Emergent BioSolutions Inc.
Q4 2010 Earnings Call Transcript

Published: 11 Mar 2011

[Operator:]

Good day, ladies and gentlemen, and welcome to the Emergent BioSolutions fourth quarter and full year 2010 financial results conference call. My name is Jeff and I will be your operator for today. At this time, all participants are in listen-only mode. Later we will conduct a question-and-answer session. (Operator Instructions) As a reminder, this conference is being recorded for replay purposes. I would now like to turn the conference over to your host for today Mr. Robert Burrows, Vice President of Investor Relations. Please proceed, Mr. Burrows.

[Robert Burrows:]

Thank you, Jeff. Thank you everyone for joining us today as we discuss Emergent BioSolutions financial results for 4Q and full year 2010. As is customary, our call today is open to all participants. In addition, the call is being recorded and is copyrighted by Emergent BioSolutions. Joining me on the call this afternoon with prepared comments will be Fuad El-Hibri, Our Chairman and Chief Executive Officer and Don Elsey, our Chief Financial Officer. Additional members of our senior management team will be present on the call for purposes of the Q&A session. Before we begin, I'm compelled to remind everyone that during the call, management may make projections and other forward-looking statements regarding future events and the company's prospects for future performance. These forward-looking statements reflect Emergent's current perspective on existing trends and information. Any such forward-looking statements are not guarantees of future performance and involve substantial risks and uncertainties. Actual results may differ materially from those projected in any forward-looking statements. You are encouraged to review Emergent's filings with the SEC on Forms 10-K, 10-Q and 8-K for more information on the risks and uncertainties that could cause actual results to differ. For the benefit of those you may be listening to the replay, this call was held and recorded on March 10, 2011. Since then, Emergent may have made announcements relating to topics discussed during today's call. So again please reference our most recent press releases and SEC filings. Emergent BioSolutions assumes no obligation to update the information in today's press release or as presented on this call except as may be required by applicable laws or regulations. Today's press release may be found on our website at www.emergentbiosolutions.com under Investors/Press Releases. With that introduction, I would now like to turn the call over to Fuad El-Hibri, Emergent BioSolutions' Chairman and CEO. Fuad?

[Fuad El-Hibri:]

