SciClone Pharmaceuticals, Inc. Q4 2007 Earnings Call Transcript

SciClone Pharmaceuticals, Inc.(NASDAQ:SCLN)

Q4 2007 Earnings Call

March 13, 2008 11:00 am ET

Executives

Friedhelm Blobel, Ph.D. - President and Chief Executive Officer

Richard A. Waldron - Executive Vice President and Chief Financial Officer

Israel Rios, M.D. - Chief Medical Officer

Analysts

Hamed Khorsand-BWS Financial.

Alan Leong-Biotech Stock Research

Rand Patel (sp)-Alpha Investments (sp).

Operator

Ladies and gentlemen good morning. At this time I'd like to welcome everyone to the SciClone Pharmaceuticals Fourth Quarter and Year End Conference Call. [Operator Instructions] Today's conference call is being recorded and now I would like to turn the call over to Dr. Friedhelm Blobel, President and Chief Executive Officer. Please go ahead, sir.

Friedhelm Blobel

Thank you, Sean. Good morning and thank you for joining us today on our Fourth Quarter and Year End 2007 Conference Call. Today we have included slides in our conference call. It can be accessed through the IR section of our website at www.SciClone.com. Before I begin, I would like to briefly remind you that we'll be making forward-looking statements during this call. These statements are subject to risk factors which include but are not limited to those detailed in our SEC filings.

Looking back at 2007 we achieved many significant milestones as we continue to execute our strategy, focused on growing our two main assets. The first is our late stage biotech business targeting the US and Europe pharmaceutical markets. The second is our valuable revenue and cash generator, SciClone China. We are executing our strategy with a goal of developing late stage products for viral infectious diseases and head for the US and European pharmaceutical markets and building SciClone China's infrastructure and capabilities to capture the opportunities in this rapidly growing pharmaceutical market. Looking forward we are gaining important momentum as we enter 2008, a year in which we expect to generate essential cash flow from SciClone China, report data from both our large Phase 3 and to prove of concept Phase 2 clinical trials for HDV.

I would like to take a minute to review the most important recent highlights for SciClone. Starting with our top line performance our strong revenue growth continues to generate valuable cash flow to fund the late stage development of all products for the US and European pharmaceutical markets. We increased revenue with 18% for the fourth quarter and 14% for the full year 2007 on strong demand for our lead product Zadaxin. Over 90% of our Zadaxin sales are to China where we continue to expand and leverage SciClone China's capabilities in this rapidly growing pharmaceutical market. Second, we are making great strides in the clinical development of our pipeline products. We recently reported promising interim blinded data from the nearly completed Phase 3 triple therapy hepatitis C trial for thymalfasin and look forward to un-blinding final results in the third quarter of this year.

Third, we began a Phase 2 pancreatic cancer clinical trial for RP101, a nucleoside analog which may act to enhance the therapeutic effect of chemotherapy. We also receive all from drug designation for RP101 from the US FDA. And finally we continue our outreach with investors and analysts by presenting our corporate strategy in New York at the BIO CEO and Investor Conference in February and the Susquehanna International Group Healthcare Conference in March. I will give more detail regarding each of these achievements later in the call but first I'd like to turn the call over to Rick Waldron, our Executive Vice President and Chief Financial Officer for a review of our fourth quarter and full year 2007 financials. Rick?

Richard Waldron

Thank you, Friedhelm. We are pleased with our solid financial results for the fourth quarter and full year 2007 and look forward to strong revenue growth for 2008. Our consolidated results for the fourth quarter of 2007 which you can see on Slide #5 if you're viewing the slide pack on the website; we're driven by an 18% increase in revenues to $10 million. For the full year revenues grew 14% to $37 million which exceeded our previous guidance of 35 to $36 million. This growth was fueled by strong demand for Zadaxin in China, a growing pharmaceutical market which accounts for over 90% of our Zadaxin sales.

As we continue to invest in the development of our late stage products, our net loss for the fourth quarter 2007 was $3.6 million, or $0.08 per share, compared to $1.5 million or $0.03 per share for the prior year.

For the full year 2007, net loss was $9.9 million, or $0.22 per share, which is less then our previous guidance of $13 million, or $0.28 per share.

For 2006 net income was $727,000, or $0.02 per share, which included an $8 million settlement received in April of 2006.

