Grace Therapeutics, Inc. (GRCE) Q3 2019 Earnings Report, Transcript and Summary

Good day, ladies and gentlemen, and welcome to the Acasti Pharma Third Quarter 2019 Earnings Conference Call. All lines have been placed on a listen-only mode and the floor will be open for questions and comments following the presentation. [Operator Instructions]. At this time, it is my pleasure to turn the floor over to your host, David Waldman, Investor Relations. Sir, the floor is yours.

Thank you. Good afternoon everyone and welcome to Acasti Pharma’s third quarter conference call. On the call with us this afternoon are Jan D'Alvise, President and CEO; Pierre Lemieux, Chief Operating Officer, Chief Scientific Officer and Co-Founder; Brian Groch, Chief Commercial Officer; and Jean-François Boily, Vice President, Finance. If you have any questions after the call or would like any additional information about the company please contact Crescendo Communications at 212-671-1020. I'd also like to remind everyone that statements on this conference call that are not statements of historical or current fact constitute forward-looking information within the meeting of Canadian Securities Laws and forward-looking statements within the meaning of U.S. Federal Securities Laws. Such forward-looking statements involve known and unknown risks, uncertainties and other unknown factors that could cause the actual results of Acasti to be materially different from historical results or from any future results expressed or implied by such forward-looking statements. In addition to statements which explicitly describe such risks and uncertainties, readers are urged to consider statements labeled with the terms believes, belief, expects, intend, anticipate, potential, should, may, will, plans, continue, or other similar expressions to be uncertain and forward-looking. Listeners are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date of this conference call. Forward-looking statements in this conference call include, but are not limited to, information or statements about Acasti's strategy, future operations, prospects and the plans of management; Acasti's ability to conduct all required clinical and non-clinical trials for CaPre, including the timing and results of those trials; the timing and the outcome of licensing negotiations; CaPre's potential to become the best-in-class cardiovascular drug for treating hypertriglyceridemia; Acasti's ability to commercially launch CaPre and Acasti's ability to fund its continued operations. The forward-looking statements contained in this conference call are expressly qualified in their entirety by this cautionary statement. The cautionary note regarding forward-looking statement information section contained in Acasti's latest annual report on Form-20F and most recent management discussion and analysis which are available on SEDAR at www.sedar.com, on EDGAR at www.sec.gov/edgar/shtml and on the Investor section of Acasti’s Web site at www.acastipharma.com. All forward-looking statements in this conference call are made as of the date of this conference call. Acasti does not undertake to update any such forward-looking statements whether as a result of new information, future events or otherwise, except as required by law. The forward-looking statements contained herein are also subject generally to assumptions and risks and uncertainties that are described from time-to-time in Acasti’s public securities filings with the Securities and Exchange Commission and the Canadian Securities Commission, including Acasti’s latest annual report on Form 20F and most recent MD&A. I’d now like to turn the call over to Jan D'Alvise. Please go ahead, Jan. Jan D’Alvise: Thank you, David, and good afternoon, everyone, and thank you very much for joining us today on our conference call. I’m really pleased to report that we’ve continued to make good progress in fiscal Q3 on all fronts; clinically, operationally, financially which now puts us in a very strong position going into 2019. In the beginning of the quarter, we completed two concurrent capital raises in the United States and Canada of over 52 million Canadian which equates to approximately 40 million U.S. Based on our current projections, we’re now fully funded beyond the completion of our TRILOGY Phase 3 studies. This capital will also enable us to initiate work on our new drug applications that we plan to submit to the FDA in the second half of 2020 assuming our TRILOGY Phase 3 trials are successful. We also initiated several important prelaunch activities in order to keep our planned U.S. commercial launch on schedule. So let me briefly update you on the progress of our Phase 3 program. I’m very pleased to report that our two TRILOGY Phase 3 studies remain on schedule. Our first study designated as TRILOGY 1 is being conducted exclusively in the U.S. while our TRILOGY 2 study is being conducted in the U.S., Canada and Mexico. Both studies will have approximately 250 patients each when fully randomized for a total of about 500 patients combined for the TRILOGY program. Based on current trends, we project that TRILOGY 1 will actually complete as much as one to two months ahead of TRILOGY 2. Consequently, we