Susan Hubbard - EVP, Public Affairs & IR Michael Morrissey - CEO, President & Director Christopher Senner - EVP & CFO Patrick Haley - SVP, Commercial Gisela Schwab - President, Product Development & Medical Affairs and Chief Medical Officer.

Eric Schmidt - Cowen and Company Andy Hsieh - William Blair & Company Peter Lawson - SunTrust Robinson Humphrey Kennen MacKay - RBC Capital Markets Stephen Willey - Stifel, Nicolaus & Company.

Good day, ladies and gentlemen, and welcome to the Exelixis' First Quarter 2018 Financial Results Conference Call. My name is Andrew, and I'll be your operator for today. As a reminder, this call is being recorded for replay purposes. I would now like to turn the call over to your host for today, Ms.

Susan Hubbard, Executive Vice President of Public Affairs and Investor Relations. Please proceed..

Thank you, Andrew, and thank you all for joining us for the Exelixis First Quarter 2018 Financial Results Conference Call. Joining me on today's call are, Mike Morrissey, our President and CEO; Chris Senner, our Chief Financial Officer; P.J.

Haley, our Senior Vice President of Commercial; and Gisela Schwab, our Chief Medical Officer, who will together review our corporate, financial, commercial and development progress for the first quarter ended March 31, 2018, as well as recent key development and corporate events.

Peter Lamb, our Chief Scientific Officer, is also here with us and will join us for the Q&A session following our prepared remarks. As a reminder, we are reporting our financial results on a GAAP basis only. And as usual, the complete press release with our results can be accessed through our website at exelixis.com.

During the course of this presentation, we will be making forward-looking statements regarding future events and the future performance of the company. This includes statements about possible developments regarding clinical, regulatory, commercial, financial and strategic matters. Actual events or results could, of course, differ materially.

We refer you to the documents we file from time-to-time with the SEC, which, under the heading Risk Factors, identify important factors that could cause actual results to differ materially from those expressed by the company verbally and in writing today, including, without limitation, risks and uncertainties related to product commercial success; market competition; regulatory review and approval processes; conducting clinical trials; compliance with applicable regulatory requirements; the availability of data at the reference times; our dependence on collaboration partners; and the level of costs associated with commercialization, research and development, business development and other activities.

Now with that, I will turn the call over to Mike..

All right. Thank you, Susan, and thanks to everyone for joining us on the call today. The first quarter of 2018 was led by strong commercial and financial performance. We continued to execute across all components of our business and achieved important commercial, financial, development, regulatory and business development milestones.

Importantly, Exelixis has built on our momentum from the past 2 years to grow the CABOMETYX RCC business and advance cabozantinib into potential new indications as either a single agent or in combination with immune checkpoint inhibitors.

I'll begin today by providing a brief summary of our key first quarter milestones and then turn the call over to Chris, P.J. and Gisela for additional details on our Q1 financials, the CABOMETYX launch in first-line RCC and our cabozantinib development activities.

Key highlights for Q1 2018 include, first, the significant growth in CABOMETYX demand and product revenue based on the strong commercial performance for CABOMETYX in advanced RCC where we now target the entire patient population with the first-line approval. Q1 net cabozantinib franchise revenues were $134 million.

Achievement of key regulatory milestones for cabozantinib in the EU and esaxerenone in Japan provided additional milestone revenues. Total revenues for the quarter were $212 million, leading to income of -- net income of $160 million and diluted earnings of $0.37 per share.

Second, we continued to make significant progress in cabozantinib development and regulatory activities as we vector towards starting additional late-stage trials for new cabozantinib indications. The sNDA filing based on the success of the CELESTIAL trial for second line HCC was completed in March.

With emerging additional data for both single-agent cabozantinib and immune checkpoint inhibitor combinations, we are actively planning the second wave of cabozantinib late-stage trials in indications across a wide range of histologies and potential lines of therapy.

Third, we are rebuilding our pipeline through internal discovery and externally focused BD activities. Today's announcement of the Invenra collaboration, which is focused on the discovery of multi-specific antibodies for treatment of cancer, moves Exelixis into biologics as a complement to our traditional small molecule discovery platform.

It also reflects our current BD approach to working with early-stage innovative biotechs in a low-risk financial manner through small upfronts and modest success-based milestones that allow us to advance new assets aggressively, while discharging scientific and downstream clinical risk.

