OPKO Health, Inc. (OPK) Q1 2020 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by. And welcome to the OPKO Business Update and First Quarter Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Thank you. I’ll now turn the conference over to I would now like to turn the conference over to Yvonne Briggs. You may begin.

Thank you, operator. Good afternoon. This is Yvonne Briggs with LHA. Thank you all for joining today’s call to discuss OPKO Health’s financial results for the first quarter of 2020. I’d like to remind you that any statements made during this call by management other than statements of historical facts will be considered forward-looking and as such will be subject to risks and uncertainties that could materially affect the Company’s expected results. Those forward-looking statements include without limitation, the various risks described in the Company’s SEC filings including the Annual Report on Form 10-K for the year ended December 31, 2019 and in subsequently filed SEC reports. Importantly, this conference call contains time-sensitive information that is accurate only as of the date of the live broadcast, May 6, 2020. Except as required by law, OPKO undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this call. Before we begin, let me review the format for today’s call. Dr. Phillip Frost, Chairman and Chief Executive Officer will open the call; then, Steve Rubin, OPKO’s Executive Vice President will provide a business update and pipeline review; and then Dr. Cohen will discuss BioReference Laboratories. After that, Adam Logal OPKO’s CFO will review the Company’s first quarter financial results. And then, we’ll open up the call to questions. Now, let me turn the call over to Dr. Frost.

Good afternoon, and thank you for joining the call today. Much has changed since our last conference call. These are extraordinary times in the public health challenges posed by the COVID-19 pandemic have impacted almost every aspect of our life since the end of February, BioReference Laboratories has been at the forefront of testing for this novel Coronavirus and we remain in constant contact with government officials at all levels. I am really proud of our management team and our employees who continue to work around the clock to bring various testing platforms online to achieve our targeted capacity levels to meet increasing demand and to play a critically important role in public health. And as we have announced, BioReference has forged partnerships with several states, cities and large healthcare systems to provide molecular testing to some of the hardest hit areas. As of last week we also started offering antibody testings nationwide which may be helpful in understanding who has been exposed to the virus and has some level of immunity. Antibody testing is an important next step as we start to open up the economy and move forward with our personal lives. As you’d expect our base testing business has been impacted. Given the government initiatives to reduce the spread of the virus with social distancing and stay at home orders, there has been a significant reduction in physician office visits and elective medical procedures. Although this impact is continuing into the second quarter, we believe demand for COVID-19 testing provides an offset to this decline in routine testing volume, especially with the pent-up demand for antibody testing. In addition to the great work at BRO, we continue to make progress with our pharmaceutical business. As you know, we reported favorable top-line results for the somatrogon Phase 3 trial in children and growth hormone deficiency, meeting the endpoint of non-inferiority compared to the once-a-week product – our once-a-week product compared to the current standard of daily interactions. We look forward to presenting detailed Phase 3 trial data to the rescheduled Endo Online 2020 this June. Also our sales representatives visits with physicians in their offices were severely limited. RAYALDEE nevertheless continues to make progress in terms of sales, number of prescriptions and number of prescribers. During this past quarter, we announced interim results from two clinical trials underway with RAYALDEE to broaden its indications. I am now going to turn the call over to Steve to go into more detail on our business units. Steve?

