Tandem Diabetes Care, Inc.
Q1 2016 Earnings Call Transcript

Published: 29 Apr 2016

[Operator:]

Good day, ladies and gentlemen and thank you for your patience. Welcome to Tandem Diabetes Care First Quarter 2016 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] As a reminder, this conference call maybe being recorded. I would now like to turn the conference over to your host, Chief Administrative Officer, Ms. Susan Morrison. Ma'am, you may begin.

[Susan Morrison:]

Thank you. Good afternoon, everyone and thank you for joining Tandem's first quarter 2016 earnings conference call. Today's discussion may include forward-looking statements. These statements reflect management’s expectations about future events, product development timelines and financial performance and operating plans and speak only as of today’s date. There are risks and uncertainties that could cause actual results to differ materially from those anticipated or projected in our forward-looking statements. A list of factors that could cause actual results to be materially different from those expressed or implied by any of these forward-looking statements is highlighted in our press release issued earlier today and under the Risk Factors portion and elsewhere in our most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q and in our other SEC filings. We assume no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or other factors. Kim Blickenstaff, Tandem’s President and CEO; will be leading today’s call. And at this time, I'll turn it over to Kim.

[Kim Blickenstaff:]

Thanks, Susan. Good afternoon, everyone. Joining me on today’s call is our Chief Financial Officer, John Cajigas. 2016 is off to a strong start and I'm very pleased with our first quarter accomplishments. Our early momentum is very encouraging and gives us confidence in our ability to exceed our original guidance and continue managing the business toward profitability. Some of the highlights of the quarter include our achievement of 63% year-over-year sales growth, our 12 point year-over-year gross margin improvement, continuing strong demand for our t

[John Cajigas:]

Thanks, Kim. Good afternoon, everyone. Overall I'm very happy with our strong first quarter sales that we achieved while incorporating 12 new territories into our commercial organization. Our performance over the last twelve months and the year-over-year advances in our operating margin, in particular continue to give us confidence as we manage the business towards profitability. Looking after sales and product shipments, first I'll discuss our rolling twelve months metrics which we continue to view as a better indicator of our progress, followed by some particulars for Q1. Our sales to the rolling twelve months ended March 31 were $80.6 million, an increase of 49% from $54 million for the previous twelve month. This was mainly driven by the increase in productivity and recent expansion of our salesforce, as well as the contributions of the t

[Kim Blickenstaff:]

Thanks, John. I'm happy to share that we've continued to progress on our new products and development. We recently provided a full update on our 2016 product enhancement and development efforts on our last call but to recap these initiatives. First, we have a 510(k) on file with the FDA to lower t

[Operator:]

Thank you, sir. [Operator Instructions] Our first question comes from the line of Kristen Stewart of Deutsche Bank. Your line is open.

[Kristen Stewart:]

Good afternoon, everybody.

[Kim Blickenstaff:]

Hey Kristen, how are you?

[Kristen Stewart:]

Hi, I am PT as always. I was wondering -- congratulations on a good quarter. So I was just wondering, just in terms of -- it is pretty impressive that the productivity in the reps was pretty much the same as the second quarter. So I guess how should we just think about that productivity as it goes to the year because I mean 19 for the first quarter, especially against a rolling twelve months of 22, pretty good. So I mean what do you see as the upper limit? I guess any comments there?

[Kim Blickenstaff:]

We're still sort of estimating that we will do somewhere between 24 and 25, sorry, 20.26 pumps per month per territory over the full year. So you'll see it progress from 19 as we move towards the fourth quarter you will see productivity be well above that number but I think overall we expect the average to still be somewhere in the 24 to 26 range through the full year.

[Kristen Stewart:]

Okay. And then just in terms of feedback I guess in the marketplace from a competitive standpoint with G4, any changes from the quarter I guess, from the fourth quarter to first quarter?

[John Cajigas:]

The mix is the same, so I think get that point, throughout the 60% of our shipments for both quarters. We don't have a good view to whether this is still pen-up demand or there is something very unique about the product. Just background, our own internal work sort of gave us the takeaway that the Dexcom CGM has perceived the best out there and our pump was perceived the best out there. There was some surveys last year where it compared us to the Medtronic product and the J&J product; and we won on ease of use, the touch screen, and the slick consumer look but we lost on lack of CGM. So we knew that it was a very important competitive feature that we're operating with all of last year. And again, the uptake of 60% of our mix is just sort of beyond what the industry averages have been forecasted for the use of CGM with pumps. It was something like 25% or 25% to 30% of all pumpers were thought to be using CGM. So we're going at a higher rate than what we're seeing as the industry average is and we think it's our product features coupled with the Dexcom product. Again, we're going to keep our forecast for the balance of the year as the same mix but we're off to a great start. It's a bit surprising to us but we're very pleased that we're getting chosen over all other products at a higher rate.

