Greetings, and welcome to the Exagen Inc. Second Quarter 2020 Earnings Call. [Operator Instructions]. I would now like to turn the conference over to your host Mr. Mark Hazeltine, Senior Vice President of Finance & Corporate Development for Exagen Inc. Thank you. You may begin..

Good morning and thank you for joining us today. Early this morning, Exagen Inc., released financial results for the quarter ended, June 30, 2020. The release is currently available on the company's website at www.exagen.com. Ron Rocca, President and Chief Executive Officer; and Kamal Adawi, Chief Financial Officer will host this afternoon's call.

Before we get started, I would like to remind everyone that management will be making statements during this call that include forward-looking statements within the meaning of federal securities laws, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

Any statements contained in this call that are not statements of historical facts should be deemed to be forward-looking statements.

All forward-looking statements including without limitation, statements regarding our business strategy and future financial and operating performance, the impact of the COVID-19 pandemic on our business, our current and future product offerings and reimbursement and coverage, are based upon current estimates and various assumptions.

These statements involve material risks and uncertainties that could cause actual results to differ materially from those anticipated or implied by these forward-looking statements. Accordingly, you should not place undue reliance on these statements.

For a list and description of the risks and uncertainties associated with our business, please see our filings with the Securities and Exchange Commission, including our Form 10-K and any subsequent filings. The information provided in this conference call speaks only to the live broadcast today, July 28, 2020.

Exagen disclaims any intention or obligation except as required by law to update or revise any information, financial projections or other forward-looking statements, whether because of new information, future events or otherwise. I will now turn the call over to Ron Rocca, President and CEO of Exagen..

Thanks Mark and thanks to everyone joining the call today. We appreciate your continued support of Exagen. We all understand that 2020 has been a challenging year for every business, whether public or private. One thing, however, has not changed. Autoimmune disease continues to affect millions of people throughout the U.S. and the world.

These very serious diseases do not take a break during a pandemic and neither do we. With that backdrop, the second quarter was a good one for Exagen. AVISE testing volumes are steadily recovering from their April trough and have continued to trend higher in each successive month.

Testing revenue in the quarter was $6.8 million with 18,522 of our flagship AVISE CTD test performed. Adopter stickiness was 96% for the period and a very good percentage given the circumstances.

The COVID-19 pandemic highlights and increases the need to transform the care continuum for patients suffering from debilitating and chronic autoimmune disease by enabling timely differential diagnosis and optimizing therapeutic intervention. Our AVISE tests and SIMPONI often meet that need.

Importantly, the SIMPONI co-promotion agreement with Janssen was amended in June 2020. We are very pleased to report that during the second quarter, we recognize $2.1 million in revenue from our promotional efforts. With our amended agreement, we have the option to renew our contract for an additional year to the end of 2022.

SIMPONI's unique value proposition as a once-per-month, self-injectable, anti-TNF biologic for rheumatoid arthritis, is well positioned for today's environment.

On the reimbursement front, we also are very excited about our agreement with Humana Military, a managed care support contractor for TRICARE East, which makes available all of our AVISE test as a covered in-network benefits to 6 million lives.

We continue to negotiate with many large healthcare plans throughout the country and hope to announce new agreements in the coming months. Although testing bottomed in April, we have experienced sequentially monthly AVISE CTD test volume increases from April 2020 of approximately 45% in May, and 52% in June.

The company saw lumpiness and geographic irregularities entering Q3, driven by resurgence in COVID-19 cases in the U.S., lending uncertainty to the broader recovery curve for our tests and SIMPONI. While on the subject of our test, I'd also like to say a few words around R&D.

A key strategic focus is expanding our product offering and we remain committed to investing in R&D. We believe this is the key to growing our leadership position within rheumatology testing space.

We are excited about our agreement with Ohio State Innovation Foundation for the development and marketing rights of a blood test to differentially diagnose fibromyalgia. This promises to be the first, rule-in rule-out test for a very difficult to diagnose disease with a large total addressable market.

Proof-of-concept for the fibromyalgia test has been completed. We are also developing a prognostic test to help determine the risk of thrombosis in patients with lupus. For both tests, further clinical validation studies are ongoing and planned.

We believe new products like these will strengthen that testing franchise that has given us the commanding presence in rheumatology and make Exagen well positioned to execute on our vision, of owning the rheumatology hilltop. I would now like to turn over the call to Kamal, to discuss our financial results..