Thank you, Phil. And good afternoon, everyone and thank you for joining us today. I hope everyone is staying healthy and safe during these unprecedented times. As Phil mentioned, while we experienced both headwinds and tailwinds relating to COVID-19 during this quarter. We are very pleased with the company’s progress in all of our business units. As discussed on our last call, our global Phase 3 trial evaluated somatrogon dosed once-weekly in three pivotal children with growth hormone deficiency successfully met its primary endpoint of non-inferiority continued to GENOTROPIN injected daily with respect to height velocity after 12 months. Two abstracts as a dataset were accepted for oral presentation at the Endocrine Society’s 2020 Meeting in San Francisco in March, which was subsequently canceled due to the COVID-19 outbreak and rescheduled as a virtual event for June. We are now scheduled for an oral presentation on June 8th to present data from both abstracts, one pertaining to the results of our pivotal Phase 3 study and the other to influence like growth factor or IGF-1 level following administration of Somatrogon, In addition, both abstracts will be published online in the April, May supplemental issue of the Journal of Endocrine Society, which we expect will be available in a week or so. Our commercial partner Pfizer is on track to submit the biologics license application through the FDA in the second half of 2020. In the Europe, we expect Pfizer to submit a marketing authorization application upon completion of the open-label study demonstrating the benefit and compliance with reduced treatment burden which is still expected to complete in the third quarter of 2020. The main study in Japan for pediatric growth hormone deficiency patients was completed in early March 2020 and final top-line data are expected in mid-2020. Turning now to our commercial pharmaceutical business, I would like to focus on RAYALDEE. From a commercial performance perspective, the RAYALDEE numbers for the quarter break down as follows: Total prescriptions of RAYALDEE, as reported by IQVIA increased 79% compared with Q1 2019 and showed continued sequential growth with a 2% increase compared with Q4 of 2019. Sales in the second half of March 2020 were negatively impacted by COVID-19 as patient visits to doctor offices declined significantly and our sales representatives were unable to detail with physicians in their offices. New patient starts decreased by less than 1% in Q1 versus Q4 and since launch, over 18,000 patients have had RAYALDEE prescribed at almost 3,000 physicians. Approximately 280 physicians or over 9% of the total number of prescribers were new RAYALDEE prescribers in Q1. Our partner Vifor Fresenius continues to anticipate European approval for RAYALDEE and first commercial launch later this year. We are making excellent progress with our ongoing clinical trial to RAYALDEE to expand its indications. At the end of the first quarter, we reported interim results from an ongoing Phase 4 clinical trial comparing RAYALDEE with three common treatment regimens for secondary hyperparathyroidism in adult patients with stage 3 or 4 CKD and vitamin D insufficiency. The interim results indicate that a daily dose of 60 micrograms of RAYALDEE is the only one of the four treatment regimens tested that reliably raised a serum total of 25-hydroxyvitamin D to the range of 500 to 100 nanograms per ml, a level required to effectively suppress elevated plasma intact parathyroid hormone in CKD patients. Nearly 80% of the subjects have completed treatment and there are sufficient data now available to make conclusions about the treatment between studies. In view of immense logistical difficulties and safety concerns posed by the ongoing pandemic, OPKO has decided to end the study early. Final results of the trial are expected in the second half of 2020. We also recently reported interim results from an ongoing Phase 2 clinical trial exploring the safety and efficacy of a high strained formulation of RAYALDEE as a new treatment for secondary hyperparathyroidism in adult patients for Stage 5 CKD requiring regular hemodialysis and vitamin D insufficiency. Interim results indicate that RAYALDEE is well tolerated to successfully metabolize to its active form despite the lack of kidney function and is capable of treating secondary hyperparathyroidism. Enrollment is being delayed by the ongoing pandemic and full enrollment is now expected in the second half of 2020 with final top-line data expected in the first quarter of 2021. OPKO has decided to continue this study to completion if at all possible, as the subjects must come into the clinic for regular hemodialysis anyway and therefore face minimal additional risk to their safety in view of the pandemic. We were planning to start a Phase 3 study with RAYALDEE in pediatric patients in the third quarter of 2021 as part a post-marketing requirement. While we have decided to postpone study initiation until after the ongoing pandemic subsides in order to protect these patients from unnecessary exposure, we have requested an extension of time to complete the study from the FDA. And now before Jon discusses BioReference Labs and our COVID-19 testing services, I wanted to quickly mention 4Kscore. Medicare coverage for 4Kscore resumed on January 1 of this year as a result of the new Local Coverage Determination by Novitas. With Medicare reimbursement in place, we began our sales force expansion and nearly 16,000 4Kscore tests were performed during the first quarter of 2020. However, following the COVID-19 outbreak in March, it was a significant drop-off in orders, which has continued into the second quarter. However, we expect to return to growth as stay at home orders begin to be lifted and patients resume visits to physician offices. We will also resume our plans to increase our sales force and seek additional commercial payers for the test. With that, let me turn the call over to Jon Cohen for a discussion of our BioReference Lab business. Jon?

