Q1 2024 Aclaris Therapeutics Inc Earnings Call

Participants

Kevin J Balthaser; Chief Financial Officer; Aclaris Therapeutics Inc

Neal Walker; President, CEO, Director; Aclaris Therapeutics Inc

Joseph Monahan; Founder, Chief Scientific Officer, Director; Aclaris Therapeutics Inc

Roger Song; Analyst; Jefferies LLC

Thomas Smith; Analyst; Leerink Partners LLC

Julian Harrison; Analyst; BTIG LLC

Corinne Jenkins; Analyst; Goldman Sachs Group Inc

Alex Thompson; Analyst; Stifel Financial Corp

Gavin Clark-Gartner; Analyst; Evercore ISI Institutional Equities

Presentation

Operator

Good day, and thank you for standing by, and welcome to the Aclaris Therapeutics First Quarter 2024 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 and to ask a question during the session, you will need to press star one one on your telephone and You will then hear an automated message advising her hand this race. To withdraw your question, please press star one one. Again, please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today. Kevin Bob, is there please go ahead.

Kevin J Balthaser

Thank you. I am Kevin Bolton-Weiser, Chief Financial Officer for Aclaris. Please note that earlier today, we issued a press release highlighting our first quarter 2024 financial results and other business matters. For those of you who have not yet seen it, you will find the release posted under the Press Releases page of the Investors section of our website at w. w. w. dot Aclaris Tx.com. In addition, we will be referring to a slide deck entitled ITK. portfolio, which can be found on the Investor Presentations page of the Investors section of our website and furnished as an exhibit to our Form eight K that we filed with the SEC earlier today. Joining me today for the call are Neil Walker, our Interim Chief Executive Officer, and Joe Monahan, our Chief Scientific Officer, Wally Smith, our scientific and business development consultant will also be available for the Q&A portion of the call.
Before we begin our prepared remarks, I would like to remind you that various statements we make during this call about the Company's future results of operations and financial position, business strategy and plans and objectives for classes. Future operations are considered forward-looking statements within the meaning of the federal securities laws. Our forward-looking statements are based upon current expectations that involve risks, changes in circumstances, assumptions and uncertainties that could cause actual results to differ materially from those reflected in such statements. These risks are described in the Risk Factors section of Aclaris Form 10 K for the year ended December 31st, 2023, and other filings Aclaris makes with the SEC from time to time. These documents are available under the SEC Filings page of the Investors section of our website at w. w. w. dot Aclaris Tx.com. All the information we provide on this conference call is provided as of today, and we undertake no obligation to update any forward-looking statements we may make on this call on account of new information, future events or otherwise. Please be advised that today's call is being recorded and webcast. A link to the webcast can be accessed under the Events page of the Investors section of our website.
I'll now turn the call over to Neil.

Neal Walker

Thank you, Kevin, and good afternoon, everyone. Last quarter we announced that in addition to various cost-cutting measures and an overall review of our business strategy. We are also reevaluating the indication selection for ATI. 2138, which is our oral small molecule ITKJAK. three inhibitor. Today, I'm pleased to announce that we have decided to move ATI 2138 forward any proof of concept study in moderate to severe atopic dermatitis. Atopic dermatitis is a Th two cell driven disease and ITK. inhibition blocks, T cell differentiation, activation and production of IL-4 and IL-13.
In fact, there is extensive literature on the role that ITK. plays in regulating the signaling pathways that are central to the production of various cytokines by both Th two cells and mast cells today, we will provide an overview of ATI. 2138 and the data we have generated thus far, Joe.

