Q1 2024 OPKO Health Inc Earnings Call
Hello, and welcome to the Opco health first quarter of 'twenty 'twenty four financial results Conference call.
Operator: Hello and welcome to the OPKO Health first quarter 2024 financial results conference call. All participants will be in the synonym.
Operator: All participants will be in listen only mode.
Operator: If you need assistance, please email a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press the star then 1 on your telephone keypad. To withdraw your question, please press the star then 2. Please note, this event is being recorded. Now, I would like to turn the conference over to your host today, Yvonne Briggs. Please go ahead.
Operator: Should you need assistance. Please you know conference specialist by pressing the star key followed by zero.
Yvonne Briggs: After todays presentation, there will be an opportunity to ask questions.
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Operator: Now I'd like to turn the conference over to your host today Yvonne Briggs. Please go ahead.
Yvonne Briggs: Thank you, Operator, and good afternoon. This is Yvonne Briggs with LHA.
Operator: Thank you operator and good afternoon. This is Yvonne Briggs with L. A J. Thank you all for joining today's call to discuss the Opco Health's financial results for the first quarter of 2024.
Yvonne Briggs: Thank you all for joining today's call to discuss OPKO Health's financial results for the first quarter of 2024. I'd like to remind you that any statements made during this call by management other than statements of historical fact will be considered forward-looking and, as such, will be subject to risks and uncertainties that could materially affect the company's expected results. Those forward-looking statements include, without limitation, the various risks described in the company's SEC filings, including the annual report on Form 10-K for the year ended December 31, 2023, and in subsequently filed SEC reports.
Yvonne Briggs: To remind you that any statements made during this call by management other than statements of historical fact will be considered forward looking and as such will be subject to risks and uncertainties that could materially affect the company's expected results.
Yvonne Briggs: Those forward looking statements include without limitation the various risks described in the company's SEC filings, including the annual report on Form 10-K for the year ended December 31, 2023, and then subsequently filed SEC reports.
Yvonne Briggs: This conference call contains time sensitive information that is accurate only as of the date of the live broadcast may 7th 2024.
Yvonne Briggs: Except as required by law Opco undertakes no obligation to revise or update any forward looking statements to reflect events or circumstances. After the date of this call.
Yvonne Briggs: This conference call contains time-sensitive information that is accurate only as of the date of the live broadcast, May 7, 2024. Except as required by law, OPKO undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this call. Before we begin, let me review the format for today's call. Dr. Phillip Frost, Chairman and Chief Executive Officer, will open the call. Dr. Elias Zerhouni, Vice Chairman and President, will then provide an overview of BioReference Health, followed by an update on OPKO's pharmaceutical business. And after that, Adam Logal, OPKO's CFO, will review the company's first quarter financial results, and then we'll open the call to questions. Now, I'd like to turn the call over to Dr. Frost.
Speaker Change: Before we begin let me review the format for today's call.
Yvonne Briggs: Dr. Phillip Frost, Chairman and Chief Executive Officer will open the call Dr. Elliot Zerhouni, Vice Chairman and President will then provide an overview of bio reference health followed by op Cos pharmaceutical business and after that Adam mogul Opco CFO will review the company's first quarter financial results.
Yvonne Briggs: We will open the call to questions now I'd like to turn the call over to Dr. Frost.
Speaker Change: Good afternoon, and thank you for joining us today.
Phillip Frost: Good afternoon, and thank you for joining us. In March, we announced an agreement to sell certain assets of BioReference Health to LabCorp for $237.5 million. The assets include bio-references, clinical diagnostics, and women's health testing services outside of New York and New Jersey. The transaction was specifically structured in a manner so as to increase the likelihood of obtaining expedited clearance from antitrust regulators, but it also streamlines the remaining operations to advance the path to profitability for our diagnostic segment. The transaction is expected to close in the second half of this year, pending FTC clearance.
Phillip Frost: In March we announced an agreement to sell certain assets of bio reference health to Labcorp for $237 $5 million.
Phillip Frost: Yes, it's included bar references clinical diagnostics and women's health testing services outside of New York and New Jersey.
Phillip Frost: Transaction was specifically structured in a manner so as to increase the likelihood of them training expedited clearance from an antitrust regulators.
Phillip Frost: It also streamlines the remaining operations through advanced the path to profitability for our diagnostics.
Phillip Frost: The transaction is expected to close in the second half of this year pending FTC clearance.
Phillip Frost: And Jerry law, our long acting growth hormone therapy continues to gain traction as we're a global commercial partner Pfizer expands its launch of the product in over 40 global markets.
Phillip Frost: In general, our long-acting growth hormone therapy continues to gain traction as our global commercial partner, Pfizer, expands its launch of the product in over 40 global markets. This once-weekly injection product to treat growth hormone deficiency is the first new chemical entity developed at OPKO Biologics in Israel, where we now have other preclinical candidates under development. One is a long-acting form of an unaccented modulant analog which I mentioned in our last quarterly call.
Phillip Frost: Once weekly injection product to create growth hormone deficiency is the first new chemical entity devoted umpqua biologics in Israel, where we now have other preclinical candidates under development.
Phillip Frost: One is a long acting form of clinical module in Ottawa, which I mentioned in our last quarterly call.
Phillip Frost: The pegylated form of this active peptide has been shown to be effective and safe in treating diabetes and obesity in a Phase II study in over 450 patients. The new long-acting form is expected to have the same pharmacology profile as the pegylated form but allow the administration of larger doses. We have, in development, a long-acting HVH antagonist for the treatment of acromegaly caused by the excessive secretion of growth hormone and IGF-1. We are progressing in our work with Enterobar to develop oral forms of Oxyntomodulin and a GLP2 analog for short bowel syndrome and other disorders involving nutrient malabsorption.
Phillip Frost: Regulated former besides the peptide has been shown to be effective and safe in treating diabetes and obesity and a phase.
Phillip Frost: His II study in over 450 patients.
Phillip Frost: The new long acting form is expected to have the same pharmacology profile as the pegwood informed what permits administering larger doses.
Phillip Frost: We have in development, a long acting hgh antagonist for the treatment of acromegaly corresponded to exactly assess it.
Phillip Frost: Secretion of growth hormone IGF one.
Phillip Frost: We are progressing in our work with antero borrowed to develop oral forms of walks into March one and two are the log for short bowel syndrome, and other disorders involving nutrient malabsorption.
Phillip Frost: We look forward to keeping you apprised of progress with these promising programs. MODX continues to advance its development work, and two programs are on track to enter the clinic this year. Our Epstein-Barr vaccine, which is licensed to Merck, and our multi-specific oncology antibody, which has received FDA clearance for a phase 1 trial. Our collaboration with BARDA is moving forward, and it provides non-dilutive financing to develop multi-specific antibodies against COVID. As work progresses on this first indication, we will begin to explore alternative targets to tackle other biodefense threats, such as influenza. With that brief overview, I'll turn it over to Elias.
Phillip Frost: We look forward to keep you apprised of progress with these promising programs.
Phillip Frost: <unk> continues to advance its development work in two programs are on track to enter the clinic. This year, our upstream bar vaccine license to Merck and our multi specific oncology antibody, which has received FDA clearance for a phase one trial.
Elias: Our collaboration with BARDA is moving forward and provides non dilutive financing to develop multi specific antibodies against Covid is <unk>.
Phillip Frost: Work progresses or this first indication we will begin to explore alternative targets to tackle other biodefense threats such as influenza.
Elias: With that brief overview I'll turn it over to Elliot.
Elias: There is.
Elias: Well, thank you Phil and good afternoon, everyone. Let me start by Apologia envelope.
Elias Adam Zerhouni: Well, thank you, Phil, and good afternoon, everyone. Let me start by apologizing if you hear background noise. I'm in a noisy environment.
Elias: Apologize if you hear background noise.
Elias: The environment of the airport well as Phil said, we were very pleased to announce our agreement with labcorp to sell certain assets or by rush himself for a cash purchase price of $237 5 million.
Elias Adam Zerhouni: But, as Phil said, we were very pleased to announce our agreement with NAPCORP to sell certain assets at BioReference Health for a cash purchase price of $237.5 million. These assets generate approximately $100 million in annual revenue and include patient service standards, certain customer contracts, and operating assets associated with testing services focused on clinical diagnostics and women's health across the U.S., but outside of New York and New Jersey, we will retain our national oncology and urology franchises and our diagnostic services in New York and New Jersey.
Elias Adam Zerhouni: <unk> generates approximately $100 million in annual revenue.
Elias Adam Zerhouni: Patient service centers, certain customer contracts and operating assets associated with testing services focus on critical diagnostics.
Elias Adam Zerhouni: So across the U S.
Elias Adam Zerhouni: Side of New York, and New Jersey, we will retain our national oncology Urology franchise.
Elias Adam Zerhouni: Diagnostic services in New York, and New Jersey.
Elias Adam Zerhouni: This complements our efforts to improve efficiencies and enhance the productivity of operations. This transaction will streamline our laboratory services business and support our work to reestablish profitability in the near future. As Phil mentioned, we expect the sale to close in the second half of 2024, subject to customary closing conditions and applicable regulatory approval.
Elias Adam Zerhouni: Copper.
Elias Adam Zerhouni: Complements our efforts to improve efficiencies and enhance the productivity of operations. This transaction will streamline laboratory services business and support our work to reestablish profitability in the near future.
Elias Adam Zerhouni: Phil mentioned, we expect the sale to close in the second half of 2024 subject to customary closing conditions and applicable regulatory approvals.