Thanks, Steve, and good afternoon everyone. Before I discuss COVID-19 testing and its impact on BioReference let me begin with some observations of our performance in the first two months of the year before the pandemic occurred. I am pleased to say, we started to see the positive impacts of the organizational changes we put in place to grow our specialty lab business including oncology, urology, women’s health and genetics, coupled with our business development efforts to secure new strategic partnerships. We expect to announce some new and exciting hospital and large medical group partnerships within the next several months. At GeneDx, Whole Exome volume had 14% growth in Q1 of 2020 versus Q1 of 2019. Neuromuscular and Neurodevelopment had a 9.5% growth in Q1 of 2020, versus Q1 of 2019. The growth in both of these sectors is related to a more focused commercial strategy and our increase in sales force we have put in place in Q4 of last year. Prior to the COVID pandemic, we were trending towards a double-digit volume growth at GeneDX in March. With the onset of the COVID-19 pandemic and government initiatives put in place to reduce the spread of the virus with social distancing and stay at home orders, everything has changed. Starting in late February, we were in constant contact with the CDC, FDA and the White House Taskforce and various state departments of health to quickly and effectively respond to the pandemic and played a leading role on the testing of COVID-19. We made the decision to immediately bring up the CDC assay and additionally validate several other real-time PCR testing platforms to perform COVID-19 molecular testing. Because BioReference is a highly complex laboratory with deep experience in viral testing, several of these platforms already existed in our labs and we have a deep bench of technicians experienced in this type of assay validation and performing the testing. This allowed us to quickly increase our capacity, while not depending on one vendor for reagent of supplies. In addition, we made the strategic decision to immediately prioritize incoming samples to the hospital patients, first responders and healthcare workers and other patients. We worked hard to keep our turnaround time to a minimum. As a result, multiple types of clients moved significant volume to us early on. In addition to our nationwide offering, we developed a specific expertise in providing testing to over 30 drive-through sites around the country. In addition, we entered in partnerships with numerous states, cities and healthcare systems including New York State, New York City, the State of New Jersey, the State of Florida and other cities. Last week, we announced our partnership with Rite Aid and the U.S. Department of Health and Human Services to provide testing services for Rite Aid self-swab testing sites at 25 store locations with a plan to grow this number over the next several weeks. To-date, we have performed approximately 700,000 COVID tests. We now have a current capacity of approximately 35 tests per day. But we continue to see a substantial need for PCR testing from our existing clients and new clients for the foreseeable future. The next phase of the diagnostic journey for the pandemic will be antibody and serology testing in addition to ongoing PCR testing. Last week, we started to offer COVID-19 antibody blood testing on a nationwide basis. The test we are offering is highly accurate and involves a venous draw by a trained healthcare professional not point-of-care or finger safe. And that tube of blood is then sent to our lab for testing. We believe that accurate antibody testing is the next diagnostic step that’s providing valuable information about the direction of the disease. With data around potential immunity emerging every day, our goals are to score epidemiological studies of COVID-19 to assist in understanding how antibodies correlate with immunity to identify at risk populations to identify plasma donors and to help provide information to support employers and employees around workforce, business physicians. By mid-May, we expect our antibody test capacity to reach 400,000 tests per day. Our existing clients before the pandemic and new clients we developed as a result of the pandemic have already started sending us antibody specimens. In addition, we announced our first government partnerships with New York State and New York City to provide COVID-19 antibody testing to state, city employees and large segments of the population. We have also seen significant large employer and health system interest in utilizing our capabilities for both antibody and PCR testing as they develop their return to work strategies and they reopen the hospitals for elective procedures. As you can see, we are committed to supporting the nation’s COVID-19 effort in any way possible and will remain committed for the duration. I want to reiterate what Phil said during his opening comments. Our team, including our frontline workers work tirelessly 24 hours a day and seven days a week to bring up these platforms and then deliver 700,000 test results through a highly complex we have not performed eight weeks earlier. Our performance during this crisis and our mostly very positive news coverage resulted in us being recognized as one of the few truly national commercial laboratories. Over the long-term, this recognition and performance had vaulted us into the national limelight as a provider of excellent diagnostic services. I am very optimistic that this has positioned us to grow our segments of our business in the future. I am encouraged that our strategy to grow our specialty segments to focus on cost containment measures and to advance our business development efforts start to produce top and bottom-line results. As a result, I believe we will emerge from this pandemic well positioned for growth and success. And now let me turn it over to Adam.

