Q4 2024 Vaxcyte Inc Earnings Call
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Jess: Good afternoon. My name is Jess and I will be your conference operator today at this time I would like to welcome everyone to the back side fourth quarter and full year 2024 financial results Conference call.
Jess: All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer period. If you would like to ask a question. During this time simply press star followed by the number one on your telephone keypad if.
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Speaker Change: I'd now like to turn the call over to Andrew Guggenheim, President and Chief Financial Officer of Vac site. Please go ahead Sir.
Jess: Thank you operator, and good afternoon, everyone.
Jess: I'd like to welcome you to <unk> earnings conference call to discuss our 2024 results and to provide a business update.
Jim Muscle: I'm joined today by our Chief Executive Officer, Grant, Pickering, and our executive Vice President and Chief operating Officer, Jim muscle.
Jim Muscle: Earlier. This afternoon, we issued a news release announcing our results copies of this and our other news releases latest corporate presentation and SEC filings can be found in the investors and media section of our website.
Jim Muscle: Before we begin I'd like to remind you that during this call we'll be making certain forward looking statements about backside, which are subject to various risks uncertainties and other factors that could cause actual results to differ materially from those referred to in any forward looking statements.
Jim Muscle: For a discussion of the risks and uncertainties associated with these statements. Please see our press release issued today as well as our most recent filings with the SEC, including the risk factors set forth in our Form 10-K for the year ended December 31, 2024, and any subsequent reports filed with the SEC.
Jim Muscle: With that I'll turn the call over to grant Pickering.
Jim Muscle: Grant.
Grant Pickering: Thanks, Andrea and all of you on the call and webcast. Thank you for joining us today.
Grant Pickering: Vaccines are what are the most powerful innovations in modern medicine, transforming public health by preventing disease, reducing hospitalizations and saving millions of lives every year.
Grant Pickering: On protecting individual's vaccines are essential to global health security curbing outbreaks alleviating pressure on health care systems, and delivering substantial economic benefits by reducing the significant financial burden of infectious diseases.
Grant Pickering: This outsized impact is particularly critical for bacterial infections, where vaccines play a key role in reducing antibiotic use and combating the growing threat of antimicrobial resistance or a M. R. One of the most pressing public health challenges of our time.
Grant Pickering: Against this backdrop 2024 was a defining year for back site as we continued to advance our mission to protect humankind from the devastating impact of bacterial diseases, including invasive pneumococcal disease for IPD.
Grant Pickering: Pneumococcal conjugate vaccines or Pcbs have long been an important element of global immunization programs. Our vision extends beyond the pneumococcal vaccines. We are building a robust pipeline of novel broad spectrum vaccines designed to address some of the world's most widespread bacterial threats, including <unk>.
Grant Pickering: Group a strep.
Grant Pickering: Periodontitis and shigella.
Speaker Change: These programs alongside our Pcbs reinforce our commitment to delivering lifesaving vaccines that can have a meaningful impact on public health.
Speaker Change: As we continue to advance our pipeline our PCB franchise remains the cornerstone of our efforts to address one of the most persistent and deadly bacterial threats today.
Speaker Change: The global Pneumococcal vaccine market currently valued at approximately $8 billion in annual sales continues to expand with the adult segment poised to grow significantly driven by expanded vaccination guidelines in the U S and in other developed countries.
Speaker Change: The infant segment remains the largest piece of the market today at an estimated $6 billion in annual sales. However, despite decades of vaccination efforts. It is estimated that streptococcus pneumonia accounts for about 300000 deaths globally each year in children under five years old.
Speaker Change: And remains a leading cause of vaccine preventable deaths in this age group in.
Speaker Change: In the U S alone more than 150000 hospitalizations occur annually due to pneumococcal pneumonia underscoring the urgent need for broader spectrum coverage.
Speaker Change: Over the past year, our team has made meaningful progress in the clinic the cross our PCB franchise in the pediatric and adult populations the.
Speaker Change: The Pinnacle achievement for Bax eight in 2024 was the stellar back 31 clinical data in adults in September we announced those top line results comparing back 31 to <unk> 20 in healthy adults, aged 50 and older. We believe these results validate the potential of our site.
Speaker Change: Civic carrier sparing platform to deliver the broadest spectrum Pcbs, providing protection against both currently circulating and historically prevalent serotypes.
Speaker Change: Based on the robust strength of this data we are advancing <unk> 31 into a phase III program for adults. We are also encouraged by our progress in infants with the backs 24 study fully enrolled and data expected by the end of this quarter and the Vacs 31 infant program underway with the first key.
Speaker Change: Dataset expected in mid 2026.
Speaker Change: Beyond our PCB franchise, we continue advancing our early stage vaccine candidates that address diseases that contribute significantly to <unk>, which is a global health crisis that if left unaddressed is expected to become one of the leading causes of death by 2050.
Speaker Change: While no single solution can fully address ahmar vaccines play a critical role in reducing reliance on antibiotics. We are incredibly proud to be at the forefront of developing vaccines that target drug resistant pathogens and we look forward to providing further updates on our pipeline throughout the year.
Speaker Change: Yeah.
Speaker Change: Our clinical progress continues to be driven by strong operational execution, including manufacturing scale up.
Speaker Change: As part of our long standing partnership with Alonza, we are executing on our plan to establish a purpose built large scale manufacturing suite within lines as IMAX dedicated bio park.
Speaker Change: The build out of this dedicated facility began in late 2023 and remains on track to be completed by early next year.
Speaker Change: This facility will play a critical role in supporting the future global commercial supply for both the adult and pediatric indications.
Speaker Change: <unk>, we have the capacity to meet anticipated demand.
Speaker Change: Also as a reminder, we are leveraging our existing manufacturing infrastructure with Liza to support the anticipated U S launch of Bax 31 for the adult population with.
Speaker Change: With this foundation in place, we are well prepared to execute on our plans and bring broad spectrum vaccines to market.
Speaker Change: Our ability to advance these programs is underpinned by a strong financial position, ensuring we have the resources to advance clinical development scale manufacturing and drive commercialization.
Speaker Change: To provide more details on our financial strength and outlook I'll now turn it over to Andrew.
Andrew Guggenheim: Thanks Grant.
Andrew Guggenheim: The details of our fourth quarter and full year 2024 results and the reasons for the variances to the comparable 2023 periods are reflected in our 10-K filing and summarized in today's press release.