Thank you, Ron. And good morning, everyone. Total revenues in Q2 2020 were $8.9 million, driven primarily by AVISE CTD testing volumes of 18,522 compared with 26,993 a year ago, due to impact experienced from the COVID-19 pandemic. The number of ordering health care providers was 1442 for Q2 2020, compared with 1450 for Q2 2019, and 1692 in Q1 2020.

AVISE CTD test revenue was $5.4 million in Q2 2020 and other testing revenue was $1.4 million. Revenue from the SIMPONI co-promotion agreement was approximately $2.1 million, as we benefited from an amended prescription baseline.

Overall, we are very pleased with the trajectory of our testing business following the April bottom which as a reminder saw a 56% year-over-year decline. We experienced sequential monthly AVISE CTD test volume increases from April 2020 of approximately 45% in May and 52% in June.

Initial indication suggests that July may be in line with June volumes as some areas are reinstating stay-at-home orders. Other revenue was $3.3 million in Q2 2020, resulting in a gross margin of 63% compared to 52% in Q2 2019 and 53% in Q1 2020.

The improvement in gross margin was driven by higher SIMPONI revenues, and is a good illustration of how the Dx/Rx model offers positive leverage to our financials.

Operating expenses in Q2 2020 were $12.4 million, compared with $14.8 million in Q1 2020 due to cost-cutting efforts and a reduction in business activity such as sales, T&E and direct testing costs. In Q2, we continue to take steps to reduce cost and conserve cash.

We eliminated 12 sales positions and three other positions, leaving us with 50 sales reps and 56 territories, which provides a reach and frequency we need at this time. The net loss in Q2 2020 was $3.4 million compared with $2.8 million in Q2 2019. Looking to our balance sheet, cash and cash equivalents as of June 30, were approximately $53.7 million.

We believe we're well capitalized under any economic uncertainty associated with the COVID-19 pandemic. Regarding 2020 guidance, we do not believe that it is prudent to offer formal guidance at this time due to a lack of visibility caused by the fluctuation in COVID-19 activity. We will now open up the call for questions..

Thank you. [Operator Instructions] Our first question comes from the line of Chris Lin from Cowen. Please proceed with your question..

Hey, good morning. Thanks for taking my questions. Based on your commentary, it appears that overall volume was about 95% of normal in June, is this right? And I know you talked about comparable trends in July.

But as we look to the balance of Q3, would it be reasonable to expect a return to growth that will be limited?.

Yeah, good question, Chris. You know, the volume we saw coming back on a daily basis and it was and it continues to be approaching the pre-COVID levels on a daily basis. So, we'd like to see that volume come up, and it continues to do so.

Predicting the future is really hard with this COVID, as we look out, and we see that certain states are continuing to stay closed and others that were open are closing, we're evaluating that on a daily basis. I think the important point here is this, there is no cure for lupus, which is a very serious disease.

It could lead to lupus nephritis or death. Those patients aren't going away even if a city is closed. So we fully anticipate, there's a [bolus] of patients as these states open up, they come back into the market. And we get right back to our pre-COVID trajectory, which was very solid.

As you recall, 2019 was a record, January was terrific, February was terrific. So coming back from this and looking into the future, I think we'll foresee a return of these patients simply because there is no cure.

But we do have to wait until the market and until the states open up and some of these local municipalities also allow patients to go back into the doctor's office..

Got it, that's actually a good segue to my next question.

Could you help us perhaps quantify the bolus of customers or really, you know, the -- how much pent up demand, you think there could be, once things return to normal?.

Yeah, and what we heard from the physicians because we are doing a lot of telehealth and telemarketing and getting a pulse on what's going on out there, is that their normal course of patient load on average for community rheumatologists, call it anywhere from 10 to 15 patients a day. They're down in some of these areas by half or even 75%.

So that bolus, they fully anticipate will return. They're just patients right now searching for it. What we're seeing is a lot of inbound calls from patients, asking for doctors in the local areas when they can't find one. So we know that the demand is there.

To quantify the exact number, I would say that we're missing roughly 50% of those patients, and they're going to come back in a big way. I will comment this, Chris.

When they come back, the test that is a solution for them is our AVISE CTD test because it's not only the lupus test, but with one blood draw, you're getting 11 generic markers of those diseases that most often overlap with SLE-2.