Thank you, Jon. Despite a challenging environment, our financial performance in the first quarter of 2020 was largely in line with our expectations. As Jon mentioned in his prepared remarks, we are well positioned to meaningfully support the reopening of America through our PCR and serology testing. Despite our demonstrated capabilities, it remains unknown of how much of this testing will be performed and what rate these tests will be reimbursed. In addition, there continues to be an uncertainty around when stay at home orders will ease around the country and when that full procedures and routine medical testing will resume thereby allowing our base business to begin returning to historical volume levels. Furthermore, our RAYALDEE and 4Kscore commercial teams have transitioned to virtual sales calls, although they are doing a good job working remotely, our sales teams have less impact on current utilization considering doctors are not actively seeing patients. And as a result, the number of new prescriptions and the number of testing ordered have been impacted. Given the significant uncertainty regarding the duration and severity of the pandemic, on a global basis, we are withdrawing the 2020 financial guidance we provided in February. We will be as transparent as possible with our periodic update and so we can reasonably forecast during these uncertain times. Now moving to our first quarter financial performance, I will start with our Diagnostics segment. We’ve reported revenue from services of $170.8 million compared to $178.9 million for the 2019 period. This decrease in net revenue, while in line with our previously issued financial guidance was impacted by COVID-19 as stay at home orders were issued resulting in a significant decline in our routine and genetic testing businesses beginning in early March. In the last two weeks of March 2020, our Diagnostics segment experienced a decline in testing volumes resulting in approximately a decline of 60%, compared to the 2019 period, not including the offset from COVID-19 testing services. When including COVID-19, overall volumes in Q1 declined approximately 6.6% compared to the first quarter of 2019. Those declines continued into the second quarter. However, we have seen several weeks of steady increases from their lows and in the early days of May, we have seen a year-over-year increase in overall testing volumes inclusive of COVID-19 testing. Despite the decrease in revenue, the cost control measures put in place over the last 18 months continue to result in an improved operating metric within the Diagnostics operating segment. Operating expenses decreased $23.5 million from the 2019 period. The 2019 period included a one-time legal expense of $10.6 million. Operating loss for the Diagnostics segment decreased from $33.6 million for the first quarter of 2019 to $18.1 million for the first quarter of 2020, a $15.4 million improvement. Moving to our Pharmaceutical segment, we’ve reported revenues of $40.6 million for the first quarter of 2020, compared to $43.6 million for the 2019 period. Revenue from product sales for the first quarter of 2020 increased to $31.1 million including $9.9 million related to RAYALDEE, compared to $25.3 million or overall product sales for the first quarter of 2019, which included $5.8 million of revenue for RAYALDEE. As Steve mentioned, RAYALDEE continued to perform well posting a 78% in growth in prescriptions. When looking at revenue from the transfer of intellectual property, we’ve reported $9.6 million of revenue for the 2020 period, compared to $18.3 million a year ago reflecting the completion of our somatrogon Phase 3 clinical trial. As a reminder, we have been amortizing our upfront payments from Pfizer over the development period of somatrogon. Loss from operations from our Pharmaceutical segment decreased by $15.4 million to $14.1 million for the 2020 period, compared to an operating loss of $29.5 million for the 2019 period, a decrease in operating loss principally reflects the decrease in cost related to our somatrogon development program. Overall, research and development expense for the first quarter of 2020 was $18.6 million, compared to $33 million for the prior year period. On a consolidated basis, we saw the first quarter of 2020 show a $34.6 million decrease in our operating loss to $40.8 million and net revenues of $211.5 million, compared to an operating loss of $75.3 million and $222.5 million of net revenues for the 2019 period. Our net loss for the first quarter was $59.1 million or $0.09 per share, compared to a net loss of $80.8 million or $0.14 per share for the 2019 period. Our first quarter net loss in 2020 included other expense of $12 million related to the mark-to-market activity for some of our strategic investments. Our cash balance as of March 31 was $34.5 million. In addition, we have the $100 million line of credit with Dr. Frost, which remains unutilized. After the quarter end, we were able to participate in certain programs as part of the CARES Act including advance Medicare claims, payroll tax deferrals, as well as a grant received under the CARES Act of $6 million. In total, the CARES Act provided us with nearly $30 million of near-term liquidity to support our operations. With that, I’ll open the call for questions. Operator?

[Operator Instructions] And your first question comes from Maury Raycroft with Jefferies.

Hi, everyone. Thanks for taking my questions. The first question is just on the COVID antibody test. I just wanted to clarify for that test do you have to apply for and get FDA approval similar to some of the other antibody tests?

Hi, it’s Jon Cohen. Our – we got to run three platforms or predominantly two platforms both already have EUA approval. Two of the three have EUA approval. The others are – the other is a LDT approved by the – by two states, but we are moving really to the two that have EUA approval within the next several days.