Andrew Guggenheim: <unk> financial position remains strong with $3 3 billion in cash cash equivalents and investments as of <unk>.
Andrew Guggenheim: <unk> 31, 2024, which includes $2 2 billion and net proceeds from the two successful follow on equity offerings last year.
Andrew Guggenheim: Turning to the income statement the increase in R&D expenses in 2024 was due primarily to increased development and manufacturing activities in connection with the adult and infant PCB programs, including to support the potential future commercial launches.
Andrew Guggenheim: As well as growth in R&D personnel.
Andrew Guggenheim: The increase in G&A expenses was driven primarily by higher personnel costs due to the growth in the number of employees in these functions.
Andrew Guggenheim: For the Buildout of the dedicated manufacturing suite at mindset to support the potential global launch of our PCB programs.
Andrew Guggenheim: <unk> incurred an additional $127 8 million in capital and facility expenditures last year, bringing the project to date total to $214 3 million about 60% to 70% of our original $300 million to $350 million estimate to which we continue to track.
Andrew Guggenheim: As we look ahead, we expect a substantial increase in both R&D and G&A expenses in 2025, particularly within R&D over both full year and Q4 2024 annualized levels.
Andrew Guggenheim: This expected increase is primarily the result of manufacturing related investments to prepare for our initial launch in the adult market, including to build inventory.
Andrew Guggenheim: The initiation of the Vacs 31, adult phase III clinical program and the growth in the number of our employees to support these and other initiatives.
Andrew Guggenheim: Consistent with historical results, we expect R&D expenses to fluctuate by quarter, largely based on the timing of manufacturing activities.
Andrew Guggenheim: The significant majority of the costs related to the construction and build out of the dedicated manufacturing suite will not run through the income statement and instead will continue to be reflected on our balance sheet in two separate line items property and equipment.
Andrew Guggenheim: Other assets once the build out is complete and manufacturing activities commence the cost will then run through the income statements.
Andrew Guggenheim: Turning to cash runway, we expect that our cash cash equivalents and investments, which as I noted totaled $3. One 3 billion as of 2020 for year end will be sufficient to fund our operating expenses and capital expenditure requirements through several expected key milestones over the next few years.
Andrew Guggenheim: These include the.
Andrew Guggenheim: <unk> 2000, and for instance, phase II study primary series and booster dose data readouts.
Andrew Guggenheim: Initiation completion and data readout from all of the anticipated phase III studies for the Vacs 31 adult phase III program.
Andrew Guggenheim: The <unk> 31 infant phase II study primary series and booster dose readouts.
Andrew Guggenheim: And the completion of Buildout of the dedicated manufacturing suite Atlanta.
Andrew Guggenheim: We remain committed to financial discipline and to making strategic investments that maximize long term impact and the steps we are taking today position us for sustainable and meaningful growth.
Andrew Guggenheim: Beyond financial and operational execution 2024 also marked the establishment of a dedicated public affairs function enhancing our engagement with policymakers and public health stakeholders.
Andrew Guggenheim: We have been working constructively with the new administration to ensure that science driven evidence based policies continued to guide vaccine development and public health decision, making in.
Andrew Guggenheim: In parallel we will continue to engage with the FDA CDC and ACI P to foster a regulatory framework that continues to encourage investment and vaccine innovation and manufacturing.
Andrew Guggenheim: During our engagement with key government stakeholders, we have been encouraged by bipartisan acknowledgement that vaccines are not only a cornerstone to public health, but also one of the most cost effective interventions available.
Andrew Guggenheim: It is estimated that vaccination in children over the last 30 years in the U S will result in direct savings of 540 billion and societal savings of two seven trillion.
Andrew Guggenheim: And expanding vaccine uptake among adults is equally important as vaccine preventable diseases cost to the U S economy, and estimated 27 billion annually and direct and indirect expenses.
Andrew Guggenheim: At that site, our mission remains clear to deliver a broad spectrum of vaccines that address significant unmet needs. We are confident in the strength of our science and the broad understanding of the critical role vaccines play protecting global health.
Andrew Guggenheim: I will now turn it over to Jim for additional commentary on our clinical development highlights and the upcoming <unk> 24, and Vin study data Readouts.
Jim Muscle: Thanks, Andrew.
Jim Muscle: Our PCB franchise continues to advance with major clinical regulatory and manufacturing milestones reinforcing our leadership position in pneumococcal vaccine innovation over.
Over the past year, we have made strong clinical progress across both the adult and infant programs with compelling data in adults or even the potential to set a new standard in disease coverage with our carrier sparing.
Jim Muscle: For the adult indication.
Jim Muscle: <unk> delivered strong results in its phase one two study demonstrating robust of <unk> activity or Oprah responses across all 31 serotypes.
Jim Muscle: 31 was observed to be well tolerated and demonstrated a safety profile similar to <unk> 'twenty and all dosing study through the full six month evaluation period.
Jim Muscle: The middle and high doses of <unk> met or exceeded the non inferiority criteria for all 20 serotypes shared with PCB 'twenty.
Jim Muscle: <unk> high dose average open immune responses were greater for 18, or 20 serotypes compared to <unk> 20, with seven of these serotypes, achieving statistically higher immune responses.
Jim Muscle: At the Middle dose open responses were greater for 13 of 20, serotypes and five serotypes achieved statistically higher responses compared to <unk> 20.
Jim Muscle: Additionally, all 11 serotypes unique tabak 31 met the superiority criteria at all dose levels reinforcing the potential for <unk> to deliver the broadest spectrum protection to date.
Jim Muscle: Based on these results in November 2024, the FDA granted breakthrough therapy designation for <unk> 31 in adults recognizing its potential to set a new standard in pneumococcal disease prevention.
Jim Muscle: This designation, unlike expedited regulatory pathway with more frequent and senior FDA engagement potentially streamlining our progression towards launch.
Jim Muscle: Pending an end of phase II meeting with the FDA, we remain on track to initiate the vaccine adult phase III pivotal non inferiority study by mid 2025 with topline safety Tolerability and Immunogenicity data expected in 2026.
Jim Muscle: We also anticipate initiating the remaining phase III studies for <unk> 31 in 2025 and 2026 with the last of the studies to enable a BLA submission expected to read out in 2020.
Jim Muscle: For the <unk> indication, we continue to advance both <unk> 24, and <unk> programs in parallel and.
