Simulations Plus Inc (SLP) 2016 Q1 法說會逐字稿

Happy New Year, everyone. It is Thursday, January 14, 2016, and on behalf of Simulations Plus, I welcome you to our first-quarter fiscal year 2016 financial results conference call and webinar.

Presenting this afternoon will be Chairman and CEO Walt Woltosz, followed by Chief Financial Officer John Kneisel, Vice President of Marketing and Sales John DiBella, and our President, Ted Grasela. (Operator Instructions) This call is being recorded for playback at our website, www.simulations-plus.com.

Before we begin today's presentation, we will start with our Safe Harbor statement. With the exception of historical information, the matters discussed in this presentation are forward-looking statements that involve a number of risks and uncertainties. The actual results of the Company could differ significantly from those statements.

Factors that could cause or contribute to such differences include, but are not limited to, continuing demand for the Company's products; competitive factors and the Company's ability to finance future growth; the Company's ability to produce and market new products in a timely fashion; the Company's ability to continue to attract and retain skilled personnel; and the Company's ability to sustain or improve current levels of productivity. Further information on the Company's risk factors is contained in the Company's quarterly and annual reports filed with the US Securities and Exchange Commission.

So with that, it's not my pleasure to turn the presentation over to Walt Woltosz, Chairman and CEO of Simulations Plus.

Thank you, Renee, and welcome, everybody, to our first-quarter fiscal year 2016 conference call.

The highlights of the first quarter are all looking really, really good. Our software renewal rates, 89% based on the number of accounts and 94% based on the fees that those accounts bring in. A number of smaller accounts, academic or such, that are very low revenue accounts change frequently as graduate students graduate or something like that, but the major fees are coming from our commercial accounts. And you can see the 94% renewal rate there is very strong.

We added 23 new software client sites during this past quarter and we have been very active in product development. Very exciting is the announcement of the development of our newest software program, PKPlus. We hope to release that in the near future.

This is a new software product that used for non-compartmental and compartmental analysis for regulatory submissions and for non-regulatory analysis as well. We believe this program has the potential to become a significant contributor to revenues and earnings based on the need and use of this type of software in the industry and the type of competition that exists out there.

We have also been working on the next major release of our GastroPlus software, version 9.5. This will add intramuscular dosing. In the past we have had transdermal dosing, through the skin, but we have not had the intramuscular, so injections into a muscle. And this is being supported in part by our research collaboration agreement with the FDA for long-acting injectable microsphere doses.

We are also adding antibody drug conjugates. This is where an antibody is used as a carrier to deliver a small molecule to a target tissue or organ. We are increasing the integration speed of the software and we are also adding new animal physiologies for the additional dosing routes. Additional dosing routes is our model that deals with ocular dosing, nasal and pulmonary dosing, dermal dosing, and shortly now intramuscular dosing.

We are also working on a significant, major overhaul actually, of ADMET Predictor. This will be version 8.0. This is a very big project, a major overhaul of the user interface to modify it and code re-factoring.

Re-factoring is something you do with software every now and then to kind of clean it up, get it more organized. As software evolves over the years it can tend to turn into sort of what people sometimes call spaghetti code, things that are linked together in a hurry to get something working. But then now and then you go back and re-factor.

This is actually more than a re-factoring. It's a significant rewrite of a large part of the code, particularly the user interface, and involved in that is also greater integration with MedChem Studio. And our consulting services have grown very nicely and we will be talking more about that.

We have two RCAs, research collaboration agreements, with the FDA. We finished the first year during this past quarter of a three-year, $200,000 per year collaboration; an ocular effort where we're improving the ocular model within GastroPlus. We've had it in there for a number of years, but we are making significant improvements in concert with the FDA and a consortium of leading pharmaceutical companies.

The first year went quite well and they renewed the effort for the second year. When we finish the second year they will evaluate whether they want to renew for a third year.

We are also looking at other business opportunities outside of the pharmaceutical industry. The aerospace application of our artificial neural network ensemble technology in a variety of ways that you can see here. In the aerospace industry, we presented at three conferences in 2015 and one so far in 2016. We have contacts that we've made with a number of different military and civilian, NASA for example, organizations in the aerospace industry.

MRI modeler. We continue to take a look at the potential of applying this technology also in a completely different area: to analyze magnetic resonance imaging data. This could also be used for other types of imaging such as x-ray, CT scan, PET scan, and so on.