Elias Adam Zerhouni: As an ongoing initiative, we continue to improve fire reference performance and, in turn, build value. Our focus remains on initiatives to reduce costs, improve efficiency, and enhance productivity. In addition, we seek to bolster growth through the expansion of insurance coverage in our higher-value specialty segments of oncology and neurology, with particular focus on our proprietary four-case core test. As you know, the 4K score test was first introduced in 2014 as a laboratory development.
Elias Adam Zerhouni: Ongoing initiatives, we continued to improve by a record performance and in turn build.
Elias Adam Zerhouni: Value our focus remains on the initiatives to reduce costs improve efficiency and enhance productivity.
Elias Adam Zerhouni: In addition, we seek to bolster the growth or the expansion of insurance coverage in our higher value specialty segments iPhone collagen neurology with particular focus on our proprietary <unk> quota.
Elias Adam Zerhouni: As you know the full case Cortez was first introduced in 2014.
Elias Adam Zerhouni: The laboratory developed tests.
Elias Adam Zerhouni: As you know, FDA published new rules to reform the regulation of lab-developed tests. This will have a minimal impact on bioreference health as all our tests are approved by New York State regulators who are exempted from the announced FDA reform.
Elias Adam Zerhouni: No FTA publish new rules to reform the regulation now.
Elias Adam Zerhouni: Uh huh.
Elias Adam Zerhouni: This will have a minimal impact on by rubbing himself as all our tests are approved by New York State regulators, who are exempted from the announced FDA reform.
Elias Adam Zerhouni: In December 2021, I would like to remind you that the 4K score, supported by its analytical and clinical data, was approved by the FDA. FDA concluded that the 4K score test had the appropriate sensitivity of 96.9% and negative predictive value of 95.9% to contribute to an overall beneficial clinical decision as to whether a prostate biopsy should be performed and accordingly minimize unnecessary biopsies without the excess risk of missing clinically significant prostate cancer. In more than a hundred independent publications by urologists since then, the 4K score has ranked us as a best-performing biomarker test for the assessment of risk probability for aggressive prostate cancer.
Elias Adam Zerhouni: In December 2021 I would like to remind you book a score was approved by the FDA supported by an analytical and clinical data.
Elias Adam Zerhouni: We concluded that the orcas Cortez.
Elias Adam Zerhouni: It would be appropriate sensitivity.
Elias Adam Zerhouni: 96, 9% and negative predictive value.
Elias Adam Zerhouni: Five 9% the contributor to the overall beneficial clinical decision as to whether a prostate biopsy should be performed and accordingly, minimize unnecessary biopsies without excess risk of missing clinically significant prostate cancer.
Elias Adam Zerhouni: And more than 100 independent publications, probably wrong then the focus core has ranked us the best performing biomarker test for the assessment of risk probability for aggressive prostate cancer.
Elias Adam Zerhouni: Our urology team delivered strong growth in 4K score test volumes in the first quarter, and we expect these volumes to build as the test is now included in various clinical guidelines for early detection of prostate cancer for follow-up after PST screening, and for initial and repeat biopsy risk stratification. In regard to Royalty, the program continues to enjoy stable demand, which we hope will grow with new data showing that Royalty may delay the onset of dialysis, according to our most recent analysis.
Elias Adam Zerhouni: Urology team delivered strong growth.
Elias Adam Zerhouni: Is called test volumes in the first quarter and we expect these volumes to build customers included mill in various clinical dialogue guidelines for early detection of prostate cancer for follow up.
Elias Adam Zerhouni: Great.
Elias Adam Zerhouni: Both initial and repeat biopsy risk stratification.
Elias Adam Zerhouni: In regards to where we all do the program continues to enjoy stable demand, which we hope will grow with new data well made delays the onset dialysis. According to our most recent analysis.
Elias Adam Zerhouni: In oncology, we are pleased with GenPath's performance due to its innovative testing platform with an expanded hematological malignancy panel and very competitive turnaround time. We continue to see strong growth in our oncology business, with over 12% growth in volume in Q1 2024 versus Q1 2023. Much of this growth has been through collaborations with large cancer centers and mid-level health systems. As health systems are challenged with cost and staffing in the oncology space, they're looking for a reference laboratory to work with for their testing, opening up possibilities for bio-reference. Genpath has been able to meet their needs with our enhanced and comprehensive manual across all stages of care.
Elias Adam Zerhouni: You know calls you were pleased with Genpact performance due to its innovative testing platform with an expanded hematology malignancy panel and very competitive turnaround times, we continue to see strong growth in oncology business with over 12% growth in volume Q1, 'twenty 'twenty four.
Elias Adam Zerhouni: Q1 2023 more.
Elias Adam Zerhouni: Much of this growth was through collaborations with large cancer centers and mid level health systems.
Elias Adam Zerhouni: Health systems are challenged with cost and staffing in the oncology space.
Elias Adam Zerhouni: Looking for a reference laboratory to work with for that.
Elias Adam Zerhouni: They're testing opening up possibilities for bio reference.
Elias Adam Zerhouni: Genpact has been able to meet their needs with our own.
Elias Adam Zerhouni: Enhancing comprehensive menu across all stages of care.
Elias Adam Zerhouni: This includes the internalization of our hereditary cancer business in late Q4 2023, which now offers clients an internal solution with fast turnaround times for timely decision making. We continue to expand our testing portfolio and expect new tests in Q2 to complement our current oncocyte advance and onco-risk portfolio, which will enable GenPath Oncology to evaluate guideline-recommended genetic components of a patient's cancer and keep us at the forefront of precision onc Similar to our New York and New Jersey women's health and clinical businesses, our national oncology testing segment will remain with BioReference Health under our GenPath Oncology brand upon the closing of the transaction with... We believe that BioReference Health is well-positioned for further expense reductions and revenue expansion with a focus on the retained businesses in the New York and New Jersey markets after the divestiture.
Elias Adam Zerhouni: This includes the internalization of our hereditary cancer business in late Q4, 'twenty, three which now offers clients an internal solution with fast turnaround times with timely decision making.
Elias Adam Zerhouni: We continued to expand our testing portfolio.
Elias Adam Zerhouni: New tests in Q2 to complement our current uncle site advance with uncle risk portfolio, which will enable genpact oncology.
Elias Adam Zerhouni: Body weight guideline recommended genetic components passions cancer.
Elias Adam Zerhouni: And keep us at the forefront of PC.
Speaker Change: Isn't mythology.
Elias Adam Zerhouni: Similar to our New Jersey, New York, New Jersey Women's Health and clinical businesses are national oncology testing segment will remain with bio reference sales under our gen powerful ecology brand.
Elias Adam Zerhouni: Closing of the transaction with noncore.
Elias Adam Zerhouni: We believe the bio rough yourself is well positioned for further expense reductions in revenue expansion with a focus on the retained businesses and in New York and New Jersey markets. After the divestiture comps.
Elias Adam Zerhouni: Complementing these efforts to boost performance, we will continue to improve our diagnostic division to further enhance profitability for OPKO Health and best position us as an innovative biopharmaceutical company. Moving to our pharmaceutical segment, as you've heard, Engemba has been launched in all major global markets, like Pfizer. We believe this drug is well positioned for significant growth as long-acting growth hormone products become the global standard for treating growth hormone deficiency in children.
Elias Adam Zerhouni: Complementing these efforts to boost performance, we will continue to improve our diagnostic division to further enhance profitability uncle help and best position us as an innovative biopharmaceutical company.
Elias Adam Zerhouni: Moving to our farmers, who called pharmaceutical segment.
Elias Adam Zerhouni: As you've heard and Jim has been launched in all major global markets like Pfizer. We believe this drug is well positioned for significant growth as a long acting growth hormone products become the global standard in treating growth hormone deficiency for children.
Elias Adam Zerhouni: The launch is progressing as expected, with an increasing and significant percentage of patients shifting from daily to the long-acting once-a-week angina product. In addition, we expect our partnership with Pfizer to expand with additional indications, including growth hormone deficiency for adults and other pediatric applications. And combined, these approvals for these two indications will entitle OPKO to an additional $100 million in milestone pay. Let me go to MODX.
Elias Adam Zerhouni: The launch is progressing as expected with an increasing a significant percentage of patients shifting from daily to the long acting once a week and Jill up products. In addition, we expect our partnership with Pfizer to expand with additional indications, including growth hormone deficiency for adults and other P.
Elias Adam Zerhouni: Yatra applications and combine these approvals for these two indications will entitle us to an additional $100 million in milestone payments.
Elias Adam Zerhouni: As for MODX, we're proud of the progress to date. In March, we announced favorable results from a Phase I clinical study with our trispecific antibody against HIV. These clinical data are the first reported for a trispecific antibody in humans and strongly support further development of multispecific, multivalent antibodies against HIV. The antibody was found to be safe and well-tolerated at all those levels, through both intravenous and subcutaneous routes with minimal anti-drug antibodies observed, with dosing ranging from 0.3 milligram per kilogram to 30 milligram per kilogram, with up to four administrations, and a pharmacokinetic, which remained consistent and similar to standard monoclonal antibodies.
Speaker Change: Let me go to mud ex us from other banks, we're proud of the progress to date in March we announced favorable results from the phase one clinical study with our Tri specific antibody against HIV.
Elias Adam Zerhouni: These clinical data are the first reported Florida Tri specific antibody in humans and strongly support further development of multi specific multivalent antibodies against HIV.