Jim Muscle: In March of last year, we completed enrollment for the phase II study of <unk> 24 in healthy infants enrolling a total of 802 participants and a two stage study designed to evaluate safety Tolerability and Immunogenicity.
Jim Muscle: By the end of this quarter, we expect topline data from the primary immunizations series comprising the first three doses administered in the first six months of life with data from the booster dose administered at 12 to 15 months of age anticipated by the end of this year.
Jim Muscle: As you will recall the primary immunization series, which is referred to as post dose group.
Jim Muscle: As a critical indicator of disease protection during the infant vulnerable first year.
Jim Muscle: The booster referred to as opposed to explore evaluate anticipated durability of protection through the first few years of life, ensuring sustained immune protection. During this heightened period of risk to pneumococcal disease.
Jim Muscle: In this study and for all precedent infant <unk> study the primary Immunogenicity endpoints, both post dose three and post dose or are based on immunoglobulin or <unk> antibody concentration.
Jim Muscle: Whereas an adult Pcbs study the primary endpoint is <unk>.
Jim Muscle: This <unk> 24 infant study is evaluating the IGT responses compared to <unk> 20 for the 20 serotypes common with <unk> <unk>. The primary endpoint post dose three is based on the percent of participants who achieved the predefined ITG concentration threshold of greater than or equal to 0.35 micrograms per ml.
Jim Muscle: This represents the seroconversion rate to.
Jim Muscle: To meet the historical non inferiority requirement phase III trial, the lower bound of the 95% comps must be within 10 percentage points of the PCB 20 seroconversion rate.
Jim Muscle: Rotate by serotype basis.
Jim Muscle: Based on precedent PCB programs before incremental serotypes unique <unk> report will be compared to the lowest performing piece of the B two spirit type other than serotype three.
Jim Muscle: And phase III studies for which the composite of those are wider due to a smaller sample size compared to a phase III trial sponsors have considered non inferior success to be a 15 percentage point differential.
Jim Muscle: We feel encouraged as we head into the instant clinical data readout based on the strength of the data from our three adult clinical studies, including the higher immune responses relative to <unk> 'twenty.
Jim Muscle: The historical translation of adult to infant data and the precedent regulatory approval bar.
Jim Muscle: With each iteration of approved Pcbs there've been misses on the non inferiority Barker individuals' serotypes.
Jim Muscle: <unk> is in the case of PCB 'twenty.
Jim Muscle: In our case, we would be disappointed with this type of outcome.
Jim Muscle: Given this is a proof of concept dose finding study the purpose of which is to determine the dose and the design of phase III program is reasonable to expect a few non inferiority Mrs.
Jim Muscle: Even in this scenario, we would still expect that 24 to be well positioned to advance to phase III and demonstrate best in class potential, particularly if we see higher immune responses across multiple serotypes as we saw in all of our adult studies.
Jim Muscle: While we await the data from <unk> 'twenty for infant study. We are also making significant progress on our Vax 31 phase III study in the same population.
Jim Muscle: Following his initiation in December 2020 for stage one of this study used a dose escalation approach to evaluate safety and tolerability for low middle and high doses.
Jim Muscle: In early February we advance the stage two based on the blinded safety assessments.
Jim Muscle: Marking an important milestone in this study is progression.
Jim Muscle: We anticipate announcing topline safety Tolerability and Immunogenicity data from the primary three dose immunization series by mid next year with topline boost through dose data expected approximately nine months later.
Jim Muscle: Despite the effectiveness of current pneumococcal vaccine IPD, including meningitis and bacteremia remains persistent in the first years of life.
The public health community has made it clear that a broader spectrum pneumococcal vaccine needed to provide expanded protection against this disease.
Jim Muscle: Our PCB programs are designed to address this gap.
Jim Muscle: <unk> has the potential to cover approximately 94% of IPD and 93% of acute otitis media in children under five offerings significantly greater coverage compared to the standard of care Pcbs.
Jim Muscle: Yeah.
Jim Muscle: Outside of our PCB programs, we remain focused on advancing our pipeline, including facts a one for group a strep our most advanced pipeline program.
Jim Muscle: Group, a strep is a leading global cause of infectious disease related death, and disability and a major driver of antibiotic prescriptions in young children underscoring the urgent need for preventative solution <unk>.
Jim Muscle: Exactly one advances towards the clinic.
Jim Muscle: We've continued to progress activities, including analytical method development immunological assays.
Jim Muscle: Process scale up for the production of GMP grade drug substance and drug product.
Jim Muscle: We will provide updates on our anticipated timeline as this program advances.
Jim Muscle: Across all of our programs our commitment to vaccine innovation remains unwavering.
Jim Muscle: With a strong foundation in place, we are well positioned to drive our pipeline forward, achieving key clinical milestones and accelerated progress towards lines.
Grant Pickering: I'll now turn it back to grant to share closing remarks.
Speaker Change: Thanks, Jim before moving to Q&A I want to express my deep gratitude to our investors partners clinical trial participants and most importantly, our employees your support dedication and belief in our mission continue to propel back sight forward as we work to develop vaccines that address some of the most pressing.
Speaker Change: Unmet needs in bacterial diseases with.
Speaker Change: With the strength of our science the dedication of our team and the momentum. We built we are well positioned to execute on our vision and deliver meaningful impact.
Speaker Change: As we look ahead to the rest of the year, we do so with confidence and optimism. This will be a milestone rich year marked by key clinical and regulatory advancement continued expansion of our manufacturing capabilities and the next steps in building a global platform for vaccine innovation with a strong foundation.
Speaker Change: <unk> in place we are poised to drive back sites next phase of growth and ultimately, bringing life saving vaccines to those who need the most.
Speaker Change: We appreciate your interest and look forward to sharing further updates as the year progresses with that let's take some questions operator.
Speaker Change: Thank you, ladies and gentlemen, if you would like to ask a question for todays question and answer period, you will need to press star one on your telephone keypad.
Speaker Change: If your question has been answered any wish to remove yourself from the queue. Please press star two periods.
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Ken: Ken that was star one for any question.
Roger: We will go to Roger song with Jefferies.
Ken: Alright.
Ken: Thanks for the update and congrats for the auto progress. Thank you for taking my questions. A couple of questions from us. So the first one is regarding the <unk> 24 in from primary serious data readout can you just.
Ken: Give us some color on the one factor.
Ken: Play into the timing of the data readout given you already finished enrolment by <unk> last year and then how should we think about how much.
