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spk10: Good day and thank you for standing by. Welcome to the MaxSight first quarter 2024 earnings conference call. At this time, all participants are in listen only mode. After the speaker's 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 your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Eric Abdal, Investor Relations. Please go ahead.
spk15: Good afternoon, everyone. Thank you for participating in today's call. MaxSight, we have Mahermasud, President and Chief Executive Officer, and Douglas Swirsky, Chief Financial Officer. Earlier today, MaxSight results for the first quarter ended March 31st, 2024. A copy of the press release will be available on the website. To begin, I need to read the following. Statements or comments on this call may be forward looking statements within the meaning of federal securities laws. Any statements contained in this call that relate to expectations or predictions of future events, results or performance are forward looking statements. Actual results may differ materially from those expressed or implied in any forward looking statement due to a variety of factors which are discussed in detail on our SSG filing. The company has no obligation to publicly update any forward looking statements in future events or otherwise. With that, I will turn the call over to Mr. Hehr.
spk17: Thank you, Eric. Good afternoon. Thank you for joining MaxSight's first quarter 2024 earnings call. It's reported 11.3 million of total revenue in the first quarter, including 8.2 million and 5.2 million of SPL program related revenue. We were able to see results in our core business, which was with our plan, along with SPL program related revenue, above our expectations. We're also thrilled with our progress in signing new SPLs with four in 2024, including B by Pharma most recently. Following the first quarter, we remain on track for the rest of the year and are confident in the trajectory of the overall business. The operating environment has remained largely unchanged from our last earnings call. We think the environment has improved as evidenced by the capital market sector in the first quarter. In perspective, SPL partners raised capital in recent months. Over the past couple of years, we saw self therapy programs and deprioritized other programs, resulting in variable levels of demand for our instruments and PAs in 2023. Though there are fewer new self therapy programs throughout the industry today, due to the deprioritization, we believe this has resulted in an industry focus on assets that are further along or have a higher probability of making it to the clinic. Additionally, Maxite's late stage preclinical and early stage clinical customers, who have either programs or the past, continue to utilize our platform for their lead. We are becoming increasingly optimistic on the market outlook for self therapy developers and continue to assess industry demand levels based on direct conversations with our existing. The timeframe for when a customer secures funding to when they make research and clinical spending decisions can take time. And our business is not directly in the role of funding in any given quarter. General trends in the non-viral self therapy market continue to bode well for the use of our expert platform. More complex self therapies across a variety of different indications with multiple engineering steps, which Maxite's electro pressure technology is well equipped to deliver. Looking specifically at the quarter, the core business performed as expected across self therapy and drug discovery. We saw return to growth in our self therapy business compared to last year, and were relatively flat in drug discovery revenue compared to last year. Doug will cover that in more detail, but I will point out that our installed base of instruments expand to 708 as of March. We actually have pipeline instrument opportunities in the first quarter in our position and for the remainder of the year. On PAs, revenue is up from the comparable prior year period and it's actually from the fourth quarter of 2023. The growth that we experienced was a lot based demand across the customer base. And we were very in crop tick in our PAs revenue compared to 2023. We are dependent upon the activity level of customers, stages of development programs and desired inventory level of customers, all of which can result in demand that can be lumpy from one quarter to another quarter. Turning to our SPL, I can add 3.2 million of SPL projects in the first quarter of 2024. This included a milestone that we did not originally forecast for 2024. Guidance for the revenue for this milestone, which Doug will address in more detail. Non-forecasted regulatory pivotal milestone underlies the strength of our business model. As our therapeutic development customers move further into the position to receive revenue, on occasion sooner than anticipated. So far in 2024, we have signed SPLs including B-BioPharma, Luzhin, Imugen and Lion CCR. Our most recently signed SPL that we announced in April, B-BioPharma, is developing a proprietary class of engineered B-cell medicines, BCMs, designed to be specific to a certain disease. MaxXI's platform will support the development programs to address unmet needs of patients with genetic diseases, cancer, cancer, cancer, cancer, cancer, cancer, cancer, the addition of B-BioPharma and the total number of SPLs in our portfolio to 27, which further showcases our position as a partner of choice with technology capability across multiple cell types to cell and gene. We remain excited about the commercial strategy. CAS-CHEVY has been approved for certain indications in the United States, Great Britain, European Union, Saudi Arabia and Bahrain, with a new drug submission that has been accepted for priority review by Health Canada. As stated on our last earnings call, MaxXI will only recognize revenue once a patient has been effused, which can take a number of months from the time a patient enrolls in the therapy program. We do not have sufficient visibility to the timing of patient dosing, and therefore continue to exclude any -CHEVY-related commercial milestone revenue in our update for outlook for SPL-related revenue. We will provide updates on CAS-CHEVY as they come from Vertex. Our new perspective, client relationship and foster are truly unique and reflective of our platform's value proposition. At MaxXI, we pride ourselves not only on our proven electro-piction technology, but on the support that we provide to our customers. We are present in the entirety of our customer's programs once they begin utilizing our platform. Our support system includes scientific customer service for 36 trained field sales and application scientists who provide customer research and development support. As part of our SPL relationships, clients have an FDA drug master file, which can help with regulatory understanding of the manufacturing process required for approval and help de-risk -on-one manufacturing process for our SPL customers. The expert platform and service that we offer to our clients is truly an all-encompassing -to-end solution. We believe our value proposition has resonated well with existing customers, and will drive substantial opportunity for MaxXI over the long term. This quarter, and over the course of 2024, we continue to deliberately evaluate and improve our business. We are focused on investing in our business to drive growth and to best support the programs of our current and future clients. Notably, we have invested in additional customer support for our SPL clients, and are working towards ensuring we are working with customers earlier in the development, and providing them with the best know-how application in the process. In summary, we are very pleased with our first quarter results and believe that we remain in a strong position to deliver our 2024 plan. As the cell therapy industry continues to move towards non-viral cell engineering approaches, I'm very optimistic about the opportunity for MaxXI both in the near term and long term at the premier cell engineering platform. With that, I'll now turn the call over to Doug to discuss our financial results. Doug?
