Q3 2019 Earnings Call
[noise], ladies and gentleman welcome to the conference call I Bio front <unk>.
And our customers request. This conference will be recorded as a reminder, all participants we being in listen only mode. After the presentation that we'd be an opportunity to ask question is any participant has difficulty hearing the conference. Please press back you find out there on your telephone for operating system, then I'll hand, you over to.
Okay head of Investor relation Charlie just first conference. Please go ahead Madam.
Thank you can do.
Good morning, and welcome to buy Frontera earnings Conference call for the first nine months of 29 too.
Earlier. This morning, we issued a press release announcing financial results for the nine month ended September Thirtyth 2019, we encourage everyone to read today's press release as well as the earnings report both of which are available on 500 tariff website.
Please note that certain information discussed on the call today is covered under the Safe Harbor provisions of the private Securities Litigation Reform Act, we caution listeners that during this call bio frontier us management will be making forward looking statements actual results could differ materially.
Though stated or implied by these forward looking statements due to risks and uncertainties associated with the company's business.
Our risks and uncertainties are detailed in and a qualified by the cautionary statements contained in Bioterrorist press releases <unk> SEC filings, including our annual report on form 20-F and subsequent filings.
This conference call contains time sensitive information that's accurate only as of the date of Thislife broadcast today November 19th 2019.
By upfront Terra undertakes no obligation to revise or update any forward looking statements to reflect events or circumstances. After the date of this conference call with that I would now like to turn to call over to professor Dr. froman, but our CEO how much go ahead.
Yes. Thank you.
Thank you very much ladies and gentlemen for taking the time today to participate in today's call.
With me is Thomas our.
Our CFO .
Cost of doing about overseas Chief commercial officer, excuse us some sort of today for health reasons.
I will summarize the gen other business development and clinical updates during the reporting period.
And we'll provide an update on the current status of our commercial efforts.
Mr Scheffel without dozens of financial results for the period for the reporting period.
The first nine months of 2019.
We continued to observe a positive business performance.
By revenue goals and clinical developments, we were able to further expand our global positioning.
Leading specialty pharmaceutical company in dermatology, and thus create sustainable value for you our shareholders.
Compared to the same period last year.
We increased our total sales by about 31% to 19.1 million euros.
Goals was to live in particular for the German at the U.S. markets, our sales increased by a launch.
59% to sleep monthly million you holes in Germany.
While in the us.
Revenues from our sales of our metals amounted to 13.6 million duals, an increase of 33%.
Following a slowdown and goal to momentum in the USA over the summer months, we're now observing a significant upturn in the U.S. business and the fourth quarter of 219.
Mr Chef of shortly go into more detail of the key financials for the reporting period.
The strong growth in Germany is due to the European approval for daylight Photodynamic therapy short PDT last year.
This label extension enabled us to make a significant bleep forward and the largest European pharmaceutical market.
I'm a news is the clear leader in Germany ahead of its competitors.
For comparison.
This year's nine month revenue corresponds to the entire annual German revenue in 2018.
Of course, we have very pleased with the success in our home markets.
We intend to further consolidate this excellent positioning by investing in our marketing efforts in Germany. This will enable us to further increase the benefits of terminals and photodynamic therapy for prescribing physicians.
We expect to increasingly call or market share, especially at the expense of topic, a clean rooms for says application.
In Spain, we continue to see a very positive market performance following the news.
The strongly growing number of terminals prescription that is the number of almonds tubes sold offset a government mandated price reduction of 27% form a loose and maintained sales at the previous years level.
We are therefore fully on track for our budgeted marketable.
And the United Kingdom, the focus of sales continued to be on hospitals in particular on the administrative steps to include among those into perspective hospital pharmacies.
And some major hospitals, our minerals is now classified as the first choice therapy for PDT for active Nickolatos says and basal cell carcinoma.
Hats off to competing product.
These achievements are already beginning to be reflected on the revenue figures.
Nevertheless, the UK still place or near mine novel, and our overall business.
In other European countries sales declined slightly over all due to declining deliverables to deliver these two license partners.
The biggest impact on our biggest business performance. However is all have a new in the largest pharmaceutical market the United States.
We generate between 70 and 75% of our total revenues though.
As just mentioned we recorded sales of 13.6 million euros between January and September of this year.