Joseph Monahan

The new ATI 2138 is a covalent inhibitor that targets the T cell kinase ITK. as well as Jack three ITK. is a kinase downstream of the T cell receptor and is important for the regulation of T cell function. While Jack Therese required for the signaling of cytokine that utilize the gamma common receptor such as IL-2, IL-4 and IL-13, ATI 2138 through effective targeting of these two critical T cell and cytokine associated pathways provides the potential to treat a broad set of autoimmune diseases. Ati 2138 was generated from our proprietary Connect drug discovery platform using structure-based drug design, focusing on molecules with high reversible affinity containing electrify the target, the ATP. site 15 positions. Similarly in ITK. injectors, as shown in slide 5, Kobayashi and engagement of six four four two was demonstrated from the proprietary crystal structure of the ATI 2138 ITK. complex ATI 2138 also binds to and engages has nine oh nine injector and the only Jack isoform with this residue in the ATP site, the cystine Jack three has also been effectively targeted by the drug lucitanib, which is Pfizer's recently approved therapy for alopecia areata. Ati 2138, differentiates from both realistic nib and reversible Jack inhibitors, thereby demonstrating unique pharmacology and best in class potential.
As shown on slide 6, ATI 21, 38 has similar high potency for inhibiting both ITKJAK. three signaling in contrast to route lucitanib, which is less potent on both pathways and demonstrates Jack three biased pharmacology. Ati 2138 is select selective project three with no meaningful crossover to other Jack isoforms. The restricted expression of JAG three to hematopoietic cells, coupled with the lack of crossover to other jacks, may result in an improved safety profile for ATI 2138 relative to broad spectrum, reversible Jack inhibitors, clear differentiation from the prevailed inhibitor. Implicitly is demonstrated in human whole blood studies shown on slide 7, panel on the left compares ATI 2138 and limitless fitness in ITK. dependent anti CD. three stimulated interferon gamma production. While the right-hand panel compares two compounds in Jack three dependent I/O to stimulated interferon gamma release. Ati 2138 is 44.4 times more potent than replacing nib and blocking ITK. dependent cytokine production and 5.4 fold more potent in the Jack three dependent readout comparable whole blood potencies of 2138 on ITK. inject three translated to similar impact on the respective PD readouts in the human SAD and MAD studies. In contrast, at the FDA recommended 50 milligram QD dose of Reverset known for alopecia areata exposures would be expected to inhibit Jack three, but have little impact on the ITK. pathway.
Now why is ITK. an important target? Slide 8 demonstrates the current understanding of the role of ITK. T & T helper cell differentiation and activation of the tech kinases. Itk alone is required for the differentiation and activation of Th two and Th 17 cells and ITK. knockdown or inhibition results in skewing of T helper cells from the Th two Th 17 phenotype to the Th one to replicate that type ITK. inhibitors have the potential as effective oral drugs to treat diseases driven by Th two and or Th 17 cells such as atopic dermatitis. Ati 2138 has demonstrated activity in a number of preclinical immune inflammatory disease models, oral activity at various doses of 20 ATI 21, 38 in rat adjuvant induced arthritis is shown on slide 9, evaluating ankle swelling on the left and histology on the right similar, strong activity is observed with doses of five and 15 milligram per kilogram, BID. as well as 30 milligrams per kilogram to date activity was also observed in the adoptive T cell transfer model of colitis in the mouse.
As shown on slide 10, ATI 21, 38 formulated in Ciao protected proximal and distal colon as well as the ileum from inflammation to a greater extent than the anti IL 12 p. 40 antibody preclinical studies supported the advancement of ATI 2138 into Phase one SAD and MAD clinical studies.
As summarized on slide 11, the drug was generally well tolerated at favorable PK characteristics and demonstrated dose-dependent modulation of ITK. and Jack three pharmacodynamic readouts.
Slide 12 shows the PK characteristics of ATI 2138 from the MAD study exposures following the final dose on day 15 of the MAD study are shown on the left and dose proportionality shown on the right linear PK is observed with ATI 2138 following two weeks of dosing with steady-state dose proportionality observed for both C-max and AUC.
Slide 13 shows the pharmacodynamic results across the two week dosing period in the MAD study. The left panel is measuring the inhibition of ITK. dependent I/O to mRNA following ex vivo stimulation and blood, the middle panel, Jack three dependent interferon gamma production and the right panel, interferon gamma production following dual stimulation of the TCR inject three pathways, ATI 2138 demonstrated dose and time-dependent inhibition under all stimulation conditions. 50% to 90% inhibition of the PD readouts was observed with doses from five to 40 milligrams BID.
Slide 14 shows exposure response analysis from the three PD. readouts in comparison to translation from preclinical human whole blood analysis These data demonstrate a strong concentration dependent correspondence between EC 50s from both the SAD and MAD clinical studies and In Vitro human whole blood studies across the three stimuli as expected similar potency as observed for the ITK. pathway, Jack three and dual stimulation inhibition. Finally, exposures generator from five milligrams to 40 milligrams BID. dosing were sufficient to provide blockade of both pathways. Successful completion of the Phase one studies effectively positioned ATI 2138 to advance into Phase two, the first indication, which ATI 2138 will be evaluated as a atopic dermatitis.
The rationale for which is shown on slide 15, the dual TCR directory specificity of ATI 2138, effectively positions it for treatment of atopic dermatitis, the important role of ITK. Th two cell differentiation and activation, coupled with the efficacy observed with the biologics targeting the Th two cytokine, IL-4 and IL-13 supports the potential for ATI 2138 as an oral alternative to these biologic. Additionally, inhibiting Jack three should and complementary efficacy through blockade of IL-2 and IL-4 signaling as evidenced by the efficacy of a number of JAK inhibitors in atopic dermatitis.
The design of the atopic dermatitis study is summarized on Slide 16. This study will be an open label 12 week 15 patient study to examine the safety, PK and early signs of efficacy of ATI 2138 in patients with moderate to severe atopic dermatitis. In addition, to the clinical readouts, there will be a heavy emphasis on PD markers of pathways and disease in this study. Moreover, we plan to demonstrate the importance of ITK. inhibition as a differentiating feature of our molecule.
In summary, as shown on slide 17, ATI 2138 is a potential best in class dual inhibitor of ITKJC. three, nonclinical potency activity at MI and safety studies supported moving the compound into clinical development, positive data from the SAD and MAD phase one studies providing clinical support to advance ATI 2138 into a proof-of-concept Phase two study in moderate to severe atopic dermatitis. Aclaris is expanding our efforts in the ITK. pathway beyond ATI 2138 with discovery efforts focused on next-generation ITK. inhibitors. Well, ITK. has been of interest to pharmaceutical companies for over 20 years has proven to be a difficult drug kinase, as evidenced by the efforts outlined on Slide 19. The research described on this slide are focused on ATP competitive inhibitors and due to poor biochemical efficiency and pharmaceutical properties they have not advanced in clinical development. More recently, covalent inhibitors of ITK. have been described with the cobas CPI. eight one eight and early clinical development on next generation efforts are focusing on selective inhibition of ITK. and eliminating core crossover on Jack kinases. As shown on slide 20, selective targeting of ITK. should provide effective modulation of both Th two and Th 17 cell functions with the potential of treating a topic in Th 17 driven diseases as summarized on slide 21 unit and mouse genetic data flows. Pharmacological inhibition strongly supports a role for ITK. and T cell biology and pathophysiology. This, coupled with the fact that dysregulated T cells are involved in a number of immune inflammatory diseases validate selective inhibitors of ITK. as an approach to treat a broad range of indications.
Thank you, Joe. I'll now turn it over to Kevin to discuss our financial highlights for the quarter.

