PolyPeptide Group AG (PPGN) Earnings Call Transcript & Summary

Ladies and gentlemen, welcome to the PolyPeptide Half Year 2023 Results and Business Update Conference Call and Live Webcast. I am Alice, the Chorus Call operator. [Operator Instructions] And the conference is being recorded. [Operator Instructions] At this time, it's my pleasure to hand over to Michael Staheli, Head of Investor Relations and Corporate Communications at PolyPeptide Group. Please go ahead, sir.

Yes. Thank you, Alice, and good morning, everybody. Thank you for joining our call today and your interest in PolyPeptide. Before we start on Slide 2, I draw your attention to our usual disclaimer. And I'm joined today by Peter Wilden, our Executive Chairman; by our CEO, Juan Jose Gonzalez; and our CFO, Lalit Ahluwalia. We have prepared the agenda as follows. Peter will make few opening remarks, and then hand over to Juan Jose for the performance highlights. Lalit will then explain the financial results in some more detail before Juan Jose shares the conclusions and the guidance for 2023. After that, we are here to answer your questions. We plan this call to run for around 30 to 40 minutes. Please limit the number of your questions so that everybody has a chance to ask. You will be able to ask your questions over the phone or in writing through the chat function. With this opening, I hand over to Peter for his remarks.

Good morning, ladies and gentlemen. A very warm welcome from my side as well and from the Board of PolyPeptide Group AG. I'm just using this opportunity to give you a short introduction and helicopter view of events that we witnessed during the first half of the year of greater importance for PolyPeptide. As you might remember from the last earnings call we had in February last year, we were discussing 3 key priorities, and that was, first of all, to fill the vacancy at the level of the CEO and to revisit the situation for executive management, as later also, our CFO decided to change his role and move to new challenges that he has just picked up on. The second point was operational excellence and achieving the sales target for the second half of the year as we have been facing some operational challenges at the end of last year. And the third one was to discuss and prepare the group for the longer-term road map, CapEx investment and financing. If I look at these 3 items in retrospective, I'm very happy, and we were probably a bit lucky in being able to find Juan Jose who was available at rather short notice. So he could pick up his duties already in April last year, which is a good advantage to us, and some sort of a relief to me personally as he took up business responsibilities very quickly. I can tell you today that, that transition has worked out very well. I'm very pleased with the collaboration with Juan Jose. He is making his inroads into our business very quickly. And we are working together both from my side, but also from the side of the Board very well. This gives me the flexibility of doing what I initially intended, and that means to step down from my executive responsibilities by the end of the quarter, which is on its way to be implemented. Secondly, I'm very pleased to see that we've been able to identify a very suitable CFO. The process has been smooth on this front as well as we had Mr. Ahluwalia available right from the beginning. He has been doing a great job during that period. I'd like to thank him personally for his engagement and his passionate work for the PolyPeptide Group, including his personal move to Malmo. He is now available for a handover to Marc Augustin, who is joining us directly out of the CDMO environment. He brings a lot of experience and a wide range of practical experiences into the group, and we are extremely happy that he has signed a contract with PolyPeptide. On the operational excellence and sales side, as I mentioned, there were 2 streams to be worked on. First of all, take care of the issues that arose in 2022. By the end of the year, we had quality -- We had a couple of technical issues that needed to be resolved. I can tell you today, most of these issues have been successfully dealt with. And there is a second point. We are -- as our peers as well, we are preparing this group for rapid growth that is pretty much unprecedent for the industry. There will be some challenges on that way, as I expected, both in terms of technical equipment -- bringing their technical equipment online and also training people, which have become -- qualified people have become a scarce resource in today's world. We are also in discussions with our major clients on the structure of new contracts, and we are proceeding well on that. First priority is to get this year behind us for us to show our operational capabilities. We are very thankful, I must say, to our key customers these days, who have been extremely supportive to us to make the transition possible. Thirdly, on the growth road map. We have not changed our position in terms of our CapEx program. Given our profile, we don't feel it's suitable for us in our specific situation to undertake huge investments into new, large-scale equipment on our [ end ], which is why we have opened discussions with our partners. That equipment would be largely customer focused, so related to one specific customer, and we cannot afford to take the risk. You have all seen that in the metabolic field, in particular, the growth expectations are enormous, which is a good thing in principle. There are some risks inherent to that rapid growth that we cannot take. But as I said, we are in discussions with our pharma partners on a proper split of risk and opportunity. Finally, on the CapEx side, we are really in advanced discussions with our banking consortium to support the CapEx needs we have, and that is multi-use CapEx. In other words, we can use that for more than one client, and this will allow us to have more flexibility in the overall manufacturing process. So overall, if I look at the total picture, we have come quite a way during the first half of the year. You have seen that on our P&L, there were 2 significant items that had a negative effect, that were inventory write-offs on the one hand and the question of cost absorption on the other hand, Mr. Ahluwalia will have a few words on that as part of his presentation. Cost absorption is a major issue in growth industries as it can end up in quite significant swings on your P&L. The more important thing for me is that this is not -- these are short-term noncash relevant items, and we are, at present, very much focusing on cash generation and improvement of our cash position. Overall, slightly mixed picture with a very positive twist. As you will also hear later on, our portfolio has seen a quite significant change in the right direction, which management will comment on. And on these words, I should like to hand over to Juan Jose Gonzales, our CEO.