Our cash position totaled $35.3 million at December 31, 2007 compared with $37.5 million at September 30. This figure is considerably higher then our guidance of $26 million for the year end. Primarily due to lower then planned fourth quarter R&D expenses resulting from our decision to review interim data from the HCV clinical trial before proceeding with extensive clinical trial development work for thymalfasin for the malignant melanoma indication.

The year end cash position was also augmented by strong accounts receivable collection from China in the fourth quarter.

I would like to note that both R&D expenses and net loss for 2007 were lower due to the January 2008 initiation of the RP101 trial and review of the thymalfasin program, which prompted us to review the Phase 3 results.

Beginning with 2008, we will report quarterly financial information for SciClone China independently, as well as SciClone Corporate on a consolidated basis. We believe that by reporting specific financial information for SciClone China we will be able to highlight and count by the value of this unique asset.

Looking forward into 2008, we continue to expect strong growth in our consolidated revenues as well as increase cash flow from sales of thymalfasin, primarily to China, which helps to fund our increasing efforts in clinical development.

On a consolidated basis, we expect revenues to increase between 14 to 19% to reach between $42 and $44 million in 2008. For R&D expenses we forecast approximately $27 million for 2008 of which roughly $12 million relate to our ongoing Phase 2 pancreatic cancer trial for RP101. We expect our 2008 net loss to be between 17 and $19 million or between $0.38 and $0.41 per share and forecast a cash position of 10 million by year-end 2008. At this point we have significant control over the amount and sources of future funding. Going into 2009 the expenditures required to complete the RP101 Phase 2 clinical trial will be considerably less than what is planned to be spent on the trial in 2008.

Depending on the results of the HCV Phase 3 trial we and Sigma-Tau may partner the thymalfasin opportunity with a pharmaceutical partner with global reach thereby alleviating us of related future clinical trial expenses while providing us significant upside commercial prospects.

Our operation in China generates considerable operating cash flow which itself may be leveraged as an alternative funding source. In short we believe that our current cash position, our China operation cash flow and product partnering prospects provide us with the financial capability and funding flexibility to execute our business strategy in 2008 and beyond. Now I will turn the call back over to Friedhelm.

Friedhelm Blobel

Thank you, Rick. Our strategy of developing promising late-stage products for the major US and European pharmaceutical market while expanding the capabilities of sites from China is paying off as we are close to achieving several clinical and corporate milestones. I would like to add to Rick's comments on the growth of SciClone, China.

To continue these growth trends in 2008 and beyond we now have over 140 dedicated sales representatives in China, and are expanding our reach beyond the top 500 hospitals into second and third tier cities to continue our double-digit increase in sales for 2008 also.

Looking beyond our successful established sales and marketing capability, our goal for the future remains to build SciClone, China into a fully integrated pharmaceutical company. To broaden our product portfolio we are preparing to launch our second product DCB in China in the second half of this year, and are actively screening additional product with the goal of in-licensing one additional product in 2008.

We are also preparing to file a clinical trial application or CTA to conduct an additional clinical trial for ST07 in China as we continue to build our clinical and regulatory capabilities in this market.

In addition to our valuable asset SciClone, China, we continue to develop our pipeline of late-stage products targeting the US and European pharmaceutical markets.

Moving to Slide 8 I'd like to begin with our lead product candidate thymalfasin. We are excited to report last month promising interim blinded data from a nearly completed Phase 3 hepatitis C trial. This 563 patient trial has a well accepted rigorous protocol to evaluate the triple therapy of thymalfasin, pegylated interferon and ribavirin for the treatment of patients infected with the hepatitis C virus, who have not responded to prior therapy or standard of care, which is pegylated interferon and ribavirin also known are these patients as non responders.

Moving to Slide Nine, as you know the hepatitis C market is a large one with a growing patient population. Currently, there are over 5 million chronically infected hepatitis C carriers in the US and Europe. Of the 160,000 new patients in these markets who try therapy each year, half fail therapy or the current standard of care, which is pegylated interferon and combination of ribavirin. This growing pool of non responder patients has few therapeutic options and thymalfasin is one of the only products in development that specifically targets this large and growing segment of non responder patients. Today, we estimate that this market is already 500,000 patients and it is growing by at least 80,000 non responder patients each year. By our calculations, this large unmet medical need represents a $1 billion plus market opportunity in the US and Europe and thymalfasin can be key components in therapeutic treatment that addresses non responder markets.