expect to report top line results independently as we receive them for each study. As we announced in December, we had essentially completed enrollment and as of February 12, over 74% of patients had been randomized at more than a 150 clinical sites across the U.S., Canada and Mexico. This compares to about 50% of patients randomized at the announcement of our fiscal Q2 results in November. So you can see we’ve made nice progress. Furthermore, about 24% of patients who had previously been randomized have already finished the full six months of their study regime. As a result, we project that we remain on schedule to report top line results by the end of this year. As a reminder, the primary endpoint of these studies is to determine the efficacy of CapRe at 4 grams per day and lowering triglycerides after 12 weeks. In patients with severe hypertriglyceridemia, and again as a reminder these are patients with starting triglyceride levels above 500 milligrams per deciliter. We’re comparing the results of CapRe with a placebo group and will confirm persistence of triglyceride lowering effect as well as the safety of CapRe over the full six months period. The study was designed to provide at least 90% statistical power to detect a difference of at least a 20% decrease in triglycerides from baseline between CapRe and placebo. In addition, the Phase 3 studies include numerous secondary and exploratory endpoints which are designed to access the effective CapRe on the broader lipid profile and uncertain metabolic, inflammatory and cardiovascular disease risk markers. We want to further explore CapRe’s effect on this broader list of biomarkers because in both of our Phase 2 studies, CapRe achieved not only a statistically significant reduction of triglycerides and non-HDL cholesterol levels in patients across the dyslipidemia spectrum. This means patients with both mild to moderate hypertriglyceridemia to patients with severe hypertriglyceridemia. But also, unlike other omega-3 therapeutic products, CapRe showed the potential to actually reduce LDL or bad cholesterol as well as the potential to increase HDL or good cholesterol, especially at the therapeutic dose of 4 grams per day. Finally, CapRe also showed a positive and statistically significant reduction of hemoglobin A1c which is an important biomarker of glucose control. This was actually a bit surprising as it had been shown in previous studies that the fish oil derived omega-3s actually tend to have a deleterious effect on glucose metabolism by increasing hemoglobin A1c. So unlike other omega-3 therapeutic products, the combination of potentially reducing triglycerides, LDL and hemoglobin A1c as well as the potential to increase HDL as what we referred to as our trifecta effect which we believe is due to the omega-3 phospholipids composition that is totally unique to CapRe. If we can confirm this trifecta effect in our Phase 3 program, we believe CapRe has the potential to become the best-in-class. And I want to further emphasize that all of our studies to-date, CapRe has shown no negative side effects or any safety concerns. Now another benefit of the phospholipids in CapRe is that they facilitate rapid absorption. Unlike VASCEPA and LOVAZA, CapRe does not require a fatty meal to improve bioavailability or absorption. This was well demonstrated in our earlier PK bridging study amongst subjects in the fasting state where CapRe showed significantly better bioavailability and absorption than LOVAZA as measured by blood levels of EPA and DHA. This data has been summarized and will soon be presented in a manuscript that has been accepted for publication in the Journal of Clinical Therapeutics. We plan to put out a press release as soon as the publication is available. Moreover, we know from both of our Phase 1 PK studies that the bioavailability of CapRe is not significantly reduced when taken with a low fat meal versus a high fat meal. Hence, we can say with confidence that CapRe has no food effect. Again, we believe this is due to the fact that CapRe’s proprietary formulation which combines both EPA and DHA and is delivered as a mixture of free fatty acids and bound to phospholipids makes them more readily absorbed by the body. As a result, we believe that patients taking CapRe can remain on their physician’s recommended low fat diet and still get full efficacy benefit. So based on this, we believe CapRe addresses a critical market need for an effective safe and well absorbing omega-3 therapeutic that can make a positive impact on the major and relevant blood lipids associated with cardiovascular disease risk. This was reinforced in our latest market research study where physicians interviewed said that they would switch approximately 68% of their patients to CapRe with triglycerides in the 200 to 500 milligram per deciliter range and 82% of their severe hypertriglyceridemia patients in two years of launch. Okay. So now switching gears, let me update you on our patent status. Last month we were very pleased to announce that a Certificate for a European Patent was issued by the European Patent Office and is valid until 2030. This patent is in addition to more than 20 patents allowed in major countries