So, overall, we are a major provider of software and consulting services for pharma R&D, all the way from the very earliest drug discovery, when a chemist first sits down maybe with MedChem Designer or some other software and draws a molecule or uses a computer program to generate 1 million molecules automatically that never existed before.

We work all the way from there through the preclinical development, in laboratory experiments and animal experiments, into first-in-human trials and then into Phase 2 and Phase 3 clinical trials. And then even beyond that when the patent expires, supporting quite a number of now generic companies. Probably more than 30 generic companies are now using GastroPlus or DDDPlus.

I mentioned the applications in aerospace and general healthcare. Financially, very strong quarter. Revenues up by $752,000, 18.4%, to a little over $4 million. The Buffalo division generated $1.43 million of that and that's a 25.8% increase over their first quarter last year.

Our net income up over 100%, 109.2%, by $578,000 to $1.11 million for the quarter and diluted earnings per share about $0.065 a share, so that's an increase of 107.5% compared to $0.031 in the first quarter of last fiscal year.

So in summary, continued growth, seven-year plus profitable trend. I think that's goes to 11 or 12 years if we don't count one particular quarter back when we had our Words+ subsidiary and had a negative quarter. It's been a very consistent ride now for well over 10 years.

Very successful strategic acquisition. The Buffalo and Lancaster divisions now are doing very well together. We've seen the results of the synergy, the physiologically-based pharmacokinetics work done in California with the pharmacometrics work, clinical trial data analysis, and reporting done in Buffalo. Those have turned out to be everything we expected them to be.

Our customer base increased, as I pointed out earlier, and we expect continued compounded growth. We see no reason for it to stop. We do believe that the pharmaceutical industry is continuing to adopt modeling and simulation technologies in all phases of pharmaceutical R&D.

Again the earnings per share increased over 100%. Strong cash. We've continued to pay a dividend of $0.05 per quarter. There will be a vote coming up soon by the Board of Directors for distribution in February. I don't expect them to change anything, but that's always their choice.

And we have now distributed over $14.5 million in cash dividends since 2012 and yet we still retain cash of $7.9 million as of yesterday.

So with that I will turn it over to John K. John, I will advance the slides for you, so if I don't anticipate it properly, just let me know when to go to the next slide.

All right, Walt. Thank you. Good afternoon, everyone. You can move on to off my name, Walt. Thank you.

The quarter was a good quarter for us. Really, really happy with the results that we saw. I think they are fairly explanatory, but we will go through it here.

Our revenues were up $752,000, or 18.4%, to $4.8 million this last fiscal year and that is a significant increase over the prior year. The net revenues for the Lancaster, California, division increased $459,000, which was about 15.6%. They were made up of software revenue increases of about $324,000, which John will talk about a little bit later on, and analytical revenues, which were up $121,000, almost 89% over the prior year. It was a good quarter for those revenues.

The Buffalo division was up $293,000, which was 25.8%, which a very happy increase over the prior year after the first of the acquisition. This resulted in our gross margins being up another 2%, so for the period we are at 77.6%. This gross margin increase did result from the containing of costs while increasing revenues, always a good thing for the bottom line. And also, as our costs tend to be fairly consistent, any increase in sales really helps our margin and our profitability.

Looking at SG&A expenses, they were down $403,000, or 19%, to $1.68 million in 2016 from the last year. There weren't really any significant increases in any of the G&A expense categories in this quarter, though we did see a couple of decreases.

The most significant one that explains the majority of the change is the decrease in consulting fees that we had last year. The first quarter we had booked $400,000 in one-time fees related to our financial advisor and business broker related to the Cognigen acquisition. But there were no such expenses in this quarter.

Looking at research and development, our total spend on research and development costs went up $84,000 this quarter compared to the prior year. Of that we incurred $618,000 and $267,000 of that was capitalized and $351,000 was expensed. First quarter of 2015 last year $274,000 was capitalized and $260,000 was expensed.

Going to the bottom line net income, it was $1.1 million. That's a record for the quarter. It increased by $577,000 over the prior year, up over 100%. And this increase came from increased revenues, which we've talked about, and the other decrease in SG&A expenses.

The other thing; this quarter's tax provision was up substantially I guess you would say, but that was probably a good thing because it was the $611,000 that we had in taxes, which was up about $400,000. It was all caused by higher income and we actually had a higher effective tax rate this period because of that increased income.

One of the factors that has always kept our tax rates low is the R&D credits we generate. Those tend to be a fairly consistent number from quarter to quarter, so the higher our revenues go, the higher our tax rate, effective tax rate goes. But all a good thing, as far as I'm concerned.

