Delcath Systems, Inc. (DCTH) Earnings Call Transcript & Summary

Good morning and welcome to the Delcath Systems Business Update Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to David Hoffman, Delcath, General Counsel. Please go ahead.

Thank you. And once again, welcome to Delcath Systems business update call to discuss the recent FDA approval of HEPZATO KIT or HEPZATO. With me on the call are Gerard Michel, Chief Executive Officer; Dr. Johnny John, Senior Vice President of Medical Affairs; Dr. Vojo Vukovic, Chief Medical Officer; Kevin Muir, General Manager of U.S. Interventional Oncology; John Purpura, Chief Operating Officer; and Sandra Pennell, Senior Vice President of Finance. I'd like to begin the call by reading the safe harbor statement. This statement is made pursuant to the safe harbor for forward-looking statements described in the Private Securities Litigation Reform Act of 1995. All statements made on this call with the exception of historical facts, may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act -- Exchange Act of 1934. Although the company believes that expectations and assumptions reflected in these forward-looking statements are reasonable, it makes no assurance that such expectations will prove to have been correct. Actual results may differ materially from those expressed or implied in forward-looking statements due to various risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those expressed or implied in the forward-looking statements, please see the risk factors detailed in the company's annual report on Form 10-K, those contained in subsequently filed quarterly reports on Form 10-Q as well as in other reports that the company files from time to time with the Securities and Exchange Commission. Any forward-looking statements included in this call are made only as of the date of this call. We do not undertake any obligation to update or supplement any forward-looking statements to reflect subsequent knowledge, events or circumstances. Now I would like to turn the call over to Gerard Michel. Gerard, please proceed.

Thank you, everyone, for joining us. Yesterday, the FDA approved HEPZATO KIT, a drug device combination product designed with administered high-dose melphalan to deliver well controlling systemic exposure and associated side effects for adult patients with uveal melanoma with unresectable hepatic metastases. The NDA approval represents the culmination of years of work for investigators and employees. We'd like to thank the FDA for the collegial and collaborative efforts through the review period of the HEPZATO and NDA resulting in approval by the PDUFA date. I also want to thank our 25 investigators, including Dr. Zager, our global lead investigator. While there are many Delcath employees that have worked tirelessly over a decade or more, I want to make a special mention to Dr. Johnny John and John Purpura, both joined the company well over 10 years ago and stuck with the business who was in a very hard times driven by a sincere belief in the potential of the therapy. It is not an exaggeration if we say the company would likely not be here if it wasn't for their support. In addition to our latest set of health care dedicated funds that started supporting us earlier this year, there are numerous retail investors and small funds that carried the business for many years. I want to thank them for their support and importantly, their trust as we navigated some difficult issues over the years. This is truly a remarkable milestone and transformative moment for Delcath, and most importantly, for patients with unresectable hepatic metastatic uveal melanoma. With HEPZATO's approval, patients in the United States now have 2 improved therapies, KIMMTRAK and now HEPZATO KIT. Importantly, the 2 treatments are -- have very different mechanisms of action, and it is hoped that after patient progresses on one of these therapies, the other may offer some additional benefit for the subset of patients for whom both products are appropriate. This is not the case of another ME2 therapy being approved. This is a significant win for patients. It is important to note that the FOCUS Trial would support the registration included both treatment i.e. in previously treated patients and had no HLA genotype restrictions. As we had expected, our labeled indication is consistent with this patient population, which means our U.S. patient TAM is the approximately 800 patients we have been discussing for years. Also, as expected, the approval comes with a REMS requirement. Much of what is in the REMS from a training perspective, we have been practicing in Europe for years with some additional formal electric keeping and afforded practices. We do not believe this will hinder peak penetration although it may add a month or two to some startup times at these sites. Commercial supply likely will be available until late in the fourth quarter, a change of an expectation earlier this summer. We had planned to produce certain product packaging items and labeling items at risk. And given the compressed time frame of the review, discussions with the agency regarding elements of the packaging continued up into the last few days before the PDUFA date. Given the complexity of the product, we have over 25 distinct labeling items. For example, the outer cardboard [indiscernible] with printed labeling, the longest lead time unusually containing a minimal amount of information was not finalized until a week or so ago. The net effect is we lost approximately 6 to 8 weeks of lead time, we hope to have to produce certain packaging items prior to the August vacations in Europe, where the printing vendor is located. Now I will need to get in the queue when the August vacations end. However, given our unique commercialization model, where we need to help create and train multidisciplinary treatment teams at multiple cancer centers as well as help establish patient referral patterns, we believe that the cumulative revenue loss in the first quarter's commercialization will be modest, which we'll be using the existing EAP treatment teams to train additional centers and reaching out to oncologists to discuss the option of referring their appropriate patients to these treating centers. When commercial supply become available later this year, we will start at a higher level of volume and greater growth rate than if we came out of the caves just now. Both Vojo and Kevin will add more detail on the EAP and commercialization plans later in the call. At this point, we are not ready to give any detailed level of dollar revenue guidance regarding our projections. I will state that our initial percentage penetration into our TAM will likely be slower than KIMMTRAK but we expect penetration into a larger TAM should eventually match at least their current penetration. We believe KIMMTRAK has reached a penetration of approximately 40% of their target addressable market in just over a single year. Our rate of penetration into our TAM will be somewhat slower due to [indiscernible] product but we do believe a similar percentage penetration into the larger TAM can be achieved after 2 years on the market. As a result of the March 2023 pipe, the approval of HEPZATO effectively triggers a $35 million financing which combined with another $25 million triggered fine reaching $10 million in quarterly revenue, we believe it should be sufficient to fund the business, including additional development activities and other indications without the need to sell additional equity. While our immediate attention will be the successful launch of HEPZATO KIT, we can now more seriously enter into conversations with investigators about additional indications. Metastatic uveal melanoma represents well under 5% of the patient population whose cancers become liver dominant. In June mid this year, we hired Vojo Vukovic as our Chief Medical Officer. Dr. Vukovic is an experienced drug development executive with a distinguished career in cancer research and clinical and global clinical development. His experience spans fairly in the late stage oncology clinical projects and global medical affairs programs across multiple anticancer modalities or tumor types. Given Vojo's extensive experience in oncology drug development and medical affairs. He is well positioned to make a major contribution as we prepare for the launch of HEPZATO and continue to advance our interventional oncology platform into other indications. As expected, we have a large set of new investors on this call and many are likely not as familiar with the Delcath and Delcath's story, as our core set of investors and covering analysts. So I'm going to hand the call over to Dr. Johnny John, Delcath's Senior Vice President of Medical Affairs and ask him to give a brief description of uveal melanoma, higher treatment and the clinical results with support of our approval. Then Vojo will share some details on the EAP at REMS program. Kevin Muir, our General Manager of U.S. Interventional Oncology, will describe our launch plans, and Sandra Pennell, Senior Vice President of Finance, will give a brief recap of the multi-trends financial transaction we entered into earlier this year. Johnny?

