ChromaDex Corporation
Q3 2016 Earnings Call Transcript

Published: 11 Nov 2016

[Operator:]

Ladies and gentlemen thank you for standing by and welcome to the ChromaDex corporation’s third quarter 2016 earnings conference call. My name is Kaylee, and I will be the conference operator today. At this time, all participants are in listen-only mode and as a reminder this conference call is being recorded. This afternoon ChromaDex issued a news release announcing the company's financial results for the third 2016 and filed their 10Q. If you have not reviewed this information both are available within the Investor Relations section of Chromadex’s website at www.ChromaDex.com. And the form 10-Q is also available on the SEC’s website. I would now like to conference over to Andrew Johnson, Director of Investor Relations. Please Go ahead.

[Andrew Johnson:]

Thank you and good morning and welcome to Chromadex corporations third quarter 2016 results conference call. With us today are Chromadex’s founder and Chief Executive Officer, Frank Jaksch and Chief Financial Officer Tom Varvaro Today's conference call may include forward-looking statements including statements related to ChromaDex's research and development and clinical trial plans, future financial results, business development opportunities, our ability to build awareness for ChromaDex’s products, our ability to increase research and development efforts, the role of NR increasing life span, future results of clinical trials, and studies including human trials, the growth of consumer awareness of ChromaDex’s products, future regulatory milestones for potential pharmaceutical products, future cash needs, ChromaDex’s operating performance in the future, future investor interest and analyst coverage of ChromaDex, our ability to execute long-term plans without dilution to ChromaDex’s shareholders, our ability to increase shareholder value, ChromaDex’s products will address in the expected revenue growth of ChromaDex’s products that are subject to risks and uncertainties related to ChromaDex’s future business prospects and opportunities as well as anticipated results of operations. Forward-looking statements represent only the company's estimates on the date of this conference call and are not intended to give any assurance as to actual future results. Because forward looking statements relate to matters that have not yet occurred, these statements are inherently subject to risk and uncertainties. Many factors could cause ChromaDex’s actual activities or results to differ materially from the activities and results anticipated in forward-looking statements. These risk factors include those contained in ChromaDex’s annual report on Form 10-K and quarterly report on Form 10-Q most recently filed with the SEC. Please note the company assumes no obligation to update any forward-looking statements after the date of this conference call to conform with the forward-looking statements actual results or changes in its expectations. In addition, certain of the financial information presented in this call reference is non-GAAP financial measures. The company's earnings release which was issued this afternoon it was available on the company's website presents reconciliations to the appropriate GAAP measures, and an explanation of why the company believes such non-GAAP measures are useful to investors. Finally, this conference call is being recorded via webcast. The webcast will be available at the Investor Relations section of our website at www.ChromaDex.com. With that, it is now my pleasure to turn over the call to Frank Jacks and Tom Varvaro.

[Frank Jaksch:]

Thank you, Andrew. Although we have seen some volatility in our stock price as well as quarter over quarter revenue, we continue to be on track with the execution of our science backed strategy to build awareness of NIAGEN. In in Q3 we also had a very important milestone as we prepared to file our first investigation on new drug or IND application with the FDA for NR for Cockayne Syndrome. And we have now completed our first pre-IND meeting with the FDA, and I'll talk about that a little bit more in the call. Given our early stage and market development for NIAGEN and are our current high concentration of sales to a small number of early adopting customers. Some fluctuation in quarterly sales of NIAGEN is to be expected. If you remember, this isn't the first time we've had variability in our quarterly revenue as the same thing happened last year in the fourth quarter. We anticipate that these fluctuations will smooth out over time as we diversify our customer base. Inclusive of this quarterly variability, sales trends remain consistent across the remainder of our business during the quarter, and revenue for the nine months ended October 1, 2016 was 21.2 million and we're currently tracking towards another record revenue year. So at the end of Q3 2016, we ended up just short of the 22 million in revenue that we reported for our fiscal 2015. We're also pleased to see significant and exciting preclinical and human studies on NR that are being published in prestigious peer reviewed journals during Q3. There was quite a few studies that came out during Q3, and I'm going to discuss that in a few moments when I go over a summary of where we're out with that. I also wanted to take a moment to remind our shareholders that we're still in the very early stages of market development in the U.S. dietary supplement ingredient segment, and with our with our ingredient portfolio including NR of course October 10, marked the first human clinical trial study data that published on NR. And, again, this is a very important event for the company that it is the first significant publication of our own human data. And it was published in the very prestigious Nature Communications journal which garnered very positive media coverage and attention. And we believe that this is going to stimulate interest and build awareness with both consumers as well as brands that want to discuss this new product - discuss the new product development with NR as a centerpiece. Now, before I get into the highlights of the business and details of science published in Q3 2016, I’d like to turn the call over to Tom so he can provide you with details on our third quarter 2016 financial results. Tom.

