Qiagen N.V. (QGEN) Earnings Call Transcript & Summary

Day 2 of the TD Cowen Global Healthcare Conference, Dan Brennan, follow tools and diagnostics. Really pleased to be joined here on the stage with me, management of QIAGEN. To my left, we have Roland Sackers, who is the CFO, and we have to his left, John Gilardi, who is Investor Relations. So gentlemen, welcome.

Thanks.

We were pleased to have you guys. A lot to tackle here. Maybe kind of -- well, let's just kick it off with Roland, you want to give us a quick backdrop on kind of Q4, maybe just look ahead to '24, kind of how you thought about the year went and maybe what are you excited about for 24?

Yes. As you said, I would say last year was actually quite a good year for QIAGEN. We finished the quarter with 8% non-COVID growth rate. Actually also for the full year, we're at 8% non-COVID particularly the growth drivers, we clearly have seen quite successful results for all 4 of them. I would say that's one which we probably take a little bit later, which is NeuMoDx, which it was a bit more difficult. Particular sample preparation QuantiFERON, but also Digital PCR and QIAstat, our decentralized instruments, all had quite good results for the full year. In terms of profitability, we made a good progress. And also now looking into this year, while recognizing, I would say, particularly for the first half of the year, probably micro driving a bit more challenging environment. We do believe at the end of the year, we will most likely also have a good year expecting also margin improvement. You have seen that we guide also for 100 basis points margin improvement, from anyway, 27% last year to north of 28% for this year, which I think is clearly industry leading. So I think not much to complain. Yes, there's clearly, I would say, some topics in China, which are not company specific, but rather, I would say, even not industry-specific, but rather macro-specific. Clearly, you have continuous resolution budget year-on-year, you have a similar situation in Europe. But I do think they are much more temporary than long term.

Maybe just stepping back, the growth at QIAGEN has posted as been solid, right? Ex-COVID, COVID was obviously a key driver for the company when it occurred, but you've grown nearly 8% organically ex-COVID and the stock hasn't performed certainly probably as well as maybe you guys would have hoped it's lagged despite executing on the 5 pillars, attractive margins and the top line growth rate. So kind of if you look at the strategy and you look at the performance that you've put up and you try to put it together with how the stocks done, kind of what are your thoughts on maybe kind of the lack of follow-through in the market? And how does management think about that as you're planning forward and kind of your forward strategy?

I think the best way to reflect on that is really going back to -- all the way back to 2019, so literally post COVID where there was clearly, I would say, a significant strategic change within QIAGEN. It's an auto management change. And I do think that clearly boosted our revenue growth quite significantly. We launched 4 new platforms into the market and I would say that was a big success factor for QIAGEN. We were clearly focusing on our core competencies around PCR and that was the reason why for the last years, we had actually all the time either high single or even low double-digit non-COVID growth rate. And so I do think that, that worked out quite well. And as I said, we also believe even if you look at this year, for the second part of the year, we are, again, expecting like 5, 6-plus percent growth rate. So I would say clearly something what is at least above industry average, and I do think delivering quite nicely. What makes the difference for us is it's clearly the resilience of our business. We have an 85% consumable franchise which also in days like this where, again, some of the macro environments are more challenging, delivering us a good growth rate. Clearly, on the intimidation side, in the segment something costs more than $100,000, people are pushing out decisions a bit more. It's also something what we are feeling. Nevertheless, the portfolio is still quite young. And you will see and we go into the details that they're all quite early in terms of lifestyle and most of them have quite significant double-digit growth rate opportunities.

So then back to the stock price, what's maybe some of the feedback that you get or?

I do think the one thing that we have to have in mind is that QIAGEN is fortunately, unfortunately, however you look at it, a global company with a global footprint. We are listed in Frankfurt and we're listed in the U.S. and shareholder split is also roughly half/half. We clearly have seen a lot of European shareholders during COVID flowing into the stock. And unfortunately, fortunately, however you look at it again, they are much more generalists, right? And of course, with all the COVID revenues, which had to phase out of our numbers over the last 12 months, it's hard for people who are not like specialists to follow that. I think we have seen that also in the mix of shareholdership, we do believe that over the last, again, probably a couple of weeks, some shift that we see more interest here, again, covering up in the U.S. and hopefully, that there's a stabilization in Europe that should help us to get again probably a more aligned performance also in terms of the stock price.