spk02: Thanks, Meher. Total revenue in the first quarter of 2024 was $11.3 million compared to $8.6 million in the first quarter of 2023, representing an increase of 32%. We reported core revenue of 8.2 million compared to 7.8 million in the comparable prior quarter, representing an increase of 5%. This includes revenue from cell therapy customers of 6.4 million, which increased 7% year over year, and revenue from drug discovery customers of 1.8 million, relatively flat year over year. Within core revenue, instrument revenue was 1.9 million compared to 2.2 million in the first quarter of 2023. Lease revenue was 2.6 million compared to 2.8 million in the first quarter of 2023, and processing assembly or PA revenue was 3.4 million compared to 2.6 million in the first quarter of 2023. We are pleased with the strong performance of PAs, which was a little better than planned, which we will continue to monitor as we move through the course of the year. Please note, we have added an appendix slide to our corporate presentation with the new quarterly historical disclosure for these new metrics. We recognize 3.2 million of SPL program-related revenue in the first quarter of 2024, compared to 0.8 million of SPL program-related revenue in the first quarter of 2023. We exceeded our initial milestone expectations for the first quarter, driven by a regulatory pivotal milestone that we had not forecasted or anticipated in 2024, due to a positive timing development at one of our SPL customers. Moving down the P&L, gross margin was 88% in the first quarter of 2024, which was comparable to 88% in the first quarter of the prior year. Our margins came in lower than our historical levels over the past year when excluding SPL program-related revenue due to fixed overhead cost absorption. We believe that as we move closer towards previous revenue levels, margins should improve. Total operating expenses for the first quarter of 2024 were 22.2 million, compared to 20.8 million in the first quarter of 2023. The overall increase in operating expenses was primarily driven by growth in sales and marketing expenses, as well as R&D expenses, with specific investments in product development and application know-how. Going forward, the company continues to be disciplined, making moderated and targeted investments to drive long-term growth, including in innovative product development and field application scientists and additional technological capabilities. We finished the first quarter with combined total cash, cash equivalents and investments of 202.5 million and no debt. Moving to our full year of 2024 guidance, we are reiterating our core revenue outlook and raising our initial SPL program-related revenue guidance. Core revenue is expected to be flat to 5% growth compared to 2023. As Meher discussed, our guidance assumes an operating environment for our customers that has remained largely unchanged from our prior earnings call. We now expect SPL program-related revenue to be approximately 5 million in 2024. The increase in our SPL program-related revenue outlook is a result of the unexpected regulatory pivotal milestone we achieved in the first quarter, which was previously not incorporated in our 2024 guidance. As a reminder, our 2024 outlook also does not include royalty revenue from Keshevy. Finally, Maxite has maintained a strong financial position and continue to expect to end 2024 with at least 175 million in cash, cash equivalents and investments and no debt on our balance sheet. I would like to close by reiterating that we remain well positioned to execute on our 2024 revenue outlook and remain laser focused on managing our spend and balance sheet to deliver long-term growth. Now we'll turn the call back over to Meher.
spk17: Thank you, Doug. Overall, we're very excited by our progress so far in 2024. We look forward to supporting our customers in their development stages as they progress through the clinic and remain committed to further expanding our SPL portfolio. We believe that we continue to be the premier enabler of non-viral cell therapies and we'd like to thank our Maxite team for their continued hard work. With that, I'll turn the call back over to the operator for the Q&A. Operator?
spk10: Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question press star one one again. Please stand by while we compile
spk09: the Q&A roster. Our first question comes from the line of Dan Arias with
spk10: Stiefel, your line is now open.
spk13: Afternoon, guys, thanks for the questions. Meher, maybe just to talk about some of the components of the revenue, the revenue bullets for the quarter, PA revenues, up sequentially to your point. And so when we think about the rest of the year, and I hear you on your comments about there being lumpiness there, but it also seems like what you record there on the PA side is largely a function of activity and just project intensity, which I think you alluded to as well. And so it feels like the funding environment is trending in the right direction. Is there a reason why PA revenues wouldn't continue to just push higher here across the year now that you're out of what is the chaldeas quarter before?
spk17: Yeah, absolutely, Dan. So obviously thank you for the question. Obviously we're still holding steady in terms of our guidance for the year, we're still cost-optimistic in terms of the rest of the year. We were not pleasantly surprised, it's what we expected coming out of last year. This is the end of last year, we saw some stabilization, we're seeing it continue through the year, and it's a mix, it's broad-based, right? It's not just related to necessarily one particular customer where we see that increase, it's across the customer base, we're seeing it. But we're not ready just yet to in any way increase revenues throughout the year, we're still seeing how the year plays out, but we're cost-optimistic then. I mean, Doug, anything else to add there?
spk02: No, I mean, I think we're pleased with how PAs were this quarter, but I think it's too soon to tell whether some of that's timing or whether we're gonna have significantly higher PU revenue than we were expecting when we projected out the year. So we're holding our guidance at the levels we provided on the March call for revenue.
spk13: Yeah, okay, makes perfect sense. And then maybe just higher level, Meher, can you just talk to the tone from customers that you're hearing right now? I mean, it does feel like there's a little bit of a side release there, just given where financing activities have gone in the last couple of months. So to your point on project prioritizations, are you starting to see things open up a little bit that maybe felt like they were less likely to be worked on a couple of months ago or six to 12 months ago? And can you just maybe talk about confidence that the industry is seeing what it needs in order to keep heading in this direction in terms of increased activity, preclinical and commercial?
spk17: Yeah, I think you hit it on the head there is that we are seeing the activities start coming back. The confidence is coming back. I think that's evident slightly from, we signed four SPLs to start the year, but also if you look at the capital markets, a few of our partners have raised a significant amount of money into capital markets in Q1. And we're seeing that confidence come back in the market. We think it's the early stages of that. We're gonna keep our eye on it to make sure that it's not just a small little bump. But I think working with our customers, even though they're still rationalizing what programs are taking into the clinic and how many programs they take into the clinic, we feel fairly confident that we're cautious, optimistic as we keep saying, but the quarter is kind of a prognosticator of where we are and where the market is right now and how it seems to be coming back slowly.
spk13: Okay, if I could just sneak one more nuance on to that last point. When you obviously, well maybe not obviously, but I assume you're looking at who's raising money and who's not raising money. Is it fair to say that those that have maybe not had a public raise are showing signs of improvement as well, or does the line really get drawn down the middle where you have some that have financed and therefore in a better position? Those are the companies that are starting to open up the spigot a little bit. Those that haven't done that haven't really changed. Is that the dynamic? Thank you, Bunch.
