INSYS Therapeutics' (INSY) CEO Saeed Motahari on Q4 2017 Results - Earnings Call Transcript

INSYS Therapeutics, Inc. (INSY) Q4 2017 Earnings Conference Call March 8, 2018 5:00 PM ET

Executives

Jacqueline Marcus - IR

Saeed Motahari - President, CEO & Director

Andrew Long - CFO

Steve Sherman - SVP, Regulatory Affairs

Analysts

David Steinberg - Jefferies LLC

Ashley Ryu - RBC Capital Markets

David Amsellem - Piper Jaffray Companies

Operator

Good day, ladies and gentlemen, and welcome to the Insys Therapeutics Fourth Quarter and Full Year 2017 Results Conference Call. [Operator Instructions]. And as a reminder, this conference is being recorded.

I would now turn the call over to Jackie Marcus at the Alpha IR Group. Please go ahead, Jackie.

Jacqueline Marcus

Thank you, Sandra. Welcome to the Insys Therapeutics Fourth Quarter and Full Year 2017 Results Conference Call. With me on today's call are President and Chief Executive Officer, Saeed Motahari; Chief Financial Officer, Andrew Long, and Senior Vice President of Regulatory Affairs, Steve Sherman. Earlier today, the company issued a press release detailing financial results for the fourth quarter ended December 31, 2017. We also published a set of supplemental slides to accompany the remarks made on today's call. You can access both the release and the slides through the Investors section of the company's website, where you can also access a webcast replay of this call later today.

Before we continue, I would like to remind everyone that all statements made on today's conference call that express a belief, expectation, projection, forecast, anticipation or intent regarding future events and the company's future performance are considered forward-looking statements as defined by the Private Securities Litigation Reform Act. These forward-looking statements are based on information available to company management as of today and involve risks and uncertainties, including those noted in today's press release and the company's filings with the SEC. Such forward-looking statements are not guarantees of future performance. Actual results may differ materially from those projected in the forward-looking statements. Insys Therapeutics specifically disclaims any intent or obligation to update these forward-looking statements except as required by law. In addition to reporting all financial information required in accordance with Generally Accepted Accounting Principles, the company is also reporting adjusted EBITDA, adjusted net income and adjusted net income per diluted share, which are non-GAAP financial measures.

Since adjusted EBITDA, adjusted net income and adjusted net income per diluted share are not GAAP financial measures, they should not be used in isolation or as a substitute for consolidated statements of comprehensive income or loss and cash flow data prepared in accordance with GAAP. In addition, the company's definitions of adjusted EBITDA, adjusted net income and adjusted net income per diluted share may not be comparable to similarly titled non-GAAP financial measures reported by other companies. For a full reconciliation of adjusted EBITDA and adjusted net income to GAAP net income, please see the attachments to the earnings release.

And with that, I'll turn the call over to the company's President and Chief Executive Officer, Saeed Motahari. Saeed?

Saeed Motahari

Thank you, Jackie, and thanks to everyone on the line for joining our fourth quarter 2017 earnings call. I would like to begin with highlights of the previous quarter and year, and then our CFO, Andy Long, will provide an overview of our financial results. I will conclude an update on our strategic initiatives and key priorities. And after that, we will take your questions.

Since I joined Insys last April, we have established a foundation for the company's transformation by referring our vision, significantly augmenting our leadership and organizational capabilities and taking aggressive actions to change how we run our business. Throughout this process, we have become a more open, transparent, accountable and compliant organization. These changes were critical in laying the groundwork to help with executing our new strategic directions and to try and form Insys into a leader in both synthetically manufactured pharmaceutical cannabinoids and novel drug delivering systems to address serious unmet medical needs. While our accomplishments today are noteworthy, I fully recognize there is more to be done, and I look forward to updating you on our progress in the coming quarters.

As I reflect on the past 10 months, I see our team's collective accomplishments have allowed us to execute against our deep and well differentiated pipeline. In the fourth quarter, we made significant strides in advancing our pipelines, including 5 major milestones. The initiated Phase II clinical trial of our CBD Oral Solution for medically refractory childhood absence epilepsy. We started a proof of concept study for epinephrine nasal spray for anaphylactic reaction. We received fast track designation from the FDA for our CBD Oral Solution for prader willi syndrome. And we completed a PK study for our naloxone nasal spray for opioid overdose.