ONT 3.4 million euros and more than in the same period in 2020 and 2018.
This figure includes 677000 geos generated with the former Catania products Skippy Seppi, an active park.
The growth in the U.S. market is primarily due to the expansion of sales infrastructure.
And improved reimbursement pharma lose since the beginning of the year.
All in all.
We see a global revenue goals of more than 30% since the beginning of this year and despite even higher expectations also wholesales. This is a very solid and pleasing business development.
Nevertheless in the some of this year.
Both momentum in the U.S., we can more than expected.
The third quarter was well below expectations. The comparison with the same period of the previous year had only a limited impact tier.
As opposed to increase on October 1st 2018 left September sales figures sorting and says for that year. We're therefore over estimated in the third quarter.
However, since October following the typical seasonal in nature of the summer months, we have again been able to record significantly stronger growth in our U.S. business.
In the future, we'd expect sales core sales growth in the us to continue to increase at a sustained plate.
Especially wants to have among those curling competitive disadvantages over its competition will be eliminated.
On the one hand for cone FDA approved prescribing information.
Only lost the reimbursement of one two of 'em lose per patient per day.
This was prediction on the Im a loose labeled as reflected in the reimbursement guidelines for on the news issued.
But at the end of 2018.
In other words Theres no problem facility Imbursement of on the lose by health insurance policy, but our labor is less productive at this point.
We are working hard to improve this section on the ambulance label as well as to extend the approval to the treatment of active nickolatos sees on the extra images tongue neck.
Currently our mills is in the U.S. support for the treatment of the phase and Scarlet only.
As you may be aware.
By a frontier has already successfully conducted a phase three study on the use of among those on other body regions. The results of which was submitted to the European Medicines Agency for label extension in September of this year.
In January 2020 , we expect the us food and buckets administration, the FDA to provide us with feedback regarding a corresponding label extension in the United States.
In order to ensure the reimbursement of several tubes, you simultaneously for the treatment of larger colorful body legions in the future.
We started preparing a pharmacokinetic study a few months ago.
In which the safety of the treatment with lead you to farm animals will be tested.
The preparatory work for the study has already been completed including the development and validation of analytical procedures and the study protocol is currently being finalized with the FDA.
Another competitive disadvantage relates to our PDT lab, which is significantly smaller than the competitors product and does not meet.
Yes market in the suspect.
Our beer photos that has been developed at the time with the goal of obtaining approval in the us as quickly as possible.
Its key features correspond to those of the land we use for phase three studies.
The similarity of both labs has allowed us to obtain ever FTC approval for the combination of Medusa and be of order that.
With data collected using the other them without further firstly tires.
To meet the needs of the U.S. medical community, we are developing a large a new larger PDT labs to be of auto let Ics additive, which allows the use of our mills on larger surfaces. The final prototype of severe order, let itself is or made almost ready.
And the application for approval is expected to be submitted by mid 22, Andy.
In that sense LIFO related developments play together the approval of the treatment of up to Nickolatos This and the polar fully.
The treatment of larger body iOS with up to three tubes of our mills and the development of a larger designed for these applications.
In combination and we expect these measures to significantly improve our market share.
In order to further increase or growth opportunities in the U.S. markets in the medium term.
We are currently conducting a clinical trial in the USA for the treatment of superficial basis and cuts enormous with almond loose in combination with all that led lab, we afford alert.
Since September 2018, we have been working intensively on patient recruitment, which show ever takes longer due to the highly demanding study protocol required by the FDA.
Following successful FDIC approval among those would be the only talked in the United States for the treatment of superficial VCC. This PDT.
We also see long term growth opportunities in the U.S.P.T. market for the contract with the U.S. Department of Veterans Affairs show to the for the sale of our mills and its hospitals.
Although we have not yet generated any significant says as a result of this cooperation.
We have yet to current the discounts demanded though.
I would like to take this opportunity to gleefully explained the significance of this market segment for our long term market development.
My new dermatologists in training in the USA work in the hospitals of the V.A.
If a prospective dermatologist has the opportunity during the education to get acquainted with PGT and what we consider to be the best Btwobtwoc, namely on the news. It is highly probable that he or she will continue to use PDT with our models after the residency.
It is also important to educate a new global opinion leaders and innovation diverse in dermatology evolve the benefits of PDT and of course on the news will become key drivers in the U.S. dermatology market in the future.