[Tom Varvaro:]

Thank you, Frank, and good morning everyone. During the three months, ended October 1, 2016 ChromaDex reported net sales of $5 million, a decrease of 20% as compared to $6.3 million for three months ended October 3, 2015. The revenue was also below the $8.8 million reported during the second quarter of fiscal 2016. The ingredient segment generated net sales of $2.7 million during the third quarter of 2016 as compared to $4.1 million in the prior year, and 6.2 million for the second quarter of 2016. Given the size of our average orders with our larger customers, it is of course common to have some variability in the timing of orders quarter to quarter, and this variability had an impact as compared to the second quarter [indiscernible] received. The core standards and service segment posted 9% growth as it generated net sales of 2.1 million for Q3 2016 as compared to $1.9 million in Q3 2015. The scientific [indiscernible] for our consulting segment of net sales increased 10% to $292,000 from $265,000 for Q3 of 2015. Gross margin for the quarter was 41% versus 39% for Q3 2015. The net loss attributable to common stock holders for Q3 2016 was $954,000 or $.03 per share as compared to a net loss of $4,000 or $.00 per share for Q3 2015. EBITDA adjusted for non0cash charge associated with share based compensation, which is a non-GAAP measure for the quarter was negative 575,000 compared to $695,000 for Q3 2015. I next want to highlight some of the expenses incurred in Q3 that were discussed in our recent quarterly report filed with the SEC on form 10-Q. The company incurred $773,000 in research and development expenses for Q3 2016 an increase of 309% percent compared to 189,000 for Q3 2015. These charges included human clinical trial fees and new ingredient developments costs. As revenue and available financial resources continue to grow, the company plans to continue to increase research and development efforts with a focus on our ingredient segment. For the nine-month ended October 1, 2016 our patent made this expense increased to approximately 476,000 as compared to $226,000 for the comparable period for 2015. As we continue to enhance our patent portfolio for our ingredient segment, we expect these expenses to you continue to increase. Cash on hand at the end of the quarter was $2.3 million. We recently established a $5 million credit facility with Bridge Bank. This traditional banking credit facility will provide us with non-diluted working capital needs for future growth as a company continues to expand our proprietary ingredient business. Including cash on hand and now available under our credit facilities we believe we are well-positioned to continue to execute our long-term plans without dilution to our shareholders. With that, I will now turn the call back over to Frank, so he can provide our Q3 2016 highlights.

[Frank Jaksch:]

