GeneDx Holdings Corp (WGS) 2022 Q1 法說會逐字稿

Good day, and thank you for standing by. Welcome to the Sema4 First Quarter 2022 Earnings Conference Call. (Operator Instructions) Please be advised that today's conference is being recorded. (Operator Instructions)

I would now like to hand the conference over to your speaker today, Joel Kaufman, Vice President of Finance and Corporate Development. Please go ahead.

Thank you. Good afternoon, everyone, and thank you all for participating in today's conference call. Participating for the company today will be Katherine Stueland, Chief Executive Officer; Eric Schadt, Founder, President and Chief R&D Officer; and Isaac Ro, Chief Financial Officer.

Earlier today, Sema4 released financial results for the first quarter ended March 31, 2022. A copy of the press release, along with our first quarter earnings slide deck, are available on the company's website.

Before we begin, I'd like to remind you that management will make forward-looking statements within the meaning of federal securities laws, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements contained in this call that relate to expectations or predictions of future events, results or performance are forward-looking statements. Actual results may differ materially from those expressed or implied in the forward-looking statements due to a variety of factors.

Additionally, these forward-looking statements, particularly our 2022 financial guidance, involve a number of risks, uncertainties and assumptions. For a list and description of these risks and uncertainties associated with Sema4's business, please refer to the Risk Factors section of our Form 10-K filed with the Securities and Exchange Commission on March 14, 2022. We urge you to consider these factors and you should be aware that these statements should be considered estimates only and are not a guarantee of future performance.

During the call, we may discuss certain non-GAAP financial measures. For reconciliations of non-GAAP measures to GAAP financial measures as well as other information regarding these measures, please refer to our earnings release and other materials in the Investor Relations section of our website.

This conference call contains time-sensitive information and is accurate only as of the live broadcast today, May 12, 2022. Sema4 disclaims any intention or obligation, except as required by law, to update or revise any financial projections or forward-looking statements, whether because of new information, future events or otherwise.

And with that, I will turn the call over to Katherine.

All right. Thank you, Joel. I'm so happy to be here at Sema4 leading an incredible team as we work together to transform the company and enter a new phase of growth, efficiency and scale.

The vision remains the same: to usher in a new era of better health made possible by Sema4's health intelligence platform. What will be different is the efficiency in which we drive growth or, put another way, how do we deliver more insights to more patients at scale. Sema4 is in the best possible position to do this today. With the close of the GeneDx acquisition, we're now a more diverse, stronger company with a faster path to profitability. We're committed to building our data platform, delivering growth with significantly improved efficiency and, importantly, reducing our cash burn with intention.

Our investments to date have been critically important to creating a data platform unlike any other in our space. Under Eric's leadership, Sema4 has developed a clinically advanced data insights engine for patients, clinicians, health systems and biopharma partners. The value of this data engine is massive. We are able to partner with health systems to deliver insights for clinicians and their patients and, ultimately, will be able to deliver a personalized health plan.

With our pharma partners, our data engine drives value as we aim to help them accelerate drug discovery and development. The combined company now has an incredibly rich data set flowing through our health intelligence platform, including one of the largest rare disease data sets in existence. We will continue to invest in building that platform. And with Eric's vision and passion for this, and his new role as Chief R&D Officer, our intention is to accelerate the delivery of transformational deals. By combining Sema4 and GeneDx, we now have a company that is changing the landscape of how patient care is delivered and leveraging efficiencies that are unique in our industry.

And that leads me to our new operating model. As a public company, it is imperative that we run an agile organization that empowers people to perform at an exceptional level. Following the close of the GeneDx acquisition, we have created a more operationally focused management team, including new leadership for our commercial operations and transformational efforts, in order to capture the best of both the Sema4 and GeneDx businesses and to ignite key drivers of our growth.

This integrated and flattened organization is designed to support 3 pillars that put us on an accelerated path to profitability: first, driving growth at scale; second, improving operating efficiency; and third, delivering transformational deals. I'll take a few moments to speak about each of these pillars for the next phase of Sema4.

First, growth at scale. As you may have read by now, we're starting off 2022 with solid performance for Sema4's based business and a return to positive gross margin. We also saw strong performance from GeneDx for the first quarter. Together, the combined company has strong momentum heading into the remainder of this year.