For Slide Ten I'd like to spend a minute talking about why we are excited about the interim blinded data from this newly completed Phase 3, from this nearly completed Phase 3 hepatitis C trial. The interim blinded results show that after 48 weeks of therapy, 171 of the 553 patients enrolled in the trial showed and end of treatment response or ETR. Of these 171 patients, 150 have already completed the trial and 54 of those achieved a sustained biologic response or SBR at week 72. This is important because achieving a SBR is considered a cure for hepatitis C virus and is also the primary end point of this Phase 3 trial. Looking at the remaining 21 patients, who showed an ETR at week 48, 19 of those have reached the first full up period at week 60. And of these, 12 have tested negative for HCBRNA and two have not yet reached week 60.

Also these are interim blinded results and, therefore, we do not know which patients achieving SBR bearing the treatment versus control group, we are very encouraged by the trends from this

Looking at Slide 11, by our calculations, the 54ser’s in 12 patients showing negative HTB RNA are 60. We could potentially have 65, or about 12% of the total patients enrolled in the trial, when we complete the trial this summer.

Since half of all our patients are randomized in the treatment arm, and the other half are randomized in the control arm, that percentage would be about 23%, if all of the SERs that we found were in the treatment arm. This obviously is not realistic, but one could assume that we've seen our trial something similar to what historical controls show. With those being between 3 and 8%, we estimate the range of possible results for the treatment arm could be between 15 and 20%.

We've shown in Slide 12 a range of potential outcomes for both the treatment and control group. In view of how treatment success in HTB evolved, frequently in increments of less than 10% of TR improvement, the final results with thymalfasin have the potential to offer an important therapeutic advance for Hepatitis C, non-responsive patient.

Turning to Slides 13, if the final results of the current European Phase 3 trial confirm these SER rates, we plan to use this data, together with this data from a small triple therapy pilot study and the results from the previous studies, which were conducted using duo therapy, without the use of ribavirin, which showed a positive trend, or so they did not reach statistical significance, as the basis for a regulatory filing as early as in the first quarter of 2009.

This significant data will be complemented with the safety information from over 1,000 patients in the US and Europe, and over 50,000 patients treated in China. Alternatively, we may choose to initiate a second Phase 3 triple therapy trial in the first quarter of 2009, should an additional regulatory trial be necessary for FDA and EMEA approval.

In addition to thymalfasin's development as an HTV therapeutic, we continue to evaluate thymalfasin for malignant melanoma indication. Last year, we reported results showing that thymalfasin met its primary endpoint in a large Phase 2 malignant melanoma trial.

As this trial was completed, our Melanoma Advisory Board recommended we request a special protocol assessment, or SPA, from the FDA based on the favorable Phase 2 result. We have looked at the optimal design of a Phase 3 malignant melanoma trial, and a market potential for melanoma therapeutics.

Considering we are indiscernible] months away from a Phase 3 Hepatitis C result, we have decided to wait until these results are confirmed before finalizing our plans for a Phase 3 trial for thymalfasin in melanoma.

Turning to our next development candidate SCV-07. As shown on Slide 15, for those who are watching that we are close to completing a Phase 2 proof of concept study and look forward to reporting data at mid year. After completing this trial we plan to file at CTA in China in the second half of this year and conduct an additional trial for SCV-07 for SciClone China leveraging our capabilities and the cost effective infrastructure of conducting clinical trials in this market.

Our third development candidate RP101, which we are currently developing for the treatment of pancreatic cancer was granted oral drug designation by the FDA, which allows us a seven-year period of market exclusivity should RP101 be approved.

We believe RP101 a novel nucleocyte analog which may act to enhance therapeutic affect of chemotherapy has the potential to make a substantial difference in the life of people with pancreatic cancer. We are pleased that we have dosed the first patient in a Phase 2 trial in pancreatic cancer. The RP101 clinical trial is a multi-sensor, randomized and placebo-controlled one and we plan to enroll a total of 153 pancreatic cancer patients by the first half of next year.

The goal of this trial is to evaluate RP101 as an additive therapy to cisplatin the standard of care in treating patients diagnosed with pancreatic cancer, one of the most deadly forms of cancer. There is a significant unmet medical need for pancreatic cancer patients as their overall median survival is currently only four to six months.