Thanks, Gerard. Ocular melanoma is a very rare form of cancer that affects melanocytes in the eye with approximately 5% of all melanomas being ocular. We estimate the U.S. incidence of primary ocular melanoma to be approximately 2,000 cases per year. While surgical or radiation therapy of the primary tumor is generally successful, approximately half of all patients with ocular melanoma will develop metastatic disease, primarily due to the inability to treat early micro-metastases of the primary tumor. The metastases are predominantly in the liver with 90% of all metastatic disease patients having some level of hepatic disease and less commonly in the lungs and bones. And 50% of metastatic UM cases, the liver is the only site of metastases and most people with metastatic uveal melanoma eventually die from liver failure. Until now, there was only one approved therapy for metastatic uveal melanoma, Immunocore's KIMMTRAK, which is approved for the approximately 45% of metastatic UM patients with a specific HLA genotype. Historically, based on the meta-analysis of survival in metastatic UM across a variety of treatments, including chemotherapy, systemic immunotherapy and liver-directed therapy, median survival is generally 10 to 13 months across all therapies and 14 to 16 months for liver-directed therapy. Multiple studies and analyses support that early and effective management of liver disease can improve survival for those diagnosed with metastatic uveal melanoma and liver-directed therapy is a core part of existing NCCN guidelines for treating of metastatic uveal melanoma patients. It is important to note that the HEPZATO KIT is already included as one of several liver-directed therapies to treat metastatic uveal melanoma in the NCCN 2023 guidelines, giving HEPZATO KIT clear visibility in the medical community. HEPZATO KIT is a very different form of liver-directed therapy. HEPZATO is the first approved product to treat the whole liver and it is targeting both imageable and non-imageable metastases in the liver. HEPZATO KIT is used to perform a percutaneous hepatic perfusion procedure during which the entire liver is subject to chemo saturation in which a very high dose of melphalan is administered while proprietary filters remove greater than 85% of the total administered dose from blood that leaves the liver. In contrast to the most commonly used liver directed therapies to treat metastatic UM patient Trans Arterial Chemo Embolization or TACE and Y90 radioembolization or SIRT, HEPZATO KIT can treat the entire liver. It does not damage the vasculature. It is repeatable up to 6 cycles per our label with an average 4 treatments in the FOCUS Trial and it is not limited by hepatotoxicity. TACE is not a whole liver therapy. And by the inherent mechanism of action lead to permanent occlusion of hepatic arteries, limiting feasibility of future liver-directed therapy. SIRT irradiates both the tumor lesions and healthy liver parenchyma. Concerns of cumulative radiation exposure to the liver and lung can lead to limiting the dosage or the number of treatments. This is specially true in patients that diffuse disease or high tumor burden will require a whole-liver treatment. These patients are in greater risk of liver function impairment and radiation induced at liver damage. Whole liver Y-90 delivery at the recommended dose typically precludes additional Y-90 treatments. Given the well-established importance of control and liver metastases in metastatic UM patients and the unique profile of HEPZATO KIT compared to existing local regional treatment options, we believe that HEPZATO should become local regional therapy of choice for appropriate metastatic uveal melanoma patients. The FDA approval of HEPZATO KIT is based on the results from the pivotal FOCUS study. The indication for HEPZATO KIT is adult patients with uveal melanoma who have unresectable liver metastases that effect less than 50% of the liver. Those patients have either no metastases outside of liver or have metastases limited to the bone lymph nodes, subcutaneous tissue or lung that are amenable to resection or radiation. Importantly, the use of HEPZATO KIT is not restricted to patients with certain genetic profiles and patients can undergo up to 6 treatments. We believe this patient population represents approximately 80% of the estimated 1000 cases of incidence of metastatic uveal melanoma patients in the U.S. The FOCUS study provides strong evidence of the clinical benefit of HEPZATO KIT for patients with metastatic uveal melanoma. There are two points I would like to emphasize. First, the efficacy was determined both in patients with tumor lesions in the liver only as well as in patients with liver and extrahepatic disease. Secondly, the FOCUS study patient population included both treatment naive as well as previously treated metastatic uveal melanoma patients, resulting in a broad label. HEPZATO KIT label includes ORR, or objective response rate and DOR as efficacy endpoints. In the FOCUS study, the 36.3% ORR, including a 7.7% complete response rate, meaningfully exceeds response rates reported in the literature in this difficult-to-treat disease. A meta-analysis of metastatic uveal melanoma studies with immune checkpoint inhibitors, which was used to estimate the required sample size with the single arm FOCUS study show that OR rate of 5.5% with these immunotherapy treatments. In several recently published articles reporting results for immunotherapy treatment, ipilimumab, nivolumab and [indiscernible] pembrolizumab in patients with metastatic uveal melanoma, the ORRs and CRs were also substantially lower than what was observed in the FOCUS study. In addition, an analysis of survival by response category, the FOCUS study showed a significant correlation between response category and survival, supporting that ORR is a clinically meaningful endpoint for this treatment modality. Overall survival is not reported in our label as the FOCUS study was a single arm trial and overall survival was an exploratory endpoint. As previously reported, the median OS was 20.5 months in a mix population of treatment-naive and previously treated patients. Well, we want to be cautious about comparisons across different clinical studies, we note that in the FOCUS study, the 1-year survival rate was 80%, which is similar to the 73% 1-year survival rate observed in the KIMMTRAK arm of the KIMMTRAK study. Given these are 2 completely different types of therapy, these comparisons are best thought of as evidence that each therapy has a role in treating patients within their labeled indication. Almost all, if not all, patients eventually progress. And if the metastatic disease was caught early enough, the HLA O2 positive patients will hopefully benefit from both products. With regard to safety, overall in the FOCUS study treatment with HEPZATO KIT was well tolerated. The HEPZATO KIT prescribing information has a box to warning which includes 3 sections: toxicity related to the procedure, the REMS program and myelosuppression. Serious adverse effects associated with HEPZATO KIT and the associate PHP procedures such as hemorrhage, hepatocellular injury and thromboembolic events occurred in less than 5% of treated patients and did not result in long-term sequelae or treatment-related deaths in the FOCUS study. In agreement with the FDA, Delcath is implementing a risk evaluation and mitigation strategy program, commonly known as REMS. The objective of the REMS is to ensure consistent conduct of the PHP procedure, and to ensure that HEPZATO KIT is only used by treatment teams with the appropriate training. PHP procedure treatment teams consist of an anesthesiologist and interventional radiologist and a perfusionist. We have trained over 20 PHP procedure teams in Europe over the past 10 years and are comfortable with the REMS training requirements. The third element of the box warning is myelosuppression, including thrombocytopenia, anemia and neutropenia, which were commonly observed in the FOCUS study patients. Myelosuppression is a well-known and predictable side effect of melphalan and is routinely managed with standard supportive care measures. This box warning was expected because generic melphalan's PI or package insert includes the specific box warning. I'll now hand back to Gerard for his additional comments.

