Precigen, Inc. (PGEN) Q4 2018 Earnings Report, Transcript and Summary

Good day everyone, and welcome to the Intrexon Fourth Quarter 2018 Financial Results Conference Call. [Operator Instructions] I would now like to turn the conference over to Steven Harasym, Vice President of Investor Relations. Please go ahead.

Welcome to Intrexon's fourth quarter 2018 investor call. I'm Steve Harasym, Vice President of Investor Relations. I'm joined by Joel Liffmann, Senior Vice President of Finance, Bob Walsh, Senior Vice President of Energy and Fine Chemicals; Nir Nimrodi, Intrexon's Chief Business Officer; Thomas Bostick, Intrexon's Chief Operating Officer; and. R.J. Kirk, our CEO, who will join us for Q&A at the end. During this conference call, we will make various forward-looking statements. Investors are cautioned that our forward-looking statements are based on current expectations and are subject to risks and uncertainties. A number of factors could cause actual results or outcomes to differ materially from those indicated by our forward-looking statements. Please read the Safe Harbor Statement contained in the earnings press release as well as Intrexon's most recent SEC filings for a more complete description. This afternoon's press release and our discussions may reference certain non-GAAP financial measures, including adjusted EBITDA and adjusted EBITDA per share. We use these financial measures as a more accurate estimate of our ongoing financial position. Reconciliations to GAAP measures are contained in earnings press release as well as on our investor section on our website. On today's call, our business leaders will provide an overview of our core businesses, highlighting progress made over the last quarter that we believe positions the firm to drive long-term shareholder value. We will conclude with the Q&A session. First, I would like to turn the call over to Joel Liffmann to provide a financial update.

Good afternoon. We are changing up our presentation order today and starting off with a financial review in order to provide some context to where we have come from, where we are most intensively focused and where we are heading. On this call last year, we discussed a transition away from the exclusive channel collaboration business model and our plan to internally develop and invest in our most promising opportunities. This transition is now sustainably complete and our immediate investments and activities are concentrated in these key areas. One, energy, where our methane bioconversion platform is advancing to commercial scale. Two, Precigen, our wholly owned subsidiary developing gene and cellular therapies in immuno oncology, autoimmune disorders, and infectious diseases Three, ActoBio Therapeutics, our 100% owned subsidiary, developing micro-based pharmaceutical agents. And four, in the agriculture and food sector, which encompasses a number of programs including Okanagan non-browning Arctic apples, Aquabounty, AquAdvantage salmon, Trans Ova Genetics, leading provider of reproductive technologies to cattle breeders, EnviroFlight [indiscernible] platform and others. The common theme to all of these programs is that in our view they are valuable now and could be partnered or directly funded by strategic or financial investors. This is an important distinction at this time. And it's clear to us that our stock price does not reflect what the management team believes is appropriate and we are actively evaluating financial alternatives for several of these key assets. I'd like to call your attention to the following selected financial information from our 2018 financial statements and the relevant implications. First, in the fourth quarter, in connection with separate transactions we completed with Ziopharm and Merck KGaA, we recorded non-cash charges of $220 million, reflecting the elimination from our balance sheet of our investment in Ziopharm preferred stock and the issuance of approximately 20.6 million shares of Intrexon stock to Merck KGaA. Importantly, these transactions have clearly established Precigen’s rights and opportunities to independently develop important new gene and cellular therapies. The first two of which are entering the clinic under newly approved INDs. Second, also in the fourth quarter, we undertook a customary review of all goodwill and intangibles on our financial statements. And we incurred a non-cash impairment charge of $60.5 million to write down certain intangibles related to Oxitec in connection with the previously announced evolution of the Oxitec commercialization strategy. So, what does this mean from a business point of view? Well, as we discussed on prior earnings calls, we have determined that our 5034 mosquito technology can be a more effective in lower cost suppression system than the prior generation 513A program. 5034 is being developed for both consumer and government markets. Recall that the previous generation product was being sold exclusively into government markets and did not generate the cash flows that we had earlier anticipated. The impairment charge addresses how we originally valued these technologies when we purchased Oxitec back in 2015. The non-cash charge does not reflect our belief that 5034 will be an important solution to the ongoing spread of disease by the Aedes aegypti mosquito across a widening geography nor does it reflect the considerable new consumer market that we expect to develop. Third, our financial statements included going concern qualifier that reflects our analysis that funding on hand is not adequate for operations beyond 12 months. Management is, of course, pursuing several options to address the going concern issue including as I mentioned earlier, potentially partnering and financing at the individual program or business unit level. And fourth, as for actual 2018 financial results, we reported fourth quarter and full year revenues of $43.2 million and $160.6 million respectively. Fourth quarter and full year adjusted EBITDA losses of $27.2 million and $102.5 million, respectively. As previously noted, our shift away from the ECC model and the termination of a number of ECCs has reduced our reported revenues, and at the same time, we've increased our focus on spending on the more mature and valuable programs that we own. The resulting year over year decrease in revenues and increase in EBITDA losses is in line with our plan and we remain highly focused on funding these opportunities through partnering and commercial success. ECC revenues will further decline in 2019 as a result of the terminations which took place in 2018 such as Ziopharm and the associated reduction of current year billings and recognition of deferred revenues. During 2018, we raised $275 million of capital through secondary stock and convertible debenture offerings. We ended the year with approximately $220 million of consolidated cash and securities on our balance sheet. In wrapping up the financial section of the call, let me again emphasize that our entire management team is focused on executing and financing the programs and developments that my colleagues will now discuss. I'll now turn the call over to Bob Walsh for an update on our energy and fine chemical programs.