Got it. Okay. And then, for this test, can you provide any specifics on costs and quantities related to size of orders or contracts that you have with some of the different partnerships in place?

Adam, if you are going to answer that?

You can take it Jon.

Right. I won’t get into the cost of testing. We already announced our – we did our press announce that’s relative to our government relationship with New York State where we will be testing significant numbers of the both state residents and state employees. We are about – we will announce within the next several days, other government contracts as they come up, we have significant interest from multiple states for our antibody testing and we had more than significant interest from numerous, numerous mid-size and large employers for both PCR and antibody testing.

Got it. Okay. And then, for the – program, just wondering if the filing by Pfizer if that’s more likely going to be a 3Q or 4Q event. And then, for the ENDO presentation, is that going to be Pfizer or KOLs given the two presentations? And can you provide anymore perspective into Pfizer’s plans to switch from genotropin weekly?

Thanks, Maury. This is Steve Rubin. So we are expecting submissions by – in Q3. The presentation of that ENDO is going to be one of our principal investigators.

Cheri Deal, Dr. Cheri Deal.

Dr. Cheri Deal, that’s the actually - I think we put the name in the press release. So that’s where we will be providing the ENDO presentation. And as of Pfizer’s plans, to switch, I don’t think that has changed. I mean, obviously they are – there is a competitor in the market they will be highly motivated to switch to long-acting product as soon as possible and also grab additional market share. Keep in mind, there is seven dailies on the market now. So, they won’t really be cannibalizing their own, so actually be growing market share.

Got it. Okay. And then, I just had two quick questions on RAYALDEE. First, I am wondering if they are going to report more details on the two data updates that you had recently. Could that come in at a medical meeting and when could that happen?

Hi, Maury. This is Charlie Bishop. Yes, as long as the American Society of Nephrology Meeting stays on track, our intention is to present the data from both of those studies that we gave interim results for – at that meeting.

Got it. Okay. And then, second for RAYALDEE. In the one dataset in the CKD5 patients you reported that your three goals were met where you showed a high dose RAYALDEE was well tolerated. You saw the elevated serum level of active metabolites and then the greater than 30% decrease in IPTH from baseline. Just wondering for you to add more context around the update and as what you are seeing equate to some level of a normal kidney function, or I guess, how do you contextualize this?

So, our assumption is that, by the time patients get to the requirement of regular hemodialysis, most, if not all of the kidney function is gone. And we are taught by the medical textbooks that the activation of the 25-hydroxyvitamin D3 which is the active ingredient in RAYALDEE requires the kidney to be functional and what we are seeing in this study is unprecedented when you give adequate amount of RAYALDEE, you do see production of the active hormone come back to normal and our interpretation of that, although we have to prove it is that we are engaging for the first time the extra renal hydroxylates. So, the enzyme in the kidney that would convert the active ingredient in RAYALDEE to the active hormone is known as 27B1. That enzyme has been mapped in the human body, it’s in the Parathyroid gland, it’s in skin, it’s in other tissues. And we believe that our therapy is enabling patients to have their serum total of 25D levels elevated safely into high enough levels that for the first time you can gauge the extra renal hydroxylates.

Got it. Okay. Thank you very much for taking my questions. I’ll hop back in the queue.

Thank you.

And your next question comes from I-Eh Jen with Laidlaw & Company.

Thanks for taking the questions and congrats on the progress and developments. Just a couple of quick questions. The first one is that, what’s the current numbers of test that’s being done for the PCR test, at the PCR net test of recent dates?

We are at…

He, I-Eh.

Hi, how are you?

We are at approximately $700,000.

So, that’s cumulative one, right, if it’s plus per day, what that will be?

No, it’s, our cumulative number since we started testing on March 13 is about 700,000. We are doing approximately 25,000 a day. We’ll be up to capacity for 35,000 a day within the next several days and we will push to 40,000 a day within the next week to week-and-a-half.

Okay. And is that will be the full capacity or do you think there is additional room for growth of that 40,000 per day?

There will be additional capacity to grow. But right now, we are hold at 40,000 at least for some brief period of time before we make subsequent decision to go further.

And in terms of the PCR, I am sorry – in terms of the antibodies test, maybe just clarify for me a little bit if you can. Are you using one of the 12 platforms that was getting to approved – or perhaps they seek they are approved or how should we see that?

No, so, we are running – the two major platforms are running is, Roche and DiaSorin. We are also running another platform in the interim as well as they are continually being brought up. So, both of those have emergency use authorizations from the FDA.