Thank you very much, Peter. So let's go through the performance highlights. First of all, the results we have shared this morning are in line with the market update we provided on July the 13. Number one, we have been able to successfully offset the COVID-related revenues. Actually, the underlying growth of the company is 29.3%. That make us one of the fastest-growing CDMO companies. The second key message is that this significant capacity expansion that we have embarked over the last 3 years, have resulted in operational challenges. Peter talk about technical challenges that we have been able to address, but we are still operating at lower levels of operational productivity, which is reducing our profitability. And in addition, there are 2 noncash items, the negative change in cost absorption and a one-off inventory write-down, that account for half of the reduction in profitability during the first half of this year. We expect, as we move forward, that we will not experience these large swing items. So overall, you have a company in rapid expansion that have experienced sharp profitability decline during the first half of this year. And as we continue, the plan is to maintain our accelerated growth and restore our level of profitability. Now, before we start talking about the specific performance of PolyPeptide, let us spend one moment to look at the market. So, in terms of the market, on the left-hand side, what you have here is the evolution in terms of the number of peptides approved as therapeutic agents. And as you have seen over the last decade, there has been a significant acceleration in the number of approvals. It's basically close to 70% increase in terms of the number of compounds. And one big highlight within this acceleration are, of course, the GLP-1 therapies. Over the last 6 months, there has been positive clinical results at the American Diabetes Association showing significant weight loss performance, and more recently initial data around cardiovascular benefits. There is still uncertainty in terms of how this market is going to evolve, and there are, at least I would say, a wide range in terms of potential outcomes depending on things like access, pricing and the additional data in terms of the actual clinical performance and side effects. But overall, we believe that GLP-1 therapies are going to be a very important growth engine for the market and for PolyPeptide, as we work with all the leading metabolic players. Now, if we look at where is PolyPeptide place in the market, we are strongly placed for 2 reasons. Number one, we have a multisite network. That gives us a very strong customer proximity. We're able to work very closely with our customers, whether they are in the U.S. or in Europe. The second thing is that we actually have superior development capabilities, and we can see that in the development of our active Custom Project pipeline. 2 years ago we had 181 projects. Today, we have 226. PolyPeptide actually have one of the leading Custom Projects pipelines in the sector. When you have this pipeline, around half of the projects are in metabolics and oncology. So we not only have a very large pipeline, but we actually have a pipeline that is geared towards the fastest-growing sectors going forward. Now, in terms of our revenue performance, overall, we had an underlying growth of 29.3%. Now if you look at our performance for each of our business areas, Custom Projects growing at 23.9%, Contract Manufacturing, 37.1%, and Generics & Cosmetics, 23.4%. And this is very important because we want to make sure that our growth is not just driven by Contract Manufacturing, but that is also driven by our other business areas. That will be an important way to make sure that we have a lower risk profile that we are going through the company transformation. Now, this is not just about overall growth. The company is actually transforming in terms of the importance of therapeutic areas and the importance of customer types. So what you have here is the mix in revenues by therapeutic area, and this is a comparison H1 2022 with H1 2023. And if you look at last year, metabolics accounted for 28% of our revenues. One year later, it's already 43%. And if you look at our mix by customer type, last year, large pharma accounted for 41%. This year, large pharma accounts for 65%. So we -- this is a very good demonstration in terms of how well is the company positioned in terms of growth, where we have metabolics already contributing to a significant percentage of our revenues and growth, and already having established relationships with large pharmaceutical companies that will be driving a lot of the growth going forward. Now, it has not just been about the growth. We are in the process of also upgrading our infrastructure and capabilities. And as Peter mentioned, we have done very important investments since the time the company went public. We actually have invested EUR 179 million. It's about 26% of our revenues going into CapEx to ensure that we have the infrastructure and resources to be able to support this market growth. Now the focus on operational and profitability improvement initiatives are critical for us. And Peter talk about the fact that we have done a positive progress in terms of solving these technical issues. And now the key challenge for us going forward is to make sure that we restore our productivity. That basically means that we improve our yield that we are able to recruit and train and deploy our talent to support our growth in a way which is effective and efficient. And finally, we have been investing also in terms of innovation, key areas around digitization, green chemistry and analytic capabilities. These areas are going to be very important, especially as we work more closely with large pharmaceutical players. Now, strength in the leadership team is very important for PolyPeptide. We are embarking in a growth journey that will require to have more sophisticated capabilities. And that's why we are glad to announce the appointment of Marc Augustin. Marc have deep health care and operations experience during his tenure at Lonza. He was the Finance leader in the Biologics division that went from EUR 600 million to EUR 3.3 billion. So he has [ gone ] as a finance executive through a journey that is very similar to the one PolyPeptide is going to embark. In addition, in his last role, he developed deeper contracting capabilities, which is going to be critical as we establish closer partnership with our key customers, including joint ventures and shared investment projects. Marc Augustin is planning to join during Q1 next year. And until then, we're going to have the support of Lalit. Now, with that, let's move into the financial performance, and I'm going to pass it to Lalit to comment on that.

