Q2 2020 Codexis Inc Earnings Call
[music].
Good afternoon, and welcome to the codecs.
Second quarter.
Financial results conference call.
All participants will be in listen only mode.
Shouldnt you need assistance. Please signal a conference specialist by pressing the star key followed by anywhere else.
After today's presentation, there will be an opportunity to ask question to ask a question you May Press Star then one on your telephone keypad.
To withdraw your question. Please press Star then too.
Please note this event is being recorded.
I would now like to turn the conference over to Bruce Bob. Please go ahead.
Thank you this is Bruce Voss with L.A.J.. Thank you all for participating in today's codecs is called to discuss second quarter 2020 financial results in recent business progress a slide presentation, featuring an updated product pipeline to accompany the conference call commentary is available on the investors section of could axis Dot com.
Huh.
Joining me from codecs, it's our John Nicols, President and Chief Executive Officer, and Ross Taylor, The company's Chief Financial Officer.
During this call management will be making a number of forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995 to the extent that statements made by management are not descriptions of historical facts regarding codecs is they are forward looking statements, reflecting the beliefs and expectations of management as of August.
620, 20, you should not place undue reliance on these forward looking statements because they involve known and unknown risks uncertainties and other factors that are in some cases beyond the company's control and could materially affect actual results.
In particular, there is significant uncertainty about the duration and impact of the coal that 19 pandemic. This means that results could change at anytime and the currently contemplated impact of the virus on the company's operations financial results and outlook is the best estimate based on available information for details about these.
Risks please see the quarterly news release that accompanies this call as well as the company's FCC filings codecs Expressway disclaims any intent or obligation to update forward looking statements, except as required by law.
Today's conference call remarks will include both GAAP and non-GAAP financial results Codexis believes the non-GAAP financial measures provide investors with useful supplemental information about the financial performance of its business enabled the comparison the financial results between periods, where certain items may vary independently of business performance.
And allow for greater transparency with respect to key metrics used by management and operating the business.
These non-GAAP financial measures are presented solely for informational and comparative purposes, and should not be regarded as a replacement for corresponding GAAP measures reconciliations between GAAP and non-GAAP financial measures can be found at the end of the financial results news release that was issued earlier today with that said I'd like to turn the call over now.
To John Nicols John.
Thanks, Bruce Good afternoon, everyone and thank you for joining us.
It's highly gratifying to report on our strong execution through the co. Good 19 pandemic to date.
We delivered better than expected financial results for the second quarter with revenues of $15 million, that's up 21% over the prior year.
R&D represented over two thirds of our total revenues and delivered a 72% increase versus the prior year.
Product sales came in as we had expected and favorable mix showcased product gross margins well above historical averages in the quarter as well.
Importantly, we are forging ahead remarkably well through the effects of cobot 19.
Our R&D operations are getting closer to their pre endemic operating levels. We have adapted the physical layout of our lab facility and our staggering employee shifts to ensure the safety of our scientists as we rebuild R&D operations.
Continuing the remote operation of our general and administrative employee base for the foreseeable future also helps to increase social distancing for the R&D team at this site.
Our ability to reopen operations at a faster rate than anticipated when we held our last call may help to drive our excellent R&D revenue performance for the quarter.
Our expectation is to return to full R&D capacity toward the end of this summer.
I'm, especially proud of the strong revenue results given that our lab was shut down or operating at low capacity for a large portion of the quarter due to the cobot 90 endemic.
While customers across the board had maintained their demand for our collaborative R&D project work the shelter in place requirement effectively extended timelines for most of our partner funded R&D project work into the future.
Our ability to catch up on those timeline delays is limited, but the good news is that this cobot related revenue effect is expected to be much lower in the second half of this year versus the second quarter, given the successful ramp up of our R&D capacity since may.
Of course, we will remain vigilant and agile in the event pandemic changes our circumstances, which of course remains a possibility.
Key to the strong results in the quarter came from our new G gene therapy partnership with Takeda.
Fear in the midst of the pandemic. The two teams expedited the kick off of multiple projects brilliantly, allowing us to deliver on several revenue recognition events in the quarter.
Among these we have transferred our G transgene technology, meaning the nucleic acid information that will code for the differentiated codecs has developed enzymes.
That is allowing Takeda to begin their gene therapy candidate preclinical work for Fabry disease.
