Bristol-Myers Squibb Company
Q2 2010 Earnings Call Transcript

Published: 22 Jul 2010

[Operator:]

Good day, and welcome to today's Second Quarter 2010 Earnings Release Conference Call. [Operator Instructions] At this time, I'd like to turn the call over to Mr. John Elicker, Vice President, Investor Relations. Please go ahead, Mr. Elicker.

[John Elicker:]

Thanks, Jennifer, and good morning, everybody. Thanks for joining us. We're here to discuss our second quarter results. You've seen the release out this morning. With me today for prepared remarks are Lamberto Andreotti, our Chief Executive Officer; and Charlie Bancroft, our Chief Financial Officer. After the prepared remarks, we'll go to Q&A. And also joining us for Q&A are Elliott Sigal, Head of R&D; as well as Beatrice Cazala; and Tony Hooper, our two Commercial leads. Before we get started, let me take care of the legal language. During this call, we'll make statements about the company's future plans and prospects, that constitute forward-looking statements for purposes of the Safe Harbor Provisions under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the company's most recent annual report on Form 10-K and reports on Form 10-Q and Form 8-K. These documents are available from the SEC, the Bristol-Myers Squibb website or from BMS Investor Relations. In addition, any forward-looking statements represent our estimates only as of today and should not be relied upon as representing our estimates as of any subsequent date. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so even if our estimates change. During the call, we'll also discuss certain non-GAAP financial measures, adjusted to include certain costs expenses, gains and losses and other specified items. Reconciliations of these non-GAAP financial measures to the most comparable GAAP measures are available on our website. Lamberto?

[Lamberto Andreotti:]

Well, thank you, John. Good morning, everyone. We have completed another quarter in which our efforts have been successfully devoted to the key elements of our strategy

[Charles Bancroft:]

Thank you, Lamberto. We did have another quarter of growth. We delivered non-GAAP EPS of $0.54 or a 13% increase over last year, supported by sales growth in our key products and continued expense management. Included in our second quarter EPS is a negative $0.02 impact of U.S. healthcare reforms. I want to give you some brief highlights from our second quarter financial results and talk about guidance before we go to your questions. The company reported second quarter net sales from continuing operations of $4.8 billion, an increase of 2%. U.S. healthcare reform had a 1.5% negative impact on net sales in the quarter and volume was up 1%. Foreign exchange was neutral compared to last year. The second quarter sales performance was driven in large part by strength in our virology franchise and PLAVIX. Our virology franchise demonstrated solid global sales growth, up 10% from a year ago. This sales strength demonstrates the continued strong demand for REYATAZ, the SUSTIVA franchise and BARACLUDE across both our U.S. and international markets. PLAVIX grew 7% in the U.S. in the second quarter as the retail inventory builds, which we saw in the first quarter, was worked down. In Europe, we saw continued erosion of PLAVIX as generic clopidogrel was available in most of the countries. As we've said, we expect erosion of PLAVIX sales in Europe to begin to slow, but it will continue. The impact is primarily recorded in equity income from affiliates in our P&L. In the U.S., ABILIFY prescription demand increased 5%. This is 2.5x greater than the overall antipsychotic market. The increase in U.S. prescription demand was fueled by our indications for bipolar and major depressive disorder. However, ABILIFY reported sales in the U.S. were down 5% due to the negative impact of U.S. healthcare reform and the reduction in our share of net sales under the revised contractual terms with Otsuka. Excluding these items, ABILIFY sales would've been up 11% in the U.S. Lastly, divestitures and rationalization of our non-strategic mature brands portfolio had a negative impact year-over-year of approximately $45 million. So U.S. healthcare reform, the ABILIFY contract extension and mature brands divestitures had a combined negative 4% impact on reported total company sales in the quarter. Now let me give you some highlights from the rest of the P&L. Our non-GAAP gross margin decreased 50 basis points to 73.8% compared to the second quarter of 2009. Improvements in product mix were offset by changes in the way we account for the agreement with Otsuka. Advertising and promotion expenses were down 12% to $263 million for the quarter. The decrease is due to less spending on the promotion of certain products at the end of their life-cycle and to Otsuka's reimbursement of certain ABILIFY, SPRYCEL and IXEMPRA expenses. This was partially offset by increased spending for the ONGLYZA launch and other pipeline products. Equity income from affiliates declined 43%, driven by continued erosion of PLAVIX sales in Europe from generic clopidogrel, as I mentioned earlier. The expected overall non-GAAP tax rate on earnings from continuing operations was 23.8% in the second quarter. Our guidance remains between 23% and 24% for the year, assuming the R&D tax credit. As a reminder, we would only account for the tax credit in the quarter it happened. In regard to our new $3 billion share buyback program, we repurchased 7.3 million shares in the quarter at a cost of $173 million. Let me turn to guidance. As Lamberto mentioned, the economic crisis in Europe has led to incremental pricing pressure. We typically realized a 2% to 2.5% price decline across our European businesses, but based on various governmental measures implemented, we will see a larger impact in 2010. Despite this pressure, we are confirming our 2010 GAAP and non-GAAP EPS guidance, and there are no changes to our line item guidance. There is also no changes to our estimates of the impact of U.S. healthcare reform. However, the European pricing measures, along with the broader U.S. healthcare reform changes, will create a headwind for 2011 beyond what we typically budget as we balance productivity and investments to maximize the value of our portfolio. In closing, we had a solid second quarter

