T2 Biosystems Inc (TTOO) 2014 Q3 法說會逐字稿

Greetings and welcome to the T2 Biosystems third quarter 2014 conference call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. (Operator Instructions). As a reminder, this conference is being recorded. I would now like to turn the conference over to Mr. Matt Clawson of Pure Communications. Thank you, Mr. Clawson. You may begin.

Thank you, operator. Good afternoon, everyone and thanks for joining us for T2 Biosystems first results call. On the call this afternoon to discuss results and operational milestones for the third quarter ended September 30, 2014 are President and CEO, John McDonough, Chief Financial Officer, Marc Jones, and Dr. Tom Lowry, Chief Scientific Officer. John and Marc will lead off the call with prepared remarks followed by a question and answer period.

I would like to remind everyone that comments made by management in responses to questions today will include forward-looking statements. Those include statements related to T2 Biosystems' future and financial operating results and plans for developing and marketing new products. Forward-looking statements are based on estimates and assumptions as of today and are subject to risks and uncertainties that may cause results to differ materially from those expressed or implied in those statements, including the risks and uncertainties described in T2 Biosystems' filings with the SEC, the Risk Factors section and its registration statement on Form S1, as well as other risks and uncertainties detailed in subsequent SEC filings. The Company undertakes no obligation to publicly update or revise any forward-looking statements except as required by law.

With that I would like to turn the call over to Mr. CEO John McDonough for his opening comments. Good afternoon, John.

Thanks, Matt. Good afternoon, everyone. Thank you for taking the time to join us for our call today. The months leading up to and since our initial public offering, which priced in August, have been incredibly active, and we made a lot of progress within the Company. And so I have been looking forward to this opportunity to updating you on that activity and how we see the Company progressing in the coming months and year. However, since this is our first call, I am going to take a couple minutes to describe a few fundamental elements we believe differentiate T2 Biosystems from other companies and our technologies from anything else available.

Most of you on this call are relatively new investors, so I thought it would be helpful to bravely restate the basic elements that will drive commercial, clinical, and financial value over the long term. At T2 Biosystems, we are developing and commercializing medical diagnostic products based on our proprietary T2MR platform that for the first time enables detection of targets of pathogens directly in a clinical sample, such as whole blood. By eliminating sample steps such as extraction and purification, our T2MR platform provides detection of cell limits as low as one colony-forming unit per ml, a breakthrough in the industry as demonstrated at our FDA pivotal trial. Our strategy is to develop a broad set of applications aimed at lowering mortality rates, improving patient outcomes, and reducing the cost of health care by allowing targeted treatment decisions to be made earlier based on fast and accurate diagnostics. We believe there are dozens of applications of the T2MR technology, some of which we will pursue directly, and others through select partners.

We are initially focused on the area of sepsis, one of the leading causes of death in the United States and the most expensive hospital-treated condition with costs to the US health care system exceeding $20 billion each year. Sepsis is an illness in which the body has a severe inflammatory response to a bacterial or fungal infection. It is a life-threatening condition that can lead to shock and organ failure with a mortality rate of approximately 30%. T2MR for the first time enables the detection of pathogens associated with sepsis without the need for blood culture in low limits of detection. Our first FDA-cleared products of the T2Dx instrument and the T2Candida diagnostic panel. T2Candida identifies the clinically relevant species of Candida, a fungal pathogen known to cause sepsis. Candida infections have the highest mortality rate of all the sepsis pathogens, averaging 40%. Published literature has demonstrated that the initiation of targeted therapy to infected patients within 12 hours can reduce that mortality rate to 11% and save approximately $30,000 per patient, driven by a reduction in the length of stay in hospital and intensive care unit. T2 Canada runs on the T2Dx instrument, a fully automated instrument that processes a blood sample and provides results in three to five hours.

We believe we have the only product that can provide species-specific results without the need for blood culture. Blood culture-based diagnostics, the current standard of care can take three or six or more days to provide species-specific results. There are over 100 drugs available today to treat patients with sepsis. Awaiting days for a diagnosis is often too long for a patient to benefit from those treatments. Due to the high mortality rate and cost of candida infections, many hospitals initiate potentially inappropriate anti-fungal drugs while waiting for blood culture-based diagnostic results. For high-risk patients such as patients in the intensive care unit and patients with weakened immune system and chronic illnesses, this practice is increasing in both frequency and the cost of drugs used with an average of 40% of high-risk patients now being put on anti-fungal drugs where the incident rate of infections is typically is 2% to 5%.