Indeed, we are recognizing revenue from the partnership earlier in the year than we previously anticipated that said, while we were able to write realize more revenue from Takeda than expected in Q2, our overall expectation for 2020 revenue from the Takeda partnership has not changed.
Product sales were solid in the quarter and are performing very well year to date.
This coupled with our robust order book gives us confidence that our full year outlook for product revenues will come in at the high end of our pre cobot expectations.
In Q2 sales to Mercks Januvia active ingredient Citic, what then continued as the leader amongst our product revenues.
We also saw a significant contribution from cure and pharmaceutical so the in enzyme in be Ova tablets for over at at that bladder being marketed in Japan.
[noise] product revenue was again spread across a broad customer base the success of our product our supply chain team to work remotely.
Combined with the outstanding continuous operations of our competent external manufacturing partners ensured that our product revenue stream and gross margin expectation remain largely unaffected by the pandemic.
Excitingly the quarter showcased the stepped up ambitions of codecs us into the world high growth and dynamic life science markets.
For new enzyme products targeting the space.
Under two highly creative new partnership deals were announced in the quarter.
These follow the recent successful partnership deal with Roche commercializing, our first enzyme DNA like AIDS for next Gen sequencing.
[noise], we aspire to penetrate the space with these enzymes plus offer more new product innovations for these life science and diagnostic applications. As this area is proving a great target for applying our platform protein engineering capabilities to bring forward transformative new products and solutions.
Let me take a few minutes to thumbnail, our two new life science partnerships, starting with Alpha design.
Led by industry veteran and former cofounder of Enzymatics, Chris Benoit Alphas I'm is a highly synergistic partner for could access for life science enzymes.
Our expertise in designing new enzyme structures that can deliver unique value added performance features complements naturally with their manufacturing strengths [noise].
On top we combined our networks and application knowledge to collaborate and bring extra horsepower for going to market.
It's very early days, but these are the three enzyme program launches are nicely on track.
Our DNA polymerase, which has been engineer to deliver high fidelity and uniformity of coverage for next generation sequencing.
He is already in customer trials is generating significant interest and is nearing its first commercial sale.
Our R&D polymerase for lower cost manufacture of <unk> messenger are in a based therapeutics and vaccines has begun has has been commercially scaled and enzyme sampling for customer Trialing has just begun.
[noise] encouragingly some of the leading players lining up for coated 19 and are in a vaccine manufacture our among those sampling our on a polymerase.
Similar milestones for the reverse transcriptase for our in a diagnostic use trail a bit behind the other two enzymes due to our chosen priorities.
All in all an excellent start to the partnership and launch of these exciting new enzymes.
As a reminder to the deal is set up with could excess fully recognizing the product sales revenue collected from customers with alpha Zions contributions appearing on our books as a cost of goods sold.
[noise] equally exciting as our new partnership with molecular assemblies focused on a disruptive enzyme based approach to synthesize the DNA, a crucial and rapidly growing input for a range of applications, including drug discovery and manufacturing synthetic biology for sustain.
And the production of chemicals and longer term for information storage.
Our assessment is that radical ends on improvements are needed to make the enzymatic DNA synthesis approach commercially viable and differentiated versus the chemical synthesis route that has been used to build todays billion dollar plus synthetic DNA market.
As you heard many times radically improving enzyme performance is what we love to do it could access and we believe that only codeevolver could ever make enzymes do what is necessary to open up enzymatic DNA synthesis technology for the world.
Looking forward this demanding target will likely take could access approximately one year to engineer those needed enzyme improvements.
In parallel molecular assemblies team will focus on optimizing the chemistry to use those enzymes.
[noise] if all goes according to plan molecular assemblies will begin to commercialize their technology around the end up 2021.
And we'll wheeled unique competitive advantage leveraging our proprietary enzymes.
The enzymes for the partnership will be owned or controlled and sold by could access and could access will enjoy its equity ownership in molecular assemblies as they succeed downstream in their DNA synthesis business.
Before I turn the call over to Ross I'm excited about sharing our updated conexus pipeline snapshot as of June 30, 2020, which we posted to our website today.
As you can see on slide two we've made considerable progress over the past year with the entire pipeline ramping at a significant pace.
Highlights include adding 13, new projects to the pipeline.
That's a 25% increase from the prior year and brings our total pipeline to 65 projects.
The number of commercial stage programs increased to 14, an increase of three from last year.
