Strata Skin Sciences Inc (SSKN) 2013 Q3 法說會逐字稿

Good day, ladies and gentlemen. Thank you for standing by and welcome to the MELA Sciences 2013 third quarter financial results conference call. (Operator Instructions) As a reminder, this conference call is being recorder. I would now like to turn the conference to our host, Mr. Richard Steinhart, CFO. Sir, you may begin.

Thank you, Eric. I'd like to first read the Safe Harbor language. This presentation includes forward-looking statements within the meaning of the Securities Litigation Reform Act of 1995. These statements include but are not limited to our plans, objectives, expectations, and intentions, and other statements that contain words such as expects, contemplates, anticipates, plans, intends, believes, assumes, predicts, and variations of such words or similar expressions that predict or indicate future events or trends or that do not relate to historical matter. These statements are based on our current beliefs or expectations and are inherently subject to significant known and unknown uncertainties and changes in circumstances, many of which are beyond our control. There could be no assurance that our beliefs or expectations will be achieved.

Actual results may differ materially from our beliefs or expectations due to financial, economic, business, competitive, market, regulatory, and political factors or conditions affecting the Company and the medical device industry in general, as well as more specific risks and uncertainties facing the Company such as those set forth in its reports on Forms 10-Q and 10-K filed with the US Securities and Exchange Commission, the SEC. Factors that might cause such a difference include whether MelaFind achieves market acceptance or becomes commercially viable. Given the uncertainties affecting the companies in the medical device industry such as the Company, any or all of these forward-looking statements may prove to be incorrect. Therefore, you should not rely on any such factors or forward-looking statements. The Company urges you to carefully review and consider the disclosures found in its filings with the SEC, which are available at www.sec.gov and www.melasciences.com.

I'd now like to turn the call over to our Interim CEO, Bob Coradini.

Thank you, Richard. Good afternoon and thank you for participating in today's call. This is Bob Coradini, Interim CEO and Director of MELA Sciences, and effective next Monday, your new Chairman. Joining me are David Stone, Director and outgoing Chairman; as well as Rose Crane, our newly appointed incoming President and CEO and who'll start next Monday; as well as Richard Steinhart, our CFO. On today's call, Richard will begin by providing a review of the third quarter financials, then I will provide an overview of recent activities as well as our evolving strategy, I will then turn the call over to Rose for some brief introductory remarks, then we'll wrap up and open the call for questions.

First of all, I'm going to say that I'm extremely excited to welcome Rose Crane as MELA Sciences' new incoming President and CEO and happy she could join the call today. I had the pleasure of working with Rose at J&J so I know firsthand what a terrific leader and executive she is. Secondly, as you may know already, last week we successfully completed a stock offering that yielded net proceeds of approximately $5.5 million. The offering puts us in a much stronger position to fund the continued commercialization of MelaFind as well as our technology development efforts. We are pleased investors saw the potential of our Company, technology, and products support a sustainable business based on information that MelaFind can provide as a tool for dermatologists.

Let me now turn it over to Richard to give a summary of the financial results.

Good afternoon and thank you, Bob. I will now run through some of the key issues that impacted our reported results in the third quarter of 2013 and a few items that will affect results going forward. As reported in the third quarter, revenues rose approximately 56% to about $108,000 from approximately $69,000 last year. At the close of the third quarter, we also had deferred revenue both current and long term of approximately $373,000 compared to about $151,000 at the close of the third quarter in 2012. As a reminder, because we entered into contracts with multiple elements of delivery, we are required to defer a significant portion of our MelaFind placement fee and book it ratably over the term of the contract despite the fact that we generally see the entire cash payment on installation. As a result, deferred revenue reflects the timed recognition of the placement fee revenue over the term of the user agreement, which is usually two years.

Correspondently, the cost of revenue for the third quarter 2013 was approximately $1.9 million compared to approximately $569,000 in the same period 2012. The current quarter includes non-cash depreciation of MelaFind systems totaling approximately $559,000 and a non-cash impairment charge of approximately $1 million for MelaFind systems placed in locations that are not providing to be sufficiently productive from a usage standpoint. Over the coming quarters, we anticipate working to redeploy these systems into environments that meet our new focus on larger high volume and higher profile medical centers, hospitals, and teaching environments. Cost of revenue is made up of direct costs associated with placement of MelaFind systems in doctors' offices, the cost of consumables, technical support cost, and depreciation expense for MelaFind systems that are placed in a deal, which remain the Company's property.