Second is operating efficiency. We've already begun work against several efforts aimed at creating stronger operating leverage across the newly combined company by improving revenue collection, driving down COGS and reducing cash spend. In conjunction with the GeneDx acquisition, we implemented a corporate restructuring, eliminating roles of roughly 10% of the Sema4 team. Although the decision was incredibly difficult, these changes enable us to execute with a greater degree of precision and simplicity to deliver on our mission. With measures we've already undertaken and several others that are in process, we'll be able to end this year with at least $200 million cash on our balance sheet, which extends our runway well into 2024 and ensures we can continue to invest in building our data platform in service of health systems, biopharma partners and, ultimately, patients.

Third, the delivery of transformational deal is based on the health insights platform, which just became even more powerful. One of the biggest advantages of the technology and team we acquired with GeneDx is its industry-leading database of more than 350,000 clinical exomes enrich for rare disease. This further enhances our value proposition to health systems and pharma companies with a best-in-class exome and expanded data capabilities. Coupled with Sema4's unmatched access to patient data and clinically relevant insights, this will position us as the partner of choice to health systems and pharma companies.

All of this points to a renewed commitment on behalf of the management team to accelerating our path to profitability. And we believe that this quarter's financial performance as well as the burn reduction efforts that are already underway demonstrate tangible progress. Not only are we making fundamental improvements from a financial perspective but we also have a stronger and more agile leadership team.

As we look ahead, I believe that systematic execution of these plans will drive sustainable, long-term value as we pave the way to revolutionize patient care with genomic testing solutions and data-driven insights.

In closing, 2022 is an exciting year for the company. As we exit this year, we anticipate Sema4 will be a company with trailing revenue on a pro forma basis of $350 million, an exit gross margin run rate of 30%, more than $200 million of cash on the balance sheet, cash runway into 2024 and an operating model that gives us the ability to achieve positive free cash flow by the end of 2025.

With that, I'm pleased to hand the call over to Eric.

Awesome, Katherine. So delighted to welcome you to the team. Since our last update in March, we have continued to make great progress with our operational initiatives and to execute our strategic plan, which includes the closing of the GeneDx acquisition, an incredible milestone for all of us but, most importantly, for our customers, patients and partners.

Concurrent with the deal close, we announced a leadership structure change where I transitioned to Sema4's President and Chief R&D Officer. In this role, I will be able to focus a great majority of my efforts on advancing Sema4's core technology, big data and AI initiatives as well as continue to dedicate my time expanding Sema4's partnerships across the health care ecosystem.

In addition to this being a meaningful moment for the company, this change in leadership is important on a personal level as I'm equally excited to get back to my roots and focus on what I love and am most passionate about. I look forward to driving our data platform forward and transforming clinical practice and therapeutic innovation with current and future partners.

As Katherine said, our vision at Sema4 remains unchanged. We believe the rapid advances in genomics and AI, along with the exponentially growing oceans of molecular imaging and clinical data, could and should be integrated into an information platform able to deliver a broad array of insights that drive more efficient treatment decisions and therapeutic development.

While there are many companies that seek to address various components of our solution, none have been able to wire these components together at scale and in a way that fully engages health systems as a health delivery partner. Our sophisticated platform draws on information from many sources: from advanced genomic testing solutions; to patient electronic medical records, including physician notes and other unstructured data; to hospital records and population health among many other large-scale sets of data available in the digital universe. With this platform, Sema4 enables patients and providers to derive differentiated insights in real time that can dramatically improve the standard of care.

What has changed following the close of the GeneDx acquisition is the change to our operating model. This operating model, which provides Sema4 the ability to grow at scale, operate more efficiently and deliver on transformational deals, is now stronger than ever before.

On the partnership front, we saw further evidence that our value proposition is resonating with health systems. A key indication within our health system partnerships is the increasing density of patient engagement. We are making substantive progress towards our mission of standardizing precision medicine within these health systems.

Now as you may recall from our last update, we held the first founder health system consortium meeting with our 4 health system partners during the first quarter. The event, which was very well received, allowed us to establish a formal network to collaborate around implementing precision medicine as the standard of care.

In addition to strengthening and deepening our current partnerships, we believe our continuing demonstrations of the power of our platform will accelerate our establishing new health system engagement while, at the same time, building relationships with pharmaceutical companies. In fact, in one recent finding published in Nature Communications, we demonstrated how our sophisticated AI and large-scale data integration efforts were not only able to stratify early-stage lung adenocarcinoma patients into different treatment groups but they provided a potential novel therapeutic for the patient group with the worst prognosis profile.