Okay. So we'll hit some of the product areas and then we'll get in the margins and capital allocation and the Investor Day. So just in terms of the products, obviously, QuantiFERON has been a great story, right? Just the guidance is your 10% plus growth, arguably could be conservative. Just how do you think about where we are in the penetration of QuantiFERON? And just in terms of some of the key drivers going forward, whether it be kind of the geographic kind of penetration, maybe on the automation side? Just how do you think about what are the key building blocks to QuantiFERON growth?

First of all, QuantiFERON is our latent TB test, as you said, very successful north of $400 million in revenues now is the third consecutive quarter with more than $100 million in revenues. So clearly a success story, but particularly driven also by a conversion of the literally 120-year-old skin test market still 65% of the addressable market. So it's really the western world, not even including China, where we see it as a midterm opportunity is still doing the skin test. And as you all know, the clinical environment sometimes is very sticky, and it took us also more or less 10 years to become a significant player into that market. But now where we have a market share of, let's say, 15%, 20% you can see we are the new standard. Everybody wants to offer the new standard. That's the reason why we see the acceleration in growth rate. And you are right, for the last 3 years, we always guided 10% in growth. We always came in significantly above it. Last year, 24%. We saw it, okay, let's guide another 10%. I'm quite sure that we're not ending up at 10% only.

What about like the mode around that business? You have Oxford Immunotec got split up between -- I think it's Perkin and Quest, right, if I remember correctly. But just how do you think about -- there's always been this concept in the market could a big diagnostics player come in and enter and what would that mean? And how would they compete with QIAGEN and QuantiFERON. So just talk about the product today and how we think about the kind of the competitive profile of the product.

So let's talk about the elephant in the room because we see that also as one of the near-term pressure points on the stock is the anxiety that a major diagnostics player could come into this market. It's kind of like we deal with new investors and the same old rumors, this is the third cycle of that rumor we've been dealing with in the last 12 years. If there was a day that QuantiFERON should die, it was September 2018 when Quest bought the rights to the Oxford Immunotec test for the United States. That's the day this product should have died. And who today is one of our biggest customers for that product and its former Chairman and CEO is now on our Board of Directors, Quest. People think that, okay, this is the anxiety of HPV replaying again. QuantiFERON is not a replay of that situation. Key factor number one, we never had decent automation solution for HPV test. It was a highly manual test that was never changed during the entire time it was within our portfolio. It set the standard. It set the gold standard in reducing the number of deaths around the world for cervical cancer. Let's be clear about that but we did not have good automation. QuantiFERON, we have a great partnership with LIAISON systems from DiaSorin. There's over 8,000 trending towards 10,000, I think, right now of these LIAISON systems from DiaSorin around the world, heavily geared towards the United States and Europe. Okay. So we have a great automation system. You go to the big major lab customers in the United States. They have factories set up to run these tests. Take our sales, think about half of the United States, then divide that by $15 or $20 a test, you get an idea about the millions of QuantiFERON tests that are being done in the factories that are set up, automated working great and creating massive profits for these big lab companies. Number two, we're innovating on this test. We are now on the fourth generation of QuantiFERON. It's going to be really hard for someone to come up with a test that is more clinically relevant than our test. Again, the QuantiFERON test is just as old as the HPV test. The HPV test was still the first generation is what we offer around the world for customers who still want it and there are a lot of customers who still like it, because the competitors are often 30 to 40 percentage points lower in terms of sensitivity than our test. But on QuantiFERON, we're now in the fourth generation. We're in all the guidelines, CVC, Stop TB UN guidelines around the world. We've been out there over 100 million patients have been tested with this product. And if we see a competitor coming as in the past with one of them, we actually told the market they were coming before they even announced it. But in terms of new competitive threats out there, we don't see them, and we don't see them in our KOL networks. And if we're not seeing them, we're trying to figure out. But again, this is the third cycle of that rumor. We're ready for them.