Patients with advanced stages of pancreatic cancer are typically treated with chemotherapeutic agents such as cisplatin alone or with other additive therapeutics with minimal increases in overall survival. We are encouraged by RP101's early clinical data showing the potential to increase patient survival and we estimate the market potential for this compound as a cancer therapeutic could reach $500 million.

As you can see it's a busy and productive time for SciClone. Moving forward we expect to report results from the nearly completed Phase 3 Hepatitis C triple therapy trial in the third quarter of 2008. Reported results from our Phase 2 Hepatitis C trial for SCV-07 in the first half of '08 and fully enroll our Phase 2 pancreatic cancer trial for RP101 in the first half of 2009.

For SciClone China we plan to grow SciClone China's revenues by a double-digit rate for 2008, launch DCBs in China the second half of 2008 , file a TTA for SCV-07 in the second half of this year and in license some additional products for China during the year. We look forward to keeping your informed as we reach this milestone. We strive, the value of our business and advance as close to our corporate goal targeting US, European and Chinese pharmaceutical markets. At this time we would like to open the call for questions. Israel Rios, our Chief Medical Officer has joined us for the Q&A portion of this call. In the interest of time and to ensure that everyone has an opportunity to participate, please limit your questions to one or two at most. If you have any additional questions you may re-queue. Sean?

Question-and-Answer Session

Operator

(Operator Instructions) we’ll go first to Hamed Khorsand with BWS Financial.

Hamed Khorsand-BWS Financial

Good morning. Thanks for taking my call. Just for clarification have you received approval for DC Bead?

Friedhelm Blobel

We have not received marketing approval for DC Bead but the Chinese SFDA has started to be back in business and we expect that we will be able to launch DC BeadTM in China in the second half of this year.

Hamed Khorsand-BWS Financial

Okay. Now what kind of sales are you expecting to occur? Are you expecting the material to how you've been generating revenues in the past?

Friedhelm Blobel

Well we have not announced details sales projections for DC Bead but obviously we in licensed this product because we think it is an extremely good fit to the Chinese market and that there is a very substantial opportunity.

Hamed Khorsand-BWS Financial

Okay.

Richard Waldron

If we could remind other people on the call; the DC Bead is a product which is targeted specifically for the liver cancer market. Israel, do you want to mention anything about that?

Israel Rios

Yes. Well, DC Bead is both a device because it's an invalid device but it also provides regional chemotherapy because it's coveted with Dr. Rufus and this is specifically used mostly in China for patients who have hepatocellular carcinoma and undergoing select disHepatic artery embolisation to diminish their tumor burden. It as you know the hepatocellular carcinoma is one of the largest causes of solid tumors in China and because of our, because of the great association with hepatitis B, for which the vaccine is approved, it naturally fits our needs and market place in China.

Hamed Khorsand-BWS Financial

Alright, thank you.

Israel Rios

Thanks, Hamed.

Operator

We'll take our next question from Alan Leong with Biotech Stock Research

Alan Leong with Biotech Stock Research

Oh thanks for taking my questions. I don't know if you're able to give this, do you have any color on the un-blinded patient characteristics of the ones that you're able to give us another key at...

Friedhelm Blobel

Are you talking about hepatitis C Phase 3 trial?

Alan Leong with Biotech Stock Research

Yes, yes

Richard Waldron

Yes, yes let me, you know this study is the study that was specifically designed to identify patient's who had been previously treated with pegylated interferon and ribavirin and who failed to respond. They were truly non-responders in the definition that is now accepted. These patients once selected in this fashion were than randomized one to one to either receive ribavirin and pegylated interferon in a placebo or to receive pegylated interferon, ribavirin and thymalfasin, which is the standard of care. Re treatment after failure is the standard of care for patient's who have not responded. Once randomized and patient's are treated for the standard time of 48 weeks and followed up as we described until week 72. So we believe this is the largest and randomized trial ever conducted in patient's who have not previously responded. And so the patient's have been very clearly identified in the study and as we have previously mentioned, we expect to un-blind the data in the third quarter of this year.

Alan Leong with Biotech Stock Research

Is that predominantly genotype 1, patient?

Richard Waldron

Yes and they represent, you know, the demographics of the US and Europe, which is about 75% genotype 1.