Thank you, Johnny. Now let's move on to the discussion of our commercial plans. I'll start by describing key stakeholders and key activities of our commercial plan. HEPZATO KIT is a combination product that is administered in the hospital by the PHP procedure team. Patients undergo the PHP procedure with HEPZATO KIT are referred by medical oncologists. Both treatment teams and oncologists are our primary stakeholders. To engage the treatment teams, we need to work with the hospitals, enroll them in the REMS program and provide training. We also need to engage medical oncologists and ensure they understand the value of HEPZATO KIT and we further the metastatic ocular melanoma patients to the treatment teams. Our commercial group has 2 dedicated teams. One will focus on the hospital treatment team stakeholders and the other commercial team focus on medical oncologists. Our medical team will collaborate with and support the 2 commercial teams. Now Vojo, please address our plans and activities within the EAP and REMS.

Thank you, Gerard. Let me start by saying a couple of words on why I chose to join Delcath. Over the course of my career, I had the opportunity to work with several buyback and pharmaceutical companies on the development and commercialization of numerous oncology drugs. While we rightfully celebrate success of each new approved drug for cancer patients, the reality is that very few drugs improve patient outcomes in a truly substantial and meaningful way. I believe HEPZATO KIT is one of such rare products that has the potential to meaningfully change patient outcomes. This unique drug-device combination has tremendous potential to address a huge unmet medical need, the treatment of unresectable liver metastases, which affect tens of thousands of patients per year in the U.S. Of course, that's a very fragmented and diverse patient population and is much more required to determine which patients could most benefit from HEPZATO. I look forward to discussing these opportunities in future calls. But for the moment, we are focused on the immediate opportunity, which we intend to successfully capitalize on launch and commercialization of HEPZATO KIT in metastatic uveal melanoma patients. It's important to recognize that there is no established road map to commercialize the product like HEPZATO KIT. It's a novel process and it involves mobilizing and training a PHP procedure team composed of an international radiologists and anesthesiologist and a perfusionist. And at the same time, engaging medical and surgical oncologists who are managing metastatic uveal melanoma patients. Our medical team will focus on providing information to treating physicians on the HEPZATO KIT and the PHP procedure, thus enabling them to choose the best treatment options for the patients. It's clearly a more demanding and engaging objective when compared to the launch of other oncology products. With that said, the clinical practice patterns have been treated before and the other plan as to how to bring HEPZATO KIT to patients. The critical and obvious first step is to identify major cancer centers interested in conducting the PHP procedure commercially and selecting those that we believe can be active soon after commercial supplies available. After HEPZATO KIT launch, PHP procedure team training will be the gating item in getting a new commercial site ready to treat patients under our REMS plan. The training is required for the 3 members of the PHP procedure team. Beyond the active training, which can be accomplished quickly, the training involves both the preceptorship and proactive PHP procedure case. The preceptorship takes place at the existing treatment side where the new PHP procedure team observes a procedure conducted by an experienced team. Currently, preceptorship can occur at our active expanded access program sites that include Moffit Cancer Center, Duke University and University of Tennessee here in the U.S. We can also offer preceptorships in Southampton, Leiden and Hanover in Europe. The final training step fit for the new PHP procedure team to conduct the procedure at the owned site under the guidance of a proctor team. We currently have available proctors from Moffit, University of Tennessee, the Angeles Clinic, South Hampton and [indiscernible], Hanover and Leiden. We have a list of 10 targeted sites, we would like to have actively treating patients within 6 months of launch. Three of these 10 sites are active expanded access program sites, which can both currently treat patients and also solicit the sites for preceptorship training of new sites. An additional 5 sites are currently in the process to join the expanded access program. Keep in mind that the expanding access program is a clinical trial and that the budget negotiations, institutional protocol review and IRB approvals involved can tick up to a year. We are well down the path with these 5 sites, but it's difficult to predict which of these will become active prior to the availability of commercial product. The advantage of adding new sites to the expanded access program, even if just for a month prior to launch, is that we can offer HEPZATO KIT to a greater number of patients prior to launch, and these sites will be ready to treat commercial patients after launch. In addition, these sites can also preceptorship and also potential proctorships. And additional 6 centers have confirmed interest in being a HEPZATO KIT treating site after launch, but are not interested in joining the expanded access program. And finally, we plan to approach at least 15 additional sites as soon as we scale up the tender of active sites and thus expand our training capacity. Second, critical works team is to reach out to medical oncologists at cancer centers with high volumes of metastatic uveal melanoma patients. Up until now, we have built an extensive network of incremental radiologists and surgical oncologists to the FOCUS study. Now we will start reaching out to medical oncologists who are directly involved with the metastatic uveal melanoma patient treatment decisions. With the HEPZATO KIT approval in hand and additional resources, Kevin, Johnny and I could partner to start aggressively pursuing the South reach. I will now hand over the call to Kevin to give more detail on our commercialization plans. Kevin?

