Q2 2021 Neuropace Inc Earnings Call
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Good morning, and welcome to narrow T. SEC second quarter earnings Conference call. At this time all participants are in a listen only mode. We will be facilitating a question and answer session towards the end of today's call as a reminder, this call.
Is being recorded for replay purposes, I would now like to turn the call over to Matt back stuff from the Gilmartin group for a few introductory comments.
Thank you operator, good morning, and thank you for participating in today's call. Joining me joining me from neuro pace or Mike Babich, CEO and Rebecca Cohen CFO earlier today Neuro pace released financial results for the quarter ended June 32021 copy of the press release is available on the company's website before we begin I would like to remind you that management will make statements.
During this call that will include forward looking statements within the meaning of federal Securities laws, which are made pursuant to the safe Harbor provisions of the private Securities Litigation Reform Act of 95 any statements contained in this call that relate to expectations or predictions of future events results or performance are forward looking statements all forward looking statements.
Including those around neuro patients clinical trials and those relating to our operating trends and future financial performance the impact of COVID-19 on our business and prospects for recovery expense management expectations for hiring growth in our organization market opportunity revenue guidance commercial expansion and product pipeline development are based upon <unk>.
Our current estimates and various assumptions. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those implied by these forward looking statements. Accordingly, you should not place undue reliance on these statements for more detailed descriptions of the risks and uncertainties associated with the fit with our business. Please.
Refer to the risk factors section of our public filings with the Securities Exchange Commission or SEC, including our quarterly reports on Form 10-Q filed with the SEC pursuant to rule 424 before on June three 2021.
As well as any reports that that we may file with the SEC in the future.
This conference call contains time sensitive information, which will which we believe is accurate only as of the live broadcast on August 12, 2021, neuro based disclaims any intention or obligation except as required by law to update or revise any financial projections or forward looking statements, whether because of new information future events or otherwise.
With that I will now turn the call over to Mike.
Thanks, Matt Good afternoon, and thank you for joining us as we discuss our second quarter operating as a public company I Hope you continue to sense, our dedication to focus on and growing growing momentum in bringing life changing therapy to people suffering from epilepsy.
Although we just recently held our first quarter earnings call in June following our IPO in April I'll start today's call with a brief company overview before moving on to covered business update and quarterly results.
Neuro pace of the commercial stage medical device company focused on transforming the lives of people suffering from epilepsy by reducing or eliminating the occurrence of debilitating seizures.
$3.4 million people in the United States are living with that philosophy, and while anti epileptic drugs are available as a first line treatment approximately one third of people with epilepsy are considered drug resistant because medications are unable to control their seizures as.
As a result, there are approximately $1.2 million people living with drug resistant epilepsy in the United States as a company, we strive to help epilepsy patients regain their lives and reach their full potential.
Our rns system is the first and only commercially available brand responsive neuro modulation platform designed to reduce or eliminate the occurrence of debilitating seizures.
Ice continuously monitors brand activity and its program to recognize patient specific patterns associated with seizures.
The device has been able to close the loop by responding in real time to deliver personalized treatment have the source preventing seizures before they start.
Our rns system also records ongoing brain activity as patients live their normal lives, giving physicians unprecedented visibility into patients unique seizure patterns, while providing insights they can use to optimize therapy outcomes.
While our current indication for use to treat adults with drug resistant focal epilepsy over time, we intend to expand our indication into a broader side of epilepsy patients.
<unk> approval for a clinical study to expand our indication to drug resistant focal epilepsy patients ages 12 to 17 and expect to begin enrollment later this year.
Additionally, and as I will shortly describe we intend to pursue potential indication expansion into generalized epilepsy. The second most common type of epilepsy.
We have developed an extensive body of clinical evidence demonstrating that our rns system offers significant seizure reduction in all areas of the brain with enduring improvements in quality of life in cognition for adults living with drug resistant focal epilepsy.
And the largest and longest prospective neuromodulation study conducted in epilepsy rns system demonstrated seizure reduction that improved through nine years of follow up.
But more recently published results from a real World retrospective study conducted after FDA approval reported even better results faster within the 82% median seizure reduction at three years of follow up.
The study outcomes demonstrate the utility of our unique brand recordings and driving improvements in therapy effectiveness across patient cohorts over time.