Elias Adam Zerhouni: Antibody was found to be safe and well tolerated at all dose levels.
Elias Adam Zerhouni: To both intravenous and subcutaneous roots with minimal anti drug antibodies observed with dosing ranging from 23 milligram per kilogram to 30 milligram per kilogram with up to four administrations and the pharmacokinetics, which remained consistent and similar to standard monoclonal antibodies. We therefore believe.
Elias Adam Zerhouni: We therefore believe, and our partners at NIH believe, that multispecific antibodies will offer a differentiated approach to long-lasting preventive and therapeutic options against most HIV-1 variants, with the possibility of activating the immune system against the latent virus population to effect a functional cure. We are a partner with NIH on this program. Our collaboration with Merck to develop MDX2201, which is our Epstein-Barr virus multivalent nanoparticle vaccine, is advancing on schedule. We received a $50 million upfront payment upon licensing this vaccine, with a potential $872.5 million in development and commercial milestones plus royalties on global sales ranging from single digit to double digit percentages.
Elias Adam Zerhouni: <unk> and our partners at the NIH believes that multi specific antibodies will offer a differentiated approach to long lasting preventive and therapeutic options against most HIV one variance with the possibility of activating the immune system against the latent virus population to attract a functional cure.
Elias Adam Zerhouni: We're a partner with NIH on this program.
Elias Adam Zerhouni: Our collaboration with Merck to develop M. D X 20, 201, which is our Epstein Barr virus multi valent nanoparticle nanoparticle vaccine is advancing on plan we.
Elias Adam Zerhouni: We received a $50 million upfront payment upon licensing these vaccine with a potential $872 5 million in development and commercial milestones plus royalties on global sales ranging from single digit to double digit percentages in terms of timing. We expect this program to enter the clinic in the law.
Elias Adam Zerhouni: In terms of timing, we expect this program to enter the clinic in the latter part of this year. Our collaboration with BARDA is also proceeding on schedule and represents another source of non-dilutive funding for the company.
Elias Adam Zerhouni: Later part of this year.
Elias Adam Zerhouni: Elaboration with BARDA is also proceeding on schedule and represents another source of non dilutive funding for the company. We secured an initial $59 million grant to fund R&D and clinical evaluation phase one study of our multi specific antibodies against known variants of Sars Covid two.
Elias Adam Zerhouni: We secured an initial $59 million grant to fund R&D and clinical evaluation of our multi-specific antibodies against known variants of SARS-CoV-2 for the treatment and prevention of COVID-19. Additional funding of up to $109 million may be available from BARDA to develop multispecific antibodies and delivery approaches to target other biodefense threats such as influenza infections. The ultimate goal of this research program is to develop a platform with gene-based delivery methods using mRNA or DNA vectors to supplement the body's natural protein production processes, which can then be used efficiently and effectively against future pandemics.
Elias Adam Zerhouni: For the treatment and prevention of COVID-19 additional.
Elias Adam Zerhouni: Additional funding of up $209 million might be available from BARDA to develop multi specific antibodies and delivery approaches to target other biodefense trials, such as extra ones, though.
Elias Adam Zerhouni: The goal of this research programs to develop a platform the gene based delivery methods using mrna or DNA vectors to supplement the body's natural protein production processes, which can then be used efficiently and effectively against future pandemics.
Elias Adam Zerhouni: Rounding out the MODEX pipeline is our immuno-oncology program, which is focused on hard-to-treat solid tumors as well as certain liquid tumors such as leukemias and lymphomas. We believe our multispecific antibody candidates can simultaneously target several tumor targets and enable better control of immune system activation. And we expect our tetraspecific laser program for solid tumors to enter the clinic this quarter as our first IND application, as indicated by Phil, focused on solid tumors was deemed acceptable to proceed by the FDA.
Elias Adam Zerhouni: Rounding out the <unk> pipeline is already been new oncology program, which is focused on hard to treat solid tumors as well as certain liquid tumors, such as leukemias and lymphomas. We believe our multi specific antibody candidates can simultaneously target several tumor antigens and enable better control of immune system activation.
Elias Adam Zerhouni: And we expect our Tetra specific laser program for solid tumors to enter the clinic this quarter as our first I N D application as indicated by shell focused on solid tumors was deemed acceptable to proceed by the F. D. A.
Elias Adam Zerhouni: Other immuno-oncology products are advancing to IND-enabling studies and are on target to enter clinical studies next year. So, as you can see, it's an exciting time for OPKO as we execute our strategy to gain profitability for bioreference health by rightsizing the diagnostic division to its most profitable areas of activities, while advancing our bold biopharmaceutical segment with several programs set to enter the clinic this year. I will now turn the call over to Adam Logal to discuss our first quarter financial results. Adam?
Elias Adam Zerhouni: Other immuno oncology products are advancing to IND, enabling studies and are on target to enter clinical studies next year.
Adam E. Logal: So as you can see it's an exciting time for Opco.
Adam E. Logal: We executed our strategy to gain profitability for bio reference held.
Adam E. Logal: By right sizing the the diagnostic division to its most profitable areas of our activities, while advancing our bold biopharmaceutical segment with several programs set to enter the clinic. This year I will now turn the call over to Adam legal to discuss our first quarter financial.
Adam E. Logal: Results Adam.
Adam E. Logal: Thank you Elliot Elliot.
Adam E. Logal: As Phil and Elias have discussed, we had a busy start to the year, realizing significant value from some of our underlying assets and strengthening our balance sheet. The convertible debt offering in January reduced our cash interest expense.
Adam E. Logal: Elliot discussed we had a busy start to the year realizing significant value from some of our underlying assets and strengthening our balance sheet the convertible debt offering in January reduced our cash interest expense.
Adam E. Logal: This refinancing provided us with the flexibility to align our cash needs for our research and development investments to debt maturities over the next five years. In addition, we used a portion of the proceeds to buy back 55 million shares of our common stock, reducing our outstanding shares by over 7%. We also announced our agreement with LabCorp for the sale of Select Assets, which was a competitive process, and when completed, it will allow us to realign our business operations to focus on core markets and test offerings and to support our path to profitability at BioRack.
Adam E. Logal: This refinancing provided us the flexibility to align our cash needs for our research and development investments the debt maturities over the next five years.
Adam E. Logal: In addition, we used a portion of the proceeds to buy back 55 million shares of our common stock, reducing our outstanding shares by over 7%.
Adam E. Logal: We also announced our agreement with Labcorp for the sale of select assets, which was a competitive process and when completed that will allow us to realign our business operations to focus on core markets and test offerings and to support our path to profitability at bio reference while we are still within the review.
Adam E. Logal: While we are still within the review window with the Federal Trade Commission, we are diligently working on the profit plan for bio-reference to ensure we get to break even and then profitability as quickly as possible. The LabCorp deal was the first large step in the multifaceted plan.
Adam E. Logal: A window with the Federal Trade Commission, we are diligent work diligently working on our profit plan for.
Adam E. Logal: Bio reference to ensure we get to breakeven and then profitability as quickly as possible. The Labcorp deal was the first large step in the multifaceted plan.
Adam E. Logal: Moving to our financial results for our diagnostic segment, we reported revenue for Q1 2024 of $126.9 million compared with $132.4 million for the 2023 period. Costs and expenses decreased to $161.3 million for the first quarter of 2024 from $172.4 million for the 2023 period. Operating loss for our diagnostic segment of $34.4 million included approximately $2.2 million of non-recurring costs related to employee severance and programs associated with our efforts to return to profitability.
Adam E. Logal: Moving to our financial results for our diagnostics segment, we reported revenue for Q1, 2024 of $126 $9 million compared with $132 $4 million for the 2020 pre period.
Adam E. Logal: Cost and expenses decreased to $161 $3 million for the first quarter of 'twenty 'twenty four from $172 $4 million for the 2023 period.
Adam E. Logal: Operating loss for our diagnostics segment of $34 $4 million included approximately $2 $2 million of nonrecurring costs related to employee severance and programs associated with our efforts to return to profitability.
Adam E. Logal: Depreciation and amortization expense were $7.9 million and $8.7 million for the 2024 and 2023 periods, respectively. Revenues included approximately $27.8 million related to the book of business that is subject to our sale agreement with LabCorp. The costs and expenses related to this business were approximately $34.8 million. As part of the transaction, LabCorp has agreed to offer employment to more than 700 of our impacted employees who support this business.
Adam E. Logal: Depreciation and amortization expense were $7 9 million and $8 7 million for the 'twenty 'twenty, four and 2023 periods respectively.
Adam E. Logal: Revenues included approximately $27 $8 million related to the book of business that is subject to our sale agreement with Labcorp the costs and.
Adam E. Logal: Expenses related to this business were approximately $34 $8 million.
Adam E. Logal: As part of the transaction Lab Corp has agreed to offer employment to more than 700 of our impacted employees, who support this business moving.
Adam E. Logal: Moving to our pharmaceutical segment, revenue decreased to $46.8 million for the first quarter of 2024 from $105.2 million for the comparable period of 23. Revenue from products including our intellectual property, our international pharmaceutical businesses decreased by $2.3 million, reflecting lower sales within our Israeli API business, partially offset by higher sales of Ryaldy. Revenue from the transfer of IP was $8.7 million for the first quarter of 2024, compared to $64.8 million for the 2023 quarter, which included an upfront payment of $50 million from Merck as a result of our EBV vaccine agreement, as well as $9.5 million of milestone payments from our partners for Rialto.