Third quarter 2013 research and development expense declined to $857,000 versus approximately $1.4 million in the third quarter of 2012 reflecting the benefit of our cost reduction plans offset by reorganization costs and resources being redeployed from our R&D activities to support our new strategy. Selling, general, and administrative expenses were $3.5 million for the third quarter 2013, flat with the same period last year. Some incremental sales and marketing expenses and reorganization costs were largely offset by the cost reduction plan. Q3 2013 G&A also reflected approximately $70,000 charge for employee termination benefits related to the restructuring we announced in August. Finally, our Q3 results included a one-time charge of about $1 million of which approximately one half was non-cash for the retirement of our venture debt. With that behind us, we have cleaned up our balance sheet and have essentially no debt.

Our net loss in the third quarter 2013 was approximately $7.4 million or $0.17 per share versus a net loss in the third quarter of 2012 of $5.4 million also $0.17 per share. Again, this year's loss included approximately $2 million in one-time charge that were mostly non-cash to clean up our balance sheet and set the stage for our new strategy. MELA Sciences' cash and cash equivalents were $2.6 million at the close of the third quarter 2013 and this excludes the proceeds of the approximately $5.5 million we raised in the registered direct offering in October.

I would now like to turn the call back to Bob, who will provide details about our strategic initiatives underway and then we will later open it up for questions.

Thank you, Richard. In my four months as interim CEO, I worked with the team to understand and develop avenues to unlock the value of our technology. In speaking with key opinion leaders in the dermatology field, we have developed deeper insights on the value of our optical imaging technology, feedback we are now using to reshape the strategy of the Company and usage of MelaFind. We have also realigned our marketing strategy and priorities to focus on multi-center, high quality academic, and other high profile installations rather than to focus solely on the quantity of device installations. For this reason, we are electing to cease reporting data on the number of installations at this time. It has become a distraction that has proven to have no bearing on value creation and in fact, unproductive machine deployments can have a very negative impact on perceptions in the dermatology field.

Said another way, we are focusing on a few major deployments with some of the leading hospitals and teaching institutions rather than a large number of small practice deployments that neither raise our visibility nor generate any meaningful level of usage. At the same time, we have taken a variety of actions to better manage our costs. As a result, we now have a new plan of action to reposition MelaFind before potential customers while also initiating research on other dermatological applications of our core imaging technology. In essence, we are embarking on a new and exciting phase of the MELA Sciences story. Coming into July, we anticipated that Q3 sales would be challenged given the 2Q trends and the impact of the seasonal summer slowdown. We saw the third quarter as an opportune time to learn what was working and what was not and to reconnect with our customers. It was also a time to launch deeper assessments of our technology, processes, and clinical data. Though a demanding process, we are pleased with what we found.

While we were able to grow revenue by 56% in the quarter albeit from a small base, the strategic review and transition of our sales and marketing focus hampered our reported results. From our analysis, we came to realize our value proposition was unclear and that our pricing and revenue models were confusing, labor intensive, and ultimately unworkable. It was very difficult to obtain data from our systems because of the personnel time and effort required to visit each machine and download its records. But we have already begun to develop a solution that will be incorporated in our next generation device. As many of you know, MelaFind is the only FDA pre-market approved or PMA automated optical diagnostic device for melanoma detection. What we discovered is that the technology was misunderstood and it is not about providing the answer, but being a tool to aid dermatologists in their fight against melanoma especially in caring for the high-risk patients who come back to see their dermatologist multiple times per year.

We recently revealed data that suggests that doctors who use the data provided by MelaFind achieve better diagnostic results and greater efficiency than those who do not use the device. We also revealed new data that suggests that MelaFind helps dermatologists make better decisions as well as find melanomas at early stages even in young adults in who melanoma is often difficult to detect. Our study strongly suggests that no matter how good a dermatologist is, using MelaFind makes them better and patients like it too. Patients have a high regard for their dermatologists when they get to see what their physician sees. Also many patients want to be a part of the decision-making process as it relates to their own healthcare and we believe MelaFind is a valuable tool in that process.

In sum, we used the third quarter to develop a new and improved marketing model including a new pricing model, new selling strategy based on relationship selling, and a new value proposition. To summarize our recent progress; we have one, established a new strategy and operating plan; two, restructured our business and implemented significant cost reductions; three, expanded our leadership ranks with several new appointments; four, deleveraged and de-risked the Company by retiring our high cost venture debt in September; and five, expanded our visibility and our outreach within the key dermatological community and in their events.