Thank you, Bob. Good afternoon, everyone and thank you for joining us on today’s conference call. For my prepared comments, I will review our financial performance for 2010 and forecast for 2011. Discuss major accomplishments achieved during 2010 and highlight key milestones for 2011. To being, let me review our financial results for 2010 we achieved revenues of $286 million and net income of $52 million this financial performance reflects the strengths of our core Anthrax franchise and demonstrates our continued success in growing revenue from the sale of our flagship product BioThrax. This performance also reflects our continued ability to manage our overall expenditures while investing in the advancement for our pipeline of vaccines and therapeutics targeting key disease areas. These results also take into account our successful acquisition of Trubion in October last year. Also today we reaffirm our 2011 forecast for total revenues of $320 million to $340 million and net income of $35 million to $45 million. In 2010, we made progress on a number of key initiatives. First, let me address our accomplishments related to BioThrax I’m pleased to report that in 2010 we delivered 8.9 million doses of BioThrax to the strategic national stock pile under our current contract. This delivery level was achieved through higher than normal production yields combined with gaining an extra month production through a shift in the timing of our annual maintenance shutdown. Moreover in December we received notice that CDC intends to expand the current contract to allow for delivery for up to an additional 3.4 million doses of BioThrax. We are diligently working on securing this contract expansion. Beyond that, we continue discussions with CDC representatives regarding a follow on procurement contract. We anticipate this contract will cover a multi-year period and will be structured to secure substantially all of our projected BioThrax capacity in Building 12. We expect to finalize this follow on contract before the end of September this year. Let me now review the major accomplishments in the area of business development. First, the BioThrax scale up contract, in mid July BARDA awarded us a contract valued at up to $107 million. This contract funds activity through FDA license for large scale manufacturing of BioThrax at our state-of-the-art facility in Lansing. In Building 55 we anticipate the future annual output to be at least 26 million doses of BioThrax which is a significant increase over our current capacity of 7 million to 9 million doses a year. Since the award we initiated scale-up activities in Building 55 and completed a number of characterization run we also made progress on gearing up activities in support of process validation which we expect will allow the initiation of the manufacturing consistency loss in late 2011. We believe that the U.S. government considers this contract a key component in meetings its stated requirement of 75 million doses of licensed Anthrax vaccine for the SMS. Next the rPA contract, in September BARDA awarded us a multi-year development contract of up to $187 million to fund activity through final formulation of PreviThrax. There are additional milestone based options under this contract including ultimately the manufacturing of consistency loss. Since the contract award we have completed selection of final product formulation candidate and initiated our key stability study. Additionally we have continued process development activities and are working towards a final manufacturing process. Next the third generation Anthrax vaccine contract, in August BARDA awarded us a multi-year development contract of up to $29 million to fund continued work on NuThrax, which combines BioThrax with a novel CPG Adjuvant under license from Pfizer. This contract which is the second round of government funding is designed to develop a vaccine candidate for a Phase II clinical trial. We initiated a Phase I clinical study of NuThrax in December of last year. The combined potential value of these three development contracts awarded us, awarded to us in 2010 is up to $320 million of additional funding and clearly underscores the government’s commitment to the development of medical countermeasures against Bioweapons. Finally in October we completed the acquisition of Trubion Pharmaceuticals which added two new clinical stage products addressing multiple indications in oncology and autoimmune disorders. As well as partnerships with Pfizer and Abbot in addition the acquisition brought us two therapeutic platforms and the scientific expertise for developing innovative candidates using these novel platforms. Let me now review the major accomplishments in the area of product development. I will begin with our BioDefense programs. For Anthrivig our polyclonal antibody candidate otherwise known as AIG we completed dosing in an ongoing clinical trial in 2010 and expect to file a study report in the second quarter of 2011. Late last year representatives from FDA and other agencies agreed on the regulatory path towards licenser under the FDAs animal rule. In response to our request we submitted to BARDA a proposal to fund continued development of this therapeutic candidate through licenser. And Thravixa our anthrax monoclonal antibody candidate we commenced dosing the first patient in the Phase I clinical trial at September. The study involves 50 healthy volunteers of the dose escalation study designed to evaluate safety and PK. We expect to complete dosing by mid 2011 and issue a final study report by the end of this year. In addition Thravixa was recently granted fast track and orphan drug designation by FDA. Now let me turn to our major production development accomplishments in our BioSciences programs. For our TB vaccine candidate as over the end of the 2010 we had enrolled over 2200 infants in our ongoing Phase IIb efficacy study in South Africa. As of March 1, that enrollment number has increased to just under 2600. This study is designed to enroll 2700 infants and is supported by the Wellcome Trust and Aeras We expect to complete enrollment by the end of May this year with a final study report anticipated in 2012. Based on the data from this efficacy study we are pursuing accelerated market authorization opportunities in South Africa. In addition we anticipate commencing a separate Phase IIb study of 1400 HIV infected adults and adolescents largely funded by our European agency and NGO’s. This study is expected to begin in the second half of this year. For our anti-CD20 therapeutics candidate SBI-087 the Phase II dose regimen finding study was initiated in patients with RA one of the most serious autoimmune diseases. This candidate is being developed by Pfizer under a license agreement from us. For our anti-CD27 therapeutic candidate TRU-016 we initiated a Phase I expanded cohort study in relapsed NHL and CLL patients two of the most prevalent detailed malignancy. More recently we started a Phase Ib2 combination study with Bendamustine in relapsed CLL patients. This candidate is being developed with Abbot under a collaboration. Finally, we have a very busy year coming up and I would like to highlight the key milestones we expect to achieve in 2011. First in terms of additional U.S. government contracts for BioThrax we expect two events the execution of a contract expansion for up to 3.4 million doses under the current contract and the execution of a multi-year procurement contract. For Anthrivig the securing of additional multi-year development funding of up to $40 million. And for Thravixa the securing additional multi-year development funding of up to $100 million. Second, in terms of milestone payments, we expect to achieve development milestones related to our SBI-087 and TRU-016 programs, which will trigger payments to us from our partners. Third, in terms of product development for Anthrivig we anticipate completing a clinical study report for the pivotal clinical trial. For PreviThrax we anticipate completing the final product formulation study and making significant progress towards demonstrating product stability. For Thravixa we anticipate completing the Phase I safety and PK study. For the TB vaccine candidate we expect to complete enrollment in our ongoing Phase IIb efficacy study on infant and to initiate the additional Phase IIb efficacy study in HIV infected adults and adolescents. For SBI-087 in RA we anticipate completing enrollment for the Phase II dose regimen finding study. For SBI-087 in SLE we anticipate completing dosing of the Phase I safety and PK study. For TRU-016 in CLL we anticipate initiating the Phase II combination study with Bendamustine and for TRU-016 in NHL we anticipate initiating a Phase I combination study with Bendamustine and Rituxan. Fourth, in terms of manufacturing infrastructure for our Baltimore facility we anticipate substantially completing a facility modification, which will allow for simultaneous manufacturing of viral and non-viral product candidates. And for our Lansing facility we plan to initiate manufacturing consistency loss of BioThrax in Building 55. And fifth, we will continue to pursue acquisition and licensing initiatives that have the potential to broaden our R&D pipeline as well as expand our sources of revenue. In conclusion, 2010 was another year of success. We grew revenues from both product sales and development contracts and grants. We also continued to invest in our R&D pipeline while maintaining profitability. We secured in excess of $300 million of additional multi-year development funding for our BioDefense programs. We’ve completed a major acquisition expanding our pipeline to now include clinical therapeutic candidates targeting oncology and autoimmune disorders. We also acquired novel antibody based platform technologies that will enable us to develop new therapeutic candidate. And we took substantial steps towards completing our plan to expand our manufacturing infrastructure, which we consider a core competency as well as a competitive advantage. Looking ahead we anticipate 2011 to be another year of growth and expansion opportunities. That concludes my prepared comments and I will now turn it over to Don who will take you through the numbers in greater detail. Don?

