Halozyme Therapeutics, Inc.
Q3 2017 Earnings Call Transcript

Published: 8 Nov 2017

[Operator:]

Good afternoon and welcome to the Halozyme Therapeutics Third Quarter 2017 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference call is being recorded. It is now my pleasure to introduce your host, Jim Mazzola, Vice President of Investor Relations at Halozyme. Mr. Mazzola, you may now begin your conference.

[Jim Mazzola:]

Thank you, Todd, and good afternoon everyone. Welcome to our third quarter 2017 financial results conference call. Following market close today, we issued a news release with a summary of our results and posted a short slide presentation to accompany this call. You will find both of these on the Investors page at halozyme.com. Leading our call today is Halozyme’s President and Chief Executive Officer, Dr. Helen Torley, who will provide an overview and update on our business; and then Laurie Stelzer, our Chief Financial Officer will review financial results for the September quarter followed by a Q&A period. Also with us today for the call is Dr. Demetrius Chondros, our Chief Medical Officer. Before we begin, let me remind you that during the conference call, we will be making forward-looking statements. The Company's actual results may differ materially from those expressed in or indicated by such forward-looking statements. For a description of risks, please refer to our quarterly and annual filings with the Securities and Exchange Commission. Now, let me turn the call over to Helen.

[Dr. Helen Torley:]