[Kristen Stewart:]

Okay, perfect. I'll get back in queue but congratulations on a good quarter.

[Kim Blickenstaff:]

Thank you.

[Operator:]

Thank you. Our next question comes from the line of Tom Backus of Piper Jaffray. Your line is open.

[Tom Backus:]

Great, thank you. Hey guys, thank you for taking my questions. Congrats on a great quarter. And I apologize if I'm redundant here, I was jumping around to another caller earlier. So I guess my first one was for John, on your comments on EBITDA profitability, I'm wondering obviously because of the seasonality in your business, that we would look at Q4 for that potential. John, street estimates are for $5 million EBITDA loss. I'm just kind of hoping you could maybe give us some comments and bridge that for us?

[John Cajigas:]

Well, I think we typically have seen a seasonally backend loaded year and I think we don't see anything being different this year. In fact there are some things come into play this year that we haven't seen in the past. One is the renewal cycle, partly renewals in the fourth quarter. We do expect to see some product enhancements, potentially be approved by the FDA here throughout this year that we will see a full impact in the fourth quarter, hopefully. And so that's what's going to backend loaded with that. And then the other thing that sort of happened is just the steady progress as we mentioned to Kristen, the salesforce expanding their productivity, both the existing territories that we had in place before the year started as well as the new territories that come on board during the first quarter. So that's going to drive the sales line, I think we'll continue to see margin improvement as sales sort of increase and we are obviously continue to manage our expenses quite proactively.

[Tom Backus:]

Okay, that's helpful. And just to follow-up on the replacement cycle. I was hoping you could maybe -- obviously, this year it's going to be a little more limited in terms of a quantifiable impact but I guess overtime can you just kind of help us think about how that drives revenue and what the impact is there? And then if you have any initial thoughts on reorder or attrition rates just built into your own model.

[John Cajigas:]

Well, this year we have sort of a conservative modest expectation. There was about 1,000 pumps that we sold in 2012, most of that was in the fourth quarter and most of that primarily was in the month of December. So as I mentioned in the prior call, the challenges whether or not those that were new in December of 2016 will actually go through the renewal cycle and valuation process, the sales cycle quickly enough as well as the insurance verification process quickly enough, it becomes sales within the fourth quarter. If not, then they become a potential for us in 2018 when along with probably 6,000 are also going to be available. And then the following after that is over 10,000. So it becomes a bigger and bigger portion for us to be able to try to recapture. I think when we launched in 2012, we now have three pump offerings that potentially are better fits for them individually, that we can go to as well as the things that Kim has talked about in the past, potentially offering an AP product in future years.

[Tom Backus:]

Thank you very much.

[Operator:]

Thank you. Our next question comes from Rick Wise of Stifel. Your question, please.

[Rick Wise:]

Thank you. Hey Kim, truly congrats on the terrific quarter. I think -- maybe I'll start with the t

[Kim Blickenstaff:]

We just comment that. You know that market is smaller than the type 1 side of the business. So we're going to always expect that it's going to be a sort of a fraction of our type 1 users of the t

[Rick Wise:]

Right. Turning to your comments about profitability, you stressed repeatedly your accelerating path to profitability and give us updated operating margin guidance, you know maybe John, a question for you. Helps us think through, is the improvement balance between better gross margins and lower OpEx or tilted to better gross margins? And maybe just reflecting that you know OpEx as you probably correctly stated it's up 13% is that’s the kind of -- should we think in terms of growth rate is that a growth rate we should be modeling that kind of range going forward?