A negative result from T2Candida may provide timely data, allowing physicians to avoid or suspend unnecessary anti-fungal treatment. This could result in a further reduction of treatment costs, as well as potentially helping to reduce anti-microbial resistant organisms, which the Centers for Disease Control and prevention has called one of our most serious health threats. T2Candida is just our first diagnostic panel utilizing T2MR, and we will touch on our first product pipeline programs, T2Bacteria and T2Hemostat, later in the call. All of our products are covered using reimbursement structures and we plan to market our products in the United States with a direct sales force.

With that as background, I will move on to Q3. The third quarter of 2014 was incredibly productive in terms of corporate activity, infrastructure build, and finally our preparation for commercialization. We successfully completed an IPO, raising about $58 million, and listed our company's stock on the NASDAQ exchange. We received a foundational FDA clearance and CE Mark for both our technology platform, the T2Dx, and first diagnostic panel, T2Candida. And we achieved the FDA milestone in a compressed and rapid time frame. Upon FDA clearance, we activated our US commercial team and turned on our marketing efforts, as we seek to make those initial key placements in the coming months.

Before Marc summarizes the Q3 results and comments on our outlook, there are a few items where I would like to provide some color. First, the FDA market authorization we announced in September was an important milestone and a real tribute to all of the employees and the partners that worked tirelessly toward that goal. The rapid 117-day period from FDA filing to clearance is also a clear signal from the FDA that they understand the urgent need for a fast sepsis diagnostic and are willing to work in a transparent manner and move quickly through their thorough review process when there is technology that can make a big impact on public health. We view their market authorization is a an important day for all of the physicians across the country in need of faster diagnostic results so they can make timely and informed treatment decisions for their patients. We believe the diagnostic capabilities offered by these products and those in development can support both improved clinical outcomes, as well as strong health economic benefits as we look forward to working closely with the medical community to bring this novel diagnostic plan to hospitals, physicians and patients.

I will cover our commercial plan and metrics in a moment, but at this point I will turn the call over to Marc Jones for a quick run-down of the financial results. Marc?

Thanks, John. As John indicated, we made excellent progress in the third quarter in terms of milestones and infrastructure build. The Q3 and nine-month results reflect an investment of our resources commensurate with those efforts, but those costs were in line with anticipated levels, and we are confident that we have established a disciplined, cost-conscious culture and will continue to manage to spend well.

As expected, we did not record revenues for this year's third quarter and first nine months. In last year's third quarter and first nine months we recorded $91,000 and $211,000 of research and grant revenue respectively, which primarily consisted of revenue related to feasibility studies. Total operating expenses for the third quarter and first nine months of 2014 were $7.8 million and $21.8 million respectively, compared to $4.6 million and $14.3 million for the 2013 periods. The increases in operating expenses were mainly associated with the direcT2 pivotal clinical trial and other regulatory support and activity, research and development activities for additional applications of T2MR, expansion of our marketing programs, build out of the US commercial infrastructure, and increases in share-based compensation charges and incremental charges related to being a public company.

The net loss for this year's third quarter was $8.8 million after adjustments for accretion of redeemable and convertible preferred stock, or a $0.71 loss per share compared to a net loss of 6.6 million, or $4.69 loss per share, for last year's third quarter. The increased loss was principally due to the increase in operating expenses which I just covered. For the first nine months of the year the net loss after adjustments for accretion of redeemable convertible preferred stock was $26.9 million, or $5.25 per share, compared to a net loss of $19.2 million, or $13.82 loss per share, for the first nine months of 2013.

Loss per share calculations for each of these periods were impacted by the overall increase in common shares outstanding resulting from our August 7, 2014 public offering. Specifically for the third quarter of 2014, we had 12.4 million weighted average shares outstanding reflecting the conversion of preferred shares and issuance of new common shares as part of our IPO in August. For the first nine months of the year we had 5.1 million shares outstanding.

For the fourth quarter of 2014 which will be the first full quarter that includes the conversion of the preferred shares and the issuance of new common shares in the IPO, we anticipate having approximately 20 million weighted average shares outstanding, which will then net to approximately 8.7 million weighted average shares outstanding for the full year 2014.