Thank you, Jim, and good afternoon everybody and thank you for joining us today. This has been a strong quarter progress for Halozyme. I'm going to begin the call with five key highlights. Firstly, we began the quarter with Genentech’s launch of RITUXAN HYCELA in the United States. This marks the first of what we now expect to be many oncology approvals for ENHANZE in the U.S. Secondly, in September we announced the signings of two new ENHANZE agreements. Our agreement with Bristol-Myers Squibb is the largest in company history both in terms of the number of targets and the upfront milestone. And we were delighted that Roche continued to expand our collaboration with the selection of new targets. These two agreements set the standard for financial terms for future ENHANZE agreements. I would also like to highlight that with the singular focus on the immuno-oncology targets, Bristol-Myers Squibb is recognizing not just the transformative potential for ENHANZE to reduce the treatment burden for patients and increased competitive differentiation, but is also foreseeing as we do a future reimbursement role for both patient preference and care delivery pay a more prominent role. The third highlight relates to the progress on the PEGPH20. Clinical studies in four tumor types were initiated during the quarter, evaluating the combination of PEGPH20 and TECENTRIQ as part of our clinical collaboration with Roche to explore the pan tumor potential of PEGPH20. The fourth and fifth highlights relate to the strength of our business model and our reported financials. Royalties from our launched products utilizing ENHANZE showed strong year-on-year growth of 31% with quarter-on-quarter revenue also growing robustly at 16%. And finally as a result of the robust royalty revenue growth and continued strength in product sales and collaboration revenue, we are raising our revenues and year-end cash guidance again and are now estimating to end the year with $400 million to $415 million in cash. With those highlights, let me now provide some additional color on our ENHANZE strategic pillar where we licensed our rHuPH20 enzyme to leading companies including Roche, Baxalta, Pfizer, Janssen, AbbVie and Eli Lilly, and most recently Bristol-Myers Squibb. Slide 2 highlights the key elements of our landmark collaboration agreement with Bristol-Myers Squibb, which includes a $105 million upfront payment, $160 million in potential milestones for each of 11 immuno-oncology targets and their initial selections of the PD-1 targets. The decision by Bristol-Myers to develop a subcutaneous formulation of PD-1 using ENHANZE is notable as checkpoint inhibitors have evolved into a cornerstone therapy from many cancers. Bristol-Myers is a leader in the PD-1 market, which is currently annualizing at over $8 billion in global sales and is estimated to increase to $25 billion by 2025. On Bristol's recent quarterly call, Murdo Gordon, the Chief Commercial Officer highlighted how they are thinking beyond patient convenience and infusion share time to repair may take place in the future, possibly moving from academic hospitals and cancer centers to more office-based treatment, particularly if patients who are on therapy beyond one year or have long travel distances. BMS also highlighted the possibility at least in the U.S. for an injectable product to be reimbursed through a different payment channel. With the potential to develop over 11 different assets under our agreement including the combination of various therapies and one subcutaneous injection, our ENHANZE technology may allow Bristol-Myers Squibb to improve again as patients received their therapy. I am also pleased to announce that the customary antitrust waiting period has expired and our agreement with Bristol-Myers has now become effective. Our team is already hard at work supporting BMS as they began planning to enter the clinic. Also in September, Roche extended their original collaboration agreement from 2006 by licensing a new ENHANZE target resulting in a $30 million upfront payment to Halozyme and the potential for up to $160 million in development regulatory and sales-based milestones. Slide 3 shows the potential opportunity for the currently marketed products that utilized ENHANZE. The 2016 sales of innovative product and the geographies and indications where the subcutaneous formulations are approved are in excess of $10 billion, representing a substantial market opportunity. The actual subcutaneous portion of these sales will depend of course on the number of indication approved and the degree of market penetration overtime with Halozyme revenues been based on an average mid single digit royalty on net sales. A significant portion of this market opportunity follows the approval of RITUXAN HYCELA in June in the United States for the indication of diffuse large B-cell lymphoma, follicular lymphoma and chronic lymphocytic leukemia. With oncology sales of rituximab in the United States estimated to have exceeded $3 billion in 2016, this approval represents a substantial new royalty revenue opportunity for Halozyme and that we expect to begin to see reflected in our royalties in 2018, given the one-quarter reporting lag in 2017. On their most recent earnings call Roche commented that the RITUXAN HYCELA launch is off to a good start in the United States. With the strong focus on the many hospitals and infusion centers that are experiencing capacity constraints, the shorter treatment duration time is expected to be seen as a benefit for both patients and for those delivering care. Turing now to Slide 4, we’ve outlined the potential opportunity with partner pipeline, which includes subcutaneous formulations of Janssen’s DARZALEX, which is now in Phase 3 testing and Roche’s PERJETA, which is completing Phase 1 testing. Data from the Phase 1 PAVO trial of subcutaneous DARZALEX and patients with relapse or refractory multiple myeloma, have been accepted for the upcoming American Society of Hematology Annual Meeting and Exposition. Based on these results, Janssen has finalized a 15 ml injection of co-formulated daratumumab plus rHuPH20 to be delivered in five minutes or less and the dose of first amyloidosis patient in the Phase 3 trial. This is the first of three Phase 3 studies Janssen plans to initiate in the near-term. The others will be in multiple myeloma and in smaller in myeloma patients. Upon the dosing of the third patient, Halozyme will earn a $15 million milestone payment. As we’ve been demonstrated previously, once the partner begins the Phase 3 study using our technology, approval has been ultimately granted by the applicable regulatory agency in all cases whereof three for three, and therefore view the star of the daratumumab Phase 3 trial as a meaningful de-risking event for the combination. To finish in DARZALEX, market receptions to the IV formulation remain strong. Janssen reported sales in the third quarter of $317 million already on an annual run rate of over $1 billion with analysts projecting DARZALEX sales in excess of $3.5 billion in 2020. The substantial market opportunity combined with the dramatic potential benefit for patients of reducing the current 4 to 6, our IV infusion down to 5 minutes or less using ENHANZE has resulted in significant excitement for the future potential of this product. At this closing ENHANZE as it ever, we continue to assess new collaborative agreement to expand the value of ENHANZE portfolio and believe many targets are still available that may benefit from our technology. In addition to the progress of our already marketed products and those in clinical development, our pipeline of active partner discussions remains robust and we continue to pursue opportunities to maximize the value of ENHANZE. Now, I'll to our oncology pillar and our investigational drug PEGPH20. PEGPH20 is a targeted therapy that temporarily degrades hyaluronan or HA, that can accumulate around certain tumors and construct the tumor vasculature. We are studying PEGPH20 with the companion diagnostic developed with partners Antena to identify patients with HA high tumors. On Slide 5 is an overview of our Phase 3 study evaluating PEGPH20 in combination with ABRAXANE and gemcitabine in first line pancreatic cancer patient. HALO-301 is a global double blind placebo controlled randomized trial of patients with stage 4 pancreatic ductal adenocarcinoma for prospectively identified and randomized based on high levels of HA. Investigator interest remains strong in the study resulted in continued progress with enrollment. Recall an interim analysis will be conducted for our first primary endpoint when we achieved target number of progression free survival events. We project the target number of PFS events will be achieved in the fourth quarter of 2018. At that time, we present we will have enrolled approximately 500 patients. Our team continues to execute well and global investigators remain highly engaged in the study. Turning now to slide 6, I'll provide an update on our clinical development program to assess the potential of PEGPH20 in other tumors. Beginning with our trial in combination with checkpoint inhibitors, we are studying PEGPH20 plus KEYTRUDA or pembrolizumab in non-small cell lung and gastric cancer patients. At the end of 2016, we moved into the dose expansion phase of the study for our non-selecting patients at for higher HA levels with the target enrollment of approximately 50 patients at 30 U.S. sites. We are now nearly halfway through enrollments of this PD-L1 all comer population who we will test retrospectively for PD-L1 standards with the goal of exploring two key questions. Firstly, whether adding PEGPH20 will allow PD-L1 negative patients to respond to KEYTRUDA and secondly whether adding PEGPH20 can increase the response rate or the death of response to KEYTRUDA in PD-L1 positive patients. Adequately address these questions, we will need to enroll more patients currently in the study, and now believe it is more likely we'll be in a position to share early response rate data in the second half of 2018. Investigator interest remains strong and we look forward to sharing data once we have an adequate number of patients. I'm also very pleased with the progress in our collaboration with Genentech to study PEGPH20 with their cancer immuno-therapy TECENTRIQ or atezolizumab, an Anti-PD-L1 molecular antibody. As this has been recently announced 2 Phase 1b/2 open-label multi-arm randomized global trials funded and operated by Genentech were initiated in patients with previously treated pancreatic cancer and previously treated gastric cancer. Both studies are part of Genentech’s MORPHEUS immunotherapy clinical trial platform in which they will evaluate PEGPH20 and TECENTRIQ in up to four additional tumor types. With Genentech funding and operating both studies, the collaboration is a very efficient way for Halozyme to have expanded our exploration of the pan-tumor potential of PEGPH20. And as announced in October, we also initiated our Phase 1b open-label randomized study of TECENTRIQ in combination with PEGPH20 and chemotherapy in advanced or metastatic biliary and gallbladder cancers. And finally, enrollment is ongoing in the Phase 1b dose finding portion of [E5] clinical trial to evaluate HALAVEN in combination with PEGPH20 and patients with HER2 negative metastatic breast cancer. In summary, this has been a strong quarter both financially and with our execution across both the ENHANZE and the PEGPH20 strategy. With that, I will now turn the call over to Laurie to discuss to financial results in greater detail. Laurie.