[John Cajigas:]

I would say you know obviously sales is going to be the key drivers of that profitability and I think for us it's always story about being able to offer multiple products and I don't think that story has change. I think as we look at Q1 and we look at Q4 having three products helps our sales force knock on doors and get people's mind share instead looking at Tandem as a company and then looking at which product fits for them because as Tim mentioned it doesn't matter which product we sell them because basically they are built at the same cost price. So for us it's really the sales uptake that we expect to see, the productivity gains we expect to see in the sales force as well as the margin improvement that we expect to see from a volume standpoint both on the pumps as well as the supplies and as a reminder you know the pump margin is much higher than the supplies. So for us to be able to recapture renewals as well as organic growth within the sell side on the pump side is very important for us and I think seeing that happen in the first quarter. I think it's something we will continue to see throughout this year as well as next year. And on the expense side the growth as I mentioned last year at the earnings call, the Q4 earnings call I mentioned that our expenses had grown a roughly 5% to 7%, I don't see that changing. I think there's some incremental cost that we had talked about such as the clinical trial cost which we still estimate to be about a $1 million this year and then the additional costs associated with the sales force expansion which was 12 territories and generally when we see a territory added its roughly 700,000 to 800,000 in cost all-in beyond just the rep and CVD it's also the people in-house as well. So I don't really see any real changes on that?

[Rick Wise:]

And another margin question just reflecting on the comments about some of the pipeline products, may be thinking about updated it specifically and I may not be asking this correctly but it seems like some of these products are more software based obviously COGS are dramatically lower. Shouldn't we assume that those kinds of products are going to provide a potential positive gross margin benefit and if that’s right, if that's correct thinking well you know how do we dwell that into our analysis to look ahead?

[John Cajigas:]

You're correct we'd like to see potentially that that [indiscernible] the updated product will allow us to update software's in the field in the current existing install base and what that does is that there are fixes just like software fixes you see in the consumer world we can address those potentially reduce our warranty costs and replacement cost. So there is a potential for that, it's highly driven by each individual update that we do as well as what the FDA or regulatory path that's required for each of those. So until we get one out there. I think it's going to depend on which one that each one individually. I think we talked about in the past. First thing we would like to do is update the software for existing install base to the latest software that being shipped with the current pumps today.

[Rick Wise:]

And just one last one for me if I could, a bigger picture question, there seem to be an increasing number of pump companies startups not for profit, new product offerings. Big new products coming obvious some of the major competitors in the field, Kim just maybe reflect on do you’ve have any incremental competitive concerns out there, you got a great product but does the sale get more complicated with all this innovation and news. How do you see the pump market evolving over the next years and how do you expect to compete in that environment? When you know I think there's a lot

[Kim Blickenstaff:]

I think there is a lot of noise and then there is reality out there. So a lot of these well things that you're hearing about you know big foot for instance them I don’t know all the other ones, what was the other one, biometrics or bio something. Anyway you know they have to build the company. They have to raise the capital, they have to get some product approved and so they've got a long way to go to be competitive on the near term horizon, probably the biggest competitive thrust that is going on is the automation of insulin delivery and so Medtronic is playing that game, there is 670G [ph] reported to be approvable or going to be approved late 17 isn't that what we have heard? Mid-17 to late-17 and so that product is going to have sort of the first treat to range or treat to point kind of a controlled algorithm. So competing with that will be an interesting challenge. Obviously we have our own products we think we're going to be launching them within a competitive timeline, we also know that our product with CGM on it is very competitive to the 670G because in the early phases only your power users are really going to want to adopt something like that, the guinea pig you know try to see whether that's going to improve control and we sort of saw that with the 530G which was the threshold shut off product. So you know that's where I see it going and we have programs to be competitive, with that I think we will be competitive as Medtronic leads the way and bring the products out into the marketplace but the others I just don't think have the marketing muscle to do much with the ideas that are getting a lot of press out there so that's sort of my take on it.

[Operator:]

Our next question comes from the line of Tao Levy of Wedbush Securities. Your line is open.

[Tao Levy:]

I was wondering if you had any insights into how many of the t

[Kim Blickenstaff:]

How many of t

[Tao Levy:]

Yes are actually using the CGM part of, I don’t know if there is software data read that you get or?

[Kim Blickenstaff:]

No we don't have an answer to that one. We don't have the data to tell you whether they're buying in and sort of shutting it off and not using it or whether they are actually using that feature. You know one of the things I can tell you is that 50% of the G4 users so far are Former MDI patients and I can't imagine that they're taking on both pump therapy and CGM therapy unless they are using the two in combination. I mean that's a shocking number to me because generally patients start with other CGM or a pump but not both because CGM, the pump is hard as [indiscernible] and CGM is a little bit more intuitive learning to use those numbers the manager therapy is not quite so intuitive but it's a great tool for controlling your HbA1c in longer term but pump also is a huge part of that, so to have MDI users, you know switching to both those tools you’re telling me that they're probably using them synergistically.