Kevin J Balthaser

You know, we continue to maintain a strong balance sheet with a robust cash balance and zero outstanding debt. We ended the first quarter with cash, cash equivalents and marketable securities of $161 million, which was compared to $182 million at year end. Our cost containment initiatives are on track and progressing nicely of our total cash expenditures. In the first quarter, approximately $14 million was related to nonrecurring payments, including discontinued research and development programs. Severance benefits for individuals impacted by the reduction in force announced in December, and payments owed to third parties related to the upfront amount received under the sun licensing agreement activities associated with discontinued programs and the reduction in force are expected to be substantially completed by the second quarter of 2024. As a result, we expect our cash expenditures on a quarterly basis for the remainder of the year to be significantly reduced when compared with the first quarter without giving effect to any potential business development transactions. We continue to evaluate business development opportunities across our portfolio of assets could be a source of non-dilutive capital in the near term.
With that, I will now turn the call back over to Neil for closing remarks.

Neal Walker

Thank you, Kevin. We are pleased to provide you with a pro forma portfolio update on our decision to shift to atopic dermatitis is the first proof of concept indication for ATI 2138. As a reminder, we are still in the process of reviewing various strategic options moving forward and look forward to providing additional updates in the near term.
For Kyle, we would now like to poll for questions.

Question and Answer Session

Operator

Thank you. And as a reminder, to ask a question, please press star one one on your telephone and wait for a name to be announced. Once again, please press star one one on your telephone keypad. And to withdraw your question, please press star one one. Again, please stand by while we compile the Q&A roster.
Yes.
And for our first question, it comes from the line of Roger Song for Geoff.

