Sellas Life Sciences Group Inc (SLS) 2010 Q2 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Second Quarter 2010 RXi Pharmaceuticals Corporation Earnings Conference Call. My name is Chenille and I'll be your coordinator for today. At this time, all participants are in listen-only mode. We will be facilitating a Q&A session towards the end of this call.

(Operator Instructions)

As a reminder, this conference is being recorded for replay purposes. I would now like to turn the presentation over to your host for today's call, Mr. Noah Beerman. Please, proceed.

Thank you, and good morning. Welcome to RXi Pharmaceuticals' earnings call for the second quarter ended June 30, 2010. I'm joined today by Amy Tata, our Principal Accounting Officer, and Dr. Pamela Pavco, our VP of Pharmaceutical Development. For today's call, I will review our key corporate highlights and scientific achievements, then Amy will take you through a review of our financials. I will then wrap up the call with an update on our progress in achieving our 2010 corporate goals and then open it up to Q&A.

Before we start our discussion today, let me first remind our listeners that we'll be making forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about the future development of RXi Pharmaceuticals Corporation's products.

These forward-looking statements about future expectations, plans and prospects of the development of RXi's products involve significant risks, uncertainties, and assumptions. Actual results may differ materially from those RXi contemplated by these forward-looking statements as a result of the risk factors discussed in RXi reports on file with the US Securities and Exchange Commission, or SEC, including, but not limited to, RXi's most recent annual report on Form 10-K and any subsequent quarterly reports on Form 10-Q filed with the SEC.

RXi does not undertake to update any of these forward-looking statements to reflect a change in its views or events or circumstances that occur after the date of this disclosure.

Let me now provide you with a review and update on our activities from the first half of 2010. RXi made tremendous scientific and business progress in the first half of the year, as we transitioned the Company from a research-focused business to one distinguished by our focused therapeutic strategy, compelling product development programs, and validating corporate partnerships. Our efforts and accomplishments have provided a solid foundation for the Company's continued growth, and we believe we are well positioned to support the next phase of our development.

We've defined our therapeutic strategy and designated key programs; advanced our therapeutic platform, including our novel and proprietary self-delivering, or sd-rxRNA, compounds; presented broad-based applications of our proprietary compounds at leading RNAi conferences; published robust scientific findings in peer review journals; established research collaborations to further explore the use of our technology; and raised additional capital to support our technology and product development activities.

Defining our therapeutic focus, which we rolled out this past June, was a very important accomplishment for the Company. While RXi's therapeutic platform has the potential to be broadly applicable to multiple therapeutic areas, we also realized it was important to focus our resources on a limited number of key therapeutic areas to be most successful. The result of this exercise is a therapeutic strategy which includes core, strategic and opportunistic areas for therapeutic development, and I'll take you through these.

RXi's core focus is centered on therapeutic development of products candidates in two areas; dermal anti-scarring and retinal disorders. We are prepared to advance these core programs into development and through clinical proof-of-concept. RXi would also consider partnering these product candidates either during or after this development process.

First off, anti-scarring. This is an attractive therapeutic indication with clear development precedent and limited competition for effective therapies. We estimate the US potential market for skin scarring is up to $4 billion, with approximately 42 million surgical procedures annually leading to scar formation.

Our sd-rxRNA compounds have shown robust delivery and effective target silencing in skin local administration. RXi presented preclinical results exemplifying the performance of these sd-rxRNA compounds in an in vivo model of compromised skin at the International Scar Club Meeting this past March.

For our anti-scarring program, we intend to select a development candidate in 2010 and file an IND in 2011. In addition to aggressively moving forward with this program, our success in dermal anti-scarring may provide additional opportunities in other dermatology applications as well as in anti-fibrotic indications such as pulmonary fibrosis, liver fibrosis, acute spinal cord injury, ocular scarring, and restenosis, which together encompass a potential market size of up to $16 billion.

Our second core focus is retinal disorders. There are multiple retinal diseases with large unmet medical need that are not addressed adequately with currently available therapies. These diseases include wet and dry age-related macular degeneration, diabetic retinopathy, and diabetic macular edema, which together affect approximately 18 million people in the US, and which have an estimated market potential of up to $20 billion.