around the rest of the world, including the U.S. This patent was validated in Belgium, Switzerland, Germany, Denmark, Spain, Finland, France, the UK, Italy, Netherlands, Norway, Portugal and Sweden. This is a really important milestone for Acasti as the allowance of a composition-of-matter patent in a major jurisdiction such as Europe further strengthens and expands the company’s intellectual property portfolio. This patent contains broad claims and provides us with uniform protection across all major markets in Europe in addition to the U.S. and major countries in Asia. Furthermore, it strengthens the company’s strategic position which could support valuable commercial opportunities in the future for the company. We’ve also filed a number of provisional patents related to our unique manufacturing process for CapRe which could also significantly expand and extend the strength of our patent portfolio assuming they’re eventually granted by the U.S. Patent Office and patent offices in other jurisdictions around the world. Before I close my prepared remarks, I’d like to take a moment to address some of the frequently asked questions we’ve received recently from investors. One of the most common questions we get is to provide an update on the commercialization plans for CapRe. Our plan is to build the commercial organization and market directly in the U.S. and to partner in other major markets around the world. You may recall that we hired Brian Groch as our Chief Commercial Officer last summer to develop our U.S. commercialization strategy and plans and to lead our partnering discussions and activities in major markets around the world. Brian has extensive drug commercialization and business development experience with both large and small pharma. Outside of the U.S., our goal is to chose the very best possible strategic partner for a given country or region in order to maximize CapRe’s commercial potential and long-term value for our shareholders. These ex-U.S. partnering discussions are ongoing and as we continue to carefully weigh our strategic options in each geographic region. Given that we are so close to the completion of our TRILOGY Phase 3 program, our primary focus right now is to identify the best potential strategic partners in each major country or region, educate them in advance of data and build on our relationships. At this point, we’re not pushing to get deals done prior to our Phase 3 data since we believe that positive results will provide a major value inflection point for the company and will be a catalyst for securing deals with the best possible partners. Also, some investors have been asking if the krill oil dietary supplements that are sold over the counter are the same or similar to CapRe. I’d like to emphasize that there are a number of important differentiators including and most importantly our unique and patented formulation which we believe is responsible for the drug’s efficacy as evidenced in our Phase 2 studies. In addition, I’d like to point out the following. First, any dietary supplement that’s sold over the counter has not been through a rigorous clinical trial and regulatory process resulting in FDA approval to market. Second, dietary supplements typically contain high levels of triglycerides and of course this is the very thing that patients with hypertriglyceridemia are trying to reduce as well as other undesirable impurities. It takes a lot of processing and a lot of know-how to remove these impurities and to further concentrate the omega-3s and phospholipids as we do with CapRe. Third, omega-3 dietary supplements include those that are krill oil based and they all contain significantly lower levels of omega-3s and phospholipids than CapRe. Therefore, they are not likely to achieve the necessary blood levels of omega-3s and phospholipids needed to demonstrate clinical efficacy. Fourth, dietary supplements are not regulated for safety, efficacy, content, quality and consistency by the same standards as pharmaceutical agents and therefore they cannot make drug claims such as for the treatment of hypertriglyceridemia or reduction of cardiovascular risk. And lastly, dietary supplements are not reimbursable by insurance and consequently the cost per equivalent dose can actually be significantly higher than the co-pay for a covered prescription omega-3. So for all of these reasons, we really don’t see CapRe competing with over the counter omega-3s including krill oil based omega-3s. Now we’ve also had questions about the availability of krill as a raw material source for CapRe. Krill is very abundant and it’s considered to be the largest biomass in the world. It’s currently estimated to be about 379 million tons just in the Southern Ocean around Antarctica, which is currently the only place where it is harvested. Catch limits are carefully managed under the Convention for the Conservation of Antarctic Marine Living Resources otherwise known as CCAMLR and last year the harvest was only about 3.7 million tons which equates to only about 1% of the total Antarctic biomass. Therefore, we can confidently say that krill is very sustainably harvested in a way that does not impact the overall ecosystem. We’ve also seen articles