Ken: Safety data, we'll provide and then.
Ken: To Immunogenicity data will be will be analyzed by the time I again through this year. Thank you.
Roger: Yes, thanks for the question Roger.
Roger: Yes, I mean, the primary endpoint for the infant indication as you know are actually split across two different co primary endpoints. The first after post dose III. The second after post dose for and those are all based on the IGT antibody responses. So.
Roger: This is that top line data read out and this is the standard accrual for the accumulation of those antibody responses. So thats the primary.
Roger: Saying that we will be focused on this particular occasion, Jim do you want to comment on the amount of the safety data Youll expect to have by the end of the quarter. So we will cut the safety data just prior to when we have all of the prerequisite immunogenicity data.
Roger: So that will include whatever we have at that point in time. So my expectation is the vast majority of safety data.
Roger: Post primary all the way up to boost will be included there will be some post foods as well, but that won't be as robust as obviously post primary through boost.
Roger: And you had a second question Roger.
Roger: Yes, if I may.
Speaker Change: So 40, I think on the call you say if your mistakes.
Speaker Change: Serotypes on the name of your R&D will be disappointed yet so that speaks to the confidence maybe just.
Speaker Change: Thank you you mentioned something given the phase two sample size is smaller than that typical phase III, how should we think about the ninth youre already criteria, maybe just give us any clarity what we are.
Speaker Change: Are we looking for you mentioned, 15% point differential.
Speaker Change: Should we think about that is the bar for the lower bound confidence interval or whats the Paul It is a point estimate difference. Thank you.
Speaker Change: Yeah, Thanks, Roger yes per the prepared remarks.
Speaker Change: The precedent for the most broad spectrum PCB to date, which would be at the 20 valent.
Speaker Change: When they were comparing themselves to the prior standard of care. The 13 valent vaccine indeed, they actually failed on sick.
Speaker Change: Six of those 13 non it while six of the 20 non inferiority comparisons and yet that was still enough for them to gain full approval and for them to gain that.
Speaker Change: Overwhelming market share so when we look at the data that we've generated across three different adult.
Speaker Change: Phase II clinical studies with <unk> 24.
Speaker Change: And <unk> 31.
Speaker Change: We've shown such consistently higher average immune responses.
Speaker Change: That was not the case for the <unk>.
Speaker Change: 20, valent versus the 13, Balan certainly in adults and even more so a widening of the gap with falling immune responses in infants and so our view is that given the continuity of immune responses from adults to infants affords us the confidence to expect a better outcome.
Speaker Change: So of course, we're comparing with the 24 valent vaccine.
Speaker Change: We will see precisely what our immune responses are on a relative basis, but indeed, we would be.
Speaker Change: Surprised to the negative if we were to have seen as many misses as they saw so we're expecting something more bullish.
Speaker Change: We could imagine missing on a few.
Speaker Change: But on the other hand, if we did we would expect perhaps at least that many with higher immune responses given how many we were better on in the adult setting so that is one.
Speaker Change: Feature, but then to your point.
The other thing in drug development for Pneumococcal conjugate vaccines is the size of the study, particularly when youre doing your dose ranging is considerably smaller than the ultimate phase III pivotal non inferior study that will need to be conducted so.
Speaker Change: Like we had talked about in the adult setting.
Speaker Change: The sponsors that have come before us and for us going forward.
Speaker Change: You have a right to take into account the smaller sample size and the way that's manifested itself in the past is even though the ultimate difference in the absolute.
Speaker Change: Right of Cerro conversion needs to be within 10 points at phase III in phase II, given how much smaller studies or other sponsors before us have considered a 15 point absolute difference as adequate as a predictor of what it will take to hit the endpoint in phase.
Speaker Change: <unk> III, so we're going to take a similar approach knowing that we will have that same opportunity to take advantage of the much larger sample size, which clearly closes up the confidence intervals in ways that can allow you to hit the 10 point absolute difference so yes.
Speaker Change: Yes, two key features of how to think about this upcoming data. So Roger Thank you for raising both of those.
Speaker Change: Thank you so much at very quick last one.
Speaker Change: Given we are looking for this primary series data.
Speaker Change: How do you how should we think about the read through from the primary series data showed a booster.
Speaker Change: You will be nine months later shall we have a higher confidence.
Speaker Change: Well more likely going to hit yes, even if you have a few misses for the primary thank you.
Speaker Change: Yes, so and we've been trying to condition the market to appreciate that the two co primary endpoints are different right. The first of which is a zero conversion comparison, whereas the second after the fourth dose. The booster is a comparison of the.
Speaker Change: <unk> of immune responses, so as everyone knows from our adult data we've shown.
Speaker Change: Great ability to not only show non inferior.
Speaker Change: The magnitude of immune responses, but in fact showing.
Speaker Change: In most cases higher immune responses and in many cases statistically higher immune responses. So we've really thrived.
Speaker Change: On that second comparison that we'll have later this year and while this aero conversion data will be the main event with this upcoming the upcoming data readout.
Speaker Change: You should expect that we will also present those agg antibody comparisons, which will give us an indication of how do we expect the post dose for data to look and while it's not the headline for the prior vaccines that are currently marketed <unk> into 'twenty.
Speaker Change: They saw an even more pronounced drop and the magnitude of immune responses at this post dose three so we reversed that trend as we did with adults not only would indicate that we've done quite well on the initial Cerro conversion, but it would also set us up for.
Speaker Change: Confidence heading into the next data point at the end of the year.
Speaker Change: We will move to our next question from Salim Sayed with Mizuho.
Salim Sayed: Great. Thanks for all the color guys and congrats on the progress.
Salim Sayed: I wanted to spend a little bit of time, just focusing on the macro discussion just kind of given that's such a heavy impact on the stock in the <unk> and <unk>.
Salim Sayed: Totally appreciate the commentary in the prepared remarks about the conversations being constructive with DC EBIT could you, perhaps give us a little bit more granularity there if possible.
Salim Sayed: As it relates to whether there have been actually this disc.
Salim Sayed: Discussions with distinction to pcv's versus other vaccines.
Salim Sayed: How we should interpret this last meeting.
Salim Sayed: Delay.
Salim Sayed: Or any other particular granularity sir thank you.
Salim Sayed: Yes, Yes, I think Andrew I can tag team. This one I'll start and then let Andrew jump in but.
Salim Sayed: Just taking up that last topic and ACI AP.