At the Association for Research in Vision and Ophthalmology, or ARVO, annual meeting this past may, RXi presented data demonstrating unprecedented delivery and effective target silencing in the retina with sd-rxRNA compounds. By applying RXi's unique delivery -- I'm sorry, by applying RXi's unique technology with existing and novel targets, and possibly multiple targets, we believe we have the potential to develop next-generation treatments for retinal disorders.

We also believe there is an opportunity to potentially improve on existing therapies, extend the time required between doses, and utilize new modes of administration for delivery to the eye. RXi intends to select a retinal disorder development candidate in 2011.

RXi will explore additional indications and proceed through preclinical development -- itself and with partners, in additional therapeutic areas that are of strategic interest to the Company. RXi is exploring indications accessible by spinal cord delivery of sd-rxRNA compounds. Direct dosing to the spinal cord could be used for severe central nervous system or spinal cord diseases in both orphan and non-orphan indications, both of which have significant market potential.

RXi plans to leverage early proof-of-concept studies and collaborations to advance programs in this area. The Company intends to advance potential candidates through preclinical studies, as well as seek partners to help support further development.

Oncology, and more specifically hepatocellular carcinoma and liver metastases, is the second area of strategic interest for RXi. We believe that these disease areas of high unmet need have a US market potential of up to $4 billion.

Given the emerging emphasis on multi-targeted therapies for cancer, RXi has the ability to develop RNAi compounds against multiple gene targets to generate effective combination therapies. The unique features of the Company's rxRNA platform may offer new alternatives to treating cancers and could lead to attractive product candidates to further advance in conjunction with partners.

Finally, RXi is also exploring therapeutic areas that are of opportunistic interest to the Company, and is prepared to engage in active development in cases where the program is funded by a partner, or we obtain promising initial results.

Importantly, by defining our therapeutic strategy we now have a scientific and business road map and a solid foundation upon which to build. Whether we are allocating resources to our internal programs, evaluating new technologies and collaborations or discussing broad-based partnering opportunities, our strategy will help guide the direction of the Company and allow us to maintain our focus as we move forward.

Turning now to collaborations and partnerships. 2010 has been a very active year for us, and we expect this to continue. We entered into multiple research collaborations and feasibility agreements to accelerate the development and validate the utility of our proprietary rxRNA technology and other related technologies. These relationships with industry and academic partners are consistent with our therapeutic strategy and have already started to produce promising data.

In June, we initiated a drug research collaboration with Royal Philips Electronics to explore the benefits in preclinical studies of combining their image-guided ultrasound-mediated drug delivery platform with RXi's sd-rxRNA compounds. Philips' delivery platform offers researchers a unique approach to investigate the delivery of various therapeutic molecules, including RNAi compounds, across blood vessel barriers and facilitating their uptake in cells.

We are excited about the potential of this approach, which may ultimately be used in developing targeted treatments for a number of disease areas, including cancer and cardiovascular disease. We expect the research to progress rapidly with the first wave of scientific results ready for presentation or publication over the next 12 months.

The collaboration we announced in January of this year with Shalesh Kaushal, MD, Ph.D., Chairman of the Department of Ophthalmology at the University of Massachusetts Medical School, has already produced positive preclinical results.

The data presented at the ARVO annual meeting in May showed effective delivery of RXi's proprietary sd-rxRNA compounds to retinal cells in the mouse eye, and demonstrated significant target gene silencing in vivo following local administrations. Successful delivery to therapeutically relevant cells of the eye establishes the potential value of sd-rxRNA for the treatment of retinal diseases, one of the areas of core focus for the Company.

We also initiated research agreements with Mirna Therapeutics, miRagen Therapeutics, and Transderm, Incorporated that were a natural fit for our proprietary rxRNA technology. Mirna Therapeutics and RXi are working to combine RXi's rxRNA technology with Mirna's microRNA mimics as potential therapeutics in oncology.

miRagen Therapeutics and RXi are evaluating the potential utility of our rxRNA technology against specific microRNA targets of interest to miRagen in the cardiac and neuromuscular disease areas. And Transderm and RXi have been exploring the use of both existing and proprietary RNAi delivery approaches for dermatological applications.

These early stage research agreements are consistent with our strategy of exploring opportunistic areas and will provide RXi with knowledge and information to enhance our therapeutic platform, as well as to help further strengthen our foundation for future growth.