So as you'll recall, before we joined the market, lupus was diagnosed basically by serial testing, they would do one test every other week or every three weeks and bring the patient back. With one blood draw, you can do it all with AVISE CTD. So we think it's the appropriate test for what's going to happen when all these patients do return..

Got it. Okay, and maybe for my last question, I believe even if you exclude the co-promotion revenue in Q2, gross margin was about flat on a year-over year basis. Is this right? And it seems pretty -- it's quite impressive given that diagnostics revenue declined 33% year-over-year.

So could you just help us understand what drove this margin result and how should we think about the sustainability of this performance going forward?.

Thanks Chris, I'll take the question. You're right. The improvement we found in gross margin was driven significantly from the revenue on the SIMPONI co-promotion. That $2.1 million of SIMPONI revenue was at 100% gross margin. But we aggressively cut the variable costs in the lab to match the decline in volume.

The only thing we couldn’t cost cut were the fixed costs..

Okay, and then just how should we, just think about the sustainability of that performance in Q3? Now, are there other --.

Yeah, we’ve got a --.

Sorry, go ahead..

Yeah, so I was going to say that we're going continue to flex our spent, especially in the lab to match the volume, as we continue to progress and [move] through the COVID-19 pandemic..

Got it? Thanks for taking my questions..

Thanks, Chris..

Thank you. Our next question comes from Brian Weinstein with William Blair. Please proceed with your question..

Hey, good morning. I know it's an early morning for you guys. So, appreciate you doing this so early. A couple questions, first on SIMPONI and the co-promote there.

That $2.1 million, was that some sort of a -- kind of a catch-up payment sort of for, kind of getting you guys to a certain level at the end of the quarter? Because, you know, obviously, there was negotiations going on throughout the quarter, so just curious what that $2.1 million represented? But then also on SIMPONI, if you could comment on the potential range going forward, I think it's right around $1.3 million to $1.6 million, something like that is what we're coming in, for future quarters based off of the new deal? And then, anything else on negotiations with Janssen, for additional co-promotes there, so that's the SIMPONI side? And then we'll do some others..

Great. Thanks, Brian. I appreciate it. And yes, it is very early here. The $2.1 million was the performance for Q2 and strictly Q2. And that's what impressed us a lot. And it also impressed our J&J partners as well. So that was absolutely Q2 performance. Because if you think about SIMPONI, the only anti-TNF, that’s once a month and you could take it home.

It does have a lot of utility. Again, it's a good solution for today's problems with COVID. So we're happy to see that. As far as the range, as we disclosed, you know, we have a range and we are continuing to look at that range. And we think that we're going to try to achieve everything we can to get to the top end of that.

The agreement is for a 5% above baseline as our cap, and we will have a bottom which is 300,000 guaranteed, which is not what we're doing, as far as the bottom. We are going to -- we have that extension option, which I think is spectacular and shows the commitment that J&J has in us.

The relationship is really strong, Brian, they really appreciate our efforts, we're out there really making sure that the patients are being taken care of with their anti-TNFs in the community rheumatology offices.

So relationship is strong, we continue to have talks about other things we can do together, but at this point, we're really focused on driving SIMPONI to the high levels that it should be..

Got it. And then on spending, you mentioned that you cut some sales reps here.

How does that impact your view on kind of the business outlook longer term and your ability to kind of get back to the growth rates that we've seen? How critical is it to have those additional numbers of sales reps in order to do that? And do you expect to rehire those positions as things get better? Or is this kind of the level that we should expect going forward?.

Yeah, a really big question and one we talked about a lot here, Brian. We flexed the headcounts, the FTEs. We just let that, flex them to the needs that we need today in order to optimize the performance of the company. And I think we did and in fact, I'm confident we did the right thing to flex to the areas that we did.

Going long term, we'll continue to monitor the reach and frequency of the field to see if it's necessary to add more FTEs or not. That's something we're going to do as we see what happens with COVID, obviously.

It doesn't make sense the hire a rep in, let's say, a state that you can't -- the doctors can't even practice because they can't get out of their houses. But it does make sense, to keep your in-house sales growing. So we've always had a good provider relationship department internally.

These are people that answer the phone that augment what the decentralized sales representatives do. We've beefed that up and we're going to continue to beef that up because as doctors get used to doing Zoom calls, we find that, at least right now, it's been very effective. We're getting to get a lot of time attention with office staff, and so forth.