Of course, the whole goal of the pipeline is to drive an acceleration of commercial recurring revenue generating programs.
That takes time, so it's great to show this year the largest jump in the number of new commercial stage programs. Since we began tracking the pipeline in 2016.
In the detail shown on slide three you can see a more than 50% increase the number of projects in our pipeline over the last two years as well as a two and a half fold increase over the past four years.
We have successfully expanded our pipeline across multiple industries and applications in parallel.
For example over the last four years the number of late stage phase two phase three pharmaceutical manufacturing projects is up more than 170%.
The number of programs in our novel Biotherapeutics pipeline has more than tripled and the number of life science enzymes increased to eight with three added over the past year.
What our pipeline it illustrates is our ability to deliver against core strategic goals as we build for a strong future [noise].
Growing and advancing development stage projects that lead to growing commercial recurring revenue products is the goal.
I find snapshot shows that moment them consistently accelerating.
Great job by the Conexus team strong Testament to the value we are creating for the future.
With that let me turn the call over to Ross for a view of our financial performance for us.
Thanks, John and good afternoon, everyone.
Starting with the Q2 top line total revenues for the second quarter of Twentytwenty increased 21% to $15 million from $12.3 million for Q2 2019.
As John mentioned, our revenues for the quarter were above our expectation due to the timing of revenue recognized from our Takeda partnership.
The timing of those revenues does not affect our full year revenue expectation from Takeda.
Revenues for Q2 2020 were split relatively evenly between our performance enzymes segment in a novel Biotherapeutic segment at about $77.5 million for each.
Product revenue for the second quarter of 2020 was $4.5 million compared with $6.2 million for the prior year period decreased due to the timing of demand for various enzymes.
Within product sales Merck once again had this had the strongest showing during Q2 in Q4 and also made any meaningful contribution.
R&D revenue for the 2022nd quarter increased 72% to $10.5 million, primarily due to revenue from our Takeda collaboration.
R&D revenue for the second quarter of Twentytwenty included $3.0 million from the performance enzymes segment.
$1.5 million from the novel Bad therapeutic segment.
Gross margin on product revenue for the second quarter of 2020 was 62% up from 56% a year ago with the increased due to product mix.
Turning to operating expenses R&D expenses for the second quarter at 2020 were $10.9 million.
This includes $5.0 million from the performance enzymes segment and $5.5 million from the novel Biotherapeutic segment with the remaining zero point $4 million attributable attributable to depreciation and amortization expenses.
The increase in R&D expenses from $8.3 million, a year ago was primarily due to higher headcount and higher allocation of occupancy related costs, partially offset by lower last supply expenses and outside service fees.
Yes, DNA expenses in Q2 of 2020 were $8.5 million, which included $2.4 million from the performance enzyme segment and zero <unk> point $6 million from the novel Biotherapeutic segment.
The remaining $5.5 million is included in corporate overhead and depreciation.
The increase in SGN expenses from $7.9 million, a year ago was primarily due to higher legal and accounting fees higher facility expense and higher head count, partially offset by lower applicable expenses.
The net loss for the second quarter, 2020 was $6.3 million or 11 cents per share in this compares with a net loss for the second quarter of 2019 $6.5 million or 12 cents per share.
Turning to the year to date financial results total revenues for the first half of 2020 or $29.6 million up 6% from the first half of 2019.
Product revenue was $9.6 million, which is on track with our expectation at the beginning of the year.
R&D revenue was $20 million and consisted of $8.8 million from the performance enzymes segment and $11.2 million from the novel Biotherapeutic segment.
Gross margin on product revenue for the first six months of 2019 was 56% increase of 50% from the and increased from 50% for the prior year period.
R&D expenses for the first half of 2020 were $21.8 million Nash DNA expenses were $17.5 million.
We reported a net loss for the first half of 2020, a $14 million for 24 cents per share, which compares with a year ago net loss of $11.6 million or 21 cents per share.
Turning to the balance sheet, our financial position remains strong with cash and equivalents of $75.6 million as of June thirtyth.
We believe this cash balance provides ample liquidity to manage through the pandemic.
In addition, we are continually monitoring that pandemic and its impact on our business such that we will be able to intelligently manage operating expenses the capital expenditures in response to any changes in revenue.
For example, as we mentioned on our Q1 earnings call, we delayed some of our new hiring plans and reduced or delayed some of our capital spending plans for 2020.