Thank you, Juan Jose. I'll start with the EBITDA bridge. The EBITDA change has been impacted by several factors. 2 of the largest items which account for a little more than half the change, the change in cost absorption of EUR 15.2 million, and a onetime inventory write-off of EUR 9.5 million. The operational and maintenance costs are EUR 9.5 million, and these include an increase in utilities and energy costs, primarily at our European sites, of around EUR 3 million. The rest is mainly due to the higher cost of manufacture, an area which is of high focus for us in the coming periods. The next item is the change in product mix of EUR 7.8 million. You have observed that we have been able to replace the COVID-related revenue. This COVID-related revenue was higher than average in its profitability, and that is primarily because of this change in our cause of this variance. The other items are essentially a wash in this -- under this head. The next item is personnel expenses of EUR 4 million. This essentially relates to merit increases, inflationary expenses and the costs as we ramp up for a higher throughput and scale in the coming periods. Next slide, please. Capital expenditure. We remain committed to creating productive capacity. And as you will note, we have been investing over 20% of our revenues in capital expenditure in prior periods. The purpose also -- of this chart is also to update our guidance. Initially, we had guided that we would spend around 10% of our revenues this year on CapEx. We now expect to spend between EUR 55 million to EUR 65 million, which are subject to ongoing partnership discussions with our customers. Next slide, please. Cash flow bridge. The key points here are -- I start from the right -- continued investment in capital expenditure under that -- which you see under the head, investments of EUR 31 million during this period. We have also spent -- used EUR 23.4 million in the changes in net working capital. Most of this is driven by increases in accounts receivable as a large part of our revenue was recognized towards the end of the reporting period. Increases in inventory have been modest and mainly in raw materials, as we prepare for higher throughput in the second half. To finance this, including the operating cash usage of EUR 24.9 million, we have organized additional short-term borrowings from our banks of, EUR 55 million. And in July of 2023, we have secured EUR 40 million in short-term credit facility from our main shareholder. Negotiations are also well underway to implement a new long-term financing plan. I now hand over to Juan Jose.