Adam E. Logal: Moving to our pharmaceutical segment revenue decreased to $46 $8 million for the first quarter of 2024 from $105 $2 million for the comparable period of 'twenty three.
Adam E. Logal: Revenue from products, including our intellectual property, our international pharmaceutical businesses decreased by $2 $3 million, reflecting lower sales within our Israeli API business, partially offset by higher sales of reality.
Adam E. Logal: Revenue from the transfer of IP was $8 $7 million for the first quarter of 2024 compared to $64 $8 million for the 2023 quarter, which included an upfront payment of $50 million from Merck as a result of our EBV vaccine agreement as well as $9 $5 million of milestone payments from our partners for reality.
Adam E. Logal: During the first quarter of 2020 for Pfizer was able to substantially reduce the cost of manufacturing of N. Gen alone by obtaining approval for our significant scale up of their manufacturing process in order to support the global launch of in Jumbo.
Adam E. Logal: During the first quarter of 2024, Pfizer was able to substantially reduce the cost of manufacturing Ingenla by obtaining approval for a significant scale-up of their manufacturing process in order to support the global launch of Ingenla.
Adam E. Logal: In turn, Pfizer revalued its inventory on hand at December 31st and amortized that difference in manufacturing costs during the first four months of 2024, which is their standard accounting policy. As a result, our anticipated gross profit share for the first quarter was less than we anticipated, and we reported a gross profit share from Pfizer of $5.8 million, which compares to $3.1 million for the 2023 period. Pfizer has obtained significant payer access in the U.S. in 2024 for Ingenla, and we look forward to the continued execution of their global commercialization.
Adam E. Logal: In turn Pfizer has revalued its inventory on hand at December 31st and amortize that difference in manufacturing costs. During the first four months of 'twenty 'twenty, four which is their standard accounting policy as a result, our anticipated gross profit share for the first quarter was less than we anticipated and we reported gross profit share from Pfizer of $5 eight.
Adam E. Logal: <unk>.
Adam E. Logal: Which compares to $3 $1 million for the 2023 period.
Adam E. Logal: Pfizer has obtained significant payer access in the U S. In 'twenty 'twenty four for in General and we look forward to the continued execution on their global commercialization plan.
Adam E. Logal: In addition, other revenue includes approximately $2.2 million from our underlying agreement with BARDA, which offsets R&D and underlying support expenses for that program. Costs and expenses for our pharmaceutical segment were $74.5 million for the first quarter of 2024 compared to $86.3 million for the 2023 period. Research and Development Expenses for the First Quarter of 2024 were $21.2 million, compared to $31.9 million for the 2023 period.
Adam E. Logal: In addition, other revenue includes approximately $2 $2 million from our underlying agreement with BARDA, which offsets R&D and underlying support expenses for that program.
Adam E. Logal: Costs and expenses for our pharmaceutical segment were $74 $5 million for the first quarter of 2024 compared to $86 3 million for the 2023 period.
Adam E. Logal: Research and development expenses for the first quarter 2024 were $21 2 million compared to $31 9 million for the 2023 period.
Adam E. Logal: The 2023 quarter included a non-recurring $12.5 million in expense related to our payment to Sanofi for their portion of our upfront payment from our customers. Partially offsetting this decrease were increased activities for a MODEX development program. The resulting operating loss for the quarter ended March 31st, 2024 was $27.7 million compared to operating income of $19 million for the first quarter of 2023, which I previously mentioned benefited from this $57.5 million of milestone payments received in the quarter. Amortization expense related to intangible assets was unchanged at $16.4 million for both parties.
Adam E. Logal: The 2023 quarter included the nonrecurring $12 $5 million of expense related to our payment to Sanofi for their portion of our upfront payment from Merck.
Adam E. Logal: Offsetting this decrease were increased activities promote X development programs.
Adam E. Logal: The resulting operating loss for the quarter ended March 31, 2024, it was $27 $7 million compared to operating income of $19 million for the first quarter of 2002, and three which I previously mentioned benefited from this $57.5 million or milestone payments received in the quarter amortization.
Adam E. Logal: Spence related to intangible assets were unchanged at $16 4 million for both periods.
Adam E. Logal: Turning to our consolidated results, the first quarter of 2024 reported an operating loss of $71.5 million, compared with an operating loss of $30.6 million for the 2023 quarter. The net loss for the 2024 period included approximately $26.2 million related to the fair value change on embedded derivatives related to our convertible notes issued in January. For both periods, we recorded non-cash unrealized gains on our investment in GeneDx of $22.7 and $16.8 million, respectively, for the 2024 and 2023 periods. As a result, our net loss for the first quarter of 2024 was $81.8 million, or $0.12 per share. And this compares with a net loss of $18.3 million, or $0.02 per share, for the 2023 quarter.
Adam E. Logal: Turning to our consolidated results. The first quarter of 2024 reported an operating loss of $71 $5 million compared with an operating loss of $30 6 million for the 2023 quarter net.
Adam E. Logal: Net loss for the 2024 period included approximately $26 $2 million related to the fair value change on embedded derivatives related to our convertible notes issued in January for both periods. We recorded noncash unrealized gains on our investment in <unk> of $22, seven and $16 8 million.
Adam E. Logal: Respectively for the 2024 and 2023 periods.
Adam E. Logal: As a result net loss for the first quarter of 2024 was $81 $8 million or <unk> 12 per share and this compares with a net loss of $18 3 million or <unk> <unk> per share for the 2023 quarter.
Adam E. Logal: Looking ahead, we are providing the financial guidance with the following assumptions for our pharmaceutical segment. There are a number of factors that will continue to impact our gross profit share payments from Pfizer, including revenue from product sales from Janet Troponin in Genoa.
Adam E. Logal: Looking ahead, we're providing financial guidance with the following assumptions. For our pharmaceutical segment, there are a number of factors that will continue to impact our gross profit share payments from Pfizer, including revenue from product sales from Genotropin and Engema. Global sales of Genotropin for the first quarter of 2024, as reported by Pfizer, were $130 million, and Pfizer has not separately reported sales of Ingenla. However, we have continued to observe consistent prescription growth globally for Ingenla, as reported by IQVIA and Symptom.
Adam E. Logal: Global sales of <unk> for the first quarter of 2024 as reported by Pfizer were $130 million and Pfizer has not separately reported sales of in Gela. However, we have continued to observe consistent prescription growth globally for in general as reported by a caveat and Symphony <unk>.
Adam E. Logal: After adjusting for the expected accounting impact for the improved gross margins associated with the increased manufacturing scale of Ingenla, we revised our estimated gross profit share to be between $30 and $40 million versus our previous estimate of $40 to $50 million. We also assume a stable foreign exchange rate for our ex-U.S. pharmaceutical businesses, which will allow for continued profitable growth. R&D expenses for the second quarter of 2024 will reflect higher activities related to our MODEX programs, including CMC and efforts related to the initiation of our first immuno-oncology clinical trial.
Adam E. Logal: After adjusting for the expected accounting impact for the improved gross margins associated with the increased manufacturing scale up in Gela, we've revised our estimated gross profit share to be between 30 and $40 million versus our previous estimate of estimate of $40 million to $50 million.
Adam E. Logal: We also assume a stable foreign exchange rate for our U S. Ex U S pharmaceutical businesses, which will allow for continued profitable growth.
Adam E. Logal: <unk> expenses for the second quarter of 2024 will reflect higher activities related to our <unk> programs, including CMC and efforts to related to the initiation of our first immuno oncology clinical trial.
Adam E. Logal: A portion of these increased activities will continue to be funded through our BARDA for the diagnostic segment. However, as the timing of our closing for our LabCorp transaction is not yet certain and is subject to FTC review, we have not adjusted our guidance to remove this business from our second quarter estimate. As we've outlined, we're working to align the business to achieve a cash flow break-even run rate by the middle of 2024 and a profitability run rate by the end of the year, both subject to the timing of the closing of our LabCorp Transact.
Adam E. Logal: Portion of these increased activities will continue to be funded through our BARDA agreement.
Adam E. Logal: For our diagnostics segment.
Adam E. Logal: As the timing of our closing for our Labcorp transaction is not yet certain and is subject to FTC review, we have not adjusted our guidance to remove this business from our second quarter estimates as we've outlined we are working to align the business to achieve cash flow breakeven run rate by the middle of 'twenty 'twenty, four and profitability run rate by the end of the year.
Adam E. Logal: Which are both subject to the timing of closing of our Labcorp transaction.
Adam E. Logal: This work continues to include consolidating our geographic footprint and rationalizing our testing offerings as we expect our client mix to improve and our cost structure to appropriately support our go-forward strategy. During this transition phase, we expect consistent core testing volumes with a slight increase in the average price per patient collection amount due to our Revenue Cycle Management Initiative. Before considering any non-recurring costs that may result from our restructuring activities and other non-recurring expenses, we expect our cost and expense in Q2 to decline by approximately $5 million to approximately $154 to $157 million, without giving effect to the approximately $35 million related to the assets as part of the LabCorp transaction. As a result, we expect the following for the second quarter of 2025.
Adam E. Logal: This work continues to include consolidating our geographic footprint and rationalizing our testing offerings as we expect our client mix to improve as our cost structure and our cost structure to appropriately support our go forward strategy. During this transition phase, we expect consistent core testing volumes with a slight increase in the.
Adam E. Logal: Average price per patient collection amounts due to our revenue cycle management initiatives.
Adam E. Logal: Before considering any nonrecurring costs that may result from our restructuring activities and other nonrecurring expenses, we expect our cost and expense in Q2 to decline by approximately $5 million to approximately $154 million to $157 million without giving effect to the approximately 35.