That said, we're very pleased with the progress, we're making and ramping up our R&D operations as well as with our strong balance sheet in overall financial position.
With that I'll turn the call back to John.
Thanks for us.
I'd like to close out our prepared remarks, focusing on the momentum we are building in our novel Biotherapeutics segment.
We are ready highlighted the great start to the noon new gene therapy partnership with Takeda.
The use of Codeevolver to generate novel trains genes to enable differentiated gene therapy candidate designed now validated by Takeda is gaining interest in the wider gene therapy universe.
Our novel Biotherapeutics business development team is gaining traction with other potential partners on the approach and we we look to step up our self invested pipeline programs. In this area now that our lead programs for this modality had been partner Takeda.
The partnership with Nestle Health Science also continues to build momentum.
We expect them to report topline results from its first clinical trial with Cdx six woman for in patients for the treatment of phenylketonuria or PK you before our next quarterly investor call.
In addition for Cdx seven 108, our partner GI disorder program, we have that have advanced the program significantly despite cope with 19, having successfully completed our GMP manufacturing campaign at our CMO partner site and having advanced much of the required preclinical.
Toxicology testing so far this year.
We're also pleased to inform that Nestle health Science has decided to work with us to discover in parallel to orally administered double enzyme disorder targets stepping up the funded partner work above the minimum requirement specified in the collaboration this the strategic collaboration agreement we extended together.
In the beginning of this year.
Finally, I'm excited to welcome Dot Dr., Jennifer acre to our board of directors.
Jennifer is the general Atlantic Professor at the Stanford Graduate school of business bestselling author and a renowned expert on leveraging behavioral science to help companies and leaders build cultures that harness purpose story and technologies to positively impact human wellbeing.
She brings to us a very fresh perspective in dynamic style that will truly leverage the strengths of our technology and team and helped bring us to even higher levels of societal impact in corporate growth.
We're very excited at her unique skills and complimentary voice to our team as we drive our strategic plan for accelerated growth going forward.
Before opening the call to your questions, Let me summarize our confidence in the ongoing strength could access.
At the core of our company is our talented team and our success in retaining nurturing and igniting them.
Our team is responding brilliantly and delivering exceptional ways as we manage through the pandemic.
We are smartly and selectively add attracting new talent that is making us even stronger.
And we continue to strengthen and grow the list of our innovative products in our pipeline as well as the list a great companies, we proudly serve as collaborative partners.
We are equipped to whether these uncertain times and are confident to be an even stronger better poised for taxes on the other side.
I want to thank all of you for joining us today and hope you and your family's remain safe and well through these challenging times.
With that overview I'd like to open up the call for questions operator.
We will now begin the question and answer session to ask a question you May Press Star then one on your telephone keypad.
If you are using a speakerphone please pick up your handset before pressing the king.
Hey withdraw your question. Please press Star then to at this time, we will pods one moment for the first question.
While we're waiting for our first question I'd like to alert you to our participation in several upcoming virtual investment conferences.
We will be presenting at the H.C. Wainwright, 22nd annual Global investment Conference, which is being held September 14 to 16.
And at the Cantor Fitzgerald Global Healthcare conference, we will be presenting a Thursday September 17 at eight am eastern time.
We will feature webcast about presentations at these virtual conferences on our website at Conexus Dot com.
Okay, operator, we're ready for the first question.
Okay. The first question comes from Matt Hewitt with Craig Hallum Capital Group. Please go ahead.
Good afternoon, and thanks for taking the questions honestly, you with staff with the pipeline update enough information is provided we can probably spend another all we're just going through some of these items sold train.
Pick smartly first of all congratulations on all the advancement on the pipeline a couple things that hop out hop out here.
How should we be thinking about the timing regarding the movement from the pre commercial to commercial good when you kind of upload. This this table are you thinking over the next 12 to 18 months or how should we be thinking about that.
All right. Every every program has a different fundamental pathway to commercialization that and so that's part of why we segment the pipeline by different market area.
Many of our starting from the top many of our programs are targeting manufacturing improvements for clinical stage.
Drug manufacturing and.
Oftentimes, we're starting those programs with customers as early as phase one in their phase one stage of their programs. So it takes many years from startup of program or the other development program in phase one for for that customers product ultimately get commercialized will.
I will commercialize our enzyme quicker, but then we're waiting for their.
Continue clinical development successes and ultimate approval for a project in that category to go fully commercial.