Thank you. Thank you, Lalit. So let's talk about our priority for the second half 2023 and the updated guidance. First of all, the clear focus for the second half of this year is to make sure that we meet the customer demand and deliver on our plan growth from now to the end of the year. And the second key priority is to make sure that as the company grows, we continue to execute on our operational and profitability improvement initiatives. It's very important that this growth translate into a recovery of the profitability as a company. So with that, our updated guidance for 2023 is the following. In terms of revenues, mid to high single-digit percentage versus 2022. So that will be 4% to 9% growth. Excluding COVID-19 revenues, this full year guidance equates to 25% to 32% growth. And as you can imagine, it's a very strong growth commitment that we are making for the second half and for the full year. Now, in terms of EBITDA, at a lower end of revenue range, we are targeting breakeven, excluding the EUR 9.5 million inventory write-down in H1 2023. That basically means that at the high end of the range, we are targeting a positive EBITDA, again, excluding the EUR 9.5 million inventory write-down. We are targeting a net loss for 2023. And as Lalit mentioned, we are significantly increasing our CapEx forecast for this year from around EUR 30 million to EUR 55 million to EUR 65 million. And this year reflects our focus on making sure that we have all of the infrastructure in place to support our growth in 2024. And with that, let's move to the Q&A.

[Operator Instructions] Our first question comes from the line of Vineet Agrawal with Citi.

I just wanted to make sure if I understood that right. On a reported basis for 2023, do you expect EBITDA to be positive at the top end of the sales guidance or not? And then, I just wanted to check how much of the hiring has been done for your Braine facility? And how much should we expect in the second half and then in 2024?

Yes. Do you mind repeating the first part of your question? The line was not very clear.

I'm sorry. I was just making sure if I understood your comment about the 2023 EBITDA correctly. I -- On a reported basis, do you expect EBITDA to be positive at the top end of your sales guidance?

Yes. So excluding the inventory write-down of EUR 9.5 million, our guidance is that we are going to be breakeven on the low-end range, and therefore, it will be positive on the high-end range. Now, in terms of Braine, I mean, we are, I would say, quite advanced in terms of recruitment for what we need, but we will still need to do some targeted recruitment until the end of the year. But it's not something that we think is going to be very material. Next question?

The next question comes from the line of James Quigley with Morgan Stanley.

I've got 2 CapEx questions. So firstly, on your expansion plans, even with your updated guidance still quite below competitors and -- WuXi [ except those in ] -- helpful information on their capacity coming online. So, can you give us an overview of where your capacity is in terms of [ meters ] and how your recent CapEx plans -- how the recent CapEx plans and disclosures across the industry could impact competitiveness? And secondly, on the CapEx guide, the EUR 55 million to EUR 65 million, you said that's subject to customer discussions. So should we read that as EUR 55 million to EUR 65 million with more upside if customer discussions go well? Or should we read it as, if customer discussions take longer, for example, we should be heading back towards 10% of service sales?

James, again, the line was not very good. Do you mind repeating your question? I think you talked something about the revenue guidance, competitive and competitor CapEx investment, but it was not very clear what you were asking.

Yes. Apologies for line. So effectively, you're spending less than competitors. Competitors are bringing lots of capacity on [indiscernible]. Is there a competitive threat from the new forward and where you move in terms of the capacity for each -- for you and your competitors?

Yes. I mean, the demand is clearly [ awaiting ] the supply across the entire market. And in the case of PolyPeptide, we consider given the size of the company that we are investing aggressively. We're investing 26% of our revenues. The difference in terms of our approach versus other players is that, rather than doing the entire investment ourselves, we are actually partnering with customers and doing co-investment as we grow the company. And we see that from a risk point of view, it is a better way to go through a period of growth, but it's still uncertainty in terms of how the GLP-1 market, for example, is going to unfold. In terms of CapEx, so EUR 55 million to EUR 65 million, that basically indicates the fact that depending on customer negotiations, we might decide to accelerate some projects into this year, and therefore end up spending more towards the EUR 65 million than towards EUR 55 million. But we just want to make sure we give ourselves flexibility because we are advancing all of our contract discussions, and we might find ourselves in the need to do more investments towards the end of the year. Next question?

The next question comes from the hand of Laura Pfeifer with Octavian.

I'm aware that you are not giving guidance yet for '24. But please, could you give us at least some directional indication what we should consider going into next year? I mean, is it fair to assume that the full year margin should be above the margin that you target for the second half this year, given that you will also have the effects from the new contracts with a better pricing? And then the second question is on your funding situation. Please, could you elaborate on your thinking with the new long-term financing plan, such as the amounts and the type of the financing it could include? And also, if you could give more details on the terms of the EUR 40 million you secured from Draupnir, this would be appreciated.

