Akebia Therapeutics, Inc.

Hello and welcome to Acabia's first quarter 2024 financial results conference call. At this time, all participants are in a listen only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising that your hand has been raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. It is now my pleasure to introduce Senior Director, Investor Relations, Mercedes Carrasco.

Thank you, and welcome to TBI's first quarter 2024 financial results and business updates conference call. Please note that a press release was issued earlier today, Thursday, May 9th, detailing our first quarter financial results and that release is available on the investor section of our website. For our convenience, a replay of today's call will be available on our website after we conclude. Joining me for the call today, we have John Butler, Chief Executive Officer and Principal Financial Officer, and Nick Grund, Chief Commercial Officer. I'd like to remind everyone that this call includes forward-looking statements. Each forward-looking statement on this call is subject to risks and uncertainties, that could cause actual results to differ materially from those described in these statements. Additional information describing these risks is included in the financial results press release that we issued on May 9th, as well as in the risk factors and management discussion and analysis section of our most recent annual and quarterly reports filed with the SEC. The forward-looking statements on this call speak only as to the original date of this call and accept as required by law We do not undertake any obligation to update or revise any of these statements. With that, I'd like to introduce our CEO, John Butler.

Thanks Mercedes, and thanks everyone for joining us today. This is our first quarterly call since the approval of AFSEO in late March. Though only about six weeks ago, I'm extremely encouraged by our early progress. I'm excited by the reaction of the dialysis market. Prescribers, dialysis providers, and patient groups as well as the excitement from the folks at Akibia to get this product into the hands of patients. We celebrated the milestone and win for the kidney community for a moment, then immediately kicked into high gear to initiate our launch. On our Vafsio approval call, I outlined three things we have to execute effectively to drive a successful launch and ensure long-term growth of Vafsio in dialysis. First, drive demand from prescribers. Second, contract effectively with dialysis providers. And third, demonstrate potential additional benefits of Vafsio for dialysis patients and the folks who serve them. Nick will go into more detail, but I'll share that our commercial and medical affairs teams have already engaged with thousands of physicians. I'm extremely encouraged by the physicians' interest and enthusiasm, particularly when I speak to investigators who have experience using the product. We believe the Vasio label supports widespread adoption, and that's how we're presenting the product to the market. We've developed our launch strategy and tactics that best position Vasio to potentially become a new oral standard of care for dialysis patients with anemia due to chronic kidney disease. As I speak to potential Vasio prescribers, besides describing their clear interest in using the product for their dialysis patients, They asked me to please not give up on working towards an approval for non-dialysis patients. We will not give up on this patient population. The FDA in the Vataduce.crl suggested we return and discuss appropriate subpopulations where the benefit risk is positive. Now, this may include conducting a new clinical trial to supplement the data we already have in the patient population we plan to discuss. One potential subgroup we're exploring are CKD patients with anemia not on dialysis with a GFR below 15. We believe these patients would benefit from treatment with Vafsio. Over 70% of these patients are not treated today, and they routinely have a higher mortality rate than patients who had their anemia controlled before dialysis. And they continue to have a higher mortality rate 12 months after starting dialysis. a once-a-day oral option may be ideal for this patient population. We plan to engage the FDA this year to discuss a path forward for these patients. And it's critical that we take this population into account as we determine our WAC pricing for Vafseo. We are carefully considering pricing and will announce the WAC by next month. So now let me ask Nick to give us more detail on launch execution.