We also continue to learn and innovate by leveraging our extensive brain recording dataset, which includes more than $6 million intracranial EEG Records. These.
These recordings, along with our data analytics capabilities allow us to improve our products and provide clinicians with information. They can use to help them monitor patient progress optimize programming parameters and better counsel their patients.
One recent example is the broad launch of our insight platform and online physician portal that integrates EEG data from the rns system with patients seizure diary information, giving physicians a more comprehensive view of their patients seizure burden.
We believe the capabilities of our rns platform provide a competitive advantage, which allows us to continue to improve therapy effectiveness for people living with drug resistant epilepsy.
Hospital and physician reimbursement is established for the RMS system implant and for the programming of the device reimbursement is also available for the periodic in person or remote review of the brand activity recordings, which we believe is unique to our rns system.
We believe that less than 1% of indicated patients had been denied coverage for implantation of IRR in our system and with positive coverage policies broadly in place obtaining approval has become routine.
Now turning to the results I am pleased to report that throughout the second quarter of 2021. The neuro based team continued to successfully navigate through these unique and challenging times, we reported Q2 revenues of $12.6 million, representing a 65% growth compared to the severely COVID-19 impacted.
Quarter of 2020.
On a sequential basis basis total revenues increased 12, 5% compared to the first quarter of 2021.
This increase was primarily driven by an increase in unit sales of our rns system for initial implant procedures.
During the second quarter, we were able to increase the number of implanting centers and remain on track to have 148 comprehensive epilepsy centers and plants, our RMS system in 2021.
As we mentioned during our last earnings call in June It takes roughly six months from the initial inpatient couple of Hep C monitoring unit or EMU diagnostic evaluation until implantation of our rns system.
Given us lag COVID-19 continues to impact our business as fewer patients have the prerequisite diagnostic evaluations in the second half of 2020 and the first few months of 2021 Pier IMU evaluations means that fewer patients have moved forward in their diagnostic journey, including being identified as candidates for the RMS system.
Yeah.
In recent months, we saw some recovery in the number of patients coming through you have used for the diagnostic evaluation, but we continue to take a measured approach in the forecasting patient volumes given increased physician and patient vacations in the summer months.
Between EMEA admission and rns system implant and potential headwinds, resulting from the COVID-19 Delta variant.
Additionally, we reported $3.4 million of replacement implant revenue, an increase of 13% compared to the second quarter of 2020, and 10% compared to the first quarter of 2021.
Given the approximately 90% replacement rates, we've seen over the last several years replacement revenue is primarily a function of battery exploration and previously implanted devices.
This can result in quarters with higher or lower than planned replacement implant revenue.
While we are pleased with the replacement implant revenue in the second quarter. It is important to remember that we expect replacement revenue.
Generally decreased over the next several years due to the transition to a longer lasting battery, which we introduced in 2018.
Next I would like to provide an update on the clinical trials, we plan to initiate in the coming quarters.
As previously mentioned, we have IDE approval for a clinical study to expand our indication for drug resistant focal epilepsy to younger patients patients ages 12 to 17.
We remain on track to initiate enrollment for this study before the end of 2021 and continue to expect minimal revenue contribution this year given the approximately three months lag between patient enrollment and rns system implant.
We also received breakthrough device designation from the FDA for rns system in patients with idiopathic generalized epilepsy, otherwise known as primary generalized epilepsy, we remain on track to submit an IDE study proposal to the FDA before the end of 2021, which we believe will position us to begin <unk>.
<unk> in 2022.
Additionally, in late June we announced the neuro case received an NIH grant through the brain research advancing innovative neuro technologies or brain initiative that will provide funding of up to $9.3 million over five years to evaluate the use of our rns system to treat Lennox <unk> syndrome.
For Lgs Lgs.
Lgs is a devastating form of childhood onset epilepsy, because it's cognitive dysfunction and frequent generalized onset seizures that often lead to injury.
Plan to use these funds to initiate an IDE feasibility study, which we believe will be the first to evaluate a neuromodulation device in patients with lgs, and which is projected to start enrolling patients in the second half of 2022.
To summarize our primary focus is to continue to grow revenue in our current indication we intend to do this by expanding into all Ccs in the United States driving increased utilization at these centers, increasing referrals and investing in innovation to improve patient outcomes and ease of use we are also investing to expand our indications.