Roger Song

Great.
Thanks for the update and taking a little questions. Maybe now with the biology question on. So for ITK. and GX. three and the spending on that as you compare to the dependence, Jack inhibitor has been a lot of the advantage. I'm just curious, how do you think about those IQ, Kim, Jackson three in terms of having synergistic or additive effect when you're in chemicals for those preclinical models, just that curious if you're seeing in all of you compare?
Yes, that Jack three or and TK. alone kind of in a preclinical model. And I have a follow-up for their clinical question. Thank you.

Neal Walker

Yes, but thank you, Roger. I'll start there and all to Joe and or Wally. But yes, that's one of the attractive things about the molecule and was one of our original hypotheses about that, if we could inhibit the Jack three and then layer on maybe the hyper boost with IGK., particularly in an indication like a topic where ITK. really targets the Th two effect, we ought to see a more robust effect there. And so we certainly tested that hypothesis out in preclinical models and and actually, I know you didn't ask this, but going forward in this initial proof-of-concept study, we'll endeavor to tease out that differential effect through looking at various pharmacodynamic markers. It just definitively prove out BITK. contribution from that molecule and maybe, Joe, if you want to add anything there.

Joseph Monahan

And the only thing I would add is that we have profiled a January more selective inhibitor with illicit NIB versus ATI 2138 in the adoptive T T cell transfer model of colitis and at equivalent doses and exposures, we did see a boost in anti-inflammatory activity with 21, 38 compared to what was sitting there.

Roger Song

Got it.
Yes, that makes sense. Then compared to JX three more selective compounds, may be that that's the AITK. component, but you're correct to see the PD. marketing the Phase two for sure. And then in terms of the of the Phase 2a, the plan, the Phase 2a you selecting the arm, no 10 meg Yankee, but those understanding you want to be more capital efficient to test the windows. Just curious on you know if you think about those is the best dose you can tell from the preclinical and also what the other potential dose, if that does see some seasonal. But you know, what do you have that those potential that you will well testing there, future clinical trials? And then also for the Phase IIa, any powering for dose efficacy or what is the on the ultimate kind of efficacy goal for the Phase IIa in order to move forward?

Neal Walker

Yes.
So from so it is it is open label. So our main objective is to show the absolute treatment effect. And I think to be fair in this indication, we want to see something north of some of the standard in market Jack inhibitors. I mean, I from my perspective, they've set the bar in a die from an efficacy perspective. And historically, we kind of understand the placebo rate.
And then the second part of the first question Joe, do you want to tackle that one?

Joseph Monahan

Yes. So with regard to the dosing, first of all, we do have the ability to go higher than 10 milligram BID. if we choose to, we identified 10 milligrams BID. as our dose in this study based on exposures in the various preclinical disease models that we looked at, coupled with the data in red, the fitness in the clinical exposure that they had. I think with this mechanism, it doesn't seem to be driven by C-max. It doesn't seem to be driven by C. trough, it more likely is driven by a C average. And at the 10 milligrams BID., we have equivalent potency at C-max as realistic and it goes against Jack three significantly more exposure and potency at against ITK. As we described at the C average, we have higher level of inhibition of both ITK. and Jack tree at this 10 milligram BID. dose. So based on the preclinical models and based on comparison to responsiveness, that's how we chose the dose.

Roger Song

And yes, there are also other questions I have now.
Thank you.

Neal Walker

Thank you, Ron.

Operator

Thank you. And once again, if you'd like to ask a question, please press star one one on your telephone keypad and for the next question. It comes from the line of Thomas Smith from Leerink Partners. Please go ahead.

Thomas Smith

Hey, guys, good afternoon. Thanks for the updates and thanks for taking our questions. Just on the preclinical data, and I appreciate all the models and comparisons to real Sidney. And I'm just curious if you've generated any data comparing 21, 38 versus ipatasertib and selective JAK1 inhibition preclinically? And any thoughts on how 21, 38 like what would stack up in an indication like atopic dermatitis versus parasiticides?

