Omnicell, Inc. (OMCL) Earnings Call Transcript & Summary

Good afternoon, everyone. My name is [ Sridikhar Sana ], and I'm part of the investment banking team at JPMorgan. It is my pleasure to introduce you to our next presenting company, Omnicell. Our speakers will be Randall Lipps, Chairman, President, Chief Executive Officer and Founder; and Peter Kuipers, Executive Vice President and Chief Financial Officer. Thank you.

Thank you and welcome. Before I start, just a couple of points to make. I'll begin the presentation today by providing an overview of the business, and then I'll turn it over to Peter, our CFO, who will take us through the long-term financial framework. Our presentation and Q&A today will include forward-looking statements regarding our products, strategy, long-term financial framework, and are subject to risk and uncertainties. In addition, our discussion of the long-term financial framework will include non-GAAP financial measures. The usual cautions and disclaimers for forward-looking statements and non-GAAP measures apply. Well, it's an exciting time at Omnicell. For the last 3 years, we have been building and reorientating ourselves to the new opportunities that we see ahead of us. And with that, we have refocused our leadership team by adding to it and committing to the long-term success of pharmacy. And we were going to do this by continuing to work with our trusted partners and move pharmacy to a new place, almost near perfection. Pharmacy should be running at perfection because that's what clinicians demand, that's what we should demand and the capabilities and the know-how is there to do it. So you may know Omnicell for 28 years. [ We believe ] in the working on the medication management solution sets. We started in certain areas of hospitals and then expanding on that with additional products. And from that, we went into some central pharmacy areas and made some acquisitions. And today, we're a leader in the medication management solution sets and platforms for big providers. And now we're going to take the company, as we had stated at the end of last year at our investor meeting, to the next step, which is to the autonomous pharmacy. We have the pieces in place, and we need to get there, for the industry's sake, for people's sake, and it will provide great growth platform for the company. We're spending $500 billion on pharmacy, and we're executing that extremely poorly. And many of the situations in pharmacy require very expensive talent to be put in the stopgap measures to make workflows work. And everywhere you insert people into a pharmacy process, you're inserting errors. And because of that, we get suboptimal outcomes. And with suboptimal outcomes, we get errors. And when I talk about executing pharmacy poorly, we're talking about 20% to 30% of scripts that are given to patients are never picked up. Of the ones that are picked up, 30% of the scripts never get administered. So very poor execution. This also leads to -- poor execution leads to over 1 million ER visits from adverse drug events, over 125,000 hospitalizations from drug adverse events. These numbers are not shrinking. These numbers have been increasing. And with this poor execution in pharmacy leads to downstream cost of an additional $300 billion. So if you kind of add up the $500 billion cost of medication meds in 2018 and the $300 billion, well, it's almost $1 trillion. There's huge opportunity here if you can solve problems that this industry is dealing with. And on top of that, we always see that in North America, U.S.-based, the answer is more regulation. This is a great chart from 1970 to 2016. We see with the additional physicians on the bottom and the 3000% growth rate of hospital administrators or managers. And so instead of relieving physicians from administrative work, we're piling it on. And as we pile it on, we're really creating a dissatisfaction amongst physicians and amongst clinicians, that would be pharmacists and nurses, in the health care industry. And we clearly see this. This is our own data right off our own systems. In order to get in our systems throughout the U.S., you have to credential yourself in. And then when you leave the institution, we take you off the list. So you can just see here in Texas in the middle of the map there, 27% of the nurses were turned over in the last 12 months. Same thing for pharmacy techs. So if you're trying to deploy a new opioid policy, change behavior, change process, you're doing that while 25% of your workforce is leaving and 25% of your workforce is coming in. So this is a recognition of the high turnover rates in health care, both the associations, both the societies for pharmacists and association of hospital pharmacists -- system pharmacists and the ANA have, as their top priority, focus on how to prevent clinician burnout. This is something that is high on the mark, and it's due to the way we have constructed the industry. No different in pharmacy. This is the second study in the last 4 years that it's been done on pharmacy workload in big providers. And now providers aren't just serving hospitals, they're serving outpatients, they're serving surgery centers, they're serving their clinics. And when you measure the types of work that are done in these pharmacies, 75% of the work -- and last time, it was 76%, so not much of a change, was nonclinical. These are activities that do not include anything to do with going to school for 7 to 8 years to become a pharmacist. And only 25% of the work would be considered clinical. You would think it would be the opposite, right? You would think that maybe there's 25% administrative work and maybe 75% of your time, you would be spending on clinical activities. But this is the very place that we need to attack and we need to improve. And this will be the indicator that we're making big progress as we continue