spk11: I mean, yeah.
spk02: No, I think first off, on PAs, I think you don't need to see the things snap back to strong levels for folks to start making investments and moving their programs forward. I think where the timing of capital raise is gonna impact things maybe on when an instrument purchase takes place. So I think those capital acquisitions are gonna be more tied to the fundraising than certainly the PA utilization is gonna be.
spk07: Okay, very good, thank you. Thank you, Dan.
spk10: Thank you. Our next question comes from the line of Matt LaRue with William Blair. Your line is now open. Good afternoon.
spk03: That just made me following up on that last point. Acknowledging that it takes some time for flow through from perhaps a successful capital raise to release of that into a budget. On the instrument side, what are you starting to hear about from customers on a budget perspective? What does the, perhaps the instrument pipeline look like relative to maybe the end of last year because obviously while PAs were strong, instruments still a little bit softer in the quarter.
spk17: Yeah, Matt, let me answer that and then I'll let Doug also weigh in. So what we're seeing in terms of instrument side really is the prognostic for that is what we're seeing on the PA side, right? That's usually where you start to see the recovery is normally in PAs because the capex spend is far less than you would do for instrument side, for an instrument purchase. So we're hopeful and we're optimistic that what we're seeing on the PAs will lead later in the year to potentially, where now customers are willing to make purchases that maybe last year they were not willing to make. But again, it's just that leading indicators is the PAs, but I'm not so sure we wanna at this point, indicate that it's gonna lead to future instrument sales just because the PAs have increased. Doug, anything else? Yeah, I mean, it's a good question
spk02: and I think it's a good opportunity to remind everybody what makes up core revenue, right? There's the leases, which I think we've got good visibility in, it's very stable. We saw some growth there. And then there's the PAs, which are a lot tougher to project. And then instrument sales. Instrument sales really is a, we build up our forecast based on very detailed information that comes from the commercial team on each opportunity that they're looking at. And so when we think about the year, certainly instrument revenue wasn't as strong as PAs was this quarter, but we still feel very good about the guidance we provided when we're looking specifically at the book of business that they're working through now on the instrument sales side.
spk03: Okay, I understood. Here you referenced in the prepared remarks, I think adding additional SPL support for clients and starting to work with them earlier. I'm curious if this is sort of a step function change or new for you, or if there are particular services or capabilities that you're adding in terms of how you interact with clients that are different from before. And whether this is something that's sort of been asked from clients or more of a push from you, either from a competitive or servicing standpoint.
spk17: Yeah, absolutely. Great question. Actually, it's more of a push from internal rather than being asked from clients per se. We've always, if you look at what we do, we do a complete -to-end solution. We provide support to our customers where from the time they first worked with us all the way through the clinic, we wanna make sure, I think I said on the last call as well, that we're doubling down that support. So we're staying ahead of the competition and we're providing support now with better communication, both electronic communication as well as -to-face communication. So we're building out systems to ensure that the support that we provide to our SPL partners, whether it's regulatory or quality or any potential issues that they have while they're in the clinical development, even potential commercial development, we stay ahead of it and the turnaround time is even faster than before. So we're ensuring that what we've done in the past, we're doing even more so of it and really coming of age with where the industry's going, where we wanna make sure, as these therapies need to make it to the clinic faster and make it to patients faster, that we de-risk that step where they're working with us. So we're investing extra resources and really capabilities in that area to make sure we stay ahead of the competition and keep up and align our interests with our partners.
spk09: All right, thank you. Absolutely. Thank
spk10: you. Our next question comes from the line of Jacob Johnson with Stevens, your line is now open.
spk07: Hey,
spk04: thanks, good afternoon and congrats on the quarter. You guys called out kind of a pivotal trial surprise in the quarter. I'm just curious if this relates to a new or an existing therapy, I think program revenues don't include Casgevy. So I'm curious if it's a new customer and maybe I'll dovetail that into looking at your chart on potential commercial approvals. It looks like you're not really expecting anything until 2026, I'm just curious if this kind of surprise, pivotal changes you're thinking about that. Thank you.
spk17: Yeah, Jacob, thanks, I'll take that. It doesn't quite change our thinking on that. We can't comment in terms of what customer it is or why it happened sooner than it should be for confidentiality reasons with our partners. However, as I mentioned, it does speak to our business model in the sense of there are gonna be times where some of our current partners that have signed licenses with us are gonna reach milestones sooner than they even anticipated or that we anticipated and we'll get the benefit of that and that's what happened here. I wouldn't change the 26 or 27 timeline for next generating events for us, we're still, that's where you see, we're confident with that. But this is a positive, this speaks to exactly why we have these licenses, why we provide the support and what I've mentioned in the past, which is these are not like antibody therapies, there's a higher potential that you're gonna have potential clinical efficacy earlier than anticipated by our partners, which will benefit us and benefit patients and our partners as well. Does that answer your question, Jacob?
spk04: Yeah, yeah, that's helpful, thanks for here. And maybe Dan asked me about customers spending money who'd receive funding versus maybe those you had and I'm just curious, maybe looking at dicing it a different way, just curious if there's any difference in PA demand, if it's maybe more skewed to customers in the clinic or if you did have some maybe preclinical demand from preclinical or earlier stage customers as well.
spk17: Yeah, I'll ask you that and if Doug wants to weigh in, I think it's spread across, it's not just clinical, it's clinical and preclinical demand as well as research. We're seeing that across the board, which is what we wanna see. We wanna see the healthy business both for the SPLs and the non-SPL customers and that's what we saw sequentially from this quarter to last quarter. So it's a healthy demand across the board, Jacob.
spk14: Got it, thanks for taking questions, guys. Okay, thank you, Jake.
spk10: Thank you. Our next question comes from the line of Matt Hewitt with Craig Hallam Capital Group. Your line is now open.
spk16: Hi guys, this is Jack on from Matt. Congrats on a good readout. We just have one question. So after like a flurry of new SPL agreements at the start of the year, could you just give us an update on that pipeline and why do you expect additional agreements this year, thanks.