The Company's balance sheet as of September 30, 2014 had total cash and cash equivalence of $75.6 million, which included $9.8 million in proceeds from a July 11, 2014 debt facility, net of deferred financing costs, and approximately $58 million in net proceeds from the August 6, 2014 initial public offering. In addition to the cash on the balance sheet, we are able to draw an initial additional $20 million from our debt facilities through June 30, 2015. We anticipate total Q4 operating expenses to grow in the range of 15% over Q3, largely driven by the growth of our commercial infrastructure and by continued investments in research and development.

And with that, I will turn it back over to John.

Great. Thanks, Marc. Before we turn it over for Q&A, I would like to spend a few moments discussing our commercial plans, and the metrics we believe will be most important to measuring our progress as we move through the coming months in the whole of 2015.

As I mentioned, we were very pleased with the timing of the FDA decision, which may have been a record for a diagnostic product going through the de novo process. We believe the agency's timely action indicates an understanding of a need that exists and recognition of the quality data from our FDA pivotal trial that stands behind the T2Dx instrument and T2Candida diagnostic panel. We believe that T2Candida is the first diagnostic that can identify species-specific blood infections directly from blood, and without the requirement of a blood culture. With the FDA clearance in hand, we get a jump start in our sales and marketing efforts that keeps us on track with achieving our goals over the coming 12 to 15 months. We anticipate ending 2014 with seven direct sales professionals who will be targeting the top 450 hospitals in the United States.

Two sales reps joined us in August and five more will be joining the team by the end of the month. The top 450 hospitals represents about one-third of the overall estimated $1.3 billion T2Candida market opportunity in the United States. With this concentrated patient base, we will be laser-focused on those 450 hospitals, and plan to grow the sales force to 15 sales reps by the end of 2015.

Looking forward, as we indicated during the IPO process, our goal is to make placements in 30 or so of these high volume hospitals by the end of 2015. We will work very closely with our initial customers so we can provide them with maximum support in implementing the platform while we learn how to streamline the implementation, verification, and other processes within each hospital. Later in 2015 and as we enter 2016, we expect to have built a solid foundation of reference accounts, and establish an understanding of how we can influence the adoption of our products and the success of our customers. We will then replicate that business model to accelerate the size and sale of our customer base to drive significant revenue and growth.

In terms of how those placements occur, we anticipate the ramp will start modestly as our sales force is small, and our selling efforts cannot commence until we receive FDA clearance. We expect that 60% or more of the initial 30 contracts will likely occur in the second half of 2015. When we close the contract with the hospital, we anticipate it will take three to six months to install and verify the performance of the T2Dx instrument. This is completely consistent with the time frames realized by other diagnostic platforms when they are initially installed. We further anticipate it could take an additional six to 12 months for a customer to ramp to testing all of their high-risk patients as they most likely will start by testing a segment of the high-risk patient population.

We estimate the average annual revenue per hospital could be as much as a $1 million among the top 450 hospital accounts, if they were to test all of their high-risk patients. In order to build in conservatism, our business model assumes that each of these large customer accounts will grow to $600,000 in annual T2Candida revenue when fully rolled out.

In addition to the 30 hospital accounts we expect to close by the end of 2015, there are several other key metrics we plan to report to you each quarter. Those will include the number of hospital contracts signed, the number of those contracts that have transitioned to active placement, or those that are installed, verified and are now testing patients, and finally we plan to report the average revenue per hospital once the number is meaningful, probably by mid2015. We do not plan to report specific T2Candida per test average selling price, because it could put us in a difficult position for contracting discussions. I can say that list price for T2Candida is above $250, the high end of the range discussed during the IPO.

While we are only six weeks into the sales and marketing efforts, we are pleased with the high level of interest in our products and the sales pipeline that is growing. During the third quarter, we attended the ICAAC Conference in Washington DC, and attended ID week in Philadelphia in October. Boot traffic was very high, and T2Candida was a hot topic in many of the conference sessions.

At the ICAAC Conference and a symposium not run by T2 Biosystems, over 300 people were polled on what diagnostic tests they would use for symptomatic patients in an intensive care unit. We were delighted to see T2Candida won the poll, exceeding even blood culture. We feel very much on track and expect to close our first hospital contracts early next year.

