Cellular Dynamics International, Inc. (NASDAQ:ICEL)
Q2 2014 Earnings Conference Call
August 12, 2014 08:00 AM ET
Tim Daley - VP, Interim CFO
Bob Palay - Chairman and CEO
Dan Leonard - Leerink
Good day, ladies and gentlemen and welcome to the Cellular Dynamics International’s Second Quarter 2014 Financial Results 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 follow at that time. (Operator instructions). As a reminder, this conference call is being recorded. I would now like to turn the call over to your host this morning, Mr. Tim Daley, Vice President, Interim Chief Financial Officer of Cellular Dynamics International. You may begin.
Thank you, Nicole. Good morning, everyone. Welcome to the second quarter 2014 conference call for Cellular Dynamics International and thank you all for joining us today. Before turning the call over to our Chairman and CEO, Bob Palay, I will begin with the Safe Harbor language.
This presentation contains statements including financial projections that are forward-looking in nature. These statements are based on management’s current expectations or beliefs and are subject to known and unknown risks and uncertainties regarding expected future results.
Actual results might differ materially from those projected in the forward-looking statements. Additional forward-looking information concerning risks that could cause actual results to materially differ from those in the forward-looking statements is contained in Cellular Dynamics’ annual report on Form 10-KA, filed with the Securities and Exchange Commission, which risks are incorporated herein by reference, and as maybe described from time-to-time in Cellular Dynamics’ subsequent SEC filings.
Any forward looking statements in this presentation speaks only as of the date hereof. The company assumes no obligation to update or revise any statements.
I will now turn the call over to Bob.
Thank you, Tim. I want to start off by letting everyone know how delighted I am, Tim has accepted the role of Interim CFO. Tim has been a consultant to CDI since 2009. He spearheaded our accounting preparations for our IPO last July and has continued in this leadership role with our subsequent financial reporting as a public company. So as you can see, he knows the company well and is very familiar with our systems and team. So as I said, we are very happy that he had agreed to step into this role.
I am very pleased with the company’s performance in the second quarter. As many of you know, CDI’s goal is for ourselves to become the de facto standard for manufactured human cells and for the company to become a dominant player in this rapidly emerging field. This quarter, we continue to demonstrate progress towards this goal.
Before I walk you through some of the highlights of this quarter, I want to walk you through a brief overview of our business and opportunity in front of us. CDI develops and manufactures human cells to precise specifications in industrial quantities. Our products are based on induced pluripotent stem cell technology, iPSC, originally developed by our scientific founder Jamie Thomson. Having industrialized iPSC, CDI has unlocking and exciting potential product metrics. Every cell type in the human body by every person on the planet.
Manufacturing this product metrics offers CDI the opportunity to prosper a close to $10-billion market. There are three components to this market. The first is a $3.5 billion market for the in vitro use of cells in drug discovery, toxicity testing and chemical safety. The second market is the $1.3-billion market for stem cell banking. The third market is the $5-billion market for in-vivo cell-based therapeutic research and development.
Our products are designed to penetrate these markets. Currently, we have two primary product lines, our iCell product line and our MyCell product line. Our iCell product line currently includes iCell cardiomyocytes, iCell neurons, iCell DopaNeurons, iCell hepatocytes and iCell endothelial cells. Our iCell products are sold cryopreserved and as a consumable. Cryopreservation allows both our customers and us to inventory our iCell products.
In addition to these five products, we currently have multiple cell types in various stages of development. These include iCell hematopoietic progenitor cells, iCell cardiac progenitor cells, iCell astrocytes, iCell nociceptors, iCell skeletal myoblasts, and additional iCell types we have to disclose. Every one of these products are being developed in conjunction with our customers, some of which result in collaboration revenue to CDI.
Our second product line is MyCell. With MyCell, our customers send us a blood sample from one or more individuals of interest. We use this blood sample as the starting point for manufacturing their personal iPSC line. Once we have manufactured the iPSC line under our strict industrial control, this line can be used to manufacture any of our iCell product types from that individual.
So to reiterate, our strategy is to continue to launch products and the potential product metrics of any cell from any genetic background. We are targeting our iCell and MyCell products at three target markets, the in vitro cell market, the stem cell banking market and the in vivo cell-based therapeutic research and development market. Our goal is for ourselves to become the de facto standard for manufactured human cells and to become a dominant player in a combined market of approximately $10 billion.