[Don Elsey:]

Thank you, Fuad. Good afternoon, everyone. As Fuad mentioned following the close of the markets today, we released our financial results for the fourth quarter and full year 2010. I encourage everyone to take a look at the press release which is currently available on our website. We plan to file our annual report on Form 10-K with the SEC, no later than the close of business tomorrow, Friday, March 11. The 10-K will also be available on our website. Let me now briefly discuss the financial results. For the full year 2010, total revenues were $286.2 million comprised of $251.4 million of product sales and $34.8 million of grants in contracts revenue. Product sales revenue compares to revenue of $217.2 million in 2009. Product revenues were 16% above those in 2009 due to a 15% increase in the number of doses of BioThrax delivered which is a function of the higher than normal production yields combined with gaining an extra month of production through a shift in the timing of our annual maintenance shutdown. Contracts and grants revenues compared to revenue in 2009 of $17.6 million for an increase of 98%. For the fourth quarter of 2010, total revenues were $103.2 million compared to $53.8 million in 2009. For full year 2010, net income was $51.7 million or $1.63 per share. This compares to net income of $31.1 million for 2009. The increase in net income was a direct consequence of the increase in shipments of BioThrax throughout the year. For the fourth quarter of 2010, net income was $26.2 million or $0.78 per share compared to $4.2 million or $0.14 per share in 2009. With respect to gross profit margins for the full year 2010 our gross profit was 81% and increased year-over-year on an absolute basis due to the higher production yields we’ve experienced during the year. For the fourth quarter of 2010 gross margin was 81% as well. On an ongoing basis our expectation for gross profit margins remains between 70% and 80%. Turning now to spending, first looking at product development spending, our full year 2010 R&D expense was $89.3 million versus $74.6 million for 2009. For the fourth quarter of 2010, R&D expense was $29.6 million versus $19.2 million in 2009. We continue to invest in the development of our BioDefense and BioScience’s portfolios including our latest product candidate SBI-087 and TRU-016, which are results of the Trubion acquisition. On the subject of Trubion please note that our 2010 R&D expense includes two months worth of activities related to our CLL operations. As a reminder R&D spending will continue to fluctuate quarter-to-quarter driven by the development stage of our various pipeline candidates. Furthermore, it is important to take into account the fact that we have contracts and grants revenues of $34.8 million in 2010 that directly offset a portion of our R&D expense. These revenues represent development funding in the U.S. government and directly support the majority of our Anthrax related programs. With respect to SG&A spending, for the full year 2010 SG&A spending was $76.2 million an increase of $2.4 million or 3% over 2009. For the fourth quarter of 2010 SG&A expense was $21.7 million versus $18.7 million in 2009. We remained focused on managing the growth in our general and administrative expenses. Turing now to the balance sheet for the full year 2010, we continue to be cash flow positive and ended the year with cash and cash equivalents plus investments of $171 million and an accounts receivable balance of $39.3 million. Finally, let me address our 2011 financial forecast. As Fuad noted earlier, we reaffirm our 2011 forecast, of total revenues of $320 million to $340 million and net income after tax of $35 million to $45 million. Now as you heard me state before our quarterly results can and often times are lumpy. This is principally caused by the timing of our fulfilling orders for BioThrax and work done under new and existing contracts and grants. Clearly as any one quarter an accurate indication of our annual performance. With that said starting this year in addition to providing the annual guidance we will also be providing revenue guidance for the upcoming quarter. For the first quarter of 2011 we are anticipating total revenues of $20 million to $30 million. We have temporarily redeployed our potency testing capacity from BioThrax release testing to qualification of replacement reference standards. This is required to enable continued product release. As a result we anticipate ramp enough deliveries under the current contract in the second quarter and completing deliveries for the current contract in the third quarter. Moreover we anticipate achieving substantial delivery levels in the second half of the year that supports our reaffirmed revenue forecast. From a contract standpoint we are still anticipating signing before the end of the first half a modification of the current contract for delivery of up to an additional 3.4 million doses. In regarding the follow on contract we remain confident that we will sign a multi-year procurement contract before the end of September this year. Moving now to my concluding remarks let me wrap up with the following. In 2010, we achieved a great deal we delivered on our government contracts, we secured significant additional government funding for our BioDefense program we advanced the development of all of our product candidates. We progressed in the qualification and the validation of our large scale manufacturing facility in Lansing and we acquired world class clinical and technical assets as a result of the Trubion transaction. For 2011, we look forward to building on the success of 2010. Our business remained strong and we are confident about prospects for growth in 2011 both in terms of financial performance but also contractual success and progress in product development and as always we remain focused on growing our business through M&A. That concludes my comments. I will now turn the call over to the operator so that we can begin the question and answer portion of the call. Operator, please proceed.