[John Elicker:]

Thanks, Charlie, and, Jennifer, I think we're ready to go to questions. And just again, as a reminder, in addition to Lamberto and Charlie, Elliott, Beatrice and Tony are here to handle any questions you might have. Jennifer?

[Operator:]

[Operator Instructions] We'll now go to our first question from David Risinger with Morgan Stanley.

[David Risinger:]

I have a number of questions. And I was in and out of the call, so I apologize if you mentioned this in the prepared remarks. But couple of things, first, in terms of the second half of 2010 revenue growth outlook, is it possible for the top line to accelerate from the 2% year-over-year growth that you reported in the second quarter, or is that unlikely given the FX headwinds? And then my second question relates to timing on three pipeline products. In terms of apixaban data timing, could you provide some color on that? In terms of the first-line ipilimumab data, any update on that timing? And then finally, on dapagliflozin, any update on the U.S. filing timing?

[Lamberto Andreotti:]

I would say, Charlie, you should take the first half of the question about sales. And Elliott, if you can update David and the others on the products and the timing.

[Charles Bancroft:]

I would say for the back half of the year and for total year, our guidance for total sales remains in the mid-single-digit range. FX is always difficult to predict as the top line will, obviously, be impacted based on the fluctuations in currency. However, as we think about our overall earnings, we have hedges in place for the basically to cover ourselves for 2010. So not withstanding any changes in fluctuations, we should still be fine on the bottom line.

[Elliott Sigal:]

Yes, David, this is Elliott. You asked about timing for apixaban, studies of ipilimumab, 024, our first-line study, I believe, was asked and dapagliflozin filing in the U.S. Well, we're most excited about the AVERROES trial, which is on patients that can't tolerate or cannot take Coumadin and that's a superiority trial that will be presented in Stockholm, August 31, at a late-breaking session. And that's the first of our large A-fib studies. It's over 5,500 patients. It's in a special population. We think it's an area of unmet medical need. This was stopped early by an outside group, and so we're gathering all the final data and look forward to that presentation. The AVERROES trial is a more all cumbered trial for A-fib. It is a broad spectrum of risk factors. That is event-driven and by our best estimate, we should that information in the first half of '11. The AVERROES trials are very unique part of our program, and I feel it may give information and confirmation about our overall profile and balancing benefit risk, targeting unmet medical need and having the right dose. Ipilimumab, of course, the first survival study in pretreated metastatic melanoma patients was presented not only in the New England Journal of Medicine, but at ASCO. And with that data, we have filed in Europe and that's been accepted. We are announcing today, we have submitted, at the end of June, an application for the U.S, and we're working with the FDA to finalize that. And it's up to them to file that data. The first-line study for ipilimumab is also event-driven, and there's no change in the comments that I've made before. There has been slowing of the events which is good news, we believe, for patients. Perhaps by the end of the year or early next year, we will see that data. Dapagliflozin is progressing well in terms of its emerging profile, of the triad of benefits, with novel mechanism. We'll have two important studies presented in Europe. We'll have more studies that we're reading out now that will be presented next year, and we are on track as an alliance to file in Europe. We have not performed the analysis that's required in the U.S. to determine the filing yet, but this is an ongoing process for this year. We'll have more to say later.

[Operator:]

We'll go next to John Boris with Citi Investment Research.