Thank you, Joel. Intrexon’s methane bioconversion program turns low cost local gas into high-value fuels and chemical products using a type of bacteria called methanotrophs, continues to make progress on a number of fronts. We ended 2018 with 50% increase in 2, 3 BDO type over the start of 2018. This improvement puts us at 80% of our cattle goal and output level that saw an adequate basis to justify commencement of the construction activity. We expect to further improve and profitably scale. For clarity, titer is the amount of material in the fermenter after a significant amount of time and it is a key metric for profitable. Our Isobutanol program also made significant improvements in 2018, having overcome several technical hurdles. Such technical improvements are consistent with a program falling behind the 2, 3 BDO program. On previous calls, we discussed our expectation and begin vinyl final design by the end of 2018. We entered 2019 still working towards that target as the related partnering and financing discussions have taken longer than expected. So, where do we stand today? First, we plan to construct plant number one at a partner’s location at an abundant natural gas infrastructure and access to ground transportation for our finished product Second, our expected product economics remains healthy. Previously, we have noted that we project our 2, 3 BTO process, we’d have a $1,000 per ton gross margin at today’s price of over 114,000 per ton. This gross margin would be outstanding to the chemical business and our projected process OpEx is more than competitive with existing technology as shown on this slide by over $750 per ton. We are engaged with at least two potential partners to operate and participate in the funding of our first plant and potentially others. Third, we've advanced the engineering and design work from our pilot plant and the data from this plant was used for level two engineering package for two designated events. We are currently fitting out level three detailed engineering design package to several contracts. This package will also produce construction, size selection has to be finalized before we complete this launch. I should also point out we are prioritizing 2, 3 BDO first facility over the other molecules in our development pipeline. For example, Isobutanol has been resourced at a level to begin detailed engineering at our large scale facility after the first 2, 3 BDO facility offering. Remember this is a platform, it is a fermentation suite are the same for all molecule, so the next molecule can go to large scale rapidly. Finally, we are continuing to make progress on the enzyme engineering with previously mentioned in line with our results. Let me turn to fine chemical. Our proprietary cannabinoid program continues to make progress toward our sub $1,000 per kilo target for the first time. While many companies are talking about starting a program, we are at 20% of our final titer target to reach this price point. Again, this is a platform with the potential to make many different targets including one on only [indiscernible]. We're under discussion on how to maximize the value in this new pharmaceutical field. I would now like to turn the call over to Steven Harasym.