Thats why I think the VA hospitals remain a strategically important market, even though we have not yet to achieve larger sales in this environment.
Without wanting to exaggerate, we continue to lead him a loose potential and the world's largest pharmaceutical market us enormous.
In order to exploited the current market potential and establish our product even better in the short and medium term, we continue to focus on the so called low hanging fruits.
Dermatologists, who are already familiar with photodynamic therapy.
At the same time. However, we're also working hard to convince dermatologists, who have no experience with photodynamic therapy of this treatment options in order to expand the over all PDT market in the us.
As part of the successful integration of Q, Tinier life Sciences, Inc. or Catania for short.
Which we acquired from our strategic partner and major shareholder Mohor in March 2019, we have expanded our product portfolio in the US to include the FDA approved luck seppi.
In this context I would like to briefly explain to you what led to the temporary suspension of active park. The second prescription block of percutaneous portfolio.
This was a development that we could not foresee when we acquired the Catania product portfolio. The discontinuation of active park was by no means our intention, though we never thought the market potential was comparable to those of our revenues offset.
We will fall.
However, confronted with Onyx unexpected quality problems in the production of October .
Which could not have been addressed in the short term and could only with larger investments have been resolved and the long term.
We did not consider these to be justified for active PUC decision that was supported by mobile Hall, who bought all the financial consequence on so fences of the discontinuation.
Notebooks happy in which we see continued considerable long term market potential.
Except beam is the first newly approved topical antibiotic on the U.S. market in about 10 years.
With this product both on Taylor is introducing the next major innovation into the U.S. dermatology market.
Except peers proven to be effective against antibiotic resistant bacteria such as Mercer.
And this explicitly approved by the FDA for infections with such perceived bacteria.
In total of on 10 million prescriptions are issued annually in the U.S. market for the hooks in indications we accept be can be effective a large part of them by dermatologists.
We therefore see significant growth potential Fox XP, we plan to complete the for the full integration of Catania by the end of fiscal year 2019, including the winding up of cutaneous and independent company.
As stated in the acquisition agreement.
The whole who has paid or will pay for all costs of this with structurally.
I'm a loose however is and will remain our most important product in the near future.
As we continue to exploit except piece market potential and further optimize our marketing strategy.
If I am a news is to remain almost in pendant important sales driver label extensions in the form of new indications are extremely important for us.
As you know we plan to develop almond loose for use in Oxnard together with mobile our longstanding strategic partner on major shareholder.
To this end.
We recently propelled the development plan to expand the indication for among those for acne and requested a meeting with the FDA for its approval.
The results of this important meeting which are expected in January with and serve as the foundation for the further contractual arrangement of our cooperation with mobile of course, we will keep you informed of further progress as it becomes available.
We have also made progress and our research Corporation with mobile for the further development of branded generics based on on margin technology.
We have now initiated all necessarily investigations and manufacturing steps for the entry into the clinical phase.
Branded generics a welcome addition to our product portfolio for the future and we're proud to have formal overall as a long term and reliable partner for the development of this product.
Independent development of lenders genetics in combination with Orlando in margin would not only be very long and resources conns consuming process for buyer from Teva.
But would also involve our high development and market risk.
Given our strategy, which is clearly focused on optimizing the commercialization of the existing portfolio.
It would be a mistake to tied to develop further products on our own and invest our own financial resources in this area.
We are therefore grateful that the strategic cooperation with small who will enable us to pursue this past nevertheless.
In order to leverage further potential for bio frontier in the longer term, but.
But us as already mentioned the main focus and the commercial success of by frontier and the coming years will remain with our mills.
With these words I hand over to our CFO Thomas Schaeffer.
Thank you chairman and a warm welcome to everyone underline I would.
Now I'd like to give you an overview of the financial results for the first nine months of 29 team in an outlook for the rest of to finish the year.
First of all I'd like to say that by Frontera continues to develop well since our market entry in U.S sales have been rising steadily.
And then the current financial year.
Continuing our dynamic revenue growth.
As Herman mentioned at the beginning continuous strong growth, we're not always happen in the linear fashion.
This is nothing unusual and growing our business, especially in the company.
Such a short history at fire Frontera.
Let's now turn to the financial figures for the by Fonterra Group.
Reporting period, we achieved a total revenue of around 19.1 million euros.