Salim Sayed: Delay I think one of the things that was not widely reported was that as a matter of course for every ACI P. Meeting historically, there is an opportunity for public comment and no. One knows precisely why it happened I think it was I think people believe it was in the Burton but somehow.
Salim Sayed: Early February that public commentary mechanism was not opened up so so that would've been atypical to not allow for that so it could be as simple as that and that is what is precipitated that delay I don't think people should overreach.
Salim Sayed: Over read into that situation, but there is a lot going on.
Speaker Change: Andrew is right that right in the thick of it maybe you can take up the first two conversations as it relates to PCB vaccines being implicated.
Salim Sayed: And just the macro discussion writ large yeah no. So I appreciate the question many of them.
Salim Sayed: And on this call know this is something we've been actively following and actively engaged and as I noted in the prepared remarks, yes, we arent commented in commenting on the very specifics of the folks with whom we've had discussion, but as I said in the prepared remarks, not only a reactive but we've been encouraged by truly bipartisan support for the important.
Salim Sayed: Role vaccines play in public Health. In addition to obviously the health benefit the significant economic benefit, but given the cost effectiveness of these vaccines and as we've said it is our view and continues to be our view that <unk> are the bedrock of our immunization programs, particularly in the infant population.
Salim Sayed: And so we will continue to monitor things will continue to stay engaged we will continue to stay active.
Salim Sayed: But I do think there is broad and understanding as I said of the important role vaccines play and really no better Testament to Canada demonstrated benefit than that.
Salim Sayed: Pcv's over the last 25 years for infants in the last 15 in the adult population.
Salim Sayed: Okay Cool and then maybe just two.
Salim Sayed: Add on to that.
Salim Sayed: Thanks for the color.
Salim Sayed: Is there anything in particular, when you're when you're having these discussions with.
Salim Sayed: The folks in D. C is there anything particular that sort.
Salim Sayed: Comes to life that the market could potentially look at as sort of.
Salim Sayed: Getting this market over the macro hump that sort of a risk in the past.
Salim Sayed: Several months is there anything in particular that we should be looking.
Salim Sayed: Looking for do you think that the market's missing.
Salim Sayed: Thank you well I guess I would say you know we ourselves we should all just kind of.
Salim Sayed: Take with caution the noise, if you will and the news and there is a lot of it and there's been speculation and Theres been talk what I think is most important for us and all of US as you know.
Salim Sayed: What ultimately.
Salim Sayed: Transpires here and we're certainly doing our best to continue to advocate for the important role vaccines play so.
I'm, just not to overreact too.
Salim Sayed: Two noise or potential changes changes are par for the course.
Salim Sayed: In general and certainly in connection with changes in administration.
Salim Sayed: And it's the actions ultimately if any that there'll be the most important thing.
Salim Sayed: Other than kind of the words or these disc.
Salim Sayed: Discussions about potential potential changes so it's certainly watching it closely but again as I said encouraged by what we have heard and hearing firsthand over the course of our discussions about kind of the support on both sides of the aisle for vaccines.
Speaker Change: And we'll move next to David Risinger with Leerink partners.
Speaker Change: Hey, guys, yes, Brian on for Dave Thanks for the updates and we appreciate you taking our question.
Speaker Change: We had two if thats. Okay. So first could you provide more color on the expected phase III program for <unk> 31 in adults, including the likely timeline from the initiation mid 'twenty five to the top line results. In 2006, we're just trying to get a sense for approximately how many months do you think it will take after initiation that we might see top.
Speaker Change: Wine results.
Speaker Change: Yes, maybe I'll start there and Jim can certainly chime in just to remind the.
Speaker Change: The guidance that we again reaffirm today that we would anticipate starting.
Speaker Change: The.
Speaker Change: Pivotal non inferiority study for <unk> 31 in adults by middle of this year.
Speaker Change: And to have the topline safety Tolerability and Immunogenicity data from that study next year. So that gives you some idea of the timeline from initiation to data.
Speaker Change: If you look back at our backs 24 study, which would be a good kind of comparator.
Speaker Change: That was 12 months to 15 months or so between.
Speaker Change: The initiation of study and data readout at this juncture C <unk>.
Speaker Change: No reason why it would be any different for this study and then that.
Speaker Change: This is one of course of a few studies that comprised the phase III program in total and as you saw today, we've just confirmed our preexisting guidance and just adding some more clarity to it we expect the balance of the studies that comprise that phase III program to start either also this year alongside our along with the non inferiority study or next year.
Speaker Change: <unk>, but those studies would readout in either 2026 or 2027 those studies in general Brian tend to be.
Speaker Change: On par or faster than non inferiority study. So it gives you a sense of kind of the expected timing for those programs.
Okay. That's super helpful. I appreciate that and then just one more on your preclinical group a strep vaccine.
Speaker Change: Could you explain why back sites technology is well suited to potentially 60, then how close might miss the IND, enabling studies.
Speaker Change: Yes, I can start on that one.
Speaker Change: For bacterial.
Speaker Change: Vaccine's conjugate vaccines have really been.
Speaker Change: The primary approach that's been effective so just like we're leveraging with our pneumococcal conjugate vaccines, we have special technology that allows us to perform site specific conjugation.
Speaker Change: Polysaccharides that are found on the outer coded the bacteria and then proteins to drive a memory response to prevent infection and preserve protection against bacteria over durable period of time. So we're leveraging the same fundamental technology that has created a.
Speaker Change: Broader spectrum classic pneumococcal conjugate vaccines, which is really what we've become known for.
Speaker Change: Group a strep on the other hand is a vaccine for which there has never been one developed to date. So there is a novelty novelty feature to this but it's also an.
Speaker Change: An area, where there is very little to no competition. So we have an opportunity to be a first mover.
Speaker Change: We're leveraging an approach that has been effective across a number of different bacterial vaccine targets. We have a proprietary polysaccharide that is resident across the full spectrum of different strains of group a strep that's unique to us and we're able to site.
Speaker Change: Pacifically conjugate it to a conserved protein on the surface of this bacteria that is accessible to us.
Speaker Change: Antibodies to clear the bacteria. So we think we have two ways to win with this particular approach technologically and then important from us.
Speaker Change: Market opportunity. We also have two ways to win to the extent. This is a problem that afflicts not only infants and primary school children, but also older adults and in fact, the magnitude of invasive disease afflicting adults by group a strep exceeds that of what was access.