Thanks, Tom. As Tom just described, our customers order patterns won't always align with our quarterly reporting, and we don't run our business on a quarterly basis. And as I mentioned earlier, we expect to report a record revenue for 2016. As we have consistently said, we believe that we are still in the early - very early in the market development for NR and our entire ingredient portfolio. As our business develops, we expect our customer list to expand, our ingredient sales mix to diversify, and our customer concentration to decline. As a result, with further business development we expect there should be lower volatility in our revenue on a quarter-to-quarter basis. While our Q3 revenue reflected the impact of customer concentration in order patterns, the key milestones achieved during Q3 followed the favorable trends of past quarters and continue to build on our market development and opportunity. On the regulatory front, in August 2016 we received an FDA non-objection letter on our GRAS filing for nicotinamide riboside. This a significant milestone for the company that opens up the food and beverage segments for us in the U.S. While we have some development work to do for applications with high water content and the fact that food and beverage companies typically have longer development cycles, this is an important milestone for ChromaDex because we believe it creates the potential for new dialogue for us and fortified foods, and it helps us in other markets where we seek regulatory approval like Europe, Canada, and Australia. These countries look favorably on our regulatory standing with approvals like NDI and GRAS both of which we have in hand as of today. We are in a strong regulatory position in the U.S., which positions us to execute against opportunities in multiple product categories and channels of distribution. On the science front, on our scientific milestones we saw a remarkable amount of peer reviewed published science research validating the effectiveness and the importance of NAD published in top tier journals. Not only for really the whole year, but a significant amount of that continued in Q3. Animal studies were published in Cell Metabolism, Nature Communications, Cell Press Science, Science Translational Medicine which studied the positive effects of muscle regeneration, the critical role of NR in the NAD pathway, and the potential for NR to increase lifespan by a DNA repair and the effects of NAD repletion on muscular dystrophy respectively. The landmark publication on October 10, in Nature Communications highlighted our first human data on NR showing that NR upregulates NAD. A long-term study conducted at the University of Colorado was just completed which will provide us with safety data, which we already have as well as important end points specifically focused on physical function meaning balance, dexterity, locomotion, endurance, and strength, maximal cardio respiratory fitness or VO2 max, exercise response, heart rate, blood pressure, and also glucose and insulin function, and resting metabolic rate. This study could publish as early as the end of first quarter 2017, but we don't have an exact publication date for that data yet but we expected to publish sometime pretty soon. Additionally, our second ChromaDex sponsored human study, which I reported on last quarter, is expected to be fully enrolled by the end of the year and completed by the end of the first quarter 2017. We expect preliminary results probably somewhere around the end of the second quarter 2017. We believe this is going to be not only an important, but a critical study confirming the dose response as well as other therapeutic end points to support health and marketing claims. As we look forward to fiscal 2017, I'm excited for the volume of additional clinical data that we expect to be published. The level of clinical research on NR is growing significantly and should continue to drive interest across multiple product categories, not only the dietary supplement space. We are seeing are tremendous amount of success with our pre-clinical collaborative studies and we are happy to see many of these transitioning into human clinical trials. Very few published science demonstrating effectiveness of NR is what media attention, and media attention will drive consumer awareness. Driving the collaborative preclinical and human studies will remain a priority for Chromadex. On the market development side for NR we continue to enjoy what I call a robust business development activity for our lead ingredient NIAGEN As I mentioned before, NIAGEN is a platform ingredient that we expect to garner tremendous interest across a wide range of different types of markets beyond the supplement market. And our business development activities reflect this in multiple category opportunities. We have been actively working on business development in food and beverage, sports nutrition, infant nutrition, medical and clinical nutrition, skincare, and of course I’ll talk somewhat about the pharmaceutical side of that, that we're working on as well. We're very pleased to announce one of our first NIAGEN customers, Thorne Research. They were one of the first deals that we did back in 2013 has renewed their contract including minimum volume commitments over the next two years. We are also excited to be involved in new outreach, an advocacy platform for educating the general public on science and benefits of not only NAD, but also nicotinamide riboside. There will be an announcement in the coming days concerning the launch of a website called AboutNR.com and ChromaDex’s involvement in helping to curate that site. The site is a non-branded, non-sale site solely intended to be both a science repository, as well as a topical vetted news destination for the public at-large to better understand the role of NAD and NR. We believe this site will help reduce the noise and clutter that are starting to develop as well as create more awareness and interest in nicotinamide riboside. On the pharmaceutical front, we have some news to at least give me an update on here as well one of the areas that we believe is an exciting development for the company that isn't necessarily even accurately reflected in the value of the company. And we continue to make great progress in this space. We completed our pre-IND meeting with