Compared to around 14.6 million euros in the nine month of 2018.
This corresponds to an increase of 31%.
The reason for this was again, mainly the strong growth in the U.S. flanked by the dynamic growth in Germany. Our most important pillar by far however is and remains to you in this market.
Face in the U.S. improved in the reporting period by 33% to around 13.6 million euros compared to 10.2 million euros in the same period last year.
So in Germany amounted to around 3.3 million euros in the first nine month of this year.
Compared to 2.1 million euros in the same period in 2018 this corresponds to an increase of 59%.
Our sales in the other European countries decreased in the reporting period by 14% to approximately 1.8 million euros compared to 2.1 million euros in 2018.
This decline was due to a decline in deliveries to license partners.
I would like to emphasis emphasize at this point in time that despite the substantial price reduction space in Spain, better on the similar level than in the prior year period.
The increase in space in Europe , overall, including Germany continues to be primarily attributable to the successful marketing of daylight PDT, which was approved in March 2018.
Gross profit increased by 3.1 million euros to approximately 14.9 million euros compared to 11.8 million euros.
In the first nine month of 2018 to gross margin decreased to 78% from 81% in the same period of to previous year.
Research and development costs remain largely stable at around 3.2 million euros compared to prior year period.
These cost includes our cost for clinical studies, but also regulatory expenses such as fees for the granting maintenance and expansion of our approval.
General administrative expenses came in at approximately 12.1 million euros in the reporting period compared to 37.3 million.
In the same period last year.
As a result.
DNA expenses increased by 4.8 million euros. This includes around 2.1 million in administrative expenses for Catania.
It was further mainly due to significantly increased legal and consulting costs for the defense obstacles, a pharmaceutical loss lawsuit as well as administrative costs in U.S.
Save cost amounting to around 20.6 million euros.
A significant increase of almost 8 million euros on the previous year.
This was Q on one hand to the costs for the further expansion of our USAA infrastructure.
And 4.6 million euros into those costs incurred incurred by Takeda.
Selling expenses include the costs for our own sales force in Germany, Spain, UK ugly newness as various marketing expenses.
Other expenses in income totaled 20.8 million euros in the reporting period.
This includes the negative difference of 14.8 billion euros assets and liabilities measured at fair market value of resulting from the purchase price allocation.
Including 6.3 million euros in income from discharging of startup cost tomorrow.
As item also includes charges to Maru under the share purchase agreement of 4.5 million Euro.
The estimated income from the purchase price allocation.
SLF income from the offsetting of expenses incurred percutaneous tomorrow, and defer half year period adjusted in the total amount of approximately 3.6 million euros in the reporting period.
In the period under review there was no extra cash settlement of startup costs Tomorrow.
Expenses and income from currency translation also included in this item.
As a result of to different from the purchase price allocation of Catania frequent betfair recognized in the income statement.
Fonterra reported a net loss of around 3.3 million euros or six cents per share.
For the first nine month of 2019 compared to a loss of 12.7 million euros or 28 cents per share.
Last year.
Cash and cash equivalents amounted to 12 million euros as of September .
Thirtyth through 19.
A decrease of around 7.5 million euros as of December 30, 128.
This includes cash and cash equivalents of Catania amounting to 2.1 billion Euro.
That was it for the financial performance part of the first nine months of 2019.
I would now like to conclude with the guidance of affinity 19 financial year.
And then has already indicated that despite the notable growth overall business performance, especially in the us.
Was below expectations of the executive Board.
We therefore have to adjust our sales and earnings expectation for fiscal year 2019.
This adjustment is further due to the sharp increase in legal costs as a result of litigation and do the pharmaceuticals.
We are higher than expected.
We now expect revenue to be in the range of 28 to 31 million euros instead of to previously planned 32 to 35 million euros.
We are adjusting our forecast for net income at 29 keen to a loss of 4.6 million euros compared to a profit of 4.7, maybe four to 7 million euros previously.
This will be influenced in particular adjustment to the other income as part of to purchase price allocation as a result of to continue acquisition.
As opposed to provision note at the time of to last quarterly report.
Contrary to our expectations. We therefore are unlikely to reach the operating breakeven point in the fourth quarter of 29 team.
However, I.
I would like to emphasize that we continued to see the fourth quarter is the revenue driver.
Especially with I mean loose upcoming price increase in us on January 120 20.