[Laurie Stelzer:]

Thank you, Helen. I will begin on Slide 7 where you will see that revenue for the third quarter was $63.7 million compared to $31.9 million in the prior year period, largely driven by the $30 million upfront from Roche. Royalty revenue totaled $17.1 million, an increase of 31% from the third quarter of 2016. Bulk sales of rHuPH20 totaled $9.8 million. HYLENEX product sales totaled $3.8 million and other collaboration revenue totaled $33 million, which includes the $30 million upfront payment from Roche. Turning to Slide 8 for a more detailed breakdown of our P&L. Cost of product sales was $8.3 million in the quarter compared to $9.1 million in the prior year period. Research and development expenses for the quarter were $34 million, which was essentially flat to the third quarter 2016. Selling, general and administrative expenses were $13.3 million compared $11.6 million for the third quarter of 2016. The increase was primarily due to personal expenses including stock-based compensation for the period. Net income for the quarter was $22.7 million or $0.02 per share compared to a net loss of $28.9 million or $0.23 per share in the third quarter of 2016. Cash, cash equivalents and marketable securities were $316.9 million at September 30, 2017 compared to $297.5 million at June 30, 2017. With strong revenue and disciplined expense management through the first three quarters of the year and a good line of sites to the fourth quarter, I would now like update our guidance ranges for 2017 as shown on Slide 9. For the full year 2017, we now expect net revenue increasing from the prior range of $245 million to $260 million announced on September 14th to $265 million to $280 million driven by stronger product sales royalties and sponsored research. I expect we will be at the high-end of this range, if we dose the third patient in the study of subcutaneous DARZALEX and recognize the associated $15 million milestone payments by year-end. Further due to our agreement with Bristol-Myers Squibb now being effective, we will recognize $101 million of the $105 million upfront payment in the fourth quarter with the remaining $4 million to be deferred to the future period. Operating expenses guidance is decreasing from the prior range of $240 million to $250 million to a new range of $230 million to $240 million. Positive operating cash flow is increasing from the prior range of $50 million to $60 million to a new range of $70 million to $85 million. Year-end cash balance is increasing from the prior range of $380 million to $395 million to a new range of $400 million to $415 million. The substantial jump in our cash position this year is testament to the value of our business model, leading us well capitalized as we exit 2017. Finally, I would like to briefly discuss an upcoming impact to our financial statements following our planned adoption in January of FASB Topic 606, as it applies to how we record royalty revenue. Historically, we have recognized royalty revenue one quarter in arrears due to the timing difference between our financial close and when we receive payment from our partners. Under the new revenue recognition guidance, starting in 2018, we will be recording an estimate for the royalty revenue for the current reporting quarter and we will reflect the difference between the actual payment and the estimate in the subsequent period. Note that we planned to provide a reconciliation schedule as part of our Q4 2017 earnings call to assist in the transition as the new accounting standard will be effective on January 1st. With that, let me turn the call back to Helen who will provide closing comments.