With regard to our leadership, I have long felt that it is the quality of the people that makes a successful organization and we have acted aggressively to build out our team in the past few months. Of particular note, today we announced the appointment of Rose Crane as our new incoming President and CEO. Rose is a former senior executive of Johnson & Johnson with whom I worked closely while I was there. She was recently a Partner and Head of Commercialization at Appletree Partners where she was responsible for assessing and recommending pharmaceutical products, medical devices, and healthcare services for the Appletree portfolio. Previously she was President and CEO of Epocrates, a health technology company, where she developed the strategic plan to advance growth and took the company public in an oversubscribed offering. Rose was Group Chairman of Over-the-counter OTC/Nutritionals at Johnson & Johnson, the largest worldwide OTC company. She also spent 20 years at Bristol-Myers Squibb, including as President US Primary Care where she managed an operating unit with annual sales of $7.5 billion.

Rose is an industry veteran with an excellent track record of growing organizations, driving corporate development activity, and successfully building commercial platforms. We are extremely excited to have her leadership and operational expertise leading MELA Sciences. We are confident she will build momentum in building our business and eventually establishing MelaFind as a standard of care in the fight against melanoma. In addition, we also added veteran medical device commercialization expert, Frank DeBernardis, as a consultant to lead a revamping of our sales and marketing and business development functions. Frank has over 35 years in marketing and sales experience in the medical device industry, he is a pro. He was the Sales Manager at Medtronic, he was the Sales and Marketing VP at PhysioControl and at Meadox Medical. And we are very pleased to have added Tony Dimun to our Board. Tony is a serial entrepreneur with more than 30 years of successful operational business development and financial experience.

Finally, to expand our reach within the dermatology community, we formed a key opinion leader group as well as a User Advisory Board. We also appointed Dr. Darrell Rigel, Clinical Professor of Dermatology at New York University, as Chief Medical Advisor to our Board of Directors. In the area of corporate and product exposure, we have accelerated and expanded our exposure before the dermatology community with presentations, demonstrations, and the publication of scientific data. This includes one, hosting our first clinical advisory meeting among key opinion leaders and use this at Annual Fall Clinical Dermatology Conference in Las Vegas. Two, we also presented clinical findings in four poster presentations. Three, live demonstrations of MelaFind at the American Society of Dermatologic Surgery Annual Meeting in Chicago early October. Four, participating in the Washington DC Dermatological Society's Fall Clinical Conference this October. And five, exhibiting MelaFind at the German Skin Cancer Congress in Essen, Germany in September.

So as you can see, we have accomplished a lot in a few short months and we are pleased with our progress. It is now my pleasure to introduce Rose Crane, our incoming President and CEO for a few comments. Rose?

Thanks, Bob, and good afternoon. I'm very excited to join MELA Sciences at this inflection point. I am particularly excited about the technology, which is what really brought me here and I've also had a personal connection to MELA. My late husband, Doug, was a high-risk patient who passed away from a non-melanoma skin cancer and while MelaFind is not indicated or designed to see or analyze the cancer that Doug had, I do recognize the importance of improved diagnosis and particularly early detection. And I can surely imagine what other high-risk patients and their families go through when dealing with the diagnosis of melanoma.

I hope to use my experience to help bring new patient-centered insight to complement the dermatologic focused approach of the Company.

The execution of the repositioning strategy has begun, and is being well received by leading dermatologists, in institutions both here in the US and Germany. And I fully expect it will provide us with a dynamic and durable road map for a strong and a profitable future. I'm excited about the opportunity and we have tremendous confidence in MELA Sciences, our leadership team, and all of our employees. I look forward to meeting and speaking with our investors in the coming months.

And we'll now turn the call back to Bob. Bob?

Thank you, Rose. As you can see, we are evolving into the next chapter of the MELA Sciences story. So let me provide an overall perspective of recent progress we have made in repositioning MELA Science. When I was appointed Interim CEO in June, it became clear that our business model could only work with high volume usage on each and every unit, usage that did not match the utilization we were experiencing. We had learned that we had a product that performed well clinically, but not economically.

In right-sizing our organization in early August, a necessary and prudent action for future success, we had to weather the disruption that stems from the significant number of positions we took out of the business. We reduced field headcount, starting first with poor performers, followed by voluntary exits.

We reassessed the hiring profile of many of our sales people, and recognized that we needed to attract, retain, and develop those reps who have the skills, experiences, and physician relationships required to be successful selling our sophisticated medical products. We also had to deal with marketing programs, which though effective at generating consumer excitement, did not translate into bringing the right kind of patients into the practice that had a MELA Science device.