[Operator:]

Thank you. (Operator Instructions) It looks like our first question comes from the line of Cory Kasimov with JP Morgan. Please proceed.

[Cory Kasimov:]

Hey, good afternoon guys. Thanks for taking my question. First of all Fuad are you surprised that the follow on BioThrax procurement contract hasn’t yet materialized.

[Fuad El-Hibri:]

Thank you for joining us today Cory. No I’m not surprised at all. I think if you look back at previous follow on contracts that we received some of them were received only months before the end of the existing one some even months or two after. So but we are still confident that by the end of the second quarter we would have a that the RFP would be out and that we would be substantially complete with the negotiations on it and certainly we are confident that by the end of the third quarter we would have it executed.

[Cory Kasimov:]

On that can you talk a little bit about the process and so the government issues the RFP and then you how long might it take once the RFP is out for you to negotiate a final contract.

[Fuad El-Hibri:]

Yeah, that’s a good question. So once the RFP comes out we will have then a clear definition of what the requirements are. We expect it to be a multi-year contract which we will try to secure substantial majority of our manufacturing capacity. So I will know the exact number we then basically sit down negotiate it’s not something we don’t have much experience within the contrary we’ve done this several times before. So it should be a relatively straight forward negotiation process and as the points of discussion should be relatively few. Because again we have had a several contracts not only with the DOD and then with BARDA but also previous contract with CDC.

[Cory Kasimov:]

Okay, and then is there a risk that’s out there that could prevent a follow on contract from materializing at all and obviously there is a lot of talk budgetary pressures and things like that. But all the funds that would be there for this contract already the great project to you.

[Fuad El-Hibri:]

All indications we have had so far from CDC is that they are committed to issuing the RFP and we anticipate it coming out pretty soon. So and as our understanding is right now as far as the members of Congress are concerned if they understand and continue to understand the risk of an Anthrax attack. Eventually if you look at some of the reports that issued they say that you know there is a very strong likelihood of another attack. So nothing I have seen nothing that would indicate that the government would not continue with their procurement of vaccine. In the country that like us to scale up they continue to be very committed to our Building 55 scale up contract. So Cory there is really even in this environment where one might think that it might have some potential negative repercussions on the size and commitment of procurement and here we haven’t seen any of that.

[Cory Kasimov:]

Alright, perfect. Thank you very much for taking that question.

[Fuad El-Hibri:]

Thank you, Cory.

[Operator:]

Our next question comes from the line of Greg Wade with Wedbush. Please proceed.

[Greg Wade:]

Good afternoon. Thanks for taking my questions as well. Fuad with respect to the follow on contract is the requirement for an RFP a new piece of information?

[Fuad El-Hibri:]

Sorry, a new piece of information?

[Greg Wade:]

Yes, I wasn’t always.

