was interesting.

So I would tell you we are talking to -- there's two or three major plans left for us, and on account of where we are, if you start looking at 137 million lives covered, I'm pretty comfortable in telling you that after we get through the end of this year, I think we will be in a great position. Reimbursement should never come up in a call as a reason that we don't hit a sales number. It should be a nonfactor.

I would tell you, the interesting thing, a couple of these key accounts that are left open, it is not the pricing that is subject to negotiation. I believe we received standard contracts from a couple of these big plans, which have several pages of clauses on things that you have to do that are kind of beyond the scope of anything we've seen from any of the plans.

So I would tell you I think we continue to move forward with the two or three major plans that we don't have a contract with. And it really is not one from pricing. So I'm comfortable that the pricing model we have will still hold up. But a couple of these plans have lots and lots of pages on -- you have to do this, that and the other thing, that just don't make sense for our business. So we have to get through that whole process and negotiate it.

Mike Weinstein, JPMorgan.

Let me just follow up first just on the manufacturing side. So maybe I will focus on Bedford first. I know you are still waiting for some of machinery to come in in Bedford. I think the last big piece was expected to come in during the fourth quarter. Has that come in yet?

It should be here during the fourth quarter. No, it has not arrived yet.

And then once that's in, you're pretty much on track from the equipment side. There's a lot of labor, obviously, in front of it, but you're then on track for the automation at Bedford, and that should occur during the first half of '08?

Yes.

And I just want to make sure I understand the timing of both the front end and the back end. So once you have Bedford automated, you could really go with Bedford fully automated, going with running that facility full-out and get your 200,000 per month, even before you get to the full integration in China?

That is correct. So we basically, if China all goes well, and once again, I will put the caveat -- I continue to -- I don't know what's going to go wrong. Something always goes wrong. But if China all went well, in the back half of the year, we have the theoretical capability, and once again with emphasis on theoretical capability, of 400,000 pods per month, if it all went plus-perfect.

Perfect. Let me turn to the demand side, then. So with the progress you're making on manufacturing, where you think you'll be six months from now and then obviously 12 months, what are you doing to start to take some of the limits off on the demand side? Obviously, you are continuing to add reps and expand territories. Talk about dollars you're spending and the marketing strategy behind the opening up of the business.

It really is kind of twofold. What we're doing today is we're looking at, given that we have 15 sales reps, we're looking at how quickly we double the size of that salesforce. And then the second thing we're in the process right now, we're starting to do some tests, direct-to-consumer marketing to find out what the best approach for that is. And to quell anyone's queasiness, our definition of direct-to-consumer marketing is, we are really rifle-shotting the diabetes industry. So we're running a couple ads now in diabetes magazines. We are in the process of -- there's a couple of diabetes-specific TV shows that we're going to do some test marketing on, and we're going to do some test marketing in direct mail that we have kicked off here in the fourth quarter this year.

Depending on how that comes back and where we see the best use of our money, that will be kind of a second-quarter to third-quarter event, where we will full-bore have our first direct-to-consumer advertising campaign. So it's more salespeople and it really is a direct-to-consumer advertising campaign. The direct-to-consumer advertising campaign, like I said, we're doing some test marketing now on a bunch of different things to try to figure out where we should put our money. But both of those, we're looking at the middle of next year being in place and going full speed ahead.

Is there a separate or specific strategy for existing pump users, with -- obviously, a lot of the growth right now is coming from patients that were not on a pump before. Is there a separate strategy to start to go after people that are on pumps that are coming off of their cycles?

Yes, and what we've found is if people see the product and can get that trial, and once again, we're the only company right now in the marketplace where you can actually wear our products for three days. You can take it for a test drive. If we can get in on the product, we've only done two very small tests, in which we basically showed the product to people, allowed them to wear it. They were existing pump users. And we had a very, very high conversion rate. Granted, they were both small [ends]. I think in total it was 20 patients.

So the key of the direct-to-consumer advertising campaign is to get people to see the product, if they are on a pump, let them try it and see the benefits of a product without too -- being how it changes how they operate on a daily basis, how it changes all the way down to their clothing choices that they can pick for a day. And we think once we do that, we will now be in the queue with those people, that when it's time for their renewal, they're not just going to sign the first piece of paper that comes through, that they are actually going to take a look at this. They'll go to their doctor's office. He can help them through a trial in addition to the wearability that we show them. So it really is geared towards -- the direct-to-consumer advertising campaign is really, really geared towards existing pumpers.