So in terms of 2024, we are going to be giving that guidance in March. I guess, what you can assume is that if you compare 2024 versus 2023, on a full year basis, we are planning to grow, and we are planning to see our profitability improve. But I think we have to wait until March to -- for me to provide more guidance. Now, in terms of long-term financing, as soon as we have it concluded, we are going to announce it. Let me just say that it is a key priority for the company and that we are in advanced negotiations. The EUR 40 million loan from our anchor shareholder -- I'm not going to get into the details of long, but let me just say that it's a very important signal regarding the ongoing and long-term support of our anchor shareholder that as a company we are able to tap into this while we finalize our long-term financing.

But maybe could you please just repeat, I think, what you said a couple of weeks ago that at this level, you said at that time, you do not consider an equity raise as an option?

Yes, we do not consider an equity raise as an option. Our financing is going to be done through the operations of the company, banks and co-investment with customers. And that's really the priority for the company. Let's go to the next question.

The next question comes from the line of Vasiliki Kotlida with Berenberg.

So my question is, what prevented you from giving us a midterm guidance, given that in the full year '22 results you said that you will provide one? And the second one is about co-investments. Can you give some more information because we've been hearing about co-investments, but anything tangible at the moment?

Yes. And basically, I guess, from the beginning of the year, there has been change in terms of me coming on board. We also see the environment developing very rapidly. We are advancing these contract negotiations, and they will have an implication in terms of what will be the midterm development of the company. So we want to make sure that we have a chance to evaluate how the situation is evolving before we are able to provide a revised midterm guidance. But I mean -- I think in terms of midterm guidance, the PolyPeptide is really going through a growth journey, and our objective is to grow while, again, restoring our profitability. So at some point, the midterm guidance is going to -- say it, how large we want to be and at what level of profitability at a certain point. But I don't think there will be a lot of surprises regarding what we are having. In terms of co-investment, first of all, we have already agreements where there are customer co-investments. And basically, the way Peter described it at the beginning is the best way to understand it. If it is a project that requires dedicated equipment, then we make sure that the customer contributes with more investment than if it is a project where the equipment can be used across multiple customers. But again, we already have co-investment agreements in place, and we continue to explore new co-investment projects. Let's go to the next question.

The next question comes from the line of Tanya Hansalik with Credit Suisse.

So I have another question -- a bit on the cash burn this year. So with the EBITDA guide you gave and the CapEx investments you planned, what -- can you give any indication of the cash burn for the full year? I think this is important to understand for us.

Yes. I mean, we don't guide in terms of cash flow. But I think you can get a good sense based on our guidance, our free cash flow will evolve in the second half of the year. Something that is important to know is that when you look at our cash flow evolution during the first half of the year, you can see that our operating cash flow, excluding the changes in net working capital, was minus EUR 24.9 million. The majority of that decline is driven by the fact that more than 50% of our revenues were recognized towards the end of a reporting period. And therefore, you will see the positive impact in terms of cash flow in the second half of the year. Let's go to the next question.

The next question comes from the line of Konstantin Wiechert with Baader-Helvea.

Maybe one left on top line guidance. I was wondering if you could help us understand why you believe you will be able to grow more than 30% in the second half as well, given the fact, I think that you prioritize finishing products in the first half rather than manufacturing intermediates and preparation for the second half? So I was just wondering if there's enough capacity in the second half for this? And if you could give us some more color on that? And then maybe a clarification on James' question, I think around the CapEx. So did I understand it correctly that you plan on spending EUR 55 million at least independently of customer participation for this year? Or was this including customer participation?

Yes. And let's start by your second question. So our range in terms of CapEx investment this year is EUR 55 million to EUR 65 million. Therefore, we expect to spend at least EUR 55 million this year regarding customer discussions. Now in terms of our top line guidance, the guidance for the full year, excluding COVID-related revenues, is 25% to 32%. And we grew in the first half of the year 29.3%. The main drivers of our acceleration -- of our continued growing in the second half is the fact that we have more capacity becoming available both in Torrance and Malmo, which are key site for us and supporting very important customer agreements. Now the -- in terms of inventory, what -- maybe just to clarify, if you look at our inventory at a total level, work in progress and finished goods during the first half of the year reduced relative to the first half of last year, and thus what drove a negative change in cost absorption. But our raw materials increase, and our raw materials increase to be able to support our second half of the year. So both in terms of capacity and inventory, we have what we need to be able to deliver against our guidance. So let's go to the next question.