Thank you, Vojo. As Vojo mentioned, to successfully commercialize HEPZATO KIT. We will need to create a new practice pattern involving a new types of treatment team and a new patient referral patterns. While this is a greater challenge than just introducing another infusion therapy oral drug, I am confident that we can accomplish this task. I have the benefit of having done this before with BTG, now Boston Scientific TheraSphere as well as the advantage of having multiple TheraSphere veterans here with me. For example, Zac McLean, our newly hired Director of Sales and Strategy will lead our sales team. Zac has spent the past 10 years with BTG Boston Scientific product in various sales and sales leadership position and has a total of 20 years in the interventional oncology market. Vojo touched upon the importance of contacting medical oncologists to share the HEPZATO clinical data and give them the information they need to select patients for who HEPZATO referral is appropriate. Patient referrals are critical. Even in this period of prior to commercial launch, because both preceptorships and proctor cases cannot occur without patients. Recall that the majority of our U.S. investigators in the FOCUS Trial were certified oncologists. And we have learned through the FOCUS Trial of the early days of EAP that these treating teams do not actively solicit patients with referral. We need to drive referrals by engagement with oncologists. And frankly, we were ended up until now because of limited headcount. With the additional financing now available with the approval, we can rapidly expand our customer-facing team and increase our level of engagement with treating oncologists. We will build a commercial organization with 2 complementary goals; partnering with treatment sites as well as driving [indiscernible]. Regional business managers partnering with treatment types will focus on supporting the treatment teams, managing any back or formulary approvals needed and soliciting referrals from within the treatment site. The commercial team will also be staffed with individuals who will focus on calling on oncologist outside of existing treatment sites. They will create the referral necessary for the treatment team to have a steady stream of patients as well as identify and qualify possible new treatment sites. I can offer some details on the tenant targeted site vojo has discussed. Beyond the 3 active sites, Duke, Tennessee and Moffit, we have identified and qualified sites that have oncology support and are treating at least 10 metastatic uveal melanoma patients at this time. These include Stanford University, the University of Miami, 2 Mayo Clinic sites, HonorHealth, Ohio State, Thomas Jefferson University. As Vojo has described training new sites will in turn create new preceptor sites and new proper teams allowing for the steady expansion of treatment sites. Starting with our 3 EAP sites, we anticipate on having 10 treatment sites within 6 months of commercial supply and 15 centers by the end of 2024 and 25 to 30 by the end of 2025. Based on our experience with Delcath CE Mark CHEMOSAT product in the EU, after sufficient training and experience with HEPZATO, we expect an average sized hospital will be able to perform one treatment per week and eventually up to 2 patients per week, assuming adequate patient demand. As Johnny mentioned, HEPZATO can be used to treat metastatic uveal melanoma patients regardless of HLA genotype. This includes the 45% of metastatic uveal melanoma patient eligible for KIMMTRAK as well as the 55% of melanoma or metastatic uveal melanoma patients who [indiscernible] approval or had better approved treatment options. It is important to note that patients enrolled in our EAP FOCUS Trial sites have included first-line stand-alone treatment. First-line treatment for those who are intending to get KIMMTRAK as second-line treatment and third-line palliative treatment. According to the NCCN guidelines for uveal melanoma with the metastatic diseases combined to the liver, regional therapy should be considered first. Guidelines also mentioned that since KIMMTRAK's response rates are low, symptomatic HLA-A*O2:O1 positive patients may be better palliated by liver-directed treatment first. We continue to explore the pricing of HEPZATO and plans to remain competitive and ensure reimbursement. HEPZATO was approved for up to 6 treatments with an average of 4 treatments per patient in the FOCUS Trial. As mentioned earlier, we expect to be able to launch and provide commercial treatment late in fourth quarter. Although the launch time is later than previously anticipated, we will now be launching with a greater number of train treatment centers in a more established referral pattern. In closing, the commercial team we are building a staff with veterans who have created new practice patterns before and our path forward is clear given there's an obvious need for a product. I couldn't be more excited to get out in the field with my colleagues and meet with oncologists, potential treatment team and to get HEPZATO of the ground. I will now hand the call over to Sandra to share some details on our financial position. Sandra?

Thank you, Kevin. The end of the prior quarter, with $14.6 million in cash and the cash used in operations was approximately $9.6 million in the second quarter and $13.9 million for the first 6 months of the year. As previously reported on March 29, 2023, the company closed a tranche price deal with health care focused institutional investors as well as existing investors that provide $25 million of upfront funding. Related to that deal, the HEPZATO accrual effectively triggers a $35 million financing within 20 days of the approval date. Specifically, the March price deal included warrant exercisable into 70.7 million shares of common stock equivalents at a strike price of $4.50 per share. Those will expire 21 days after approval. Similarly, another 4.1 million shares of common stock equivalents are issuable at a strike price of $6 per share, representing $25 million in additional gross proceeds. And these warrants will expire within 21 days of the company achieving $10 million in quarterly revenue. We are confident the $35 million in proceeds we expect to receive within 3 weeks, combined with our cash on our balance sheet will be more than adequate to allow our revenue ramp to achieve $10 million in quarterly revenue, which will trigger the additional $25 million without the need to raise additional capital outside of this tranche financing. We believe that the second $25 million tranche should be sufficient to fund the company until it becomes cash flow positive. That concludes our business update, and I'd ask the operator to open the phone after Gerard...

Open the phone for questions.

Yes. Open the phone for questions. Thank you.

[Operator Instructions] Our first question will come from Marie Thibault of BTIG.

Congrats to the whole team. Really, really happy to see this for you. I wanted to start here and see if I could get a little more detail on how the team is planning to sort of message or position against KIMMTRAK maybe against isn't the right word to use there because it sounds like it could be complementary. It certainly seems like a good opportunity in those patients -- those patients who don't have the right allele profile. But just tell us a little bit more about the awareness oncologists have of HEPZATO at this point, sort of the willingness or interest in finding another treatment or using another treatment?

So I'll start off then Kevin can add some more color. We really don't view these as necessarily competitive. There will be times where a doctor has to decide what's most appropriate for first line. Patients generally die from liver failure from this disease. So at some point, you really do need to do a liver-directed therapy, that is part of guidelines. But we don't control systemic growth. All patients progress at some point. So I -- I think the question for the docs will be which they start first with, I think in some cases, it makes more sense -- probably they will decide it makes more sense to start with KIMMTRAK and others with us, patients progress, hopefully. They will get caught early enough, the patients can get both. In terms of awareness, I'll be frank, there isn't a tremendous -- I think oncologists are aware of the product but we have not been out there talking to them aggressively with MSLs because we really haven't had any to date. And most of them are treating teams, our KOLs have been surgeons and some IRs in this country. And that's just a function of where this product came from. You pull the calendar back over 10 years, it was derived in a surgical procedure in a hepatic perfusion, where surgeons were taking the lead, and they naturally have the most interest in the first trial that was run over 10 years ago, and a lot of those continue their interest. That's not to say oncologists aren't aware of the product, but we're going to have to get in front of them and show the data. Whenever we do have calls, KOL calls with docs, they are very impressed with the data. They're very excited to get their hands on it. But they're wondering where are the treatment teams? How do I get things started? There's a bit of work to do there. Kevin, do you want to add any color to that?