Neal Walker

Yes. Thanks for that question. I think it's I think the X factor here is the ITK. inhibition. And when you look at the literature on ITK. and inhibition in general, it really skews to inhibiting the Th two cytokine. So it directly acts on IL-4, IL-5, et cetera. And so we really think that that is going to give the Jack three side of Boost. And Joe, while I am not aware of direct comparisons between the it's pure covalent Jack three versus Jack one specifically in AD., I think you know, our hypothesis is when you have a dual mechanism that we demonstrated synergy, we ought to have an additive effect. So I that would be the goal is to outperform. You have the them.

Thomas Smith

Understood That's helpful.
And just on on the Phase IIa trial design, can you talk about the rationale a little bit, I guess, specifically the choice of an open label design versus maybe a slightly larger placebo-controlled design. It sounds like here and you have some interesting biomarkers identified that that you'd like to take a look at here in terms of signal-finding, but I'm just curious in terms of maybe more definitively teasing out the clinical signal here, the switch to the open-label trial design?

Neal Walker

Well, I think you know, it's a couple of things. One is that it's a lot easier these days in a relatively competitive environment to enroll studies that have just an active arm when you're when we're looking for signal finding, I think our our goal is speed and the study was our very cost-efficient way to get a lot of answers. And I think we know what the and what these molecules and different kind of surrogates can do like if we just compare look at real estate and that percentage of all these other drug categories, I think we don't have a good understanding of what the absolute responder rate needs to be across these measures. And so I think that was the balance here of trying to get data as quickly as we can. And if it works out the way we hope and expect that we would certainly be interested in progressing in a little bit larger AD. study, but also importantly, looking at some of the indications that lucitanib has as already started to blaze the ground on looking at vitiligo, looking at alopecia areata, I think there's a couple of a couple of different. We have ways to go post this initial IDE study.
But I think just to go back to the original premise of your question, I think I don't think that we lose too much and not having a placebo group. We enhance the enrollment cadence, we'll get data quicker, which I think is important for us given where we're at at the moment.

Thomas Smith

Got it.
That makes sense.
And just on along those lines, Neil, with respect to study start, like I understand where putting together the protocol and the operational preparations are underway, do you have an early guess early sense of when we might be able to expect some top-line data from the Phase IIa?

Neal Walker

I think we're giving guidance just yet, Tom, but it's going to be you know, it is definitely going to be within a year of this call, right? So it's a I'll give you that this hub Hexion marker, but we'll give more color on that once we get the first patient.

Thomas Smith

Got it.
Makes sense.
I guess thanks for taking the questions.

Operator

Thank you.
And your next question comes from the line of Karine Johnson from Goldman Sachs. Please go ahead.

Good evening.
This is Omar on for Karin.
So I had a couple of questions.
One is, are you funded to complete the proof-of-concept study?
And then to our strategy, where do you see unmet need in atopic dermatitis?

Neal Walker

We're certainly funded to complete this study. This is a exceedingly cost-efficient study, which was kind of by design and so we're trying to generate data very quickly. This is in contrast to what we had originally proposed at the tail end of last year, which was a study in UC, which was a lot more expensive going to take a lot more time. So we have a robust balance sheet, as Kevin alluded to in his comments.
Yes, that's that balance sheet is not going to change to appreciably through through the end of the year. And so we feel very comfortable to a very small amount of burn while we continue to review various strategic options.
And we'll sorry, what was the first the second question.

where do you see the unmet need in atopic dermatitis?
So I don't have a strategy.

Neal Walker

Yes, we're at the front end of the topic market. This is where psoriasis was years ago. We certainly I don't think anybody can claim that we've maxed out efficacy in this space. You know, obviously do Diplomat is a wildly successful drug, but 60% of the patients we aren't even getting clear or near clear by week 16 and then 50% of those patients get us some optimal response. So and that's on the biologic side on the Jack inhibitor side. And we have much better efficacy, but there's still a lot of headroom in this space and what we're trying to do here is tease out the ITK. effect. We really think this is a strong mechanistic approach to this category.
And on the competitive landscape, in AD. is, as you can see by clintrials.gov, this is still in its infancy. It's continuing to evolve. A lot of people are starting to look at that space because they're, you know, we aren't where we're at with psoriasis where we're talking about positive 100.

Thanks.
Restaurant growth.

Neal Walker

Yes, Kyle, is there any other questions in the queue?

Operator

Our next question or comment comes from the line of Julian Harrison from Bank TRG. Your line is open.