Also, as mentioned on our last call, the FDA accepted our NDA for buprenorphine sublingual spray for moderate to severe tooth pain. Reinforcing our commitment to file 1 NDA per year through 2021.

The standard of our pipeline is also reflected in the talent we have added to the company over the last several months. In 2017, we not only revamped our commercial organization, we also continued to solidify and incentive both our senior leadership and board of directors with the top talent. Most recently, we hired Carol L. Summersgill, as the Vice President of Human Resources and Dr. Ahmed Elkashef, as our new Vice President of Clinical Development. Notably, Dr. Elkashef has spent more than a decade of study year-to-year with NIDA, the National Institute on Drug Abuse. Both Carol and Ahmed bring tremendous experience to Insys and will be strong contributors to our organization.

Additionally, our board appointed Vaseem Mahboob as a new director in January. Vaseem brings a strong financial background with more than 20 years of experience in various corporate financial roles across the healthcare sector, including GE Healthcare and Endologic. I'm delighted to have him join our board.

This quarter, we also continued our efforts to stabilize SUBSYS and gross SYNDROS, our two marketed products, and while I'm not satisfied with our short-term results with either product, there remain opportunities to better as we move forward.

I will update you on those efforts in the few minutes. But first, I would like to turn the call over to Andy who will talk through our financial performance during the fourth quarter. Andy?

Andrew Long

Thank you, Saeed, and good afternoon, everyone. I'll begin with a review of our fourth quarter financial results and close with some high-level comments regarding our 2018 financial picture. Slide 4 of our company presentation provides a summary of our key financial highlights for both fourth quarter and full year 2017. Starting at the top of the P&L, we reported gross revenue of $46.1 million in the quarter, which resulted in net revenue of $31.5 million. This represents a 43% decline in net revenue from the prior-year period, which remains in line with the overall TIRF market, which experienced a 41% decline in 2017.

Sequentially, fourth quarter versus third quarter, net revenue rose by $0.8 million, up 3%. Our fourth quarter revenue was comprised of $30.7 million from SUBSYS and $0.8 million from SYNDROS. Our Q4 gross-to-net was 68.3%, a sequential improvement from our Q3 gross-to-net of 62.7%. As anticipated, this increase in gross-to-net quarter-over-quarter resulted from the reduction in the amount of expired product that was returned from our channel partners. While I can't say that this issue is completely behind us, we've continued to take significant steps to minimize future product expiration issues in the long run.

In Q4, we reported gross margin of 85.4%, up from 82.1% in the year-ago period and up significantly from third quarter's gross margin of 75.6%. Our sequential gross margin increase was driven by the improvement in our gross to net, which I just discussed, coupled with the reduction in the amount of expired inventory in our own warehouses, as we continue to make improvements in our supply chain operations.

Moving to operating expenses. Our overall total operating expense in Q4, excluding legal settlements, was $43.2 million, which is down slightly year-over-year and lower than Q3 by about $5 million. Breaking down the components of our Q4 operating expenses. Sales and marketing expense was $7.1 million, down by $6.4 million from the prior-year period, while our General and Administrative expense of $19.7 million was up $3.9 million year-over-year. These variances were primarily the result of a reclassification of approximately $4.5 million of costs, previously booked as marketing expense, that we believe are more appropriately treated as General and Administrative expenses, going forward.

R&D expense of $16.4 million increased $0.9 million compared to Q4 of last year, as we continued to invest in our robust pipeline of new products, which Saeed will discuss in more detail later in the call. R&D in the quarter declined sequentially versus Q3, primarily due to the non-repeat of the $2 million payment associated with filing our NDA for buprenorphine in Q3.

In wrapping up my comments on Q4 operating expenses, I want to point out that we reported $4.4 million in legal settlements, which includes one major health insurer.

Turning to tax. We recorded tax expense of $26.8 million compared to $0.3 million of expense in the fourth quarter of 2016. The tax expense this quarter includes a provisional tax expense of approximately $7.5 million related to the 2017 Tax Act as well as expense of $22.6 million to fully reserve our deferred tax assets.

While management believes our pipeline of new products will drive profitability in the future, our recent history of pretax operating losses, combined with an expected loss in 2018, support the need to increase the valuation allowance. These tax assets continue to have value, and we expect them to be utilized when we return to profitability as early as 2019.