Our national footprint was too small to benefit from the marketing and PR we were generating. Given these factors, we knew that it was best to pull in, and learn why our launch had not gone well in our best to reposition MELA Science. We talk to our customers, all the advisory panel meeting, talk to reimbursement consultants, and then talk to our customers again. Needless to say we learned a lot.

We have learned the following. One, MelaFind is a serious medical tool to assist in diagnosing a serious medical disease. Two, MelaFind can give physicians far more information than a simple binary high or low outlook. Three, we believe that MelaFind has the ability to give the pathologists [who read] the biopsy more information than he or she currently has about a biopsy lesion. This was an incredible important finding. The biopsy and the slide readings are open and completely independent events. The doctor sees the patient and in something of a vacuum the pathologist sees the excised tissue.

We believe MelaFind data can link the two and give the pathologist more information about the lesion that he or she has ever had in the past. MELA Science may even play a very valuable role in the preparation of a sample for biopsy, improving the end result and also saving valuable time. The insights that we have gained over the past several months have helped shape and evolve our new strategy for success. The key word here is evolve.

MELA Sciences, along with our flagship product MelaFind, is evolving. We are transforming the Company around the power of the information we provide. Our value proposition is not just the machine or the algorithm, but our technology's capability to see, capture, and provide information, which can assist dermatologists and possibly pathologists in their work.

We are refocusing the Company on the value of this information. The potential of our technology and how our data may improve patient outcomes as well as the efficiency and accuracy of the process. We are also looking at future applications, and what we maybe able to do with the technology. Imagine that we could see the margins of lesions in the operating room and how that could improve surgery results and procedure times. Imagine if we can look at prior cases and see if lesions are changing over time. Imagine if this data could be transmitted wirelessly, securely stored in the cloud and linked into electronic medical records effortlessly. Imagine if we could send images and metrics to pathologists along with the tissue samples to help them do their job better and with greater efficiency.

We are making substantial progress in improving and streamlining our commercial efforts. Mainly we plan to utilize and develop our key opinion leader relationships to drive further evolution and developments of our strategy. There are several areas of this plan I would like to highlight. One, we plan to present more data and insights on the capabilities of our technology and the benefits it offers and to work alongside key opinion leaders within the dermatology community at leading institutions, similar to our experience in Germany.

Two, we are focusing on placing units with key opinion leaders and at universities to gain exposure, experience and run clinical protocols. Three, we are engaging with numerous key opinion leaders in dermatology and pathology to seek their feedback on how MelaFind imaging can enhance their practice and procedures. Four, we are increasing the cadence of clinical presentations using MelaFind and demonstrating its value at major medical meetings through posters, papers, publications, and podium time.

Five, we are developing a pharmacoeconomic model, which will support appropriate reimbursement levels. Six, we are exploring new sales messaging, which would emphasize the use of MelaFind imaging and metrics to better manage our high-risk patients, consistent with our indicated regulatory labeling. Seven, we have hired several independent sales agents for long-standing relationships with key opinion leaders and teaching sectors.

Eight, we are developing and testing new pricing models involving a variety of delivery, installation and monthly fees. Nine, we are overcoming the perception that MelaFind gives only a high low reading as to whether a lesion is malignant by teaching MelaFind users that the product is a tool for managing the high-risk patients. And ten, we're developing new ways of explaining the value of images and the value of history of patient data.

In sum, we are working hard to evolve our messaging, change our pricing model, gain key opinion leader support, and evolve the dermatologist and pathologist community in a collaborative way. In conclusion, having come to this new understanding for our pioneering technology, we are more enthusiastic than ever before. We have made significant strides in the last several months and we expect to make even more progress in the months ahead.

There is nothing here that cannot be managed. The technology behind MelaFind is robust, approved, and it's need is clear. We have an invigorated team, which has been strengthened by recent additions. We are exploring the transition of MelaFind from a melanoma scoring technology to a dermal imaging and metrics clinical tool. And we are transforming MELA Science from a technology orientation to focus on optically gathering data that may improve dermatologists' results, enable better patient care, improve efficiency and reduce healthcare costs.

We have a strategic vision and team in place and are beginning to execute on our strategy. As a result, I believe that we are at an inflection point in our growth trajectory. I remain confident that MelaFind can and will be the standard of care for dermatologists in their fight against melanoma.