We continue to see a growing level of interest from third parties who are interested in working with us to develop new applications based on the T2MR platform. We are being highly selective in this process, but through collaborations is one way to pursue the many application opportunities for T2MR without having to do it all ourselves. You should expect to see small revenue levels related to these opportunities going forward which will likely relate to research projects that we pursue. Some of these opportunities could turn into significant product opportunities. We will report on these opportunities as they move from research to full scale development projects when appropriate.

During the third quarter we continued to make progress on the development of our next two products -- T2Bacteria focused on detecting bacterial targets associated with sepsis and T2Hemostat, an instrument and diagnostic panel that will deliver critical hemostasis measurements in 20 minutes or less, initially targeting the screening of trauma patients. These development efforts are on track with the timelines we discussed during the IPO with T2Bacteria on track to enter an FDA pivotal trial in the second half of next year, and T2Hemostat on track to enter an FDA pivotal trial in the first half of 2016. We estimate our total addressable market including T2Candida, T2Bacteria, and T2Hemostat is over $3 billion.

With that, I will turn the call over to the operator for questions. Operator?

Thank you. (Operator Instructions). Our first question comes from Kevin Chen of Leerink. Please go ahead.

Good afternoon. I'm sitting in for Dan Leonard today. A lot of my questions have been addressed. Could you reconfirm that initial product sale revenue will probably be recognized somewhere in mid-2015, is that correct?

Yes, that's correct. We expect to see first product revenue potentially as early as the first quarter of the year.

First quarter. Okay. Great. Could you maybe comment on the competitive environment of the sepsis market? Has there been any new entrants in the space?

No new entrants in the space. We do not have any direct competition vis-a-vis doing testing directly from a blood sample. The only other alternative for species-specific identification of these pathogens are all based on blood culture itself. And blood culture, as you know, takes a minimum of two days and as much as five or more days to get a result. It always takes five days to get a negative result. But if a blood culture bottle goes positive, there are other products based on PCR, mass spec, and other approaches that can deliver the specific result in anywhere from an hour or two to a couple of days. We don't really view that as direct competition at all, because our value propositions are really different. It's independent of blood culture. It's specific for fungal pathogens today, and will deliver the results in three to five hours, which changes the therapeutic decisions in a very rapid manner.

Great. Thanks for the color. And one more thing, for the T2Bacteria, will the turnaround time be similar to Candida? Like three to four hours?

We expect it to be very comparable to T2Candida. The T2Bacteria product has different probes. There are some nuances, but generally speaking it is very similar, comparable assay work flow to what we are doing with T2Candida.

Great. Thank you very much.

Thank you. (Operator Instructions). Our next question is from Paul Knight of Janney Capital Markets. Please go ahead.

Hi, guys. This is Bryan Kipp on behalf of Paul. Congrats on the rapid de novo authorization in September. That was great to see.

Thank you, Bryan.

My first question -- I think you guys gave a little color on pricing and right now you think you will list price north of $250. Can you go into why you are thinking north of $250? What kind of changed your view, and what conversations were you having that resulted in that adjustment?

Yes, so during the IPO road show we talked about $150 to $250 a test. As we have concluded our market research what is driving the pricing of the product is the economic value of the test. The economic value of the test has really been confirmed through the discussions we have had at this point with prospects, where you can price in the order of $800 a test and slightly different by institution and the hospital system will break even. Remember all of the patients that are being tested are covered under DRG codes. So importantly, we don't have to get reimbursement and the value of the test is priced based on the economic value of the test itself. It is generally understood that a hospital would expect a vendor to take 30% to 35% of that economic value. When you do the math on all of that, it points to a price that is slightly north of the $250 price point which is where we are starting.

Great. Is there any anecdotes you have had since the authorization with certain hospitals, large payers, or regionals, that you think will be worthwhile to discuss? Anything you thought was incrementally positive or something they didn't think about that would be important to highlight?

For sure most of what we are seeing, and we are now, I think, day 43 into our commercialization effort, not that anybody is keeping track, but what we are really seeing is confirmation of what we really believed and what we had seen through our work prior to FDA clearance. I think the most exciting thing for all of us in all of the interactions we have had with hospitals, and this continues really on a daily basis, we haven't even had a neutral reaction from anybody. It is all quite positive, and high degrees of interest in all places. Going from interest through the sale cycle and through the contracting process, we all know that takes some time. But it is, the product is being met universally with a lot of anticipation and excitement and understanding and the value it can bring to hospitals and more importantly to patients.