[Fuad El-Hibri:]

The government always issues RFPs in advance of a solicitation in advance of a procurement. So this has been this is the case even with our developments contracts so it’s very, very typical it’s required actually to have an RFP that comes up.

[Don Elsey:]

Greg, this is Don I would add one thing this is going to most likely be a cell source procurement. The RFPs in the past have specifically called out BioThrax. Of course, we are the only ones that can supply BioThrax but, as Fuad says, this is standard operating procedure for the government.

[Fuad El-Hibri:]

That’s a good point, Don, because there are two types of RFPs one an open RFP and the other one is kind of a sole source type of RFP.

[Greg Wade:]

And then with respect to some work that’s being done in manufacturing could I just get a little more granularity into this reference testing versus release testing work. And then during the time that this release testing I guess is going to be unavailable for release of manufacturing will the company still be able to manufacture BioThrax for release later and or just to build up sort of a bowl of material that can help you to achieve your full year numbers is that the case.

[Fuad El-Hibri:]

Yeah, that’s a very good question and to be clear we are continuing manufacturing sub lots are being manufactured. We are formulating lots to a while we are deploying the potency testing capacity to qualify additional reference lots. We obviously cannot release and until new reference lot is approved you know we will continue to release test and then put after we’ve completed that exercise we would continue to release test and once that approval is in place release those lots.

[Greg Wade:]

Great, thanks for the clarification.

[Operator:]

Our next question comes from the line of David Moskowitz with Madison Williams. Please proceed.

[David Moskowitz:]

Yes, hi good afternoon. Just a question on the release you guys talked about reaffirming your guidance driven by a number of items and you did talk about milestones from the Trubion partnership assets so I’m wondering is that necessary for you to meet your guidance to get milestones from those partnerships. I guess is that included in the $65 million to $75 million guidance for grants.

[Fuad El-Hibri:]

Yes, it is. It contributes it doesn’t contribute largely but it does contribute.

[David Moskowitz:]

Okay. Now, you are willing to give us sort of a rough percentage of what that means in the grant guidance.

[Fuad El-Hibri:]

No, we don’t really go into that granularity in providing this information.

[David Moskowitz:]

I appreciate it Fuad. But if I can just you know you are saying it a small contribution so you know roughly 10% to 20% or is it in the higher end like 50% or something like that.

[Fuad El-Hibri:]

It doesn’t; it contributes but it’s not the major contributor.

[David Moskowitz:]

Okay, so will it be possible to meet the low end of that guidance if you didn’t get the milestones.

[Fuad El-Hibri:]

Well, you know, it’s a combination of factors that we very carefully calibrate and estimate that we have several contract several collaboration agreements that you know each one single factor may not necessarily cost any deviation from the range. Obviously if there are several things that happens simultaneously we might but we will inform you if we feel that you know our outlook and views change in the future.

[David Moskowitz:]

Okay, I appreciate that and in terms of the BioThrax capacity expansion on Building 55. Are you able to give us an update on how that’s progressing and what’s the next what kind of milestones we could expect over the next couple of quarters?

[Fuad El-Hibri:]

Yes certainly it’s progressing quite well and I would say you know in the meetings we have with BARDA they are satisfied with the progress we are making we hope to be able to initiate manufacturing of the consistency loss for the scale of BioThrax by the end of this year. So that is a key milestone that we are very, very excited about.

[David Moskowitz:]

Excellent. Thanks for taking my questions and congratulations on a good quarter.

[Fuad El-Hibri:]

Thank you, David.

[Operator:]

(Operator Instructions) Up next, we have Eric Schmidt with Cowen. Please proceed sir.

[Eric Schmidt:]

Well thanks good afternoon I missed the first few minutes of the call Fuad so forgive me if I’ repeating. But the reason for the most delay in the procurement contract for BioThrax from Q1 say into Q3 is that basically because you are given this 3.4 million dose extension and that I guess takes the pressure off the government in terms of timing and delays the steps saying for the RFP from being.

[Fuad El-Hibri:]

Well, first of all, we haven’t secured the 3.4 million extension of the existing contract yet. You know that’s notice has been out and you know we’ve been negotiating and we expect this to be done shortly but it’s not finalized yet. But certainly you are right that is puts you know less pressure on getting the follow on contract signed well in advance. Because you know the follow on contract now can comfortably start in the fourth quarter of 2011.

[Eric Schmidt:]

Okay, and what in terms of the negotiation on the 3.4 million extension is sort of rate remitting I thought that you had a good sense of price already in that extension.