So as you evaluate us as a company, I encourage you to think about us as I do. Is CDI making progress on its long term strategy? Let me walk you through some of the highlights from the second quarter, which include our continued rapid revenue growth. Total revenue increased 41% for the trailing 12 months ending in the second quarter of 2014 to 13.3 million as compared to 9.4 million for the 12 months ending in the second quarter of 2013.
In addition our trailing 12 month revenues through our top 10 customers increased 45% year-over-year. Average revenues to this group for the trailing 12 months ending in the second quarter 2014 was $908,000, up from an average of 626,000 for 12 months ending in the second quarter of 2013.
In the second quarter total revenues were 3.6 million an increase of 29% over the 2.8 million of the same quarter last year. Our growth in total revenue this quarter was driven by strength and collaborations partnership and other revenue, which increased by 46% over the corresponding quarter last year. As with the first quarter that growth was driven principally by our activity and our contracts with California Institute of Regenerative Medicine, CIRM and Coriell as well as increases in revenue and our grant with the Medical College of Wisconsin and growth in unit volume of iCell hepatocytes.
During the second quarter we recognized $425,000 of revenue from our CIRM and Coriell contracts. And our deferred revenue related to these contracts increased by $844,000. This is a point worth explaining. The increase in deferred revenue relates to slower than expected rate of sample collection and delivery by the CIRM selected third party academic grant recipients. Very simply, CDI cannot reprogram CIRM tissue samples into iPSC lines until we receive them from the academic sample collectors.
The first samples did not arrive at our new facility in Novato California until April of this year. For these awards we recognized revenue on a proportional performance method. So similar to last quarter the recognition has been slower than the receipt of funds from CIRM and Coriell.
Product revenue grew 22% this quarter compared to the same quarter last year. The growth was due to strong increases in sales of our iCell neurons, iCell DopaNeurons and MyCell products. These gains more than offset a 14% decline in iCell cardiomyocytes sales for Q2 when compared to last year’s second quarter. As we noted last quarter we believe the lower cardiomyocytes volume in the first half of this year versus last reflects the natural volatility of order placement for cryopreserved products that our customers can inventory.
On a positive note, iCell cardiomyocytes sales increased 92% in Q2 versus Q1 of this year. We believe this is evidence that our customers are working through inventories they built with year-end 2013 purchases of our iCell cardiomyocytes.
We remain encouraged about future growth and products sales. We believe this quarter’s result reinforces the value of our strategy of investing in a broad diversified portfolio of differentiated cell types to meet the broad research and therapeutic goals of our life science customers.
This sales growth was accompanied by an increase in gross margin of product sales. This gross margin was 77% for the quarter and 74% for the first half of the year as compared to 66% for both periods from 2013. We believe that CDIs rapid revenue growth accompanied by high gross margin is indicative of the strength of our products and of our competitive position.
Some additional highlights from the quarter include we demonstrated strong progress on our NHLBI Medical College of Wisconsin cardiac hypertrophy grant. By the end of this quarter CDI completed cardiomyocyte batches from 80 different donors under this grant. We believe we are the very first group to deliver manufactured cardiomyocytes from 80 different individuals. Dr. Ulrich Broeckel of the Medical College of Wisconsin will be presenting results of this latest experiment -- of his latest experiments on these cardiomyocytes later today at the CDI annual user group meeting.
Also you may wish to look at the video on the home page of our website www.cellulardynamics.com where Dr. Broeckel talks about his experience with our products.
Let’s talk a little bit more about CDI's annual user group meeting, which kicked off last night. Over 170 participants scientists from around the world are attending this meeting in Boston, sharing their data, novel uses and experience with CDI's iCell and MyCell products. You can find the agenda of this meeting on our website.
Just to give you an idea of some of the work being done on our platform, I’d like to highlight some of the scheduled talks. Eric Chiao of Biogen Idec and Maria (Usanovich) [ph] at Merck, are presenting how they use CDI's products for drug discovery in neuro degenerative diseases. Robert [indiscernible] of Roche is giving a talk on how he uses our products to study diabetic cardiomyopathy. Matt Peters at AstraZeneca is speaking on how they use our cardiomyocytes for toxicity research. Solomon (Katani) [ph] of Colorado State is presenting and developing 3D liver models using our hepatocytes products. Jacqueline Bolin of the University of Colorado is giving a talk on the use of our products to study the virus that causes [indiscernible]. (Gordy Whistler) [ph] of MIT is speaking on the use of our cells in organ-on-a-chip programs. Jason Wertheim at Northwestern and Scott Nyberg at the Mayo Clinic are each presenting on the use of our cells in tissue engineering.