[John Boris:]

Firs question just on apixaban. Elliott, when you originally sat down and met with the FDA on the AVERROES trial and design of the trial, obviously, it's a unique design to that trial. Was there any agreement that you had with the FDA that if it did demonstrate superiority, that the FDA would be open to, obviously, evaluating that in a meaningful way toward approval? Or are you anticipating that the FDA's going to require the second trial? Secondly, what percent of patients are considered refractory or tolerant? And then third, in your release, you say it has an acceptable bleeding profile. Can you just help us understand what acceptable is?

[Elliott Sigal:]

I'll start answering some of these, but I think it's very important to hear from our Commercial leaders. And I think Beatrice Cazala will follow me with some remarks on the opportunity here with AVERROES. First of all, I think the FDA will and should keep all options open based on the data, and we're all assimilating the data that would be presented. And all I can say about our very, very initial meetings years ago was, that this design was recognized as a unique part of targeting unmet medical need. We received fast-track status on the basis of the design, but we had intended to have both studies completed around the same time. This one as, you know, will start, stop early and closed early because of an independent assessment that the benefit far outweighs the risk and all the patients that weren't on apixaban should be offered that choice. You will see, and I cannot preempt the scientists and the data, you will see August 31 in Stockholm, the design of the trial, the exact number percent of patients that were refractory or how they were determined to be unsuitable for Coumadin, which is for a variety of reasons. They may have been on Coumadin, couldn't be monitored properly, couldn't be titrated properly, had drug-drug interactions or high risk. Or patients that the physician, for a variety of those reasons, felt that it was unwise and they were unwilling to put the patient on Coumadin. The data will be presented, and the bleeding comment that I made was, that I do believe this independent group made sure that it was very clear that the benefit/risk could be evaluated, and you will see what the acceptable profile of bleeding is at the conference. Beatrice?

[Beatrice Cazala:]

Yes, from the commercial perspective, you can imagine we are analyzing that situation with a lot of interest. It's very unusual population as per your comments. However, it's, in our estimation, a very large number of patient, and we even believed that, through our market research, it's probably more underestimated than we have found. We considered this at least 40% of patients than group in overall. And there are several subsegment, obviously. They are the one that are on Coumadin, as Elliott mentioned, and cannot be controlled or have difficulty in control [ph] (45

[Elliott Sigal:]

And I think the alliance that we are in with Pfizer will be advising publicly our filing strategy as all this unfolds in the rest of the year.

[Operator:]

We'll go next to Seamus Fernandez with Leerink Swann.

[Seamus Fernandez:]

Just a couple of questions on ipilimumab actually. Can you just discuss the kind of strategy that you might be evaluating relative to -- assuming that the frontline study is successful, the strategies in terms of pricing that you're thinking about relative to the differential in the 3-milligram per kilogram dosing versus the 10-milligram per kilogram dosing that you have for second-line versus first-line and how you can deal with that commercially? And then secondly, could you just, Elliott, clarify for us the maintenance paradigm in the IPI 024, the frontline study, versus the retreatment paradigm in the 020 study? I think there might be a little bit of confusion out there. I think it would help to clarify that.

[Lamberto Andreotti:]

Than means I would start, and I will ask Beatrice to follow. Obviously, pricing of IPI is natural very important to us. We have initiated that review of the different options we have. And for obvious reasons, we will not disclose much in terms of prices until we are closer to the market. There is a -- this is really a different situation from what we experienced in the past with other oncology products because of the emerging profile of these products. So we don't want to exclude any possible new approaches to pricing, and we will discuss more about this when we launch. But Beatrice, why don't you speak a little bit more about the opportunity that we see for IPI?

[Beatrice Cazala:]

As you know, this is a working science and new, so we don't really have a comparator into most standard of care because many investigational agent are used in that segment. So it creates a new set of challenges for us on pricing, I think if you outline some of them with a three and a 10, you will find interesting and new approach to solve that. The number of case is 30,000 to 40,000 annually in the U.S. and EU, and 60,000 worldwide. And we also know from, and Elliott will comment more about the schedule and dilution, but we also know in the surrounding setting that most of the patient will be treated with a number of dose and that would be it. So it creates an interesting situation for pricing and we're, clearly, today working very hard on nonstop therapy pricing in our overall share to be determining the optimal pricing for the products and to satisfy the multiple stakeholders and the access around markets when we introduce it. So interesting challenges, not on insufferable secondhand setting with a definite, it's a definite market. As you know, some of our patients also know it's a semi-treatment in most patients. So those are along the line of what we are working on today.