One of our stated 2010 goals has been to complete one or more corporate partnerships. RXi's continued development of our therapeutic platform, presentation of new preclinical data, and focused therapeutic strategy have provided further strength and clarity to our partnering discussions. We continue to be actively engaged with a number of potential partners, and remain focused and confident in achieving this important goal.

With respect to advances and recognition for our technology, we have continued to publish and present excellent progress with our proprietary RNAi therapeutic platform. This platform, which is comprised of next-generation rxRNA compounds and advanced delivery approaches, continues to produce promising in vitro and in vivo preclinical results.

Specifically, new data has been presented throughout the year, including presentations at the Keystone Symposia's RNA Silencing Mechanism, Biology and Application Conference; the Third International Scar Club Meeting; Association for Cancer Research, or AACR; and IBC TIDES Oligonucleotide and Peptide Technology and Product Development Conference; and the IBC Oligonucleotide Therapeutics Discovery Conference, as well as the ARVO annual meeting, which I mentioned earlier.

In addition, an article entitled Modified sd-rxRNAs are not processed by Dicer maintain potency and are incorporated into the risk complex, or RNA-induced silencing complex was published in the journal Nucleic Acids Research in January 2010. The data expands the understanding of how chemically modified RNAi duplexes interact with key programs involved in the silencing pathway and that longer modified duplexes can be highly potent gene silencers.

These presentations and publications demonstrate the robustness in potential for broad-based applications using our proprietary self-delivering or sd-rxRNA compounds as well as RXi's other unique RNAi-based compounds, again providing the foundation for growth in many diverse therapeutic areas.

We also just recently announced that RXi was awarded an NIH grant to fund preclinical development of RNAi therapeutics using our proprietary platform. The National Institute of Allergy and Infectious Diseases or the NIAID, part of the NIH, awarded RXi a highly competitive, advanced technology Small Business Innovation Research, or SBIR, grant for preclinical development of RNAi therapeutics using RXi's novel proprietary therapeutic platform.

RXi was awarded approximately $600,000 over the first two years of this grant. Additional funding of up to $1 million per year, over a time period of up to three years, may be requested for Phase II.

Finally, in March 2010, we successfully raised net proceeds of approximately $11.4 million, which gives us the necessary financial runway and foundation to focus on and achieve our 2010 goals, as well as aggressively advance our therapeutic programs into 2011.

I would also like to mention that one of RXi's largest shareholders, CytRx Corporation, has been in an orderly way decreasing their position in RXi. We believe that this is ultimately in the best interest of RXi and our shareholders, as we continue to establish ourselves as an independent RNAi-based therapeutics company. CytRx currently owns approximately 17% of RXi's shares.

Following our March financing, where we had taken down the remainder of our shelf, on May 21, 2010 we filed a new $75 million shelf registration statement with the SEC. It is typical for biotechnology companies at our stage of development to have our shelf registration filed, as it provides us with timely access to financing if and when the market warrants.

I'll now turn the call over to Amy for an update on our financial performance.

Thank you, Noah. Good morning, everyone. I'll keep my comments brief, so please refer to our release for additional information. At the end of the second quarter, cash, cash equivalents and short-term investments totaled $11.1 million. In addition, we continue to have minimal debt. As of June 30, we have $85,000 in capital lease obligations for equipment used in research and development and technology equipment.

According to accounting principles generally accepted in the United States, our net loss for the second quarter of 2010 was approximately $2.1 million, compared with a net loss of $5.1 million for the same period in 2009. The decrease in net loss of $3 million includes the decrease in operating expenses of $0.2 million and the increase of $2.8 million in other income, of which $2.6 million is a non-cash gain related to the change in the fair value of warrants issued in connection with several financing transactions.

The decrease in operating expenses of $0.2 million is primarily due to a $0.7 million decrease in research and development expenses, offset by a $0.5 million increase in general and administrative expenses. This resulted in a net loss of $0.12 and $0.37 per share on both a basic and diluted basis, based on 18.4 million and 13.8 million weighted average shares outstanding for the second quarter of 2010 and 2009, respectively.

R&D expenses were $2.3 million and $3 million, including approximately $0.8 million and $1.2 million in non-cash stock-based compensation for the second quarter of 2010 and 2009, respectively. The decrease of $0.7 million was primarily due to a decrease in non-employee, non-cash stock-based compensation, offset by an increase in employee non-cash stock-based compensation expenses as a result of additional headcount. I would expect that our R&D expenses will continue to increase as we expand our development activities.