Bruce Cranna, Leerink Swann.

This is Carlo in for Bruce. I have a couple of questions, just on where you are seeing the most growth. Are you seeing growth coming from mainly MDI switchers or -- excuse me, MDIs or pumps switchers? What would be the split if we had to model it out going forward?

Today, it is still three out of every four of our customers are coming from MBS. I think we won't see that dynamic change until we start doing that direct-to-consumer. We still think it will probably be 60/40, but it will come down a little bit, because, like I said, the key for existing pumpers, the way we are marketing the product today is we're working with the physicians, we are knocking on their office door, and they're giving us people that typically could benefit from our device. They're not giving me someone that's on an existing pump and everything is going okay and just may want to make a different choice. They're giving me the patients that are having trouble controlling their diabetes, probably should've been on a pump, but for one reason or another didn't choose a pump. So those are the kind of patients we're going for. When we go to the direct-to-consumer campaign, it is our hope and belief that patients will show up in their doctor's office and say, look, I want to give this a try. And that's the kind of existing pumpers we'll be in a position to do that.

Great. And in light of how successful the ramp has been to date, where do you see yourself exiting the year in terms of patients, in terms of how many patients you will have on the OmniPod?

We actually have not guided on patients. What I will offer up is that if you take the capacity we were at end of third quarter, so 45,000 pods, and then translate that into 3200 customers, then, as we have said, we will be at 55,000 pods per month by the end of the year. And if you do the exact same translation, then you're in between 3700 and 3900 patients. Let me leave it at that.

No, that's great. Thank you, guys. One last question, and it is regarding data. Are you currently part of any studies that are maybe exploring the impact of pump disconnects on hemoglobin A1C or anything along those lines? Should we expect data coming out anytime soon?

There will be data. We found out literally at the beginning of this week there will be an article published, and I'm not sure -- there will be an article published in Diabetes Care sometime I think in the first quarter. Is that right? First quarter this year on the impact of disconnecting from pumps. We have two or three other studies that are underway that aren't to the point yet where we would say -- I can give you any guidance on whether it would be published or not. But on the disconnect study, The Effects of Disconnecting has been approved by Diabetes Care and it will be published sometime in the first quarter.

So, we continue to work in the background with several key centers, physicians. We continue to look at the ability to expand into other areas of diabetes. So all that is -- we do have an ongoing program with that. Like I said, all of that still is at various stages, from protocol refinement to actual -- the studies are actually ongoing. But we continue to be intrigued by what we see in our own customer database and we continue to look at the possibility of various studies to put some science behind what we're seeing anecdotally.

Great, thanks very much, guys. That was very helpful. Thanks again for taking my questions.

Robert Faulkner, Thomas Weisel Partners.

A couple things, one manufacturing and one further on demand. When I think about '09, particularly towards the end of '09 in manufacturing, should we still think about adding just one manufacturing line per year, which is what our original forecast was based on, or with the addition of a Flextronics relationship, can we think that if the first rollout goes well, you might be able to add more than one line, let's say towards the end of '09?

Yes, I think, Rob, I think the way to look at '09, if the Flextronics goes well, instead of two lines in the back half -- by the back half of '09, you're probably looking more at three. This is where we are going with this. Once again, everything is gated on we get the equipment over to Asia and we get it up and working and it does what it's supposed to do. But if that all happens, I think '09 looks like more like three lines by the end of the year.

Okay, great, with about $70 million, $75 million in revenue per line? Is that the way we can think about it?

I don't know. I will turn it over to the finance guy.

We're not giving a per line sort of run rate revenue numbers.

That's, to give you some sense, that's about 600,000 pods per month.

So it's the same number of units per line as the --

Yes.

Thank you. That's helpful. And when do you think you might make that decision, once the first line is installed?

I think we will know by the time we qualify the product in Nashville, Tennessee. If you look at it, the whole process takes about 12 months. So I think best case would be when we qualify the equipment. Worst case is when we get it over to Asia and get it up and working.

Okay, and again, that's towards -- about a year from now, we will know kind of --

Yes.

-- probably what you're going to do a year from there in Asia.

Yes, it will probably be a little bit sooner than that on what we're doing, but yes.