Thanks, John, and good morning to those of you joining us on the call. I'm pleased to report that the Experience to Keep You commercial and medical affairs organizations have been extremely active in the field, engaging with prescribers to build demand for VASIO and with dialysis providers to effectively contract as we prepare for product availability and Tdapa reimbursement in January. It is apparent that excitement and advocacy around the HIF class is strong. A clear, unmet medical need exists. with nephrologists reporting that one-third of the diuresis patients with anemia due to CKD have hemoglobin levels that are below the target range. This is despite the availability of ESAs. Further, a PBS-sponsored market research found 85% of physicians are familiar with the HIF class, and of those who are extremely familiar, 85% have a very positive impression. This is despite the low early adoption of the other approved HIF. I believe this is a very solid foundation to build upon with strong differentiating messages specific to VASIO. Additional research suggests that nephrologists envision broad utilization of a HIF product with over 75% of nephrologists stating that they are comfortable prescribing a HIF in any dialysis setting. In fact, research suggests a HIF will be the preferred treatment versus ESAs for almost one-third of nephrologists. These metrics are very encouraging. Even prior to approval, we had started to ramp up for launch. The first step was the expansion of our field-based medical and commercial teams, which we grew 55% from 2023. We are excited to have expanded the teams now so that we have an eight-month runway to continue to build advocacy and demand for VASIO. In the first six weeks since approval, Akibia's key account managers have been actively engaging with approximately 4,500 calls to our key target prescribers with many of those calls, including VASIO messaging. John will talk more about this later, but I will quickly note that the VASIO approval has facilitated improved access to Eryxia prescribers. The efforts in the field team have been further supported by digital tactics. VASIO messages appeared in almost 26,000 times in paid search, and we have had over 240,000 targeted brand impressions. We are also proud to have had sponsorship presence at three key meetings since approval. The American Nephrology Nurses Association, the Renal Physicians Association, and the Renal Healthcare Association meetings, which allow for scientific exchange sessions and in-depth discussions with key customers. In parallel, Akibia's medical affairs team continues to work with our publication steering committee to ensure timely and continued publication of relevant Vatadustat data for clinical and scientific community. To date, the primary results for both Innovate and Protect Global Phase III clinical programs have been published in the New England Journal of Medicine in two separate manuscripts. Data on several additional important analysis and subgroups have been published, including peritoneal dialysis subgroup, erythropoietic effects of Vatadustat, overall adverse event profile of Vatadustat from the pooled Phase III clinical program, et cetera. These publications were helpful in driving the high degree of HIF awareness that we are reporting from the field. As of the first quarter, the medical affairs team continues to publish key data and analysis at scientific meetings, such as the 2024 Annual Dialysis Conference, where the cardiovascular safety of Vatadustat in patients new to dialysis with CKD-related anemia and the safety and efficacy of Vatadustat in the treatment of anemia patients with CKD in the U.S. region were presented. Beyond driving prescriber awareness, advocacy, and demand, contracting with dialysis organizations is critical. Through that process, we will finalize our WAC price. As a reminder, we anticipate pricing VASIO at a premium. As you likely know, medications for dialysis patients are contracted through dialysis organizations, and those contracts include both an off-invoice discount and a volume-based discount opportunity. meaning that when volume goes up, net price will come down. Engagement with dialysis organizations has been productive. Commercial discussions have been initiated with large dialysis organizations, and ongoing contract development meetings are planned. ERIXI and the high likelihood phosphate binders will be in the bundle has allowed for us to begin dialogue with dialysis organizations where we aligned around contract structure and critical components of implementation clickable across the portfolio. With both products available, we have a unique offering to help patients and dialysis organizations achieve their goals. I look forward to updating you as we finalize these agreements over the next several months. Turning now to Tdapa. We will submit our application by June, and as a reminder that the application is only accepted once a quarter. After a six-month Tdapa application process, anticipated to be completed in January 2025, We expect the product would be reimbursed and widely available and accessible to patients with rapid adoption. As you can see, our entire organization is working on every aspect of reaching our prospective prescribers, securing access for patients through key channels, and laying groundwork for future growth. Our partners are hard at work, too. Medici plans to launch Vasio in Germany and Austria as early as June 1st. They also have launches planned in Netherlands, Switzerland, Sweden, Norway, and Finland by end of year. While we reiterate that a US launch of VASEO represents the primary commercial opportunity for Akibia and the potential to target an approximately $1 billion US market. We're also pleased that patients through Europe will soon have access to the product. Now let me pass it to John to cover additional opportunities and next steps.