The month of December just like September last year, thus remains virtually in unpredictable.
And still we have decided as a precaution to adjust our expectations downwards due to the weakest summer months.
At this point of we'd like to hand over to Harman for some closing remarks.
Yes, Thank you Thomas.
At this point be who'd like to invite you to shareholders to the extra ordinary shareholders meeting to be held on Thursday December 19 2019.
This is already the second extraordinary general meeting this year.
And once again, our shareholder dodged a bullet on energy together with its subsidiary Deuschle bullets on biotech HCCI code for the meeting which makes this the content the continuation of the long lasting dispute that has been going on for years.
Visits demands Deutsche but not on clearly shows that it is still not interested in a cooperative partnership with the management board of by a factor achieved.
And that dodged a bullet on energy is once again pushing the limits of what is legally permissible.
Being responsible management board, we nevertheless, extend our hand to Deutsche a bolt on AG and half half convened this additional shareholder meeting as requested.
Despite considerable legal concerns.
In essence, Deutsche Abella on AG demands.
First the submission of the expect of the expert opinions on the tender offers of Deutsche a bullet on biotech AG and Movado motion Gmbh of last summer.
Second an amendment to the articles of association regarding capital increases that are advantageous for Deutsche a bolt on AG.
Third discussion of the Investor relations measures of the management Board.
Fourth Volte Fovista all of confidence for the management Board.
We have already given our detailed comments on these funds and the invitation to the meeting but would like to take this opportunity to briefly to address our counterproposal for the creation of new authorized capital.
The possibility of a patent capital increase is important for publicly listed company.
However, the approach of touch a bullet on AG. Two this possibility suggests that it is it does not primarily act in the interest of Biopharm, TAVR AG and all shareholders.
Although biopharm Taylor currently has already has the possibility to increase the capital.
I remind you of the resolution of the annual General meeting on May 24, 2017.
Which has been block five torture, but a lot on for years.
Torture, but not on AG, what now likes to cancel this resolution and have it replaced by its own resolution to resolution proposal.
Which in particular sets the maximum price of the issued shares for the next five years at four euros.
And the interest of equal treatment of all shareholders and the benefit of the company.
We do not consider this to be appropriate and have therefore puts our own more balanced proposal to the vote.
Let us all on this topic snapback towards the operational business.
I will conclude today's telephone conference with the Somali that we are on a sound growth path, which we will maintain.
Due to the cost competitive disadvantages, just described in our largest market, which emerged in 2019 sales in the third quarter and particular fell short of our expansion expectations.
Due to our flexibility that comes with being a smaller company. However, we can react quickly and have initiated counter measures such as the change in approval for several alternatives tubes or the development of Pf Autonet X added.
Due to the strict regulatory environment in the pharmaceutical sector.
These measures. However, we're not immediately bear fruit in the coming year, we will therefore have to continue to operate within the given competitive framework.
Even in this environment, we have been achieving goals of over 30% so far this year.
The market potential of almond loose and of course Seppi is enormous and we look forward to continuing to redefine the global dermatology market with our innovative products.
We are confident that we will continue to successfully implement our growth strategy and thank all employees and shareholders as well as a supervisory board for their continued support on our way of developing bio frontier into a multi product dermatology company.
And now I would like to open the line for questions.
Thank you ladies and gentlemen, if you have a question follow speakers. Please style SER one on your telephone keypad now tend to the Q. Once you name has been announced you can ask a question. If you find your question is on just how does your Chen speak you can die due to come to your question if you.
Thanks, Chris None today, please understand that based on making you selection.
So the first question.
The first question is from Bruce Jackson, the benchmark company and is now open.
Hi, Good morning. Thank you for taking my question questions with the first thing I want to.
Get into Steve Steve the extra large lap second me a five 10-K.
And when do you think there might be.
The market.
Well this is not a five 10-K, because it's part of the of a combination product that's driven by the talk side of ft.
So we think that we'll be able to submit this land.
In the beginning beginning of knowing the middle of next year.
To the FDA.
And then if everything goes according to plan on the FTC Gliese with our thinking on this.
Then we should have the approval within about six months.
Okay. So the lamp is going to be done tied to the drug so a combination product.
Okay.
And then secondly.
With the Basle cell carcinoma trial, Spus, specifically do you have a rough idea when you might.