Speaker Change: <unk> for pneumococcal vaccines when they were approved for adults. So it's a really big opportunity for us.
Speaker Change: We're really gratified to be in the lead in this area. We have mentioned further work that we've been doing to complete the <unk> one program to get it in the clinic, we're stopping just short of when we're saying that clinical study, we will get underway, but rest assured we're getting closer and are excited and we will.
Speaker Change: Keep everyone updated on our progress there.
Omar: Hello, New next to Omar <unk> with Evercore.
Speaker Change: Okay.
Speaker Change: Hi, guys can I ask 25 questions like Selim also.
Speaker Change: Yeah.
Speaker Change: They are not bought Numerex alright, 31, that's a good number.
Speaker Change: In all seriousness.
Speaker Change: Three quick ones, if I may 1st I realize you mentioned on the call that the.
Speaker Change: The non inferiority margin is 10% Delta.
Speaker Change: I feel like that's the right Delta for a registrational trial powered appropriately.
Speaker Change: Are you being too stringent with the choice of that Delta knowing that Merck had used a more wider 15% delta to defined non inferiority that's number one.
Speaker Change: Second.
Speaker Change: If I just step back and think about it very simplistically, most serotypes seroconversion rates are 80%, 90% on 'twenty.
Speaker Change: 'twenty, except to just serotype, three and 12 F where theyre seroconversion rates are more like 50% and I guess, that's my question do you, let's say you're not in figure, but you were 40% seroconversion.
Speaker Change: That a successful outcome to you.
Speaker Change: I ask because on those two serotype, three and 12 months at least and adults on agg not opa.
Speaker Change: You guys were at fairly ahead.
Speaker Change: And last point I realize the focus is entirely on.
Speaker Change: Post dose three would you happen to have any post dose for data even if it's a 100 out of the seven or 800 patients. Thank you very much.
Speaker Change: Okay.
Speaker Change: Yeah, you got it exactly right.
The 10% Delta is the registration hurdle.
Speaker Change: And we are not trying to.
Speaker Change: Make things more difficult honest then we should we will look at that same 15 point Delta that Merck used when they develop vaccines advance is the hurdle that we should be looking at for all the right reasons, it's purely because of the wider confidence intervals when you've got a smaller cohort of subjects. So we.
Speaker Change: We're trying to not only acknowledge where we will want to be I guess the point that people will have taken is even with our smaller phase II studies in adults, we were able to meet the registrational non inferiority hurdle, but thats a luxury not a necessity, we really want to see that 15 point Delta.
Speaker Change: Exceeded at this stage and that will guide us to what the sample needs to look like in phase III to ensure that we get hit the 10 point Delta when it matters, which is that pivotal registration study to your point.
Jim Muscle: Then as it relates to the second question with regard to the Cerro conversion rates, Jim do you want to talk about that and obviously <unk> pointed out there were two big laggards for <unk> or 'twenty, but like how are you thinking about that now.
Speaker Change: Thank you.
Jim Muscle: I think you're spot on your assessment.
Jim Muscle: <unk> got greater than 90% conversion rate that means that your GM sees are much higher than the level of the 0.35 level, whereas for serotype three.
Jim Muscle: The GMC is almost the same as the <unk> 35 level, so any slight miss on serotype three could have a greater impact on percent of individuals who achieved that protective threshold.
Jim Muscle: I do think that given our results in adult so far and with the results of serotype, three being higher and theyre being translate ability between adults and infants.
Jim Muscle: Don't expect us to see that type of result, but if we do we had said before if we have a few misses.
Jim Muscle: We feel that that's still a very good product that we can move forward and get approved.
Jim Muscle: In the phase III trials.
Jim Muscle: And then.
Jim Muscle: Your last question I think the 31st question that you asked.
Jim Muscle: The PD three versus PD for data.
Jim Muscle: We'll wait and unwind all that PD four data in mass so while we could theoretically look at some cases.
Jim Muscle: By the time, we got the PD three that would not make good clinical quality. So we'll wait until we get critical mass on that that's what we'll be able to read out later this year it will not be cherry picked.
Speaker Change: We'll move next to Seamus Fernandez with Guggenheim.
Seamus Fernandez: Hey, guys. Thanks for the question. So just a couple of quick ones here.
Speaker Change: The first question is that.
Speaker Change: The opportunity.
Speaker Change: Or if it makes sense at all to consider the possibility of 31 potentially advancing directly to <unk>.
Speaker Change: Sure.
Depending on obviously, the 24 data and 31 data is there an opportunity to kind of assess moving that 31 forward or is there a compelling reason to move both 24 and 31 forward.
Speaker Change: Given differences in the sort of international.
Speaker Change: Dosing decision what would be the decision points.
Speaker Change: You would be looking at that would be most critical.
Speaker Change: To making that decision.
Speaker Change: Then.
Speaker Change: The second question is really around this discussion and debate over efficacy studies.
Speaker Change: It seems a bit ridiculous and quite redundant.
Speaker Change: Pneumococcal space, but there is a an efficacy study that the team could conduct in the pediatric setting.
Speaker Change: Post approval that could be quite compelling, which isn't otitis media opportunity, hoping you could just kind of put some context around that.
Speaker Change: And what you see as the opportunity for potentially back 31.
Speaker Change: Perhaps securing in otitis media claim.
Speaker Change: And what that study might look like thanks, so much.
Speaker Change: Yeah. Thanks Seamus.
Speaker Change: So your first question was about the <unk> 31 versus <unk> 24, pivot opportunity and intense obviously, we navigated that last year in <unk>.
Speaker Change: Association with the strength of the back 31 data to make it obvious.
Speaker Change: To graduate from <unk> 24 to <unk> 31, as our singular approach for adults, but in that case, we didn't really have a time delta between the two programs based on how things lined up from a product availability.
Speaker Change: <unk>, so that was a very straightforward choice.
Speaker Change: Here, we are on the verge of receiving our first pediatric data with <unk> 24.
As we've declared we've not waited to get backs 31 into the clinic and incense. So we have two trains that have left the station. The one is going to get to the next station before the other we will have a period of time, where reman, it where we'll be managing.
Speaker Change: What would be the most broad spectrum vaccine available to the market at the fastest pace, which would be <unk> 24, which of course here in the U S.
Speaker Change: Principal competitor would be the 20 valent from Pfizer, but as you point out in Europe.