Sure. In speaking with a number of medical oncologists out there. One thing they will always go to if they can, liver-directed therapy would be their first choice. Their goal is quite simple or to stabilize the existing disease and preserve existing liver function to kind of treat the disease or stop the disease at its track and allow the patients to live with the liver that they have. We've seen this in practice in both the FOCUS Trial and specifically the EAP where we've been used this simply as a first-line treatment. But we've also seen it since the approval of KIMMTRAK where some physicians have used KIMMTRAK first to do what I just said, stabilize the disease, preserve the existing liver function prior to administering KIMMTRAK. So there are physicians out there that are treating that way. And it's our hope that when we get out and educate them, we will do a lot more centers to treat exactly [indiscernible].

And Vojo, you want to add any color to that as well?

Yes, sure. I'll provide a couple of numbers, so it's easier to calculate the patient populations. And starting with front line of the HLA profile, which is indicated for KIMMTRAK approximately 40%, 45% patients. These are the only patients who can receive this product. The second number that you can consider is basically the percent of patients who had liver-only disease. And that's certainly -- these are patients who are prime time candidates for liver-directed therapies. But then as Gerard mentioned earlier, there's also a lot of patients where the disease is dominant in the liver that these as a physician have to first make sure that the livers stabilize because that's what's really life threatening to the patient. So taking everything into account, I think it's probably fair to say that about 60% to 70% in central patients in front line would be that serve the liver-directed therapy and with only approved option. And the second line, obviously, everybody else we haven't received it in the front line. So the I think some numbers are helpful when you think about the market opportunity.

Extremely helpful. I guess my follow-up here would be to try to understand the reimbursement process a little bit better. There's a slide there in your deck gives a wide range of reimbursement possibilities. How should we be thinking about what the most realistic level of reimbursement might be? And what the workload is for the doctors, the hospitals in securing some of that reimbursement?

Kevin, want to touch on reimbursement, please?

Sure. We really get it to inpatient around patients. The most of the patients that were in the FOCUS Trial is treated commercially would have been considered outpatient. So we feel comfortable that the majority of the patients that we treat will be outpatient. But that being said, we're taking steps to make this procedure -- reimbursable to the hospital in the inpatient side. So this October, we will be helping them with outlier payments by applying for the NTAP, which is a new technology add-on payment. That's for CMS patients. At these site, PPS-exempt MPI cancer centers. Most of them will have their own contracts with private payers that will give them good reimbursement for inpatient procedures. For outpatient procedures, shortly, we will be -- with the news of this approval, we will be applying for TdT to get our transitional pass-through status that will cover the drug. We have done a number of TdT mapping exercises. And we believe that although there will not be a specific TdT for percutaneous hepatic perfusion procedure that has [indiscernible] be used in that there are more than enough existing credits to make this a well-paying or covered within the hospital and the physicians will get adequate fees for their time during -- their time spent during the procedure.

Just at a higher level and Kevin covered this crystal clear. I mean most -- for most of these patients, the drug will be a pass-through expense for the hospitals. So I think as everyone knows, CMS Medicare for physician-administered outpatient drugs picks up the cost and that 6% for the hospital. So we don't see -- and in terms of private payers, for these ultra-orphan type products. And again, we're thinking our TAMs about our patients. And generally, it's just not an area of focus for them. They generally have a tendency to follow what CMS does. And I think one thing these hospitals that we're going to go to do well is they know how to get reimbursed. These are not community oncology, infusion centers, these are major cancer centers that, frankly, this is part of what they do for a living is making sure they maximize their reimbursement. And KIMMTRAK had been very successful, literally very different products, not a procedure, but you have to go into the hospital, be watched during the infusion. And I don't believe -- I mean I don't know this firsthand, but I don't believe they have a lot of reimbursement issues, and we don't expect that similarly, we don't expect having any reimbursement interest ourselves given the nature of the product.

The next question comes from Bill Maughan of Canaccord Genuity.

I definitely like to add my congratulations here. So just wanted to ask about the EAP going forward. Now about 3 or 4 months out from launch, potentially looking at some turnover in that program. So just wondering how you're thinking about continuing to enroll and essentially ramp patients on drug before commercial availability balancing, getting free drug versus having sort of a captive audience once you launch to convert to commercial pay? And then I just -- I also wanted to ask about the ramp of centers. I think you said something like 15 by year-end '24, 35 by year-end '25. So -- just wanted to get a sense of the staging of those hospitals, how you plan on adding those? And I guess, is there any sort of -- I mean, diminishing return at the end of that? For example, are the first 15 or 20 going to be high prescribers and then sort of the next tranche a little less active? Or just how are you seeing sort of bucketing by hospital volume?

Yes, Bill, let me break that into three portions. One is rationale for the EAP that's close to launch. Two, how we're going to expand the EAP and expand patient lower than 3. And 3, how is Kevin going to -- once we have commercial launch, how is he going to prioritize additional centers beyond the 10 we already prioritized. In terms of the rationale for the EAP. First and foremost, we don't have commercial supply, but we have clinical supply. Just given the way the regulations work, we're allowed to over sticker commercially available melphalan says for clinical supply and ship it out to centers and treat patients. We can't sell that stuff. That has a whole different set of labels and that's going to take -- to say what could take us so long about printing labels and getting some cardboard boxes put together. But anything that's highly regulated, it takes a while. So it's going to be a bit of time until we have commercial products we can legally sell. Now we want these patients to be treated. We don't want any patient who could possibly get this product not to be treated. So we're going to try to get them into the EAP and treat them. Now those patients could very well become paying customers between the third and fourth dose. We have commercial supply -- but really, the first reason to do this is to make sure patients have access to product. The second thing is we can't expand and get more sites trained unless we get patients flowing through the EAP. So this is -- this is what's going to allow us. And our hope is that the approval, there will be a little bit of resurgence of interest in getting the EAP. And frankly, Kevin has hired 2 people in the last few weeks, [indiscernible] got some folks he's bringing on board. We're actually going to get start getting out there in front of oncologists, which we frankly haven't doing much of due to just trying to make the money last. We'll start helping oncologists figure out how to refer their patients to these sites. We've heard stories of oncologists calling our EAP sites and frankly, referring to patients and something else happening because we don't have good established referral patterns. That's what we need to do now. Now in terms of expanding the EAPs, Vojo, why don't you tell them again how we're going to expand this number. And then Kevin, you can turn to how are you going to prioritize sites to choose?