raising the specific concern about China’s harvesting of krill but we believe these concerns are significantly overstated. For example, in 2014, China harvested only 1.4% of the overall total catch limits. Importantly for us, there are numerous high quality low cost suppliers of raw krill oil that we have validated as meeting our raw material specifications for making CapRe. These suppliers are located around the world and have abundant supply, so there’s plenty of diversity in the supply chain and we believe that our supply of raw krill is secure. So on that note, I’ll now turn it over to Jean-François who will discuss the financials in more detail. Jean-François? Jean-François Boily: Yes. Thank you, Jan. So turning to our results for the quarter, R&D expenses were 9.6 million Canadian for the quarter ended December 31, 2018. That was up from 4.3 million in the quarter ended December 31, 2017. The 5.3 million increase was primarily attributable to a 5.8 million increase in clinical research contracts offset mainly by a decrease in other professional fees. That increased contract research expense primarily resulted from the planned increased patient enrollment and randomization activities combined with the contract manufacturing production activities to support the TRILOGY Phase 3 clinical program. General and administrative expenses were 1.2 million for the quarter ended December 31, 2018 compared to 0.9 million for the quarter ended December 31, 2017. The net increase was mainly attributable to the expansion of the accounting and administrative staff and for business development and U.S. commercial launch activities. Loss from operating activities for the third quarter ended December 31, 2018 was 10.7 million compared to a loss from operating activities of 5.2 million for the quarter ended December 31, 2017. The approximate 5.5 million increase was related to the planned research and development expenses for the TRILOGY Phase 3 program. Now the net loss for the third quarter ended December 31, 2018 was 4.6 million or $0.07 per share compared to a net loss of 6.1 million or $0.40 per share for the quarter ended December 31, 2017. The lower net loss of 1.5 million was primarily due to a 7 million increase in financial income due mostly to a gain related to the reduction in value of the warrant derivative liability which was offset primarily by a 5.5 million increase in planned R&D expenses. On the balance sheet now; cash and cash equivalents of 28.9 million and marketable securities of 16.7 million totaled 45.6 million as of December 31, 2018 which increased by 37.4 million compared to the quarter ended December 31, 2017. The increase was generated from gross proceeds from the May 2018 underwritten public offering in Canada and by the two subsequent October 2018 public offerings with the full exercise of the overallotment options offset by cash used in operating activities. As Jan mentioned earlier, we were able to successfully raise capital in both the United States and Canada in October which resulted in gross proceeds of over 52 million Canadian which equates to approximately 40 million U.S. Hence, we believe that the net proceeds from these public offerings together with existing cash will fully fund our operation beyond top line results of our TRILOGY Phase 3 clinical trials. We reached our peak spend on the TRILOGY program for the past fiscal third quarter. Looking ahead, we expect clinical expenses will now begin to steadily decline with the study winding down by the end of 2019. We also recently put in place an at-the-market facility also known as an ATM facility, which gives us another flexible tool to use with our currently active shelf prospectus. For those of you unfamiliar with ATM in the financing world, it is an extremely cost effective way to sell new shares from treasury into the market. If or when we would ever decide to use the ATM, our shares would be sold at the prevailing market price at the time of the sale without discounts or warrants and the banker fees are significantly lower than what you would typically see with a traditional registered public offering. As I mentioned earlier, we believe the net proceeds from our recent public offerings again together with existing cash will fully fund our operation beyond top line results of our TRILOGY Phase 3 clinical trials. And let me further emphasize, there are no short-term plans to use the ATM facility. However, following the advice of counsel and our advisors, the Board felt it would be prudent to put an ATM in place as a potential capital raising tool solely to give us as much flexibility as possible down the road should an interesting opportunity present itself and as we continue to execute on our business plans with commercial launch of CapRe. We also had a number of warrants outstanding from our earlier financings, most of which have strike prices between $1.05 and $2.15 expiring at different times over the next five years. Should we hit our upcoming milestones, there’s a reasonable likelihood many of these holders will exercise their warrant which again could bring considerable additional capital into the company. Now, operator, I will now open the call to questions.