the USFDA on November 1, 2016 to discuss the development plan for nicotinamide riboside for Cockayne Syndrome, which is a rare pediatric orphan disease that results in significantly shortened lifespan in affected children. The FDA addressed ChromaDex’s questions related to pre-clinical and clinical data and the planned clinical trial design. The FDA also provided greater clarity on the requirements needed to file and IND to initiate a Phase 1, Phase 2 clinical trial in patients with Cockayne Syndrome. ChromaDex anticipates filing this IND in the first half of 2017. The FDA has indicated that it will consider a fast track designation for nicotinamide riboside at that time of the IND submission. We are encouraged by the productive discussions with the FDA, and we believe that preclinical and clinical data supports the clinical advancement of nicotinamide riboside, and we are currently undertaking IND enabling steps. Submitting this IND will be a significant milestone in ChromaDex’s drug development strategy for NR and additional NAD precursors in our pipeline. Cockayne syndrome is just one part of an overall IND/drug development strategy for NAD and NR that addresses mitochondrial dysfunction or mitochondrial related diseases and a great beginning to what we believe can ultimately transition into a multiple orphan disease strategy. We believe NAD precursors or a hot and upcoming space in the pharmaceutical area for new drug development, ChromaDex is well positioned to capitalize on the field as it develops. Also in Q3, we launched another new ingredient. We launched AnthOrigin at SupplySide West tradeshow, a trade show in Las Vegas in October - early October. AnthOrigin is a great addition to our growing portfolio of proprietary ingredients as a game changer for naturally-nationally sourced anthocyanins. It comes from a unique antioxidant rich source that is grown and processed in North America, so it is aligned with the needs of manufacturers and their consumers. We believe that it also helps protect our customers from the supply and price volatility associated with other sources of anthocyanin. We’ll have more updates about that development as it continues to move forward. On the corporate front, I’d like to comment on a few corporate milestones. The growing validation of ChromaDex’s business model and a leading research in development capabilities continues to allow us to attract talent at every level of the organization. Over the last month, we have added both to our scientific advisory board and our board of directors. In early October we announced that Kurt Gustafson joined ChromaDex’s board of directors. Kurt brings over 25 years of corporate finance experience at the board, the majority of which was spent at Amgen where he ended up in the role of CFO at Amgen International. Kurt brings a wealth of experience to both our board and the audit committee as well as experience in the pharmaceutical segment which will be important as we move in that direction. Earlier this week, we also announced that Dr. Matthew Roberts has been appointed to our scientific advisory board. Dr. Roberts has been appointed to our scientific advisory board. Dr. Roberts is an accomplished innovation executive with over 25 years of success at major companies across the industry. He brings a unique combination of both commercial and research and development experience. Currently he’s managing and growing an advising startup companies across the food nutrition digital health industries. So, Dr. Roberts will add a further operational development in discovery experience to our scientific advisory board. So to wrap it up, there's been a remarkable steadiness in the amount of research being published around NR. The growth of our collaboration and media attention to the science of aging, we have over 90 collaborative studies underway now. And many of these studies that started over three years ago are now transitioning from preclinical studies to human clinical studies. And let me explain how crucial this is. As normally a good outcome over the past three years it would have been to have five or six collaborative study studies in place, so having over 90 is almost hard to imagine. It's also important to note that ChromaDex is not paying for these studies and we believe that collectively these collaborative studies should result in somewhere in the range of 40 to 50 million in research dollars spent on nicotinamide riboside. These collaborative studies are also very important in driving how we have been prioritizing our clinical development plan, not only in the - sort of the food or the dietary supplement space, but it's also going to continue to drive to the plan in terms of where our pharmaceutical development interests will go. It's still too early to expect steadiness in quarterly revenue as customer order timing can affect the quarter quite a bit. So, you have to look at our numbers over the previous several quarters, over the past several years to realize where we have come from and where we're in the process of going. As our customer base grows, and as we expand into other markets beyond dietary supplements, we'll have more revenue transparency and we may be in a better position to provide such guidance. However, we are in the early innings of the dietary supplement market alone, and we probably won't have an enough information from our customer base to provide accurate revenue guidance in the near term. However, we also see strong development of key metrics and milestones that will drive our business. We are focused on what we believe will have the most significant impact on shareholder value, and that is having more research collaborations in place as well as peer reviewed published research in prestigious journals. Science drives consumer awareness. So, with the addition of science publishing it opens the door for larger customers that will ultimately drive the sales of our ingredient business. Scientific support is growing, our RND efforts are building, and we believe the sales of our ingredients should grow alongside the building science. We are also expanding the business into additional markets so that you have multiple forces that will combine as untapped markets will also become additional sources of income. Now, let me turn the call back to the operator for questions. Thanks.