Separately, before I open it to questions, I would like to thank the MELA Sciences team for their full support and confidence while acting as Interim CEO. And a special thanks to David Stone, our former Chairman and member of our Board of Directors for his contributions.

And finally, a welcome to our new incoming CEO, Rose Crane, who I know before from my J&J days, and who I look forward to working again with. It's been a great experience these past several months and the horizon ahead looks limitless with possibilities in diagnosing skin disorders. We are evolving, welcome to the new MELA Sciences.

We can now open up for questions.

(Operator Instructions) Josh Jennings, Cowen.

Hi. Thank you for taking the questions. And Rose, congratulations on the position. First, Robert -- it's really a one question in terms of how we should be looking at kind of the near-term growth potential, with this revised strategy, and understanding the outlook that you shared with us throughout the call on the longer-term opportunity and in the technology platform, what it can do for dermatologists in terms of diagnosing early-stage melanoma. But just in the near term, can you just give us some details about how you are thinking about your sales force, where you are now, and with this strategy of looking at larger centers, research focused centers, what does that to in terms of the near term opportunity to really drive revenue growth out through 2014 and into 2015? Thanks a lot.

Hello, Josh, thanks, this is Bob here. So let me see if I can try to answer and then I think David Stone, our Chair might want to say a few words as well. But a couple of things; first, the way I would look at this, and hopefully today's call was just one indication. I shared with you -- we like to tell you when it's done, not what we are doing.

And so the best way to keep track of what we're doing is to look at our press releases, the data we publish, the institutions we announced that are coming on board. And some of this will take a little time in the sense of, we will have systems and institutions, but it takes time to get the press releases with all the lawyers and everyone that have to get involved, but I would look at the things we announced as the track of what's going on.

In terms of our sales reps you asked, we are putting strategic reps, both whether they are Company hires or they are these sales agents that we're employing that have strong experiences around key medical institution clusters. So you can kind of figure it out if you've been tracking where these top leading teaching and medical institutions are in dermatology, where they'd be.

So for example, if you expect one in Boston, and yes, we have one in Boston. So that's all I'm going to say on the call, give you a little time to figure out where we have them, but this is our strategy, and really Josh, what we are planning on doing is telling our investors a lot more where we are when we get to our 10-K report, because by then it will become hopefully very clear that some of the data, the studies that we are doing, as to where MelaFind is going, especially with the key sets of meetings in the early part of 2014, starting with [Winter Derm] Clinical Meeting, followed by the Maui Derm, followed by the South Beach, followed by the [Compaq DDG] Meeting in Europe, and you can follow the series up to the AAD Meeting in March.

David, I don't know if you'd like to add a few words?

Sure, Josh, thanks for the question. It's a great one. I've been intrigued with the results we've seen so far as Bob has refocused the Company from a strategy that was informed by viewing MelaFind as essentially consumer product. We knew we're launching a system without reimbursement employees and so a decision was made to focus on the cosmetically oriented dermatologists who used to selling stuff to his or her patient and having them pay from their pockets.

And if the system were a very simple, easy-to-use, easy-to-make-money kind of system that might have worked. And we've got some dermatologists to (inaudible) give that a try, but it's really a much more sophisticated tool that provides a lot of information that needs medical interpretation.

It's not a consumer product for the self pay market. As we've shifted from a sales force that was sort of pharmaceutically-oriented, used to detailing BOTOX for example and (inaudible) to these new sales people who have relationships with medically oriented derms and research centers. Then the update from the key opinion leaders has been really impressive.

And we're hearing that they appreciate the Company's new willingness to work with them and talk with them, and frankly we're replacing 15 new places where doctors wanted a system but couldn't get one because they were at the focus of the previous strategy. So I think they'll see that follow through more in the kind of people who are associated [itself] with the technology and the places that it's being talked about in medical meetings than in the numbers initially.

But if we can get systems into centers where they see a lot of high-risk patients they're going to have lot more opportunity to use the system on a daily basis. And that will ultimately follow through the utilization data and that's going to come through in the sales reports a little further into the reposition.

Thank you David and thanks Josh.

Jeffrey Berg, Health Care Insights.

Hello, and good luck with the changes and the directorships and your rise to chairmanship, Bob and certainly to Rose Crane who has joined. It's not quite on the website yet, but I realized it was just announced, so I'm looking forward to seeing those comments, certainly that's the strengthening of the management of the Company. I wish you well with that. Two questions. Bob, you did mention that there are other dermatological conditions that you are contemplating or looking at for indications using the Company's core imaging technologies. I don't know if you can elaborate on that. But I would be interested if you have any specifics. The other question (inaudible) melanoma drugs and certainly there are only limited ones for (inaudible) new initiatives. Given that certainly Rose Crane's background in pharmaceutical, do you envision any affiliation with the company that has a drug for melanoma in some collaborative way or joint marketing or something to that effect?