So you feel good, that's great. Maybe just switching gears to digital PCR. So today, I think that business was a $70 million business in 2023. The guidance, I think, is $90 million in 2024, we've hosted Thierry in the past. Out of all the 5 pillars, even though QuantiFERON is the biggest, fastest-growing, he almost seem most excited about digital PCR, where that could go. You discussed clinical product coming later in '24. Just talk about that franchise today, the level of differentiation versus competitors and kind of where that could go post this clinical start as we look ahead beyond '24?

Yes, I would say, as you said already, it is clearly a product which is most likely -- still a product where we have to do better education, how much of an impact, a difference it can make for QIAGEN. Because, as you said, it's more or less close to year 3 after launch, and we're going to have $90 million in revenues. We clearly have an automation solution, which is state of the art, probably [indiscernible] the best in the market. There's one competitor was early in the market. But if you look at the workflow opportunities with our instruments, the 3 different sizes we have, in terms of implementation in the market, a significant advantage for our customers. It's clearly also an instrument where our entry point is around $35,000 compared to others, which you start rather with a 6-digit numbers. So you have a nice opportunity to -- based on your volume needs to pick the right instruments. Second, it is also what I said before, the conversion, it's a nice opportunity for customers doing qPCR with a newer technology to get more information and clearly, again, drive science. Right now the majority of our revenue is coming out of the Life Science and now increasingly out of the pharma area. But as you said before, end of the year, we're also going to enter the clinical market, which, again, some companies saying it's overall a $10 million market, a $10 billion market opportunity. Right now, we say, we're focusing as we did so far, the Life Science is $2.5 billion market opportunity. But it is clearly a market ready for conversion. We have an opportunity to really increase productivity by adding more panels. We're adding more or less every quarter 2, 3 new panels that drives utilization. Clearly, right now, by far, the majority of revenues comes out of placements of the hardware component, but it also shows how successful we are in placing this new instrument, right? And I think that's also not only true for digital PCR but also for some of our other instruments, particularly the ones with a lower price point. The market for them is very stable. We have similar placement numbers even like for some of other instruments, but including QIAcuity as well as we had in the peak of COVID. So I think if you have a great instrument and a market where we're converting to a different technology, you can generate a lot of opportunities. You have an opportunity to grow. Simple example for digital PCR, pharma companies love it specifically because it allows them to replace some of the expenses there for sequencing. Because if you do like a drug research, for example, as a pharma company, sequencing, of course, takes literally weeks, cost in terms of thousands, digital PCR is done in that day and probably this $100-plus in terms of cost. Sequencing is a great technology if you're looking for the unknown information. Pharma companies typically know these are the 4 or 5 markets, which either change or not changing. There's something exactly what you can do much better, much more efficient with digital PCR. Big part of our growth comes, for example, all of this area.

Especially when you think about -- this conference is great, what you put together because you hear from the experts outside. And when you hear all the buzzwords, liquid biopsy, MRD, cell and gene therapy, this is right in the wheelhouse of digital PCR. We forget sitting here in Boston that 80% to 90% of all cancer patients are being treated in community hospitals. These patients aren't going to be getting the CGPs, in these big expensive NGS panels. Doctors are looking for quick, efficient results, and that's where we want to drive digital PCR. And that's driven by our precision medicine business. We have partnerships with all 30 of the big pharma companies out there, and we're on the labels of a lot of these drugs for companion diagnostics. That's all being driven right now on qPCR and that's going to be transitioning to digital PCR. We already have one of our first partnerships in that area.

So will the clinical there be like companion diagnostics, will it be pharma developing MRD test. Will you just be the engine in the background? Or would you look to develop any of your own assets?

No. Look, we're the picks and shovels guys. We're the guys who will sell you the equipment. You name all the companies that you're talking here about all these liquid biopsy tests. You go there and you'll see this ample prep factories that we've built for them. You'll see the bioinformatics from us being used off the back end. And then you're going to start to see the QIAcuity digital PCR systems being used as well.