With the increased net income, our diluted earnings per share doubled to $0.06 per share from $0.03 the prior year and our EBITDA was up approximately $80,000. It was $978,000, which tracks really pretty closely to the increase in the operations for the period.

Now we will go through a few of the slides here. I will probably go through them pretty quick here. A few of you have seen these before, but these charts -- this chart shows really the revenue growth over the last year: how it's jumped up, the consistency within the quarters.

Our fourth quarter has always tended to be a little low on revenues, just the way the software sales have developed over the years. But last quarter, fourth quarter, because of the Cognigen acquisition, our revenues jumped up in that quarter.

Going over to the gross profit chart, we can see the same continued growth. It should track with the --gross profits should track with revenues going up in our case.

Net income, first quarter shows a substantial increase from $530,000 to $1.1 million. Last year we didn't show -- we showed a slight decrease, but again that was mainly to the $400,000 that we spent in the first quarter of last year for the acquisition.

The next slide, diluted earnings per share. I can see the trends are all generally good and this quarter, obviously, with the net earnings we were up substantially there.

The next slide, EBITDA. This growth in our EBITDA in the first quarter really is just really the effect of all the earnings from operations at this point.

Let's move on to the next chart. Thank you, Walt. The red line on this chart is our cash balance since 2011. You can see where we've actually spent the money back at the beginning of the 2013 fiscal year.

Made a major, major distribution of dividends for tax related because the rates are going up and so it paid out some and held back in the next -- the rest of that year. But really we have returned to issuing $0.20 a year pretty consistently. The blue bars show that.

There have been two events in the last couple of years that have used cash. One was the acquisition or the renegotiation and buyout of our royalty agreement with TSRL on our flagship product, GastroPlus, which really was a great thing because it locked in the amount we were ever going to pay on it and stopped the perpetual expensing and payments that were going out to them. Then, again on the 15.1 the first quarter last year, the $2.1 million that was paid out for Cognigen, which again has also been a good decision for the Company.

But even with those items, we are still maintaining cash. We keep -- even though we distribute it we keep increasing our cash balance. It gives us opportunities to do stuff in the future.

On this one I'm not going to spend a lot of time. The period presented here is August to November for the balance sheet changes. Most of the ratios are still all the same, but we got a good, strong curve ratio and the Company is well capitalized.

For those of you wondering when our 10-Q will be out, it will be -- it is scheduled to be filed just right after the call today. Now I will turn it over to John DiBella.

Thank you, John. Next slide, Walt. In case we have anybody new to the Company that is on the call today, please allow me to just briefly describe our products and services and where they fit in the drug development process using this visual here.

In a nutshell, what we do is we offer end-to-end solutions which span from early discovery going all the way through to clinical development and regulatory filings. Walt has talked about this already.

The Cheminformatics software package that we offer, which consists of ADMET Predictor, MedChem Studio, and MedChem Designer, allow research scientists to design new compounds, virtually screen them across a spectrum of properties to really help them prioritize testing as they go forward. The simulation suite, which consists of GastroPlus, DDDPlus, MembranePlus, and the new PKPlus platforms, help scientists model and predict complex in vitro experiments and, ultimately, the in vivo exposure in animals and humans.

And the KIWI software tool is a cloud-based validated program for managing and communicating pharmacometric projects and results. All of these software tools are complemented by our team of experts, both in California and New York, who can provide consulting support on a project-by-project basis.

Next slide. Diving a little bit deeper into the products themselves, Walt has mentioned already that the software development team is working really hard on new releases for all of the programs. The next version of GastroPlus, which is the flagship product, is expected in the spring and will include some new optional add-on features for intramuscular dosing and also enhancements to one of our newer modules for biologics. And we expect that both of these will help develop more sales in the future.

The Cheminformatics development team is working really hard refreshing the ADMET Predictor and MedChem Studio interfaces and, based upon the initial feedback we've gotten from a number of beta testers, it's being very well received. What we are also doing is adding an optional add-on module to the new ADMET Predictor, which we hope will serve as a revenue driver for us.

The simulation tools, DDDPlus and MembranePlus, should both have new versions coming out in calendar year 2016. Some of the features of note include new optional add-on modules to predict properties from chemical structure and also tighter integration with the GastroPlus package, which we hope is going to increase the exposure of programs and serve as another revenue channel.