Moving to the bottom of the income statement. Total adjusted EBITDA for the fourth quarter was negative $11.5 million compared to positive $6.1 million in the fourth quarter of 2016.

Looking at the balance sheet. We remain debt-free, with $163.9 million in cash, cash equivalents and short and long-term investments. Sequentially, cash was reduced by about $13 million compared to the third quarter of this year. Three factors account for this reduction, first, legal settlements of $3.9 million; second, ongoing operating activities of approximately $6.3 million; and finally, capital expenditures of $3.1 million.

I'll wrap up my section by providing some high-level insight on our 2018 financial outlook. While we don't provide full guidance on the P&L, we have made mention of a few key financial metrics that I will summarize for you. On the top line, we expect our revenues to stabilize in 2018 compared to 2017, based on the actions we have, and continue to take, to stabilize SUBSYS in gross SYNDROS, provided that there is some level of stability in the overall TIRF market. We don't expect to see a significant impact of our revenue stabilizing actions in Q1, as it will be too soon to see the impact from these efforts.

We believe gross margin will improve in 2018 compared to 2017, based on actions we've taken to reduce our expired inventory. We expect overall operating expenses, excluding legal settlements, to be lower in 2018, despite increased investment in R&D, as we further advance our clinical pipeline. A key variable in next year's operating expense projection is our level of legal costs incurred to support ongoing litigation.

Finally, as I mentioned, earlier in my tax discussion, we expect to have a pretax loss in 2018. However, this loss is expected to be significantly improved compared to 2017.

With that, I'll turn the call back over to Saeed. Saeed?

Saeed Motahari

Thank you, Andy. Likewise, as a reminder of the strategy we set last year to guide our organization, and I want to update you on some of the progress we have made over the last few months against the corresponding plan. First, our entire organization continues to work towards putting the legacy issues behind us. In Q4, for instance, we settle a loss with a large insurer partner consistent with our financial expectation. While each legal proceeding presented own set of facts and circumstances, we'll continue to see resolution if we can do so in a manner consistent with our business objectives, which we believe are in the best interest of our shareholders.

As you may have seen last week we publicly announced the execution of independent trust agreement related to our majority shareholder, Dr. Kapoor. According to the terms and conditions of this publicly filed trust agreement, Dr. Kapoorr holdings of approximately 60% of the company's outstanding common stock will be managed by an independent trustee, and the shares will be awarded by independent awarding committee, which will include one of our board members and a representative of the independent trustee and three other independent parties unaffiliated with Dr. Kapoor or the company. As a reminder, we told you in our third quarter 2017 earnings call that we reserved $150 million for potential settlement with DOJ, which we would expect to pay over five years. We have no further update on this as of present. As we have previously stated, the timing of these proposed settlement remains largely outside of our control, and while we have no new update today, we intend to provide further information on the details of this potential settlement with advisable.

Our second strategic priority focus on strengthening the foundation of our company and improving execution. I've already talked about some of the new talent and capabilities we have added to our organization, which are key prerequisites to success for the other 3 priorities on this slide. As we look forward, our efforts here will focus on optimizing expenses and improving productivity over time. As Andy outlined, his team has identified several opportunities for us to lower our cost structure and will be focused on executing those throughout 2018.

Now, let's spend some time on the third strategic objective, which relates to our 2 marketed products, SUBSYS and SYNDROS. SUBSYS has a challenging quarter that echoes the pressure on the TIRF flat in general. On a positive note, we did see the rate of decline in prescriptions modestly improve for the third consecutive quarter. We also continued to hold relative shares with SUBSYS remaining the market leader among branded TIRF products.

It is our belief that there are cancer patients who breakthrough pain can be addressed if proper use of SUBSYS, which we also believe have superior bioavailability factor onto the action compared to other TIRF products.

In the second half of 2017, we focused on number of areas to help stable our SUBSYS. Most notably, we revamped our managed care organization, enabling us to contact more aggressively. As a result, the product was placed under preferred list with 3 major managed-care accounts in January and was subsequently added to 2 of those accounts Medicare Part D plans. While it's difficult to predict the floor for the TIRF market, we believe these successes will provide some contribution to help stabilize SUBSYS in 2018.

Moving to SYNDROS, our dronabinol or THC product, which is indicated initially for anorexia and AIDS patients and for nausea and vomiting in chemotherapy patients and other antiemetic fails. We continue to execute against a conservative launch strategy. As another reminder, we launched the product in August with our existing sales force, so there was no significant incremental investment.