[Tao Levy:]

And the only reason I was asking you hear a lot of the Medtronic users who use the pump but don’t use the CGM part of it and so that’s why I just didn’t know if you were seeing any of that with your embodiment [ph]?

[Kim Blickenstaff:]

We have heard that too and we have also heard that the if they got the low threshold suspend, they don't use that feature either many don't.

[Tao Levy:]

And then I was wondering the age reduction, the filing that you have in place, what do you think that does to your growth rate? Is that I know you mentioned earlier on that you are expecting some approvals later on here that could help with the growth rate and you're positive EBITDA target for the fourth quarter, is that's a critical part of it?

[Kim Blickenstaff:]

Well we don't have a good assessment of how many you know under 12s that we're missing by not having that indication. So I can't quantify it for you but I can tell you that you know we have carefully avoided off label marketing and that means we have to avoid a lot of these summer camps where you have kids of all ages you know down below our indicated approved age. So we've been very careful not to market aggressively at those and so with that indication we think we're going to be more aggressive get to broader adolescent group and be less tentative along that age group but we really don't have numbers on how many 12 over 6 patients there are out there.

[Tao Levy:]

And then just question form John, the cartridge -- in the past you talked about as being negative margin product for you guys. Is that still the case or you have enough volume now that that’s turned positive?

[Kim Blickenstaff:]

It's still the case but the margin has improved dramatically over the last twelve months.

[Operator:]

Your next question comes from the line of [indiscernible]. Your line is open.

[Unidentified Analyst:]

The first for me on what would it take for you to go forward with another sales territory expansion? Is there a kind of a number in your head of pumps per month for instance that you’ve in your head that would necessitate that?

[Kim Blickenstaff:]

I think for us we want to see how 2016 plays out having three products going through the single reps, whether that helps improve the productivity or is there still a ceiling because there's only so many days in a month that operates [indiscernible] accounts. So I think for us it's sort of watching where we go, I think our goal this year is to move on average from 24 to 26. I will say last year I saw many reps well above that number so there is a potential for a rep productivity fee north of that number. But on average that's where we're sitting today. I think we will look at sort of the productivity, we'll look at the reach, we will look at whether or not we are seeing calls or complains that we're not able to visit accounts of visitation and look at that as other factors that we will use to decide when and where, where we will add territory. I think as we add territories in the future we will do something very similar to what we did this year which will be very targeted and very limited in to specific situations that make sense for us and we will typically do those in the early part of the year when it's least disruptive and most beneficial for them to be up to speed by the time they get to high pump selling season which is the third quarter and fourth quarter.

[Unidentified Analyst:]

And then on productivity I know t

[John Cajigas:]

Well on the Type 2 side there's definitely we believe a much greater educational effort that we have to go through, not just with the patient but also with the offices so that process we think is going to be slow, the reimbursement side of the equation is also something that can be challenging if there are people who are primarily on Medicare which makes very difficult for us to gain the reimbursements. So that's a fact of the mix slower and sometimes those can be overcome through appeals and so forth that just makes the process longer.

[Kim Blickenstaff:]

I was to mention the other thing is whether there are current pump wear and there are switcher that’s probably an easier sell than trying to go with somebody that injection insulin and you’re trying to get them on to pump, I don't think we have any visibility to what our mix is so far in a hope of t

[Unidentified Analyst:]

And then last thing for me on you mentioned switching and I think it was also in response to Mr. Levy's question. In terms of switching from existing pump CGM. Combos, I mean we've seen quite -- I wouldn’t say quite a few but a number of who have switched from the Medtronic device but quite a bit fewer from the animus device and obviously the relative market share places a factor into that. But are you seeing a lot of switching from the existing pumps CGM products that are out there?

[Kim Blickenstaff:]

Yes about 50% are switchers. So there's probably switching as you said along the lines of market share that’s out there right now with those that have integrated CGM with is Medtronic and J&J. I know you’ve done some work and that’s may be consistent with what we’re saying. I think it is.

[Operator:]

Our next question comes from the line of Erik Shoger of Northcoast Research. Your line is open.