Speaker Change: The 20 valent was not able to meet the European schedule of the two plus one.
Speaker Change: Approach versus the U S schedule, where they give an extra vaccination. So the competition in Europe is really the 15 valent. So we do have a.
Speaker Change: A winner in our mind for which the data reading out here shortly but of course, the Dax 31 data as we've guided we're expecting to get that data by the middle of next year. So it is not far behind <unk> 24.
Speaker Change: So once we receive that backs 24 data, we'll be able to better handicap, how much headroom. There was for the 31 day lead to be effective recall in this 24 Valent study, we do have that mixed dose cohort, which gives us a leading indication of how much.
Speaker Change: Incremental protein carrier will affect immune responses for.
Speaker Change: For the studies to date, we haven't seen much of an effect of the incremental protein carrier.
Speaker Change: At least not nearly to the extent there.
Speaker Change: Previous technologies have faced so yeah, we're going to have hopefully.
Speaker Change: A decision to make I think were going to be in a good position with either <unk> 24, but arguably an even stronger position to the extent the back 31 data is positive, but we'll be taking all those things into consideration Seamus as we have that data readout over the ensuing.
Speaker Change: 12 months to 15 months.
Speaker Change: Your question about efficacy studies I think you were kind of hinting at some of the macro backdrop of what's going on there.
Speaker Change: No question that pneumococcal conjugate vaccines have been studied with the utmost integrity clarity with placebo controlled studies certainly if theyre outset. When they were developed initially in infants. So there is absolutely no question of the clear and present danger of pneumococcal.
Speaker Change: The bacteria and the effect of these vaccines that prevent 90% to 95% of infections. So.
Speaker Change: I think the way you kind of phrased. It was is there an opportunity there for us to distinguish ourselves with an efficacy study that's manageable and I think Jim has something in mind is that potentiality.
Speaker Change: No I would say.
Speaker Change: 80% of infant get a case of otitis media.
Speaker Change: Almost 50% get multiple cases. So this is a very common ubiquitous type of manifestation in the majority of causes the main driver is strep pneumonia now for the.
Speaker Change: Current PCV 20.
Speaker Change: They prevent roughly mid 30 to high.
Speaker Change: Low 40 percentile in terms of overall serotype coverage, but with our 31, we are in the mid 80 percents low 90, and so we think that even with a comparative study.
We will have enough cases with that type of incidents and that type of improvement in coverage to be able to do a study of otitis media and actually determine the efficacy as you say, it's going to take longer than <unk>.
Speaker Change: Immunogenicity study and safety so most likely we would see that come in after the approval, but we do plan on exploring the possibility of doing an efficacy study with otitis media for our 31 Balan.
Speaker Change: We'll go next to Jason <unk> with Bank of America.
Jason: Hi, good afternoon.
Speaker Change: Hey, Jason.
Speaker Change: Congrats on all the progress this year and thank you for taking my question.
Speaker Change: I just had a couple on the box.
Speaker Change: 24 infant study.
Speaker Change: We would like to get your view on it.
Speaker Change: And how this initial primary dose series datasets will provide read across to Derisking <unk> 31 in the infant population.
Speaker Change: And can you just remind us if you have the ability to tweak X 24 doses and certain ferrotype, depending on what <unk> seen in the phase two and if that would be a consideration for phase III dose selection.
Speaker Change: And then we'll just have a quick follow up on the regulatory front.
Speaker Change: What specific measures with RFA have to take in order to actually change the PCB routine child vaccination schedule.
Speaker Change: I guess that in a different way what are kind of the hurdles.
Speaker Change: And he would have to overcome and does he have the sole powered kidneys al. Thanks, so much.
Speaker Change: Yes, Thanks Peter.
Speaker Change: So as it relates as it relates to the <unk> 'twenty for infant data.
Speaker Change: Reading across <unk> 31 to be sure I mean, just like we saw in adults we were able to look at in particular the dose essentially.
Speaker Change: From the low middle to the mixed and that mixed dose cohort was able to.
Speaker Change: Take a look at a similar amount of the protein carrier that is in our <unk> 31 formulation. It was definitely a leading indicator of what we thought we could expect with the vacs 31 data read out in adults and of course.
Speaker Change: It was even better than we could have predicted from that mixed dose data. So.
Speaker Change: That.
Speaker Change: We will have a similar opportunity with this infant data to use it as.
Speaker Change: A bellwether for how to think about the vacs 31 data when it does read out so.
Speaker Change: Of course, what we found was with that incremental protein carrier, we really didn't see a falloff in the magnitude of immune responses when compared to <unk> or 'twenty. So.
Speaker Change: If the Vacs 24 data is good I think it will definitely only triangulate our confidence that came from the adult data for <unk> 31 to your question about tweaking the doses of individuals' serotypes most.
Speaker Change: Most definitely that will be afforded to us we have seen a really nice consistent pattern of dose response across all three of the phase III studies that we've run.
Speaker Change: And there's a wide berth that's afforded based on.
Speaker Change: The toxicology studies that are conducted and so indeed, we will reserve the right to potentially tweak certain doses if.
Speaker Change: If we see responses that should and could be improved.
And then your third question would be.
Speaker Change: Related to potential.
Speaker Change: Changes to the immunization schedule for pneumococcal conjugate vaccines, I think it's really hard to predict.
Speaker Change: What might happen Theres been no discussion of pneumococcal conjugate vaccines to date.
Speaker Change: In any forum. So I don't think there is anything to go on to make us think that there would ever be an effort to reduce the schedule associated with pneumococcal conjugate vaccines. This is.
Speaker Change: Not some distant memory of a pathogen and this is a pathogen that is routinely circulating and inhabiting the upper respiratory tract of a substantial portion of our population and the moment you pulled back a dose or pullback rates of immunization with <unk>.
Speaker Change: Rocco conjugate vaccines more kids and more adults will get sick and more adults and more infants will die. There is no question of that so.
Speaker Change: I don't think Theres really a thesis to suggest that there would be a path or an impetus to do something like that and maybe I'll just add to <unk> comments I mean the.
Speaker Change: The environment is right as I said 25 years of vaccination of infants 15 years of adults the health and benefits.
Speaker Change: Benefits are very clear right. The current system is incredibly complex.
Speaker Change: Brilliant institution involving multiple multiple stakeholders and I'll also maybe saying I can perhaps just <unk> earlier question refer assault.