To younger patients with focal epilepsy patients with generalized epilepsy, and exploring potential opportunities outside the United States.
Finally, we are supporting the early feasibility work that could bring the benefits of responsive neuromodulation therapy to patients with other brain disorders.
With that I will turn the call over to Rebecca Neuro cases, Chief Financial Officer.
Thanks, Mike.
Neuro cases revenue for the second quarter of 2020, Wang with $12.6 million compared to $7.6 million for the second quarter of 2020, an increase of 65%.
Increase was primarily driven by an increase in unit sales of our rns assistance through comprehensive epilepsy centers for initial implant procedures.
In the second quarter revenue from the initial implants was $9.2 million an increase of 100% over the second quarter of 2020.
On a sequential basis initial implant revenue increased 14% compared to the first quarter of 2021.
Revenue from replacement implants, with $3.4 million, an increase of 13% compared to the second quarter of 2020.
As Mike stated, we continue to expect replacement implant revenue churn related decrease for the next several years due to the transition to a longer lasting battery.
Gross margin for the second quarter of 2021 was 74, 1% compared to 71% in the second quarter of 2020.
Gross margin improved in the second quarter at 20 to 21, primarily due to lower fixed costs per unit as our production volume increased in the second quarter of 2020.
Gross margin was negatively impacted by reduced production volume as manufacturing must temporarily idled due to the COVID-19 pandemic.
Total operating expenses in the second quarter of 2020 Wang.
<unk> million compared with $8.9 million in the same period of the prior year.
In the second quarter of 2020.
<unk> had a number of cost cutting measures in response to the COVID-19 pandemic, including furloughs and temporary salary reductions, resulting in lower operating expenses.
R&D expense in the second quarter of 2021 was $4.4 million compared with $3.3 million in the same period of 2020.
The increase in R&D expense was primarily driven by an increase in compensation expenses.
Additionally, we saw an increase in product development and clinical study expenses.
SG&A expense in the second quarter of 2021 was $9.5 million compared with $5.6 million in the prior year period.
The increase in SG&A was primarily driven by an increase in compensation expenses and costs associated with operating as a public company.
We also saw an increase in sales marketing and field support costs, including travel.
19 restrictions ease and we returned to conducting more in price and visits with our customers.
Loss from operations was $4.6 million in the second quarter of 2021 compared to $3.4 million.
Period.
And other expenses, we have recorded a final noncash charge of $2.1 million due to an increase in fair value of the convertible preferred warrant liability, resulting from our initial public offering.
This expense is non recurring the warrants were exercised at the time of IPO.
Net loss was $8.5 million for the second quarter of 2021 compared to $8.8 million in the second quarter of 2020.
Our cash and short term investments balance as of June 32021 was $127.9 million.
Our long term borrowings totaled $49.4 million.
Now I'd like to provide an update to our 2021 outlook.
While we were pleased with our second quarter results. We continue to take a measured approach given the uncertainty surrounding COVID-19, including the risk posed by new variants and the potential impact on hospital physician and patient behavior.
Based on this we continue to expect full year total revenue of approximately $47 million representing growth of 14% compared to full year 2020.
We expect initial implant revenue of approximately $36 million, which includes the minimal clinical trial revenue and.
Ah represents growth of 29% compared to full year 2020.
Lastly, given the replacement revenue dynamics, Mike mentioned previously.
We anticipate replacement revenue to be approximately $11 million, representing a decline of 16% compared to full year 2020.
This concludes our prepared remarks, I would now like to turn the call back over to the operator, who will open the call for questions.
Okay.
Thank you to ask a question you will need to press Star then one on your telephone to withdraw your question. Please press the pound key we ask that you limit yourself to one question and one follow up then you may rejoin the queue. If you have any additional questions. Please standby, while we compile the Q&A roster.
Our first question comes from the line of Robbie Marcus with Jpmorgan. Your line is now open.
Hi, guys. This is actually Allen on for Robbie.
Congrats on a great quarter, just to start off with kind of the elephant in the room, obviously, but I think a lot of investors are thinking about right. Now is the impact of COVID-19, especially with some hospital some states moving.
Moving towards deferring elective procedures.
So with respect to yourselves. So what are you seeing in terms of your own patient demand versus capacity and what are you seeing.