G&A expenses were $2.5 million and $2 million, including $0.8 million and $0.6 million in non-cash stock-based compensation from common stock options issued to employees and common stock warrants issued in exchange for services for the second quarter of 2010 and 2009, respectively.

The increase of $0.5 million, or 25%, was primarily due to an increase in both cash and non-cash compensation as a result of additional headcount, as well as an increase in non-cash compensation associated with warrants issued in exchange for investment advisory services.

This wraps up our financial highlights. I will turn it back over to our President and CEO, Noah Beerman.

Thank you, Amy. I'd like to conclude the call with a review of our 2010 corporate goals. As previously mentioned, 2010 is a pivotal and transitional year for RXi as we evolve from a research stage company to one focused on the advancement of product development programs that are in line with our new therapeutic strategy and the execution of validating corporate partnerships. The goals we set at the beginning of the year reflect the promise of our proprietary technologies, and will create significant value for our company and for our shareholders.

With the necessary cash in hand from a financing earlier this year, our guiding therapeutic strategy and the collective experience of our seasoned management team and advisors, including our Co-Founder and Nobel Laureate, Dr. Craig Mello, we are well positioned to achieve all of the goals set at the beginning of the year, in fact, we have already accomplished four of our six stated goals.

We have defined the therapeutic focus for rxRNA technology, further strengthened our intellectual property, maintained appropriate cash resources to support advancement of our therapeutic pipeline, and continued our moderate cash burn. Our team is focused and confident in the ability to achieve the remaining two goals, which include selecting a product candidate to advance into development and completing one or more corporate partnerships.

In conclusion, I would like to express my enthusiasm for the progress we've made this year in laying a solid foundation for growth to our strategy, our committed employees and advisors, our next-generation therapeutic platform, our industry collaborations, and our financial resources. It is an exciting time in RXi's development, and I look forward to advancing and building the Company and realizing the promise of RNAi therapeutics.

Our next call will be in conjunction with our year-end results, but we will continue to provide updates throughout the year demonstrating our progress on our goals, therapeutic programs and partnerships.

Operator, we would now like to open it up for some questions.

Thank you.

(Operator Instructions)

Your first question comes from the line of Simos Simeonidis of Rodman & Renshaw.

Good morning. Thank you for taking the questions.

Hi, Simos. How are you doing?

Good. How are you?

Good.

Noah, I know it's hard to talk about sensitive type of information, but I was wondering if you can give us any type of granularity on the status of the partnership discussions. And I know you addressed it a little bit on your prepared comments, but could you talk about your comfort level of completing a meaningful partnership by year end?

Sure. Thanks for the question, Simos. In January when the Company rolled out our goals shortly after I arrived, we did disclose partnering as one of our important goals for the year, and certainly we've been very focused on it.

What I can tell you is that we are actively engaged with a number of partners. We continue to be very focused on this. It's a very important goal for the Company. We're comfortable with the guidance that we gave at the beginning of the year, and we're confident that we'll be well positioned to achieve this goal this year.

Okay, great. Again, on partnerships, do you see more of the interest coming from big pharma players versus regional, or both? And also, is there one or two therapeutic areas where you see more of an interest focusing in?

Sure. So, let me take those in two parts. First of all, our partnering strategy has been global. We're obviously focused on big pharma and big biotech, but we also have quite an extensive interest in regional companies in Europe as well as an outreach into Japan. So I think we've taken a strategy that's quite inclusive, and I'm confident that we're, again, well networked and well positioned in these efforts.

In terms of therapeutic areas, one of the five products of our therapeutic strategy is certain areas are quite, I would say, prominent in kind of the partnering landscape. The two core areas that we selected are most important for us based on the fit with our technology and our ability to advance those into development and get some proof-of-concept data. That being said, they are also areas of interest in potential partnerships.

But I just would mention that the strategic areas which include spinal cord delivery [of] CNS applications as well as oncology and, frankly, the opportunistic areas which include other oncology applications, respiratory, other hepatic conditions, et cetera, are quite interesting on the partnering landscape and often produce some very interesting opportunities.