to deploy our systems. And this is what causes the burnout, right? You went to school to become engaged with patients to change the outcome. Instead, you're engaged with reports and forums and administrative work, which have nothing to do with patients. And here is a plethora of issues that all pharmacies face around safety, finance, efficiency, compliance and people, 47 million doses lost to drug diversion. Probably one of the biggest concerns about big providers is that there are over 250 drugs short at any one moment. Every time one of those drugs changes, you have to go through a bunch of sets of reviews about which drugs can be replaced, which surgeries may have to be canceled, things that you have to do to get around those 250. You look at the efficiency problems they have, you look at the financial stress that many of the inpatient providers are on. And these though, spell out for us the opportunity that we can convert with the autonomous pharmacy. We want to address each one of these and make most of these things, we believe, we can reduce significantly or just make go away. And so what does the pharmacy of the future look like? What is the autonomous pharmacy? Well, how do we think about that if we have all of these problems? So it really involves the envisions that pharmacies, particularly in hospitals if you want to picture those, do not have pharmacists in the basement anymore. They need to be engaged with patients, and the pharmacy of moving meds around tracking meds, knowing what you have, making sure that it arrives at the right time, needs to be done by automation and needs to be driven by cloud-based systems, which have the ability to do countless calculations to make sure things are delivered in the right way. And then this really allows pharmacists to move away from, "Gee, I hope the drug gets there. Gee, I hope we have the right one. Gee, I hope we can mix this appropriately," to "How do we make sure I've assigned the right drug to the right patient to make sure we get the best outcome." And so many of you know our story. We've been focused on the point-of-care for years. We just introduced in the last 3 years our latest generation of the point-of-care systems. We're only 18% of the way through our current base of current users that currently have our products. So we're at the very beginning of this cycle where we see customers wanting to buy the equipment to help them move through these big pharmacy issues. But probably the one that's really intriguing and is really driving more of our growth, which -- at a higher percent, which Peter will cover, is the central pharmacy. This is where the autonomous pharmacy begins. And this is where the opportunity to take people -- high cost people out of the process and replace it with perfectly accurate robots, right, and perfectly accurate systems to drive perfection through the process. So one of the issues that every acute care and even cancer center has is the issue of compounding drugs, mixing compounds that are clear liquids that -- they go into a syringe, to be given to specific patient based on their diagnosis. Now if you take a well-trained pharmacy technician and they prepare about 1,000 compounded doses for patients, they will make about 30 errors 97% of the time. For a well-trained pharmacy technician, they'll have 30 errors in 1,000, that's about 3%. Or you could take Omnicell IV station, robotic preparation, would prepare about 1,000 in less than probably half the time and would have no errors. Which hospital would you rather be in? Which ones would you rather see? I mean it's low probability that it's a mistake, but there's 0 probability that robot is going to make a mistake. So -- and the only other alternative if you can find a technician that's experienced to do this, is to outsource. So you outsource at 5x to 10x your cost of doing it yourself. So if you could insource effectively with a robot, you can save a lot of money, improve your accuracy, be tied into our cloud-based system and our experts who help you manage the right flow of drugs so that you only outsource the 1 or 2 you need, not the ones that could save you the most money. And we see the same opportunities, although it would be early on the retail side. We see opportunities to help pharmacies with our cloud-based technologies go into the pharmacy databases of retail pharmacies, find patients that aren't engaged in getting their meds and syncing them up to get their meds on a regular and consistent basis. Pharmacies are paying us for that, and even payers are paying us for that. So it's a new and exciting area. But really, the company has gone through, the last 3 years, a lot of work to get to this point. We have new management in place, new Chief Commercialization Officer, new Chief Product Officer, new customer service [ out there ]. We're moving more of our products to these value-add services. Even though you have robots and technologies to manage workflows, if you leave them in the hands of the customers only, they don't get optimized. You really need expertise to come alongside to buy extra services to help do that. And that's driving our growth. And our growth is really what we're all about because we've got to get to the ultimate destination of pharmacies that are near perfection, and finally arrive at a point where we can really make significant improvements and what we expect pharmacy should have and should deliver on. And finally, I think our -- one of our key concepts our management thinks about all the time is how do we differentiate? How do we improve? How do we make sure that we know we're going to win and how can we put the best products on the platform that are going to drive the best value for the customer and deliver the best revenue and earnings for our shareholders. So with that, I'll turn it over to Peter to give you more detail on the financials.