[Elliott Sigal:]

So with regard to the maintenance schedules or the terminology of induction, re-induction and maintenance, in 020, there was no maintenance per se. There was induction and based on physician evaluation, a possible re-induction. The induction is an infusion, in this case, the three milligram dose, every three weeks for four complete doses. Now if a patient did respond, and these are patients that are pre-treated for which there's no approved drug and it is a fatal disease. If they did show some benefit after that induction and then later, seem to deteriorate, they could be reinduced. The 024 was a different trial, there is an approved drug DTIC and we ran ipilimumab on top of that backbone. To see if we could improve against the standard care and first-line metastatic melanoma and the protocol for that was at 10 milligrams. It was the same four doses in the induction every three weeks, and then there was a maintenance every three months.

[Operator:]

We'll go next to Chris Schott with JPMorgan.

[Christopher Schott:]

First question is on EU pricing, as relative to your 2% to 2.5% historic impact on price, could you just clarify first what price impact you saw on the first half of this year? And then give us a little bit more color on what you're anticipating second half, as well as 2011 assuming no further government actions? I guess, could that pricing be maybe double that, that historic level over that time frame? Second question I had was regarding the emerging markets is now at 4% sales, do you have any idea what type of growth you're anticipating? And where do you see that as percent of sales maybe going by 2015, and maybe where within the portfolio you see the largest growth of opportunities? And then finally, generic PLAVIX penetration in the EU, where are we now? And I think you mentioned share plateauing, but did we see the share-related plateau as we look at 2Q at this point?

[Charles Bancroft:]

This is Charlie. We have been operating in a negative pricing environment in Europe for quite some time and we have extensive experience, unfortunate experience in understanding these market dynamics. As I mentioned, in my comments, we have historically budgeted 2% to 2.5% price decline each year. But as you can imagine, the current situation is more impactful for that. It's a modest impact in the second quarter and what we see for the full year is a 1% to 2% incremental impact to historical level as we think of the annualization of some of these impacts that have happened during the course of this year and some still to be implemented effective later this year. For 2011, we have to make these pricing measures, we'll have an incremental mid-single-digit negative impact to EU sales compared to historical level. Let me comment on the PLAVIX question you had in Europe, and then Beatrice can talk about emerging markets. Except for a few countries in Europe, most of the PLAVIX business in Europe is co-promoted with sanofi. And in those co-promoted countries, sanofi acts as the operating partner and books to sale, so we see the impact in the equity income of netzoids [ph] (54

[Lamberto Andreotti:]

I can probably make a comment, Charlie, on the emerging markets. This is Lamberto. You're right, Chris, where our sales in the five markets that we define as our key emerging markets which are India, China, Russia, Turkey and Brazil. The sales in those markets were 4% of our total sales in the quarter. I'm not going to give you our target sales for those markets, but it is the percent that you obviously is going to be much bigger than what we have today. To give you a flavor of how those markets are performing, those five markets, their sales in the quarter grew 16% versus prior year. And what counts a lot to me is that sales are driven not by older brands or sales growth, not driven by older brands or by local products. So our sales growth comes from BARACLUDE in China and Brazil, REYATAZ in Brazil, ABILIFY and SPRYCEL in Turkey, Brazil and Russia. We launched ONGLYZA. So we are developing and we continue to develop in those markets exactly the same portfolio that we have elsewhere. And this is what makes our emerging market strategy probably different from the strategy that most other companies have. And I'm very confident that we have -- in those five countries with big populations, with growing commitment to healthcare, increasing respect for intellectual property and expanding financial trend. Our BioPharma portfolio can be established and as said before, generate a much bigger contribution to the overall sales of Bristol-Myers Squibb.

[Operator:]

We'll go next to Jami Rubin with Goldman Sachs.

[Jami Rubin:]

If you could just review again, I think that you had talked about $350 million to $400 million revenue hit this year for healthcare reform and then double that next year. Yet, the 1.5% hit this quarter would, I guess, imply a run rate that is below that level of guidance for healthcare reform. So if you could -- you now obviously have more visibility, where are we with that? And number two, Lamberto, the fact that you've reconfirm your 2013 for estimate even with the new headwinds of healthcare reform and your European pricing pressures obviously very positive, should I imply by that statement that you expect to replace that with another $700 million to $800 million in new product sales? Can you just provide a little bit more granularity around your confidence in the 2013 number, given that obviously revenues will be hit by U.S. healthcare reform.