Adam E. Logal: Related to the assets.
Adam E. Logal: As part of the Labcorp transaction.
Adam E. Logal: As a result, we expect the following for the second quarter of 2020 for total.
Adam E. Logal: Total revenue between $182 and $187 million; revenue from services between $127 and $130 million, including $26 to $27 million from assets related to the LabCorp transaction. Revenue from product sales of $40 to $45 million and other revenue between $10 million and $14 million, inclusive of the Pfizer gross profit share estimates, which are between 7 and 10 million. We expect second quarter costs and expenses to be between $234 and $243 million, again excluding any non-recurring expenses and expenses related to our restructuring of biorecovery.
Adam E. Logal: Total revenue between $180 million to $187 million revenue from services between 127, and $30 million, including $26 million to $27 million from assets related to the Labcorp transaction revenue.
Adam E. Logal: Revenue from product sales of $40 million to $45 million and other revenue between 10 and $14 million, including inclusive of the Pfizer gross profit share estimates, which are between seven and $10 million.
Adam E. Logal: We expect second quarter costs and expenses to be between 234 and $243 million again, excluding any nonrecurring expenses and expenses related to our restructuring of bio reference.
Adam E. Logal: It will also include approximately 20 to 26 million dollars for R&D expenses. The range is based on the timing of certain CMC activities for a MODEX program, as well as depreciation and amortization expense of $24 million. That concludes our prepared remarks. Thank you for your attention. And now, operator, let's open the call for questions.
Adam E. Logal: It will also include.
Adam E. Logal: Approximately 20% to $26 million for R&D expense.
Adam E. Logal: Range is based on the timing of certain CMC activities for our <unk> programs as well as depreciation and amortization expense of $24 million.
Adam E. Logal: That concludes our prepared remarks, thank you for your attention and now operator, let's open the call for questions.
Operator: Yes, thank you. We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the key. If at any time your question has been addressed and you would like to withdraw it, please press star then 2. At this time, we will pause momentarily to assemble the roster. And the first question comes from Maurice Raycroft with Jeffrey.
Speaker Change: Yes. Thank you.
Operator: The question and answer session to ask a question you May Press Star then one on your telephone keypad.
Operator: Speakerphone, please pick up your handset before pressing the keys.
Operator: So anytime you're your question has been addressed and you would like to withdraw it. Please press Star then two.
Operator: Time, we will pause momentarily to assemble the roster.
Maurice Thomas Raycroft: And the first question comes from Maury Raycroft with Jefferies.
Maurice Thomas Raycroft: Hi, Thanks for taking my question.
Maurice Thomas Raycroft: Hi, thanks for taking my question. I was going to start with a question related to bioreference. With the remaining bioreference services business, it sounds like you plan to continue to streamline, optimize, and grow that business with the aim of getting to profitability. Once the LabCorp deal closes, will you be able to provide more clarity into timing for getting to breakeven and profitability? And what is the longer-term strategy for maximizing value for both the services and the pharma parts?
Maurice Thomas Raycroft: I was going to start with a question related to your bio reference with the.
Maurice Thomas Raycroft: The remaining by our reference services business. It sounds like you plan to continue to streamline and optimize and grow that business with the aim to get to profitability.
Maurice Thomas Raycroft: The lab core deal closes will you be able to provide more clarity into timing for getting to breakeven and profitability and what's the longer term strategy for maximizing value for both the services in pharma parts of the company.
Adam E. Logal: So, I'll take that first. Question, Maury. Thanks for the question. So, you know, the timing for us getting to break even is going to be tied to the LabCorp transaction. We're not, we're certainly not waiting for that as it relates to the rest of the business, and we're actively working down our fixed costs at face value. We're exiting certain facilities currently, which will help bring down our fixed overhead.
Speaker Change: So I'll take the first.
Speaker Change: And Maury thanks for the question so.
Adam E. Logal: The timing for us getting to breakeven is going to be tied to the labcorp transaction. We're not we're certainly not waiting for that is as it relates to the rest of the business and where we're actively working down our fixed cost base we're exiting.
Adam E. Logal: Certain facilities.
Adam E. Logal: Currently which will help bring our fixed overhead we're also continuing to realign.
Adam E. Logal: You know, our stated goal was to have, you know, plans that would be executing to have us to run rate cash, cash flow break even mid-year. I think we're still looking towards that. Obviously, if FTC takes longer than expected, then that could take longer, but otherwise, that's the path we're on.
Adam E. Logal: Our stated goal was to have plans that would be executing to have us to run.
Adam E. Logal: Run rate cash cash flow breakeven mid year I think we're still we're still looking towards that.
Adam E. Logal: Obviously, if the FTC takes longer than expected then that could that could take longer but otherwise that's the path we're on.
Speaker Change: Got it understood.
Adam E. Logal: Got it, understood. And then for InGenLaw, can you provide any more perspective or clarity on the revised guidance there and the change in gross profit there?
Adam E. Logal: And then.
Speaker Change: In general I.
Adam E. Logal: Can you provide any more perspective.
Adam E. Logal: Or clarity into the revised.
Speaker Change: Our guidance there and the changing.
Adam E. Logal: Gross profit per share.
Adam E. Logal: Sure. So overall, we've seen, in general, demand continue to be strong on a global basis where Pfizer is in the market the longest. Obviously, it's continued to do very well. Really, the change to guidance has to do with an accounting consequence of their revaluing some inventory they had on books, and that flows through our gross profit share. It has no reflection on the strength of the program, just on the timing of when we're going to realize the benefits of that improved gross margin that's coming from their scale-up.
InGenLaw: Sure. So so overall, we've seen in general the demand continue to be strong on a global basis, where Pfizer has been in the market. The longest obviously its continued to do to do the best really the change the guidance has to do with an accounting consequence of their of their revaluing. Some inventory they had on books in that flow.
Adam E. Logal: <unk> through our gross profit share.
Adam E. Logal: Has no reflection on the strength of the program just just on the timing of when we're going to realize the benefits of of that improved gross gross margin thats coming from their scale up.
Speaker Change: Got it understand.
Gary: Got them understood. And Maybe one question just on some of the MODX clinical assets, if there are specific catalysts this year that we should be focused on, in particular for 2001 moving into the clinic. I don't know if there's anything more you can say about that study and when we could see initial data from that.
Gary: And.
Gary: And maybe one question just on some of the the <unk> clinical assets.
Gary: Yes, there are specific catalysts this year that we should be focused on.
Gary: In particular for two years or one moving into the clinic.
Gary: I don't know if theres anything more you can say about that study and when we could see initial data from that.
Gary: I'll let Gary, who's on the line, who's the CEO of Monarchs, answer that specific question.
Speaker Change: I'll, let Gary is on the line.
Gary: Good question Gary.
Gary: Yeah, you know, as Elias and Phil mentioned, we have the green light to go, so we're at the moment setting up sites and really looking to bring patients into the trial. I think, as Elias said in his comments, We're hopeful this should happen by the end of the quarter, and we're working to make it happen sooner if possible. In terms of any clinical results, you know, as you probably know, whenever you're taking a new immune therapy into the clinic, you start at a low dose and you escalate the dose, really for safety reasons, and that's a plan that we came up with with the FDA. So I wouldn't be expecting to see any data on, certainly, efficacy, at least for probably next year. The time frame in which you might expect to see some type of results.
Gary: Yeah, well you know as early as Phil mentioned, we have the green light to go so.
Gary: We're at the moment setting up sites and are really looking to bring patients into the trial.
Maurice Thomas Raycroft: Okay, understood. Thanks for taking my questions. I'll hop back in.
Maurice Thomas Raycroft: I think the as early as said in his comments.
Maurice Thomas Raycroft: We're hopeful that it should happen by the end of the quarter and we're working to make it happen sooner if possible in terms of any clinical results.
Maurice Thomas Raycroft: As you probably know.
Maurice Thomas Raycroft: Whenever you're taking a new immune therapy into the clinic.
Maurice Thomas Raycroft: You start at a low dose and you dose escalate really for safety reasons and that's the plan that we.
Maurice Thomas Raycroft: Too.
Maurice Thomas Raycroft: Craft with the FDA.
Maurice Thomas Raycroft: I wouldn't be expecting to see any data on certainly efficacy.
Maurice Thomas Raycroft: You know at least for prep.
Maurice Thomas Raycroft: Next year is the timeframe in which you might expect to see some types of results.
Speaker Change: Okay understood. Thanks for taking my questions I'll hop back in the queue.
Maurice Thomas Raycroft: Thank you and the next question comes from Jeff Cohen, with Ladenburg Thalmann and company.
Jeffrey Scott Cohen: Thank you. And the next question comes from Jeff Cohen with Lattinbrook Pharma Company.
Jeffrey Scott Cohen: Oh, thanks for taking our questions and good afternoon, a few from her and.
Jeffrey Scott Cohen: Thanks for taking our questions and good afternoon. A few from our end. I was wondering if you could talk about Ingenua and who will be paying for the additional studies as far as the couple of expanded labels that were mentioned? Is that Pfizer or yourself?
Jeffrey Scott Cohen: I was wondering if you could talk about in general and Hum.
Jeffrey Scott Cohen: We will be paying for the additional studies as far as the couple of expanded labels as I mentioned, there is a clause or or yourself.
Jeffrey Scott Cohen: So the way our partnership works for those additional indications as well split.