[Dr. Helen Torley:]

Thank you, Laurie. In summary, we continue to great strides across both pillars of our strategy during the third quarter, delivering a strong performance. Our ENHANZE portfolio delivered significant value as we established ENHANZE as a go-to technology for taking IV drugs subcutaneously with two new agreements. And we saw increased recognition by partners of how ENHANZE has potentials to increase the competitiveness and market adoption of their products. As Janseen also dose the first patient in their Phase 3 trial of DARZALEX HC, our currently marketed product delivered yet another quarter of robust royalty growth and new therapies progressed in their clinical development. In the oncology pillar, conviction and support from opinion leaders and investigators remain high for HALO-301 study with the potential for achieving the target number of PFS event late in the fourth quarter of 2018. We and Genentech made great progress in HC studies in four tumor types to evaluate the combination of PEGPH20 and TECENTRIQ. And we continue to progress in the dose expansion phase of our KEYTRUDA study. Above all, we remain confident that the investments we are making both pillars of our strategy will generate near-and long-term value for our shareholders and our partners. And I want to close by expressing as ever my on growing gratitude and appreciation for the talented Halozyme team for their continued hard work to advance our programs and in support of our partners and patients. We're now ready to take your questions. Operator, please would you open the call.

[Operator:]

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Our first question comes from Jessica Fye with JP Morgan.

[Yuko Oku:]

Hi, this is Yuko Oku on the call for Jessica. Thank you for taking our questions. For study 301, could you remind us of how often you get updates on the DSMB? And how many patients are enrolled in the study thus far?

[Dr. Helen Torley:]

Yes, let me ask Demetrius to address the question of the DSMB.

[Dr. Demetrius Chondros:]

Yes. Thank you, Helen. The IMC of the study or DSMB meet at least every quarter on a regular base. So far the accommodation was always to continue the study as planned without any modifications. Regarding enrollments, the study is enrolling according to our expectations and we expect the final number of progression-free surviving then to be reached towards the end of Q4 2018.

[Operator:]

Our next question comes from Charles Duncan with Piper Jaffray.

[Sarah Weber:]

Hi, this is Sara on for Charles. Congratulations on the quarter. Two quick questions. So first, any idea how quickly Janssen can move into Phase 3 for multiple myeloma and smouldering myeloma?

[Dr. Helen Torley:]

Well, certainly for multiple myeloma, the previously made comments that it will happen before the end of this year. So I do think absolutely in the next weeks for the multiple myeloma study. I don’t think this given the specific from the smouldering myeloma, but we know they’re working all three of the studies in parallel. So, it will begin soon as well.

[Sarah Weber:]

And then just one follow-up. Can you talk in a little bit more detail about some of the factors behind raising 2017 revenue guidance today? And is that related to the RITUXAN HYCELA launch yet or not yet?

[Dr. Helen Torley:]

Let me ask Laurie to address that.

[Laurie Stelzer:]

Hi, Sarah. So as you know, we don’t typically give out the components of our guidance and so for revenue, no exception. But what I can say is we’re continuing to see strength across all the categories of our revenue. We’ve seen robust growth in our royalty revenue. We've had some increase in API, which is you know we talk about before can’t be a bit lumpy in its nature. And we see strength in our sponsored research as well and this is reimbursement of sponsored research from our partners. As far as impact from HYCELA, again remember in 2017, we’re continuing to book one quarter in arrears. And so, we didn’t expect and have not seen an uplift yet, but we do consider anticipate that to be a factor going into 2018.