So, we have had a very inclusive strategy. We believe the therapeutic areas that RXi is focused on represent attractive areas for not only ourselves, but also for potential partners.

That's helpful, thanks. One last one, and then I'll jump back in the queue. This morning, we saw an announcement from Silence about one of their new patents, Zamore, and yesterday we had your neighbors in Massachusetts, Alnylam and Regulus, announce another patent of their own.

And with that opportunity, I was wondering if you could comment on your level of comfort with RXi's IP state at this point, and also tell us whether there are any RXi patent applications that are pending that you think may have significant impact in terms of strengthening your IP.

Sure. Excellent questions, Simos. The IP landscape is certainly very, very important in the RNAi space, and I think we all know that. RXi, in particular, has certainly taken this very, very seriously and continues to do so as we move forward.

We do believe we have excellent intellectual property around a number of our different molecules including our sd-rxRNA molecules. We're certainly aware of other intellectual property that's in the space that's Silence and Alnylam and other companies, but we feel quite confident in our intellectual property.

In terms of the specific timing of any allowances or issuances, we don't -- that's information that we wouldn't regularly disclose. Obviously, as we do get additional issuances, et cetera, we will make disclosures of that, but we take the intellectual property landscape very seriously, and I think we've put ourselves in a very strong position.

Okay, great. Thank you for taking the questions.

Sure.

Your next question comes from the line of Pamela Bassett of Cantor Fitzgerald.

Hi. Thanks for taking my questions. Good morning.

Hi. Good morning.

Staying with the partnership -- can you hear me okay?

Sure.

Okay. Staying with the partnership opportunities for a minute, how would you characterize your focus? Is it more on therapeutic areas, specific targets, or platforms or all of the above?

So, Pamela, excellent question. I would characterize it as all of the above. As you and other folks know, in the RNAi space one of the ways that companies structure deals is around therapeutic indications another way is around therapeutic targets. Certainly, technology development is often an important component in a partnering arrangement.

We are actively pursuing those discussions, and all of those aspects factor into the different types of opportunities that are presenting themselves to RXi.

Which are your priority? Which type?

So, what I would say is at the end of the day what we're trying to do as a company is develop products. We have a -- what we believe, is outstanding platform technology, but at the end of the day our goal is to develop products, ourselves and with partners. And therefore, not the target applications under a partnership. So, securing specific targets will provide us with an ability to get to a product, again, either ourselves or with a partner.

The technology development components are enabling us to get there. And so we put these in context, but at the end of the day the goal and the ultimate benefit for the Company and our shareholders is to develop products. The way we'll get there is through the platform technology.

And briefly, how would you outline the key features of a deal structure that you might enter into?

Yes. So, Pamela, we don't go into a lot of detail publicly with respect to specific deal points. But what I can tell you is that you've kind of actually outlined a number of the critical features that are important to have in a partnership and collaboration, which include components which lend themselves to further technology development, components that lend themselves to focusing on a specific therapeutic area, and components that are focused on specific biological targets.

And so those are all themes that we are putting into our partnering discussions, and we would anticipate could be in a final agreement.

And finally, will you discuss, please, the timeline for your work with Philips?

Sure. The Philips agreement was put in place at the beginning of June. Phillips is really an impressive organization and we're very thrilled to be working with them. The partnership, as I mentioned, is based on our proprietary compound and their cutting-edge delivery technology using ultrasound-mediated image-guided delivery of biologicals. And they have a significant effort at their facility in Eindhoven in the Netherlands, and that's the team that we're working with.

The timeline and the collaboration is off the ground; we're actively working together. And the timeline, broadly speaking, is that we will be generating data, including preclinical data, over the next 12 months.

The collaboration would go beyond that, but the research and preclinical work would be generated over the next 12 months. And it is our intention to present and publish the results coming out of this collaboration, which is on, again, the delivery of our molecules using their image-guided ultrasound technology.

Thanks, Noah.

Sure.

Your next question comes from the line of Keith Markey of Griffin Securities.

Good morning, Noah, and thank you for taking my phone call.

Sure. Hi, Keith.

Hi. I just wanted to verify that the second half, as far as expenses go, is going to look pretty similar to what we've seen in the first half. And if you could elude to what you're plans might be for R&D coming up in 2011, that would be helpful.