So as you can see the user group meetings showcases some of the existing work being done with our products. Abstracts for all of the presentations and posters can be found on our website. And this is just a sample the research being done using CDI’s manufactured human cells. Additionally our website lists 60 publication subset of papers published on our platform. This is another example of why we believe CDI’s iCell and MyCell products are gaining wide acceptance in the research world.
And our patent portfolio continues to grow. Recently CDI announced their award of three patents on the derivation of iPSC cells from human blood. These patents were added to our portfolio with over 800 patents and patent applications worldwide. We encourage you to stay tuned for future new patent announcements.
So in this quarter we saw a continued penetration of our iCell and MyCell products into the in vitro market. We also saw progress on our contracts with CIRM and Coriell in the stem cell banking markets. In addition, we continued our business efforts -- our business development efforts to expand our presence in stem cell banking, targeting large government banks like CIRM and also commercial entities like cord blood banking firms.
During the quarter we increased our focus in efforts in in vivo cell therapy research market. This business development efforts were intensified with both industry and academia. We believe that CDI’s ability to develop cells to precise specification and then scale the manufacture of these cells offers unique benefits to cell therapy companies. Over the course of the next year or so, we expect the in vivo cell therapy aspect of our business to generate revenue and contribute significantly to the overall growth of the company.
We have also recently increased our efforts in Asia. We believe there is a significant opportunity in that area of the world particularly in Japan and we intend to increase our efforts in this important country.
I will now turnover our call to our Chief Financial Officer, Tim Daley, who will discuss additional aspects of our financial performance.
Thank you, Bob. Bob has mentioned several financial highlights and much of our revenue related results already. I will briefly share with you some additional balance sheet points and operating expense items for the second quarter and the first half of 2014. Items of note on our June 30, 2014 balance sheet include cash, fixed assets and deferred revenue.
Obviously our cash balance stands out from all other items on the balance sheet. We believe that our strong balance of $47.4 million provides the required cash to pursue our strategy over the coming year.
Moving to fixed assets, in the past six months we have invested $1.7 million in property, plant and equipment. Nearly half or 42% of this investment occurred in California from which work will be performed on the CIRM and Coriell contracts. Capital expenditures in California on this project amounted to 714,000 for the six months ended June 30, 2014. We expect to invest approximately an additional 500,000 in our California facilities in the remainder of 2014.
The additional capital expenditures during the year primarily relate to the expansion of laboratory space in Madison, Wisconsin and to improvements in our information technology and network infrastructure.
As Bob mentioned, our deferred revenue balance related to the CIRM and Coriell projects is significant. As of June 30, 2014, $2.7 million of the 3.0 million deferred revenue balance relates to CIRM and Coriell. With regards to the statement of operations, Bob has already touched on revenue and margins so I will begin with research and development expenses, which increased from 3.9 million for the three months, ended June 30, 2013 to 5.6 million for the current quarter.
For the six months ended June 30, 2014, these expenses grew from 7.8 million to 10.5 million. The increase in both timeframes is attributable to the cost of delivering collaborations, partnerships and other revenues, namely iCell hepatocytes and CIRM and Coriell. Most of the headcount increases in our research and development organization has been in support of our new California operation and the CIRM, Coriell projects.
As mentioned in our last call, going forward, we do not expect to materially grow R&D costs attributable to new product development. However, R&D costs in the aggregate will continue to increase in future quarters as we perform on the CIRM and Coriell contracts and deliver other collaborations partnerships and other revenues.
With regards to sales and marketing, quarterly sales and marketing expenses increased from 1.5 million for the three months ended June 30, 2013 to 2.1 million for the current quarter. For the six month periods, sales and marketing increased from 3.0 million in 2013 to 4.0 million in 2014.
We continue to hire in order to expand our sales and market activities and to support our growing number of customers. In the past six months, our sales and marketing headcount has grown from 26 to 33 people. Our sales and marketing staff have put significant time into planning for our annual user group meeting that Bob mentioned and that began Yesterday in Boston as well as our first ever European user group meeting in London this coming October.