Okay. Maybe the last – go ahead.

The Roche platform, just you know is, you may have seen is close to a 100% accuracy for IGG.

Right, right. And maybe the last question here is that, maybe a little bit difficult to answer. What kind of the sort of commercial opportunity we’ll see as the COVID-19 test goes combine the antibody, as well as PCR? Just assuming that going forward, there will be quite a while that that be highly in demand. Is there any way you guys please try to model that.

It’s a difficult thing to model I-Eh. But I think, as we sit back, the PCR testing, as Jon mentioned, we have got current capacity of 35,000 tests per day and we’ve performed 700,000, we gave an update in early April that when we had passed the 200,000 mark. So if you wanted to kind of get a runrate, you can do the math to see what our daily averages look like. And it is testing that’s being seven days a week. As we look forward, we are continuing to expand our capacity as Jon mentioned because we see that the demand for PCR testing continues. What’s unknown to us is how long that demand will stay. We also – when we look at the antibody testing, we do think that it’s going to be a meaningful way to get the country back open again and we continue to expand our capacity as Jon laid out to bring our capacity to 400,000 patient samples a day, which as you know, is a significant increase historically BioReference processed just less than 40,000 samples a day on its normal business. So, both the antibody and PCR testing come through, the potential upside is dramatic in comparison to what BioReference’s historical business is. It’s just we don’t know that what the demand is going to look like and the duration of the demand and further to that the serology testing still hasn’t gotten a reimbursement amount yet. So there is a lot of variables for us to consider as we look to forecast ourselves.

Okay. And maybe just a last question here, or just addition to the question here really is that, do you anticipate or project at least what will be for the full year 2020 if not even more?

Yes. I could only - I’ll tell you that the interest level, there are multiple different segments with a lot of the different interests. I would say that, you ask specifically about both PCR and serology. I would say that a large number of employers, both large, medium, are looking for both as they try and develop their strategies to reopen their businesses. So we are having substantial discussions with a large number of employers around that issue. The second is that, hospitals and health systems continue to have a fairly significant appetite for both the PCR and the antibody testing for their healthcare workers in addition to as they open up for elective procedures, elective surgery, outpatient procedures et cetera. They are looking to do increased numbers of the PCR in addition to sequential antibody testing.

Okay. Great. That’s all. I appreciate and good luck on the balance.

And your next question comes from Ted Tenthoff with Piper Sandler.

My question is following up on the RAYALDEE, how will that being incorporated into the label? And how can that actually be communicated to doctors? Is that something that kind of communicated there or would it ultimately have to wait for label extension, how should we be thinking about that? Thank you.

Yes. This is Charlie Bishop, again. That’s a great question. What we have found in the markets for which we already have FDA approval is that, patients with Stage 3 chronic disease which is an earlier stage of disease show the same response to the drug as patients who have a later stage of kidney disease which is Stage 4 CKD. And what’s fascinating about that, is that, RAYALDEE, according to mainstream has to be activated in the kidney and yet it shows in our current market that it works just as well in early stage CKD as in later stage CKD which suggest very strongly that the kidney is really not important in activating this drug. Now when we go to Stage 5 and we see where the kidney is all together, in most cases not functional, that RAYALDEE can be activated and then we can lower PTH. That adds to the story that likely RAYALDEE doesn’t need the kidney to be activated, which is very important, because the many drugs to treat secondary hyperparathyroidism all do not require the kidney and now RAYALDEE with the data that we are generating looks like it doesn’t need the kidney either. The advantage of RAYALDEE over the leading therapies is it doesn’t have the safety concerns. So, to answer your question, we are currently thinking about the indication for Stage 5 is just getting an extension of our current indication. Our indication right now reads that we are approved to treat secondary hyperparathyroidism in adult patients with Stage 3 or Stage 4 chronic kidney disease and vitamin D insufficiency. And the label that we would intend to pursue presuming that our development program for Stage 5 patients stays on track would be simply to add Stage 5 to that indication. But our data allow us to tell physicians about this possibility of being activated without a strong kidney, we can tell a story now.

Great. That’s very helpful, Charlie. Thanks so much everybody.

And there are no further questions at this time.

I want to thank everybody for participating, and we look forward to speaking with you again next quarter. Bye now.

Ladies and gentlemen, this concludes today’s conference call. Thank you for your participating. You may now disconnect.