Thank you, Randall. Talking about differentiation. We see strong differentiation off our offerings in really 3 categories: one, we believe we have the most comprehensive medication management automation platform in the industry; two, we believe that we are the leader in innovation in this area; and then three, given our market size and scale, we believe we have the superior channel to go to market. Framing our opportunity, we see large market opportunities in the areas that Randall discussed earlier. Again, we believe we have the market-leading platform that drives meaningful outcomes for our customers and for patients. We are driving innovation and driving growth. And increasingly, we have long-term contractual relationships with large health systems to help them improve outcomes. And on the right side of the page, you can see, of course, how this manifests itself in financial results consistently over time. Talking about the addressable markets. Again, you see the 3 areas, as Randall talked about as well. Point of care. We believe we are a market leader. We do have large accounts there. We see growth from expansion. Again, we are early in the replacement or upgrade cycle of the customer installed base. We're at 18% for the end of 3Q of 2019, and we do see growth from competitive conversions as well. Central pharmacy. Again, that is the next big automation opportunity. That is where digitization and automation needs to start if you want good results. We do also have an upgrade opportunity there. And then increasingly, we believe that there is a market for services as well to drive outcomes. And then from our retail pharmacy, institutional pharmacy and payer perspective, we have a large network of pharmacies in our customer base. We see growth on population health solution side both driven by the retail pharmacy chains that we have in our base, but also increasingly by payers that will want these services. And then, again, the retail pharmacy sector is being disrupted, as you've seen, so there's an opportunity to help our customer base. From a financial perspective, we believe that we can support sustainable organic growth, and we'll talk about the numbers in a little bit. We have committed to an increased non-GAAP operating margin over time. And then lastly, we've also now guided back in December on the long term, a range of cash generation on a free cash flow perspective. So if you look at organic growth for the next 5 years, we believe that from the current estimate in 2019 that we guided to in the October earnings call of $889 million to $895 million, we believe we can grow that organically to $1,450 billion to $1,550 billion by 2024. That is our goal. So that translates roughly to a CAGR of between 10% and 12%, again, organically. Point of care, again, good growth there, both from an expansion perspective, upgrade perspective, competitive conversion and then innovation as well as we continue to invest in technology and solutions to drive better outcomes for our customers. Randall talked about the opportunity in central pharmacy. We also do have a replacement cycle there. Interesting is as well another format in central pharmacy is the carousel. The carousel is semi-automated. So we also see an opportunity there for our robotic solutions for customers to upgrade from a carousel to a robot. And then lastly, there's greenfield opportunity also. Then again, on retail, institutional and payer perspective, we see growth in population health and then also via further innovation. At the bottom of the page, you see our roughly estimated non-GAAP operating margin of around 15% for total year 2019. We believe we can increase that to 18%, or 1-8, in 2024. And how do we get there? If you look at -- we believe our profitability will increase by about 500 basis points over that 5-year period driven by economies of scale. Then, of course, our long-term customer partnerships will help us develop scale and profitability as well over time. Then we believe we can skill further manufacturing and get savings there also. And then we think we can further simplify our processes and improve those. We are reinvesting some of those 500 basis points in margin improvement, essentially in innovation and ultimately driving customer success. You've seen, I think, in December that we announced that we're also now are going to provide professional services, as many med tech and health care IT companies do. And then we'll have modest investments as well in infrastructure to run and further scale the company. Again, from a revenue perspective, the goal between 10% and 12% CAGR we believe we can achieve organically by 2024. We believe we can expand our non-GAAP operating margin to -- in 2024 to 18%. From a free cash flow perspective, as we scale and grow the company, we believe that we can convert between 90% and 110% of our GAAP net income to free cash flow. Then from an M&A perspective, we are -- M&A and acquisitions remain part of our strategy. So what we talked about earlier, it's all organic, but M&A is definitely still a focus area for us. Again, here are our priorities that Randall went through as far as our vision and mission. We believe we are a strong leader in medication management. We believe we're very strongly differentiated superior channel, a large customer base. And I just talked about the financial goals as well. So with that, I want to thank everybody for attending. And these were our prepared remarks, and there's a Q&A session after this. Thank you.