[Fuad El-Hibri:]

Well you know, we are really not comfortable sharing with you all the specific details but every contract you know whether it’s with a government or a commercial party has several points that are being negotiated. So all we can comment is that we hope that we will execute this contract in the very near future.

[Eric Schmidt:]

Okay. And in terms of the process on the next generation multi-year BioThrax contact, you mentioned the RFP comes out in response to a previous discussion you sort of indicated that in point you began discussions of negotiations. But I thought that you’ve already had fairly advanced discussions about the terms and size price per dose and things like that.

[Fuad El-Hibri:]

Being for the follow on contract.

[Eric Schmidt:]

Yeah.

[Fuad El-Hibri:]

Yeah, so Eric that’s right I mean we have the government has asked for us you know what’s our capacity comfortably you know we gave them the range and that you know we would very much like to have a multi-year contract five years. So we submitted that information to and some other information that they’ve requested to CDC and I believe they are taking that into account in finalizing the issuance of the RFP.

[Eric Schmidt:]

Okay, so that will be a starting point when you negotiate the finer details from there.

[Fuad El-Hibri:]

Yeah, exactly.

[Eric Schmidt:]

Okay, and then in terms of the new potency testing capabilities in capacity can you maybe go into a little bit detailed about what exactly you doing there and is that impacting our margins at all.

[Fuad El-Hibri:]

Sure, so potency testing is part of what is required to release each and every lot. We get approval from we submit the potency information to FDA and we get approval on that submission and then the lot is ready for release. For the last couple of months we’ve kind of redeployed the potency testing capacity to qualify additional reference lots which is required and for future releases and while that is taking place.

[Eric Schmidt:]

I’m sorry, Fuad, I’m not sure I understand what that means and kind of in English.

[Fuad El-Hibri:]

Okay, so where would you like me to start.

[Eric Schmidt:]

Well, redeploying new potency testing to validation lots I mean I understand every lot has to be potency testing but what’s actually changed here related to what you are doing last year.

[Fuad El-Hibri:]

Okay. So when a lot is ready to be potency tested, it goes into the potency testing facility for the testing. Now their testing facility is basically not available for release testing because we are testing or qualifying I should reference lots. So those are reference standards that are required for future potency testing. So while we are doing that it’s using up the capacity we can’t be using up, we can’t be releasing you know testing manufactured lots for release. So you know we’ve looked at that and we’ve looked at the impact and we’ve looked at the projections so it impacted first quarter because we started giving revenue guidance for the upcoming quarter we explain this as being an important reason why we feel that in the next in the second, third and fourth quarter it will ramp up. But the guidance was build based on every quarters performance as we have anticipated and the ramp up as we anticipate for the rest of the year.

[Eric Schmidt:]

So clearly, you have been manufacturing lots during this period of redeployment as you mentioned.

[Fuad El-Hibri:]

Yes, absolutely.

[Eric Schmidt:]

You don’t yet know; you don’t yet know which of those lots have failed or passed testing however.

[Fuad El-Hibri:]

Correct, they are waiting testing.

[Eric Schmidt:]

Okay, thanks for the clarification.

[Don Elsey:]

To your question, Eric, with regards to gross profit, as you know in a process manufacturing like this is gross profit is really determined over the course of full year of manufacturing. We are not estimating that this is, this takes us outside of the range that I talked to earlier on the 70% to 80% gross profit margin.

[Eric Schmidt:]

That range, Don, is obviously lower than which achieved last year is this your typical conservative nature or which is.

[Don Elsey:]

Guilty as charged.

[Eric Schmidt:]

Fair enough. Okay, I think that’s it for me. Thanks for taking the questions.

[Don Elsey:]

Thank you, Eric.

[Fuad El-Hibri:]

Thanks, Eric.

[Operator:]

(Operator Instructions) Ladies and gentlemen, this will conclude the Q&A portion of the call. I would now like to turn it over to Mr. Burrows for closing remarks.

[Robert Burrows:]

Thank you, Jeff. Ladies and gentlemen, that concludes today’s call. Thank you for your participation. Please note that today’s call has been recorded and a replay will be available beginning later today through March 24. Alternatively, there is available a webcast of today’s call an archived version of which will be available later today, accessible through the company’s website. Thank you again and we look forward to speaking to all of you in the future. Good bye.

[Operator:]

Ladies and gentlemen, that concludes today’s conference. Thank you for your participation. You may now disconnect. Have a wonderful day.