Great. That's helpful. On the demand side, in the past -- well, I'm wondering if you have new anecdotes on just what proportion of patients are choosing OmniPod when given the choice? You had I think one individual at your analyst meeting at ADA who gave a number and now you've entered new centers. I'm wondering what that's looking like.

You know, look, it varies from center to center. But I would tell you where we see the business coming down when we go head-to-head with the market leader, it's 50/50. People are looking for kind of a closed-loop view of the world. They go with the market leader. And if people are just evaluating head-to-head on the features of the pumping technology, we win, and we win almost all of those.

So it really is, in most of the major centers where we see, and once again, this is a big, broad generalization, but the critical factor for us is people are looking at the theory that there are closed-loop systems around the corner and it's important that a part of that -- obviously, we're not offering that where we stand today, and they go with market leader on the pumping. If you just look at pure pumping, we're doing very, very well.

Got you. Great. Thanks. Good job, guys.

Ben Andrew, William Blair.

It's actually Matt in for Ben. Just on the manufacturing side, I know we're still relatively early, particularly (technical difficulty)

Can you -- you were cutting in and out. I was wondering, can you repeat the question, Matt?

Sure. Your deals (technical difficulty)

Matt, we lost you. Operator, I don't know if there's anything we can do to kind of clean that up?

Bill Plovanic, Canaccord Adams.

A couple questions here. First, can you just outline what [Karim] strips are through 2008 that would increase the manufacturing from the -- you're going to exit the year at something about 165,000 pods a month. Can you just let us know from a timeline standpoint what those next steps are through '08 and what the impact is on pod production?

Sure. So the next big steps for us vis-a-vis driving towards that 200,000 pods per month, where we have to be, is really the chassis subassemblies. And so we have to get those lines. We've ordered the equipment over in Asia. Like I said, we currently have one line. We've now gone to two shifts, which can produce approximately 50,000 chassis subassemblies. And we're in the process of ordering three more lines of that equipment. And we have to bring them up, hire the people, go through that whole process. So that is the key factor to get to the 200,000 pods per month. That would anticipate, obviously, that all those chassis come to Bedford, Mass., and we finish them all in Bedford.

With regards to having complete product coming out of Asia, the real big steps, the first big step, obviously, was we've already placed the POs and we've ordered all the equipment with Wright Industries. The second big step is the qualification process down at Wright, which will happen at the beginning of '08. And then the third step is, obviously, you have to tear the equipment down, box it up, ship it to Asia. The facility itself is in place in Asia. So it's going to go in there, and then we have to get it back up and get it qualified again.

So it really comes down -- the gating item is obviously finishing off the equipment, and then the second thing is obviously pulling it apart, getting it back over to Asia and then rebuilding it. So that whole process, once again, is about 12 months. So that kind of sticks us in the back half of next year, where if it all goes well and it all goes on time, that we should have that full operation in China.

Great. And then the second question is more of a housekeeping. Number one, ASP on pod holding steady at about $29 each? And then number two, number of diabetes educators you ended the quarter with. And that's all I have. Thanks.

I think vis-a-vis the average pricing, all the contracts, everything we're doing, so we haven't really seen anything that resembled a material variation in that. So we're still very comfortable with those numbers. And in terms of diabetes educators, I think we have half as many as we have salespeople, approximately.

(Operator Instructions). Hamed Khorsand, BWS Financial.

Just a couple of questions. My first one is, what large market states are left and what's the timeline to entering those markets?

Well, I think if you really look at it, like I said, we just rolled into California and Texas in the last 90 days. Our timeline, which ties to our manufacturing process, is by mid-next year we would like to have 30-plus salespeople in the U.S., and they would be covering all the states. Now, granted, we'd be thinly covering all the states, but that's kind of the timeline. We are really shooting for middle of next year, the middle of next year to have the United States completely covered for the first time.

And on the operating side, what kind of, for sales and marketing, you think, doubling the sales effort -- so should we assume that your marketing expenses would double or more than double if you are taking on marketing efforts as well?

We have not yet guided on 2008. So let me not answer the question directly. Suffice it to say that due to the fact that we believe the training burden associated with our product is far lower than that of a conventional pump, and due to the fact that our sales reps are more productive out there in the field, we believe as a result of those two factors, will we be able to do the costs to acquire patients at a 15% to 25% lower compared to the costs to acquire patients of a conventional pump company, and let me leave it at that, and then we'll guided more closer on 2008 expenses once we have announced our full-year 2007 results.