Thanks, Nick. Nick covered prescriber demand and the contracting progress. The third strategic imperative is to continue to collaborate on clinical studies to fill gaps in our data, potentially to expand our label, and separately to allow large dialysis providers to gain experience utilizing Vafsio in their own patients. We're in discussions with key investigators and dialysis providers on a collaborative study that we believe will generate significant data. We hope that these data will lead to valuable publications to support further physician education as well as provide doctors with increased comfort in utilizing Vafsio, potentially enabling continued growth and utilization even after Tdapa concludes. Again, we believe the Vafsio label supports widespread adoption in dialysis patients. Our team has been working diligently to prepare the groundwork for potential Vafsio label expansion to permit for more flexible utilization of the product in both new to dialysis patients and in alternative dosing regimens. As I mentioned earlier, we also believe Vafseo could benefit CKD patients who are not on dialysis, and we plan to explore label expansion to those patients as well. This is the most significant potential value driver for Akebia after the launch in dialysis. Now I'll switch gears to our financial results. But before I review the financials, I'll mention that we have an active search for CFO that's going well. But I'd like to thank our finance team and our chief accounting officer, Richard Malibre, for the effort and attention they've put in since our year-end close to ensure the quarter close process was seamless while I serve as principal financial officer. As we've previously reported, I can reiterate that we are well financed to execute on our Vafseo launch. We also previously strengthened our balance sheet with proceeds from our at-the-market or ATM sales agreement. Our cash and cash equivalents as of March 31st, 2024, were approximately $42 million. In addition, in Q2, we drew down the additional $8 million available to us upon approval of Vafsio under the BlackRock debt facility. We expect that our cash on hand, as well as revenue generated by Arixia and now Vafsio starting in January, will fund planned operations for at least two years. We've kept tight control of our spending in the first quarter and are managing the business for stable year-over-year spending in 2024. The team is demonstrating good financial discipline while investing appropriately for a successful launch. You'll notice we also announced that we amended our working capital agreement with V4 to simplify the payback as a royalty. This does not fundamentally change the timing of the payback of that cash, but it greatly simplifies the operational aspects of managing our supply chain. Total revenues were $32.6 million for the first quarter of 2024, compared to $40 million for the first quarter of 23. Net product revenues were $31 million for the first quarter of 24, compared to $34.7 million for the first quarter of 23. The decrease versus last year is largely a volume decrease as a result of our contracting strategy as we exited the final large Part D payer contract. We remain confident that we can achieve net product revenue growth in 24 versus 23. We believe our Arixia outreach is actually enhanced by the Vafsio launch as prescribers are eager to discuss a new product. And recall that there's a 96% overlap between Arixia and Vafsio target prescribers. Also, CMS has released guidance on incorporating phosphate binders into the dialysis bundle. Dialysis organizations are now contracting with an eye towards the binders going into the bundle in 25, as Nick mentioned. One other note on Arixia. In April, Akiba's licensee, Averoa, submitted a marketing authorization application to the European Medicines Agency for ferric citrate coordination complex. And if approved, Averoa will make the product available to patients throughout the EU. I want to congratulate Averro on the submission and will be available to support launch efforts in the coming years. Cost of goods sold were $11.6 million for the first quarter of 24 compared to $20.2 million for the first quarter of 23. Akebia continues to carry a non-cash intangible amortization charge of $9 million per quarter through the fourth quarter of this year. Research and development expenses were $9.7 million for the first quarter of 24, compared to $19.7 million for the first quarter of 23. Now, we will continue to progress a number of new programs in 24, including the collaborative study I mentioned earlier, as well as preclinical development of HIF-based molecules in our pipeline. But we do not expect a step up over 23 expenses. SG&A expenses were $25.4 million for the first quarter of 24 compared to $25.1 million for the first quarter of 23. Again, we're tightly controlling spend and do not expect a significant uptick as we launch VASIO. Net loss was $18 million for the first quarter of 24 compared to a net loss of $26.9 million for the first quarter of 2023. Before opening the line for questions, I know that Allie Brassel from Piper could not make the call this morning, but she sent Mercedes a couple of questions, and maybe we can start with those. Mercedes?

Sure. Thanks, John. The first question, please walk us through the V4 license agreement and amendment and how we should think about modeling the impact.