Thank you for joining us today. My name is Peter Kuipers, Executive Vice President and Chief Financial Officer. For this Q&A session today. I'm joined by Randall Lipps, Chairman, Founder, President and CEO of Omnicell. Also with us is Scott Seidelmann, Executive Vice President and Chief Commercial Officer. With that, I'd like to open it for the first question.

I'm just going to ask a top-down question. Do you feel like you've got all of the pieces now for this autonomy -- autonomous pharmacy that you're talking about? You got the central pharmacy, we have the autonomous that you covered, retail [indiscernible].

We -- so the question is, how do we feel about -- do we have all the pieces for the autonomous pharmacy. And I would say we'd have all the core pieces and we're always looking to either abate or add on. But we feel like there aren't major components that we can either partner with or build out or acquire. So -- and I think the big move for us was the XR2 central pharmacy robot, which deals with each single dose at a time in sorting and the large operations that automate a large portion of a pharmacy, over 90% of all the products in a pharmacy can be put through that system. So that's been an important development and product release for us, which was last year.

The professional services. Can you go into detail of how that's going to work? And is that called upon by your customers because they just don't have the technical expertise to deal with your systems?

You can go ahead, yes.

Yes. I mean generally, that's correct. I mean the reality is, is that our...

Could you repeat the...

Sorry. The -- sorry, of course, it was. The question was, was professional services, that's something that was called upon by our customers. Is it a necessity, et cetera? And the short answer is yes. I mean the reality is over the last several years, the customers have gotten much larger and much more sophisticated, our relationships with those customers have gotten much larger and more complex, which ensues the project complexity has increased, the sophistication of our products has increased, right? So this isn't simply installing a number of cabinets in a community hospital any longer, this is a, frankly in some cases, a very large IT project deploying across multiple institutions of multiple sets of products. The most complicated of which is change management. You're simply -- you're changing workflows inside of an institution. So I don't think there's anything unusual about our professional services. I think it's just something that, as a large health care IT company engaging enterprises now, it's pretty much standard to offer that as a service, so...

Peter, [indiscernible] and how the financial model will work on the professional services [ side of that ]?

Yes. So from a professional service perspective, we announced that in December last year. So we'll start with a number of our biggest health system customers. And frankly, they will also be a revenue generator, but not -- it's very modest in the early years, you would say, than what we've seen. Yes.

You mentioned you've converted 18% of your customer base to the new point-of-care system. What's the cadence [indiscernible] what's kind of the gating factor? Do we have to wait for contracts [ moving forward ] or something like that?

Well, no, I think that it's usually about a 7 -- the question is, 18% on the conversion of our current customer base with our point-of-care system. And what's the cadence of conversion as you move forward. And kind of what that looks like. We've said it's probably about a 7-year to 9-year rollout. Most of it is still to come, obviously, and it peaks -- it continues to accelerate each year as more and more hospitals move toward that. But most of our hospitals already are -- our customers already have long-term contracts, we may be updating those contracts to include other products. But a key piece is because every institution has to have these systems in order to run. And to get the latest features, to get the more secure operating systems, you have to eventually upgrade these systems. And so we think those are some pretty big drivers and in the coming year -- in the coming years. Yes?

Just curious, what you guys have seen out of Pyxis this last couple of years or product development-wise?

So the question was, what have you seen from a product development perspective from Pyxis.

Yes. I think the biggest thing that we've seen, kind of on a competitive front, is kind of a replication of a performance engine-type system to do analytics across our broad base of products. And -- but other than that, I don't think we've seen a lot of new technologies or new services.

Are some of the large institutions that you're working with open to moving to the cloud?

The question is -- are some of the large institutions that we're working with moving to the cloud? I think absolutely. I mean the reality is -- and that's not -- we're not trailblazing there, right? I mean it's just simply that we're following in the coattails of many others, right? And frankly, now what you're seeing is the very large technology providers are moving there as well. So I don't think that -- I think it's moved relatively quickly. I don't think the cloud is the scary thing that it was. I mean, frankly, at this point, most health systems have policies for it. They have programs for it. They're trying to move their systems there, et cetera. So that doesn't seem to be -- it's an additional compliance process that exists. But again, that's not us breaking that ice. I mean it's simply -- they've been there before.