The significant momentum we see in early 2018 is a reflection of our strong performance in the financial, commercial, development and regulatory components of our business.

Our efforts to grow revenues from product sales, collaboration milestones and royalties, while maintaining our expenses in a rigorous fashion, allows us to generate free cash to sustainably reinvest in our business.

Finally, as our partner Roche Genentech reiterated in their earnings call last week, we continue to expect top line results from the IMblaze370 pivotal trial, investigating the combination of cobimetinib and atezolizumab in second- and third-line CRC in the first half of 2018.

This is obviously a critical readout for the cobimetinib franchise as well as the entire immuno-oncology field that is looking for novel mechanisms to increase the sensitivity of cold tumors to immunotherapies. So with that, I'll turn the call over to Chris, who will provide more details on our Q1 financials..

Thanks, Mike. Total revenues for the first quarter of 2018 were $212.3 million, with $115.9 million of net income and diluted GAAP earnings per share of $0.37 compared to total revenues of $80.9 million, net income of $16.7 million and diluted GAAP earnings per share of $0.05 for the same period last year.

Total revenues include net product revenues of $134.3 million for the quarter ended March 31, 2018, compared to $68.9 million for the comparable period in 2017.

The increase in net product revenues reflect the continued growth of our second and later line advanced RCC business and the impact of additional sales following the December 2017 FDA approval of the expanded indication for CABOMETYX to include first-line advanced RCC patients, which now encompasses all patients with advanced RCC.

On a quarter-over-quarter sequential basis, our net product revenues increased by approximately $38 million or 40%. This was the result of a approximate 30% increase in CABOMETYX patient demand and an increase in trade inventory of approximately $9 million, which was also a result of the increased demand.

Our deductions from gross sales in the first quarter of 2018 increased slightly to 15.8% when compared to the fourth quarter of 2017 due to increases in our commercially contracted businesses.

Total revenues also include collaboration revenues of $78.1 million for the quarter ended March 31, 2018, compared to $12 million for the comparable period in 2017.

The increase in collaboration revenues for the first quarter of 2018 was primarily the result of recording $45.8 million in revenue for a $50 million milestone from Ipsen we expect to earn for the approval of cabozantinib for the first-line treatment of advanced RCC by the European Commission following a positive opinion from the CHMP in late March 2018.

The increase in collaboration revenues was also a result of a $20 million milestone from our collaboration partner, Daiichi Sankyo, which was earned as a result of Daiichi Sankyo's submission of a regulatory application in Japan for esaxerenone as a treatment for patients with essential hypertension.

Additionally, during the quarter, we adopted accounting standards update 2014-09 titled Revenues from Contracts with Customers also known as ASC 606. For more information on our adoption of this new revenue standard, see Note 1 of our quarterly report on Form 10-Q filed with the SEC earlier today.

Our total costs and expenses for the first quarter of 2018 were $96 million compared to $83 million in the fourth quarter of 2017. This increase in total costs and expenses is primarily the result of increases in personnel-related expenses and the upfront payments to StemSynergy and were in line with our expectations.

Cash and cash equivalents, short- and long-term investments, short- and long-term restricted cash and investments totaled $525.6 million at March 31, 2018, as compared to $457.2 million at December 31, 2017.

And finally, the company is maintaining its guidance that total cost that operating expenses for the full year will be between $430 million and $460 million. This guidance includes approximately $50 million of noncash costs and expenses related primarily to stock-based compensation expense. I will now turn the call over to P.J..

Thank you, Chris. We saw strong performance in Q1 with CABOMETYX net revenue of approximately $130 million. This compares favorably with the Q4 2017 net revenue of $90 million, representing growth of approximately 43% quarter-over-quarter. In the first quarter, end customer product demand for CABOMETYX grew by approximately 30% relative to Q4.

Demand growth was driven by increases in new patient starts and refills for patients already on therapy. As you know, CABOMETYX received an expanded indication on December 19 and is now approved in the U.S. for all advanced RCC patients regardless of line of therapy or clinical risk category.

This broad label strongly positions us to continue in our efforts to make CABOMETYX the TKI of choice in kidney cancer. While it is still so relatively early in the launch, the initial metrics and market research are very encouraging.