[Operator:]

[Operator’s Instructions] Our first question comes from the line of Todd Horberg with Horberg Enterprises Your line is open.

[Todd Horberg:]

Hey, Frank. First I want to say hello, and [indiscernible] doing this business. I got a couple questions, so if you can keep the line open. I wanted to start, you said that you don't think the company’s getting any value out of this potential drug, that you're right on the corner of filing the FDA. I'm noticing a $178 expected in the orphan drug market by 2020. You also are saying there's no dilution coming from developing this drug. How are we not getting any value for that? And when you say we're not getting any value for it, what do you think it's worth?

[Frank Jaksch:]

You know, the orphan drug space has been, you know, one of the hotter and more consistent categories within the pharmaceutical space for the past couple of years. There's been a lot of activity in the orphan drug space, and there's a lot of incentives right now within FDA and NIH to basically moved these types of programs as, you know, there's a lot of - there's thousands of these orphan indications that are currently nothing to serve or to help with these conditions. And, you know, that's where, you know, nicotinamide riboside in this case happens to be a good fit for several of them where there's a link between mitochondrial dysfunction or cellular energy metabolism breakdowns. And Cockayne Syndrome is a great example of that. And you're right, Todd. I mean considering where we're at, the stage that we're at right now, the fact that we've had our first pre-IND meeting and the fact that we're tracking towards filing our first IND and we have a pretty good grip on an actual timeline of what that looks like now. You know, we feel that we have a pretty good shot of being not only getting our IND submitted and approved early next year sometime or sometime in the first half of next year, that we’ll actually be in the clinic. And, you know, to me there's no value for that in our stock right now. My opinion is that I don't think there's any real perceived value for that development. And it doesn't end there, and like I mentioned during the call is we have several shots on, you know, with nicotinamide riboside or NAD and other spaces. The Cockayne Study is a good proof of concept for what could lead to several other similar orphan diseases that this could be beneficial for, and, you know, we’re often mistaken that if it works in the one that it very likely is going to work in a basket of other related pediatric orphan disease. And, you know, right now I don't think there's any value for that in the stock.

[Todd Horberg:]

Okay. Speaking of value on this [indiscernible], my next question is I'm looking and I have found some comps, and I'm showing the average analyst is putting a 5.5 times forward-looking the revenue evaluation on companies with lower growth and lots of that especially compared to our zero debt. Yet we're not even trading at that multiple on current revenues, which goes to my follow-on question, which is you have done a great job of raising money without any banking fees, with less of a discount to the market than a bank would charge you. And that is all great for the company, great for your [indiscernible], and great for shareholders. However, it will lacks getting analysts coverage, because you know how this works. You know, you got pay to play to get the coverage. So, do you think that, that was a mistake, or you would change it in the future if you had any capital needs?

[Frank Jaksch:]

Let me take those one at a time. So, the first part, wow, you've done your homework. You're right. The average of our peer group, you mean peers in the novel ingredients base that are publicly traded companies. The ones that are out there do trade on average 5 to 7 times forward-looking earnings. We are currently trading at a fraction half of that as a multiple on our current revenue base. So, you're right. I mean if we were trading on what 2017 revenue could potentially look like, and just bear in mind that we don't give guidance so it's not easy to figure it out, but if even if you just postulated based on our past, you know, revenue growth over the past few years on an annual basis and look forward to 2017, yeah, we're definitely trading under - we're growing faster than our peers, and we're currently trading at a lower multiple than our peers. We’ve raised less money than our peers, and we have less debt than our peers. So, yeah, if you want my opinion of whether or not the stock is undervalued based on just simple fundamentals, Absolutely.

[Todd Horberg:]

Would you would you want to have an analyst coverage? Should you have got more dilution per share holders for the banks to come out with analyst coverage?

[Frank Jaksch:]

So, I'll speak as one of the largest shareholders. And the answer is no. I mean you're right. We haven't done an investment bank related financing since2012. All of the money, all the financings that we've done since that point have either been strategic in some way or what I'll call no fee related financing is under very favorable conditions lower discounts and no warrants. So, I would score that is a pretty big win. But you're right. I mean the price that you pay in some cases is the fact that a lack of analyst coverage is definitely one of the side effects from that. And don't forget we just announced this week that we just took a line of credit where ChromaDex is finally in a position where we can qualify for, you know, standard bank debt. We have a $5 million line of credit in place, which is great. And that will also allow us you know additional non-dilutive capital to cover certain expenses as we grow the ingredient business. The biggest cash need we've had over the past couple years is largely been inventory. And moving forward, that's probably going to continue to be the case outside of, you know, potential RND, which of course we've been ramping up our spend there too. But, yeah, that's the price we pay for not being out there like our peers, raising a lot of money and taking a lot of debt. I agree with you.

[Todd Horberg:]

Okay. Yeah. Well, I mean it's very favorable for dilution. But it would be nice to get a report out for the public to see how analysts feel about the evaluations rather than me doing my homework and the market cap not showing the proper valuation from my work.

[Frank Jaksch:]

No. That's a that's a fair point, but I mean I can tell you I'm not especially at the price that we're at right now, and, you know, as CEO, and as a large shareholder of the company, I wouldn't be all that excited about going and raising money at these levels. And right now we don't have, you know, any pressure to go out and raise money at this level if the market becomes more favorable, if we can get the stock trading back hopefully in a range where it's more acceptable to do something like that. I think you’re right. I think we should probably consider something like that, but, again, I don't think it's a good idea to consider it right now.

