HLS Therapeutics Inc

TSX:HLS

Earnings Call Transcript 2024-Q2

[Operator]

Good morning, and welcome to the Q2 fiscal 2024 financial results conference call for HLS Therapeutics. On this morning's call, we have Craig Millian, Chief Executive Officer; and John Hanna, Interim Chief Financial Officer. [Operator Instructions] Earlier this morning, HLS issued a news release announcing its financial results for the 3 and 6 months ended June 30, 2024. This news release, along with the company's MD&A and financial statements are available on HLS website and on SEDAR plus. Please note that slides accompanying today's call can be viewed via the webcast, a link to which is available in the company's earnings press release and at its website on the Events page. Certain matters discussed in today's conference call or answers that may be given to questions could constitute forward-looking statements. Actual results could differ materially from those anticipated. Risk factors that could affect results are detailed in the company's annual information form, which has been filed on SEDAR plus at www.sedarplus.com. During this conference call, HLS will refer to adjusted EBITDA. Adjusted EBITDA does not have any standardized meaning prescribed by IFRS. Adjusted EBITDA is defined in the company's press release and annual filings that are available on SEDAR plus, and on the company's website. Please note that all financial information provided is in U.S. dollars unless otherwise specified. I would now like to turn the meeting over to Mr. Millian. Please go ahead, sir.

[Craig Millian, executive]