These data indicate that physicians are motivated to prescribe by the CABOSUN trial, in which CABOMETYX demonstrated superiority to Sutent, the long-time standard of care in first-line RCC. Consequently, we are seeing increases in demand and new patient starts in both the academic and community settings of the marketplace.

As we have previously stated, the first-line approval enables us to continue our growth, both in terms of increasing the eligible patient pool and increasing prescriber adoption as more community oncologists treat patients with first-line disease.

In line with this thinking, the growth of the CABOMETYX prescriber base accelerated in Q1 and grew by approximately 20% relative to Q4. The team was well prepared to launch efficiently in first-line RCC as we leverage our knowledge of the marketplace and of our customers. Many synergies are helping to accelerate the launch in first-line RCC.

For example, prescriber base for first-line RCC is the same as the second or later line, a base with which our team has established relationships. The majority of these RCC prescribers have experienced prescribing CABOMETYX, which is facilitating adoption in the first-line setting.

We will not disclose our market share in distinct lines of therapy for competitive reasons. However, CABOMETYX has had significant uptake in the first-line setting.

Interestingly, the first-line data demonstrating superiority over Sutent reinforces the growing physician impression that CABOMETYX is the TKI of choice in RCC, [indiscernible] in turn strengthens our position in later lines of therapy. As a result, we saw increased new patient starts in the second- and third-line setting in Q1, as well.

In the IMS data for the market basket of CABOMETYX, Sutent, Votrient and INLYTA, CABOMETYX grew 4 share points going from 21% to 25%, representing a nearly 20% increase in market share in Q1 relative to Q4.

Also in Q1, total prescription volume increased by over 20% as we saw a significant increase in new patient starts and many more patients on therapy at the end of Q1 relative to the end of Q4.

While we are pleased with our Q1 progress, we are not satisfied with it and are optimistic about continuing to grow our position in the RCC market moving forward.

In addition to the continued growth of CABOMETYX through the expanded RCC indication, we look forward to the opportunity for further growth through a potential label in HCC, which would represent a third tumor type and fourth indication for the cabozantinib franchise.

This year, cabozantinib data had been presented in RCC, HCC, differentiated thyroid cancer as well as other histologies.

As you will hear from Gisela, these potential new opportunities were at the forefront of our near-term development plans and we view them as potential markets for future commercial growth, assuming clinical and regulatory requirements are satisfied.

We're excited about the future where indications like differentiated thyroid cancer and combinations of cabo with checkpoint inhibitors could offer potential long-term opportunities for the franchise.

We are very pleased to say that cabozantinib has become the leading anti-angiogenic TKI in the United States, with Q1 2018 franchise net revenue of $134 million. It is well differentiated based on its robust clinical data and unique mechanism of action. However, we recognize that RCC is a fiercely competitive market.

The recent approval of ipilimumab and nivolumab for the treatment of poor and intermediate risk first-line RCC adds to that competition, and we expect further I/O-TKI combination data readout over the next few years. That said, we believe that the totality of strong RCC clinical data and broad label position CABOMETYX well for the future.

We are pleased with the results of Q1 but believe that many more RCC patients could benefit from CABOMETYX. Our team is focused and motivated to compete every day to bring the benefit of CABOMETYX to every eligible patient as we continue to build on the positive momentum of the franchise. With that, I will turn the call over to Gisela..

Thank you, P.J. I am pleased to provide an update on the progress of the cabozantinib development program in the quarter. I will start with the regulatory update on HCC and first-line RCC. We have filed the supplemental NDA for CABOMETYX for previously treated patients with advanced HCC in mid-March with FDA.

This submission is based on our positive CELESTIAL trial results in previously untreated advanced HCC patients. Our partner Ipsen has also submitted these data to the European Medicines Agency who validated the filings in late March.

Regarding first-line RCC, we have recently announced that Ipsen received a positive CHMP recommendation for CABOMETYX in March. The next step towards a potential approval of an expanded indication in RCC is the review for the European Commission who has the authority to approve the product for this expanded indication in the European Union.

With these important submissions completed, we are fully focused on the broader development and life cycle management plan for cabozantinib, including combinations with immune checkpoint inhibitors in collaboration with BMS and Genentech Roche.

We are pleased with the progress of our clinical collaboration with BMS of combining cabozantinib with nivolumab alone or both nivolumab and ipilimumab.