What have you seen so far in third quarter with respect to the impact of Covid a delta on your forward looking trends.
Great. Thanks for the question and before I answer it directly I wanted to take a minute to go back to some of the fundamentals of the business. So let me start with just reiterating some of the prepared remarks that we're really pleased and I. Appreciate your thanks on the performance in Q2, especially.
Really the strength of that driven by the initial implant procedures, which are the fundamental long term growth driver for our business. We saw as we reported.
Doubling of that initial implant revenue over Q2 of 2020, and 14% sequential growth over Q1.
Additionally, color behind that.
That growth was driven both by more centers implanting the device as well as higher utilization within those centers.
Really wanted to keep that grounded on the fundamentals of the business, which are long term drivers of growth in the business. That's enabled by the clinical data that we've established the reimbursement that's in place the balance sheet that we have for the organization and really with that as long as well as investing in future indication expansion, putting us in a really fundamentally strong position.
For long term growth.
With all of that said the elephant in the room that you mentioned.
We have seen headwinds to start off Q3, that's coming in part from vacation schedules from physicians and patients.
That we saw to a much greater extent than what we've seen historically and then on top of that in the last couple of weeks really within the last couple of weeks. There is increasing uncertainty associated with the delta variance of COVID-19, and what that and what the implications of that for our business.
Really just in these last couple of weeks, we have started to see the reemergence of electric of limitations on elective procedures in certain limited regions across the country.
Especially for procedures like our initial implant procedures that require an ICU stay.
While these factors that I talked about have the potential for an impact on our business. We do believe that they are transitory in nature.
<unk> kind of impact we saw last year to a much greater degree.
And when the hospitals started to allow those elective procedures to happen again, we saw the recovery of those procedures being completed once those limitations were in place.
Very fat recently emerging impact and so we don't know at this point, how long that's going to last or what the magnitude of that impact at this point like I said, it's very regional applications, but with more uncertainty associated with that the guidance that we're providing for full year.
Assumes that any impact of the Delta variant.
Works its way through the system before the end of the year. So while there could be and there may be timing impacts we weren't those procedures happen and we expect that they'll work their way through the system. This year and then the other impact of Covid, which we've talked about in the past as well as around patients that are coming through the epilepsy monitoring unit we.
We had reported that during the second half of 2021st quarter of this year that we had been seeing a reduced number of patients coming through the EMU, we'd started to see a recovery in the number of those patients starting really at the end of March of this year.
No yet it's too early for us to know what the impact on EMEA admissions are going to be associated with the delta variant.
Again, I expect those to be transitory in nature, but at this point too early for us to understand how much of an impact or how well how long that impact is going to make is going to maintain I think no different in many ways than the other companies that you're talking to.
Got it and then just as a quick follow up.
This kind of more challenging environment, how able are you to drive continued improvements in the referral channel and you know really grow awareness of this so when hopefully fingers crossed delta in Covid are much less of an issue in <unk> or 'twenty, one and into 'twenty 'twenty, two we're able to kind of getting your feet and start running thank you so much.
Thanks to this point the ability our ability to do referral development and reaching out to physicians and the community more of the physicians in the community as well as some of the things that we're piloting around direct to patient awareness education awareness hasn't been impacted by Covid.
And I don't anticipate that those efforts will be impacted by the delta variance specifically of a lot of that we're doing it remotely.
Been able to do more and more of that in person here as the travel restrictions that have come out, but even if there is additional travel restrictions put in place. We've got the capability of doing that through digital media as it relates to patient education awareness.
And through us through remote visits as it relates to the referring physician education and awareness.
Thank you.
Our next question comes from the line of Larry <unk> with Wells Fargo. Your line is now open.
Thank you for taking my question.
Next with IV.
I was actually wondering if you could.
Just let us know how much the Q2 sales benefited from backlog and then with respect to the cadence in the second half how should we think about.
Q4, I guess should we assume a step up in Q3, because it reflects.
Yes.
It was in Q1 and Q2.
You know with Covid headwinds begin to ease.
To be masked by.
Replacement implants, and then it does sound like you know COVID-19 headwinds would probably impact Q4 and likely into.
Q1 of next year is that fair.
So I think thanks for the question, so starting with man and if I missed any of this let me know, but starting with your question around impact on Q2 of this year.