Are you seeing discussions evolve away from a single test utilization for patient to maybe multitest utilizations on the back end to confirm that it was speciezation [sic] and the removal of the bacterial or fungal infection?

We are seeing a high degree of interest. We enter this modeling the business assuming one test per patient. We are definitely going to see more than that for positive patients. There is going to be a lot of monitoring using the T2Candida panel. All of that has been quite positive.

And two quick ones last for me. The bacteria panel, I know it is a little ways away, but when can we expect some additional color on the potential for gram negative, gram positive, and kind of a portfolio? Is it post pivotal trial, or do you think you can give color ahead of that?

It is likely where we have the opportunity to do so, as we did with T2Candida, we had all sorts of poster publications of data as we went through the process. And to the extent those opportunities surface over the next 12 months, we will certainly do that. We did have a poster presentation on some of the species in the bacteria panel demonstrating limits of detection and all below five cfu per ml.

And a quick one to fit in here -- the, actually I will get back in the queue and see if anyone else has additional questions. Thanks.

You bet.

Thank you. The next question is from Steve Beuchaw from Morgan Stanley. Please go ahead.

Hi, Good afternoon, guys. Thanks for taking the questions.

You bet, Steve. How are you doing?

Very well. I think thus far the questions have been directed to John. Mark, one for you following up on the comments, the very helpful comments around the outlook for next year. I wonder if there are any basic parameters on operating expense you could speak to into 2015. And then John, I had a couple for you as well.

Great question, Steve, thank you. As we noted in the prepared remarks, Q3 was a busy quarter with many activities growing our commercial infrastructure and continuing investments in R&D. And so we anticipating OpEx in Q4 grow in the range of 15% over Q3, and we would expect to continue to grow as we move into 2015. And I suspect that we will provide trends as it relates to those expenses as we move through 2015.

Okay. John, I think one of the questions that potential customers will have as they think about the pricing on the test is what kind of real world evidence do you have of the utility of the test? I'm sure you have plans in place to work with some of the early customers and development partners to develop data to help give potential customers a view of the cost-savings based on real world analysis. Can you speak to the plans there of the economic analysis based on real world data?

You bet. We have done work with a marketing economics firm, and you should expect to see some publication probably in the next I will say three to nine months, because one can never control the timing of a publication, where they take not just published literature, but actually go into real price books and wholesale pricing of drugs, apply the data from our pivotal trial to that data, and derive the economic value of our test. That will be an important highlight.

One of the important outputs of that work, and that has been independently done by this firm -- one output is we have the data where our sales force can now go into hospitals and plug in a hospital's real data. How many candidate patients do they see? High risk patients? What drugs are they putting on? What percentage? And what price do they pay for drugs? We can in real time with that hospital build an economic model to show the value of testing the high risk patients. That will be number one.

Number two, there are a number of studies under way and this is an ongoing part of T2 for years, frankly. We have another four studies underway getting more clinical data from independent sites, comparisons of T2 to blood culture, showing T2Candida measurements in the presence of patients on anti-fungal drugs, testing pediatric patients, and all of the things that will lead to publications -- some of which we should see in 2015 and perhaps we will see most on 2015.

Got. And the last one from me building on the comments on the outlook for 2015 and the 30 contracts -- I wonder if could -- I wonder if some subsets of these, let's call them IDNs, to bigger networks where it may be possible to have multiple instruments for the hospital or hospital network? That's it from me. Thanks again.

Absolutely. I expect during 2015 that IDNs be a part of that group of initial adopters. So yes is the short answer.

Thank you. The next question is from Isaac Ro of Goldman Sachs. Please go ahead.

Good afternoon, guys. Thank you. I know it is early, I think you said 43 days into the sales cycle here. But I'm hoping to get anecdotes from you in terms of what you learned so far, and specifically interested in getting a sense of the number of touch points in some of your early target accounts you are going after and is it more in line with your expectations? What I mean by that is the number of decision makers, given the importance of sepsis, across an institution, and the number of people you are trying to get to sign off on an early adoption?