Turning to general and administrative expenses; quarterly G&A expenses increased from 1.8 million for the three months ended June 30, 2013 to 3.7 million for the current quarter. For the six months periods G&A increased from 3.9 million in 2013 to 7.1 million in 2014. These increases are less stark when compared to the other quarters subsequent to our IPO. We believe that this quarter’s expense and that of the prior three quarters are reasonably indicative of our ongoing G&A expenses through the remainder of the year.
As with the prior periods most of our increases in G&A can be attributed to increases and compensation and non-cash compensation include as of and since the IPO as well as to the costs associated with our status as a public company. Beginning next quarter our quarter-over-quarter G&A comparisons as well as our loss per share comparisons will be more telling as both quarters will be post IPO. Obviously our year-to-date loss per share and expenses won’t be completely free of this IPO effect until 2015.
One final comment concerns interest expense included in other expenses and the related long-term debt. During the quarter and six months we continued to make interest only payments on the long-term debt incurred shortly before the IPO. As disclosed previously monthly principle and interest payments of $445,000 are scheduled to begin in February of next year and continue for the next 29 months thereafter.
This concludes my comments for this quarter. I’ll now turn the call back over to Bob.
Thank you Tim. To summarize CDI experienced rapid over 41% revenue growth during the trailing 12 months ended Q2 2014. Growth during the quarter was fueled by growth in iCell neurons, MyCell, iCell hepatocytes and our CIRM and Coriell contracts. iCell cardiomyocytes sales rebounded from Q1. The gross margin on product revenue for the quarter hit 77%.
The CIRM contract continued to generate cash. We believe we are seeing the acceleration of acceptance of our products across our three target markets. So our game plan is to continue to invest in new products and the rapid market penetration of our existing products in order to capture a significant share of an approximately $10 billion market.
We are a leader in a new and rapidly evolving industry. Our results are likely to vary from quarter-to-quarter and year-to-year but our goal is clear. We encourage our investors to evaluate us as I do, based on our progress towards our goal of establishing our products as the industry standard for manufactured human cells.
Thank you for joining us this morning. And now I would like to open up the line for questions.
(Operator Instructions). Our first question comes from the line of Tycho Peterson of JPMorgan. Your line is now open.
This is Jordan on for Tycho. So real quick it sounds like you still are seeing some backups from the cryopreserved inventory from some of your large customers. I am just wondering if you can speak to some of the lumpiness and orders and how we should think about that a modeling perspective going forward.
Yes, I think there is two areas where you might see that. If we’re talking about the iCell cardiomyocytes, what we believe happened is in the fourth quarter of last year our customers made large purchases of iCell cardiomyocytes. And because our products are cryopreserved that means they have time to use them. So that they have been working through some of our larger customers have been working through big inventory purchases. And as you can see what happened in the first quarter, there was a pretty significant reduction versus the first quarter of the prior year and in the second quarter we saw a pickup in most iCell cardiomyocytes sales.
So we think it’s just normal purchasing behavior on the part of our customers and that we expect that to improve over time. If you look at our other cell types, there has been dramatic increases. So the way we like to think about it is one of the reasons we’ve launched all these products is that some products can be -- any individual product can be lumpy but as we add more and more products it will smooth things out.
Also I think your weighted average iCell product ASP was up over 10%. Can you just talk about what drove the increase?
It’s mainly having to do with the type of contracts we’re signing now. We’re not having to discount as much to get larger purchases and therefore the ASP stems is going up. I think you also see that as the ASP goes up so has our gross margin. So again we’re seeing that the ASP increase, the gross margin increase as indicative that we’re not feeling tremendous competitive pressure at this time in any of our product types. But it also tells you that we have the opportunity to experiment with price if we choose to try to drive revenue.
Okay, and then last one from me. Can you just speak a little bit more on the significance of the patents you are awarded and maybe an update on your IP strategy going forward?
Yes, our IP strategy, well the three patents are important to the methodology we use for making stem cells. We start with the standard doctor’s office blood drop and we turn those -- and we reprogram them into iPSC lines. We believe this is the best way to collect sample for our business, for the iCell and MyCell parts of our business. And so what we're doing is following our strategy in this component of our business. Our strategy is number one, to ensure freedom to operate for our products and freedom of use of our products for our customers. That’s step one, we believe that’s accomplished for all of our product types.