Complete enrollment for that trial.
It's something that we will have the results of thats higher higher to 2020 long.
Okay.
And then.
One last question the.
On the shares that the management team tender.
Earlier this year.
What are your current holdings in the company and then do you still have the intent of at some point.
Buying back in.
To the to the shares that they previously tendered.
Yes, we have already bought in.
To a certain amount spent in.
I have together with my wife personally holds NOL Holland tunnel, except the except number but it's on 90000 shares.
And Thomas as Heska only purchased 10000 shares.
And we do intends to acquire more shares.
We are obviously waiting for also the results of the upcoming shareholder meeting.
Okay. Okay.
All right that's all I needed. Thank you very much.
Thank you group.
Your next question is from West flat Ari Securities. Your line is open.
Hi, there.
Excuse me hi, there. Thank you for taking my questions just a couple today.
Firstly could you, possibly provide to comment on what was driving the slower than expected sales in the U.S. during the summer summer months.
Secondly, what do you anticipate your capital requirements for next year might be.
And lastly, what could you also provide comment on what your legal costs have been this year and what you might expect next year was off thanks very much.
If I start with question Ron on the.
On the slower development in the summer months.
Last year, we had a pause increase on October 1st which was.
Heavily driving September sales, particularly in the last plea weeks.
So.
And when we were planning this year sales we.
Did simply.
Overestimate or underestimates the general seasonality.
In in Q fleet.
Because last year's.
Last year's results were sort of obstructed by that effect.
And this was the only this was the only basis for comparison, we had and planning.
When we look at what happens then we were actually behind the results of last week last year only in the last three weeks of September and all the other weeks prior to that were higher.
Than previous year. So this is clearly related to the price increase in October .
Thank you.
So we unfortunately, we cannot at this point in time given.
Given the outlook or forecast our anticipation for for next year.
And to your question about the legal costs and so far in 2019, we have incurred.
Some 5 million euros already.
Perfect and are you able to give an.
Estimate on what you expect legal costs to be next year.
Not yet.
We cannot.
Fortunately give any estimates for any period beyond beyond 2019 at this point in time.
Understand thank you very much.
You're welcome. Thank you. Thank you.
Your next question is from Penn State Lake Street Capital markets is now open.
Good afternoon, guys. Thanks for taking the questions.
Can you given the significant increase in legal costs have there been developments in reducing litigation beyond what you had anticipated or the any color that you could provide there.
This is.
Difficult because a lot of this is done between the lawyers and is also not of the material that has been exchanges also confidential to us.
It's I think fair to say that do so as not interested and a settlement we would like to settle all we have been.
Efforts to settle a long time ago, because any kind of settlement would be cheaper than the legal costs.
But.
This is clearly not the intention off of Sun pharma.
Great and then.
The guidance the updated guidance. The 28 of 31 million euros does that include Catania I think previously you had excluded between your from your revenue guidance I just wanted to clarify that was included or excluded.
Yes that range includes Catania product, which is product mix. It basically only one left.
Right.
And then final question the gross profit for the gross margin sorry in the third quarter was was reduced sequentially could you.
Comment on that what led to the reduction in gross margin.
By the it's a blended margins, though it's a mix of the.
Various margins of to products.
And the mix of debate of to various products within the given period of time and the one then that further.
Q2, the mix of.
In which markets we are selling our products.
We so into various markets buyer with our own the salesforce with however, with different prices.
And then we.
Only 50% on average of the.
After revenue will have to price when we refer to license partners.
And then finally.
The reason of course this is changing to some extent.
The amount of other.
Since cost or cost of service that we did incur like for instance, upgrading our our manufacturing facilities.
So thanks again.
Within the range, where our margins usually are still.
Thank you.
Thank you Thomas Thank you.
At the Marine Dan No further questions you remind the if you would like to ask the question. Please press star one on your telephone keypad.
Is there no further questions I would like to hand back to Mr. just kick.
Well thank you.
Okay.
Thank you all for joining the call today I Hope we were able to answer your questions and provide some color on to Q3 and nine month numbers and it will be too.
Nice rest of today.
Thank you.
So thank you for my search for taping, taking the time today.
Being above until shareholder. Thank you very much. Thank you and have a good day everyone.
Ladies and gentlemen, thank you for yet and then Cisco has been concluded you may disconnect.