Great question, Isaac. Everything to date is very confirmational of the touch points and call points during the sales cycle. We are certainly talking to lab directors and infectious disease docs. We are also talking to chief of critical care and often folks on the transplant side as well. That was all anticipated, everything very consistent in terms of what we have seen and what we have expected. But typically, we are certainly seeing there are champions that form. The champions quickly form on the infectious disease side, almost always. We are seeing champions forming in critical care and on the lab side as well.

So the process is moving great. We haven't seen any blockers or surprises. As you said, we are 43 days into it, so the number of data points is in the tens. It is certainly not in the hundreds. And it is all moving exactly the way we would have hoped. And we look forward to the next 90 days and we will know a lot more when we are on this call in February.

Good. That's helpful color. And maybe if we look at the overall capital budgeting environment. We are obviously toward the year-end for most hospitals. Has the overall budgeting dynamic you are working against more or less been in line with your expectations for your target accounts?

It has. We are seeing -- we expect to place instruments either on reagent rental or through capital sales. We had said on the road show that we expected 80% reagent rental/20% capital sales. Anecdotally, it is falling in line with what we are seeing right now. That 80/20 feels about right although it is early to be conclusive with that. And the issue of budgets and getting access to funds has not been a blocker yet. So I don't have much to add on that.

Great. And then just the last question would be if we look at the path into 2015, there is obviously an earlier question about potential for IDNs and some of these new structures within the health care system to have an influence on adoption of new technology. Do you see that being a material tailwind next year? We are digesting the first year of the ACA and hopefully seeing a little more focus on cost containment and all of these aspects that are probably secular trends to the system? Do you see that as being a material enough of a tailwind to actually influence adoption to your technology in 2015?

I think it is. I think all of that helps. The more focus there is on economics -- and there is a tremendous amount of focus on that -- I think it really helps us. There is a tremendous overuse of drugs. We are seeing that in our discussions that overuse of antifungal drugs, as we have said before, 40% on average are being put on antifungal drugs, and in some institutions for as three weeks. They keep patients on antifungals even if they get negative blood culture results, in some cases, because they don't trust the negative blood culture result because blood culture doesn't perform well in the presence of drugs. Not only is that an economic problem, but the other thing we are definitely seeing in some of our discussions is the concern around resistance in hospitals and how the overuse of drugs can affect the overall performance of a hospital. So I think All of those trends bode well for us in terms of what we are trying to accomplish here over the next 12 to 15 months.

Got it. Thanks so much, guys.

You bet, thanks.

Thank you. The next question is from Paul Knight of Janney Capital Markets. Please go ahead.

Hi. It's Bryan again. Two quick follow-ups. One was on the IMS Health. I think that was the consultant firm you were outsourcing some of the data mining to. The three to nine-month horizon, I guess I was under the impression it would be through the back half of the year. Is this in line with your expectations, or do you think there is a few things where it will push it out to 2015 more likely than toward the end of14?

No, nothing's changed there. Probably, if there was any discussion about this year, it would be about when something would be submitted. It has been submitted. It's more than just a question -- we would never try to predict when something will actually get published. You just don't control that. Sometimes it can take three to six months to be accepted and three to six months to then have it published after it is accepted. And sometimes it happens fast. Sometimes it happens in 90 days. That's a really fast path when that happens.

Okay. Thank you. The last one from me is just the ramp in sales force you said going from I think two you had -- sorry five at the end of the month, incremental adds. What kind of profiles of the people you are hiring and who are you drawing from? Is it people in the industry for ten, 15 years? Younger people ramping up? Just kind of the profile of who you are hiring and who you are keying in on.

Yes, it is more in the ten to 15 years of experience. It is people who have sold capital sales experience, sold in the labs. We are really excited about the sales force and the team we have been able to bring on board early on. We are looking forward to getting the second sales school going here. Actually it will be next week with five additional people. Two people have already been through it. Yes, we are a little ahead of where we thought we might be in terms of the size of the sales force. That was really just driven by the opportunity to hire what we believe are some real A-players who wanted to be a part of the team.

Are these people coming from larger firms and looking at it as a great opportunity or do you see a lot of people coming tangentially?

Yes, I would say it is mostly larger firms looking for the next big opportunity.

Thank you.

Thank you. We have no further questions at this time. I would like to turn our floor back over to management for any closing remarks.

Well, we appreciate everybody dialing in today, exciting to get our first call behind us. We look forward to reporting back in the coming weeks, and we will talk to you all after the first of the year.

Thank you. Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time, and thank you for your participation.