The second aspect of it is to make this proprietary and create opportunities to -- that are more blocking in nature. And these three patents are start -- are part of the picket fence that make it more difficult for other companies to reprogram human blood. I think you will see that part of the strategy is trying to play out a little more over the coming months and we’re hoping to have more patent announcements in the future, the second aspect of it, the blocking aspect. We do have blocking patents now, but I think what you are starting to see the patents we filed earlier in the company are starting issue.
Thank you. And our next question comes from the line of Dan Leonard of Leerink. Your line is now open.
Dan Leonard - Leerink
So I was hoping if you could give us some update on your business development efforts. I think you alluded to the therapeutic opportunity in your prepared remarks. But maybe more color around that as well as your efforts to pursue additional opportunities in stem cell banking?
Okay. So there is a two-pronged focus to our current business development efforts. The first prong I would call is the cellular therapeutic prong, that’s the primary focus. And that’s occurring in negotiations and discussions with both cell therapy companies and we are also seeing traction in academia. We believe that we’re starting to see the early signs [Audio Gap] of myself and the business development team over the last year and we're hoping that if there is prudent in the near future.
The second prong of this business development effort is I’ve spent -- I was in Japan at the beginning of the quarter and there is a very high level of excitement about iPS technology and a level of interest at very senior levels in companies. I’ve met with very senior management at large Japanese companies in June and in fact between last Friday and the coming Friday, I will have three meetings in the United States. So we are focusing on Asia because in Japan there seems to be excitement around iPS in general and iPS therapeutically. So I would say on the therapeutic side, there is a two-pronged aspect.
On the stem cell banking side, we are continuing to work in two areas. One is this concept of the HLA bank. The idea that you can find super donors that match, that are of good matches to large numbers of people on a rejection panel type of analysis.
And so we are building one of those ourselves. We have five super donors which we believe covered depending upon how you do the matching the HLA matching paradigm. But somewhere between 15% and 20% of the North American population and we should have that bank; we are working on that bank and should have it done in the near future.
And we are using that as a demonstration bank because we think that other companies and countries will be interested in this approach of therapeutics.
The second prong of that is we’re also in discussions with multiple parties about creating stem cell banks basically for private individuals, with core blood banking firms and we are also having that discussion with some private, not for profit institutions.
So there is the therapeutic which is focused on discussions with company’s academics and in Japan and then there is the stem cell banking which is we’re building our own bank and in discussions with banking companies and public and the not for profits that are interested in it.
Dan Leonard - Leerink
Got it and then my follow up question, have you seen any disruption in customer demand from the M&A chatter and large pharma?
Every time it happens we do have a little bit of freeze up what I call with the customers. There is two things that happen in big pharma that can affect our quarterly revenue. One is M&A discussions. If one of our large customers gets into M&A discussions with another large company what happens is the R&D departments start discussing the probability of that and because these kind of mergers usually end up in headcount reduction in R&D. So they all start worrying about their jobs. So it does tend to slow acquisition.
The second thing that can happen to us and actually happened in the cardiomyocyte area in the first quarter is that a major customer there will be a decision at corporate to close the unit. Now just close the whole area of discovery and that happened in one of our large customers in the first quarter around cardiomyocytes, one of our large purchases in therapeutic discovery of cardiomyocyte disclose their group.
So we live in the ebb and flow and tide of what happens in large pharma. But I think you should also look at what happened in a number of customers. Our customer base grew pretty dramatically over the quarter; I think it went from 136 to 179 year-over-year trailing 12 months. And what we’re starting to see is more traction in biotech. And we think that’s a good sign because biotech tends not to have -- I don’t know how to say it, the lumpiness of headcount reduction that happens in big pharma.
So we’re seeing because we were already in 19 of the 20 top pharma we can’t really add the one. What we’re seeing is the growth in our customer base in the biotech area and in academics.
Dan Leonard - Leerink
I am sorry, that example you gave the decision that one of your large customers to close a unit, that was related to M&A or that was unrelated to M&A?
That one was unrelated, they just decided that they weren’t going to do cardiac discovery anymore. It’s their asset allocation in their discovery program. So they won’t do cardiac anymore. The good news is the person moves to neurons. So the person ahead of that group didn’t get fired in up neurons. So we think it will pick up there, its again why we're -- it’s another example of why diversification is important.