Sure. So just to remind everyone, back in 2022, as part of an amendment to the V4 agreement, BFOR provided $40 million of working capital or a working capital fund to finance the product purchases for Vafsio in advance of launch. And in the agreement, we had basically a payback that would go on over time where ultimately the $40 million would be returned to them. It was a very complicated, you know, as POs are approved, uh more money is added or money is refunded and um you know po's have to be uh agreed upon and it really complicated the uh uh the management of our supply chain but it was wonderful to have that 40 million dollars in cash uh to help finance the um the the purchase of our product so we really wanted to look to simplify that um that arrangement so Previously, you know, the way we would model it out is that $40 million would be a hit to our cost of goods over time. And as I said, that would decrease over the life of the product, ultimately being paid back fully. So we really tried to model that as closely as we could in a royalty relationship. So basically, there will be no payments, no royalty payments till July 1st of next year. And then it's an 8% royalty for the first or for under a hundred million dollars in revenue. And the dollars over a hundred million is a 14% revenue over time. And then there's, there's three makeup, uh, periods at the end of 26, 27 and 28. Uh, that's $10 million. If they haven't received that in royalty, $20 million, and then $40 million at the end of 28. So, uh, uh, so that will come in. you know, now would be in your models as a royalty obligation. And again, as I said, it really is somewhat quite close to the way we expected that money to be paid back over time previously.

Thank you. Next, you've indicated cash and cash resources to fund operations for at least two years. What are the underlying assumptions to that projection?

Yeah, so it's very simple, actually. We have, you know, we finished our ATM back in the first quarter. Then we drew the $8 million on the BlackRock note, and that's kind of current cash. And we think about current cash plus sales of Erixia and Vafsio. And that, again, will last us at least 24 months. As we think about oryxia, we recognize that there is LOE in March of next year. But with the phosphate binders going into the bundle, we do think there's an opportunity for the product to, you know, not have the kind of patent cliff you usually would ascribe to a small molecule. But I think we've been appropriately cautious in our cash planning around the way that the revenues will progress for Arixia. You know, we think that there's real opportunity for the product, but, you know, we wanted to be cautious as we planned. And then on the VASIO launch, you know, obviously we're looking at sales starting in the first quarter of next year. And during that Tdapa period, we've talked about the opportunity for rapid adoption. Again, I think even if we are more conservative in our launch projections, we're very comfortable with the cash projection of at least 24 months of cash runway.

Of course, if that launch goes even better, that's an even longer runway. Okay, so now, Andrew, maybe we can open the line for questions.

Absolutely. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again.

And our first question comes from the line of Ed Arcee with HC Wainwright.

Hello, can you hear me?

yes we can hey ed great hi john nick congrats on uh the approval once again and uh looks like you're um really gearing up for preparations uh starting uh for sales in january a few questions for me first um on the on the pricing you mentioned that the whack would be disclosed next month and that of course uh given um the value offered here that this would be priced at a premium. I'm wondering if you could go into a little bit more detail around some of the criteria that you evaluated or are evaluating as you come to a final determination on the pricing. In particular, the consideration of when the product comes off the Tdapa designation. That's one. Two is the collaborative study. I was wondering if you could give a little more detail as to what the objectives are there and timelines to the extent that you could share that. And then finally, third question is around Avero in the EU. I'm hoping you could provide us the economics of that partnership there. and also when the loss of exclusivity would be under that agreement. Thanks so much.

Great. So we'll start with pricing. And I'll ask Nick to give some color on the work that we're doing. You know, we talked about announcing WAC pricing next month. And, you know, it's really important to kind of the difference between WAC pricing and what our net pricing in the market will be. And again, I'll ask Nick to spend a little bit of time on it. But, you know, WAC pricing, you know, kind of really gives you the starting point for, you know, for pricing and that TDAP or reimbursement. But all of these sales will be contracted sales. And as we said on the earnings call, or sorry, on the approval call, you know, while not guiding on price, because this really will be contract dependent, when I look at your model and the other analysts covering the company, you know, the range of net pricing is, you know, is certainly within reasonable expectations of where that will land. And all of you kind of bring net pricing down post-TDAPA, and that's exactly what will happen. We expect that it will become you know, get closer to ESA pricing. But as we think about WAC, we also really have to think about the NDD population. And, you know, with the IRA, you're only allowed to price once. And, you know, you have to think about the entire lifecycle of the product. So, and as I mentioned, there are patient populations that we're considering, but we're still drilling down, if you will, on kind of what patient population to go and talk to the FDA about. And that affects the size of the population and therefore, and the value we'll bring and will be part of pricing. But then, you know, understanding that the economics and dialysis is part of it as well. So, Nick, maybe talk a little bit about that.