Thank you. The floor is now open for questions. [Operator Instructions]. Our first question comes from Andre Uddin with Mackie Research. Please state your questions.

Hi. Good afternoon. This is Toby Ma on behalf of Andre Uddin. Jan, can you please update us on the Asian licensing deal with a Chinese pharma which you discussed in November 2017? Is everybody still at the table? Jan D’Alvise: Yes. Hi, Toby. Thanks for your questions. In terms of China specifically, we can’t comment specifically on the status of discussions. But given the size of the market and the strong interest, I want to emphasize that it’s important to us that we get the very best partner for this important market. So we’re now in discussions with multiple interested parties in China as well as in other countries around the world. It’s important to keep in mind that the scope of these discussions are very large and complex and they take time, and I would say particularly in China. So bottom line, we have a lot of traction, a lot of interest, discussions are ongoing. But beyond that, I really can’t provide any more specifics.

Okay. Thank you very much. That’s all. Jan D’Alvise: Sure.

Okay. And our next question comes from Chen Lin with Lin Asset.

Hi, Jan. Thank you for taking my questions. I’m just wondering we had discussions about the two Phase 3 trials. Is it possible to give us some preliminary update before the final result is readout likely in fourth quarter? Jan D’Alvise: Yes, it’s a great question. And the answer is no. We would have a statistical penalty if we were to do that. And these studies are only of six months duration. So it makes sense to complete this study and then we’ll get top line results as soon as possible. So we expect again we’ll have top line results before the end of this year.

For both trials, right? Jan D’Alvise: For both trials, yes.

All right. Thank you. And I appreciate you take a step back and deal with outside like China and the other major markets. It looks like you want to wait until the Phase 3 results so you get the max value for the product or the maximum down payment. Jan D’Alvise: Yes, that’s exactly right, Chen. We are so close to the completion of our Phase 3 program and so really the focus right now is getting all the right players to the table and engaged in discussion with us. And we’re very pleased with the quality of the companies that we’re speaking to. And we really believe that the results of our Phase 3 will provide that major value inflection point and enable us to get the best possible deal with the best possible partner.

Thank you, Jan. Finally, Amarin has a REDUCE-IT trial. So do you envision in the future once you get approval, Acasti with a partner or [indiscernible] might plan to do something similar to their trial? Jan D’Alvise: Yes, that’s a good question. And we’ve obviously had a lot of discussion about this internally. We may ultimately need to conduct an outcome trial, but we believe if our Phase 3 results can replicate our trifecta effect as seen in Phase 2 that based on our discussions with key opinion leaders and high volume prescribers that CapRe could gain significant market traction even without an outcome trial and become in fact the preferred omega-3 for patients particularly in the severe hypertriglyceridemia category. And I think the other factor here is we want to wait to see the outcome of strength. That’s of course the big cardiovascular outcome trial that is being sponsored by AstraZeneca. The importance of that trial is that it uses EPANOVA which is omega-3 fish oil that incorporates EPA and DHA. So it will be very important to see the outcome of that trial and I think those results will give us insight into whether we would want to conduct an outcome trial and how we might design it. So if and when we decide to conduct an outcome trial, I can also say that we would expect to enroll clinical sites and patients from around the world and potentially in collaboration with one or more strategic partners.

Thank you, Jan. You have a lot of questions answered at the very beginning and those are very good questions. I’d just like to add maybe one comment on your profit margin in case some people may not know some fish oil or you already [ph] go genetic, but how would you maintain your profit margin going forward? Jan D’Alvise: Yes, again, cost is key and I think the thing we have in favor really is that the cost of raw krill oil is less expensive actually than raw fish oil and it’s in very abundant supply as I mentioned earlier. We expect our target cost of goods to be in the same ballpark as VASCEPA and LOVAZA. And we hope that potentially with volume we can get it below that in the future.

Thank you, Jan. Thank you for taking my questions. Jan D’Alvise: You bet.

[Operator Instructions]. Okay. Our next question comes from Bob Johnson with [indiscernible]. Please state your questions.

Hello, Jan. Thanks for having this series of sessions with interested people. My question relates to your comment about a decision to go it alone in the U.S. to build and to market. Could you just flesh out a little bit the rationale of the potential expense of building up the sales force in comparison to maybe working in relationship with a larger entity already in the U.S.? Jan D’Alvise: Yes, I’m going to turn that question over to Brian. Brian, do you want to fill that?

Sure, absolutely. I appreciate the question. As we evaluate the market opportunities, certainly we think that based on our Phase 2 data, CapRe offers a tremendous value and certainly as our Phase 3 data comes forward, that should look very, very positive. So we’re really excited about the prospect. When you consider commercializing the product in the U.S., obviously you need to be preparing to commercialize the product ourselves, but we are certainly continuing dialogue across multiple partners, as Jan said. So we’re looking at all options and keeping all options open at this point.

Okay, thanks for the clarification. I inferred from the way you were speaking that it was going to be just your own, but I’m glad to hear that you’re considering others. Thanks.

Yes.

[Operator Instructions]. Okay. We have a question that came in from David Wallace [ph] with Acasti. Please state your questions.