Thank you, Bob. Next slide please. I would now like to review the traditional healthcare biotech assets Intrexon is advancing, next slide. By re-acquiring almost all cell and gene therapy rights in late 2018, Precigen fully transitioned from the ECC model to an autonomous in-house model with focus on oncology, autoimmune disorders, and infectious diseases. We now have the opportunity to create value by advancing drugs in the clinic. R&D work is being done at Precigen facility in Germantown, Maryland. In addition, Precigen expects manufacturing to begin later this year at a new modular facility also in Germantown that is being constructed to produce GMP materials for Precigen’s early phase trial. The projected cost of the new facility is less than the cost of outsourcing one or two targets with CROs. And, therefore, we believe it will save money as well as time. We reported significant progress as two INDs have been cleared to proceed using our UltraCAR-T platform. In December, PRGN-3006 cleared to initiate a phase 1/1b study for an Investigational Drug for patients with AML and higher risk MDS. This clearance paves the way for first-in-kind investigational therapeutic candidate that uses Precigen’s UltraCAR-T platform and which can be administered within two days following non-viral gene transfer. And earlier this month, PRGN-3005 cleared to initiate a phase 1 study for an Investigational Drug for patients with advanced-stage platinum resistant ovarian cancer. We hope to begin those things both of these trials at the start of quarter two. Next slide, our success gives us greater conviction that Precigen’s UltraCAR-T platform has a potential to disrupt the current CAR-T treatment landscape. Some of its potential advantages include increased patient access through shortening, manufacturing time, decreasing manufacturing related costs, and improving outcomes using advanced approaches for precise tumor targeting in control of the immune system. We look forward to sustaining the momentum and will provide you with updates on further advances in our precision gene therapy programs. Intrexon has a number of human health initiatives outside of Precigen. One of these I would like to highlight is are wholly owned subsidiary of Xogenex. Xogenex is focused on treatments for heart failure. We continue to move forward evaluating INXN-4001, the world's first investigational triple gene drug candidate to target heart failure. The leading cause of death in humans. Despite current state of the art treatments, it appears that consistent survival advantage and relief is still unacceptably poor in patients with chronic heart failure. Heart Failure is not a single gene defect disease but rather multimodal in its cause with multiple points in its progression. We aim to address the limitations of current treatments with our investigational non-viral plasmon based therapeutic candidate, which is designed to drive expression of the three cardiac effector genes involved in heart failure. Xogenex has completed an evaluation of three advanced heart failure patients who are administered INXN-4001 as part of a phase one clinical trial. This phase one trial which is performed in patients maintained on left ventricular assist devices is exploring the safety of administering our investigational triple effector drug via minimally invasive retro grade coronary sinus infusion. This is the drug delivery route for this trial. The data reflects the patient's status six months after being given the dose and appears to indicate that the drug material and delivery process were both well tolerated by the patient. A preliminary review of the data suggests improvements in several cardiac performance parameters. We focused on one clinical site to assess the early safety and feasibility. Xogenex is now recruiting additional clinical trial sites to expand the program. With that, I would like to now turn the call over to Nir Nimrodi.