I'll start the discussion with a Phase II HCC trial evaluating safety and preliminary activity of the cabozantinib-nivolumab and the cabozantinib nivolumab and ipilimumab combinations in advanced HCC. This trial is run as part of the CheckMate 040 trial and has completed enrollment.

The primary objective of the evaluation are safety of the combinations and secondary objectives include objective response rate and progression-free survival. This is an important study as we plan for further development of cabozantinib in combination with immune checkpoint inhibitors in HCC, including front-line therapy.

We are also collaborating with BMS on the Phase III Checkmate 9ER study in treatment-naïve RCC patients based on the encouraging results from a Phase Ib trial combining the checkpoint inhibitors nivolumab and ipilimumab with cabozantinib in genitourinary cancers.

This trial is co-funded by ourselves and our collaboration partners, Ipsen and Takeda, together with BMS, who is conducting the study. This trial is evaluating the combination of checkpoint inhibition therapy combined with cabozantinib compared to sunitinib, and enrollment in the trial is ongoing globally.

The triplet combination of cabozantinib, nivolumab and ipilimumab continues to be evaluated in the ongoing Phase Ib trial mentioned earlier in patients with advanced genitourinary malignancies, but has established the preliminary safety and tolerability and the recommended dose for this combination.

And a separate Phase III trial investigating the triplet combination versus nivolumab and ipilimumab in first-line RCC is in development.

We continue to make additional progress in our collaboration with Genentech evaluating the combination of cabozantinib and atezolizumab in an initial dose-ranging study with planned cohort expansions in various different settings, including patients with previously untreated advanced RCC, patients with previously treated or untreated bladder cancer and additional tumor cohorts, including checkpoint inhibitor-experienced bladder cancer and non-small cell lung cancer patients as well as checkpoint inhibitor-naïve non-small cell lung cancer and castration-resistant prostate cancer cohorts have been added to the study.

We have identified an active dose with good tolerability for the combination in the dose-ranging part of the trial and all expansion cohorts are now actively enrolling patients.

We are also planning on adding a number of additional histologies to the ongoing expansion cohorts investigating a variety of additional tumor types, including gastrointestinal malignancies and gynecological malignancies.

Further studies and additional indications are under discussion and our partners, Ipsen and Takeda, will each have the opportunity to participate in future combination trials in accordance with the terms of their respective collaboration agreements.

We are planning to start additional pivotal trials with cabozantinib in further tumor types in 2018 and in 2019 and are advancing in our work on specific study designs for such trials at such time, and we look forward to sharing details on the next studies at the appropriate time.

In addition to our internal and clinical partner efforts, there are also multiple study concepts advancing through review and preparation at NCI-CTEP and our investigator-sponsored trial program of Phase II trials combining cabozantinib with various immune checkpoint inhibitors.

Such trials are moving forward in several indications, including non-small cell lung cancer, triple negative breast cancer and endometrial cancer. And lastly, single-agent cabozantinib has shown encouraging activity in a variety of tumor types, including neuroendocrine tumors of, both sphenoid and carcinoid, and in differentiated thyroid cancer.

Indications for which Phase III studies are being developed by ourselves and by cooperative groups for initiation this year. So in summary, I'm very pleased with the progress made in our cabozantinib development program and with the important regulatory milestones reached during this quarter and look forward to updating you in the future.

And with that, I'll turn the call back to Mike..

All right. Thanks, Gisela. I'll close by saying that we made significant progress across the organization in the first quarter and continue to see solid performance in all aspects of our business as we move forward in 2018.

Our notable commercial and financial progress in Q1 provides the strong foundation for future cabozantinib trials in important new indications and to explore new opportunities to rebuild our pipeline through internal R&D efforts and in-licensing of external assets like the Invenra collaboration we announced today. We're off to a strong start in 2018.

We had a good Q1. We don't take our success for granted and remain extremely vigilant in making every day count as we look to fulfill our mission to help patients with cancer recover stronger and live longer. Today is the last earnings call from our South San Francisco facility as we'll start moving to our new headquarters in Alameda later in May.

We're excited to build on the team's 2-decade legacy as we move to the East Bay and we'll use this important milestone to recommit to working with even more focus and urgency to deliver new therapies to patients with cancer. We look forward to updating you on our progress. Thank you for your continued support and interest in Exelixis.

We're happy to now open the call for questions..