CII products still has to take conscious and establish steps in the market, and we are intentionally conservative with our targeting to ensure that the product is being used only with approved indications. The product performance in Q4 was lower than we expected in terms of prescription, but the number of units prescribed has been higher than our -- than original projections.

Overall, as I look at our short-term performance on both SUBSYS and SYNDROS, I believe we can do better going forward, and there are a number of opportunities for us to improve execution in 2018.

Moving on, our forward strategic initiative is advancing our pipeline. While 2017 was a year for laying the foundation for transformation, 2018 is the year for execution. And at the heart of that is our pipeline. The Slide 6 covers program's current status, and the Slide 7 provides a list of some of the upcoming milestones.

I am particularly excited about the enrollment of first basis in our recently initial proof-of-concept study of 2 formulation of epinephrine nasal spray for anaphylactic reaction. We expect to have data from this study in the second quarter of 2018.

Turning to our cannabinoid platform, we initiated a Phase II study of our CBD oral solution for childhood absent epilepsy, from which, we expect to see data in the fourth quarter of 2018. We also, just last week, issued a Phase III study of our CBD Oral Solution for infantile spasms. We expect data from this pivotal study in the second quarter of 2019. Looking ahead, our planned proof-of-concept study of our CBD oral solution for prader willi syndrome will likely begin early next quarter, with data expected in the fourth quarter of 2019.

Turning back to our spray platform, we recently met with the FDA to discuss the result of the PK study of our naloxone nasal spray for opioid overdose, and we remained on track for NDA filing in 2018. And lastly, we recently supplemented our NDA for buprenorphine sublingual spray for moderate to severe acute pain with seven-day safety data, and expected PDUFA date in the second half of 2018.

We are excited about these opportunities and believe there's tremendous potential for us to expand the capabilities of our pharmaceutical cannabinoids and the spray technology in the coming years. Thinking longer term, we continue to look at other ways to leverage the $250 million that we have invested in our pipeline over the last five years. This includes the potential to license SUBSYS and SYNDROS outside of U.S. On that front, we received initial interest from several companies in Europe and South America and plan to exchange information with them over the next few months.

Additionally, interest in our CBD platform is growing, both academically and clinically. There are a variety of indications that we're interested in developing further. To that end, we are looking to build collaborative R&D partnership and will provide an update on these activities as the year progresses. That said, I want to caution that both the international business development idea that just mentioned are works in progress and may never materialize. But I think it's important for our investors to understand that we are thinking long-term and broader than we are today.

So to conclude, in 2017, we invested in our people, our pipeline, our products and our costs of compliance and will continue to do so in 2018. We are committed to resolving our standing legal issues and look forward to putting those issues behind us, as we are radically transforming this company. Our vision is to become a leading specialty pharmaceutical company focused on cannabinoid and novel drug delivery system that affect serious unmet patient needs.

And with that, operator please open the line for questions.

Question-and-Answer Session

Operator

[Operator Instructions]. Our first question comes from the line of Jason Butler with JMP Securities.

Unidentified Analyst

It's [indiscernible] on for Jason. I think I just had one quick question on the prader willi Phase II. I just wanted to know how you guys are defining success on the primary endpoint for that trial, are there any targeted safety concerns with the population that you should be noting?

Saeed Motahari

I'm going to ask the Chairman to address that question about prader willi, the primary endpoint.

Steve Sherman

So the primary endpoint is hyperplasia. We believe that's the output that we we'll be able to influence with CBD, the craving aspect of prader willi. Does that answer your question?

Unidentified Analyst

Well, I was just wondering if there was a certain threshold to respond. Can you give us any detail on the primary endpoints that you're looking for to be able to say the trial was a success and move onto the next step.

Steve Sherman

Well it's only ever been used in a Phase II trial previously. So we're looking at that rate of win if you looking in our -- while you can't look into our protocol, sorry, the protocol says...

Unidentified Analyst

You can send it to me if you want.

Steve Sherman

That's all right. There is a 6-point drop in the hyperplasia score, and we believe, at least based on our interactions with investigators and different organizations, that amount of a drop is clinically meaningful. And that would be the indication that we should go. And this is a Phase II study and it's positive then we'll go to the next step and develop a Phase III trial.

Operator

And our next question comes from the line of David Steinberg with Jefferies.