Adam E. Logal: So the way our partnership works for those additional indications is we'll split the cost 50-50 with Pfizer. For the adult, we're not necessarily expecting any additional studies, so just be there.
Adam E. Logal: Cost 50, 50 with Pfizer.
Adam E. Logal: But we're not looking for the adult where not necessary expecting any additional studies, so just really their pediatric basket.
Adam E. Logal: So it just may be a pediatric basket.
Adam E. Logal: Okay.
Jeffrey Scott Cohen: Okay, got it. And for full year 24, what should we anticipate from BARDA reimbursement? I know you called out 2.2 in the first quarter. Should we extrapolate that?
Speaker Change: Okay got it.
Adam E. Logal: For full year 'twenty four.
Jeffrey Scott Cohen: We anticipate from our BARDA reimbursement I know you called out $2 two in the first quarter should we extrapolate that.
Adam E. Logal: You'd expect that to continue to ramp up, Jeff, so that's part of the reason why the R&D number's going up. They're getting ready to do some CMC activities, which will bump that number up. And just as a reminder, it was $2.2 million on the revenue line. The expense line is slightly less than that.
Jeffrey Scott Cohen: We would expect that to continue to ramp up Jeff. So that's part of the reason why they are the R&D numbers going up they're getting ready to do some some CMC activities, which which will bump that number up and just as a reminder, there's it was $2 $2 million on the revenue line. The expense line is slightly less than that.
Jeff: Yeah, Okay kind of they make sense and Adam can you just clarify on the to cash and debt. So it was 76 cash in.
Jeffrey Scott Cohen: Yep, okay. I got it.
Jeffrey Scott Cohen: 230, plus 71, one on the discharge.
Adam E. Logal: That makes sense. And Adam, can you just clarify on the cash and debts? So it was 75.6 cash and 230 plus 711 on the debt side? That's right. 301? That's right. Okay, and the anticipated LabCorp closing you're expecting by the end of the year, it sounds like the back half. That will be... So we have the gross number, right? It's $237 million.
Adam E. Logal: 301.
Adam E. Logal: And the anticipated labcorp close and Youre expecting by engineer it sounds like back half in.
Adam E. Logal: That would be.
Adam E. Logal: The gross number right, it's 237 years.
Adam E. Logal: Yeah, I mean, the large unknown on the timing is just FTC, so once we clear FTC, assuming we clear FTC, we'll be working quickly with that WebCorp transaction.
Adam: Yeah, I mean, the large unknown on the timing is just FTC. So once we clear the FTC, assuming we clear the FTC will be working quickly with that.
Adam E. Logal: The transaction.
Jeffrey Scott Cohen: Okay, got it. You're feeling optimistic about the back half, right?
Adam E. Logal: Okay got it you're feeling optimistic on.
Jeffrey Scott Cohen: Back half of the year.
Adam E. Logal: That's our expectation.
Jeffrey Scott Cohen: That's our expectation.
Jeffrey Scott Cohen: Okay, I got it, and then I think that does it for us, so thanks for taking the questions.
Adam E. Logal: Okay got it and then.
Speaker Change: I think that does it for also thanks for taking the questions. Thanks, Jeff.
Operator: Thank you. And the next question comes from Edward Tenthoff.
Jeffrey Scott Cohen: Thank you and the next question comes from Edward <unk> with Piper Sandler.
Edward Andrew Tenthoff: Great, thank you for taking my question too. First, just a quick one, Adam, you mentioned cost guidance for the second quarter, 234 to 2, and I was writing furiously, but I didn't get the number 2. 43. 243, 234, 243.
Edward Andrew Tenthoff: Oh, great. Thank you for taking my question two.
Edward Andrew Tenthoff: First just a quick one Adam you had mentioned cost guidance for the second quarter of 234% too.
Edward Andrew Tenthoff: I was writing furiously, but I didn't get the number too.
Edward Andrew Tenthoff: <unk> three.
Edward Andrew Tenthoff: 243, 4% to 34%.
Adam E. Logal: Okay, great, super helpful. And then just kind of a higher level question, appreciating what Gary and Elias were saying about the multi-specific antibody getting moving. I think the first one is for hematologic cancers, if I'm not mistaken, or is that for solid tumors? And at a higher level, what do you ultimately expect to do with these different MODEX assets? You know, the stuff under BARDA, could that be further partnered? Should we expect more partnerships like the Merck EBV deal?
Edward Andrew Tenthoff: Okay, Great Super helpful. And then just kind of a higher level question appreciating.
Adam E. Logal: Well, Gary analysts are saying about.
Adam E. Logal: Multi specific antibody getting moving.
Adam E. Logal: I think the first one is for hematologic cancers, if I'm not mistaken or is that for solid tumors.
Adam E. Logal: And at a higher level, what do you ultimately expect to do with these different mode.
Adam E. Logal: The stuff on their part or could that be further partner should we expect more partnerships like the Merck EBV deal.
Adam E. Logal: You know, do you expect to keep the cancer stuff and generate some clinical data next year? Higher level commentary on sort of what the plan is. Thank you. I'll be happy to do that, and forgive the background noise.
Speaker Change: Do you expect to keep the cancer cell.
Speaker Change: And generate some clinical data and next steps higher level commentary on sort of what's the plan.
Speaker Change: I'll be happy to do that and forgive the background noise I think it's a solid tumor molecule that we are.
Elias Adam Zerhouni: I think it's a solid tumor molecule that we're entering into the clinic this quarter, okay? We do have a liquid tumor molecule that we're actually discussing with several parties who are interested. I think in the grand scheme of things, we have a platform, right? Actually, two platforms, a vaccine one and a multi-specific one, and we are eliciting a lot of interest. We're interested in partnering, and especially in research collaboration that will be funded by third parties, where we could develop more targets to enter a larger portion of the market than we could afford on our own.
Elias Adam Zerhouni: Entering into the clinic this quarter, Okay. We do have a liquid tumor molecule, which were arguably discussing with several parties who are interested.
Elias Adam Zerhouni: In the Grand scheme of things, we are just like we have a platform.
Elias Adam Zerhouni: Actually two platforms of vaccine one and.
Elias Adam Zerhouni: And a multi specific models and we are taking a lot of interest we are interested in partnering and especially in the research collaboration that will be funded by third parties, where we could develop more targets.
Elias Adam Zerhouni: To enter a larger portion of the market than what we could afford it on our own. So we wanted to leverage the platform with the ability for us to through results through the results we've already had with EBV.
Elias Adam Zerhouni: So we want to leverage the platform with the ability for us to, through results, through the results we've already had with the EBV, with the phase one multi-specific data, and hopefully with this one, I think it's going to generate momentum for collaborations and partnerships and licensing that I think will increase our bandwidth. I'll stop here, and Gary, if you have a...
Elias Adam Zerhouni: As one specific data and hopefully with this one I think is going to generate a momentum for <unk>.
Elias Adam Zerhouni: Collaborations and partnerships.
Elias Adam Zerhouni: Licensing.
Elias Adam Zerhouni: <unk> increased our bandwidth I'll stop here and Gerry if you have more to say.
Elias Adam Zerhouni: Yes.
Gary: Yeah, I think you said it well, Elias, and I'd say Ted did the... We're open to whatever makes sense in terms of advancing these products to approval and getting them to patients. I think that the advantage of having a platform is that we can take individual products and partner them with third parties, and then we can reserve some that may have higher value and an easier path forward for commercialization. We can take some of those internally as well. So, at the end of the day, I suspect that we'll probably partner more than we will develop internally, but we're very open to collaborating. Well, I think that makes a lot of sense, too.
Gary: Yeah, and I think you said it well, let's say.
Gary: <unk>.
Gary: We're open to whatever makes sense in terms of advancing these products.
Gary: Approval.
Gary: And getting them to patients I think that.
Gary: The advantage of having a platform is that we.
Gary: We can take individual products and partnered them with third parties.
Gary: And then we can reserve some that may have higher value.
Gary: And your path forward for <unk>.
Gary: Commercialization, we can take some of those in play as well so at the end of the day.
Gary: I suspect it will probably partner more.
Gary: We will develop internally but.
Gary: We were very open to collaboration.
Speaker Change: Alright, Thanks that makes a lot of sense to when you think about all the different <unk>.
Edward Andrew Tenthoff: Well, I think that makes a lot of sense, too, when you think about all the different factors and agents that you can engineer into the multi-specific antibody. A big oncology group who really is doing that, you know, multiplex combinatorial analysis makes a lot of sense. That's a lot for you guys to do on your own. And I think you'd really be able to empower some of the bigger players who are looking at ways to combine these different mechanisms. So, I really appreciate what you're saying about the partnership potential for that platform. Thank you.
Edward Andrew Tenthoff: Actors and AIDS in fact, you can.
Edward Andrew Tenthoff: Engineered into the multi specific antibody.
Edward Andrew Tenthoff: A big oncology group, who really is doing that.
Edward Andrew Tenthoff: Multiplex combinatorial analysis makes a lot of sense. It's a lot for you guys to do on their own and I think it would really be able to power. Some of the bigger players who are looking at ways to combine different mechanisms. So I really appreciate what youre, saying about the part of the potential for that platform.
Speaker Change: Thank you.
Edward Andrew Tenthoff: Sure.
Edward Andrew Tenthoff: Thank you and the next question comes from Yale Jen with Laidlaw and company.
Yeo Jen: Thank you. The next question comes from Yeo Jen with Leila Law & Company.