Thank you, Steve. Turning to the next slide, you can see that ActoBio Therapeutics continues to progress therapeutic program. Particularly, our partner Oragenics continues to enrol patients in the phase 2b clinical trial for AGO13 for the treatment of Oral Mucositis, one of the most common adverse events associated with chemotherapy. Oragenics is targeting 150 patients in the US and Europe and is expecting to conclude the study by the end of 2019. Meanwhile, our potential disease modification therapy for type-1 diabetes is advancing well. ActoBio dosed the first patient in late October in the AGO19 phase 2 study and is enrolling patients according to plan. Type-1 diabetes is an autoimmune disease affecting over 1 million children and adults in the US with no treatment available for the underlying condition. Finally, in AGO17, an immune tolerance approach for the treatment of celiac disease, we continue to target an IND in Q2 2019. Next slide. Turning to the Okanagan Specialty Fruit business. More than 2,100 billion of Arctic apples were picked in our 2018 harvest. These apples are available at select retailers in the form of delicious fresh sliced apples and ApBitz dehydrated apple snack. ApBitz are also available on Amazon. Activity to the apples continues to be favourable and the focus of this season is to validate for the demand and to confirm our expectations for perspective product performance. We shared in the past, we expect to scale this business rapidly and our plan is forecasting five times more apples in this year's harvest and 25 times more apples in 2021 when compared with 2018. Next slide. Turning to the next slide and our cattle business, Trans Ova Genetics is the preeminent leader in bovine genetics in North America supporting elite breeding in both the dairy and beef industries. Trans Ova’s $80 million plus business is used to focus mainly on the provision of advanced reproductive services to the farmers. However, in the past few years, it was investing supporting the business to gradually transform to a product-based business selling embryos. Product-based business is expected to scale faster domestically and internationally and will provide greater value to its customer. 2019 and beyond, Trans Ova will continue to expand and improve bovine genetics in support of the sales of embryos. More than 575 heifers were added in the last year including two Jersey heifers ranked number two and number nine in the world. Our herd also includes 15 of the world 37 top Holstein bulls based on the industry accepted dairy production index. Next slide, our Exemplar Genetics enterprise continues to experience growth. As we previously reported, in addition to selling our predictive miniswine based model, Exemplar results were focused on expanding its business beyond disease model into regenerative medicine. The fourth quarter, Exemplar and Mayo Clinic launched Cytotheryx, a joint venture which is focused on the development of human liver cells to advanced medical research. We see a significant need for these type of cells for both research and therapeutic purposes for life threatening diseases. The immediate addressable market for research purpose only is estimated at over 250 million annually. The use of these sales for therapeutic purposes significantly eclipses this potential and we're not aware of any other product with similar advantages that is being developed. Next slide, turning to the next slide. EnviroFlight continues to establish itself as the market leader in the production and commercialization of black soldier fly based product. Now a joint venture with Darling Ingredients, EnviroFlight opened the largest black soldier fly facility in the US at the end of November. Facility is built in a modular manner allowing for scalable expansion based on actual market demand. Phase 1 of the facility has the ability to produce 900 metric ton of product a year and is designed to scale up to 30-100 metric tons. Orders for products from the new facility already account for about one third of the anticipated annual outcome. Next slide. Now for a recap on AquaBounty, our majority owned subsidiary and the owner of our lead protein food in food, the AquaAdvantage Salmon. As a reminder, this salmon achieved market weight in half the time and on less food and other salmon, driving both time and cost advantage. The FDA approved an Indiana based land facility to raise AquaAdvantage Salmon in April 2018. December, the USDA issued labeling goal, which pertained to all food, including AquaAdvantage Salmon. Companies who have failed to comply with the stated requirement. However, AquaAdvantage still awaits the publication of official guidelines by the FDA prior to the introduction in the US. In the meantime, the Indiana facility is stocked with additional Atlantic salmon. In the fourth quarter, AquaBounty secured a loan that will enable it to complete production with Edward Island 250 metric ton facility in Q2, allowing for the immediate large scale production of AquaAdvantage salmon in Canada while AquaBounty continues to sell its products. Next slide. We're also happy to be report that in December the AquaBounty and Intrexon gene edited Tilapia, FLT 01 is now exempt from GM regulation according to Argentina's National Advisory Commission on Agricultural Biotechnology. This line of Tilapia enables more sustainable production for fillet yield, growth and feed conversion efficiency. Tilapia is the fourth most consumed seafood after shrimps, salmon and canned tuna and it’s forecasted to be one of the highest growth production segments in aquaculture. This jointly developed Tilapia demonstrated significant improvement in fillet yield of approximately 63%, a growth rate improvement of approximately 14% as well as the feed conversion rate improvement of approximately 16%. Offering promise to producers to shorten the time to harp. Shortened production cycle can reduce input costs, increase production output and reduce risk of disease. With that, I'd like to now turn the call over to Tom Bostick. Thank you.

Thank you, Nir. Next slide. I will now provide an update on Oxitec [indiscernible]. As Joel pointed out earlier, we continue to transition our mosquito business to a second generation technology. Oxitec’s initial field trial in Brazil for its second generation technology noticed 5034 is showing promising mosquito suppression result. Oxitec also just received formal approval from the Brazilian government to test new 5034 based release device prototypes in a second city within Sao Paulo State. Oxitec is leveraging its second generation features, which have the potential to eliminate several costly manufacturing and deployment requirements that were necessary with Oxitec first generation technology. This new release device product development process is focused on developing a scalable and cost effective Oxitec friendly Aedes control solution that can be sold to government and commercial markets alike without the need for a large scale production facility or adult mosquito release. Our two collaborative agreements with the Bill & Melinda Gates Foundation are underway and we're happy to report that some efforts for the first strain to combat malaria in the Western Hemisphere and the second to combat malaria in India, the Middle East and the Horn of Africa are both off to a promising start. The technical milestones being achieved on sched. Additionally, Oxitec has secured two multi-year development agreement with a partner to develop solutions for pest problem beyond the mosquito and which have the potential for application in key markets globally. Next slide. Moving on to the agriculture space. In January, we announced a strategic licensing agreement with Next Green Wave to advance our Botticelli next generation plant propagation platform into development for cannabis enabling rapid production of Next Green Wave’s proprietary cannabis cultivar for the California market. In the US market, legal cannabis revenue projected to exceed 23 billion by 2022, with California representing approximately one-third of that market and a significant opportunity to apply our novel approach. The collaboration between the companies will be two stake. First, an optimizations phase in which Intrexon will calibrate for Botticelli technology, the Next Green Wave specific cannabis cultivar and second production phase in which Next Green Wave may utilize technology in the production of cannabis plant or downstream product and the sale of plantlets to third party producers in California. Intrexon will be entitled to royalties on Next Green Wave’s own plantlet usage and the parties will share equally the revenues from third party sale. The Botticelli platform is an advanced tissue culture technology designed to enable efficient propagation of plants while maintaining genetic purity and product performance. When applied to cannabis, we believe Botticelli offers potential for a sustainable, scalable, and more economical solution than conventional clones. Next slide. In closing, I want to share a few of my thoughts about Intrexon. First of all, Intrexon is a company that is performing the type of work that has the potential to achieve significant and enduring impact for the world in so many different areas. For the year 2015, Intrexon will serve a world with 2 billion more people on the planet, whether it is in the field of energy, health, food, agriculture or the environment. This company through innovation and forward thinking continues to meet this broad array of count. We strive to address unmet need by strategically applying for technology across multiple fields. Building a robust pipeline focused at various stages of development, hedging against the uncertainty inherent and making significant discovery in developing that, we do scalable, commercially viable solution. We are confident that our talented team will continue to make great strides as we continue to review, scale and scope, pursue multinational partition, cultivate joint ventures and maintain professional relationships, all in support of the greater good and future generation. We’re always seeking to drive long term shareholder value. We are starting 2019 more potentially to demonstrate the value of our technology than at any point in our 20 year history. And we look forward to what is yet to come, this year, and beyond. We will now open up the call to questions.

[Operator Instructions] Our first question comes from Jason Butler of JMP securities.

First one, on the methanotroph platform, it would be helpful maybe if you could just walk us through how the structure of the partnerships you're considering now has evolved over the last 12 months. So, obviously, you've made a lot of technology improvements, but the actual partnerships -- your goals out of those, how do they look now versus what – again 12 months ago?

They haven't really changed in concept, Jason. I think we have publicly said that the ideal relationship for us would be a 50-50 joint venture across the entire platform. While that's not necessarily the only outcome, because we do have interest in individual molecules as well. That's still our favorite, our favorite scenario. And we're enjoying active discussions with numerous parties about that. So…

Great. And then the follow up is on the UCAR-T platform, the goal of two-day processing, is that achievable today, or are there other process or technology developments that have to be achieved in order to hit that two-day processing goal?

Totally, totally achievable today.

Our next question comes from Tycho Peterson of JP Morgan. Please go ahead.

Hey, guys. It’s Tejas on for Tycho. Thanks for taking the questions. My first question actually was around just top line growth and how you see that evolving. I think Joel in your comments you said something around ECC revenues continuing to decline in 2019. Can you just help us think about that decline versus any growth you expect on the Trans Ova side? I'm just trying to get some comfort around should we expect sort of revenues to be flat to down or should we expect there to be a bottoming out and then potentially a pickup in the back half of the year?

So the runoff of the ECC revenue continues, given number one that we terminated additional ECCs in the second half of ’18 specifically the Ziopharm and Merck ECC revenues that were in ‘18 will not be showing up in ‘19. So that alone gives you a downtick there. In addition, the reported revenues that was the run off of deferred revenues on our balance sheet, of course, we wrote off the portion of the deferred revenues that was associated with terminated ECCs, since that work is no longer going to be performed. So that headwind right there is going to mean that the ECC revenues are lower in ‘19 verses ’18. And when you take our current revenue generating subsidiaries, principally Trans Ova, as you know, that's not a -- has not been a high growth revenue line for us in the last few years. And while we have very high expectations for the embryo business that we're developing there, those are not 2019 large jumps in revenue. So the net of it is 2019 revenues, absence new ECCs, which we're not actively pursuing or other types of arrangements that would bring in a large bulk of revenues, ‘19 revenues, as reported, will indeed be lower versus ’18.

Got it. That's actually very helpful, Joel. And one quick follow up on the growing concern language in your press release. Was that sort of the FASB requirements that you have to include, and could you help us just understand what sort of conditions or events led you to conclude that statement was warranted at this point in time?

Sure, there is a black and white test that all companies perform in connection with their financial statements that is prescribed by the accounting standards that one has to take a measure of your cash and available liquid assets to satisfy your operations. You have to have sufficient capital to operate the company beyond the prescribed time horizon. And absent that, you have a going concern opinion. And so that's where we are. That is a mathematical exercise, you cannot perform it into that exercise asset sales, you cannot perform it into that exercise the likelihood or additional securities offerings or other means of raising capital. So, it's a black and white test, we perform it, the result was –

Certainly nothing from partnering.

Certainly nothing from partnering or any other strategies that we actively pursue, as you know. So, it's a black and white test that is performed by every company and for the first time, we've had to make that disclosure.

Got it. And one quick follow up there, R.J. for you. I mean, given that you have the 12 month test here, how does that impact your ability or your leverage in these partnering discussions?

It doesn't impact it at all. It's actually more than 12 months. So there's a little bit of fudge factor that's added to the test. So for us, just so you know, would be May 2020. And so you'd have to assume that we don't have any partnering or as Joel said, the sale of a division or what have you, basically operate the same way we are today with actually no event that supplies cash coming to us between now and May 2020. It's a hard and fast test. And I've been through this before, I've actually been on boards of several companies that recorded going to, clinical data, which I don't know if you recall at all. We also had a going concern reservation of clinical data. There were certainly options available and we discussed that as a management team, options available to avoid the going concern reservation. They all seemed to us inferior to simply accepting the reservation, given the quantum of cash we have and will we consider our prospects to be in the near future.

[Operator Instructions] And our next question comes from Derik De Bruin of Bank of America.

So just to sort of follow up on Tejas’ questions, can you give us some sense of sort of like the R&D spend in 2019. We've got -- now that you've sort of taken the rights over for the UltraCAR-T, those are sort of going and starting some clinical runs, just you've got a lot going on. So just give us a little bit of color on how we should think about the R&D and also the SG&A expense in 2019?

Yeah. So we, as you know, we don't make projections, we don't provide projections on line items of expenses, at least that's been our policy in the past. Clearly what we've said is that to run clinical trials is we're going to increase our expenditures from operations, whether it's broken out between SG&A, R&D is accounting classification. But there's no question that we are going to spend more on developing these products for our own account and growing it. The other side of that of course is that by exiting the ECC business, those costs that were associated with supporting our ECC partners are diminishing, while the revenues from ECC partners covered a fair amount of that, we've built up a fair -- we also built up a fair amount of infrastructure and overhead which we're now using for our own programs. So if you take our German town operation, we're presage in this house. That is an operation that has been built over the past decade or so through the programs that we're operating with our ECC partners. So the infrastructure, the assets, the research tools, the laboratory space results built and paid for, so we don't have to incur those expenses anew, however the daily operating costs of the people and the payments out to clinical investigators of course are new expenses for us.