[Operator Instructions]. And our first question comes from the line of Eric Schmidt with Cowen..

Chris, on the inventory side for CABOMETYX, did I hear you say an $8 million benefit in Q1?.

Yes, Eric, it's Chris. Thanks for the question. Yes, during the quarter, we -- there's actually approximately a $9 million inventory build, which was primarily related to the increase in the underlying patient demand, CABOMETYX demand, and was not a buy-in in anticipation of a price increase..

So you ended March about where you expect in terms of merchandise?.

Yes. So we continue to be in the three-week range of inventory on weeks-on-hand of inventory in the trade..

Okay. And maybe just a question for Gisela on enrollment in the CheckMate 9ER study. Obviously, that Sutent control arm that, I guess, could be problematic for some centers.

Are things going okay? Are you able to enroll patients into that design?.

Yes, the study is enrolling actively globally at this point. I'm civilly not commenting on day-by-day enrollment numbers, but we are pleased with the progress made..

And our next question comes from the line of Andy Hsieh with William Blair..

Just something that we haven't really talked about much recently. The prostate cancer opportunity, obviously, this is very big.

Just wondering about your thoughts, lesson learned from COMET-1 and 2 as you prepare to run the checkpoint inhibitor plus cabo Phase I trials?.

Sure. I'm happy to address that. This is Gisela.

We have certainly learned a lot from the COMET-1 and 2 and the prior Phase II experience and have seen clear biological activity, as you recall, with the decreases in circulating tumor cells, the bone, skin responses, extension of progression-free survival, but not the translation into extension of overall survival in the COMET-1 study.

And so these learnings, certainly, will be helpful in thinking about combination approaches and certainly, good rationale for combining with checkpoint inhibitors given that cabozantinib results in a more immune-permissive tumor environment and could potentially exert cooperative activity with checkpoint inhibition.

So we will look forward to the results and -- of the enrolling 021 study, the atezolizumab combination study that will give us initial insights in this space..

Andy, its Mike. Just to add on to that, just I'll remind you that prostate cancer is one of the colder tumor types out there.

And I think part of the goal with the 021 study in the cabo/atezo combination is to ask some fundamental questions about, can we actually make those cold tumors more sensitive to ICIs by adding cabo onto it? So it's really a signal search part of that trial, but it's one that we think is certainly very interesting based upon the prior activity that we have with cabo and the potential there with the large patient population..

And our next question comes from the line of Peter Lawson with SunTrust Robinson..

Just wondered if you could add any color around that kind of split between first and later lines in renal, whether it's kind of the new patient starts, whether it was greater in first-line or second-line? Any color there would be great..

Yes, I'll pass that over to P.J. He can address that..

Yes. Thanks for the question, Peter. First, I'll say we're certainly pleased with the quarter. Very pleased with the demand growth we saw that's 30% in Q1 relative to the same period in Q4.

As we look at kind of by line of therapy, as I mentioned in my prepared remarks, for competitive reasons, we're not going to share specific numbers, but we really did see a significant uptake in first-line new-patient starts, new-patient market share and we're tracking that very closely.

We actually saw it taking share from both Sutent and Votrient in that case and what's kind of really interesting. So when you look at the totality of our data now with CABOSUN, with METEOR and the market research from physicians, we're really seeing sort of a halo effect and physicians really viewing this as the TKI of choice in RCC.

So I think, that, along with our promotional efforts, led to increases also in the second and third-line settings. So we believe we have significant opportunity in the TKI market going forward and really look forward to competing for every patient -- every eligible patient every day in all lines of therapy..

And did you see any uptick in off-label use for liver cancer?.

Yes, it's our policy, Peter, generally, to not comment on off-label utilization of a therapy. So for that reason, I think I'll just leave it at that..

And our next question comes from the line of Kennen MacKay with RBC Capital Markets..

Maybe just a housekeeping question for Chris off the bat.

I was wondering if there was much donut hole impact on Q1 or with the new accounting standard came mostly in Q4 of the cycle?.

Yes. So Ken, this is Chris, thanks for the question. So there was donut hole impact in Q1. But as we talked about during the Q4 call, as we left the year, we had a certain amount of wholesale inventory which was going to be sold to patients that would enter the donut hole during Q1. And so we accrued for that during -- at the end of Q1.