To really simplify the explanation, I think the analogy of a snowball volume out here is a good one. Currently, we have 3 active sites, which can treat patients and they can also train the procedure experts if we conduct the procedures at other sites. So if you keep these first 3 sites going, we will not only take patients, but we will also train up the other site so we can actually open them. First, within the EAP and then when commercial supply is available, all sites will be switched over from the EAP to commercial treatment sites. And that's really the plan. It's all based on pushing referrals and the procedures being conducted, new procedure team members being trained, and that gives us the possibility to open up new sites. So we'll conduct 3 or 4 cycles like geometric progression 2, 4, 8, 16 and so on. And until we hit the number of sites that we believe is the right number of sites pursuing the size of the indication. That's what Kevin can provide some more detail.

Thanks, Vojo. On the -- starting the kind of the back half of next year and through 2025, we would expect to have an upside trend as we talked about during the presentation, the gating items for opening accounts in a lot of ways is training just having the appropriate amount of receptor and partnerships available. So mid next year, we should get behind that problem or ahead of that problem, sorry. As we prioritize the sites that we choose, one of them -- one of the first things we look at is the current use of the liver-directed therapy -- or do the site of the desire to use liver-directed for therapy first. And on top of that, do they really have a desire to truly treat the whole liver. That's what we talk about with HEPZATO KIT the ability to truly treat the entire liver and sparing any healthy [indiscernible]. These are key things when we talk to the physician. Then we get the desire to use the product, as I mentioned, and the desire to train. There are some training requirements that will be outside of a physician preference or physician preference device or an infused drug. So there has to be motivation on the part of the team, and that's part of our qualification process when we look at these sites. And I believe firmly that if we can get to that 25 to 30 sites, we'll have the majority of the sites in the U.S. that treat metastatic uveal melanoma patients, and we'll have a nice regional base of accounts that patients who aren't -- who don't live next to a facility to get HEPZATO KIT. They can travel to one pretty easily.

Yes. And I think one of the key drivers really is how many patients do they currently treat just to pick the rollout [indiscernible]. And I would say that the top 10 we're choosing right now are probably within the top 20 in terms of patient volume. And we're fairly confident that I think if you take the top 30 sites, in terms of current treatment volume, we'll probably have 25 or so of those at the end of the year after next. So it's a number of patients, but and having an oncologist that is interested is key. And that's kind of what's been missing in the equation to date, given our KOL basis of certain docs.

Yes. And just 1 more comment. I mean, until now just to remind you, there were no approved liver-directed treatments. I mean, the medical profession has evidence in the NCCN guidelines recognize the significance of this treatment over systemic treatment, yet nothing is approved. And if it's not there, if we don't build it, nobody will come. So I think this new dynamic will kick in and that all current centers are treating the uveal melanoma patients across the nation will eventually have to adopt a liver-directed treatment. Some of them are doing it voluntarily because they believe they've directed to do but now with an improved drug, it's a very different dynamic.

Next question comes from Scott Henry of ROTH Capital.

Congratulations. Really a big day for the company. I just had a couple of questions. First, as far as the -- I don't know if registration of the center is the correct term, but the EAPs, do they automatically become registered to be commercial sellers or providers? Or is there a process they have to conduct at that point?

Well, the only process that's involved is that EAP is technically a clinical study in the process of conversion from the EAP Concur study status to commercial status, we just have to close out the Concur study. There is a formal process that takes a couple of weeks' time.

And I think there's also -- so these -- all of these centers that will be part of the EAP will have conducted the required number of doctor training, the preceptor share the [indiscernible]. So really, it will be paperwork at that point to get them formally registered within the ramps. So it will be a paper exercise for the EAP sites.

Okay. Great. And I believe it's Slide 23, you indicate 9 centers that are targets for launch. Would your goal to have all 9 of those certified or registered to be commercial by the launch in late Q4?

No because what will be ready for launch when we have commercial supply will just be the EAP centers. And then the commercial centers, they cannot conduct a treatment with clinical trial material. They only conduct a treatment with clinical supply. So those who do not choose to become part of the EAP, you frankly just can't work through the bureaucracy to get the IRB approval and everything else. What we will want to do is have them have completed their didactic training. We will want them to have completed their preceptorship, i.e., having done that an airplane that watched the procedure. And then what they will need then is a patient to treat at their own site and with a proctoring team to be with them. That would be the final step if you were not part of the EAP, but you did get the previous 2 steps I mentioned. The -- ideally, and what we're trying to do is get these commercial sites that have a strong interest or the EAP sites or the pending EAP sites to follow one of their patients to one of the 3 treating sites, do the preceptorship, watching their patient getting treated, and then hopefully, the next treatment can be a proctored one at their own site as part as a commercial member or an EAP if they get done in time. That's a lot to digest, hopeful that you could follow that.

Okay. No, that's helpful. And I know you've given us a lot of this information already, but it's kind of nice to walk through it a second time. So at the time of commercial launch, how many centers do you expect to have in the EAP program that you could transfer over? I mean we know we have 3.

I think 4 to 6. Downside, only 1 more comes in under the -- over the finish line before we launch upside, we get it up to 6. And then we would hope to have 10 commercial sites up and running within 6 months of launch. And then after that, we would hope to have 15 centers at the end of next year, calendar year, and then 25 to 30 at the end of 2025. I think I had the years correctly in my fingers here, at the end of 2025.

Okay. And then I think you mentioned one treatment per week at the start working itself up to 2 treatments per week for centers...

I think it will probably a launch, it will be close to 1 per month, working its way up to 1 per week at the end of next year. And I think it could -- for some of those centers, it could become 2 per week. But I think somewhere between 1 and 2 and now the futures have been hazy, we get that far out, but it's somewhere between 1 to 2 a week would be the goal with between, let's call it, 25 plus centers again, end of year after next.