Sure. Good question. We've done a very, very good job at staying on budget for the first half and we do anticipate that trend will continue in the second half. We did conduct a mid-year budgeting exercise -- and very much on track. And we expect, again, to maintain that budget for the second half of the year.

The R&D activities, as you can imagine, are quite focused on the specific core and strategic therapeutic areas. And so this is an important definition that we can now provide our shareholders, which is the resources that we are putting to bear on our R&D programs are being focused on anti-scarring and retinal disorders as the core areas, and then in the strategic areas with some investment in spinal cord delivery and oncology through systemic delivery.

That's what we're focused on. That will continue in the second half. And while there may be other opportunities that I would say fall below the line, that we're very excited about, but don't fall into those key areas, we are not planning to pursue those unless we are doing so with funding from a partner. Okay?

And, of course, if we have adequate funding from a partner we will move ahead with those. Or, if we see adequate signals coming out of our core and strategic areas, we would pursue those. So the R&D programs, you can expect high emphasis on dermal anti-scarring. That's the one that we anticipate, as I said during my address, selecting a development candidate this year and filing an IND next year.

Retinal disorders, we're looking at selecting a development candidate next year. And then, for the two strategic areas of spinal cord delivery and oncology, focus on hepatocellular carcinoma and liver metastases. Those will be moving from research to preclinical over the next 12 months.

So, does that answer your question, Keith?

Very much so. Thank you so much.

Okay, great. Thanks a lot. I think, operator, we're in a position to take one more question.

Sure. Your final question comes from Kevin McDevitt from UBS.

Hi, Noah, and congratulations, on the progress you've made.

Thanks very much.

I have a question about the overhang of the stock that's available with the 17% ownership to CytRx and then your shelf registration. And my question is -- because it makes it difficult for someone to have the confidence to come in and buy the stock with all that overhang out there from an individual, and also I would think as an institution to come in and purchase the stock.

My question is, do you see that naturally being resolved when you have secured a partner?

So, Kevin, that's an excellent question and I do believe that this situation will naturally resolve in the not-too-distant future based on key events, including a partnership. CytRx -- but I would mention that CytRx Holdings just over a year ago, okay, were 46% position in the Company. And so to the extent that it is an overhang, that is now 17% as opposed to 46%.

So it certainly -- if you're considering it an overhang, it's moved significantly in the right direction. And while we are not in a position to comment on what CytRx's interests are per se, I do believe that this situation is moving in the right direction, it's been done in an orderly fashion, and that ultimately the resolution of this will provide further ability for us to operate as a fully independent RNAi therapeutics company.

Let me just comment on the shelf registration that you mentioned. During the financing that we completed in March of this year, we basically took down the rest of the shelf that we had up at the time. And as you know, it's quite common, and really, ordinary to -- for companies in our position -- biotechnology companies in our situation to have an active shelf on file.

And so the purpose of filing the shelf -- the $75 million shelf, which we filed at the end of May was simply to get another shelf up because we did not have one up. It was not intended to signal anything to the marketplace in terms of our interest in doing additional financing, taking down more money off the shelf, anything else. It was just intended as a measure to put another shelf up.

It was done in that 60-day period after the last financing for various reasons, and now we have it in place and, frankly, it's a very, very good tool to have in place if and when we choose to raise additional funds, and if and when the markets will support that.

Okay, thank you. Just to comment -- and I've seen shelf registrations with a number of companies. Even though people state and the company states that in the near term there is no intention to use the shelf, it's still out there and it causes investors to --. In fact, I think in some instances I've seen where it's caused investors on the short side to short these companies because it's out there. It's just my comment, then.

Sure. Look, Kevin, I think that our shelf that we have up is very common, very standard. We haven't used the shelf yet, wasn't intended to signal anything other than it was important that we had one up in that period of time because we had taken down the remainder of the previous shelf, and it was the prudent thing to do as a public biotechnology company. So, it was really as simple as that.

Yes, I got --.

But I appreciate your question.

I got that. Thank you.

Thanks a lot.

Ladies and gentlemen, that concludes the Q&A session. I would now like to turn the call back over to your host for today's call.

Okay. Well, thanks very much for joining the call this morning and we'll look forward to speaking with you again soon. Okay. Good morning, everybody.

Ladies and gentlemen, that concludes the presentation. Thank you for participation. You may now disconnect. Have a great day.