Alan Leong with Biotech Stock Research

So you're getting a lot of people who are multiple non-responders then?

Israel Rios

These are patient's who are truly non-responders; they are not re- lapsers. As you know probably the biology between re-lapsers and responders is different. These are patient's who have failed to respond completely or have had a partial response to their initial course of pegylated interferon and ribavirin. That's why we know from historical comparisons that the SVR rate is very low, in the single digit.

Alan Leong with Biotech Stock Research

Yes, just one other question. Can you update us with regard to the SSDA in China about what the atmosphere is around it and I'm just assuming, cause you're giving us milestone, that time has healed the former situation somewhat.

Friedhelm Blobel

Well obviously time helps everywhere and also in China and the agency is really getting back to focus on really thinking about product and among others approving product and during last year for a long time they were kind of busy and focused on themselves to sort their internal problems. Now, very recently, the FDA was acknowledged that they will become part of the Minister of Health but we don not expect that this would have, in terms, of approval process or similar things as substantial impact but we certainly will watch this situation carefully.

Alan Leong with Biotech Stock Research

Okay. Thanks a lot.

Operator

(Operator Instructions) we will go next to Rand Patel of Alpha Investments.

Rand Patel (sp)-Alpha Investments (sp)

Uh, yes hello, thank you for taking my call. Congratulations on your wonderful progress on the Zadaxin ACV trials. Did I understand Rich to say that there is a possibility that you may be looking to have a pharmaceutical partner to further develop this Zadaxin for this application?

Israel Rios

That certainly is a prospect that we and Sigmatel are looking at. As you probable understand the Hepatitis C market is very much dominated by large pharmaceutical companies and for very good reason is that it's a very big market and a very large and focused sales force is most effective in this rather competitive environment here. So, we are looking that as a possibility between Sigmatel and ourselves. As you know Sigmatel has European rights to develop the product, we have all other rights outside of Europe as far as developing the product. So, Sigmatel and our selves are going to be looking at the un-blinded data in the third quarter and be making some decisions depending upon the result of costs what is the optimal path towards the developing and commercializing this product for both parties.

Friedhelm Blobel

Let me add that in this world where IP protection is so crucial that also thymalfasin does not have a position of measure anymore, but we do have IP protection until 2021 for triple therapy, the combination of thymalfasin in this a peculated interferon plus ribavirin. So, that will be allowing a quite substantial period to market this under IP protection should we be able to move forward and get approval. That's a, excuse me, go ahead.

Rand Patel (sp)-Alpha Investments (sp)

I was going to ask Israel to perhaps comment on that how thymalfasin would be used in combination with the standard of care, how he would view the receptivity of the physician market for this kind of a therapy?

Israel Rios

Well, I mean, clearly if we obtain approval and show, demonstrate efficacy in this most difficult to treat patient population of non-responders, it would be apparent to me that both physicians and patients would also choose to use this and possibly patients who relapse as well because we know that, at least as Friedhelm mentioned, half of overall patients, naive patients, were initially treated with pegylated interferon and ribavirin don't respond. This includes both truly non-responders and re-lapsers, and then there are a substantial number of patients who we do, would respond and might even obtain cure but fail to adhere to the regimen of interferon and ribavirin for 48 weeks because of the side effects and toxicity there associated with this regimen. So the demands for the unmet medical need for both non-responders and re-lapsers is huge based on the both because of the toxicity issues and true non-response rate, so in addition thymalfasin has been demonstrated to be extremely safe. It doesn't have any of the side effects associated with interferon. It doesn't produce neutropenia, depression, fever, and so on, so we believe that because of its extremely well tolerated and safety profile, as well as the efficacy, has proven in this trial, it will enjoy broad use beyond the specific non-responder population.

Rand Patel (sp)-Alpha Investments (sp)

That's really exciting news. Switching over to the melanoma application of Zadaxin, is there any inclination on your part to also go ahead with the pharmaceutical department as well as that indication is concerned?

Friedhelm Blobel

We certainly see this as a possibility, and although it's possible to handle at markets two indications for the same molecule through two channels, but there is certainly also a strong rational to keep it in the end of one party. That simplifies a number of things so, we are clearly open to all alternatives which present its self, and we will be driven by what are the most attractive terms and who are the strongest partners. Who can really help to maximize the value of this product as well as the time lines.