Pent up demand comment I would say just as our business works the pipeline of patients coming through.
Through to be considered for implant with the RMS system is driven by patients coming through the <unk>. We saw last year in Q3 of last year really the recovery of the patients that were deferred in Q2 of last year and so that that surge of patients that were deferred in Q2, we really capture.
For those patients in Q3 of last year. So the performance of the business in Q4 of last year Q1, and Q2 of this year.
It was driven just by fundamentals of the business, adding more centers more utilization per center. It wasn't a pent up demand specifically, we've started to see as I mentioned, an increase late March through the second quarter of patients coming through the game you those numbers getting closer to pre pandemic levels.
That is a longer term driver for the growth in our business, we're continuing to monitor whether COVID-19 Delta variant restrictions will have impact on that for the for the business overall and then as far as your question goes about impact on the second half of the year.
As we had mentioned in the prepared remarks as well as in the last question.
We've started to see more or have seen more COVID-19 related headwinds in the third quarter some of that coming from pent up vacations that had happened for both patients and physicians and then now in the last couple of weeks uncertainty related to patients coming through the <unk>.
I'm, sorry, not coming through the end of it coming through surgery elective procedure limitations that are coming up with monitoring whether that'll happen right. Now again, it's been limited pockets across the country, but thats really late developing just within the last in the last couple of weeks literally last couple of weeks, but that started to come up.
So with that we see that there's those headwinds that are in place for Q3, but again, our expectation is that those will be transitory in nature and that they will work themselves through the system.
The impact whatever impact that COVID-19 will be relatively short term as it relates to our assumptions and then obviously monitoring whether that's <unk>, whether that's a fair assumption.
Thank you.
Thank you.
Our next question comes from the line of drew Ranieri with Morgan Stanley. Your line is now open.
Hi, everyone. Thanks for taking the questions.
Just specifically.
Specifically to the second quarter, Mike I was hoping to just get a little bit more color on what's driving the underlying strength in the quarter specifically to utilization.
Just curious if youre seeing more of your existing users.
Increased our rns adoption or is it more a function or becoming more of a function of kind of your land and expand at a comprehensive epilepsy center.
Thanks drew the growth that we saw in Q2 came from pulse more centers implanting the device as well as from utilization.
We have provided guidance that we're expecting to increase the number of implanting centers to 148 and 2021, we continue to be on track to that so making increased and the number of those of those centers that are implanting the device.
With that said the bulk of our growth is coming from and we expect it will continue to come from greater utilization within the centers that are implanting the neuro based system.
That's a combination of more physicians within those centers in planting and then also over time, increasing the amount of utilization from each center, but overall driving utilization growth within those centers and that's the trend that we saw in Q2. So we did see an increase in the number of centers, but the bulk of the growth coming from utilization within the centers and again Thats a trend that we have.
Expect to continue.
Got it thank you and just on the pipe line for a moment with the adolescent Socal and primary generalized.
Ah studies coming soon can you, maybe just give us a timeline of future milestones beyond that and maybe just how many patients do you expect to enroll in both of those studies or any details that you can provide at this time would be helpful.
Yeah.
Let me start with the adolescent studies, but the adolescent study we have the <unk> approved for that we're working through the process of getting enrollment started in that trial. We continue to expect that that enrollment will start here in the second half of the year.
As I have mentioned in the prepared remarks, there is a about a three months delta between.
Between shouldn't he's dealt with the Delta variant a three month delay between when a patient is enrolled in the study and when the patient is implanted in the study and that's because there's a baseline of period of baseline seizure activity that's collected for each patient before they get the device implanted.
With that we're expecting really minimal revenue impact from the adolescent study enrollment this year. So we'll start enrollment in the study.
With the delay to implant and expecting minimal impact from revenue in the second half of this year and then that'll be expanding next year.
Study that we have approved requires for adolescent study requires a minimum of above 75 patients to be filed followed for one year.
For our primary endpoint in that study so we'll be we'll be enrolling those patients following in planting those patients again with the bulk of that and enrollment expected to take place next year in 2022.
Switching over to the generalized epilepsy study the idiopathic generalized or primary generalized epilepsy study. That's the study that we received the breakthrough device designation for that trial. We're working on the design of that trial, we're engaged with the FDA and anticipate submitting to the FTA and the <unk>.