With that, I would now like to pass the call over to Isaac to discuss our financial results and guidance.

Thank you, Eric. Turning to our financial results for the first quarter of 2022. Total Sema4 revenue in the first quarter of 2022 was $53.9 million compared to $64.2 million in the first quarter of 2021. Excluding COVID-19, total revenue in the first quarter was $50.1 million, up 4% year-on-year and up 6% versus the fourth quarter of 2021. Regarding volumes, we achieved a new record this quarter with 84,925 resulted tests, excluding COVID. This represents a 27% year-over-year increase versus the first quarter of 2021. Women's Health grew 23% and Oncology grew 159%.

As a reminder, we completed the previously announced wind-down of our COVID-19 business in Q1 of 2022. Therefore, the remaining 3 quarters of 2022 and beyond will not include COVID-19 revenue.

Turning to gross margin. I will be referring to our non-GAAP results. I encourage you to review the reconciliation of GAAP to non-GAAP measures, which can be found in today's earnings release and 10-Q filed with the SEC. As a result of our early efforts to improve profitability, we delivered adjusted gross margin of 13% for the first quarter 2022. This represents a sequential improvement of 1,300 basis points versus the fourth quarter of 2021. Margin improvement in the quarter was driven by a combination of operational improvements within the lab, increased scale and continued progress in our procurement and sourcing efforts.

Turning to the balance sheet as of March 31. We had total liquidity of approximately $441 million with cash and equivalents of $315 million and an undrawn revolver of $125 million. Our first quarter cash flow was negatively impacted by onetime items related to the wind-down of our COVID operation, the acquisition of GeneDx and certain working capital items that have already reversed early in the second quarter.

Now turning to guidance. As a framing statement, our long-term path to profitability is centered on focused execution, improved lab operations, opportunities in revenue cycle management and enhanced payer engagement. Now that the GeneDx acquisition is closed, we will also explore opportunities for synergies across the combined franchise. These are recurring themes that you should expect to hear about again in coming quarters.

Now regarding the 2022 outlook, we are encouraged by the trajectory coming out of the first quarter from both legacy Sema4 and GeneDx. Starting with volumes, we are reaffirming our previous targets and now expect greater than 55% growth year-on-year with the inclusion of GeneDx volumes for the last 8 months of 2022.

Turning to revenue. We are reiterating the targets provided when we announced our acquisition of GeneDx. We expect pro forma full year revenue from both companies to be approximately $350 million, excluding COVID-19. And when adjusted for 8 months of owning GeneDx, we expect Sema4's 2022 reported revenue will be in the range of $305 million and $315 million.

On margins, we are raising our full year outlook for adjusted gross margin. Gross margin is now expected to be approximately 20% in 2022. We delivered 13% in Q1 and expect to exit the year with 30% gross margin in Q4 enabled by our efforts across billing, collections, reimbursement, lab efficiency and procurement. In addition, recall that stand-alone GeneDx had a higher gross margin profile than stand-alone Sema4, making this transaction immediately accretive to our combined gross margin. Taken together, these initiatives will allow us to deliver on our goal of achieving gross margins in excess of 50% by 2025.

To further accelerate and focus our path to profitability, we also initiated a comprehensive program to improve our operating efficiency, and this has already resulted in a number of actions that will reduce our cash burn starting in Q2. We plan to reduce cash spend significantly through the rest of the year and finish 2022 with at least $200 million in cash and equivalents. This will extend our runway into 2024, excluding any use of our $125 million available revolver. This year-end cash guidance reflects a greater than $50 million reduction to our 2022 cash burn relative to the financial targets we outlined when we announced the GeneDx acquisition in January.

Now turning to share count. Upon closing the GeneDx acquisition, our basic share count was approximately 374 million, which includes 80 million shares issued to OPKO, the parent of GeneDx, and 50 million shares issued to investors that subscribed in the pipe. We expect our weighted average basic share count for the full year will be in the range of 335 million and 349 million shares. We expect the fourth quarter 2022 basic share count to be in the range of 380 million and 384 million shares.