Thank you, Matthew. Good morning, and thank you all for joining us. On our call today I'll review Q2 and recent highlights. John will follow with a more detailed look at our financial results, and then we'll hold a Q&A session. Financial results for the second quarter included revenue of USD 14.5 million, adjusted EBITDA of $4.3 million, and cash from operations of $2.5 million. We made progress in positioning HLS for future growth and profitability by implementing strategies to drive demand while we also actively manage our costs. Q2 saw solid growth from our promoted products, Clozaril and Vascepa, particularly in Canada, where sales grew 11% year-over-year in local currency. Of note, we reduced operating expenses by 13% while still generating this top-line product portfolio growth. In addition, we strengthened our balance sheet and long-term flexibility by completing the sale of the Xenpozyme royalty interest, a non-strategic asset. Moving forward, our focus will continue to be on driving growth and profitability for the HLS product portfolio. If we take out royalty revenue and consider adjusted EBITDA based solely on HLS product sales and related OpEx, Q2 adjusted EBITDA would have grown 86% year-over-year. This is encouraging as royalty revenues will become a much smaller part of the baseline when calculating growth in future quarters. I'll start my Q2 review with a look at Clozaril, which had one of its stronger quarters in quite some time. In local currency, Clozaril Canada revenue grew 5% year-over-year and 16% over the first quarter. Initial indications are that our Clozaril regional strategies are working. Clozaril patient numbers in Canada were up 1.4% versus Q2 of last year. Underpinning Q2 revenue growth has been market share expansion in Western Canada, ongoing market leadership in Ontario, and stabilization in Quebec through patient retention efforts. We're managing unit decline in Quebec in line with our expectations and offsetting those small losses with unit growth of more than 5% year-to-date in the rest of Canada. In Q2, the Quebec-based study examining the positive impact of pharmaceutical support programs on persistence with clozapine treatment was published in the journal of Clinical Pharmacology and Therapeutics. The study concluded that patient adherence to treatment is greater when using a support program and that offerings between programs can impact persistence levels. More specifically, the study found that patients enrolled in the HLS support program known as CSAN, had a compliance rate 32% higher than those using the leading generic. We plan to leverage this publication in our ongoing discussions with the Ministry of Health as we seek to improve access in Quebec for new patients. Clozaril Canada revenue on a year-to-date basis is relatively flat to 2023. However, based on the momentum heading into the second half of the year, we are anticipating modest growth in Canadian net sales in 2024 for the first time in several years. In the U.S., Clozaril Q2 sales were up 9% year-over-year and 31% on a sequential basis from Q1. We still have a gap of a few hundred thousand dollars to make up on a year-to-day basis due to the inventory build at the end of last year. That said, the U.S. business has stabilized in Q2 and is in line with our quarterly expectations. To sum up, we are encouraged by Clozaril's Q2 performance and believe there is momentum building as we head into the second half of the year. Turning now to the Vascepa. Q2 revenue in Canadian dollars was up 21% year-over-year, while unit demand grew 45% and our consistent prescriber base grew 76% from a year ago. We expect slightly stronger revenue growth for Vascepa in the second half of the year and are on track to achieve our goal of brand profitability by year end. We'll achieve this through a combination of unit demand growth, reduced operating expenses, and active efforts to both improve reimbursement rates and stabilize the payer mix. I'll take the next few minutes to drill down into some key aspects of our plan for the second half. First, as discussed on our last call, we're bringing the primary care sales function in-house and terminating our promotional services agreement with Pfizer. We have mutually agreed that the transition will be completed by the end of August. The transition is going well, and while we should acknowledge some customer impact in the near-term is possible, we believe good planning and execution will keep any disruption to a minimum. Our commercial team is excited to bring all selling efforts in-house and have full ownership and accountability for driving Vascepa to its full potential. In the near-term, we believe that minimal additional resources will be needed to sustain demand growth. In the future, we'll have the flexibility to scale operations once we see sufficient growth in the primary care segment. Once the primary care sales function is transitioned to HLS, we will eliminate approximately $5 million in annual costs related to the Pfizer partnership, starting in Q4 of this year. A small portion of these savings will be reinvested in 3 additional sales territories to ensure adequate customer coverage, and in expanding programs that are having a positive impact on reimbursement and patient adherence to treatment. I want to emphasize that while exiting the Pfizer agreement, will result in considerable savings, we don't view this transition as a growth-limiting factor for Vascepa. In our new sales model, we'll continue to call on prescribers who are collectively responsible for initiating over 90% of the new-to-brand Vascepa patients over the past 2 years. In addition, we'll leverage up to a 1/3 of our selling efforts against the highest potential prospects who have not yet initiated new patients. Unlike the previous model, where potential was based largely on statin prescribing, we've begun to leverage other data sources to improve both the productivity and efficiency of our customer targeting. For example, we'll now factor in payer dynamics, so we target physicians