spk17: Thanks, Jack, I appreciate it. I can speak to that and then Doug, feel free to speak as well. Obviously very healthy start to the year. We're still, what we've mentioned in the past, we're comfortable with the three to five per year. The funnel and the pipeline itself for future SPLs is healthy. We're confident that we can continue to have those three to five. I won't comment on whether we're gonna sign another one this year just yet. Obviously for obvious reasons as I mentioned last time, sometimes you see a bolus of SPLs signed at any one particular time. The reason being is we're oftentimes working in research, working with these customers really in the benches with them, supporting them and then from there, it ends up being a negotiation a little bit thereafter where now we're negotiating licenses where they're about to enter into the clinic. So sometimes you might have them where you have three or four along at the same time we've been working with in the past 12 months, 18 months that are about to sign licenses. So that's why you see a bolus, but we're completely confident at three to five moving forward. We won't speculate as to whether we'll sign another one and then the funnel itself is healthy and that's why we're confident at three to five moving forward as
spk09: well. Jack, did that answer your question? Yeah, that was helpful, thank you.
spk16: Absolutely.
spk10: Thank you. Our next question comes from the line of Mark Massaro with BTIG, your line is now open.
spk01: Hey guys, this is Vivian on to Mark. Thanks for taking the questions. So just a quick one on VLX adoption. It sounds like that might be more of a lagging indicator about the PAs, but just any new applied or early feedback to report there, thanks.
spk17: Yeah, thanks for the question. On the VLX in terms of, as I mentioned last time, we're still working with early adopters. We're taking a step back to ensure that we do this where we understand the true application needs for the VLX. I won't mention for confidential reasons the name of those early adopters, but it's just to ensure that we understand the space that we're entering into, where it's different than cell therapy, where we're really trying to disrupt the industry here, and not just from the VLX, but just in terms of production of proteins in a transient manner that has not, at a scale that's not been done before. So in terms of the PA usage for that, we haven't disclosed that in terms of instrument sales, we haven't disclosed that, but we're still working with early adopters to truly understand the space, and then launch in a manner that allows us to have true market adoption for the VLX and applications around the VLX as well. But we have not disclosed anything specifically there.
spk01: Perfect, understood. And then just one follow up, you guys have a pretty healthy balance sheet. Just any tuck-in acquisitions or tech that you might look to evaluate, particularly for upstream or downstream steps, kind of like cell enrichment or harvesting, just any conversations going on there.
spk02: Thanks. We have an active corporate development effort. Clearly, we're not in a position to talk about specific targets we're looking at. I think the types of things you mentioned are sort of in the realm of opportunities we would look at, but we've got healthy effort just to balance out our initiatives to target both inorganic and organic growth opportunities. So this is one of the use of proceeds when we went public, so we're mindful that that's part of the reason why we have the healthy balance sheet that we do. And our goal is to look closely at things, but be very prudent. And I think it's healthy that we're evaluating things, and it's also very good that we've been very disciplined in not pulling the trigger on things that either we didn't think were valued correctly or just weren't the right fit.
spk08: Awesome, thanks for taking the question.
spk12: Thank you.
spk10: Thank you. Thank you. Our next question comes from the line of Jacqueline Kissa with TD Cowan. Your line is now open.
spk06: Hi, this is Jacqueline Kissa. On for Stephen Ma. Thanks so much for taking the questions. Just to start off, with regards to your new and ongoing BD discussions for new SPLs, are you seeing these discussions weighted more towards emerging biotechs or large pharma? Is there like a noticeable mix or anything?
spk17: Yeah, hi Jacqueline. Thank you for the question. I'll take that. It's more towards, it's not large pharma, it's more towards, I'd say, smaller to mid-size biotechs. And it's a mix of what we're seeing there. Obviously, as the industry keeps changing and evolving and as cell therapies have greater adoption, we could see that mix begin to change as well, whether from early to mid-size to larger biotechs. It's a good mix. I mean, it's a good question. I think you're seeing it across the board. I wouldn't say large pharma. We don't have, that's not our focus right now. It's more on the support. And that's needed for that smaller to mid to even larger size biotechs.
spk06: Right, great, thank you. And then if you look across the clinical programs you're supporting, can you speak to the diversity of the cell types and molecules that your partners are using to create their cell-based therapies? And has this trended over the past 12 months? And if you're willing to call it any emerging trends with regards to that, that would be really cool too.
spk17: Absolutely, Jack. So actually that's the beauty of our support and what we do truly best is it's emerging across cell therapies, whether it's T cells or NK cells, whether it's TILs or TCRs, we're working with all of them. And obviously for the indications, it's increasing where you went from blood cancers to solid tumors, which is where we're having a presence in. And then you're seeing the space really get more complex with the companies we're working with and truly begin to go into other indications. So you're seeing autoimmune diseases begin to really take shape here and that's where it seems the space is lining itself. And we're working with a few of our partners on autoimmune disorders, cell therapy for autoimmune diseases, rare diseases. So it's an entire breadth and that's what we anticipate. We anticipate the field continue to evolve, continue to mature and really get more complex. And that's what we've built the last 15, 20 years to ensure that we're ahead of the competition and working with everyone regardless of the cell type, regardless of the modality and indication. So I hope that answers your question, Jacqueline.
spk05: No, that's great. Thank you so much, I appreciate it.
spk10: Thank you. And I'm currently showing no further questions at this time. I'd like to hand the call back over to Mahirah Massoud for closing remarks.
spk17: Yeah, thank you, operator. And thank you all for joining today's call. I look forward and we look forward to speaking with all of you again on our next earning call in a few months. Thank you.
spk10: This concludes today's conference call. Thank you for your participation. You may now disconnect.
spk00: ["The Day We Met Again"] ["The Day We Met Again"] ["The Day We Met Again"] ["The Day We Met Again"] ["The Day We Met Again"] ["The Day We Met Again"] ["The Day We Met Again"] ["The Day We Met Again"] ["The Day We Met Again"] ["The Day We Met Again"] ["The Day We Met Again"] ["The Day We Met Again"] ["The Day We Met Again"] ["The Day We Met Again"] ["The Day We Met Again"] ["The Day We Met Again"] ["The Day We Met Again"] ["The Day We Met Again"] ["The Day We Met Again"] ["The Day We Met Again"] ["The Day We Met Again"] ["The Day We Met Again"] ["The
spk10: Day We Met Again"] ["The Day We Met Again"] ["The Day We Met Again"] ["The Day We Met Again"] ["The Day We Met Again"] ["The Day We Met Again"] ["The Day We Met Again"] ["The Day We Met Again"] ["The Day We Met Again"] ["The Day We Met Again"] ["The Day We Met Again"] ["The Day We Met Again"] ["The Day We Met Again"] ["The Day We Met Again"] ["The Day We Met Again"] ["The Day We Met Again"] Good day, and thank you for standing by. Welcome to the MaxSight First Quarter 2024 earnings conference call. At this time, all participants are in listen-only mode. After the speaker's 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 your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Eric Abdal, Investor Relations. Please go ahead.