In closing, I'm encouraged by the progress we have made thus far in 2022 and excited by the financial profile reflected in our guidance. As summarized in Slide 10 of our earnings presentation, by the end of this year, we expect Sema4 will be a business generating $350 million of pro forma revenue on a trailing basis, an exit gross margin run rate of 30%, more than $200 million of cash on the balance sheet, cash runway into 2024 and an operating model that gives us the ability to achieve positive free cash flow by the end of 2025.

Now I'll turn it back to our CEO, Katherine Stueland.

Thank you, Isaac, and thank you, Eric. Our vision for Sema4, as I said earlier, remains unchanged. The path to success is more clear. We have a well-defined set of operational and financial objectives, which the team is already working hard to achieve. We'll continue to focus on growth, operating efficiencies, scaling towards profitability and transformational partnerships. We're confident that our diagnostic and clinical data platforms have the potential to dramatically improve the standard of care for all, and we look forward to capitalizing on these opportunities.

With that, we can open up the call for questions.

Our first question comes from Mark Massaro with BTIG.

Congrats on the quarter. I guess I wanted to ask about underlying volume trends. Do you think that the 23% and 159% growth rates in Q1 for Women's Health and Oncology are reasonable run rates as we look out later into this year? And maybe can you just remind us where exactly, maybe help us think about the particular growth rates between legacy Sema4 and legacy GeneDx?

Mark, thanks for that question. So just a reminder that Q1 this year was a comp over the peak COVID period last year, right? So I'm sure you knew that. But as we think about the rest of the year, we feel really good about what we're seeing in the channel with our commercial team. We're obviously just getting married together between the 2 sides. So we think that we're off to a strong start. That should continue as the year progresses. We'll, of course, provide more detail on the quarters as we progress into the year. But right now, we're off to a strong start. We thought it was sufficient to reiterate the guidance.

Okay. And then as we think about the $50 million reduction in cash burn this year relative to your original plan, how much of that was already realized in the corporate restructuring? I guess can you help us maybe elaborate on where some of those reductions are coming?

Yes. Sure. So number one, obviously, never an easy thing to do and really want to credit the entire team for pulling together here, but it's important to also provide context that, that work was done while we were in the process of closing GeneDx. It would have been done independent of the transaction. And so it really was focused on the core Sema4 franchise as it was prior to the close. And the savings that we referenced in the script are largely still to come. Those are all changes that we made to ensure that our cash burn comes down as we look at the sequential quarters for the rest of the year and exit the year in a really strong position.

Okay. One last question for me. You had a nice tick-up in adjusted gross margin. I know it's not necessarily the most sexy thing to talk about, but can you talk about some of the improvements you've already made with things like procurement and sourcing, operational improvements in the lab? And where else can you draw some improvements from? How should we think about the progression and some of the progress you're making in some of those line items?

So I'll tee it up and then let Isaac comment further. I think one of the things that became very clear, Mark, in diligence and then in integration planning, was you have 2 teams with highly complementary technologies and skill sets. And some of the things that the GeneDx team brings to bear are, I think, some really interesting approaches to drive down COGS. So as we're thinking about integrating the companies and operations, that gives us an additional ability to continue to realize some savings there. So I would say that there's a number of efforts that can support that even further. But I'll let Isaac comment some more.

Yes. Thanks. Katherine is totally right. We're still in the very early days of exploring where our gross margins can ultimately be. And in Q1, what you saw in the numbers were, number one, a good mix in ECS this quarter that helped us relative to plan and a little bit of benefit from the work we're doing in procurement and sourcing, harvesting low-hanging fruit opportunities. Implicitly, I think that means that areas around lab automation, longer-term efficiencies in the supply chain, all those things, the technology that Katherine mentioned, are still to come. And so we want to make sure that we execute that well. We've got to also balance that against our growth plans. But the point here is that I think we're still in the very early innings and harvesting low-hanging fruit that will continue as the year progresses.

Our next question comes from Brandon Couillard with Jefferies.

This is Matt on for Brandon. Just one quick one on pricing. It looked like solid progress there sequentially in the quarter. Can you just talk about some of the initiatives you expect to come online in the back half of the year that you previously highlighted, I think, in oncology and market access and kind of where you see ASPs headed from here for the rest of the year?