Julian Harrison

Thank you for taking my question and for hosting this call. I got on a few minutes late. So apologies if this has already been covered, but I'm wondering if you can remind us of the scope of your IP portfolio related to the use of Jack inhibitors for alopecia and how we should be thinking about that opportunity going forward?

Neal Walker

Sure. Thanks, Julian. So we had a long time ago back in 2015, 2016 or so executed transaction with Columbia, securing the rights to the method of use IP around utilizing various Jack inhibitors for the treatment of alopecia areata and actually various other types of alopecia. And thus far to date we have we've announced two royalty deals. One is worth and Lilly for the use of baricitinib for alopecia areata. And the other is with some pharma who had acquired concert, we had a deuterated ruxolitinib, and that was also executed late last year. And so those are the two current molecules that we have granted access to the utilizing our IP. So we think it's a we think it's a very valuable estate. Clearly, we've done two deals in. We'll constantly be looking at ways to We enhanced the value of that portfolio.

Corinne Jenkins

Thank you.

Operator

Thank you. Our next question or comment comes from the line of Alex THOMPSON from Stifel. Tom, your line is now open.

Alex Thompson

For Alex. I guess you could just talk a little bit more about how this drug differs from the Pfizer compound?
And then is there any case for differentiation on the black box warning? Thanks.

Neal Walker

Do you guys still expect a black-box warning fix?
I'm sure that Thanks, Alex. I think until you get through an actual FDA approvals process and have those dialogues whenever we're tickling charged a Jack at this stage or is that they're thinking about?
So in thinking about your black box, but I do think a lot of the black box warnings, if you look at all the government Jack inhibitors out there, they're all slightly different wind boats, bonuses, division and cohesiveness, et cetera. So beta, we'll drive some amount. And maybe Joe can handle the question about what are the different key differentiating features between our drug and motor segment.

Joseph Monahan

Yes.
The I mean, they both have called out inhibitors that target a similar cysteine residue and they both are potent inhibitors and frac three. The key differentiation for our industry is that, um, with nib has a low dose of finances, it's significantly more potent on Jack three than any excluding ITKS. And in contrast, ATH. one 38, depending on which read-out you use, it's very similar potency, refractory CAR T K kind of the clinical exposures and doses that we have, clients use it have you and what the fitness business?
I think it's pretty clear that we will garner addicts will have exposure to that criminal lead block, I should say in factories significantly, whereas with fitness is more of a jagged three biased drug with little impact on IPK. at the clinical dose and exposure.

Alex Thompson

Got it.
Thank you.

Operator

Thank you. And one moment for your next question.
Yes.
And our next question comes from the line of Kevin Clark Gardiner from Evercore ISI. Please go ahead.

Gavin Clark-Gartner

Hey, thanks for taking the question.
Apart from the black box side of things, I'm just wondering how you believe that providers will view the safety profile relative to the other Jack ones. And specifically, I'm wondering if there are any learnings from the alopecia or even the rheumatoid arthritis space that may give some early hints into how they may view this Yes.

Neal Walker

Thanks, Gavin. It's a good question because I think on the face you look at it and say, well, it's a black box. And then I mean, I could tell you having practice know, oftentimes, it's more of a chore for the physician to explain the laundry list of things that could happen. However, I would say that in talking to various colleagues over the last couple of years, I really don't think and I think it is reflected in their sales. And I really don't think it's been that big of a hindrance once you explain the issues. And then at the end of the day, patients want and their disease to be better. And we know that there really hasn't been much of a tail off at all. In fact, you know, baricitinib have been growing in alopecia areata. You've seen nice growth with Rinvoq in atopic dermatitis, and there's a reason it provides order of magnitude benefit over over biologics for sure. So I think at the end of the day, when patients want relief and they know they're going to get it very quickly rather than perhaps waiting 16 weeks for a biologic to kind of take you get the max effect.
Yes, that's important.

Gavin Clark-Gartner

Got it.
Thanks.

Operator

Now I'm showing no further questions at this time. I would now like to turn the conference back to Neal Walker for closing remarks.

Neal Walker

Well, thanks, everybody, for joining our call today, and we're excited to provide additional updates in the coming months. And appreciate your time. Thank you.

Operator

This concludes today's conference call. Thank you for participating, and you may now disconnect.