Yeah, no, it's a great question, Ed, and I could go on for weeks on pricing. But if I just think about the major components is First, what's the value of the product, right? Really simply, we believe this is an innovative product. We have physician support of that through our market research, where just about 90% of folks believe the HIF class is an advanced or major advance versus existing ESA therapy. And so their perceived value, as well as what I'll call the real valuable, the tangible value we see in the label and with the product. As you noted in my script, 30% of patients are missing target range on their hemoglobin. And that's despite decades of uses with ESAs. The second piece around value I think about is the frequency of overshoots and undershoots, how hard it is for dialysis organizations and physicians to manage hemoglobin within a relatively tight range. All that value goes into the product and the value of the price. Second, I think about differentiation versus the existing HIF in the marketplace today. We spent a lot of time talking about their label and the risk it poses for people with a history of heart failure. 40% of that population has a history of heart failure. And therefore, differentiation versus the other HIF is high. John mentioned the future value of NDD. That's in our thinking as well, or non-dialysis. But then again, When we think about Tdapa and why it was set up, it was set up to support innovative products and support the utilization of those innovative products outside of the bundled rate. And therefore, making sure that the economics support that usage within the dialysis organizations is critically important. Our conversations with dialysis organizations, they understand the innovative value. They also understand the economic value. incentives associated with it as well, and we've been in good conversations driving towards conclusion here in the late summer, early fall.

Thanks, Nick. So, your second question was on the collaborative study. Now, this is definitely still in process, but this is kind of outlined in the script. I mean, there are always data gaps. The way I like to think about it is It took 20 years for dialysis providers, physicians, to understand how to use ESAs effectively in dialysis. So there's always a need to generate new data. I look at the TdapA products that have been introduced, and one of the places I think that they've missed the mark is that they haven't continued to support the product to generate new data. You know, we think beyond Tdapa and think about long-term adoption. Price may have to come down post-Tdapa. You know, that's the reality of the market, but the market will continue to grow and will continue to want to penetrate further. And as we said, we have a desire to be an oral standard of care. To do that, you have to continue to generate data. So, you know, I'll refrain from giving specifics around endpoints, et cetera, in the study, but, you know, basically what you want to do is demonstrate that these are things outcomes that are significant advantages for patients, but also provide either cost savings or benefit to the dialysis providers as well. And beyond that, I mean, it's also an opportunity for a lot of physicians to have an opportunity to use the drug in their dialysis clinics. And that kind of, for dialysis providers to see the drug, in their patient populations. You know, I referenced that, you know, I've had the opportunity to speak to a number of investigators in other studies and, you know, when they've used the drug, they've seen the benefit, they've seen how easy it is for them to use, fewer dose titrations, et cetera. And any bigger study gives more physicians the opportunity to see the benefits of using the product while generating really important data that we can publish and, and can help grow the product through its life cycle. So stay tuned. You know, I think we're quite close to being able to talk more about that study, but it's one we're quite excited about. And then the third question was on Averroa and Arixia in Europe. This was very much an opportunistic deal. You know, we really had concerns about pricing in Europe, know the ability to to make a business avaro has approached it in a really um creative strategic uh manner have worked very very hard on introducing uh or getting the product to uh to maa the the um the agreement calls for mid single digit to low double digit royalties um and you know the expectation for avaroa uh which we you know don't know how likely this will be but they do hope to get regulatory exclusivity because of the way they're approaching the indication, and that would yield them, I think it's in Europe, 12 years of exclusivity on market exclusivity. But that's not a sure thing yet. But the way this contract was structured was very opportunistic for us, and we're really quite happy with the progress our partners made.

Fantastic. That's helpful. Thank you.

Thanks, Ed. Thank you. One moment, please, for our next question. And our next question comes from the line of Julian Harrison with BTIG.

Hi. Good morning. Congrats on the progress, and thank you for taking my questions. First, can you remind us of the segments of the dialysis-dependent CKD market where you expect Vapcio to have the strongest use case? And with Erixia now entering the bundle in 2025, I'm wondering if you could talk more about how maybe your long-term outlook for Erixia revenue has changed.

Julian, thanks so much for the question. So I'm going to ask Nick to talk about segmentation. Of course, as I said, our positioning is that this product is appropriate and labeled for any patient who's been on dialysis at least three months. But clearly, whenever we introduce a new product, there are areas where physicians will want to use the product first, and maybe Nick can outline that.