Sure. Matt, thank you. So on the pricing side, the most important thing, I think, is the fact that our team is materially strengthened from where it was even at the start of the year. We've, on the Sema4 side, expanded that team with a new leadership and then, of course, with GeneDx, massively increased the scale of that team. So now that we've got a really significant capability that we didn't have just a few quarters ago, we're in a position to, I think, push on several fronts to drive better ASPs.

Of course, on the oncology front, we've talked before about pushing forward with reimbursement for somatic profiling. That's making good progress and on track with our plan to realize better reimbursement by the middle part of the year. And then on the market access side, there's just a huge universe of ways in which we can optimize our efforts in partnership with our commercial team, in partnership with payers, in partnership with our health system partners, a whole bunch of things that I would say, together, should allow us to, with the same amount of volume like-for-like, drive better amounts of revenue and, therefore, ASP. So I'm personally very excited about the opportunity that we have this year to drive improvement there. It's a meaningful part of the gross margin improvement strategy.

That's helpful. And then can you just talk about, it's really early days, plans for the integration of the commercial teams and where you see the most opportunity, if any, to get more efficient as you guys kind of talked about in the prepared remarks?

Absolutely. The commercial opportunity here, I think, is one that requires a little bit of context. So one, on the GeneDx side, we spent the back part of 2021 building up the commercial team. So we doubled the size of the sales force. So as we have arrived last week with a combined team, we now have a really impressive footprint on the commercial side of things. We've got about 175 field-based reps combined between the teams. I think it's important. As we think about the commercial opportunity, we're going to be running the rest of this year with the playbook that they have to ensure that we deliver on revenue on both sides.

But what's really nice, Jen Brendel, who is leading our commercial efforts, she spent about a decade at Pfizer, she was at Bayer and she was at Invitae with me. Jen has developed a really strong approach to being able to develop integrated commercial plans that really ensure that we're using a data-driven approach from a sales perspective as well as marketing, medical affairs and other efforts at scale. So we got that off the ground at GeneDx, and now Jen's leading all of the commercial teams to be able to develop those plans as well across Women's Health and Oncology, in addition to the peds and NICU side of the business. So lots of opportunities as we think about cross-selling in 2023. But in 2022, we're really going to have the teams focused on delivering on what they signed up for this year and ensuring that we continue to build on the momentum after a really strong first quarter for both teams.

Our next question comes from Max Masucci with Cowen and Company.

First one for Isaac. Can you just walk us through maybe the reimbursement dynamics that played into the gross margin beat in the quarter and the raised guide, if we do separate those from some of the lab operation improvements and other factors?

Yes. Sure, Max. So I wouldn't say that reimbursement changed dramatically in Q1. We obviously, like I said earlier, had the benefit of a little mix. But really, it was, what I would call, a quarter of relative stability, and that's what we've been working towards. And as you look at the rest of the year, there will be some moving parts. But in general, we're obviously very excited about the potential for better reimbursement in oncology. As I mentioned earlier, that's something that's around the corner. And then as we look at the rest of the business, a lot of the opportunity around ASP really relates mostly towards improved billing collections, that kind of thing. Future contracting is also important. It takes a little bit more time for that to work through the numbers. But there's a bunch of levers that we're pulling that will translate into better ASP, and reimbursement is just one variable in the equation.

Okay. Got it. It sounds like you're in the process of evaluating the revenue synergies, you have some remaining cost synergies that might be more visible now that the business combination is closed. So can you maybe give us a sense for what you're seeing on both of those fronts? And which of the 2, going forward, do you plan to attack more aggressively?

I'll start on the revenue synergy side of things. I think one of the clear opportunities that is ahead of us is when we think about health systems and pharma. The combined data set, once we announced the acquisition in January, really captured a lot of attention from pharma companies. And I would say we had 2 teams that were very eager to get to day 1 so we could really start driving that strategy forward. So I think that's one area where we think that we have a very strong position in terms of having a right to win in the pharma space.

On health systems, that became another really clear area. Obviously, the model that the Sema4 team has built to be able to [be cost efficient with volume] through these health systems is incredibly impressive. And being able to go in and now add our exome for the pediatric segment into the NICU, something that we've heard from current customers as well as potential future ones, is something that is of interest. So I would say those are 2 of the areas where I think we have a really differentiated offering between the way that Sema4 has set up these health systems, the data engine and then adding in GeneDx' exome and genome.