Okay. And when you set these targets, do you consider that a capacity limitation or a demand limitation? Meaning people need to get familiar with it before they put more patients in it. Or is it strictly capacity-wise, they're just coming up to speed. How -- what is the gating factor there, supply or demand?

Well, immediately right now, the gating factor is oncologists knowing where and how to refer a patient to 1 of the 3 sites. They just don't know that. So that's probably the immediate one. It will then become the number of sites available. That's going to be the next gating item, which is going to be driven by how many you've gone through preceptorships or proctorships. We're asking docs -- treating teams to get out of airplane. 3 people watch a procedure and then we need to get generally a proctor cases will require 2 proctors. We believe an anesthesiologist and an IR. We got to get those scheduled. That is not as simple as it sounds. Now it will -- once it's done, it's done and we have a treating site, but that would be the next limitation. And then the third limitation, quite frankly, is who knows truly we're estimating [indiscernible] versus TAM. If you listen to Immunocore, the market is twice as big as we're saying. I don't think that's the case. And then within our 800 patient -- 800 TAM -- patient TAM, we're saying it's about 80% of our estimated 1,000 patients with metastatic uveal melanoma. Maybe it's really only 60% of that really fits within our TAM. Maybe it's twice that amount. So that's where we get a little fuzzy because these small disease states, it's pretty tough to be very precise. We know there's hundreds of millions of dollars' worth of business here, but I can't really put a cap on it.

Okay. And as we try to get our arms around this process, so it sounds like all 3 members of the team have to be certified and go through those 2 steps. Now when they go back to their center, do they certify other members of the team? Or do those individuals also have to go through the process if a different oncologist wants to...

Our 2 most established centers in Europe, Leiden that they primarily do clinical work, but -- or Southampton, which is mostly self-pay. Both of those centers have multiple IRs strains, multiple anesthesiologists trained, multiple perfusionist trained. And that's one of the things we need to do. In our established 3 centers, we want to expand out those teams. So within a center, we want to have more than 1 specialist for each role available, both to do -- treat a patients as well as they get on an airplane and be a proctor.

Next question comes from Yale Jen of Laidlaw & Co.

My congrats to you guys as well as a nice job done. My first question is that in terms of marketing, you have -- marked 2 teams, one for the interventional oncologist and secondly, for medical oncologists. My question is that in terms of medical oncologists, hitting the referral, what's your current goal in terms of how many patients -- how many physicians try to reach? And what sort of the timeline? And what do you see the challenges here at this moment? And then I have a follow-up.

I think our first focus will be reaching the medical oncologist at the treating -- the EAP sites that we currently have, each one of those have several medical oncologists. And I'll be honest, not every single one of them are well versed that -- it's building -- building a block down, they have somebody doing this procedure. And again, that's a factor of just the lack of resources we've had. The next target will be sites that are interested in becoming part of the EAP or interested in becoming a commercial site that -- those 10 or so sites we mentioned. So we'll have the teams calling on those oncologists there. And each one of those have at least 2 to 3 oncologists that might make sense to call on. Thereafter the target will be the sites that are part of the 20 to 25 that we want to actually become commercial. But that will -- that second set will be driven largely by the end, who's got the most patients. And we have the data, longitudinal data is pretty good now. So we know who's treating how many patients. The targets, I could say the average reps going to have maybe 25 or 30 oncology targets, maybe a little higher than that with a big doc maybe having 10 of these patients or 15, but a lot of the docs just having 1 or 2. So they're clustered around certain centers, but it's surprising how many oncologists there are with just 2 or 3 of these patients, but they're clustered around a number of high-volume centers. Kevin, does that sound about right? In terms of 30 oncologists per rep or so?

Yes, George. When you look at this, we can confirm that with some claims data. There's kind of 2 scenarios in these hospitals. One, there is one uveal melanoma specialist, one medical oncologist that has focused his practice, at least in part, on uveal melanoma. And then there's the other scenario where there isn't a specific uveal melanoma specialist, where the medical oncologists just treat everyone -- they treat their own patients. They don't refer them all to the uveal melanoma specialists. So when you look at what we're looking at, there's probably 30 sites that we think we're going to open, as we mentioned by the end of 2025. And if you look at the -- again, the claims data that we use to target and qualify account, there's probably 90 to 100 accounts that have any kind of volume of uveal melanoma outside of 1 or 2. And so we would -- when we break territory up depending on the type of scenario that I described earlier, 30 to 30-ish medical oncologist per rep is a good number.

And then we're talking about roughly 4 reps.

Four reps. So that would cover 100 or so hospitals. And then the second part of your question is the IRs are going to be a little more condensed. They're going to be at the treating site but as you rightly called out, we will need to train multiple IRs within the institution that gives us flexibility for treatment time, vacations, and it allows us to increase our volume.

So the oncology rep team, they'll be calling out a lot more centers and a lot more docs than the hospital-focused team that will be calling on and supporting the treating teams at specific centers, if that helps.

Okay. Great. That's very helpful. Maybe just to tag on this question a little bit more, which is that what about the oncologists who are not associated with the -- these sites. I understand that a very large number all very first. So was there any plan in terms of tackling those and how to prioritize that in terms of that endeavor?

I'll just tell you -- one thing we've noticed when looking at the longitudinal data is it seems like most of these patients, some are all on the line, make a stop at the top 20 or so centers. It's -- if we look at Thomas Jefferson is a good example. If you don't understand how to look at the data, you think they treat every single patient has this disease or close to it. But in reality of what a lot of people do is they make a stop at these centers. So there's -- these patients do have a tendency to make a stop at one of these centers of excellence. So that isn't going to be a gating item. We think when we talk to the oncologists who have 1 or 2 of these patients. But it means nowadays, a lot of this stuff is done virtually but it's going to mean a lot more virtual calls or airplane rides for the oncology team, the medical oncology team versus the team focused on the hospital treating centers.