And it's very efficient from a staff and so forth. And it's very efficient from a cost standpoint, because when you're here centralized, you can make a lot more phone calls and so forth.

So to answer your question, but this telehealth and telemarketing may be a staple of companies in the future regardless of what happens with COVID, as we find it to be an effective way to communicate the value of your products to the doctors..

Got it. And along the lines of kind of, you know, what the future may look like here.

Have you guys thought about and maybe worked with anybody about implementing any kind of mobile phlebotomy to work with your physician partners to be able to test people in their homes for lupus or other autoimmune diseases?.

Yeah, we have quite a few mobile phlebotomy contracts now and we continue to do those. We also find doing contracts with community hospitals to be an effective way to get the phlebotomy as well. So we'll look at whatever it takes. We often remind doctors that they can, they know how to draw blood too.

They did go to medical school and those doctors can draw blood. And if they see the value of the test, they do it themselves. So we'll continue to add more mobile phlebotomy. There's really no national company to contract with, so it's almost on a state-by-state or even the zip code-by-zip code level.

But when necessary, we have no problem doing that, if it enables the proper utility to get the blood to us. We also have two capillary tests, just to remind everybody, and those tests are at-home tests. So you can test your methotrexate, the most widely used drug in rheumatology today. It's usually used for RA.

Or you can measure your HCQ, your hydroxychloroquine with their touch tests. These are capillary tests that patients can do at home. But for our big test, for AVISE CTD, we will do whatever we can to enable the proper phlebotomy for those patients..

Great. Last one from me is on Humana and the deal that you struck for the in-network. Can you give us some idea about where the pricing came? And obviously, you won't be exactly but relative to your average test now -- average reimbursement now and I think it was the $711 that you guys talked about the new dossier.

Can give us some idea about kind of the range where this fell in and it's, I’m assuming this will be nicely accretive to your ASPs?.

Yeah, we're really excited about it because obviously, this is how you get a start, right? So we did the dossier, we got the demand and now you start to get in-network and covered through these payers.

So we're really excited about TRICARE and Humana and all the other negotiations that are ongoing, because that dossier really does illustrate the value it has for the patients and the payers, to your point that health care economic study showed that you can actually save money by using our tests upfront.

We're not revealing each contract -- contract specific on the ASP. But I'll let you know what this does do is, it opens up our test to a lot more patients. And that's the key too. So we're excited about this, Brian. We think it's a contract. It’s the first of many to come.

And we're excited to see where it leads, but the rest of this year, we’ll continue to drive more contracts. And definitely march towards that higher ASP. That is the goal with these contracts. That's why we do those going forward.

When you start these, like the first one we have, we're also looking at increasing the utility of the brand beyond just a few patients, but enabling to be used on many, many more patients within the system..

Thank you..

Thanks, Brian..

Thank you. [Operator Instructions] Our next question comes from a line of Kyle Mikson with Cantor Fitzgerald. Please proceed with your question..

Hey guys, thanks for taking the question.

So now you talk about patient flow and the backlog of your practices, on their impact but could you just talk about some of the current trends in those regions or markets that are experiencing surges in COVID infections right now like Texas, Arizona, Florida? I know you have a soft report in those areas, so just curious if you could provide any color there? Thanks..

Sure. Thanks, Kyle. Good question. So we saw Florida do extremely well, early on, then they went back and shut down. And what's interesting here is because we are a CLIA lab. I know today how many orders we got yesterday. So I know which cities are open and close. So we saw Florida come back roaring, and then slowed down.

Same thing happened actually in a lot of the zip codes in Georgia, Texas as well as Arizona. Those are strongholds for us and that definitely affects us. What's interesting though is, we've been doing a lot of telehealth and telemarketing with those doctors there and they are unwavering. So we know when those patients return.

Those doctors because our adopters, as you can tell over 90% stickiness, they will come back to using our test. And again, I want to remind everybody that our test, AVISE CTD is not only the best lupus test but it has all the other markers. So it's a very convenient test for when this bolus comes back.

They can't do -- well they can but it's going to be difficult for them to do -- to go back to serial testing, when you have a waiting room full of patients and a whole bunch more waiting to get in. So the convenience of one blood draw that can do it all, I think is going to play in real well as this bolus of patients come back.

As far as the trends per state, we monitor it constantly. It does appear to be -- in Texas, it appears be coming back. Florida it’s a little flat, Georgia is coming back nicely and Arizona, partially because it's July in Arizona. We're seeing that slowdown as the snowbirds go.