Okay. Great. Maybe final one for Eric. Just curious how much of your time you're now planning to dedicate to new health system wins versus new biopharma partnerships, how everything is going on that front? And then if you could just give us a sense for the personnel and the teams that the combined business now has in place to target each of those opportunities would be great.

Yes. So going to again, as I indicated, spending just really the great majority of my time both on the information platform, evolving that, in addition to the pharma, kind of outwardly facing, developing those relationships and progressing larger-scale deals. But the health systems, like these things are all intertwined, as you know, as we've indicated before, in terms of facilitating the right kind of access to patients to high-dimensional, longitudinal data and so on. So view that as a core driver of the value we can push into pharma in partnership with the health systems. So it will be somewhat balanced. But no doubt, the pharma push, which I'll say the platform we have is complex, the kinds of engagements we have with pharma to help them understand all the different types of utility, those take a lot of time. And I'm well positioned with the team to help kind of drive that understanding and work on some of the components of the deal that helps drive maximal value.

With the GeneDx, like Katherine said, we were anxious from the signing of that agreement, 350,000 plus clinical exomes, more than 2 million phenotypes on an amazing ramp to keep growing, that kind of a resource, and a team that has deep expertise on both the genomics side in terms of interpreting genomes for these rare disorders and their connectivity to common disorders but then also on the clinical side, linking that molecular data with pathophysiology of these diseases, which is how you impact clinical medicine. So what we're getting with that group is a tremendous strengthening of R&D that's already, within the first week, now actively engaged with us on driving some of these pharma deals. So it's great.

Our next question comes from Matt Sykes with Goldman Sachs.

This is Dave. Congrats on the strong quarter. In oncology, can you double-click on some of the biggest volume drivers? What are the most popular oncology panels you're seeing and any trends there, such as increasing interest in bigger panels?

Yes. Sure. Dave, thank you. So remember, in oncology, our portfolio today is really 2 major product lines: the hereditary cancer risk test as well as the somatic profiling. And the former is much larger from a volume standpoint. So when you look at the total performance in the quarter, with 159% growth, most of that was in the HC business, which continues to do very well for us, both in the broader market as well as with some of the health system partners with whom we're working where we've mentioned in the past, we've been able to drive much higher rates of compliance relative to the targeted populations, thanks to our sort of comprehensive platform and partnership model. So I think that's a good validation that we're doing well.

And then we're just scratching the surface in somatic where there's, obviously, a huge opportunity to drive a higher rate of market adoption for a really, really valuable testing category. And we think we've got a very unique and best-in-class solution there. So even though we're a smaller player today, we think our opportunity to be much bigger continues to be very compelling. And of course, in lockstep with volume, we want to generate a higher rate of revenue attached to those volumes which is, as I mentioned earlier, we're on track for. So in general, good momentum in the Oncology business, lots of opportunity ahead of us. And stay tuned, we expect this topic will be a bigger area of conversation as the year progresses.

Great. And any additional color you can give us on the REPRESENT study and your expectations there?

Eric, do you want to take that one?

Yes. So the number of these protocols we have running that particular study continued to perform very well in addressing core components of our technology, the ability to address disparities and so on. So we continue to bring on new sites and drive enrollment into those studies. So it's all on a good path.

Awesome. Thanks. So just to close things out, I want to say one thing which is, to reiterate, we are really excited about the start to the year and the momentum in the core business. We want to really welcome and we're excited about the opportunity with GeneDx and finally, on the liquidity side, reiterating that we're going to finish the year with over $200 million of cash and $325 million of total liquidity.

And as we think about some of the moving parts around liquidity, also worth mentioning that as we think about the potential for the earn-out with GeneDx, I want to remind investors that there are really 3 pieces to think about there. One is that the earn-out, if triggered, we really retain the option to pay that out either with cash or equity. Now in the event that we paid out in equity, the conversion price is locked at $4.86 a share per the merger agreement. So if you run the math, and assume that the entire earn-out is triggered at $4.86 a share, that equates to 31 million shares or about 8% dilution. And then, of course, on top of that, there are additional lockups related to that equity if it is paid out. So I just want to make sure that was clear as we think about what the numbers look like exiting this year.

All right. Well, thank you, Isaac. Thanks, Eric. Thank you all for joining. We look forward to talking to you at upcoming conferences. I appreciate the attention today.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.