Yeah, and then just to reiterate, in talking to dialysis organizations as well as physicians, they don't pigeonhole it to any particular modality of dialysis, whether that be in-center or home, though many, their first inclination is home patients make sense. You don't have to bring them into the facility for additional injections. They think they'll be well managed in the home. Many patients who are at home who unfortunately may have to stick themselves with a needle would enjoy the ease of use as well as the less pain associated with an oral dosing. And so that's a real advantage and a real population that we think will be one of the faster growing in the initial launch. And the size of that That's about 80,000 patients, so sizable. The second patient population is the high-dose ESA patients. Those are folks that are not well-controlled on an ESA. They're requiring higher and higher doses. We heard from several dialysis organizations that it represents roughly 15% to 30% of their total population. And one dialysis organization went as far as said 20% of our patients on high dose represent 50% of our ESA costs. So not only do you see a benefit in driving down high doses of ESAs that have been linked to mortality rates, you see the opportunity for economic advantages within the dial-ups organizations around spending as we don't see the same dose response needs with VASIO. And so those two very quickly go to mind, but others have also suggested that they would love to take all of the ESA management out of the dialysis organization. And so I do believe it'll be a stepwise fashion about anchoring back to what John said is the broad use in dialysis patients and becoming the next standard of care, which requires us to be able to address all patient needs.

And that's one of the reasons for the desire to continue to generate more clinical data. And as we said, we We plan on talking to the FDA ultimately about adding the three times weekly dosing to the label. So, you know, we've heard with the focus data that was presented last year that many dialysis providers will make that choice on their own. I am encouraged to hear, you know, about the folks who really just want to take anemia management out of the dialysis center completely, and the once a day oral nature of the product makes a lot of sense. Again, I'll ask for Nick's comments on on Arixia revenue and maybe on more specifics around the binders in the bundle. I'll have to say, Julian, I mean, that was has been our expectation. This is where we're going to land. I know, you know, and there's still the potential for legislation to to delay that. But given that CMS has now put out guidance, I think it's it's less and less likely that there's going to be any delay. And we've been readying ourselves for this for some time.

Yeah, when I think about boundaries in the bundle, it is one where the Tdapa profile around creating incentives around innovative products also applies to branded products that are existing in the marketplace as they go into the bundled environment. When I think about that, I imagine dialysis organizations in our conversations, they're going to want to put further controls around their formularies around that, and therefore making sure we're out there engaging with them around the value of Erixia is extremely important. Erixia is a very, very good binder in the eyes of the physician, and they really want to use it moving forward. I believe it'll allow us to contract for predictability around volume in the face of potential generic competition. We haven't necessarily built that into our cash flow models as we talk about it. But if you can imagine folks having a Rixia on formulary with open access, certainly in the Medicare fee for service patients will be that first population that we'll see usage in. But an open formulary position with a Rixia compared to where we are today will be an enhancement to physicians' access to the product. And all that underpins how we think about the opportunity

binders going into the bundle may present for arixia. Very helpful. Thank you very much.

Thank you. Now I'm showing no further questions. So with that, I'll hand the call back over to CEO John Butler for any closing remarks.

Thanks, Andrew. And I just want to make one correction. You know, I referenced 12 years of exclusivity and my crack team already got back to me and said it's 10 years exclusivity in Europe. So thank you, thanks for that. But a very nice opportunity for our partner and for Akibia. So I do want to thank everyone for joining us this morning. Our organization is excited, focused, and executing on the opportunities ahead of us. Since our last earnings report, we've received approval for Vafsio, we're engaging thousands of potential prescribers, We've had contracting discussions for both of our products with almost all significant dialysis providers. We'll submit our application for TdapR reimbursement in June. We're finalizing plans for a significant collaborative research study with Vafsio. We've simplified our working capital fund repayment with v4CSL. We're preparing to engage FDA on a path for the new dialysis and the predialysis patient populations. We're supporting one partner for a launch of Vafsio in Europe this quarter. and a second on a potential launch of Arixia in Europe next year. And we're doing all of this from a position of financial strength. I look forward to continuing to update you on our progress. Have a great day.

Ladies and gentlemen, thank you for participating. This does conclude today's program, and you may now disconnect.