Speaker Change: The comments that Senator Cassidy made in connection with.
Speaker Change: This decision to support the nomination of.
Speaker Change: RFK junior to the Senate speaking directly to a number of commitments that you obtained from both Canada and the administration, including kind of maintaining the CIP that is one of the important bodies in terms of the recommendation of immunization schedules.
Speaker Change: Other commitments kind of all geared toward kind of the status quo as it exists with respect to vaccination and there are other bodies as well as the AAP American Academy of Pediatrics itself, but a statement a while back is an important role in the organization of our of our influence as well.
Speaker Change: We'll move next to Tom Shrader with BTG.
Tom Shrader: Good afternoon. Thank you for answering so many of my questions.
Tom Shrader: With all the noise about a step I wanted to squeeze in one more about current medical practice.
Tom Shrader: With risk factors have gotten pcv's at $50 for a while now is it standard practice to boost them at 65, and I guess really the question is if everyone is getting them at 50 now is it kind of the expectation they'll get boosted at 65 or do you really need a sip.
Tom Shrader: Hard wire that and if you have any thoughts on whether insurance will pay for that second shot it would be great as well. Thank you.
Tom Shrader: Yes, Hey, Tim.
Speaker Change: Thank you for the question, maybe Jim and I can tag team. This one I mean going back.
Speaker Change: Prior to the pneumococcal conjugate vaccines being approved in adults 15 years ago, and only up until recently was there.
Speaker Change: Two vaccine schedule. So 15 years ago, there was only the polysaccharide only vaccine and then pregnant 13 got approved and until <unk> or 'twenty was approved Pneumovax was also recommended on top of the pneumococcal conjugate vaccine and in the case of the polysaccharide only vaccine.
Speaker Change: That was administered by recommendation every five years. So so multiple vaccine doses have been a consistent feature of the adult vaccination range.
Speaker Change: And at the last ACI team meeting there was quite a bit of discussion around.
Speaker Change: How long should we wait for a second vaccination once we start giving the routine universal vaccination at age 50 to your point, Tom people with certain health conditions have been getting vaccinated in that range for some time and there was a real recognition that another vaccination dose should come in when they turned to <unk>.
Speaker Change: 65, but there was reticence on the part of the CIP to go there just yet and what they were really looking for was the newer higher valent vaccines to come out and then those could be the second vaccination when people turn 65 and it was gratifying to see that we were.
Speaker Change: Is that the vaccines that they were referencing both <unk> 24, and <unk> 31, So yes, I think that is where the future is headed it hasnt been co defied but to your point if.
Speaker Change: And individual goes in and they're within the right age range, it's likely that they will get the vaccine if they ask for it I mean, thats just kind of how we're condition and there hasnt been any controls on reimbursement for multiple doses to date did IFC and these these vaccines have such a great return on investment.
The dollar you spend on vaccines return, depending on the class seven to $11 in savings to the healthcare system and Thats why given their safety profile given the efficiency.
Speaker Change: When people go in and ask their pharmacist for a vaccine more often than not they'll get it.
Speaker Change: Even if it's a second vaccine.
They had gotten to one previously and their history. So so yes, I think you're kind of setting things up not everything has been totally solidified but the ground is fertile for what should be the case, which is people getting multiple vaccinations over the course of their lives, particularly as their immune systems bigger.
Speaker Change: To wane as they get into their sixties seventies.
Speaker Change: We will move to our final question from Joseph Stringer with Needham <unk> Company.
Joseph Stringer: Hi, Thanks for taking our questions.
Joseph Stringer: We assume the eventual approval of either 24 or <unk> 31, what's your current thinking on the likelihood that <unk> would not grant preferred recommendation.
Joseph Stringer: Realize this would sort of go against precedent, but could you give your updated thoughts on the puts and takes on this hypothetical scenario and has your outlook on this changed at all with the New administration.
Jerry: Yeah, Hey, Jerry Thanks for the question.
Joseph Stringer: I mean, we've got <unk>.
Jerry: <unk> 31 will be first up.
Jerry: As we look ahead, we've got obviously complete the phase III studies, but given that that.
Jerry: The strength of the treatment effect in phase two we're extremely confident heading into the phase III experiment and once we have that package together.
Jerry: We have to get all of our.
Jerry: BLA, together et cetera, et cetera, but looking ahead to a potential ACI peer review.
Jerry: We have.
Jerry: A product that has the makings of the most compelling profile that they would have reviewed to date and even the last occasion wear and adult pneumococcal conjugate vaccine was debated.
Jerry: There were expectations that that profile could have warranted a preferred recommendation, but for the fact that while it had improved coverage. It did not cover historically circulating strains some of which were actively circulating in the moment and so for US we have <unk>.
Jerry: <unk> profile at least based on what we've seen to date that has even higher coverage than that particular vaccine, while covering the historically circulating strains and improving immune responses to boot, which are multiple advantages relative to what anyone else has ever seen.
Jerry: And we have seen preferred recommendations.
Jerry: Granted in the adult setting and it gives us the kind of <unk>.
Jerry: Confidence that it's certainly something that we can plan for it is not a guarantee.
Jerry: But something that we can plan for and the infant setting. The last conversation was when <unk> was approved and debated and really the coverage there.
Jerry: Based on the dialogue they had was enough to warrant a preferred recommendation, but they explicitly did not granted preferred recommendation because of the diminished immune responses that were evident which is the reason why as we think about our 24 valent and 31 valent moving forward. It gives.
Jerry: A lot of confidence that <unk> 24.
Jerry: Which is ahead truly does have a differentiated superior profile in that if we can see anything similar to the adult results, where we're not only conferring broader coverage with additional conjugates, but also potentially higher immune responses that would have been precisely what they were looking for when.
Jerry: They last considered preferred recommendation.
Jerry: And then I think as it relates to what will happen in the future we're a ways away from.
Jerry: That ACI conversation that ACI composition et cetera. So I think it's premature to suggest anything other than the basis for which these decisions have been made historically, which is based on the merits of the vaccine for which theyre considering relative to.
Jerry: The vaccines that are the standard of care up to that point and to what extent the newer vaccine can provide better protection and better return on investment for this country.
Jerry: Ladies and gentlemen that will conclude today's question and answer period and also concludes today's back site fourth quarter and full year 2024 earnings call.
Jerry: These disconnect your line at this time and have a wonderful day.
Jerry: Goodbye.
Jerry: Okay.
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