David Steinberg

In terms of your spending, you've cut your combined sales and marketing and G&A quarterly, sequentially over the last couple of quarters. Is the fourth quarter number -- the aggregate number I think of about $27 million, is that a good run rate time as for next year? And then secondly, the DOJ investigation, I know you said you're hoping to resolve it soon, it has been going on for -- seems like years and years and years now. And can you -- you've taken some steps, can you give us some sense of what -- in last quarter, what demonstrable progress has been made? And do you think that in the first half of this year, there will be some answer from DOJ either way? And what the payment might be and any other items involved in the settlement -- potential settlement?

Saeed Motahari

So Andy will answer the first part.

Andrew Long

Yes. I'll start with the expense question. Yes, I mean, I would say that I characterize Q4 as a relatively uneventful quarter in terms of spending. And as I look to 2018, I look for, as I talked about cost reduction in aggregate across operating expense, in the 5% to 15% range. But keep in mind that we expect R&D expense to slightly track upward. So I think that kind of gives you a feel for what we're head at on operating expenses.

Saeed Motahari

And with respect to DOJ, we continue to work with them very closely. Obviously, a major issues is for the quarter and beginning of this year for us to deal with this independent committee and finding a trust to actually manage Dr. Kapoor's shares independently. And that obviously, was a major step in terms of identifying the trustee, identifying the voting committee, having a chance to wed those. So it took some time but I believe we are on the right track, and while we cannot speak of timing because it's completely outside of our control and there is no deal until it is formally announced. We remain cautiously optimistic that we are moving in the right direction.

David Steinberg

All right and just one more question. Your entire management team is still fairly new. Could you comment on your sales force? Are there any professionals still there who were there several years ago and you've made a lot of changes, what's the typical profile of the sales reps you now have and maybe some flavor of what types of firms they have come from and what their specific skill sets are?

Saeed Motahari

I think that's a great question. I think the profile has changed significantly. First of all, I'll try to address your question. Over 95% of the people who are in the sales force right now are new individuals, they were not here during the trouble time. So I think that is a major kudos to our new leadership. We have also significantly upgraded the talent, and we have changed the composition, making it much more consistent with the industry norms. And most of these individuals that had a chance to meet 25 of them over the last month or so. As we had 3 different classes of training here. And top-notch individuals, many seasoned, so is that coming from the great companies with a strong pedigree. And I remained very bullish about this. Another thing that I think we want to mention here is that our current sales force is about 109 representatives. When I came here, it was about 145. So we have made changes here to optimize the sales force. We just rolled a new alignment in January in order to make sure that we balance the opportunity in this territory with the workload, something that was not taken placed over the last couple of years as the sales force had gone from 250 to about 109 right now. So there are a lot of changes that have taken place. We have a much better alignment, we have a much better sales force from our perspective in terms of talent and experience, and we'll see over the next couple of quarters, the impact that, I'm optimistic our entire team will have.

Operator

And our next question comes from the line of Randall Stanicky with RBC Capital Markets.

Ashley Ryu

This is Ashley Ryu on for Randall. I just wanted to clarify whether you still believe that you can grow the top line in 2018. I know, late last year, you mentioned in your release that you were projecting growth on a top line by stabilizing SUBSYS and grown SYNDROS. And I just wanted to clarify, given your prepared remarks, you seem to be talking more about stabilizing revenue rather than growth. And if not, what's changed, kind of, between that late October timeframe when you mentioned that versus now? And then as a follow-up, can you also talk about what you mean about stabilizing SUBSYS, assuming a stable TIRF market? What expectations have you baked in to the TIRF market for the year?

Saeed Motahari

I think the biggest unknown for us is the pace of decline in TIRF market. We obviously expect to increase our share in first quarter and second quarter of this year, particularly in second quarter, as you start pulling to some of the managed care wins. But even if you take out 3, 4 or 5 share points from this win, if the market continues to decline at the rate that it is declining, obviously, diminishes our chances of stabilizing or growing the top line. So while we are confident, if you look at actually our unit, not our spread, our unit market share, we had 36%. So we are continuing to execute well on that front since our competitors. But we have to also be cautious about the TIRF market. In the first quarter, year-to-date versus similar period in 2017, TIRF market is down another 35% which is very significant and much higher than we had anticipated because we definitely see some level of stabilization in the market and will be able to take share given our managed care view. With that, I think we still -- we remain optimistic in terms of our ability to execute against these wins, and we'll update you, obviously, over the next couple of months as we have more data.