[Operator:]

And our next question comes from Joel Beatty with Citi.

[Joel Beatty:]

The first question is for the PEGPH20 Phase 3 trial. Now that looks like data could be coming out of 2018. Could you provide any comments on the powering assumptions for that trial? And how many events are needed for that assessment?

[Dr. Helen Torley:]

It’s not our practice to give any all of the details on this statistics and with the study sell ongoing, we’re not going to do that. But I think you are aware that we have given one piece of information and that is that we are seeking a PFS hazard ratio of 0.59. So that’s the only information on statistic that we are going to provide at this time.

[Joel Beatty:]

And then another question is on -- with multiple trials, combo trials going on PEGPH20 such as with KEYTRUDA, TECENTRIQ and HALAVEN. Are you able to get any data internally that help us to assess the responses in the context of HA status?

[Dr. Helen Torley:]

It certainly is a question that we are seeking to address in the studies, Joel. For the majority of the studies, we are evaluating data in an HA enrich population and that will give us the initial data to be able to looked to correlate HA levels with responses we see in each of the population. If you recall, that was a core goal of the 202 study was to generate that data. And so, we're really at that stage again with these tumor tumors where we want to generate the data, so we can look at the relationship. But we obviously don't have that yet, and as we complete these studies and get to the end of them that will certainly be one of the examinations of data that we planned to do.

[Joel Beatty:]

Excellent. One last question, if I could. With the change in revenue recognition beginning next year. Could you just discuss a little bit on how accurate you expect the estimates to be able to being how much data you'll have to get those estimates?

[Laurie Stelzer:]

Hi, Joel, this is Laurie. We are going to be working very closely with our partners so that we can zero in on those estimates and make those estimates as close to real as we possibly can. So again working very closely with our partners and I anticipate not having estimates that we book far off from the actual.

[Operator:]

Thank you. And our next question comes from Andrew Peters with Deutsche Bank.

[Andrew Peters:]

I guess a couple of from me. Just first on the potential for new ENHANZE deals. I guess can you describe just the process around dealing with the selection of new targets under ENHANZE, as it relates to potential areas where some of the, your existing partners have already kind of staked the claim, if they haven't been named publicly? And then just the second one on PEGPH20, as we think about some of the combination data especially at the upcoming readout in lung and gastric with KEYTRUDA. How should we think about what the appropriate compare dataset should be? Do you expect any sort of difference to be seen as it relates HA status? Or is there any information that you have to help kind frame true apples-to-apples comparison as we await that data?

[Dr. Helen Torley:]

Great. Thanks Andrew. I'll address the ENHANZE question and I'll have Demetrius to talk about the background rates that all going with the IO agents. For ENHANZE, I think it's fair to say that as you look at the targets that have been selected by current partners, we have a heavy emphasis on oncology targets. And what's important to remember is that we believe ENHANZE can bring utility in multiple other different disease areas. If you look at inflammation, you can look at some neurology, and you can look at many other areas. And the process generally is that once a partner enters into bona fide discussions with us and they start to seek out -- if the target is available, we can let them know at that point in time, if that target is available. But as I mentioned in my prepared remarks, there are a number of targets that we believe we could be very beneficial for, and that's why I do believe that we will find future ENHANZE deals. We can never quite predict the timing of them, but we certainly believe there are more targets out there that we’ve benefit from ENHANZE. Let me turn it over to Demetrius to talk about the expected efficacy rates that we would be comparing our data too.

[Dr. Demetrius Chondros:]

Sure. Thank you very much, Helen. So, we would expect to demonstrate a clinical meaningful difference that's historical flow data. And as you are aware, there is a plethora of data out there. And to come back to the apples-and-apples comparison, you ask about is the most relevant data set is, was presented earlier this year at the ASCO Annual Meeting for pembrolizumab in previously treated gastric cancer patient as monotherapy. And the overall response rate there in an all-comers population was a little bit about 11% and 15.5% as I recall in the PD-L1 positive patients. And the respective numbers for the lung cancer population, again for pembrolizumab monotherapy was 80% to 90% in the all-comers population and up 30% in the PD-L1 high expressers. So this would be our benchmark, but again, we would go for -- we’re looking for our clinical meaningful difference about these standards.