spk15: Good afternoon, everyone. Thank you for participating in today's conference call. On the call for MaxSight, we have Mahermasud, President and Chief Executive Officer, and Douglas Swirski, Chief Financial Officer. Earlier today, MaxSight released financial results for the first quarter and at March 31st, 2024. A copy of the press release is available on the company's website. Before we begin, I need to read the following statement. Statements or comments made during this call may be forward-looking statements within the meaning of federal securities laws. Any statements contained in this call that relate to expectations or predictions of future events, results or performance are forward-looking statements. Actual results may differ materially from those expressed or implied in any forward-looking statements due to a variety of factors which are discussed in detail on our SSG filing. The company has no obligation to publicly update any forward-looking statements, whether because of new information, future events or otherwise. And with that, I will turn the call over to Mahare.
spk17: Thank you, Eric. Good afternoon, everyone, and thank you for joining MaxSight's first quarter, 2024 earnings call. MaxSight reported 11.3 million of total revenue in its first quarter, including core revenue of 8.2 million and 3.2 million of SPL program-related revenue. We were pleased with the results in our core business, which delivered in line with our plan, along with SPL program-related revenue, which came in above our expectations. We're also thrilled with our progress in signing new SPLs, with four already signed in 2024, including B by Pharma most recently. Following the first quarter, we remain on track to meet our financial projections for the year and are confident in the trajectory of the overall business. The operating environment for our customers remain largely unchanged from our last earnings call. We believe the funding environment has improved as evidenced by the capital markets activity during the first quarter. We have seen several existing and prospective SPL partners raise capital in recent months. Over the past couple of years, we saw self-harpies companies prioritize their lead programs and deprioritize other programs, resulting in variable levels of demand for our instruments and PAs in 2023. Though there are fewer new self-harpies programs throughout the industry today, due to program reprioritization, we believe this has resulted in an industry focus on assets that are further along in their development or have a higher probability of making it to the clinic. Additionally, MagSight's late-stage preclinical and early-stage clinical customers who have reevaluated their programs over the past couple of years continue to utilize our platform for their lead programs. We are becoming increasingly optimistic on the market outlook for self-harpy developers and continue to assess industry demand levels based on direct conversations with our existing and prospective customers. The timeframe for when a customer secures funding to when they make research and clinical spending decisions can take time, and our business is not directly correlated with the level of funding in any given quarter. General trends in the non-viral self-harpy market continue to bode well for the use of our expert platform. Companies continue to pursue more complex self-harpies across a variety of different indications with multiple engineering steps, which MagSight's electro-pressure technology is well equipped to deliver. Looking specifically at the quarter, the core business performed as expected across self-therapy and drug discovery. We saw return to growth in our self-harpy business compared to last year's first quarter, and were relatively flat in drug discovery revenue compared to last year. Doug will cover that in more detail, but I will point out that our installed base of instruments expand to 708 as of March 31st, 2024. We executed well against our pipeline instrument opportunities in the first quarter and are positioned as planned for the remainder of the year. On PAs, revenue was up from the comparable prior year period and improved sequentially from the fourth quarter of 2023. The PA growth that we experienced was reflective of broad-based demand across the customer base, and we were very encouraged to see an uptake in our PA revenue compared to 2023. PA sales are dependent upon the activity level of customers, stages of development programs, and desired inventory levels at customers, all of which can result in demand that can be lumpy from one quarter to another. Turning to our SPLs, we recognized 3.2 million of SPL program-related revenue in the first quarter of 2024. This included a regulatory pivotal milestone that we did not originally forecast for 2024. We have raised our guidance for the SPL program-related revenue line to account for this milestone, which Doug will address in more detail. Accomplishment of the previously non-forecasted regulatory pivotal milestone underlies the strength of our business model. As our therapeutic development customers move further into the clinic, we are positioned to receive revenue for milestone achievements on occasion, sooner than anticipated. So far in 2024, we have signed four SPLs, including B-BioPharma, Wusion, ImgGene, and Lion CCR. Our most recently signed SPL that we announced in April, B-BioPharma, is developing a proprietary class of engineered B-cell medicines, BCMs, designed to produce therapeutic proteins specific to a certain disease. MaxXI's platform will support the development of B-Bio's BCM programs to address unmet needs of patients with genetic diseases, cancer, and more. The addition of B-BioPharma brings the total number of SPLs in our portfolio to 27, which further showcases our position as a partner of choice with technology capability across multiple cell types to cell and gene innovators. Moreover, we remain excited about the commercial opportunity of CacheVe. CacheVe has been approved for certain indications in the United States, Great Britain, European Union, Saudi Arabia, and Bahrain, with a new drug submission that has been accepted for a priority review by Health Canada. As a reminder, and as stated on our last earnings call, MaxXI will only recognize revenue once a patient has been effused, which can take a number of months from the time a patient enrolls in the therapy program. We do not have sufficient visibility to the timing of patient dosing, and therefore continue to exclude any CacheVe-related commercial milestone revenue in our updated 2020 for Outlook for SPL program-related revenue. We will provide updates on CacheVe as they come from Vertex. The current and prospective client relationships that we have built and fostered are truly unique and reflective of our platform's value proposition. At MaxXI, we pride ourselves not only on our proven electro-patient technology, but on differentiated support that we provide to our customers. We are present throughout the entirety of our customer's programs once they begin utilizing our platform. Our support system includes scientific customer service from our 36-plus trained field sales and application scientists who provide customer research and development support. As part of our SPL relationships, clients have access to our FDA drug master file, which can help with regulatory understanding of the manufacturing process required for approval and help de-risk one part of the manufacturing process for our SPL customers. The expert platform and service that we offer to our clients is truly an all-encompassing -to-end solution. We believe our value proposition has resonated well with existing customers and will drive substantial opportunity for MaxXI over the long term. This quarter and over the course of 2024, we continue to deliberately evaluate and improve our business. We are focused on investing in our business to drive growth and to best support the programs of our current and future clients. Notably, we have invested in additional customer support for our SPL clients and are working towards ensuring we are working with customers earlier in the development and providing them with the best know-how application in the process. In summary, we are very pleased with our first quarter results and believe that we remain in a strong position to deliver our 2024 plan. As the cell therapy industry continues to move towards non-viral cell engineering approaches, I'm very optimistic about the opportunity for MaxXI both in the near term and long term at the premier cell engineering platform. With that, I'll now turn the call over to Doug to discuss our financial results.