[Todd Horberg:]

Okay. Well, thank you. No more further questions.

[Frank Jaksch:]

Thanks, Todd.

[Operator:]

Thank you. Our next question comes from the line of Michael Collonesse [ph] with [indiscernible] company. Your line is open.

[Michael Collonesse:]

Hi there. My question’s somewhat related to that in a previous topic around capital need. So, what would you say the likelihood is that you’ll need to raise additional capital to finance operations in the near term here, especially giving the recent ramping cost for RND? And as a follow-up question to the RND, do you see that the most recent investments are more weighted toward near-term revenue producing opportunities or more types of early stage opportunities for future growth?

[Frank Jaksch:]

Okay. So one of the time. You know, no, right now, I don't see that we need to raise additional capital on the near-term especially in light of, you know, the bank line that we just took to basically buffer and to cover our needs. Yes, we have been ramping our RND spend, but we've also been ramping our collaborative RND. meaning these 90 plus studies that we currently have in place are largely yielding published research pre-clinical and are also transitioning into human clinical studies. And those studies we're not paying for, so there is non-dilutive research on a big level that primarily those studies, the ones that they're publishing there, those are the ones that are having a big impact on driving visibility for us supporting business development activity. But the biggest chunk of what we’ve They just been paying in RND expense over the past six months is largely our own clinical trial, which we’re, you know, like I said during the call, we're in the process of finalizing enrollment, which means the study should wrap up at the beginning of the year and hopefully we'll have that reported before the, you know, the end of the first half of the year. And that's going to be a critical study for helping us support driving additional revenue as well, but those types of studies are going to be critical for us as we move forward. And right now I'm not concerned about being able to finance those without having to do a financing.

[Michael Collonesse:]

Great. Great. Thank you. And as one last question, if you can talk about the amount of MCAs you currently have in place and how you plan on leveraging those MCAs in the collaboration job with the research - higher institutions and universities?

[Frank Jaksch:]

Yes. Right now, I mean, you know, based on our calculations we have 90, almost of 100 of these things in place now. And in three years, which is like I said on the call that's pretty crazy. I mean 100 that represent right now as far as we can tell $40 million to $50 million in money that we're not paying for. That's a huge deal. Those are now translating not only into peer-reviewed published research, but some of these are already - we're now in process of actually licensing patents that came as a result of that research. So, some of those have now translated into additional intellectual property. We have rights under our MTAs to basically license that intellectual property, and those are going to not only further protecting our franchise here around nicotinamide riboside, but they're also providing additional science that can be used as a selling point to drive additional types of clients, that we can go after as well. So, it hits on all cylinders really.

[Michael Collonesse:]

Great. Thank you.

[Operator:]

Thank you. At this time, I’m showing no further questions. I'd like to turn the call back Mr. Jaksch for closing remarks All right, everybody. So, you know, thanks to all of you who joined on. We had quite a few people on the call today, and, you know, I appreciate all of your participation. And I appreciate the long-term shareholders that have been in this for - including myself by the way - been in this for 17 years that we're progressing exactly as we need to right now. You know, there are going to be a couple hiccups. We had in the fourth quarter last year, we had our bump. This year it seems that the third quarter was that bump in terms of just revenue timing, but overall in all like we said in the update I mean we're pretty close already ending the three quarters very close to what we did all of last year. And, you know, we're on track for a record revenue year, and, you know, we've been continuing to perform year over year with significant revenue growth. We expect that trend hopefully to continue. And all of the pieces of this being a very large market meaning nicotinamide riboside are there. Yeah. Me and our management team couldn't be more excited about what we have in terms of the science that's coming out that's that they're going to validate where this thing is going to go. And you should look at it that way, the more science you see, the larger it's building the potential market for the compound. And that's why I've been like a broken record over the past three years, and basically keeping and reiterating that same point over and over again as the published science and these types of collaborative studies that we have underway are mission critical for us, and it directly correlates to the size of the market we're going to penetrate with nicotinamide riboside. So, with that, I’ll wrap it up. And I look forward to hopefully having you guys all on the next call that we have.

[Operator:]

Ladies and gentlemen thank you for participating in today's conference. This does conclude the program. You may all disconnect. Everyone have a wonderful day.