But then as you move down the chart and refocus on some of the other performance enzyme markets.
Like food and ingredients or.
Scientists here, we can commercialize much quicker.
We can set our sights on the on the new a new project.
We can put our teams to work to engineer the novel enzyme that often takes in the range is six months I shared today that that the project with molecular assemblies for DNA synthesis is going to be a longer project. So good that when we expect about a year.
And if we hit our targets weekend commercialize quite quickly thereafter, we have to scale up we have to get registration trial and in commercial scale facilities at the customer site, but from that point our customers are set up to go to market. So you've seen in in the new the new growth.
Both sectors, the new growth vectors for performance ends on from the start of a program to fully commercial we can get we can get through that timeline in as fast as two years and we've done that multiple times. So so the the timeframe for for any given project, that's pre commercial or in development stage.
To move to fully development depends mostly on the target application and and the success not only of Orange enzyme engineering capabilities, but also on the success of the customer to to go to market themselves. Hopefully that was helpful. Yeah I know that that's that's perfect. Thank you.
During your commentary regarding next Gen sequencing.
You indicated that you could end up having your for sale in that area here pretty soon how should we be thinking about the magnitude or the contribution.
I don't know is it six figure seven figures just help us quantify that.
Well of course, it depends on the timeframe so for the the DNA Klim raise I think we've highlighted for our investors.
This is the largest current enzyme used in next gen sequencing.
So were targeting a large current enzyme use and we believe will bring a performance improvements forward with our DNA polymerase. So so this this this enzyme opportunity if were successful like we plan to be could become an eight digit product sale for could access.
It'll take its time you know the actual revenue contribution.
For the DNA polymerase in 2020 will be modest.
But it's great to see that we're starting you know we're rapidly approaching making actual product sales for that product, which we just recently launched its showing a lot of good interest. So you know so it's you know it will have it will have its early beginnings with product sales. This year and we look forward to sharing those with you as we unfold.
Third and fourth quarter results, and then where we're targeting for for it to grow from there to hopefully a peak revenue that's that's a digits Oh a larger.
Very helpful. Maybe one more and then I'll hop back into queue I just want a point of clarification. I think you had mentioned that product revenues you expect to actually come in near the upper end of your prior.
Guidance range and the if I'm not mistaken that was 25 to 27 million just is that do I have all those numbers and everything accurate.
Yeah exactly that's that's exactly what we wanted you to here. Thanks, great. Thank you.
Great. Thanks, Matt.
The next question comes from Brandon Cool yard with Jefferies. Please go ahead.
Thanks, Good afternoon.
John just curious if you just maybe delve into a little bit more Oh, you seem a little bit cautious about kind of the R&D activity and some of the projects coming back fully aligned with what aspect of the operations are still constrained today.
Yeah. So so you know not all the employee base is a is is back on site, we've had to spread our employees around the we've we there's been some I'd say modest.
Single digit kind of productivity hit from spreading the team now from the new.
Workflows to ensure that our workforce is safe. So so we're bringing in a few additional employees smartly to build up that capacity, but generally you know, we're really really proud and pleased a impressed with the R&D group's ability to to rebuild the R&D capacity we.
Shared in in the prepared remarks that were currently operating at a majority capacity, we've said that in the press release as well and you know it's a strong majority of our pre a pre pandemic capacity.
And so we've got most of our R&D project work is back in motion.
As as we as we came depressed today. So we're in good shape, we we Ah we do still have some opportunity to build it up even further but the heavy lift giving the R&D operations in the R&D revenues that are generated from that I'm back in place had been are now behind us.
Okay, then John I think you mentioned.
And your remarks on.
Even if the effective rents are greater willingness to self fund some of the virus therapeutic programs.
Did you working on she's you were talking about door, how your risk appetite is maybe evolved over the past 12 months and when we might move a little bit more about somebody other programs that are in the pipeline in terms of your being in a position to sort of share with is more details on where those games are in kind of the progress you've made.
Yeah sure sure. Thanks, I'm happy to do that.
So so really all of our big successes in novel Biotherapeutics.
Have started with self funded projects you know if the large majority of them.
PK. The PK you program started as a self funded project, we built proof of concept preclinical proof of concept data.
And then we did the Nestle partnership.
The the Fabry program and the pump a disease program, we started a little bit later, we're both self funded projects and the data we generated from those projects enabled us to strike a very attractive deal with a with Takeda. So you know we're kind of right now.