For all the problems with medication adherence, especially in the retail, it seems like a bubble pack is going to be the answer. How do you increase that or change that?

Well, I think it's one of the answers...

You've got to repeat my question.

Oh, the question is -- can we just give you guys a microphone? It was so long ago. So the question was increasing patient compliance and doesn't the bubble pack provide a way to get more patients involved in compliance with the medications and really solve some of the answers. And the answer is it does. But what we are finding as well is that before you get to the packaging, you've got to get engaged with the patient to actually get their meds, agree to get their meds. And so what we're finding is that by working with retailers, we're able to really pinpoint specific patients that we know we can probably reach down and attract to the pharmacy and get them more compliant on just coming in and picking up their meds. Once you get to that stage, then it's about, can you move on to the packaging or get in for some counseling or some other activities that are med-related. And so the packaging is a little bit further down the line in solving that which -- it's just getting people there to pick up their meds is a big problem.

So I guess, as you pointed out, the size of the problem is enormous. So it's maybe bullish for me to try to parse it down. But I wonder if parts of the reason why people don't pick up medication for financial or other issues that are not going to be easily solved. So when you think about the area that -- where you really can move the needle, how much room do you think is in there for you...

Well, I think they say almost 25% of the reason people don't pick up meds is financial. And -- but there -- but what's amazing is there are programs to address that. So there are ways to get connected to the patient, if you can, but generally, they're not accessible or they can't get to them. So did I forget to repeat the question again which was, what are other ways that -- how do you parse down the issues related to getting the meds? There are other issues. And I think that -- I think what's interesting now is health care providers, all the constituents, really want to try to solve those problems more elegantly than they happen to have. So if you can use technology, use the cloud, use apps, use Amazon's Alexa to connect to the patient to get them engaged, then when it becomes elegant, when it becomes easy, then people follow through. Right now, that's just -- there are too many barriers in the way we do things.

So you mentioned picking up medications, that tends to be a big issue. 20% I think is what you said for this is cost. How do you see the impact of -- obviously, you mentioned Amazon and have the PillPack approach as well as CVS now offering free shipping of their medications at all pharmacies. How do you see that paradigm changing in relation to what has historically been, I suppose?

Well, I think that almost all the retailers can figure out how to do delivery. The issue with medications is that when you're on multiple medications, the timing by which they get filled is not the same date. So people end up having to go to the pharmacy or get 3 or 4 deliveries instead of getting 1 delivery for a whole month. That's called med synchronization, and that's some of the technology we use in pharmacies to make sure that -- and whether using PillPack or CVS or using us, you have to do a med synchronization, which means partial copays is actually a complicated thing to do. But -- and I think once you get there, once you make it easier, then it's easier to get more engaged with the pharmacy. And then the pharmacy has the right to say, "Mary, your meds are due on the second of every month. You didn't come in and get them. I'm calling you to come pick them up? Are you doing okay?" The pharmacy now because they have all the meds, now has this clinical relationship with the patient. Before, it was more transactional. And that's what you have to be careful about with PillPack or some of these other things is, are they transactional or are they engaged? And you tend to get better results if you can key in the engagement along with the transaction.

And I think, let's be clear, like medication adherence or disadherence is an enormous problem in health care, right? I mean, it's -- and particularly amongst the polychronics, the 5% that are driving 30% to 50% of the cost spending in your statistics, those patients are also taking multiple medications, right? So as such, given the size of the problem from a clinical perspective, the size of the problem from a cost perspective, there are a ton of constituents looking at that problem. And it is a multifactorial problem, right? The way that we think about participating in the solution, we're not going to solve the whole problem or even attempting to, right? I mean if you're managing diabetes episode, you're working on medication adherence, if you're managing behavioral health, you're sending nurse clinicians into those patients' homes to check their -- that's not -- what we believe is that a pharmacist can play a role in driving medication adherence. And the solutions that we're offering are -- the vision is to say, can we offer a set of tools that enables a pharmacist to participate in that, right? And that's where that opportunity really is for us. And blister cards packaging could be one of those tools, software that enables them to predict patients that they could get on med synchronization programs, do clinical reviews of their meds, that's how we approach that problem, which by no means is the mass of that market.