with a greater proportion of privately insured patients in their practice. We're confident that these and other changes to the Vascepa go-to-market model will help us achieve our goal of profitable growth. Looking at other drivers of demand for the second half of the year, we continue to make progress on the public reimbursement side. We announced a product listing in the province of Alberta effective August 1, which means we now have national coverage for more than 90% of eligible Canadians who are part of a public or private plan. Earlier, I mentioned our focus on payer mix, which is a key factor in driving net revenue growth and margin expansion. With the opening of public access in BC and Alberta this year, we expect continued near-term differences between unit demand growth and net sales growth due to the increase in public claims. However, we are confident gross to net will begin to stabilize in future quarters. In the meantime, we're focused on both increasing reimbursement success rates and improving patient retention once on therapy. And we have a particular emphasis on the private payer segment. One example of this is our enhanced financial assistance program for privately insured patients. Our goal is to reduce script abandonment at the pharmacy and increase patient compliance and persistence. Now these are greater issues for patients on private insurance due to a higher cost burden than is generally experienced by patients on public plans. This improved financial assistance program was launched May 1, and while still in the early days of the rollout, we've seen an inflection in program enrollment which grew by 25% over the most recent 3 months versus the prior 3-month period. We've also added field reimbursement specialists in Ontario to help physician offices navigate the Expanded Access Program in that province. The Expanded Access Program, or EAP, places a considerable administrative burden on physicians trying to start patients on Vascepa. When assisted by our field reimbursement specialists, prescribers have experienced a substantial improvement in both EAP approval rates and average turnaround time. We're encouraged by the progress that's been made in Ontario, including the reduction in the authorization backlog from over 50 days last summer down to less than 5 days currently. That said, we continue to work towards more substantive reimbursement solutions to eliminate what remains a significant barrier to product adoption in Ontario. For a comparison, in Quebec, where reimbursement is not fully optimized but is far less of a barrier than in Ontario, we're seeing Q2 year-over-year growth rates in unit demand of more than 75%. In Ontario, where the reimbursement process is more challenging, growth rates are just over 40%. Clearly, this represents an opportunity to accelerate growth in our largest province. To sum up on Vascepa, we believe we are on track to both achieve our 2024 sales guidance and our Q4 brand profitability goal. In Q3, we'll finalize the primary care sales force transition from Pfizer to HLS, we'll continue to drive unit demand growth, efficiently manage operating expenses, leverage our broad access, and work towards achieving more balanced growth across payer channels. We continue to believe in Vascepa's long-term potential based on its exceptional clinical data, along with its patent runway that extends into the late 2030s. Now, I'll move on to other important developments from the second quarter. With our emphasis on the performance of the HLS medicine portfolio, and with the declining importance of our royalty portfolio, we decided the time was right to monetize the Xenpozyme royalty, selling it to DRI Healthcare at the end of the second quarter. The Xenpozyme transaction is valued at up to USD 45.75 million. This consists of $13.25 million upfront in cash, $14 million in potential sales-based milestone payments, and DRI's assumption of $18.5 million in potential future milestone payment obligations that HLS might have had. This includes DRI assuming the obligation of a significant near-term milestone payment that HLS likely would have had to make in 2025 and which would make the near-term cash value of the deal closer to $20 million. In July, we used the upfront cash proceeds to pay down $14 million in principal on our term loan, enabling us to accelerate deleveraging, strengthen our balance sheet, reduce annual interest expense, and sharpen our focus on growing our marketed products. Heading into 2025, this deal will provide HLS with greater flexibility for future capital allocation. John will add some details on the positive impact of the debt repayment in his section. With the release of Q2 results today, we also announced that Laura Brege has decided to step down from the HLS Board of Directors, effective immediately. We're currently reviewing our Board composition and will decide on how best to address this opening in due course. One of our current compensation and Governance Committee members, Norma Beauchamp, will replace Laura as Chair of that Committee. On behalf of the Board and HLS management, I want to thank Laura for the insights, guidance, and leadership she provided during her 5 years on the Board. Moving on to 2024 full-year guidance. We're making no changes to our outlook, which was updated on July 2 when we announced the Xenpozyme sale. Our consolidated revenue guidance range is $58.5 to $59.7 million. Comprising that number is Vascepa revenue of $17 million to $18 million, or in Canadian dollars $22.5 million to $24.5 million. Clozaril revenue of approximately $40 million, and royalty revenue of $1.5 million to $1.7 million. 2024 adjusted EBITDA is expected to be in the range of $15.5 million to $16.7 million, and as communicated previously, we expect Vascepa to make a positive contribution to adjusted EBITDA starting in the fourth quarter, meaning HLS would enter 2025 with a growth portfolio of 2 profitable products, Clozaril and Vascepa. With that, I'll turn it over to John for a closer look at the numbers. John?