Rand Patel (sp)-Alpha Investments (sp)

Well if I understand you right, you're talking about one pharmaceutical partner for both of the indications, both the hepatitis C as well as for melanoma, is what you have in mind?

Friedhelm Blobel

That's clearly a possibility, but we don't exclude at this point that we may also partner with the two parties or that the go-ahead for Sigma-Tau for part or all of this.

Rand Patel (sp)-Alpha Investments (sp)

Right, sound a bit exciting. The reason I say that is your melanoma data seem to really indicate that Zadaxin, you have to go through, was quite superior to existing therapies.

Richard Waldron

Well, yes, obviously we share that thought. As you know we reported at ASCO last year the results of the largest trial ever done in Phase 2 for patients with stage 4 melanoma. We have then subsequently met with FDA and we were encouraged to submit a special protocol assessment, which is in the midst of the final preparation. So we have extensively reviewed these data with outside experts in melanoma and the excitement is shared, as you mentioned, so we are very enthusiastic about the prospects of Simacin in stage 4 melanoma as well.

Rand Patel (sp)-Alpha Investments (sp)

Great progress again. And thank you. I think really, I think you folks are onto some exciting things happening here. That's good. Thank you.

Richard Waldron

Thank you, Rand.

Rand Patel (sp)-Alpha Investments (sp)

Thank you.

Operator

And we'll go to our next question now; it's a follow-up from Hamed Khorsand.

Hamed Khorsand of BWS Financial

Just had two more questions, on the malignant melanoma trial that you said that you're waiting for the HCV trial before you can serve initiating the Phase 3, is any of that Phase 3 cost included in your R&D expense for '08?

Richard Waldron

The, there is a due element costs which are still being pursued for melanoma because clearly we're going on that. What we have not done is initiated the dosing of patients for the melanoma clinical trial as yet. That obviously carry on to a very set and very, the extensive and expensive part of the process. So there are expenses though which are being incurred as we keep the progress being developed as far as talking to doctors, talking about sites, lining those things up, everything being prepared for still a Phase 3 clinical trial for melanoma, and those costs are included in the projection for and guidance figures for 2008.

Hamed Khorsand of BWS Financial

So how quickly would you be able to begin dosing if you decide to go ahead?

Israel Rios

Well right now we're anticipating that if we chose to do so we would begin dosing around October, this fall. We are very advanced in the planning stages. We have identified sites. We have an advisory board. We have initiated all the registration of prophecies in Europe as well as the other countries where we project. We have a planned large study already that would involve the sites around the world where melanoma is predominant. So we are in the very late stages of the development process and as Rick pointed out, we have continued our efforts moving forward to make sure that physician’s have remained motivated and that everybody is aware that we intend to move forward with this.

Friedhelm Blobel

Let me add to that, that we have mentioned that we are, and very, very much encouraged also from the FDA in the end of Phase 2 meeting, to prepare a special protocol assessment, and that's underway and, obviously, a result of that we'll finally determine the exact design of the trial.

Hamed Khorsand of BWS Financial

Okay. And then my second question is related to, in China there's been some press and in Hong Kong specifically, about a severe flu season, has that translated into Zadaxin sales increasing for you guys?

Friedhelm Blobel

No, we don't think that this is, our sales, the results are related to that. We think that the nice increase which we are seeing and the, if you like, so the even acceleration of the increase was 18% in the fourth quarter versus the 14 of the full year. It's driven very much by the education efforts and the marketing and sales efforts and we are constantly expanding the sales organization and moving into additional cities, which we call the top, the Tier 2 and Tier 3 cities, which in China still are cities with 1 million inhabitants. And with the economic development continuing strongly, obviously also in these cities, there are more and more people who can afford to pay for Zadaxin, which is seen as the God sender. It's just a bit too expensive for a number of people, but the patients we reach is clearly increasing and we think it has to do a lot with our expanded sales organization.

Hamed Khorsand of BWS Financial

Okay, alright, thank you and good luck.

Friedhelm Blobel

Thank you.

Operator

(Operator Instructions) and we have no further questions at this time.

Friedhelm Blobel

Well thank you for participating in our quarterly conference call. Please feel free to contact us directly should you have any further questions. Thank you.

Operator

And ladies and gentlemen, this does conclude today’s conference. Thank you for your participation, you may disconnect at this time.

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