Jeff, thank you very much, and thanks for joining the call and great question. You are a very (inaudible). I did mention other dermatological conditions. First let me take a step back and say one of the things that really impressed me -- again my background has been with -- starting at GE Imaging where I started my early medical career, before I moved to Johnson & Johnson, was the power of what's inside of an image and the evolution of those images.

And if you remember in the early days of ultrasound, the images people used to call them fuzzy grams and they weren't quite sure, they weren't sure which applications (inaudible). And as time progressed, the images became clear as we understood what they were seeing. Things started to manifest themselves.

And that one thing you started to see is there in pregnancy and gestation, the baby being developed in the womb. And then you can start to see what was the sex of the baby, was it a little boy or little girl. And now as you know ultrasound is progressing in gynecology and obstetrics to go far beyond where you can actually see the beating heart, you can see the valves, you can see other structures, you can see the spinal canal.

I mean there is a whole host of things that go on and all the different medical disorders in terms of -- as a big new development, but it didn't stay just in gynecology. It moved ultrasound into cardiology into other areas as well. We have here in our core technology instead of using sound we use light, so instead of ultrasound think of it as ultra optics. So we can start to see into the skin, we see into a depth because we use ten different waypoints, into a depth of up to 2.5 millimeters. We can go down there slice by slice based on the different frequencies and this is what I see our intellectual property covers. And in that sending these signals down, the signals bounce back, we detect them and in those signals we believe is information. Now we're still at an early stage of understanding what that information is. But in some of the cases, we can see things such as hair follicles, we can see things such as other cancers if indeed they're pigmented and the question is well, what if they're not pigmented, you can't see them. Well, my answer to this having grown up in GE Medical Systems is well, what did they do when they couldn't see things in ultrasound, they used a contrast agent so maybe there's a contrast agent we could use, I don't know.

We are at an early stage, Jeff, of where we can go with this technology. But it's not just the ability to see, it's the information that comes back that we have the most excitement about and so we need to do our work, we need to do the feasibility trials that occur. But the nice thing here is when you put a system like MelaFind in the hands of a leading medical and research institution and not as David Stone mentioned earlier, a cosmetic firm that's just seeing cosmetic patients for a certain condition. When you're in a leading teaching institution, you start to have those researches push the technology. This is not a drug, this is an imaging device; an imaging device that gives metrics and information and so again, those are not indicated label uses. We have to do them under research protocols, but we are very excited and very pleased and yes, we have begun.

Well, (inaudible) answer, but elaborate. I've done some studies with Israeli companies using optical message to non-invasively measure blood constituents; hemoglobin, inadequate red or white blood cells, this is again non-invasively and it's an optical method. Something you'd probably want to take a look at as well.

Well, I know I appreciate that, and Jeff, we need to follow up there and you mentioned something. I too have spent a lot of time in Israel and I'm very impressed with the quality of the information and the knowledge that exists in Israeli institutions. As you know, Jeff, I was one of the key people involved in the Biosense acquisition for Johnson & Johnson, an acquisition that we paid a significant sum for a technology at the time in electrophysiology; people laughed at both with a cartoon, and didn't really hold the full clinical value. And yet today if you look at Johnson & Johnson, Biosense Webster is one of the leading companies in electrophysiology and their CARTO system is clearly one of the leading products using the Biosense technology. So I believe that there are some things we can do. I'm hoping I'll be able to get back to Israel. Now although Rose will be the new incoming President and CEO, hopefully she'll let me do some strategic travel and go look around. And you mentioned about melanoma drugs. That's another area that we need to do some more work in. It's still early and premature, Jeff, as you pointed out but there's a lot of opportunities there and we just have to stay focused and make progress. And I think we made a lot of progress in the third quarter and I'm looking forward to make even more progress in the fourth quarter.

Thanks very much.

And I'm showing no further questions.

Okay. Thanks. Well, then in closing, let me thank everyone for joining us on today's call. We hope we have shared with you why we're excited about MELA Sciences, our core technology, and what MelaFind our first flagship product can offer. So have a great evening. We look forward to updating you on our progress in future calls. Thanks.

Ladies and gentlemen, that does conclude today's conference. Thank you for your attendance. You may all disconnect. Have a great day.