Where a victim of all this great partnering success because most of our many of our pipeline projects are now in part in partnerships.
So we're rebuilding our pipeline of of programs now we're going to come a self fund once again.
Some of those programs are in other amino acid metabolism disorders.
Some of those programs or in other Gee I oriented disorders, because we believe we have you know a competitive capability a comparative capability to to develop enzyme treatments that are orally administered bold given all the experience of the company has stabilized enzymes and very aggressive such.
Nations like in the human G.I. system.
And then I showcased in the my prepared remarks today.
We're looking to rebuild some project pipelines that project in our pipeline that are going to creates a new self funded gene therapy targets for the company as well writing on the success that we've had with fabry and Pompe, a and with Takeda.
We have freedom outside of Takedas arrangement to work on other disorders. So that's gonna be.
A new area of a pipeline development for the company. So it gives you some feel for for the you know the.
Self funded pipeline in the therapeutics area that we're building at this point.
Great just last one for awesome, including share with us as far as though your expectation for the phasing of revenues between third quarter and the fourth quarter understanding Takeda kind of view some of those.
Reps have came a little bit earlier than you expected, but just thinking because it's about the back half the year well spacing.
Yeah, not a whole lot of clarity I can get brand and just because some of this is a hard for us. The you know forecasts and as you know weve really moved away from giving guidance, but I think Jeff.
Conceptually you can.
You've heard that our R&D operations were definitely hinder quite a bit in Q2, a lot of the quarter. We were shut down you didnt start and your random things back up until a may you know that trend is progressing through Q3, and then in Q4, we would expect it.
The.
Back to kind of near full capacity at the end of the summer as John mentioned, So Q4, we would hope would be a more normal pace for the R&D operations.
So I think that type of trajectory you can use that help or help with your modeling, but it's a tough for us to say much beyond that.
Yeah I'll just add the you know we gave you some color and that asked about it as well around product sales that gives you pretty good.
Pretty good visibility to what we're expecting for the second half on product sales and that's up versus the first half and then generally the company delivers you know materially stronger results in the second half versus the first out pretty much every year for the last number of years. So.
And we were hopeful you know barring any kind of unforeseen change and in the the impacts of the pandemic on could access that that that's the way the second half unfold for us.
Gotcha. Thanks.
Cool thanks, Thanks Brent.
Well again.
If you have a question. Please press Star then one.
The next question comes from Jacob Johnson with Stephens, Inc.
Please go ahead.
Hey, guys. This is mason on here for Jacob just a few quick ones for me.
On our again call you weren't in your van I think there was going to be a pull back in terms of sales to these customers in 2020 due to some stocking ahead of drug launches any updated thoughts on that van from these customers as we look into 2021.
Ah yes, the demand for for that group of three customers looks really strong year on year for 2021 versus 2020.
And we're actually seeing a little bit attraction in that group of customers based on their good successes in their launches. So we highlighted a you know material order from product order from cure in in the second quarter and that was nice to see and so yeah. It will be a down.
Year versus the really strong 2019 product sales.
Maybe not quite as down as we thought which helps us to move the expectation you know to the upper end of our prior expectation range.
But certainly there all three customers are set up for nice year on year growth and product sales in 2021 versus this year.
Got it and then just one more for the Takeda agreement. It looks like you guys are eligible to receive.
Payments up to 22 million as reimbursement for for your services in certain preclinical milestones how should we be thinking about the pace and timing in size of these R&D. After efforts in the payments that are there a corresponding with them.
Ross I'll, let you a jump in on that I'll add if necessary.
Sure Yeah Nathan.
22 million is comprised of both development milestones as well as R&D payments and.
Yes, I think the R&D payments will be spread over the next you know to an after three years and the development milestones will also be spread during.
That time period I think.
Yield remains to be seen exactly how even that navy over the subsequent three years, but we do expect to at least several million dollars in R&D revenue associated with Takeda during the second half of this calendar year.
Got it that's it for me thank you.
Hey, thanks. Thanks.
At this time there are no further questions, but this concludes our question and answer session.
I'd like to turn the conference back over to John Nicols for any closing remarks.
Okay, well thanks, everybody for your questions, we've stayed very strong and navigated well.
Through the pandemic, a while continuing to build you know and even stronger future for for could access. So thanks again, everyone stay safe and well look forward to talking again the future.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.