The question at central pharmacy, are most of the sales you're making in central pharmacy greenfield? And sort of what are you doing to try to shrink the sales cycle? Have you been able, in the last 12, 18 months to kind of narrow that down and be a little more efficient?

So the question was, what is the -- kind of the speed of the transactions in central pharmacy. And do you see an increased velocity there or not. And what are the drivers?

Yes. And I think when we talk about central pharmacy, is oral solids, the pills and the robotics, the XR2 system specifically that picks pills, and I'm not sure how much we've disclosed about sales cycle. What I would say is, it's a pretty typical enterprise sales cycle for selling something into a large provider. Whether or not you can contract that or not, we're not seeing sales cycles that are outside of what is a typical sales cycle in any way. The reality is, is that a portion of that market today is a replacement market. There was an earlier generation of the robot and we are replacing those. We are still seeing greenfields as well, okay? And so it's a good mix of both as we grow that out.

Yes. The shortage of pharmacy technicians is also an important piece of the puzzle for that, right, because you can't fill your positions. A lot of the manual tasks that are being done to -- are going to be replaced by the robot and it will be done more efficiently and more accurately. And not only just in the picking process, but you're now identifying all the expiration dates on every single med in your pharmacy. And so when it comes to LIFO or FIFO, first-in-first-out, the robot just does that automatically. No one has to think about those kinds of issues anymore, expiring meds on the shelf which is a fairly common issue in most pharmacies. Yes?

The inventory, you had to stay contracted with some of those customers. Where are you -- where is that -- like so you have to have so much inventory for the past products on your books?

Yes. So the question is the inventory for the installed base, how should we think about that. So we disclosed in December and then today again, and it's publicly available, that of the prior generations of point-of-care products were 18% through the upgrade cycle, and that's actually for bookings, right? It goes into backlog and then it converts a couple of months later to revenue after installation is completed and signed off. So [ the inverse ] 82% of the installed base is prior generations, so both from the Omnicell prior generations, but also from the central AcuDose generations, but that is -- we are committed to our customers to make sure they are successful. So we support that installed base. And then also central pharmacy, Scott talked earlier about that -- there is also an upgrade cycle there. Of course, we have parts in inventory to service those existing installed base and prior generations as well. Yes?

So then just to be clear, the 18% you referenced is bookings, not what comes to revenue yet, so there's...

Correct.

For central revenue is half of that? Is it something like that?

So the question was further clarification on the 18%. So the 18% is upgrade cycle to date for September 30, 2019, 18% of the $1.8 billion upgrade opportunity was booked. And some of that, of course, was -- is also in revenue, we're not breaking out how much went to revenue. But typically, we have disclosed in the past that the average time between a booking or a purchase order and then revenue is about a 7-month time period, right, from backlog -- on average, 7 to 8 months. And it's not, again, not 7 to 8 months of work, it is planning because the hospital is a 24/7 operation, if you will. We need to carefully work with the hospital, most of them are scheduling. So the installations and implementation and the customer sign off and training, that typically takes a number of weeks to a number of months max and not a full 7 months. But that's the way to think about the cadence from purchase agreement into backlog into revenue for point of care.

[indiscernible]

Good.

Can I just ask one last thing? I'm sorry to spend so much time on adherence but I haven't probably talked about this before because that is such a huge problem and therefore opportunity. The drug companies, obviously, have so much skin in the game here [indiscernible] because of the health care system, with also [indiscernible] companies. Are there models, have you engaged with the drug companies to try to bring them into this as a partner? Or maybe even help to fund some of the cost of addressing this problem that could accelerate or enhance your ability to actually attack that?

Yes. So the question is, have we engaged with pharma companies in the issue of med adherence. And have we been able to help them get people to take their drugs on a regular basis. Why don't you answer that?

Yes. I think that you've got to remember that it is early. We're just seeing to be -- so why does the drug company care about that, right? Which is they care about that because now you're seeing the beginnings of payers contract with drug companies on a value-based basis to basically say, "Look, this high cost specialty med, or this medication, I will pay you if it achieves that outcome." Well, the only way it's going to achieve that outcome is through generating adherence, right, and so improving that adherence, et cetera. It is early days for that. So while we've had some discussions about -- with pharma companies about this, it's still quite early for them.

Good. Thank you, everyone. This concludes our Q&A session. Thank you very much.

Thank you.

Thanks.