Thank you. Our next question comes from the line of Doug Schenkel of Cowen and Company. Your line is now open.
This is Ryan in for Doug. Can you talk about progression of the long-term supply agreement with Nestlé and how does Nestlé revenue compare with revenue from top 10 customers? What state of adoption is Nestlé in and how is interest for your products and applied markets progressing announcing this agreement?
Good question. Unfortunately we don’t disclose what the Nestlé account under our agreement with them, so I can’t go into detail. I can say that we are seeing more traction in this area and more interest. The one that we’re particularly excited about and there is a big European RFA around is chemical tox, in other words there is, I don’t know how many chemicals in commerce, I forget the data. But there is a very large number and most of them haven’t been tested for safety. Particularly in Europe this is becoming an important point that the European governments want the chemistry and commerce to be tested for safety on humans or just safety in general.
And the only way to do it currently is to do animal studies which are extremely expensive. So there is a recent initiative in the European Union to look for non-animal model systems. And we are busily looking at how to become involved in that process. So I think where you’ll see the next big uptick, we have Nestlé with food but I think the next area of interest will be the safety if chemicals and commerce from an environmental impact.
And that ties very nicely to our strength of our products in the toxicology market and to talk Jim Thomson gave at the Society of Toxicology in the first quarter of this year and precisely this topic.
And then on SG&A, so what is the focus of the sales and marketing team in terms of end market or applications as we continue to build out the sales force. How much focus is on expanding sales to existing customers whereas addition of new customer and should we expect that expense remain relatively stable or to continue to increase over the balance of the year?
Let’s start with what we have been focused on, because I think this is important. Though it’s growing rapidly on a percentage basis it’s still not a giant number. So we to focus our sales and marketing team very consciously every quarter. And really what they got focused on in the last quarter, because we look at dollars expended in sales and marketing in some ways as dollars we’re investing in our brand equity and in the products.
So on the first quarter we spent a lot of our sales and marketing effort on the neuron products. We did a DopaNeuron road show to highlight all our neuronal products, where our sales and marketing team visited, did 30 presentations plus webinars and things like that, the 30 person presentations around the world, calling on large clients and primarily in Europe, U.S. and in Japan, in Asia.
So I think you also saw added excitement in those products. So we pick, we had to pick very carefully how we apply that theme. We don’t give projections on the SG&A increase but it is part of our plan, our thinking to strengthen that team because the other ones that build our brand equity and drive our revenues.
And then just one last one on the collaborations, partnerships and other revenue. So it decreased sequentially from Q1. You mentioned in the Q that there was decreased revenue from the Lilly agreement as the contract neared the expiration. Can you provide some more color on what happened in the quarter and were there any other factors that led to the sequential decline?
In Lilly revenue, which question, repeat --
Just in overall collaborations, partnerships and other revenue.
Adding an increase? Tim's going to take a look but there was an increase of -- I believe it’s 40 something percent.
Year-over-year increase, I just meant from Q1 to Q2.
From Q1 to Q2, it was the Lilly just as it came to -- its nearing in by the end of this year is when the Lilly agreement is expected to end. So the Lilly revenue is a little bit less than the second quarter than in the first quarter.
Yes, the main item in the collaboration revenue, that I just want to make clear about is the way CIRM works, we collect payments every quarter. But this last quarter, we did not recognize $844,000 of that payment and that has to do with the fact that because we’re not receiving samples, we're not recognizing the revenue. That revenue is being deferred. So when I looked at the -- when I personally look at the quarter and think about how the business is doing and how we are doing sales and marketing wise. I know -- I think of that as unrecognized revenue but a sales win for us; and that we'll recognize the revenue later. So I think a lot of what’s happened in our collaboration revenue numbers has to do with that deferral of income under our revenue recognition policy.
Thank you. And I am showing no further questions at this time. I’d like to turn the call back over to Mr. Tim Daley for any closing remarks
Thank you, Nicole. Thank you all for joining us today. And I will turn it to Bob for any closing.
Thank you for joining us and we appreciate you being with us and we look forward to interacting with everyone in the future.
Ladies and gentlemen, thank you for participating in today’s conference. This does conclude today’s program and you may all disconnect. Have a great day everyone.
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