Yeo Jen: Good afternoon and thanks for taking the questions. I have two questions with regard to the MODEX product to enter the clinic soon. The first one is for the EBB virus vaccine. And my question is, is there also a competitor of Moderna also developing the vaccine against the same target? So my question is that, at least on theoretical grounds, how do you compare yours to that of Moderna's? And I have a follow-up question.
Yeo Jen: Good afternoon. Thanks.
Speaker Change: Thanks for taking the questions too.
Yeo Jen: Two questions with regard to the modem.
Yeo Jen: Product.
Yeo Jen: To enter the clinic stent. The first one is on the.
Yeo Jen: EBV virus.
Yeo Jen: Vaccine and my question is there also a competitor.
Yeo Jen: They are now.
Yeo Jen: Oh the vaccine against this target. So my question is that at least on theoretical ground, how do you compare yours to dot.
Yeo Jen: But they are nuts, and I have a follow up question.
Elias Adam Zerhouni: Well, the answer is simple, Jim. I mean, we're better, but I'll let Gary give you the specifics. I'm just kidding.
Yeo Jen: The answer is simple done them and we're better but I'll, let Gary give you the specifics.
Gary: Specifics I'm just kidding.
Gary: Well, you know, just to take a step back. Moderna actually is delivering through mRNA almost the same gene products that we've managed to engineer onto the ferritin nanoparticle. I'd say, for the good of the patient. It's actually a good thing to have more than one product out there being tested because, you know, one never knows how they will perform in the real world. I think what we like about our platform is that it's a protein platform and we're using adjuvants that are well described with a safety profile that looks favorable in humans.
Gary: Well you know just to take a step back.
Gary: <unk> actually is delivering through mrna.
Gary: Almost the same gene products that we've managed to engineer onto the Sheraton nanoparticle.
Gary: I'd say for the good of the.
Gary: Ah patients, it's actually a good thing to have more than one.
Gary: Check out there are being tested because.
Gary: One never knows how they will perform in the real world.
Gary: I think what we like about our platform is the fact that it's a protein platform.
Gary: And we're using our adjuvant that are well described with a safety profile that looks.
Gary: <unk> in humans.
Gary: The preclinical data in non-human primates and in our animal models is very strong, and so we're following a pretty well prescribed path, with a nice set of immunogens. We're, I think we and with great biomarkers when you're looking at viral loads and immune responses to the virus. So we feel pretty good about our product. I really don't want to get into the details of the alternative program, but what I will just say is the obvious, which is that they're using a different platform.
Gary: Preclinical data in nonhuman primates and in our animal models is very strong.
Gary: And so we're following a pretty well prescribed tasks.
Gary: With a nice set of immunogen.
Gary: Where I think we got it.
Gary: Great Biomarkers when Youre looking at.
Gary: Uh huh.
Gary: Viral loads and immune responses to the virus.
Gary: So we feel pretty good about our product.
Speaker Change: I really don't want to.
Gary: Get into the details of the.
Gary: The alternative program, but what I will just say is the obvious.
Gary: Which is that they're using a different platform, they're using an mrna platform that has some advantages in terms of going fast, but it has some unknowns, particularly with regard to side effects of the therapy.
Gary: They're using an mRNA platform that has some advantages in terms of going fast, but it has some unknowns, particularly with regard to side effects of the therapy. As you begin to treat more and more patients with a vaccine, those issues become more and more important. And so, there's no way to, you know... [inaudible] and knowledge for how to expand the trials and how to expand the reach of this vaccine to what we would ultimately like to address, which is the cause of cancer or the cancer aspect of the vaccine. So that's. I think that's all I can do for you right now.
Gary: And you know as you begin to treat more and more patients with a vaccine those issues become.
Gary: More and more important and so theres no way to you know.
Gary: Or gain or to have a crystal ball about which will work better.
Gary: But we feel pretty good about the platform that we have and the partnership with Merck.
Gary: They have.
Gary: A real deep bench of experts.
Gary: And knowledge for how to expand the trials and how to expand the reach of this vaccine.
Gary: So what we would ultimately like to.
Gary: Address which is the.
Gary:
Gary: The cause of cancer or are they the cancer.
Gary: Aspect.
Gary: Vaccine. So that's I think that's the best I can do for you right now.
Speaker Change: Okay, Great that's very helpful.
Yeo Jen: Okay, great. That's very helpful. There are a lot of details here. Maybe just one more one in terms of the 2001. Is there any... Could you give us some detail about the study design and maybe what the targets being pursued by this tri-target antibody? Thanks.
Yeo Jen: Details yet.
Speaker Change: One more.
Speaker Change: In terms of the Tuesday.
Yeo Jen: One.
Speaker Change: Is there any.
Speaker Change: Could you give us some detail about the study design and maybe what are the targets.
Yeo Jen: <unk> been in pursuit.
Yeo Jen: Okay.
Yeo Jen: Okay.
Yeo Jen: Anybody.
Speaker Change: Yeah, we we havent formally disclosed the targets that we will disclose them in the near future probably within the next few weeks.
Gary: Yeah, we haven't formally disclosed the targets, but we will disclose them in the near future, probably within the next few weeks, as we line up to enroll our first patient. But what I can tell you is that we've picked two cell surface markers that are found on a number of... A Solid Tumor. There is actually a list of about 13 malignancies that express these two antigens, and they include lung, breast, prostate, pancreatic, and the list goes on.
Gary: As we mine up too.
Gary: Enrol, our first patient, but what I can tell you is that we've picked two.
Gary: Cell surface markers that are found on a number of.
Gary: Solid tumors.
Gary: There actually is a list of about 13 malignancies that express these two antigens and they include lung breast prostate angry.
Gary: Pancreatic.
Gary: And the list goes on there theres a fairly large number to be tested and we will in the initial stages.
Gary: There's a fairly large number to be tested, and we will, in the initial stages, look at a variety of those tumor types, and we'll be looking for signs of some tumor types where we might be seeing more efficacy. And then, with time, if that bears out, we'll focus more on the tumor types where we're seeing efficacy and expand the trials in those tumor types.
Gary: Look at a variety of those tumor types.
Gary: We will be looking for signs of some tumor.
Gary: Tumor types, where we might be seeing more efficacy and then.
Gary: With time, if that bears out we'll focus more.
Gary: On the tumor types, where we're seeing efficacy and expand the trials in those tumor types.
Speaker Change: Okay, Great. That's very helpful and congrats to move this program off the ground.
Yeo Jen: Okay, great. That's very helpful, and congratulations on moving this program off the ground.
Speaker Change: Thank you we were very excited to see it get get to patients.
Gary: Thank you. We're very excited to see it get to patients.
Gary: Thank you and the next question comes from Louise Chen with H C. Wainwright.
Yi Chen: Thank you. And the next question comes from Yi Chen with HC Wainwright.
Yi Chen: Okay.
Yi Chen: Thank you for taking my questions just to follow up on the.
Yi Chen: Thank you for taking my questions. Just to follow up on the... MDX-2001. The Phase I solid tumor trial is an all-comer solid tumor trial, correct? And how many patients do you intend to enroll in this trial?
Yi Chen: <unk> 2001.
Yi Chen: Solid phase one solid tumor trial.
Yi Chen: A all comer solid tumor trial, correct and how many patients do you intend to grow for this trial.
Yi Chen:
Gary: The trial is broken into parts, so we have a Phase 1a and then a Phase 1b. I'd say in Phase 1a will be the group where we will look at multiple different types. And then after that point, we will begin to drill down on the ones where there's more activity. We expect to be able to make some decisions with approximately 40 or so patients in the first, but then that includes some dose escalation because we have to go slowly, and we will do that again agnostic to the tumor type. And then when we reach what we think will be close to a therapeutic level, assuming we don't see any side effects that would preclude further expansion, then we would treat the larger number.
Yi Chen: The.
Gary: The trial is broken into two parts. So we have the phase one a and then a phase one b I'd say in the.
Gary: The phase <unk> will be the the.
Gary: Groups, where we will look at multiple different types and then after that point.
Gary: We will begin to drill down on the ones, where there's more activity.
Gary: We expect to be able to make some decisions with approximately 40 or so patients.
Gary: In the first but then that includes some dose escalation because we have to go slowly.
Gary: <unk>.
Gary: And we will do that again and agnostic to the tumor type and then when we reach what we think will be close to a therapeutic level, assuming we don't see any side effects that would preclude further expansion than we would.
Gary: Treat the large number.
Gary: And.
Gary: And just to clarify, did you say that the results from the Phase 1 trial won't be available until 2026?
Speaker Change: Just to clarify did you say that the results from the phase one trial won't be available and so 2026.
Speaker Change: I didn't really say when they would be available because I said, probably not before next year is what I said earlier and I I would stand by that it does take a while too.
Gary: I didn't really say when they would be available because I said probably not before next year, and I would stand by that. It does take a while to get to the point where you think you're in a therapeutic dose, and then you have to enroll deficient patients, and then you have to follow them for a period of time. So, I am expecting to see, you know, even early efficacy data.
Gary: I'll get to the point, where you think you're in a therapeutic dose and then you have to enroll.
Gary: <unk> patients and then you have to follow them.
Gary: For a period of time so.
Gary: Expecting to see.
Gary: You know even early efficacy.
Gary: Data, we certainly will have safety data.
Gary: We certainly will have safety data, I think, before the end of this year that tells us what doses and how well-tolerated it is in patients. But I don't expect that we'll begin to start seeing signals until well into May.