[John Hanna, executive]

Thank you, Craig, and good morning, everyone. Starting with revenue, total revenue for Q2 was $14.5 million compared to $16.4 million in Q2 last year. Excluding royalties, revenue from marketed products in Q2 was $14.1 million, up 9% from Q2 2023. Combined Canadian product sales of Vascepa and Clozaril in Q2 were up 11% in Canadian dollars. Q2 sales growth in Canada was driven by both marketed products, with Vascepa revenue up 21% in Canadian dollars and Clozaril sales up 5% in Canadian dollars. U.S. Clozaril product sales were up 9% in Q2 compared to the prior year period. Year-to-date, U.S. Clozaril sales are down 5%. As discussed on our Q1 call, wholesalers ended 2023 with larger inventory balances than usual and drew down on these balances early in 2024, affecting Q1 net sales. We have strategies in place to drive our Clozaril business in the U.S. and we'll look to continue to make up ground as we move through the second half of the year. We've taken a modest price increase in June of this year to further support the U.S. business. Royalty revenues of $0.4 million in Q2, down from $3.4 million in Q2 last year. As you know, the royalty term for what was the largest royalty in the portfolio came to an end midway through Q4 last year, which led to the year-over-year decrease. We also made adjustments in Q2 this year related to prior period estimates, which had the effect of reducing Q2 royalty revenue. We now have one remaining royalty interest, which is Obizur, marketed by Takeda Pharmaceuticals. Based on historical performance and future expectations, we look to Obizur to generate annual revenue of approximately $700,000 going forward. Following the sale of the Xenpozyme royalty, and subsequent to the end of the quarter, we paid down $14 million of principal on our term loan, which will save us approximately $1.5 million in annual interest expense. On the expense side, we made good progress in Q2 with reducing our cost base while maintaining the growth potential of the business. Q2 operating expenses, comprising sales and marketing, medical and regulatory, and G&A, were down 13%, while promoted product revenue was up 9%. With the expectation that the transition of the primary care sales function to HLS will be complete at the end of August, we will see another decrease in operating expense in Q4 this year that will continue into 2025. As Craig said earlier, we expect the transition to save us approximately $5 million annually, with most of the savings falling to bottom line after some modest investment. As expected, cost of product sales increased in Q2 due to growth of Vascepa and Clozaril year-over-year. Q2 adjusted EBITDA was $4.3 million compared to $5.5 million in Q2 2023. Excluding royalty revenue, adjusted EBITDA for Q2 would have been approximately $3.8 million compared to $2.1 million in Q2 last year, an 86% increase. This reflects the growth in our promoted product revenue year-over-year, as well as the steps we have taken to reduce our cost base. For Q2, the direct brand contribution from Clozaril to adjusted EBITDA was $7.6 million, while the direct brand contribution from Vascepa to Adjusted EBITDA was a loss of $1.6 million. Year-to-date, the direct brand contribution from Clozaril to adjusted EBITDA was $13.7 million, while the direct brand contribution from Vascepa to adjusted EBITDA was a loss of $3.2 million. By comparison, for the first half of 2023, Vascepa brand contribution was negative $4.7 million. We saw a 32% improvement. As Craig mentioned, we expect Vascepa to make a positive direct contribution to adjusted EBITDA beginning in the fourth quarter of this year. Cash from operations in Q2 was $2.5 million compared to $2.7 million in Q2 last year. Cash and cash equivalents were $32.5 million at quarter end, compared to $22 million at December 31, 2023. Quarter end balance included the $13.25 million of cash received in the Xenpozyme royalty sale. We continue to [ delever ] our balance sheet and made principal payments on our term loan during Q2 of $1.5 million. In addition, after quarter end, we used the upfront cash proceeds from the sale Xenpozyme plus cash on hand to pay down $14 million of principal on our term loan. Following that payment, the principal balance on the term loan stood at approximately $71 million. This is down significantly from $88.5 million at the end of 2023. In closing, after 6 months in the CFO role, I'm pleased with the progress that we've made to strengthen our operations and financial position. We have derisked our balance sheet by paying down debt which will reduce our annual interest expense and have made great progress in reducing overall OpEx. We expect to drive profitable organic growth with Vascepa this year and to maintain Clozaril's performance. If we're successful, as we turn to 2025, we'll be in a stronger position to pursue transactions and augment the assets we have. And with that, I'll pass it back to Craig for his closing comments.

[Craig Millian, executive]

Thanks, John. So to sum up, the second quarter was a solid quarter of growth from our promoted products, achieving a double-digit percentage increase for Clozaril and Vascepa sales in Canada, while we delivered on our promise to reduce expenses, cutting OpEx by 13%. We completed the sale of our Xenpozyme royalty, which enabled us to pay down debt, reduce interest expense, and will give us greater financial flexibility longer-term. In Q2, we saw strong Clozaril performance with momentum building from our regional strategies. With Vascepa, there are several growth drivers in place for the second half of the year, and we expect brand profitability starting in the fourth quarter. This will set up HLS to enter 2025 with an improved growth outlook, an increasingly profitable product portfolio, a reduced expense base, and a stronger balance sheet. That concludes my prepared remarks. At this point, I'll ask the operator to please provide instructions for asking a question.

[Operator]

[Operator Instructions] And your first question comes from George Ulybyshev of Clarus Securities.

[George Ulybyshev, analyst]

Just a few here on my end, I believe on the last conference call with respect to Vascepa, you guys mentioned that a significant portion of your new to brand patients and prescriptions were coming from a relatively small number of general practitioners. What's your strategy going forward when it comes to targeting the other, much larger portion of GPs?

[Craig Millian, executive]