Now, we’ll say this with the Sonora Quest agreement we have in Arizona, we do have high expectations for Arizona coming out into the fall when the snowbirds come back to Arizona.

Anything else Kyle?.

No, I mean, that's pretty helpful. It's actually great color.

But I was curious also about payer mix and how that kind of trended throughout the quarter as well as how it's going to look in July also? And maybe what you're expecting in the second half of the year, as well just given, you know, elevated unemployment rates and, you know, etc.?.

Yeah, a good question. So we have a lot of programs if patients call in. We have a lot of programs to enable them if they can afford the product and try to get them to do -- get on a payment plan and so forth. So we have mechanisms there to help those patients as their COBRA ends, actually, which is coming up soon for a lot of patients.

The payer mix hasn't really changed. We get paid by everybody because we do CPT code stack if we're not covered in-network. So we do get paid. We -- as we march forward and get more of the contracts, it goes back to the earlier question. That's how we're going to drive our ASP going forward. But the payer mix has been consistent.

And we don't see any reason why it wouldn't be for the remaining part of this year..

Okay. And then on the ASP, I know you touched on it earlier.

But I think in TRICARE, it’s kind of phased reimbursement on Medicare rates and so I'm just wondering if you think there's going to be a material impact on ASP, just due to this new TRICARE coverage? And then also on the TRICARE agreement, yeah, very encouraging, but because given that, you know, Humana is the contractor for TRICARE East, is that going to kind of help your relationship with Humana in terms of expanding coverage to the rest of the Humana’s book of business as well?.

Well, that's obviously the desire. We do have meetings with Humana set up and we're continuing to schedule more. We have meetings with TRICARE West, and their payer as well, their contractor as well. So, all those -- all those payers, we are driving forward to meet them.

We think this is such an important test in an area that has such a great unmet need. I do want everybody to recall that this is potentially a deadly disease or could lead to lupus nephritis removal of a kidney.

And if you can treat these patients early because you diagnose them correctly early, you can actually save them a lot of pain and heartache and extend their life to a normal range. So it's really important to get there and the fact that the dossier is done, and it's now that the demand is up to a point.

As we have these contracts and as we have these negotiations, we fully expect coverage in in-network and most of the payers going forward. Getting back to your question as far as the ASP, it should increase as we get these contracts. The first few are always the most difficult.

But as you get to that tipping point, and you have momentum, actually, it gives us a lot more confidence in being able to negotiate a higher ASP as it gets going. You have to get it started and get the momentum going.

So some of the early contracts may not be at the highest level that we desire but going forward, as we get each one it becomes, again, we get a little bit more confidence and as we negotiate these..

Okay, thanks. That's interesting. And then I just -- I want to squeeze one more in here about the pipeline.

So have you begun planning for your fibromyalgia dossier yet? And then just remind us of the timelines in terms of the fibro tests and when we could expect some revenue contribution from that? As well just recognizing that it’s probably few years out, but I'm just curious..

Yeah, this is really exciting for us. The fibro is a very, very difficult disorder to diagnose. It also often appears clinically like lupus, which is really important to understand. These patients end up in a rheumatology office and they present like a lupus patient. I got rash, I got a headache, I got tired, fatigued, I got brain fog.

And clinically, the doctor has to differentiate which is a potentially chronic disease, or was potentially deadly disease. And that's a big differentiation. One takes steroids, lupus, one does not take steroids, it'd hurt the patient. So understanding the difference between those two at the community rheumatologist level is really critical.

The timelines, we're pushing this fast as possible, but science takes time. And we do quality science here. The Ohio State collaboration is terrific. They got a lot of really smart people. We have an incredible amount of smart people here with our CSO and CMO.

So it's going to take time, we'll try to speed it up as much as possible, but not at the risk of not doing the right studies for the dossier. On appointments dossier here too is, as we talked to payers, they realize that these fibro patients do eat up a lot of economics in an office.

They hang around a lot, a doctor shop, because they know something's wrong with them, and they can't get a definitive diagnosis. So we think we're going to have a willing participant to make sure we differentiate fibro from lupus going forward. So this is a really, really important project for us.

We'll step on the gas as much as possible as long as we don't risk the quality of the science..

Okay and very helpful. Thank you so much, and I'll leave the rest for a follow up. Congrats again..

Great. Thank you, Kyle, I appreciate it..