My last question is regarding these POs for the equipment that you've made, have you basically provided the cash for it up front, or how does that work from a cash balance standpoint?

With regards to the equipment, to give you some sense, a new line of automated equipment is about $9 million and it's typically a third upfront, a third once we're qualified and then a third once the equipment is finally approved. So it's about a third, a third, a third.

[Anut Mita], Canaccord Adams.

Just one question. Are there any thoughts about potential partnerships with other products to build out the OmniPod in any way?

You know, we're talking to a lot of people. The only agreement we actually do have in place is with Abbott Diabetes Care to integrate their Navigator system, so the continuous sensing system, into our product. That is an agreement we do in fact have in place. We've been approached by several companies.

One of the interesting things about this business is we have probably, for a strip manufacturer, we have the most profitable customers they want. Our average patients are using about seven strips a day, which is really the business. And basically, we're driving, for the current strip manufacturers we have in our product, we're driving -- about 85% of our customers are using that strip. So we are being approached. We're talking to a lot of people. Obviously, anything we would do would have to make some financial sense. But, today, the only agreement we do in fact have in place is with Abbott with regards to Navigator.

And does that limit you from talking to anyone else who has a continuous glucose monitor, or are you locked in with Abbott with that technology?

No, we can do development -- the agreement is such that we can do development work with -- there's not a lot of players on the continuous side. So there is nothing that would preclude us from doing development work with other companies.

[Jeff LaCorde].

Jeff LaCorde. I'm an OmniPod user, actually, been a diabetic for over 30 years and held off going on to the pump for a lot of the reasons you've already expressed until OmniPod came out. More of technology questions -- the software in the OmniPod, is it going to be able to be downloaded to be able to transfer to the doctor's offices or on to our computers anytime soon, and an update on when the continuous glucose monitoring from Abbott would be available? And also, any partnerships or thoughts of trying to integrate the pod itself or the PDM into a cellphone or a BlackBerry-type device so we have one less product to carry around?

Sure. I think with regards to the download software, we are now -- I think we are at about four site. We will be up to about six sites by the end of the year, seven sites where we have prototype software out there. So if you use -- close, within six, eight months, we should have that capability in place to download it at the doctor's office. We're working, like I said, we have prototype software out there that we're working with some key physicians on just to make sure we have all the feature sets that they're looking for. So that is an ongoing project and is hopefully not too far away.

With regards to the continuous sensing, you've got to talk to the guys at Abbott with regards to where they are in this whole process with the FDA. I would tell you that if you looked at any timelines we have with Abbott, I'm sure Abbott is disappointed on where they are with the FDA and how long it's taken, and we're behind the queue.

So the key path for us is once they have approval of the Navigator from the FDA, then we really can accelerate. We're doing the work in the background. But the real key for us is, we have to go to the FDA, we have to understand what kind of clinical works they are going to require of us, and we really can't do that until they have an FDA-approved product. So that's kind of where we are.

What was the third question again?

Any talk on putting the PDM into a cellphone or some type of personal assistant device so that there's one less thing that we have to carry around in our daily lives?

I think while we continue to look at that as an option, the regulatory path to that is very difficult because once you start sharing -- you know, we're not a diagnostic device. We're a therapeutic device. So the regulatory path to that is a little bit more complicated. And we continue to talk to patients on an ongoing basis, and then we really get mixed response. Obviously, by your question, I think you are of the opinion that you'd like to have one less thing. We also have a whole group of people that are saying, look, I don't want this mixed up with my phone. It's a therapeutic device. I want it completely separate.

So we look at it, and as technology continues to improve, I would tell you that we continue to work on enhancing that PDM. We think we can make it -- we can upgrade the product over time and continue to put in more feature sets. So we are always looking at it. I would tell you today there are no specific plans to integrate it, i.e., into your BlackBerry or your phone.

Thank you very much. It's been a great product. It's life-changing for me.

Thank you very much. That's great to hear.

At this time, there are no further questions. I would now like to turn the call back over to Mr. DeSisto for closing remarks.

I would like to thank everyone for joining us today. Like I said, we're very pleased where we are through the first nine months of this year, and we look forward to updating all of you on our progress on the next call. Thank you very much.

Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect, and have a good day.