Yes, thanks for the question, George. Yes, no, that's correct. So as we mentioned, and this was one of the really compelling reasons why we decided to transition our go to market model, our sales model for Vascepa, away from this larger sales force combined with Pfizer and HLS to something that's, I think, much more efficient, is because the vast majority of calls that Pfizer were making were on positions that were actually not necessarily writing Vascepa, and an even smaller number of physicians who are actually initiating patients onto Vascepa. So I want to be clear on the difference here. Oftentimes, patients are started on Vascepa by a specialist, and then their care is maintained by a general practitioner. So in many cases, the physicians we were calling on were simply refilling prescriptions. In terms of the percentage that we're actually initiating patients onto Vascepa, it was a rather small percentage of the total. And that number, the number of physicians who have initiated patients onto Vascepa over the last couple of years, is numbers in the hundreds. So the current model will easily cover most, if not all, of the primary care physicians who have initiated patients onto Vascepa. So those are truly the physicians who are believers in Vascepa. Of course, we'll also cover a large percentage of the physicians who are filling out refill prescriptions for their patients. And this model still gives us a fair amount of capacity to go after both specialists and general practitioners who have been identified as high potential based on a number of different criteria, including the number of patients in their practice who are -- who would meet the reimbursement criteria for Vascepa, for example, being on a statin, as well as this new dynamic that we're looking at, which is being attentive to payer mix. And frankly, looking at physician practices that have a larger percentage of privately insured patients, because as we've discussed in the past, our margins are much better on that book of business than on the public book of business. So while we do give up a fair amount of call capacity with this new model, admittedly, the vast majority of that call capacity that goes away was inefficient. It was, in some cases, 10, 12, 15, 20 calls being made on physicians who were not writing at all. And we simply feel that investment can be better placed elsewhere. For example, in other parts of the marketing mix where we are having success. And certainly, as our business evolves, and as we start to gain greater traction in primary care, we expect we will over time, we certainly can continue to scale up. And the nice thing about it is we have full control over those decisions on a go forward basis.

[George Ulybyshev, analyst]

And just one more from me. Have you guys seen any material impact on unit demand for Vascepa in western Canada from the addition of Blue Cross and public reimbursement in BC?

[Craig Millian, executive]

Yes, good question, George. So we're starting to see it. Admittedly, we're not -- we haven't seen as much growth as we would like to at this point, but we have seen growth start to pick up. There is a little bit of a, I guess, a learning curve almost with physicians in terms of getting their patients onto Vascepa on these public plans. And so in the second quarter, we were encouraged by the fact that sequential growth in prescribing from Q1 to Q2 in British Columbia outpaced the national average. So that's a positive. And from a year-over-year perspective, in BC and Alberta, there was very little growth in the first part of the year. And so we're excited about the potential now to see both those provinces ramp-up to the levels at least that we've seen in the rest of the country and hopefully outpace it. And that's why we're excited about the growth potential in the second half of the year. So we're starting to see some pickup every month. It's getting better, but there's definitely some Runway there, and we expect that to hit in the second quarter. We actually expect Alberta may pick up even faster than British Columbia due to some idiosyncrasies that exist in the BC public plan, where it tends to be a rather high deductible plan for patients who have higher incomes, and so the copays tend to be higher. And so there's a little bit of an economic barrier there that we don't see in the other provinces. So we actually think we'll get traction in Alberta much faster than we're getting it in BC.

[Operator]

And your next question comes from Rahul Sarugaser of Raymond James.

[Rahul Sarugaser, analyst]

So my question is on Vascepa have been answered, so maybe I'll focus a little bit on Xenpozyme transaction. We noticed that in the PR that it was indicated that these -- much of these proceeds would be used for paying down debt. I don't see it in the financials this quarter. Could you give us a little more color in terms of the intended use of those proceeds and when we may see that?

[John Hanna, executive]

Sure. The transaction closed in the final week in June. We received the proceeds, which were reflected in our cash balance. But the debt repayment didn't happen until the first week in July. And so we used the proceeds at $13.25 million plus a little more, and paid down $14 million in principal.

[Rahul Sarugaser, analyst]

And then, this one as a follow-on, about 2/3 of the transaction are back-ended. Do you have any visibility and or confidence on when those cash flows may accrue to HLS?

[Craig Millian, executive]

Yes, it's a fairly traditional deal structure where it's tiered. There's actually 3 different tiers that where there are milestone payments associated, and there's a fairly long runway for Xenpozyme to achieve those tiers. And for us to get each of those payouts would be several million dollars. Obviously, the lower tiers, we have a higher degree of confidence based on -- we don't have any insights into the business that you don't have. But based on the analyst projections, we think the lower tiers we have a good shot of achieving. The higher tiers are more of a stretch. But obviously, we hope that Xenpozyme does very well and we're able to benefit from that. So it would not be -- if there's nothing likely to happen, I would say, in the next 2 to 3 years, based on the current runway. Again, I'm not that familiar with their forecast models, but based on what I know, I'd say it's unlikely that we'll see an economic benefit in the next 2 or 3 years. That said, in addition to the upfront cash, $13.25 million, there was a fairly achievable tier next year that we anticipated Xenpozyme will hit in 2025 that we were actually beginning to accrue against that now will no longer be an obligation of HLS. And if you factor that in, really the value over the next 12 months or so is really closer to $20 million to HLS in terms of the upfront cash, plus the liability -- the potential liability that goes away.