Thank you. [Operator Instructions] Our next question comes from line of Mark Massaro with BTIG. Please proceed with your question..

Hey guys, thanks for taking my questions. You know, congratulations on recognizing the revenue for SIMPONI. I know historically your baseline; I believe was at 29,000 units per quarter. Ron, I think you talked about some metric about 5% above a particular baseline.

I guess, was the baseline lowered in the quarter? And if it wasn't, can you just speak to what drove the success in Q2?.

Yeah, I'll take the last one first. What drove the success, I think was the fact that the quality of the representatives we have, is outstanding and we have the methotrexate test. So methotrexate is used along with anti-TNFs. So it's actually in their package insert.

So being able to discuss the methotrexate level along with the anti-TNF, I think engages the doctor in a more meaningful subject matter. And I think that has a lot to do with it.

Also, what can't be lost is the fact that if you're an immunocompromised patient, do you really want to go to an infusion center with a bunch of other immunocompromised patients during this COVID period. It seems to me to be a safer alternative, it's the only once-a-month anti-TNF that you can take at home, and I think doctors are realizing that.

The baseline is 26,000 and what we're looking at is 5% above the baseline for Q3 and Q4. We like this product from a financial standpoint, because it's almost 100% gross margin. And we like it from the standpoint it validates the Dx\Rx model. And also, it's a relationship which we think is a very important company, Johnson & Johnson..

That's super helpful. I also wanted to ask sort of a bigger picture pipeline question. You know, recognizing that lupus can certainly cause damage to kidneys and other vital organs.

Where are you guys as you think about developing product or maybe talking to partners about, advancing organ -- whether it's organ transplant or it’s kidney damage?.

Yeah, a really good question Mark. So, the great thing about the complement system and CB-CAPs itself, which is the fragment that cleaves off the C3, C4 and covalently bonds to a cell. The great thing about that is, when it comes to transplants, complement has an active role.

So I can share with you that our scientists are very interested in looking at more of that. We have had ongoing discussions to look at markers to better enable perhaps a stronger lupus nephritis product. So that is an area we're interested in, in a broader way to your point. I can't divulge too much other than say that it's on our radar..

Understood, and then maybe a final question for me. How is your conversation with commercial health plans going relative to your expectations? I know that you had a lot of meetings on the schedule after having submitted the dossier.

But you know, how should we think about commercial health plans potentially coming on in Q3 and Q4 here?.

Yeah, I -- we have a lot of meetings set up. It's a little more difficult with Zoom in that. You know, you have to bring in so many people and coordinate it. But we are continuing to push forward with these meetings. There is a couple things to keep in mind.

One is, there is a recognized problem with trying to diagnose systemic lupus erythematosus correctly and early. And the payers know it, we know it, the patients know it, the doctors know it. It’s well documented. Two is, our dossier is done, and it answers the questions of clinical validity, clinical utility, so we answer those questions.

And from a healthcare economics, we don't really burden the system. So we think we're in a really good position to have these discussions because the payers want to help the patients, we want to help the patients.

And right now, based on the solutions that are out there, we think CB-CAPs offers the best solution to help these patients correctly get diagnosed and treated, so they can lead a more normal life. And at the end of the day as healthcare companies, that's what we're about.

So I'm looking forward to these discussions going forward and having a lot more discussions about how we can help more of these patients..

Last question for me, I know you guys had a pharma royalty kind of roll off. I think it was in January of this year.

When should we see the benefit of that roll off benefit your gross margins?.

Yeah, Mark. That royalty expense came off on January 7. It was paid to Royalty Pharma, and it was 10% on our CB-CAPs. Now, any test done before January 7 but collected after January 7, is still going to have an expense come across. So every quarter, we're going to see that amount decrease. So it's slowly coming off the books.

We do anticipate it to be completely off within 12 months of the January 7 date..

Understood. Thanks, guys for taking my question..

Thank you, Mark..

Thank you. Ladies and gentlemen, this concludes our question-and-answer session. I'll turn the floor back to Mr. Rocca for any final comments..

Right. I just want to thank everybody for their time this morning, early morning. I do appreciate it. We're very, very happy with the way Q2 turned out. We have a mission here to help patients and that's our drive, that's what keeps us focused. And we think we have products that will enable the doctors to assist those patients even better.

So again, thank you for your time. We look forward to discussions in the future. Take care and have a wonderful day..

Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation..