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DATE
Wednesday, May 21, 2025, at 8:30 a.m. EDT
CALL PARTICIPANTS
Chief Executive Officer — Ofer Gonen
Chief Financial Officer — Hani Luxenburg
Executive Vice President, Strategy and Corporate Development — Barry Wolfenson
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TAKEAWAYS
Total Revenue: $4 million in total revenue for Q1 2025, $4 million, a $1 million decrease compared to Q1 2024, attributed to lower BARDA-funded development services as the NexoBrid program nears completion.
Gross Profit and Margin: $0.7 million in gross profit for Q1 2025, with gross margin rising to 19% from 12% due to a favorable change in revenue mix.
R&D Expenses: $2.9 million in R&D expenses, up from $1.5 million in Q1 2024, reflecting continued investment in the EscharEx VALUE Phase 3 trial.
SG&A Expenses: $3.1 million in SG&A expenses, compared to $2.9 million in Q1 2024.
Operating Loss: Operating loss was $5.2 million, compared to $3.7 million in Q1 2024.
Net Loss: $0.7 million or $0.07 per share, a significant improvement from the $9.7 million net loss, or $1.05 per share (GAAP), in Q1 2024, driven by "non-cash financial income related to warrant revaluation," according to Luxenburg.
Adjusted EBITDA Loss: Adjusted EBITDA loss was $4 million, compared to $2.9 million in Q1 2024, reflecting increased operating investment.
Cash Position: $38.7 million as of March 31, 2025, down from $43.6 million at year-end 2024, due to $5.1 million operational usage during the quarter.
EscharEx Phase 3 VALUE Trial Progress: Recruitment is "progressing as planned." with most US sites open and the majority of European sites expected to activate in the third quarter.
Interim Analysis Timing: The EscharEx VALUE Phase 3 interim readout is anticipated at 65% enrollment in mid-2026.
EscharEx Phase 2 Comparative Study: A 45-patient head-to-head trial versus collagenase (Santyl, Iruxol) will begin in the second half of 2025, intended to complete ahead of VALUE Phase 3.
External Industry Validation: New collaboration with Kerecis brings "almost all the leading global wound care companies" into MediWound's research programs.
NexoBrid US Revenue Growth: Vericel reported a 207% year-over-year increase in NexoBrid revenue in the first quarter of 2025 and a 31% sequential increase in NexoBrid revenue.
Global Demand for NexoBrid: Demand "continues to exceed manufacturing capacity" in Japan and Europe.
Manufacturing Scale-Up: New manufacturing facility completion is on track for operational readiness by year-end, pending EMA and FDA approvals; Site selection for the US-based backup facility is projected to be finalized in Q3 2025.
BARDA/DOD Funding: "All programs now appear to be back on track," according to CFO Hani Luxenburg, with 2025 funding guidance unchanged despite earlier delays from the US government transition.
SUMMARY
MediWound (MDWD -4.58%) reported a decrease in total revenue in Q1 2025 compared to Q1 2024, but gross margin improved, supported by a favorable shift in revenue mix and warrant-related financial income. The EscharEx development program is advancing on schedule, with broad external validation from key wound care industry partners and interim trial results targeted for mid-2026. NexoBrid achieved record U.S. commercial growth and is experiencing demand surpassing production capacity internationally, prompting accelerated manufacturing infrastructure expansion plans.
Luxenburg explained that the net loss improvement for Q1 2025 was due to "non-cash financial income related to warrant revaluation," a line item highly sensitive to the share price at quarter end.
Gonen stated that planning and site selection for a US-based manufacturing facility is fully supported by BARDA, with formal details expected after project completion in the third quarter.
Wolfenson said, the current model with our $851 price target is merely the first component and further pricing strategy will incorporate comprehensive health economics outcomes research (HEOR) findings.
Gonen confirmed management is prioritizing real patient treatment over government stockpiling and has incorporated expected government demand into stated revenue guidance.
Peer-reviewed data highlighted EscharEx's superiority in key clinical endpoints versus comparator, including 58% complete debridement and a median completion time of 23 days in diabetic foot ulcers, as observed in the Phase 2 study, supporting future regulatory submissions.
INDUSTRY GLOSSARY
BLA (Biologics License Application): Formal FDA submission seeking approval to market a biologic product in the United States.
Barda (Biomedical Advanced Research and Development Authority): US government agency funding advanced research and stockpiling of medical countermeasures.
Value Phase 3: MediWound's pivotal Phase 3 clinical trial for EscharEx in venous leg ulcers.
HEOR (Health Economics and Outcomes Research): Analysis of clinical, economic, and humanistic outcomes to inform product pricing and market access.
Santyl: Collagenase-based enzymatic product currently FDA-approved for wound debridement, serving as active comparator in EscharEx trials.
Iruxol: European collagenase debridement agent used as a comparator in clinical trials.
MariGen: Kerecis's fish skin graft product used for active wound closure in MediWound's upcoming diabetic foot ulcer trial.
Full Conference Call Transcript
Ofer Gonen, Chief Executive Officer of MediWound, and Hani Luxenburg, Chief Financial Officer. Barry Wolfenson, EVP of Strategy and Corporate Development, is also participating in today's call. Following our prepared remarks, we will open the call for Q&A. Now, I would like to turn the call over to Ofer Gonen, Chief Executive Officer of MediWound. Ofer?
Ofer Gonen: Thank you, Dan, and good morning, everyone. We entered 2025 with strong execution across our clinical, commercial, and operational priorities, maintaining the momentum we established in 2024. The EscharEx program is on track, and the addition of a collaboration with Kerecis marked a significant milestone, actually bringing nearly all the major wound care companies into our clinical research program. Meanwhile, NexoBrid continues to gain global traction as we advance long-term manufacturing investments to support sustained growth. Let's begin with EscharEx, our next-generation enzymatic debridement therapy for chronic wounds. Recruitment for the VALUE Phase 3 study for venous leg ulcers is progressing as planned. The global trial will enroll 216 patients across approximately 40 sites in the United States and Europe.
Most of the U.S. sites are already open, and the majority of the European sites are expected to be activated in the third quarter of 2025. Our EscharEx program is strategically de-risked, building on the strong results of our Phase 2 studies. If EscharEx simply replicates those clinical outcomes, the Phase 3 trial would be considered a clear success with results expected to support both regulatory submissions and commercial positioning. The VALUE Phase 3 protocol also includes key enhancements designed to further increase the likelihood of success. We have a larger patient population to increase statistical power, interim analysis at 65% enrollment enabling adaptive adjustments. This assessment is anticipated in mid-2026.
We have standardized treatment protocols to minimize variability and ensure consistency across sites. Finally, it is important to note that EscharEx shares the same FDA-approved active pharmaceutical ingredient as NexoBrid, for nearly identical indication as eschar removal. To further strengthen our BLA submission and to enhance commercial readiness, we are planning a 45-patient randomized prospective Phase 2 head-to-head comparison of EscharEx versus collagenase, scheduled to begin in the second half of 2025. This study will include both Santyl and the European product, Iruxol, generating critical comparative data that would be instrumental in supporting our market access and pricing strategies. This quarter also marks a major milestone in our strategic research collaborations.
We now have participation by almost all the leading global wound care companies across our clinical development programs. Added to the list is Kerecis, which will support our upcoming diabetic foot ulcer trial by providing its tissue product, MariGen, a fish skin graft for active closure. With Solventum, Molnlycke, Kerecis, MiMedx supporting our clinical programs, EscharEx has received strong external validation from most of the key players in the industry. The growing excitement around EscharEx comes from its clear clinical advantages, particularly when we compare it to Santyl, the only FDA-approved enzymatic debridement aid. This was further reinforced by a recent peer-reviewed publication in Wounds, which included a post hoc analysis of our Phase 2 chronic study in VLUs.
The data confirmed EscharEx's superiority across multiple endpoints, including faster debridement, enhanced granulation tissue formation, and improved wound closure. The company has secured the €2.5 million grant component of the European Innovation Council Accelerator Funding to support the clinical and regulatory advancements of EscharEx for the treatment of diabetic foot ulcers. Following a successful evaluation process, the company engaged in discussions for the €13.75 million equity investment, which may not be materialized. We do not expect this to impact our timeline. The DFU study remains on track to begin in 2026, pending alignment with both the FDA and EMA on the trial protocol.
The rationale for our excitement around the DFU program was clearly demonstrated at recent major international wound care conferences, including the WHS, SAWC, and EWMA. We presented the DFU-specific data from our first Phase 2 study of EscharEx. That study included patients with DFU, VLU, and with trauma wounds. The DFU results mirrored the strong efficacy we have already seen in VLUs. I will mention a few key findings. EscharEx achieved 58% complete debridement compared to just 14% with the gel vehicle. Demolition tissue was observed in 42% of treated wounds versus only 11% with the vehicle. The median time to complete debridement was just 23 days for EscharEx compared to 128 days with the gel.
The median time to wound bed preparation was 24 days for EscharEx, whereas it was not achieved at all in the vehicle group. With all this momentum and assuming positive results from the VALUE Phase 3 study, we believe EscharEx is well-positioned to become the global leader in enzymatic wound debridement. Now let's turn our attention to NexoBrid, our innovative enzymatic therapy for severe burns. U.S. adoption of NexoBrid continues to expand with consistent ordering from nearly 60 burn centers. Our commercial partner, Vericel, reported a 207% year-over-year increase and a 31% sequential increase in NexoBrid revenue during the first quarter of 2025. In Japan and Europe, demand continues to exceed manufacturing capacity.
We remain on track with the commissioning of our new manufacturing facility, with operational readiness expected by year-end 2025. Commercial availability will follow regulatory approvals from the FDA and EMA, anticipated in 2026. This facility will significantly expand our production capabilities, enabling us to meet growing global demand and support sustained revenue growth. NexoBrid also featured prominently in recent scientific and clinical communications. Results from a pediatric Phase 3 study were published in the peer-reviewed journal, Burns, reinforcing NexoBrid's efficacy and safety as a nonsurgical eschar removal therapy for both adults and pediatric burn patients. At the American Burn Association annual meeting, new data were presented on NexoBrid's emergency use during the Israel-Hamas war.
NexoBrid was used to treat patients with blast injuries and complex burns. One hospital reported treating a trauma or burn patient every minute for 24 hours, highlighting NexoBrid's vital role in mass casualty and emergency situations. Governments around the world took note of NexoBrid's impact. In particular, the US government has expressed interest in establishing a domestic backup manufacturing site. In response, we have initiated planning and site selection for a future US-based facility, a project supported by BARDA. We are also seeing increased interest in stockpiling NexoBrid as part of global emergency preparedness efforts, and we believe some of these discussions will translate into concrete opportunities once our manufacturing capacity expands.
And now I would like to turn the call over to Hani Luxenburg to review our financial performance in more detail. Hani?
Hani Luxenburg: Thank you, Ofer, and good morning. Total revenue for the first quarter of 2025 was $4 million compared to $5 million in the first quarter of 2024. The decline reflects lower revenue from BARDA-funded development services as the NexoBrid development program for both adult and pediatric populations approaches completion. Gross profit for the quarter was $0.7 million, representing a gross margin of 19% compared to $0.6 million and a gross margin of 12% in the prior year period. This improvement reflects a favorable change in our revenue mix. R&D expenses totaled $2.9 million compared to $1.5 million in Q1 2024, reflecting continued investment in the EscharEx VALUE Phase 3 trial and associated development activity.
SG&A expenses were $3.1 million compared to $2.9 million in the prior year period. The operating loss for the quarter was $5.2 million versus $3.7 million in Q1 2024. Net loss was $0.7 million or $0.07 per share compared to a net loss of $9.7 million or $1.05 per share last year. The improvement was primarily driven by non-cash financial income related to warrant revaluation. Adjusted EBITDA loss for the quarter was $4 million compared to $2.9 million in the prior year period. Now turning to our balance sheet. As of March 31, 2025, we had $38.7 million in cash, cash equivalents, and deposits compared to $43.6 million at year-end 2024.
We used $5.1 million to fund our operations during the quarter. That concludes my financial review. Ofer, back to you.
Ofer Gonen: Thank you, Hani. So in summary, we began 2025 with strong execution and meaningful progress across our key programs. The VALUE Phase 3 trial of EscharEx remains on track, supported by growing scientific evidence and engagement of virtually all major wound care players and partners. We are advancing complementary studies to support market access and future commercial success. NexoBrid continues to gain traction globally, with record US sales, high demand in international markets, and new clinical data demonstrating its value in both routine and emergency care. Operationally, we remain focused on scaling our manufacturing capabilities to support long-term growth, with the new manufacturing facility progressing on schedule and US expansion plans underway.
With a solid foundation, focused pipeline, and strong strategic alliances, we are well-positioned to deliver long-term value. With that, I will now turn back the call to the operator to open the line for questions. Operator?
Operator: We will now begin the question and answer session. If at any time, your question has been addressed and you would like to withdraw your question, please press star and then two. Our first question comes from Chase Knickerbocker with Craig Hallum. Please go ahead.
Chase Knickerbocker: Good morning and good afternoon. Appreciate you taking the questions. Maybe just first on manufacturing. Can you remind us what is yet to be done to be ready for scale-up by year-end? And then any additional feedback that you've gotten from the relevant agencies around the timing of those required regulatory approvals, sign-offs, particularly with the FDA. Thanks.
Ofer Gonen: Hi, Chase. Great to have you with us today. Let me address the manufacturing question. So as I said, the demand for NexoBrid is increasing due to several factors. We have major market launches in the US and Japan, growing governmental interest, expanding indications, the pediatric indication, the military use. So we are focusing on making sure that we will be able to deliver. We completed the construction of the new facility, and we are now in the commissioning phase. Actually, we are on time, and we anticipate achieving all operational capacity by the end of 2025. After that, we are calling for inspections, EMA and FDA.
EMA is easier because the inspectors are Israelis, so we expect it to be quite sooner. As for the FDA, there is quite an uncertainty about how they are doing the remote inspections these days. Anyway, we are expecting that only around mid-2026, so we have time.
Chase Knickerbocker: Got it. And then just on the potential for some US capacity, any thoughts on kind of when investors should be expecting kind of movement there, when you could have seen kind of a site be identified, something formal with the US government in place, etcetera? Do you have any thoughts on kind of timing there?
Ofer Gonen: Yeah. So as you know, the US government has expressed interest in establishing such a domestic backup manufacturing site. We have projects that we believe will be finished by Q3 this year. After that, we will have the understanding about location, timing, etcetera. As I said, this project is fully supported by BARDA.
Chase Knickerbocker: And then you had a number of posters and presentations at SAWC, and I would imagine you had an opportunity to catch up with a lot of the relevant clinicians at a lot of your sites for the VLU study. Any incremental thoughts from them? And as far as enrollment goes, are things kind of to plan as far as what you expected thus far? Anything taking longer or shorter than expected? Just kind of an update on the initial cadence of activations and as we look for some initial enrollment progress here in the short term.
Ofer Gonen: Yeah. So since I met you at this conference, I know that you've been there. In this conference, MediWound had a very strong performance, many presentations, posters, abstracts were shared. We met the majority of the PIs from the United States, and the excitement is there. This trial is the most significant and comprehensive trial in venous leg ulcer patients in the past few decades. This is why all the leading wound care companies and the top KOLs are collaborating with us in this endeavor. Because they know that if it is a success, this trial is going to have a huge impact on the market. So as we said, the recruitment of this study is progressing as planned.
We expect the next milestone, the most important milestone, is having the interim data mid-2026. We do not see an issue in getting there.
Chase Knickerbocker: Thanks, Ofer.
Ofer Gonen: Thank you. And the next question comes from RK with H.C. Wainwright. Please go ahead.
Swayampakula Ramakanth: Good afternoon, Ofer and Hani. A couple of quick questions. So in your prepared remarks, you started talking a little bit about stockpiling of NexoBrid. So in general terms, how are you planning for this? I know you have enough demands on you for the product. So I'm just trying to think in general terms what could we even be thinking in dollar amounts worth of stockpiling that you could be expected to fill.
Ofer Gonen: Hi, RK. It's great to have you on the line today. It's a great question. You know, currently, we have guidance regarding our revenue. We can achieve those numbers. And currently, our preference is to treat patients, not to use NexoBrid. I do not want it to be on a shelf somewhere. So even governments that we are speaking with, they are familiar with our priority. First of all, to treat real patients, and it will also support great commercial launches in specific territories. As for how much governments will in 2026, 2027, I cannot really give you the numbers. All I can say is everything is embedded in the guidance that we are giving.
Generating revenue of $24 million this year and generating $32-$33 million next year. After that, we will know better. I just can share with you that after what countries saw what NexoBrid did during the Israeli-Hamas war, there is a growing interest around many governments, United States, Europe, and others, and we are just starting the discussions.
Swayampakula Ramakanth: Thank you for that. So in terms of the ongoing EscharEx Phase 3 trial, you were saying you have 40 centers running the trial for you. Of the 40 centers, what percentage is in the US? And would there be any reason why the study could get completed ahead of time than what you are anticipating right now?
Ofer Gonen: It's an interesting question. First of all, as for the facts, almost 50% of the sites, between 17 to 20, will be in the United States. We have two to three sites in Israel, and the rest will be in Europe. So this is the structure of the site. As for enrollment pace, as you can imagine, there are 1.5 million patients in the United States that are relevant to such a treatment. We chose the most performing sites to participate in the trial. So we do not think that enrollment will be an issue.
Having said that, we spent a lot of energy, a lot of money, and a lot of effort making sure that we are recruiting the right patients. I do not want a healthy patient to join the study. I do not want someone that the placebo can cure his wound to join the study. I do not want a person that by mistake, by chance, knows the PI to join the study. So the screening process is something which is very, very articulated. We plan half a patient per site per month. This is our track record of clinical trials in this indication. This is what we know from the previous clinical trial that our CRO has.
So we do not see a reason that it will be quicker. Actually, we are not in a rush. The only thing that we care about is that this trial will be a success and that it will change the treatment of chronic wounds.
Swayampakula Ramakanth: And last question from me, Ofer. In terms of the Phase 2 head-to-head study against collagenase, which you plan to start soon, would the results of that study and the Phase 3 study come around the same time, or would the Phase 2 come ahead of it? Just trying to understand so that you know when the whole package will be ready to be sent out to the regulators.
Ofer Gonen: The plan is that the trials will finish. I think the head-to-head study, since it did not start yet, I cannot tell for sure. But the plan is that it will be finished ahead of the Phase 3 study. It's a much shorter study. We are looking at all kinds of parameters that will impact, especially safety, market aspects, pricing aspects, etcetera. We do not need the long follow-up, the three-month follow-up after the study completes in the Phase 3 trials. So this is a much shorter and simpler trial as far as we are planning now. We will get the final results before the Phase 3 is completed.
Swayampakula Ramakanth: Thank you. Thank you very much for taking all the questions.
Ofer Gonen: Thank you, RK.
Operator: And the next question comes from Michael Okunewitch with Maxim Group. Please go ahead.
Michael Okunewitch: Hey there. Thank you so much for taking my questions today. I guess I would like to follow up a little bit on the head-to-head study. What considerations might go into the pricing strategy? If you're achieving faster debridement than Santyl with fewer applications, do you have to justify enhanced pricing to match cost per application, or do you also need to consider the reduced healthcare utilization with bed preparation as well? Just like to get a sense of what factors and metrics would be relevant for those pricing determinations.
Ofer Gonen: Hi, Michael, and thank you for joining us today. Barry, can you please address that question?
Barry Wolfenson: Sure. Absolutely. Hi, Michael. Good question. I think the model that we have out right now with our $851 price target is merely the first component that you mentioned, which is what was the cost of the product over the duration of the treatment period, and we're comparing the average cost of Santyl over a treatment period versus then what would be the anticipated premium for the average cost of EscharEx. The next part is what we'll be doing.
We're actually doing a full market research study on market access and pricing that will get into the second component, which is the HEOR, the health economics component of it, where we do look at what are all the downstream impacts of saving six weeks of treatment from the time that it takes to apply the drug, the nursing time, the physician time, to what happens to these patients. Do some of them end up in the hospital? Do they have infections that need to be treated?
Once we get all of that together, if indeed there's a good pot of dollars that the facility would save on average, then we think that we have the opportunity to take a higher premium against Santyl.
Michael Okunewitch: Alright. Thank you. I really appreciate that additional clarity. And then when thinking about the potential for new stockpiling programs for NexoBrid, would you expect that these would come from your expanded new manufacturing facility, or would you expect the domestic program to set up a dedicated manufacturing for those?
Ofer Gonen: It's a good question. We are planning to have some flexibilities here. We have the current manufacturing facility. We are going to have available the new scale-up manufacturing facility. We are planning a new manufacturing facility in the States, and we have another facility to support the Department of Defense program, another facility that will be completed by the end of 2025. Actually, it will be completed this year. For many windows, facilities significantly expand our manufacturing capacity. We do not want to be in a position three years from now launching EscharEx, telling the analysts again, hey, there is huge demand, but we cannot support that.
So those facilities significantly expand our manufacturing capacity and will provide us with critical support to, first of all, to a successful launch of EscharEx, and to be able to satisfy the demands for all the countries that will be interested in stockpiling.
Michael Okunewitch: Alright. So there is an expectation that this new US backup manufacturing facility will be part of the stockpiling.
Ofer Gonen: Yeah. The current facility that we are building in Israel is enough to start supporting the demand we anticipate. Adding a facility in the United States can be not only a backup but also to expand manufacturing of NexoBrid and maybe to support us with the manufacturing of EscharEx as well.
Michael Okunewitch: Alright. Congrats on all the great progress. Thank you for taking my questions once again.
Ofer Gonen: Thank you.
Operator: And the next question comes from Scott Henry with Alliance Global Partners. Please go ahead.
Scott Henry: Good day. First question, the NIH funding environment is certainly challenging, which could impact BARDA, Department of Defense. It seems like that revenue was down a little bit in Q1. Are you expecting that to rebound significantly in the coming quarters, or how should we think about that overhang even though that's not a main priority? Obviously, product sales are more important. Just trying to get a sense of how to model that development services line.
Ofer Gonen: Hi, Scott. It's great to have you with us today. Hani, do you want to answer this question?
Hani Luxenburg: Hi, Scott. Great to have you with us. Thank you for the question. So our guidance for 2025 remains with no change. Actually, we anticipate $24 million in total revenue. As you are all aware, the change in the US administration caused a brief delay in the approval of both BARDA and DOD-funded activity during the transition. However, all programs now appear to be back on track, and we do not anticipate any material impact on our revenue or our 2025 funding outlook. The outcome is that the revenue will not change for this year.
Scott Henry: Okay. Great. So it sounds like we should expect that to rebound if not in the second quarter, certainly in the second half of the year.
Ofer Gonen: Yeah. Let me step in here and clarify. In the first 60 days of the administration, they did not know what they could approve, what they could not approve, then it was a kind of uncertainty. The feedback that we are getting is everything, at least for our programs, is back on track, and we anticipate the $24 million guidance will remain as it is, and the programs that they are funding are programs with a priority that will keep on getting the US government funds.
Scott Henry: Okay. Great. Thank you for that color. And, Hani, since I have you there, could you talk a little bit about the below-the-line, below the operating income, that financial income expense line has been pretty volatile. It's certainly very positive in this quarter. More of an expense in the prior quarter. How should we think about that below-the-line expense, financial income expenses going forward? What's a representative number? Is there any noise in there?
Hani Luxenburg: I wish I knew the representative number. If I knew it, I would not be here because it very much influenced by our share price at the end of each quarter. So the below-the-line expenses are mainly from the financial income or expenses from revaluation of our warrants. At the end of each quarter, we are doing a revaluation, and it very much depends on the share price. If it was increased or decreased from the beginning of the quarter, and this sets the direction of the income or expense. At the end of this quarter, the share price was $15.52, much below what it is now.
So it is very much dependent, and I cannot tell you what to expect. It depends on the market. I hope we will see a good transition in our share price, and it will set the opposite way. Because if it increases, there are expenses, financial expenses. If it decreases, there are financial income. I hope I answered.
Scott Henry: Yes. And that's actually quite helpful. I'll just take a look at the filings where I'll get the greater detail. But that is helpful. Thank you for that. Thank you for taking the questions.
Ofer Gonen: If I may add, those warrants expire in November 2026, and there are $34 million of warrants that are way below the money. If you want to look at next quarter, you will see that there was a significant increase in the share price. Probably, there will be financial expenses related to that, but we are okay with that. Hopefully, after November 2026, this company will remain with no warrants, and this issue will disappear.
Scott Henry: Okay. Great. Thank you for that color.
Ofer Gonen: Okay. Thank you, Scott.
Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Ofer Gonen for any closing remarks.
Ofer Gonen: Okay. So thank you, everyone, for joining our call today. We look forward to updating you again in our next quarterly call.
Operator: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.