So it more or less smoothed the donut hole impact between Q4 and Q1 as we looked at it. Now the new accounting standard didn't actually have any impact on the way we recognize our product revenue. It's only having an impact on how we recognize our collaboration revenue..

Got you. And one for P.J.

Wondering -- I guess, since the approval of ipi/nivo, how your sales reps and your MSLs are discussing the use of cabo in the frontline RCC setting? And the advantages versus ipi/nivo, how that sort of changed detailing MSL calls here?.

Yes. Thanks for the question. Obviously, we tracked ipi/nivo very carefully for some time and our team was extremely well prepared for that approval that came on the PDUFA date. Certainly, it's great news for patients to have more options, therapeutic options.

That said, ipi/nivo won't be for every patient by any means and really doesn't fundamentally change our strategy of making CABOMETYX the preferred TKI in RCC. So really, the way we see it shaking out is patients will get CABOMETYX in the first-line, certainly. And those who don't, who might get, for example, ipi/nivo in that setting.

What we hear from market research is that CABOMETYX would be the preferred agent for them to get after progression on that therapy. So really, when we think about sequencing, we think that most patients will get CABOMETYX in one of those lines of therapy.

And it really comes down to the totality of the data, and we have a very broad label that positions well across lines of therapy moving forward. And I think that gives us plenty of opportunity as we look ahead..

And then, I guess, just thinking about that, do we have any sense of how duration could look? Obviously, this would be still the first anti-VEGF agent that these patients get, whether it's true frontline therapy or it's post-I/O and obviously, resistance to I/O therapy is very different than resistance to VEGF and then a second VEGF.

But do we know what duration could look like at all coming post I/O versus, for instance, the true frontline therapy?.

Yes. Thanks for that question. With regard to kind of duration in the first-line or in the post-ICI space, it's really far too early for us to comment on that since we've only been on the market for a few months.

So certainly, something we're tracking very carefully, and duration's something you need significant follow-up to really get a reasonable mathematical sense of it. So too early to speculate on that..

[Operator Instructions]. And our next question comes from the line of Stephen Willey with Stifel..

May be for P.J., can you maybe just speak a little bit about where you're seeing frontline utilization with respect to risk subgroups?.

Yes. Thanks for the question, Stephen. What we're seeing, again, very early days in the launch, is broad utilization. And that's with regard to subgroups, it's with regard to academic versus community settings.

Physicians are very comfortable with using TKIs across the board in the first-line setting and we have the -- a very broad indication, which is playing well. So it's helping us, not only in first-line, but as I mentioned earlier, in the second- and later-line settings as well. So we're very pleased with that..

So there is no clear differential then at this point between, I guess, favorable and then core and intermediate-risk patients?.

Yes. Like I said, we're seeing uptake across the board, and it's really early to kind of provide any further details with regard to that..

Okay. And then, maybe a question for Gisela.

Just on the CheckMate 40 study that has recently completed enrollment, can you talk about how many patients are in that CaboNivo cohort in HCC?.

We haven't really talked about the details of this trial. Just to say, there are 2 cohorts, one, is CaboNivo; one, is using the triplet, CaboNivo and ipilimumab, and it's a Phase II trial evaluating about 30-plus patients per cohort with a primary objective of safety and a secondary objective of response rate and PFS..

Got it. And then maybe another question for you, I guess, or for Mike. I know that you kind of have your hands tied on what you can say about IMblaze.

But just kind of curious as to what your interpretation of that rate accrual in the study is right now just given the fact that it appears to be accruing in terms of death events, I guess, relatively slower than what we've seen from other competitive trials conducted in the salvage setting?.

Steve, it's Mike. Obviously, we're really able or comfortable to comment on what's happening with the conduct or the result of that trial. So I can't really say much there.

And certainly, the guidance that Roche and Genentech reiterated on their call, I think it was last week, was that we have -- we'd see data or top line results, I should say specifically, in the first half of '18. So that's kind of the party line right now and it's all we can really speak to..

Thank you. And at this time, there are no further questions. So I will turn the call over to today's host, Susan Hubbard. Ms.

Hubbard?.

Okay. Thank you, Andrew, and thank you for all for joining us today. We welcome your follow-up calls with any additional questions you may have that we were unable to address in today's call. Thanks again..

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program. You may all disconnect. Everyone, have a wonderful day..