Yes. I'll just add one thing. I mean this disease starts as a local tumor in the eye. And that's type of treatment, the surgery or radiation therapy which are the most common treatments are done at a specialized center. That's not done in community. So all these patients with uveal melanoma, they will go to a large center, and they will be becoming part of the follow-up. If and when they metastasize, it has been due. If the chemotherapy -- systemic chemotherapy, which is the old option for treatment that was the only option available that you can give anywhere. You don't have to travel 200 miles to get an infusion of some tumor. You can look at the local community practice 2 miles down the road. On the other hand, if you have specialized treatments like, for example, KIMMTRAK or liver-directed therapies and HEPZATO, that's deliver a large treatment centers. So I think as Gerard mentioned, virtually all these patients will be referred either the primary physician to a large specialized centers. It will become basically a correctional patient choice is somebody willing to make the efforts to get specialized treatment, not every patient is motivated to do that. But we will have these referral factors. And then, of course, we will work through other channels to the patient-directed channels, for example, patient advocates to make them aware of this treat being available. So information will be coming to patients from 2 different channels. So we believe that these measures will really help us maximize the number of patients who are eligible and able and willing to take -- get treatment.

Okay. Great. And maybe just one follow-up question here. With Gerard, I understand that you will not reveal the actual pricing for the drug at least for the time being. But just curious, what was the general thought of principal at this moment in terms of how to think about that? Would that be on par with the KIMMTRAK or something else you can comment on? And congrats.

Comparing the 2 products from a pricing perspective. There's a bit of an apples and oranges in that they can go on. The patients could be on KIMMTRAK for 2 years. We're capped at 6 treatments. We can get a good handle on whether a patient is getting response in our product after 2 doses. They have to -- they treat through progression because of pseudo progression. Then you can look at it on an annual basis. So a lot of different ways to cut it. I will say it will be in the same order of magnitude, the same ballpark. Given the difference in the types of treatments they are, weekly versus up to 6. In some ways, you calculate the number we pick may come out a little higher, otherwise that may come out a bit lower. But let's just say it's in the roughly the same ballpark is what we're thinking.

Next question comes from Swayampakula Ramakanth of H.C. Wainwright.

Congratulations. Most of my questions have been answered, but I got a few. So thinking about the NCCN guideline that's already out there. So how do you plan to utilize that in your commercialization? And also, how can it -- how much of it can you use during detailing as well?

For how much? I think it's perfectly fine in all doctors from most perspective, hey, percutaneous hepatic perfusion is on guidelines as one of the local regional therapies. I think it's also perfectly fine to tell docs that for patients who are liver-dominant and already symptomatic or have liver-only disease what the regional therapy is recommended. And lastly, I think we talked to oncologists and interventional radiologists, we can clearly state, we are the only local regional therapy on guidelines. I mean I approved that is our guidelines. So yes, I think we'll fully leverage that. I think it will be incredibly helpful, not only for uptake, but also for reimbursement purposes. I don't foresee a lot of headwinds with commercial payers, but the fact that we have this in our hip pocket is incredibly helpful.

Yes. And then thinking about KIMMTRAK and you're saying that at this point, it looks like it's capturing nearly 40% of its TAM. So our...

I'd just interrupt for a second RK, that's Gerard's calculation. So Unicorn may beg to differ. I think the market is larger. I don't, for a moment, mean to dispute because it's very, very big -- but yes...

That's not on the point of the question. That's just an introductory remark. But how -- in terms of utilizing those centers that have already used KIMMTRAK -- are using KIMMTRAK at this point, since these physicians and centers are familiar not only with the indication, but also with therapies for those -- for that indication. Would those points of contact be your initial places to reach out in terms of commercializing HEPZATO KIT?

Yes, without a doubt, I mean, anyone who is treating a lot of these patients is using KIMMTRAK. So they will naturally be in our list of oncologists to call upon. Now they can track well over 100. I think it's 140 centers they said they were in.

Like 187.

Thank you, 187. That's far more centers than we're planning on going to but most of these patients have to drive weekly to get this infused therapy. We're going to be every 6 to 8 weeks. I suspect it's going to be closer to the 8-week timeline for our patients. So whether or not it's a flight -- in a hotel room versus every 2 months versus a weekly drive infusion, who knows which is more preferable it depends on the patient. But I don't think one is tremendously better than the other. So we will be calling on those oncologists, but we'll be trying to get them if they're not already at a treating center -- we're going to try to get them to refer their patients to another oncologist at a treating center. What we need to do is make sure that the doctor receiving the referrals is the best if they are an oncologist that what we've learned. It's very difficult and again, we've learned this both through the FOCUS Trial as we've kind of done an analysis of how things went as well as the early days of the EAP. What we've learned is, it's difficult to get oncologists to refer to a totally different center, if they're referring to another to an IR. They're much more comfortable referring to another oncologist. So those are the referral networks that we have to build up.

Okay. And then the last question from me is in terms of what you've observed during the clinical trials, how long do you think it takes for a surgical team to get trained so that they can use this procedure on a regular basis?

Yes. So I think for the REMS program dictates that do the didactic training just a couple of hours. That go and attend a case. So that's going to be an airplane trip. It's going to be a day out of their schedule to see a case somewhere else. And then they need to treat a patient. I wouldn't necessarily say that takes time, but they're going to do that anyway, but they need to treat a patient under a proctorship having an experienced treating team there with them. So it's less of a time issue. It's more of a skinning schedules to a line issue. And that's why if we talked about the snowball effect that Vojo was talking about the more potential we have for preceptorships and proctors in terms of fit into a team schedule, the better off we'll do. The only other time aspect to that is there'll be paperwork and that sort of thing any REMS program is -- it's a government-enforced program. So by definition, it's going to be a little more bureaucratic, that's part of what our rep has to do. So we're going to have hospital support there for working through the REMS, probably getting the documentation done. And we're also going to hire some clinical support specialist types. We have that in Europe. We'll actually attend cases after these docs are trained. Just to be there in case there's an issue, answer any questions, help troubleshoot. But again, that's not time out of the doctor's schedule to be trained, but it's important to know that kind of their training will be ongoing as they do more and more of these with some Delcath support or some support by another expert on the phone, if necessary, because we'll build networks of that as well.

This concludes our question-and-answer session. I would like to turn the conference back over to Gerard Michel, CEO, for any closing remarks.

In closing, I want to once again thank the multiple stakeholders who had a role in making this approval a reality; employees, investigators and the treating teams at the sites, patients, FDA and investors all played an important role. We look forward to launching next quarter in the interim, building out the EAPs and referral networks and then longer term, accelerating our efforts to expand the availability of this product into broader indications. Again, thank you very much, everyone, for your time this morning.

The conference has now concluded. Thank you for attending today's presentation, and you may now disconnect.