Thanks for your presentation. Could you tell me how the potential profile of Chinese consumers compares to that in the United States? And what is the range of efficacy for statins now and how does that compare to what you’re looking for in your Phase 3 trial in terms of your percentage of response in 12 weeks? Jan D’Alvise: Okay, great. Let me give the first part of that question over to Brian about the market profile in China versus the U.S. and then maybe Pierre can take the second part of the question in terms of performance of CapRe versus statins. Brian, do you want to --?

Sure. Yes, absolutely. So the Chinese market represents a very big opportunity when you consider the prevalence of patients with hypertriglyceridemia. Approximately 220 million have prevalence of disease in China, so it represents a very, very big opportunity. And certainly as the Chinese market continues to evolve, companies are looking for more innovative therapeutics and we would fall into that area. So it’s a very exciting opportunity and we continue to have very good dialogue with potential companies over there, as Jan mentioned. Pierre, you want to get the second part of the question?

Yes, in terms of comparing CapRe with statins, so first of all our product is mainly for the management of triglycerides. So we’re expecting in our Phase 3 trials to show minimally at 20% reduction of triglycerides. And on the LDL side if we want to compare with statins, so what we observed so far in our Phase 2 trial is either a neutral effect, so having no raise of LDL like some omega-3s have shown in the past. But even we can expect a reduction probably around 5% to 6% on the LDL reduction. So that would be what we expect from the LDL front. So CapRe’s not as statin per se, so it’s not going to reduce LDL by 20%, 25%. But if we can combine and also having impact on HDL that’s going to be what we call the trifecta effect. So this is how we are foreseeing the potential of CapRe. And on top of all this, like Jan mentioned, so what we’ve observed in some animal studies and in our Phase 2 trials that we also have the [indiscernible] to show that have a benefit on A1c which is a long-term marker of diabetes. And we all know, statins they are not so great – not so benefitting diabetic patients. Jan D’Alvise: Just to add on to that, it’s very common that these patients with hypertriglyceridemia also have LDL issues. So it’s common to have a large percentage, 30%, 40% of these patients who are on omega-3s may also be on a statin. So it’s very complementary. And furthermore to Pierre’s point about diabetes, often these patients have diabetes as well. So it’s really positive that CapRe can potentially move all of these biomarkers of cardiovascular and cardiometabolic risk in the right direction. Any other questions?

[Operator Instructions]. And just to clarify, David Wallace is not an Acasti employee. Okay. Our next question comes from [indiscernible]. Please state your questions.

I think you said Apti [ph]. You all put out a – I came in just a few minutes late to the conference call, so I caught part of the initial conversation. And I apologize if I ask you to repeat something. But there was a flood of information that came out today, three of four documents and it was – I just didn’t have enough time to read all of it. But one of the things that came up as I was perusing through it was the fact that the tax consequences if Acasti and I can’t remember the term, but basically becomes a foreign – some type of foreign entity for U.S. investors and how that – if Acasti somehow gets saddled with becoming a foreign entity as far as U.S. investors that our investment could – it could very well affect our investment tax wise. I see that you had a lot of shares and you put up in a prospectus to get us through the Phase 3 if needed and to get ready for U.S. marketing if needed. Can you describe what I might have been missing with this foreign investment potential for U.S. investors? It sounded ominous? Jan D’Alvise: Okay. I’m not an expert in this I’ll just say that upfront, but we are a foreign private issuer. Acasti is a Canadian company and has foreign private issuer status in the United States. As far as tax consequences, I can’t really speak to that. Jean-François, I don’t know if you can. But I would just advice to speak with your tax advisor. But just to say that our foreign private issuer status has not changed for – we’ve been a foreign private issuer since we went public. I think you were also referring to the ATM and let me just clarify a few things there because I think you got a few facts maybe not quite correct. As we mentioned in our prepared remarks, we currently have a very solid balance sheet and we have absolutely no plans to use the ATM in the future. As mentioned, we have cash now to fully fund our Phase 3 program and get us through to top line results at the end of this year. The ATM is really an opportunistic tool. We have an existing shelf filing in the United States. I’ll just remind everyone that we filed that last March and it allowed us to raise up to $50 million over a three-year period. Now we did use it in October to raise $19 million in the overnight offering in the U.S. So that has left a remainder of 30 million on that shelf that can be used over the next two years. So the ATM think about it just sitting on top of the shelf and it gives us another way to access that capital in the future if and when we need it, okay. And it allows us – so it’s another tool in our toolbox to access the market in a very efficient and cost effective manner. And I’ll just add a couple more points that ATMs are very common in the United States particularly with U.S. healthcare companies because of their flexibility and it really gives the company complete control of if and when we use the ATM. And it also does not preclude us from any other approaches to raising capital in the future. So it just really is a tool to give us maximum flexibility if and when needed to raise money at prevailing market price and without the discounts or warrants that otherwise we might face if we had to go out and do a full blown public offering. Okay, so hopefully that clarifies it. Jean-François, I don’t know if you have anything to add on the foreign private issuer status? Jean-François Boily: Yes, I will. There’s two notions that the gentleman raised and yes to the first point that you divulged. We are a foreign private issuer for SEC purposes. The other notion is and that was filed with the prospectus for the ATM is the notion of foreign passive income corporation and that’s what I think the gentleman --