[Andrew Peters:]

Okay. I guess just a quick follow-up on that. You guys have long talks about high HA being a kind of prognostic factor for patients, potentially to high HA patients potentially doing worse. Do you have any sense of or any -- is there any data, if lung cancer patients are equally impacted by HA status? Is there any kind of pre-clinical data on that? Or anyway you can tease that out?

[Dr. Helen Torley:]

Andrew, this is Helen. There is some retrospective case cohort types of studies out there in pancreas. Looking at patients who had high HA versus non-HA, it does suggest across multiple tumors including breast and colon, and I believe lung to say that HA is per prognostic factor in those as well. But obviously, those are retrospected from [indiscernible] data, but we believe the relationship holds.

[Operator:]

And our next question comes from Jim Birchenough with Wells Fargo.

[Jim Birchenough:]

Two questions if I may and I apologies, if I should know the answer to one or both of them. But certainly 301 trial is originally listed as 420 patients. I think you have a range on the side of 420 to 570 and that the PFS analysis will be done when you expect 500 patients to be enrolled. Can you just enlighten me as to what the gating factor is in terms of the final enrollment?

[Dr. Helen Torley:]

Nick, when we started the study, we originally mentioned the fact that this is the study that we go from 420 to 570 patients, if recall, because of the adaptive design. With the first time endpoint, the first primary endpoint being look at being progression-free survival, what we now see based on the accumulation of data will be giving the study is that we estimate will be 500 patients by the time we get to that first primary analysis. We choose on the PFS, we distribute by a target number of PFS event. I guess what we have information to update you all with regard to.

[Jim Birchenough:]

Basically, the event rate is a little slower than it was anticipated.

[Dr. Helen Torley:]

There is accumulation of some factors go into that. Nick, we're not going to be breaking that out. I think what importantly obviously is that we're delivering this, in the fourth quarter of '18 which is why in the middle of the window that we have predicted when we started the study which would be that we'll be in a position to be filing sometime in the '18 to '20 timeframe. So we are delighted that we're kind of tracking to our original plans.

[Jim Birchenough:]

Okay terrific, thank you. And my second question on exclusivity targets. So for example if you take the PD-1 pathway, presumably, there nobody else can have a subcue formulation of PD-1 inhibitor that does not extend to a PD-L1 inhibitor or PD-1 bi-specific with something else. How do you sort of allow me slice that exclusivity?

[Dr. Helen Torley:]

Yes, so it's a very good question and I will see PD-1 and PD-L1 are considered different targets, as our like 3 for the all those types of things. So, we have a database, which gives us based on scientific criteria what are considered separate targets and that's how we do it.

[Jim Birchenough:]

And so the Bristol targets, they don't have exclusive options to all 11. They were available when they did collaboration, but they would have to actually sign up for each individual one to complete the land grab?

[Dr. Helen Torley:]

That is correct. We said at the time of the announcement was that BMS has taken 11 targets. The all-in-one that they announced publicly is PD-1 that they have selected for exclusively several other targets, but they haven't named how many or they haven't named what they are. But they also have some open slots.

[Operator:]

[Operator Instructions] Our next question comes from Michael Palmer with Guggenheim.

[Michael Palmer:]

Did I miss an update on the ORR for PEG10?

[Dr. Helen Torley:]

No, we indicated was that as we seek to explore both the efficacy of the PEG10 in two different tumor types and across the range of that PD-L1 expression. While we've gotten to almost halfway through our target enrollment, we don't have sufficient number of patients to be able to provide the data at this point in time. So, we're going to continue enrolling in the study and now expect reporting that data out in 2018. It was always a question of would we have enough patients? And the answer is, we don’t. It's going to be 2018 read at.

[Jim Mazzola:]

And operator, there is no further question maybe we turn call back over to Helen for closing comments.

[Dr. Helen Torley:]

Now, it's great. Well, thank you. I really appreciate everyone's attention and the great questions that you'd asked today. And obviously, we’re delighted with the progress and we look forward to continuing this progress and providing an update to you next quarter. Thank you very much.

[Operator:]

Thank you, ladies and gentlemen. This concludes today's teleconference. You may now disconnect.