[Erik Shoger:]

I wanted to go back maybe flesh out a comment you made in the prepared remarks. Maybe this is just me reading into it a little too much but I thought you said that you know more than half of your new t

[Kim Blickenstaff:]

No, we haven't. I mean that’s pretty much our base, that's pretty much what it is on the margin as we go through every quarter. You know it's what we're seeing with the with the G4 which is sort of surprising for the reasons I've already mentioned so. We're not seeing much of the difference there, I mean I think we're doing in terms of new pump stars better than anybody in the industry and there's some data out there to support that. So I think that's back to the ease of use, the ease of getting somebody started on the t

[Erik Shoger:]

And then maybe to go back on your comments about sort of the pediatric opportunity, somewhat of a similar question but may be asked in different way. What sort of appetite you know just based on your own observations is there for a pump at all among kids as young as six years old particularly as you have new products on the CGM side that allow parents to their CGM remotely and obviously we don't get that feature with the t

[Kim Blickenstaff:]

Well you know I’ve never seen any data that breaks out pumpers versus and MDI by age groups. So I mean I really don't have a good answer for you on that. You know just anecdotally. It is really probably those that are very aggressive and the parents are a vital involved in the switch to the pump and so you know I don't know what that percentage is but it takes a real sort of power user, a family that's really trying to get the pest control early on. So they get the a long term results and I just don't have a good breakout on what that might be.

[Erik Shoger:]

Yes. I mean I guess in the end they could still get a t

[Kim Blickenstaff:]

That's correct.

[Erik Shoger:]

And then maybe lastly just on the on the new territories, do you have any sort of breakout you talked about sort of a 9 to 12 months ramp in terms of the new territories I mean, what sort of difference were you seeing in the new territories in terms of pumps per day versus maybe your existing ones in the first quarter here if you have color there?

[Kim Blickenstaff:]

For just the mix I think the pleasant thing that we saw in Q1 is I think we did a very good job and our hiring did a very good job and our training upfront as well as the hand-offs within the territories as well as well what territories we are picking to make sure that those transitions were going to be as least disruptive as we thought that we should be. So I think that's where we saw the benefit. I think most of those folks are moving up to scale. Some of them have inherited territories where business was already booming and the existing rep moved into the new sort of call it Greenfield and some of them took over Greenfield. So it's a mixed bag. So it's hard to give you a sort of flavor that’s generic across the whole new territories but I would say people who cared very but I would say would quite happy that they're on board doing well. I think they will move and be very effective here in the third and fourth quarter.

[Operator:]

Our next question comes from Doug Schenkel of Cowen & Co. Your question, please.

[Unidentified Analyst:]

This is Ryan Bikerin [ph] for Doug. A couple of pipeline ones, on the first gen AP product, is there any chance that that could incorporate the G6 sensor, is it pretty safe to say that will definitely be G5? At this point?

[Kim Blickenstaff:]

We haven't really discussed what the integration plan is for the G5, did you just refer to the G6 as well?

[Unidentified Analyst:]

Yes I meant for the first generation AP product that you talked about launching in launching in late 2017 which sensor you plan on using there? Will that be definitely G5 or is there a possibility that can be G6?

[Kim Blickenstaff:]

It will be G5, no possibility it's going to be G6, it's not approved. I don't know what the approval timeline is on it, their call was today or yesterday so I don't know what the update was maybe you do better but. G5 we can count on, G5, something we can count on to get in our timelines.

[Unidentified Analyst:]

Okay and for t

[Kim Blickenstaff:]

Well that's something that is really under sort of hot thing right now, the FDA has issued guidelines and they consider this whole concept of controlling from phone to be a Class 3 device and so it's going to have more scrutiny obviously then you know Class 1s or Class 2s and the whole question is the operating system of the phone is considered or the phone is considered to be part of the product and so it has to be verified and validated just like any internal component that we put on the phone and as you probably know every phone out there has its own version of an operating system. So the universal coverage of phones operating pumps today would be impossible to have that kind of wide choice among droids and then Apple products. This may be changing over time. There the thinking is probably on a two to four year horizon but that’s the guidance document that we have today so you know we're planning on a dedicated controller and hoping that perhaps someday there is going to be a possibility for us.

[Unidentified Analyst:]

And last one for me, you've talked about you're being number one in customer support and that's obviously a key differentiator for Tandem. As the install base continues to grow how do you guys maintain that number one customer support rating and how should we think about that from an investment perspective? What is the risk that OpEx core growth where you talked about earlier in the call meaning to increase a bit to maintain that rating? Thank you.