[Lamberto Andreotti:]

Yes, let me start and then Charlie can elaborate a little bit on both, on the impact of healthcare reform and the contribution on yield products to overall sales. And in fact, Tony you can add some information on healthcare reform -- about 2013, you're very right. I mean, the fact that we decided to confirm -- we concluded that we could confirm guidance is because we believe that the newer products can contribute to offset the impact of healthcare reform. And also the impact of this European pricing situation that is evolving in a negative way for us and everybody else over the last few months. We also said, and I repeat it now, that we'll continue to expand our attention to productivity and so that obviously the component of our confirmation of guidance for 2013. Before passing it to Tony on healthcare reform, healthcare reform is still evolving. This huge, look [ph] (58

[Charles Bancroft:]

Let me just comment quickly on the impact. So in the first quarter, we saw a $50 million top line impact and then in the second quarter, $70 million. So that's really related to the Medicaid rebate change, as well as some element of managed Medicaid. What we see -- that we're accelerating in the back half of the year is the 340B Hospitals and the expansion in that arena, as well as probably additional impact to the managed Medicaid. So we still feel comfortable with approximately $0.12 as we look at 2010. Obviously, as we get to the third quarter, we'll have another quarter of experience and we'll be able to give a more firm update as we think about 2010.

[Tony Hooper:]

Not much to add. I mean, it's pretty clearly you can see immediately the impact on Medicaid as for claims coming from the states and those vary -- based it on demand that's flowing through the market, as well as the managed Medicaid. Not many institutions have actually identified them yet under the new 340B PHS definition. We do have a clarification now around orphan drug has not been included, so there's a few drug weren't included in the future. But we do know that these institutions can identify themselves, and then do retroactive plans back to January this year.

[Operator:]

We'll go next to Tim Anderson with Sanford Bernstein.

[Tim Anderson:]

On PLAVIX, can you talk about what you expect Astra's Brilinta might do? What are the biggest unknowns and uncertainties with that product in your view? [indiscernible] (1

[Lamberto Andreotti:]

Tim, this is Lamberto, let me start with a comment on your last point. I must tell you, not only there is no hesitation but I think we are very pleased of the choices we make. Because if you think the so-called developed world in these pricing environment, it is innovation that one needs and despite all the very negative major stake in Europe, our products still get price and we got pricing agreements in the last few countries. We are not priced ONGLYZA yet, [indiscernible] (1

[Elliott Sigal:]

So Tim, I just want to be clear with dapagliflozin I'm talking about a standard routine analysis that has been instituted by the FDA over the last year and a half to assure no cardiovascular harm can be detected in a large enough patient population with the meta-analysis and pre-described boundaries for that estimate. So I'm not signaling any concern. In fact, the benefits from dapagliflozin in lowering blood pressure give us great hope that this, along with its weight loss, as well as control of glucose, will benefit more than just glucose lowering for these patients. But there is a protocol that's been instituted and was instituted right as ONGLYZA was being launched for all new diabetic compounds to meet a certain requirement that is event-driven and we're waiting for the number of events to make that calculation.

[Beatrice Cazala:]

And if we look at SGLT2 was a new class, on the commercial side, we're really excited by making our action because it's going to really provide a very strong alternative for the product that will be no need for an independent and has very different motor fraction with additional benefit to the traditional 1C or lowering. So all the market research we are doing confirm the interest in all the population as well as of sub-segment. And in it's dual activity boost on [indiscernible] (1

[Elliott Sigal:]

So we're cautiously optimistic. I want to interject the fair balance that represents things we've said before, nothing new. And as a new class, when we get the large number of patient safety database integrated, we will go over the usual analysis for safety signals. I've been asked most commonly about lower urinary tract infections. In some trials, we see no difference from the control and in some cases, we see some elevation. We'll know when we combine the database where we stand, the concern with these which are often seen in diabetes patients unfortunately. And then many diabetic trials is whether there's an upper kidney urogenital infection like pyelonephritis. In the last study, I was asked about two cases. But I can tell you that I am not concerned about any imbalance across the program, and we do monitor this very carefully and we will look at the integrated safety. The tolerability issue of having excess glucose is something we're working with patients to deal with, but I think it's more tolerability than safety and that is the yeast infections, they can develop in diabetic patients are at increasing rates, with this particular agent but we're working out ways to address that tolerability issue and hope the benefits far outweigh them.

[Operator:]

We'll now go to Steve Scala with Cowen.