The last question from the telephone comes from the line of [ Megan Capilla ] with [ Financial VHS ].

I was also a bit disappointed that you did not show a new midterm guidance. But can you maybe explain why you lowered the guidance for this year from high single-digit revenue growth to mid to high single-digit revenue growth?

Yes. And, I mean, we have orders which are higher than this revenue guidance. And the same was the case in 2021, and the same was the case in 2022. Our guidance reflects our ability to be able to produce and release these orders in time. And as we mentioned before, our capacity expansion generated operational challenges. And the biggest challenge we have is in terms of our ability to make sure that we get to acceptable levels in terms of output from our manufacturing plants, and that's really what is driving this revised guidance. Now I have to say the revised guidance, although it's a downward revision, again, excluding COVID-19 for a full year, you are talking about a 25% to 32% growth. So, it is still a very strong underlying growth. But it will take us some time until we have the operations to the level that we need to be able to do better. Let's go to the next question.

I'm handing back to Michael to read out the questions in writing.

Yes, there are a few questions that came in through the chat function. I read the question of [ Jonas Kier ] from [ Nissan Thunder ]. Could you provide more financial details on the capacity investments relating to that one specific large pharma customer in metabolic, how much for how long? Not sure whether we can answer that question specifically, Juan Jose?

No. I mean, we don't talk about CapEx product for specific customers, but let's say, our overall CapEx reflect the investment required to make sure that we have what we need to support that specific customer.

Jonas had also a second question. Of the Phase 3 projects, can you say anything about how many are related to GLP-1 or metabolics?

Yes. I mean, again, we don't split our pipeline by therapeutic area. But as I mentioned before, we work with all the major players in metabolics across multiple projects. And this is very important because I think there is going to be some volatility that this market is being created and being able to participate across multiple customers will reduce our overall volatility as a company.

Then Thomas Brown from Premier Miton asks a question, what margin can you make on projects where you have co-investment?

Yes. I mean, again, we don't comment in terms of margins by different types of projects. I will say, don't assume that there is a lot of difference between margins across projects. We actually don't see that. It's mainly in terms of the way you go around financing the buildup of infrastructure. That's really the key difference in terms of the agreements.

And then there is one more question from [ Amir Patel ] from [ Bolzoni ] Asset Management. Is the mid to high single-digit growth guidance on reported growth or constant currency? What FX impact are you assuming?

I think you should take reported growth.

Yes, reported growth.

Yes. Reported growth, I don't think we comment on...

We don't know how the currency is going to move.

And there is a question from Tanya related to -- customer concentration is increasing, hence, risk. Could you ask whether this concentration means that other customers have been lost? What does this concentration to large pharma mean for margins?

Yes. And, I mean, first of all, if you look at our Custom Project pipeline, it has increased 25% over 2 years. That basically means that we haven't lost customers, but actually, we have gained customers. And the concentration in terms of large pharma, we actually see it as a way to reduce our level of risk. We are going through an environment where there is a lot of funding pressure for biotech. So it's actually better to have more of your revenues and growth being driven by large pharmaceutical companies. And also, although there are fewer customers within these customers, we are actually having more projects. So we had engaged across multiple development and commercialization initiatives. And with large pharmaceuticals now you have a higher likelihood to see these projects being completed and being launched. And we, of course, get their knowledge and support as we go through the development process. And I think Peter referred in terms of the support we have gotten from some customers as we go through our operational improvement program. And that's a very good example in terms of the benefits of working with large pharmaceuticals.

So I don't see any more comments in the chat function. I believe there are also no other questions over the phone. So I think we are at the end of the Q&A session. Maybe, Juan Jose, if you want to make some concluding remarks?

Thank you. Well, first of all, thank you, everyone, for joining this call. Just to summarize, PolyPeptide is going through a significant transformation. We are scaling the company rapidly. We are doing it while facing some operational challenges, which are all under our control. There is nothing that we need to do that requires some additional capabilities of technology. It's basically making sure that we have all the fundamentals in place and that we focus on executing on our agenda. As we grow the company, we should see that we'll be able to restore our profitability. Now it is going to take some time for us to be able to do that. It's not going to be immediate, but that's a clear focus of all of us working at PolyPeptide. So thank you very much, and I look forward to connect with you in our next call.

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