spk02: Doug? Thanks, Mehear. Total revenue in the first quarter of 2024 was 11.3 million compared to 8.6 million in the first quarter of 2023, representing an increase of 32%. We reported core revenue of 8.2 million compared to 7.8 million in the comparable prior quarter, representing an increase of 5%. This includes revenue from cell therapy customers of 6.4 million, which increased 7% year over year, and revenue from drug discovery customers of 1.8 million, relatively flat year over year. Within core revenue, instrument revenue was 1.9 million compared to 2.2 million in the first quarter of 2023. Lease revenue was 2.6 million compared to 2.8 million in the first quarter of 2023, and processing assembly or PA revenue was 3.4 million compared to 2.6 million in the first quarter of 2023. We are pleased with the strong performance of PAs, which was a little better than planned, which we will continue to monitor as we move through the course of the year. Please note, we have added an appendix slide to our corporate presentation with the new quarterly historical disclosure or these new metrics. We recognize 3.2 million of SPL program-related revenue in the first quarter of 2024 compared to 0.8 million of SPL program-related revenue in the first quarter of 2023. We exceeded our initial milestone expectations for the first quarter, driven by a regulatory pivotal milestone that we had not forecasted or anticipated in 2024 due to a positive timing development at one of our SPL customers. Moving down the P&L, gross margin was 88% in the first quarter of 2024, which was comparable to 88% in the first quarter of the prior year. Our margins came in lower than our historical levels over the past year when excluding SPL program-related revenue due to fixed overhead cost absorption. We believe that as we move closer towards previous revenue levels, margins should improve. Total operating expenses for the first quarter of 2024 were 22.2 million compared to 20.8 million in the first quarter of 2023. The overall increase in operating expenses was primarily driven by growth in sales and marketing expenses, as well as R&D expenses with specific investments in product development and application know-how. Going forward, the company continues to be disciplined, making moderated and targeted investments to drive long-term growth, including in innovative product development and field application scientists and additional technological capabilities. We finished the first quarter with combined total cash, cash equivalents and investments of 202.5 million and no debt. Moving to our full year of 2024 guidance, we are reiterating our core revenue outlook and raising our initial SPL program-related revenue guidance. Core revenue is expected to be flat to 5% growth compared to 2023. As Meher discussed, our guidance assumes an operating environment for our customers that has remained largely unchanged from our prior earnings call. We now expect SPL program-related revenue to be approximately 5 million in 2024, the increase in our SPL program-related revenue outlook is a result of the unexpected regulatory pivotal milestone we achieved in the first quarter, which was previously not incorporated in our 2024 guidance. As a reminder, our 2024 outlook also does not include royalty revenue from KSJV. Finally, Maxite has maintained a strong financial position and continue to expect to end 2024 with at least 175 million in cash, cash equivalents and investments and no debt on our balance sheet. I would like to close by reiterating that we remain well positioned to execute on our 2024 revenue outlook and remain laser focused on managing our spend and balance sheet to deliver long-term growth. Now we'll turn the call back over to Meher.
spk17: Thank you, Doug. Overall, we're very excited by our progress so far in 2024. We look forward to supporting our customers in their development stages as they progress through the clinic and remain committed to further expanding our SPL portfolio. We believe that we continue to be the premier enabler of non-viral cell therapies. And we'd like to thank our Maxite team for their continued hard work. With that, I'll turn the call back over to the operator for the Q&A. Operator?
spk10: Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, press star one one again. Please stand by while we compile the
spk09: Q&A roster. Our first question comes from the line
spk10: of Dan Arias with Stiefel. Your line is now open.
spk13: Afternoon, guys. Thanks for the questions. Meher, maybe just to talk about some of the components of the revenue, the revenue bullets for the quarter. PA revenue, up sequentially to your point. And so when we think about the rest of the year, and I hear you on your comments about there being lumpiness there, I think that's a good point. But it also seems like what you record there on the PA side is largely a function of activity and just project intensity, which I think you alluded to as well. And so it feels like the funding environment is trending in the right direction. Is there a reason why PA revenues wouldn't continue to just push higher here across the year now that you're out of what is the chaldeas quarter of the four?
spk17: Yeah, absolutely, Dan. So obviously, thank you for the question. Obviously, we're still holding steady in terms of our guidance for the year. We're still cost-optimistic in terms of the rest of the year. We were not pleasantly surprised. It's what we expected coming out of last year. This is the end of last year. We saw some stabilization. We're seeing it continue through the year. And it's a mix, it's broad-based. It's not just related to necessarily one particular customer we see that increase. It's across the customer base we're seeing it. But we're not ready just yet to in any way increase revenues throughout the year. We're still seeing how the year plays out. But we're cost-optimistic then. Doug, anything else to add there?
spk02: No, I think we're pleased with how PAs were this quarter. But I think it's too soon to tell whether some of that's timing or whether we're gonna have significantly higher PU revenue than we were expecting when we projected out the year. So we're holding our guidance at the levels we provided on the March call for revenue.
spk13: Yeah, okay, makes perfect sense. And then maybe just higher level, can you just talk to the tone from customers that you're hearing right now? I mean, it does feel like there's a little bit of a side release there, just given where financing activities have gone in the last couple of months. So to your point on project prioritizations, are you starting to see things open up a little bit that maybe felt like they were less likely to be worked on a couple of months ago or six to 12 months ago? And can you just maybe talk about confidence that the industry is seeing what it needs in order to keep heading in this direction in terms of increased activity, preclinical and commercial?