[Rahul Sarugaser, analyst]

And then just maybe 1 last question then. So looking forward, given the [ sort of ] balance sheet now, what is your philosophy and intention around potentially bringing in any new assets?

[Craig Millian, executive]

Yes. Yes. So I think we as a -- certainly as a management team, I think support of the Board believes that we need to, at some point, expand our portfolio. We have 2 great assets. In the near-term as I've said, we felt that we had work to do to optimize those and to strengthen our financials and really earn the right to put additional capital to work and bring in fresh assets. So that -- admittedly, we're in August, so I would say unlikely to happen in the next few months, but we're actively looking. But certainly, we'll become a greater focus as we move into 2025 and as we put a few strong quarters under our belt, we think we'll be in a good position to do that. And I think ideally, as I said before, we feel we have very strong capabilities and infrastructure in 2 therapeutic areas, in cardiovascular and in psychiatry or neuroscience. And so obviously, we'll be focused on those areas, but certainly any sort of specialty medicines that kind of fit our criteria. And again, looking for, obviously, commercial stage or near commercial stage assets that are either synergistic to our portfolio or accretive in the near-term would be the immediate focus.

[Operator]

[Operator Instructions] And your next question comes from David Martin of Bloom Burton.

[David Martin, analyst]

I apologize. I got on the call late and you may have addressed this, but I'm wondering, what was the change -- percent change in the number of patients on Clozaril in both Canada and the U.S. this quarter?

[Craig Millian, executive]

Yes. So Canada, the increase in patients was 1.4%. I don't know if I have the U.S. numbers in front of me. There was growth in the U.S. year-over-year, but I don't know in terms of absolute or as a percentage what the growth was. But we can get back to you on that, David.

[David Martin, analyst]

So Canada, 1.4%, that's the same as Q1. So that seems pretty consistent.

[Craig Millian, executive]

It is. It is, yes. And the patient numbers are obviously, they're -- it's a dynamic figure, but one of the things we were encouraged by in particular was we had one of our stronger quarters in Quebec in terms of really minimizing the kind of the net loss in patients. It was actually one of our strongest quarters we've had, frankly, since Bill 92 was implemented in Quebec. So we put a new kind of bespoke, go to market model in Quebec to really ensure that we retain as many patients as possible. And it seems that that strategy is working.

[David Martin, analyst]

And what about getting new patients? I know you're lobbying the Quebec government using the CSAN program. Any headway there?

[Craig Millian, executive]

Yes. So the -- so as one of the key, I think, deliverables from the second quarter was the publication of the Quebec study, which showed the importance of patient support programs for patients on -- for treatment-resistant schizophrenia patients on clozapine treatment, and the specific benefit of CSAN. So we got that data published. It had been presented, as you recall, last year, and we actually got it published. And that was one of the requests from the Quebec ministry, was to -- once the data were published, to then set up time to speak with them again. So that's our intention. We think we have a really compelling set of arguments. First and foremost, we think it's in the interest of patients for them to have access to Clozaril and to CSAN, and to CSAN Pronto. We think there are really some unique attributes, despite being in a generic market, and obviously our market leadership speaks to that. So we think we have some compelling arguments. We certainly have a lot of advocacy that's aligned with us, and so we're certainly not giving up. And we intend to have another conversation in the near-term with the ministry. We'll see what the outcome is. No guarantee, but we're going to continue to make those arguments. And now we have a publication that supports it.

[Operator]

And there are no further questions at this time. I'd now like to turn the call back over to Mr. Millian for closing comments.

[Craig Millian, executive]

Thank you, Matthew, and my thanks to everyone for participating on today's call. We look forward to reporting to you on our progress in the coming quarters and speaking with you all again soon. Thanks, and have a great day.

[Operator]

Ladies and gentlemen, this concludes today's conference. We thank you for participating and ask that you please disconnect your lines.