[Kim Blickenstaff:]

Well you know we have the ramp there was cost up on a ratio of the people in the field because they're placing pumps sort of out that are out of the volume that we can calculate and estimate how much headcount that we need here. So you know we don't think that those ratios are going to change as we go up the volume curve here.

[John Cajigas:]

And I would say that what we’re also focused on just making sure that the ease of use stays easy to use as we move through multiple generations of products and that will keep us sort of in the number one position as well as having key updater potentially being a source of updates to allow people to get the latest and keep them from being having complaints about certain things that aren't being fixed or being shut out of innovations that come down the road.

[Operator:]

Our next question comes from the line of Jeff Johnson of Robert Baird. Your line is open.

[Jeff Johnson:]

So just three quick one here for me so first, John or Kim I guess on the device updater in the 12 year old or the six year old indication, I'm sorry for t

[John Cajigas:]

We are sending in the guidance.

[Jeff Johnson:]

Okay, you’re assuming in guidance is that what you said John?

[John Cajigas:]

Yes. Sorry yes.

[Jeff Johnson:]

And then on the low glucose to spend and potentially starting that pivotal before year end, Kim any idea then on the bezel adjustment or the hyper side of things? I think the last update you gave was maybe a staged process that the FDA was talking you through but just any update there would be helpful.

[Kim Blickenstaff:]

That would be the second step, that’s the advice that we have gotten from the FDA. So I think predictive low glucose was spent from all research that we have done indicates that is really probably the major concern is going low having a hypo event, obviously you wake up and you have a very bad day. I mean obviously it's like having the worst hangover you ever had and it sends you into a sort of rollercoaster, of not being in control during the day. So avoiding hypoglycemia is probably the number one thing that patients want to get out of an automated insulin delivery products. So we think that PLGS will be very competitive and then the second focus is keeping going high in the range. Those are going to give you better term, long term control on your HbA1c and we will be in feasibility throughout 2016 on that product.

[Jeff Johnson:]

Okay, will the FDA do know at this point like you start a pivotal on that before the pivotal and approval comes on the low glucose spend?

[Kim Blickenstaff:]

We wouldn't be in a position to do that.

[Operator:]

[Operator Instructions]. Our next question comes from the line of Ben Andrew of William Blair. Your question, please.

[Ben Andrew:]

Two questions I guess for me, what is your market research suggests as the number of patients who are starting pump therapy or whether it's MDIs or new diagnosis kind of a total not just you all.

[Kim Blickenstaff:]

How many are starting? 45,000 a year is probably what we have as a number kind of a guess but that’s probably [Technical Difficulty] in the range. Are you talking about the G6 product? That’s no long adjunctive, that’s what you’re talking?

[Ben Andrew:]

Well they are talking G5 for the non-adjunctive initially and that’s the subject of the panel that they're scheduled for July but I'm just curious if it would drive at different level of usage of sensors broadly including your G4?

[Kim Blickenstaff:]

We don’t have a lot of research on it but obviously if you have to confirm every glucose value before you make dosing decision that’s a lot of extra work. So you know to be able to free yourself from blood glucose sticks and rely on your CGM that would be a big deal.

[Operator:]

Thank you. At this time I would like to turn the call back over to Mr. Blickenstaff for any closing remarks. Sir?

[Kim Blickenstaff:]

Thanks again everyone for joining us today. There's a couple of conferences that we're going to be attending here within the next couple of weeks. The Deutsche Bank Annual Healthcare Conference on May 4th, and we’re taking Investor meetings at that conference as well as presenting and we're also at the Bank of America Merrill Lynch Healthcare Conference on May 10th and we’re taking investor meetings also on that day. As for industry of events the company is also going to be attending the 88 Conference in New Orleans on June 10 through June 14, the hottest time of the year and the Children With Diabetes Friends for Life Conference in Orlando, Florida on July 5th and 10th. So in conclusion you know I'm extremely pleased with our early momentum in 2016 and we look forward to building upon it throughout the year and we look forward to keeping you updated as the company continues to progress. So we will talk to on our next conference call for the second quarter. So thanks for being on the call today.

[Operator:]

Thank you, sir. Ladies and gentlemen that does conclude your program. Thank you for your participation and have a wonderful day. You may disconnect your lines at this time.