Ashley Ryu

Got it. Can you talk a little bit in more detail around what your assumptions for the TIRF market overall for the year are then?

Saeed Motahari

I think, last year, the market declined by about 42%. Our assumptions for this year basically, pertain less than 20% for the TIRF market. And that, essentially, meant that we will more share given the managed care to create some level of stabilization for SUBSYS and grows SYNDROS to obviously, create some momentum in the top line.

Operator

[Operator Instructions]. Our next question comes from the line of David Amsellem with Piper Jaffray.

David Amsellem

So in terms of SYNDROS, I think your aspirational targets for sales for 2018 suggest that the product will be a greater contributor, and I just wanted to get some color on what gives you that confidence given the very modest sales to date. Can you maybe talk about what you think is going to drive volumes here? How difficult to managed care landscape has been, what kind of efforts are you undertaking regarding contracting?

Saeed Motahari

Yes, actually know we are -- as I mentioned the last time we met we're continuing to obviously engage with managed organization, we just 1 Part D account, a major part D account, which we are hoping that will contribute. We also were put on AID app in one of the states and that we also recovered of the state Medicaid in Missouri. So we are getting wins, small wins, but I'm confident that the growth will accelerate in second and third quarter based on the actions that we have taken as well as the familiarity of physician increasing. The issues the dosing, the doses are very different. AIDS patients versus the cancer patients, so we do a lot of education to make sure that they take care of that and educate our customers in a right way. But the product, it requires refrigeration and that also has created some challenges in terms of stocking. But our internal expectations for SYNDROS in 2018, wasn't very significant based on what we have seen and will still believe we have a chance to hit those internal expectations, albeit the first -- fourth quarter will be disappointing.

David Amsellem

Okay. Then if I may ask a follow-up question on SUBSYS, going back to your comments on stabilization. I just wanted to press you on that a little bit in terms of just the TIRF market, you seem to suggest that the TIRF market in general may stabilize, and given the realities of the opioid crisis and the pressure that the class is under and are controversial for TIRF class is -- I'm just trying to get a better sense of why you're confident that we may see more stabilization in the class, not SUBSYS, specifically, but the class.

Saeed Motahari

I'll give you a little bit of perspective. So we just -- as a part of our discussions with the European companies, I got the data on TIRF market. And the number of units in TIRF class in Europe, in the -- in Western Europe specifically, is 50 million units versus 4.5 million units in the U.S. That tells you the significant under treatment of the breakthrough cancer patient in the U.S. And now, as all of you know, Europe is much, much more difficult in terms of prescribing opioid. Opioid -- but they are using it for the right indication, which is for cancer patients who have significant amount of pain. That tells you -- I think that this pendulum has moved so much in the other way that many cancer patients in the U.S. with breakthrough cancer pain I believe are not being treated.

Though last year, we had about 45,000 prescriptions for the entire class. If you assume that each patient takes 3 or 4, these are the members, these are late-stage patient and they are sometimes -- even if they take 3 or 4 prescriptions, we are talking about 15,000 patients. We know that the number of cancer patient with breakthrough cancer in the U.S. is much, much higher than that. It's not even -- represent 2% or 3% treatment rate. So my -- our hypothesis was that in 2017, most of the discussion or use associated with TIRF by basically filter out the managed care. And as we get in 2018, giving that the number of prescriptions have been around only 40,000, there's got to be some bottoming up here. We are not seeing it in the first 2 months because of all the issues that you mentioned. People are still reluctant to use this product, even for appropriate patient that FDA has approved it. But just the data in Europe should give you a sense why we believe this field and opportunity here and, hopefully, at some point, the pendulum would be little more balanced around making sure that the right patients get this product for the right doses and for the right duration of therapy.

Operator

Thank you. And I'm showing no further questions. I'd like to return the call to Mr. Saeed Motahari for his any closing remarks.

Saeed Motahari

Well, I just wanted to thank everybody for joining us in this call, and we are continuing to be optimistic about the strategic plan that we laid out. And will continue to update you on the progress that we are making in each component of that strategic plan. Thank you so much for joining us.

Jacqueline Marcus

That concludes our call. Operator, please close the line.

Operator

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program and you may all disconnect. Everyone, have a great day.