Gary: Before the end of this year that tells us what what doses and how well tolerated. It is in patients, but I don't expect that we'll begin to start seeing signals.
Gary: Until well into next year.
Yi Chen: Got it. And could you give us some idea of how many oncology candidates you intend to bring into the clinical stage of development before the end of 2023?
Speaker Change: Got it and could you give us some idea that how many oncology candidates you intend to bring to clinical stage of development before the end of 2025.
Speaker Change: I would say that we have.
Gary: I would say that we have... It will be in the range of two to four. I think, very likely, there will be two that will be in the clinic by next year. Then, depending on some partnerships, we may have opportunities to advance another two.
Gary: It will be in the range of two to four I think very likely there will be too that will be answered. The clinic by next year, then depending on some partnerships but.
Gary: But we may have opportunities to advance another 10.
Yi Chen: Okay, and for partnerships, is it likely that you will need to generate phase 2 level proof of concept data to materialize a partnership deal?
Gary: Okay and for partnerships is.
Yi Chen: Is it.
Yi Chen: Is it likely that you will need to generate phase II level proof of concept data.
Yi Chen: To materialize a partnership deal.
Yi Chen: You know I I think L. A.
Gary: You know, I think Elias. Would you like to respond?
Elias: Would you like to respond.
Elias Adam Zerhouni: No, no, I wanted to just clarify that it's very different in oncology than in other areas. In oncology, you start with patients. You don't need Phase II data to generate a partnership. You need to have a basket trial and some demonstrable results.
Elias: I wanted to just clarify that it's very different than oncology.
Elias Adam Zerhouni: So they don't colleges, who started with patients. So you don't need phase two data.
Elias Adam Zerhouni: The partnership to meet you.
Elias Adam Zerhouni: The basket trial, but most of all resolved.
Elias Adam Zerhouni: Phase 1, 1B, and the beginning of 2.
Elias Adam Zerhouni: Phase one.
Elias Adam Zerhouni: <unk>.
Elias Adam Zerhouni: But you don't need to do what you need to do at other areas.
Elias Adam Zerhouni: We need to do what we need to do in other areas, Phase II, to attract a major partner who would like to be a strategic buyer of the asset. I don't know if you agree with that, Gary.
Speaker Change: Phase two to attract major.
Gary: Parker, we'd like to be a strategic buyer.
Gary: I don't know if you agree with that.
Gary: No, I very much agree. I think that often in oncology, you can begin to see signals in phase one, and then in instances where you don't, it really just depends on the appetite of the partner and of our internal teams in terms of you know, at what point we really want to make those transitions. So I'd say the safe answer is somewhere between phase one and phase two.
Gary: No I very much agree I think that.
Gary: Austin and oncology you can begin to see signals in phase one.
Yi Chen: Got it. Thank you.
Yi Chen: And then in instances, where you don't really just depends on the appetite of the partner and of our internal teams in terms of you know at what point, we really wanted to make those transitions. So I'd say the safe answer is somewhere between phase one and phase two.
Yi Chen: Got it thank you.
Yi Chen: Thank you and the next question comes from Michael Tuscany, with Barrington Research.
Michael John Petusky: Thank you. The next question comes from Michael Petusky with Barrington Research.
Michael John Petusky: Good evening.
Michael John Petusky: I just want to ask about the... We've got some data, we've got... slow CKD progression, and I'm just curious, I mean... Are your sales folks able to share this data, this evidence, with a nephrologist, or are there any... Anecdotal reactions that, hey, yeah, this is really compelling. Matter of fact, can you just give a sense of, you know... If there's any sense, you know, that this could really unlock it, I can't expand on that.
Michael John Petusky: Wanted to ask about the re aldi and.
Michael John Petusky: You guys have had been indicating for the last.
Michael John Petusky: A few months at least for several months maybe.
Michael John Petusky: Hey, we've got some we think we've got some data we got some evidence of that.
Michael John Petusky: The product.
Michael John Petusky: Hello, CK progression and I'm, just curious I mean.
Michael John Petusky: Are your sales folks able to share. This data. This evidence with nephrologists are there any even anecdotal reactions that hey, this is really compelling.
Michael John Petusky: Really matter I mean.
Michael John Petusky: Can you just give a sense of if there is.
Michael John Petusky: If there's if there's any sense.
Michael John Petusky: You know that this could really unlock this product going.
Michael John Petusky: Going forward. Thanks.
Elias Adam Zerhouni: I mean, the data that we generated this year was very telling from real-world evidence as well as from our own data that you could delay the onset of dialysis by six months, if not more. Now, in terms of the reception of that, we're publishing, obviously, but presented to KOLs and nephrologists, it really makes a difference because no other therapy of secondary hyperthyroidism has shown the ability to do that.
Speaker Change: I can expand on that I mean, it's clear that the data that we generated this year was very Kelly from real world evidence as well as from our own data that you could delay the onset.
Elias Adam Zerhouni: Dialysis by six months, if not more in terms of the reception that we're publishing obviously.
Elias Adam Zerhouni: Presented to Kols.
Elias Adam Zerhouni: Nephrologist it really makes a difference because no other therapy of secondary hyperparathyroidism has shown the ability to do that.
Elias Adam Zerhouni: And it shows, also, that we have the biomarkers that really indicate which patients are the ones that really will have the loyalty to delay the onset of their dialysis when they're CKD-4. So, yes, the cell source is out there. Yes, it's talking to the nephrologists. We see a lot of late-stage CKD patients that are likely to go into dialysis, but we also think it's valid for CKD-3 patients, not just 4. So, a story in evolution. I think it reinforces the point that treating secondary hyperthyroidism in this patient does have an impact on the evolution of the disease, which was one of the questions we always had. Does it change?
Elias Adam Zerhouni: And it shows also that we have the biomarkers are really indicate which patients are the ones that really well.
Speaker Change: Well D J.
Elias Adam Zerhouni: To delay the onset.
Elias Adam Zerhouni: We're very sticky core so yes, the sales forces out there yes.
Speaker Change: It's worth talking through the year.
Elias Adam Zerhouni: Prologis, we see a lot of late stage deals that are likely to go into.
Elias Adam Zerhouni: Dialysis, but we also think is valid.
Elias Adam Zerhouni: Patients born so.
Elias Adam Zerhouni: A story of an evolution I think it reinforces the point that treating secondary hyperparathyroidism the station.
Elias Adam Zerhouni: Does have an impact on the evolution of the disease, which was one of the questions. We always have does it change the outcome.
Elias Adam Zerhouni: This is the answer that we have so far and the data has been reviewed.
Michael John Petusky: Can I just ask a follow-up to that? In terms of, okay, so you get the data published. How long do things sometimes seem to move much slower than they logically seem like they should in terms of changing behavior, prescribing behavior? I mean, is this the kind of thing where, hey, it's really a missionary effort, and it's a matter of years rather than quarters, or really changing behavior? If the data is that compelling, absolutely. I think that's the right question.
Elias Adam Zerhouni: And that is going to be.
Michael John Petusky: Okay.
Michael John Petusky: Can I just ask a follow up to that in terms of okay. So you get the you get the data published and you start talking to docs about this I mean, how how long.
Michael John Petusky: Fix sometimes seem to move much slower than.
Michael John Petusky: Logically seem like they should.
Michael John Petusky: In terms of changing behavior prescribing behavior.
Michael John Petusky: I mean is this the kind of thing.
Michael John Petusky: It's really good missionary effort.
Michael John Petusky: And it's a matter of years rather than quarters or two.
Michael John Petusky: To really change behavior.
Michael John Petusky: If if if if that data.
Michael John Petusky: Is that compelling.
Michael John Petusky: Absolutely the right question.
Elias Adam Zerhouni: I mean, if you know medicine, medicine patterns and clinical guidelines take time to develop. I mean, you're talking about a year or two before they make it into the guidelines. Well, they're using the guidelines now, so it's not a rapid process. Depending on the strength and reception of the community of pathologists who deal with it, it may be faster or slower. But it's not a matter of a quarter or two. It will take time to develop. All right, very good.
Michael John Petusky: As you know Madison Madison pattern.
Elias Adam Zerhouni: Clinical guidelines to take time to develop.
Elias Adam Zerhouni: Talking about a year or two before they make it to the guidelines.
Elias Adam Zerhouni: And using the guidelines at all so it's not a rapid process, depending on the strength of the resumption of the.
Elias Adam Zerhouni: Community Nephrologist your deals without it maybe.
Elias Adam Zerhouni: The slower, but it's not a matter of a quarter or two and it will take time to develop.
Michael John Petusky: All right, very good. Thank you.
Speaker Change: Alright, very good thank you.
Michael John Petusky: Okay.
Speaker Change: Thank you.
Operator: Thank you, and this concludes the question and answer session. I would like to return the floor to Dr. Phillip Frost for any closing comments. I just want to thank everybody for participating and for your very good questions and discussion.
Speaker Change: Concludes our question and answer session I would like you were trying to floor back to Dr. Phil Frost for any closing comments.
Operator: Thank you. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
Phillip Frost: I just want to thank everybody for participating and for your very good questions and discussion, and we look forward to being together with you again at the end of next quarter.
Speaker Change: So just wanted to thank everybody for participating and for your very good questions and discussion and we look forward to being together with you again at the end of next quarter.
Phillip Frost: Okay.
Phillip Frost: Okay.
Phillip Frost: Okay.
Speaker Change: Thank you. The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Phillip Frost: Yeah.
Phillip Frost: [music].
Phillip Frost: Okay.
Phillip Frost: [music].