[Steve Scala:]

First for Elliott, does Bristol have the PLAVIX CLARINET data in-house? And just to confirm, regardless of the data by virtue of having done the study, you are automatically granted the six-months pediatric exclusivity? I guess, asked another way, is there any risk that you won't get pediatric exclusivity based on CLARINET? And then secondly, perhaps for Lamberto, Gilead had apparently said on its call that it has an option to de-emphasize ATRIPLA presumably when the Sustiva patent goes off. Can you clarify what patent they're referring to, 2013 or 2015? And would you provide Bristol's perspective on this option?

[Elliott Sigal:]

Yes. Well, you're referring to the pediatric trial that we have an agreement with the agency that if completed the way that it was designed would give us a pediatric exclusivity. That's the CLARINET trial. And we are announcing that we have submitted that application. And we do believe we've met all the requirements, so we do expect over the coming months to hear about our exclusivity in that regard.

[Lamberto Andreotti:]

Steve, as far as ATRIPLA and SUSTIVA are concerned, I think that the comments made by the management of Gilead -- I'm not sure exactly to which comment you're referring, but I suppose they made comments about -- not the patent but their contractual obligations. There is no disagreement with Gilead on rent for the patent and this is something that was not clear in the past, but I think it's clear now. Now they have the rights to not to support ATRIPLA, according to the contract. And as far as Bristol-Myers' concern, I think we have committed to Sustiva. We have committed to ATRIPLA. Based on the recent information I've seen, I'm looking forward to the budget discussions for my team about ATRIPLA in 2011 and beyond. So I think ATRIPLA and SUSTIVA are going to be some important elements of the HIV therapy for a number of years to come. Tony, do you want to elaborate on that?

[Tony Hooper:]

Just the patents are clearly defined in the orange book and when we look at the pediatric extension that's for six months beyond that. So the contract is clearly linked to a point of which efavirenz will lose patent. Now as I look at the HIV franchise, it's interesting that despite the recent entries of new products into HIV, seven out of every 10 patients that are naïve to treatment or not getting either REYATAZ or efavirenz as an initiation. And in fact, these two products have both held their market share growth, if you will. It's all about suppressing the virus, keeping the virus down and avoiding resistance. And that means you had talk about efficacy and placing persistence and when you look at -- in a sovereigns base region like ATRIPLA, it actually has the longest treatment persistence of all HIV regimens. And therefore, I think with all due respect, given the value proposition the HIV franchise provide for naïve patients, any new products we need to offer disproportionate benefits in order to make significant inroads in our market.

[Operator:]

We'll go next to Tony Butler with Barclays Capital.

[Charles Butler:]

Lamberto, single question. I respect the additional buyback that was announced this morning, but does it in any way send a signal about the availability or the confidence and additional business development activity over the near term?

[Lamberto Andreotti:]

Tony, the answer is no. I think that we still see a lot of opportunities outside there. You know that our approach to assessing and acting of those opportunities is very focused and is very balanced and disciplined. So we continue to have a large number of opportunities under assessment, and I'm confident that we will find the right deals on the right targets and we -- a number that we are. The repurchase of our own shares is just one of the things that we announced and are doing to meet the flex of our shareholders. And I think it's an indication of our confidence in cash availability in the future. So we are not giving up on business development, that is our first priority subject to the divisions. Quarter-by-quarter by our board, we are committed to our dividend policy and on top of all this, we believe at this stock repurchase is something that make sense and we can top forward.

[John Elicker:]

I think, thanks, everybody for all your question. We're going to be around at the BMI Investor Relations team to answer any follow-up questions you might have been. And before we close the call, I just like to go back to Lamberto for some closing remarks.

[Lamberto Andreotti:]

Yes, thank you for many interesting questions. Just a couple of closing thoughts. First, is our results demonstrate operationally things are going well and we are glad to confirm 2010 guidance, despite the negative impact of both U.S. healthcare reform and pricing issues in Europe. Second, as Charlie said, 2010 is just the beginning of impact of U.S. healthcare reform and of the intensified pricing issues in Europe. With more significant impact of this global pressures expected in 2011 and beyond. And further and most important, our new positive clinical data provide great momentum for our pipeline and continued confidence in our longer-term strategic vision. We'll continue to invest in helping ensure that promise in the future. Well, thank you, again for joining us today, and thank you for your attention.

[John Elicker:]

That wraps up our call. Thanks, everybody.

[Operator:]

This does conclude today's conference call. We thank you for your participation.