Second half of this year for that IDE approval.
Because we don't have approval yet there's uncertainty about exactly how large the sample size is going to need to be and what the amount of follow up is but what I can tell you is that what will be proposing to the FDA is something that is of similar magnitude to what I. Just described for the adolescent study.
Looking forward to engaging with the FDA on that here as we make that submission here later this year.
Great. Thanks for taking the questions Mike I appreciate it.
Yes, thanks sure.
Thank you. Our last question comes from the line of Danielle <unk> with SBB Leerink. Your line is now open.
Hey, good afternoon, everyone and thank you so much for taking my question Congrats on a very strong second quarter.
A question for you or maybe this is like a little bit of a follow up to jeremy's question, but but more around sort of how you're seeing new centers.
How youre opening new centers like what the process is acuity I'm getting a center up to scale. However, you define scale and getting multiple surgeons implanting and then the Avalon apologists, referring sort of how long does it take and what what's the process for your sales rep to.
To get back that way.
Okay. Thanks, Danielle so the the growth in the number of the increase in the number of implanting centers.
For us comes from a combination of some centers that we've just recently engaged with there is a program that wants to get started that we've created interesting rns as a treatment for their drug resistant epilepsy patients and it also includes some centers that we've been engaged with for a long time, but it really requires them to.
Create that first set of patients identify that first set of patients that they go through all of the process and ultimately implant those implant those patients and so it's a combination of both we had talked in the in the road show and leading up to the IPO that we have a pipeline of accounts that we've been engaged with that have the contracts in <unk>.
Until a lot of that a lot of that increase is coming from those centers that we've been engaged with for a while and then it's a matter of getting those first patients identified and implanted.
Sometimes we do have centers that come through and move very quickly through that contracting process and are unable to move move onto that so long way of saying is that there's a lot of variability and how long it takes to get somebody from initially expressing interest actually doing their first implant.
We're continuing to make growth in that and so we're seeing the number of those centers expanding over time, we're expecting to grow 132 centers last year implanted we're expecting that to go up to 148. This year and again those are mixed with some centers that have been engaged with us to some level for awhile and others that are relatively more recent in the.
Process and we continue to have a pipeline of accounts that we've engaged with it yet haven't gotten to that point there'll be.
Supporting the increase of number of centers and as we go into 2022 and beyond.
Okay, and then just a follow up question on the guidance and I think it's sort of tied to that question is just that but.
You do get to a 148 by the end of the year and I know these aren't perfect number because you don't necessarily know where you were in Q1 and Q2 as it relates to implanting accounts, but basically the guidance to suggest.
Or do you, even maybe a little bit.
Yes.
Dilutive.
Back half of the year utilization for implanting, a cow and I guess my question is why wouldn't that number go higher and I think.
Maybe the answer is that the new centers coming online are pretty dilutive initially, but would love to get any color from you on why utilization in the back half wouldn't be higher than even what we saw in Q2.
Yes, I think thanks for the question Danielle So it's.
Maybe a little bit of detail around when we talk about the number or the number of implanting centers. We look at the number of implanting centers over a longer period of time, because the average number of implants per center per year is.
Still relatively modest we're relatively early in the adoption phase for those centers and so when I'm talking about the number of centers implanting in 2021, that's the number of centers in planting and the full year 2021, and so some of those centers will have implanted in Q1, and Q2 and Q3 and other.
We'll just come on and start implanting toward the toward the end of the year.
So there's a there's a little bit of nuance I guess with the way that the math works out for that with that said overall, we're continuing to see an increase in utilization. If you look at it on an annual basis 2021.
He is going to increase over 2020 in terms of utilization and if you look at it on a rolling 12 month basis or a rolling four quarter basis that increase continues into the second half of the year as well so and so it's a little bit of I'm just looking at the way that we report the number of implanting centers based on the average utilization.
I don't know if that if that may be confusing, but if that.
That's helpful. Thank you for the reminder.
Center commentary that's helpful. Thank you.
Thank you.
There are no further questions at this time I will now turn the call over to Mike.
Remarks.
Thank you all for your time today, Rebecca and I would like to thank you for taking the time with US we look forward to meeting you in the future hopefully at some in person events or industry conferences as that's available.
Have a great evening.
Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.
Okay.
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