spk17: Yeah, I think you hit it on the head there is that we are seeing the activities start to come back. The confidence is coming back. I think that's evident slightly from, we signed four SPLs to start the year, but also if you look at the capital markets, a few of our partners have raised significant amount of money into capital markets in Q1. And we're seeing that confidence come back in the market. We think it's the early stages of that. We're gonna keep our eye on it to make sure that it's not just a small little bump, but I think working with our customers, even though they're still rationalizing what programs are taking into the clinic and how many programs they take into the clinic, we feel fairly confident that we're cautious, optimistic as we keep saying, but the quarter is kind of a prognosticator of where we are and where the market is right now and how it seems to be coming back slowly.
spk13: Okay, if I could just sneak one more nuance on to that last point. When you obviously, well maybe not obviously, but I assume you're looking at who's raising money and who's not raising money. Is it fair to say that those that have maybe not had a public raise are showing signs of improvement as well, or does the line really get drawn down the middle where you have some that have financed and therefore in a better position? Those are the companies that are starting to open up the spigot a little bit. Those that haven't done that haven't really changed. Is that the dynamic? Thank you, Bunch.
spk11: I mean, yeah.
spk02: I think first off, on PAs, I think you don't need to see the things snap back to strong levels for folks to start making investments and moving their programs forward. I think where the timing of capital raise is gonna impact things maybe on when an instrument purchase takes place. So I think those capital acquisitions are gonna be more tied to the fundraising than certainly the PA utilization is gonna be.
spk07: Okay, very good. Thank you. Thank you, Dan.
spk10: Thank you. Our next question comes from the line of Matt LaRue with William Blair. Your line is now open. Good afternoon. It
spk03: just made me following up on that last point. You know, acknowledging that it takes some time for flow through from perhaps a successful capital raise to release of that into a budget. On the instrument side, what are you starting to hear about from customers on a budget perspective? What does the, perhaps the instrument pipeline look like relative to maybe the end of last year, just because obviously while PAs were strong, instruments still a little bit softer in the court.
spk17: Yeah, Matt, let me answer that. And then I'll let Doug also weigh in. So what we're seeing in terms of instrument side really is the prognostic for that is what we're seeing on the PA side, right? That's usually where you start to see the recovery is normally in PAs, because the capex spend is far less than you would do for instrument side, for an instrument purchase. So we're hopeful and we're optimistic that what we're seeing on the PAs will lead later in the year to potentially, where now customers are willing to make purchases that maybe last year were not so strong. That's not sure that we're not willing to make, but again, it's just that leading indicators is the PAs. I'm not so sure we wanna at this point, indicate that it's gonna lead to future instrument sales just because the PAs have increased. Doug, anything else? Yeah, I mean, it's a good question.
spk02: And I think it's a good opportunity to remind everybody what makes up core revenue, right? There's the leases, which I think we've got good visibility in, it's very stable. We saw some growth there. And then there's the PAs, which are a lot tougher to project. And then instrument sales. And instrument sales really is a, we build up our forecast based on very detailed information that comes from the commercial team on each opportunity that they're looking at. And so when we think about the year, certainly instrument revenue wasn't as strong as PAs was this quarter, but we still feel very good about the guidance we provided when we're looking specifically at the book of business that they're working through now on the instrument sales side.
spk03: Okay, understood. Here you referenced in the prepared remarks, I think adding additional SPL support for clients and starting to work with them earlier. I'm curious if this is sort of a step function change or new for you, or if there are particular services or capabilities that you're adding in terms of how you interact with clients that are different from before. And whether this is something that's sort of been asked from clients or more of a push from you, either from a competitive or service end standpoint.
spk17: Yeah, absolutely, great question. Actually, it's more of a push from internal rather than being asked from clients per se. We've always, if you look at what we do, we do a complete -to-end solution, right? We provide support to our customers where from the time they first worked with us all the way through the clinic, we wanna make sure, I think I said on the last call as well, that we're doubling down that support. So we're staying ahead of the competition and we're providing support now with better communication, both electronic communication as well as -to-face communication. So we're building out systems to ensure that the support that we provide to our SGL partners, whether it's regulatory or quality or any potential issues that they have while they're in the clinical development, even potential commercial development, we stay ahead of it and the turnaround time is even faster than before. So we're ensuring that what we've done in the past, we're doing even more so of it and really coming of age with where the industry's going, where we wanna make sure, as these therapies need to make it to the clinic faster and make it to patients faster, that we de-risk that step where they're working with us. So we're investing extra resources and really capabilities in that area to make sure we stay ahead of the competition and keep up and align our interests with our partners.
spk09: All right, thank you. Absolutely. Thank you.
spk10: Our next question comes from the line of Jacob Johnson with Stevens, your line is now open.
spk04: Hey, thanks, good afternoon, congrats on the quarter. You guys called out kind of a pivotal trial surprise in the quarter. I'm just curious if this relates to a new or an existing therapy. I think program revenues don't include Casgevy, so I'm curious if it's a new customer and maybe I'll dovetail that into looking at your chart on potential commercial approvals, it looks like you're not really expecting anything until 2026, I'm just curious if this kind of surprise, pivotal changes you're thinking about that. Thank you.
spk17: Yeah, Jacob, thanks for that, I'll take that. It doesn't quite change our thinking on that. Obviously, we can't comment in terms of what customer it is or why it happened sooner than it should be for confidentiality reasons with our partners. However, as I mentioned, it does speak to our business model in the sense of there are gonna be times where some of our current partners that have signed licenses with us are gonna reach milestones sooner than they even anticipated or that we anticipated and we'll get the benefit of that and that's what happened here. I wouldn't change the 26 or 27 timeline for next generating events for us, we're still, that's what you see, we're confident with that. But this is a positive, this speaks to exactly why we have these licenses, why we provide the support and what I've mentioned in the past, which is these are not like antibody therapies, there's a higher potential that you're gonna have potential clinical efficacy earlier than anticipated by our partners, which will benefit us and benefit patients and our partners as well. Does that answer your question, Jacob?
spk04: Yeah, yeah, that's helpful, thanks for here. And maybe Dan asked me about customers spending money who'd receive funding versus maybe those you had and I'm just curious, maybe looking at dicing it a different way, just curious if there's any difference in PA demand, if it's maybe more skewed to customers in the clinic or if you did have some maybe preclinical or earlier, demand from preclinical or earlier stage customers as well.