Yes. Jean-François Boily: That’s it, okay. So for IRS purposes if you have no revenues but just cash, the IRS could label you as a foreign private issuer – foreign passive income corporation and hence it could be difficult for shareholders to dispose of its shares in the most advantageous legal way – in fiscal way I should say. The notion here is are you parking dollars for generating passive income and is interest income your only source of revenues? So technically we will not park cash. We will use that cash. And as we deplete cash, the interest income that could be derived from such cash will no longer be considered passive income. So this is a tax avoidance status that the IRS is agitating so that we’re not parking cash for passive income purposes only. So this is a disclosure that must be set in the prospectus but we are not at risk of any of that in the shortcoming.

Thank you very much. Like I said, you all put out a lot of documents today and that caught my attention right away and I appreciate you elaborating on that. I understand about the ATS and the need to have it available should the company need it in the future. On one of the documents they’re talking about risk factors and so I understand the complete risk factor with pharmaceutical companies. While I understand we’ve got – or the company has 43 million or thereabouts plus the access to this other 30 million in I think you called it ETFs -- Jean-François Boily: ATM.

Okay. One of the things that caught my attention specifically was on the forward-looking statements. They said something that we have significant and I’m going to paraphrase this, significant additional future capital needs. And it further stated meeting ongoing capital requirements for current operations may make you commercially unacceptable in the long run and there’s a whole list of reasons why. I understand 43 million takes the company through Phase 3. The 30 million in ETFs for whatever reason the Board needs moving forward. Are there any additional – I remember reading that significant additional future capital needs and the fact that you may not be able to raise additional financing required to finance continued research and development, that really caught my attention. Is that statement that you have significant additional future capital needs that may not be able to be raised for future research and development, is that outside of the 30 million plus you have in cash and the additional 30 million in ETFs? Jan D’Alvise: So just to clarify, we had 45 million at the end of Q3 in cash and that’s enough cash to get us through our Phase 3 program and beyond. We’ll have additional need to raise capital beyond this year. So I would say out into next year once our Phase 3 results are reported and assuming they’re positive, it’s going to be a full speed ahead to commercialization and launch. And so more capital will be needed to prepare the company for launching the product in the United States and in other countries around the world, and how much at this point I can’t comment. But I think that where you’re maybe confused is we already have this shelf in place. So we already a shelf mechanism to raise the remainder, the $30 million that’s left on the shelf. All the ATM does is it gives us another way to use that shelf. So really nothing has changed other than this ATM is another mechanism whereby we can use the existing shelf in the future to raise money. And we’ve said over and over that we really don’t plan to use this shelf any time soon. It really will be used if needed in the future for our needs beyond Phase 3.

[Operator Instructions]. Okay. I would like to turn the call back over to management. Jan D’Alvise: Okay. Thank you. To wrap up, let me just say a few things here. We’re progressing again on all fronts. We’re very encouraged by this clinical data we’ve reported to-date and the progress we’re making in our TRILOGY Phase 3 program which again remains on schedule. We see enormous potential to expand the addressable market for CapRe based on the encouraging results of REDUCE-IT as discussed last quarter. And we’re currently well funded with a solid balance sheet and relatively clean capital structure. As a result, we’re extremely confident in the long-term outlook for Acasti. So let me just thank you all again for joining us today and we look forward to providing you with further updates in the near future. Thanks.

Thank you. This concludes today’s conference call. We thank you for your participation. You may disconnect your lines at this time and have a great day.