Then finally, as Walt talked about earlier, we are adding a new standalone program to our portfolio in 2016, PKPlus. This program is going to be targeted to scientists who perform routine PK modeling in the preclinical or clinical settings. We've tried to design the program's workflow and interface to help automate many of the tasks that are going to be required for submitting reports for regulatory filings.

Based on some initial feedback, some discussions that we have had with people, there seems to be some significant enthusiasm. It's going to be a low-cost, high-volume tool and we are really excited to get it into the hands of people.

John has already discussed the Company's strong performance in Q1. Here I would just like to simply describe a few highlights. The software revenue growth for the quarter was up 12% due to strong renewal rates and also new license sales.

Additionally, the PBPK consulting revenue, which is being handled -- or consulting studies and subsequently revenue being handled by both California and New York offices, increased by 129% in Q1, driven by increased marketing and sales efforts and also this ability to handle some of the increased demand by having several of the scientists in New York be cross-trained on the approaches.

As you can see on the bar chart, we had a really nice 29% increase in the number of software units which were licensed in the quarter. This was driven by the addition of 23 new software clients in Q1, including several new commercial companies in markets which are outside of our traditional pharmaceutical space and a new large order from an FDA division.

As a reminder, the definition for us of a new client is a brand-new company or organization which has never licensed anything from us before or an existing group that has added licenses in new departments or research sites.

And finally here -- sorry, Walt, just real quick. For the quarter itself, the software revenue, license revenue made up 65% of the total with consulting and training making up the remaining 35%.

We continue to see some nice expansion around the globe, which is evident from the breakdown of software and PBPK consulting revenue by geographical location. We saw some really nice performances in Q1 from China and India, which helped to lift the Asian territory to a slightly higher percentage than what we saw in Europe. We're going to continue to invest in all of these areas through attendance at conferences and hosting workshops in 2016.

And then finally, in terms of marketing activities -- we talked a little bit about this on the last call -- the big news is the work that we've done to rebrand Simulations Plus as this end-to-end provider of modeling and simulation services with offices in California and New York. We've redesigned the Company logo. We've updated marketing materials and we are now kicking off a project to revamp the website and hopefully come up with some nice, clear, concise messaging that will address a variety of different groups.

Additionally, we will continue with our heavy travel schedule, attending and presenting at numerous conferences both in this Q1 and also going forward into calendar year 2016, and also hosting training seminars and workshops around the globe. The workshop schedule, in particular, is really aggressive. We're going to be visiting India next month, San Francisco in March, Europe in April, China in May, Korea in June, East Coast in October, Japan in December.

Our reason for this is we've mentioned before that education and training have been identified as really key drivers for continued expansion and hopefully licensing of our technology. To help with some of the promotional activities, like travel to conferences and training seminars, we also have a very robust social media presence and continue to explore other digital marketing opportunities. And all of this is being complemented by our webinar series and publication of peer-reviewed journal articles.

In Q1, it's just to note there at the bottom, that there were nearly 20 journal articles published, all from our clients. These are really valuable marketing tools for us because it shows prospects, people who are interested in the technology, just how their peers are applying it on real case studies without any influence from us whatsoever.

Now I would like to invite Ted to give an update on the New York operations.

Thanks very much, John. This afternoon I will be giving you an update on the consulting activities and the products that we offer through the Buffalo group.

And as Walt mentioned at the beginning of the presentation, we have been realizing the strategic and synergy benefits of the Cognigen acquisition and have forged very strong collaborations between the Buffalo and Lancaster-based scientists. What is important about those collaborations is, as a result it, we've been identifying new and innovative ways of using modeling and simulation to bring insight to our clients' research and development programs. And that insight is the thing that keeps them coming back to us for additional work.

We have also been focusing on social media and email blasts as a strategy for marketing our services and have been focusing on the modeling and simulation activities, but also our data assembly services as well as new KIWI functionality. And I will talk a little bit more about that in a moment.

Lastly, we have increased our presence at national and international scientific meetings. That just gives us an opportunity to talk with current and existing clients and keep moving forward with these programs.

As of the end of the first quarter of this year, we are working with 19 companies on 32 different drugs and for those products we have a total of 56 projects. 15 of those projects actually started in this first quarter. We have expanded the scope of projects with three companies. And that happens when, as we perform analyses, we discover new factors that need to be explored and clients approve the additional expenditures and revenue to delve into some of those questions and issues to address them for regulatory submissions, for example.

Currently our pipeline has a total of 26 outstanding proposals. Over the past year we have brought in seven new companies that we hadn't worked with previously, and as we work with these clients, we continue to build relationships and look forward to getting additional work from them in the future.

The most common therapeutic area that we work in now is oncology and that's followed by neurology and drugs for immunologic disorders. On average, every year 25% of the work that we do on projects results directly in regulatory interactions. These are either the submissions of new drug applications to regulatory agencies or meetings with the FDA to resolve certain issues or questions that either the FDA or the pharmaceutical companies have about advancing a drug and securing approval.

In addition to specific work on specific drugs, we have also over the past year had four contracts for process improvement initiatives where the pharmaceutical or biotechnology company is hiring us to help streamline the processes that exist within the Company. The goal of those activities in general is to speed the delivery of modeling and simulation results so that they are available at the time the decision-making has to be -- decisions have to be made.

In the first quarter, we presented 12 posters or publications at different meetings describing clinical pharmacology, modeling simulation analyses, or our methodologies for communicating results.

I had mentioned that the synergies between our two groups have been leading to interesting new projects and I think this reflects the fact that we now have the ability to be more sophisticated in the types of projects that we can do. And the completeness of the way that we can approach them is allowing us to deal with problems that we wouldn't have been able to deal with in the past.

I had mentioned redesigning our research and development processes. Our modeling simulation results are being used to support patent applications for new formulations. And we actually had one of these in multiple sclerosis and another for the treatment of gout.

We have also seen emerging applications of systems' pharmacology models to research and decision-making in oncology and diabetes. These models are more complicated than the ones that we had done in the past, but they provide the opportunity to get more insight into how drugs are working and what are the determinants of safety and efficacy in those medicines. That just helps to improve the application to regulatory agencies for approval and helps to address questions that might otherwise linger about a compound.

And then, finally, we have been working to develop platform opportunities. These are the application of physiologically-based pharmacokinetic modeling and systems pharmacology modeling and simulation that enable us to support multiple programs within a particular therapeutic area. So this is a strategy for applying the things that we have learned in one project for a company to other projects like that drug in the future.

I will just give a few talking points about KIWI. The analysis of data during the research and development process can be quite messy. In part this is because we have data and results coming from many different departments over the lifecycle of a drug development program. And careful synthesis and communication of these different results is very important.

The industry has access now to enormous computing power. Moving analysis on to the cloud has become a quite popular activity to get access to that almost unlimited processing power. But what we find is that industry actually lacks the tools for harnessing that power in a deliberate way, particularly with respect to organizing complicated modeling and simulation results.

So to address this need, we developed KIWI, which is our software platform for accessing Simulations Plus validated cloud-processing capabilities. This is a schematic that shows a little bit about the architecture that's involved.

On the left, we have users who come in using just the web browser. They register and come through the firewall and gain access to the web server. The web server has a variety of modules that constitute KIWI and they enable scientists to manage their modeling and simulation projects; to visualize different results, so looking at different graphs; analyze those results; and increasingly, we are looking to help them automate the report preparation process as part of all of this.

We have had several successful meetings in the first quarter where we have been able to provide demonstrations to scientists as part of that meeting setting. And we've had about 20 different demonstrations and different people over that period of time. We continue to improve and update the functionality of KIWI and we are targeting the release of the next version in February of 2016.

This particular version is going to focus on improving the data visualization tools, as well as metadata labeling. This metadata is the thing that we are beginning to use now to automate the report preparation and team communication process.

One of the things that we realized, as the functionality within KIWI gets more complicated and we are able to do more things, we had to take a step back and implement a more agile methodology for testing and validation so that we can speed up the release of future versions. That validation aspect of the program is very important, because it's the testing and validation that allows us to be able to submit results to the regulatory agencies using this program in the event of an audit.

The next release is going to be in July of 2016 and we're going to be continuing on with the metadata and report preparation processes functionality.

Next slide. So in summary, the Buffalo office is strong and growing. Our revenue and earnings are up and we are contributing to the overall growth of Simulations Plus. Our consulting has been expanding through enhanced marketing and sales activities and by leveraging the synergies that exist with the Lancaster office. And the KIWI software program continues to generate interest based on our enhanced marketing and sales efforts and delivering demonstrations at scientific meetings.

Thank you. Walt?

All right, thank you very much, John, Ted, and John. Now just to summarize everything before we go to the questions, both divisions are performing very well. We were very pleased with the synergies that we expected, those will be realized. We are now addressing the regulatory agency interest emphasized in a couple of meetings that were held at the FDA and the MHRA in England in 2014 to apply PBPK modeling in clinical pharmacology.

Our software sales continue the strong growth trend. You saw the bar charts. They have a nice slope upward; very nice jump over the past year now with the acquisition of Cognigen and the performance during the first quarter this fiscal year.

We do expect our new releases to further enhance our offerings and expand our markets, both our traditional products and the new PKPlus software. We expect it to become a major source of revenues and earnings. We will see how it goes, but we have very high hopes for it.

Then pursuing the other industries outside of the pharmaceutical and healthcare and -- in healthcare and in aerospace. Again, to summarize: first-quarter revenues up 18.4%, income up 109.2%, and diluted earnings per share is over 100%. So we strongly believe that Simulations Plus continues to lead the trend toward greater use of modeling and simulation and drug development.

I'm going to leave it on that slide for questions and I will ask Renee to read the questions and then we will direct them to the appropriate person for an answer.

Howard Halpern has the first questions in the queue. His first question is how does the landscape look for potential acquisition candidates?

Well, it's a good question, Howard. As you know, we are always shopping, always looking. Right now don't really have anything that is on the immediate horizon, but we are always looking.

With the share price being where it is it gives us a little bit more currency to maybe look at some bigger fish than we've looked at before. But, for now, we just keep looking and if you know of something that looks attractive, please let us know about it.

Walt, Howard's next question is are you seeing increasing interest from industries other than pharmaceuticals for your products?

The traditional products actually have been sold not only to pharmaceutical companies but also to food, to agrotech, and we even had the military in the past. I'm not sure if we have a military license right now, but I know we did at one time not too long ago.

For the new industries, the aerospace and healthcare, we have continued to have contacts with a number of groups in aerospace. Words from two of those groups were not whether they would fund us, but how they would fund us. Government agencies are not the fastest to get something like that done, so we are hoping that they are able to stir up something and get us marching down that path.

Thank you, Walt. Howard's next question is probably for Ted. What drove the revenue increase in the Buffalo division and do you anticipate the growth trend to continue through fiscal year 2017?

Thank you, Howard, for your question. A lot of the increase from last year had really two factors that were involved. One is we moved past the distractions that we had post acquisition as we retooled our systems and learned how to manage the Company as a public company. My team has gotten very good at doing that and so that has been an important factor.

The other factor, though, is really recognizing the fact that together the two types of analyses that were performed by Lancaster and Buffalo really blended together very nicely. And I can't emphasize enough the synergies, the scientific synergies that we see in being able to have a much broader look at the kinds of issues that pharmaceutical companies are faced with and demonstrating that the software and analytical skills that we possess is valuable to those. Some of it is just learning how to manage the business better; some of it is increased sales.

We are all hoping that will continue; of course, we never know, but as I mentioned, we have a healthy pipeline of projects that we are working on for the future. So I will leave it at that.

The next question, and what appears to be the last question, is from Paul Carter. He asks: in the last three months, Cyprotex twice announced that its full-year EBITDA would exceed market expectations. Has a competitive threat that Cyprotex's Cloe PK software presents to GastroPlus increased at all recently?

I think Cyprotex has refocused their business, from everything that I know over the last number of years, to more laboratory services. I don't even know if they offer Cloe PK anymore. I don't really think they do.

There was a comparison study that Pfizer did back in 2008 comparing, at that time before PBPK, software programs that were out and Cloe PK came dead last in both oral and IV dosing accuracy for predicting first-in-human pharmacokinetics. They seemed to just drop off the picture at that time. If they are still selling Cloe PK, it's not very obvious to me and I don't think to anyone else here.

Well, that appears to be the last question. None of our attendees have their hands raised. There have been no further written questions submitted.

That is the shortest list of questions we have had in a long time.

Well, seeing no other questions, thank you, everyone, for attending today. I hope you are pleased with the performance of the Company. We are very excited about how things have been going and the opportunities going forward.

I'm going to turn it over back to Renee now to wrap it up and see you next quarter.

Thank you, Walt. We have just one final announcement. We will be presenting at Source Capital Group's 2016 Disruptive Growth and Healthcare Conference at the Convene Conference Center in New York City on Thursday, February 11. There are opportunities for one-on-one meetings at this conference, so we hope to see some of you there.

And with that we conclude today's conference call. If you missed any part of today's presentation, the replay will be available at our website, www.simulations-plus.com. We'll have that a little later this afternoon.

Thank you all for joining us today.