spk17: Yeah, I'll ask you then if Doug wants to win, I think it's spread across, it's not just clinical, it's clinical and preclinical demand as well as research. We're seeing that across the board, which is what we wanna see. We wanna see the healthy business both for the SPLs and the non-SPL customers and that's what we saw sequentially from this quarter to last quarter. So it's a healthy demand across the board, Jacob.
spk14: Got it, thanks for taking questions, guys. Okay, thank you, Jacob.
spk10: Thank you, our next question comes from the line from Matt Hewitt with Craig Hallam Capital Group. Your line is now open.
spk16: Hi guys, this is Jack on from Matt. Congrats on a good readout. We just have one question. So after like a flurry of new SPL agreements at the start of the year, could you just give us an update on that pipeline and whether you expect additional agreements this year? Thanks.
spk17: Thanks, Jack, I can speak to that and then Doug, feel free to speak to that as well. Obviously very healthy start to the year. We're still, what we've mentioned in the past, we're comfortable with the three to five per year. The funnel and the pipeline itself for future SPLs is healthy. We're confident that we can continue to have those three to five. I won't comment on whether we're gonna sign another one this year just yet. Obviously for obvious reasons as I mentioned last time, sometimes you see a bolus of SPLs signed at any one particular time. The reason being is we're oftentimes working in research, working with these customers really in the benches with them, supporting them and then from there it ends up being a negotiation a little bit thereafter where now we're negotiating licenses where they're about to enter into the clinic. So sometimes you might have it where you have three or four along at the same time we've been working with in the past 12 months, 18 months that are about to sign licenses. So that's why you see a bolus, but we're completely confident at three to five moving forward. Won't speculate as to whether we'll sign another one and then the funnel itself is healthy and that's why we're confident at three to five moving forward as well.
spk09: Jack, did that answer your question? Yeah, it was helpful. Thank you.
spk16: Absolutely.
spk10: Thank you. Our next question comes from the line of Mark Massaro with BTIG. Your line is now open.
spk01: Hey guys, this is Vivi and he went off to Mark thanks for taking the questions. So just a quick one on BLX adoption. It sounds like that might be more of a lagging indicator relevant to PAs but just any new applicable system applied or early feedback to report there. Thanks.
spk17: Yeah, thanks for the question. On the VLX in terms of, as I mentioned last time, we're still working with early adopters. We're taking a step back to ensure that we do this where we understand the true application needs for the VLX. I won't mention for confidential reasons the name of those early adopters, but it's just to ensure that we understand the space that we're entering into, where it's different than cell therapy. We're really trying to disrupt the industry here. And not just from the VLX, but just in terms of production of proteins in a transient manner that has not at a scale that's not been done before. So in terms of the PA usage for that, we haven't disclosed that. In terms of instrument sales, we haven't disclosed that. But we're still working with early adopters to truly understand the space and then launch in a manner that allows us to have true market adoption for the VLX and applications around the VLX as well. But we have not disclosed anything specifically there.
spk08: Perfect,
spk01: understood. And then just one follow up. You guys have a pretty healthy balance sheet. Just any tuck-in acquisitions or tech that you might look to evaluate, particularly for upstream or downstream steps, kind of like cell enrichment or harvesting, just any conversations going on there.
spk02: We have an active corporate development effort. Clearly, we're not in a position to talk about specific targets we're looking at. I think the types of things you mentioned are sort of in the realm of opportunities we would look at. But we've got healthy effort just to balance out our initiatives to target both inorganic and organic growth opportunities. So this is one of the use of proceeds when we went public. So we're mindful that that's part of the reason why we have the healthy balance sheet that we do. And our goal is to look closely at things, but be very prudent. I think it's healthy that we're evaluating things. It's also very good that we've been very disciplined and not pulling the trigger on things that either we didn't think were valued correctly or just weren't the right fit.
spk08: Awesome. Thanks for taking the question.
spk12: Thank you.
spk10: Thank you. Thank you. Our next question comes from the line of Jack Willing. Kisa with TD Cowan. Your line is now open.
spk06: Hi, this is Jacqueline Kisa. On for Stephen Ma. Thanks so much for taking the questions. Just to start off with regards to your new and ongoing BD discussions for new SPLs, are you seeing these discussions weighted more towards emerging biotechs or large pharma? Is there like a noticeable mix or anything?
spk17: Yeah, I, Jacqueline, thank you for the question. I'll take that. It's more towards, it's not large pharma. It's more towards, I'd say, you know, smaller to midsize biotechs. And it's a mix of what we're seeing there. Obviously, as the industry keeps changing and evolving and as cell therapies have greater adoption, we could see that mix begin to change as well, whether it's from early to midsize to larger biotechs. It's a good mix. I mean, it's a good question. I think you're seeing it across the board. I wouldn't say large pharma. We don't have, you know, that's not our focus right now. It's more on the support that's needed for that smaller to mid to even larger size biotechs.
spk06: Right, great. Thank you. And then if you look across the clinical programs you're supporting, can you speak to the diversity of the cell types and molecules that your partners are using to create their cell-based therapies? And has this trended over the past 12 months? And if you're willing to call it any emerging trends with regards to that, that would be really cool too.
spk17: Yeah, absolutely. So actually, that's the beauty of our support and what we do truly best is it's emerging across cell therapies, whether it's T cells or NK cells, whether it's TILs or TCRs, we're working with all of them. And obviously, for the indications, it's increasing where you went from blood cancers to solid tumors, which is where we're having a presence. And then you're seeing the space really get more complex with the companies we're working with and truly begin to go into other indications. You're seeing, you know, autoimmune diseases begin to really take shape here. And that's where it seems the space is is lining itself. And we're working with a few of our partners on autoimmune disorders, you know, cell therapies for autoimmune diseases, rare diseases. So it's an entire breadth and that's what we anticipate. We anticipate the field continue to evolve, continue to mature and really get more complex. And that's what we've built the last 15, 20 years to ensure that we're ahead of the competition and working with everyone with regards to the cell type, regardless of the modality and indication. So I hope that answers your question, Jacqueline.
spk05: That's great. Thank you so much. I appreciate it.
spk10: Thank you. And I'm currently showing no further questions at this time. I'd like to hand the call back over to Mahirah Massoud for closing remarks.
spk17: Yeah, thank you, Operator. And thank you all for joining today's call. I look forward and we look forward to speaking with all of you again on our next earnings call in a few months. Thank you.
spk10: This concludes today's conference call. Thank you for your participation. You may now disconnect.
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