Great. And then just one follow-up, you noticed while you're doing commercial production of the black soldier fly larvae is underway. Can you just sort of like talk about the commercial opportunity there, just our revenue – do we see revenues from that in 2019, just a little bit more color on that line?

Nir Nimrodi will respond.

Yes. The total market is divided between mostly poultry swine and in the future aquaculture. Currently, we're targeting mostly the first two, mainly because the volume that will be required to both aquaculture is much, much greater. The overall market for insects in the US is getting closer to 100 million a year. But is expected to grow exponentially in the next five years, well beyond $1 billion. We are the only commercial facility currently producing product in the US and we do expect to sell the revenues in the following quarters.

This concludes our question-and-answer session. I would like to turn the conference back over to R.J. Kirk for any closing remarks.

Alright. Well, first let me thank everyone for your time and attention. As always, I want to thank our board, I want to thank the people in the room here with me and the team that help us run this fine enterprise, also the extended team of Intrexon. I think that we as general Bostick indicated, we've never been in finer condition. So tremendously gratified by the hard work of all. Of course, I want to thank our board. We recognize, as I indicated in the press release, we recognize our fundamental obligation here and we understand that any business has as its primary purpose the obligation to produce value for its owners. We recognize that intensely. So I just want to make clear something that may not have come through adequately in the call today. And that is everything that you see here is something that we planned on happening and hoped it would happen. So if you go back to go – if you look at our IPO materials and those of you who were involved with the company, even prior to the IPO, the two biggest things that we were focusing on was a, our belief that CART represented a huge -- an enormous therapeutic advance as a motif, but as the practitioners -- the existing practitioners of that motif, we're not working with technologies that would actually make it primetime so to speak, it wouldn't be really usable in very many cases, it wouldn't be accessible, it certainly wouldn't be reasonable cost, it would always involve a great safety risk to patients. And that has largely been the case for CART today. So the two INDs that we have opened, [indiscernible] and her team have now opened and cleared with FDA, one in solid tumor, one in liquid tumor, we represent -- we believe that this is really a game changing event. And so we are very eagerly anticipating the clinical data coming from those two. And then the other thing that was a focus at the time of our IPO was of course our natural gas upgrading technology, what we call, referred to as our methane bio-conversion platform. I'm part of the meetings at times with parties and people in the energy industry. I will tell you nobody who is studying this technology has any doubt that it is a huge, enormous contribution to the field. We believe that it's an appreciating asset. And as an appreciating asset, I'm not that eager to do a deal today or do any, the first deal that comes along if it doesn't suit our purposes and doesn't conform to our objective. On the other hand, I'm very -- we're very, very eager to see this technology take its place in the world, actually be used to produce many, hopefully, many, initially a few of the products that today are derived from oil, instead of from natural gas, which, as you all know, really represents by far the lowest cost carbon feedstock in the world and today and for every measurable period of time that we can anticipate looking forward. So these two have succeeded on these two efforts to the degree that we have make us very, very proud. We believe that we are in excellent condition to commercialize of these two platforms. We think the rest of the company is also outstanding, but I would direct your attention to the accomplishment of these two goals and look, our purchase of oncology rights from Ziopharm and from Merck, those were made because of our belief in the value of that ultraCAR platform and the rest of the pipeline that Helen Sabzevari and her team at Precigen have created. So I invite you all to continue to -- I want you to be critical. I want you to hold us to task. I'm being very clear here about what we think our talent is. And I'm reminding you that the tasks that we've told you for five and the five, our 5.5 years as a public company that we were focused on, these are precisely the ones that we've delivered. We intend on actually seeing these all the way through and to all of our mutual benefit. So thank you very much.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.