So like, I guess, we'll learn more at the Investor Day, but like the clinical growth, as we look at '25, '26, it's been growing at a nice clip, the digital piece of your business, could we see over the ensuing 2 to 3 years a real inflection given clinical adoption?

That's exactly what we hope for. Again, we see already that -- as you know, we started in academia only, right? We had a very nice ramp. Then in September, more or less at '22, we started with the first application for the pharma customers, which was giving us an acceleration in growth rate. Now we're adding on top end of this year, so while it was a '25, impact clinical applications, while others are doing as well. And again, the throughput is building for them, of course, as we speak. That will have an impact on QIAGEN.

So you and Bio-Rad or who are the other players in digital PCR?

I would say it's quite obvious that, that is probably the #1 and #2 position in the market. There's a couple of other players. We reviewed their technologies at some point as well. We believe that we have not only the best machines, we have an opportunity to build value. I don't think there is too much change to be expected in terms of market share.

And what's important also is we have complete freedom to operate in terms of cross-licensing with Bio-Rad. We've cross-licensed our IP portfolios. So we have that freedom to operate, and that's really important for our customers to have that peace of mind.

So just switching gears for a second, kind of zooming out maybe from a customer level, pharma and academia, just pharma is 15% of your business. I think part of the first quarter guide is you talked about maybe slower pharma LIAISON budgets. Just how do you see the Pharma business acting in Q1? What's your expectation for '24? Just any color about where we are with pharma spending?

I think pharma is overall doing okay. As I said, we see certain areas like digital PCR, but there's also some other areas, even opportunity to help them to be more efficient and there is quite a significant demand was a good start for us in most of our areas within the pharma sector. So I would say that's actually quite a stable environment for us. I would say the one thing where we expect was a change in Q1 upwards is on the regional side, is China. And on the budget side, it's more in the academic space.

So academia, I know we kind of met with you guys a few weeks ago. Just in terms of the continuing resolution in the U.S., kind of what have you assumed? Is there some pressure point that the customers are seeing either real time or whatever is baked into the guide?

Expectation is that we most likely expect sometimes in the second quarter that these things resolved.

Got it. Okay. And maybe circling back to China. I mean you have a small business in what appears in China but just what we've heard several comments throughout the conference here, some of the instrument players are saying things are bottoming at pretty weak levels but bottoming. Others are saying some of the applied markets are actually starting to pick back up their stimulus. Kind of what's your view on the ground in China right now?

Just to frame it. China for us is 6% of total. So it's sizable, but I think it's reasonable as well. Different to most other companies, we have a 2-layer set out in China. We have 60% of our revenues in China with more or less a global QIAGEN brand on about 40% of the revenues was actually a local copycat we bought in 2005, developing in China, producing in China, selling in China only, similar margins, different price points. And we clearly can see difference impact. What I mean with that is, I think China right now has 3 layers of topics, which have to be solved. One is value-based pricing. That's not a big topic for us. The only product for us, which falls into that category is HPV, which I think it's less than $2 million in China, so not really important for us. The same one is but with reference to what I said before, this is overall by local topic wide, which is clearly something what I would believe stays for quite some time, not sure will it ever go away. But right now, it's clearly on the agenda. And here you will clearly see a difference between, call it, the Global QIAGEN brand and a brand which has a clearly significant different China footprint. And I do think it's important for companies to think through that, how we get more local. It is not scientist specific, right? Go back to the U.S., like in the 90s like, when all this German as well as Japanese car companies started to have production plants in the U.S. to become more American, right. So I don't think it's something that we see new. But the thing is also something within health care where we have to see how do we become more local. I think we as QIAGEN have opportunity. We have production on the ground. So we have an opportunity looking at assembling and other opportunities. But I do think it's an opportunity as well. I would say the third one is what now is the most important one for us as well as for any other company. Also China, of course, has overall macro ratios, why? We have significant budget cards. We have significant unemployment rate, I think we all expect improvements over time. We expect right now that Q1 is significantly negative for us, it's certain stabilization then over the course of the year. And if we end the year in China with a flattish growth rate, it's more or less what is baked in, in our expectations, that would be a good result. We are far away from the double-digit growth rate pre-COVID, I think there's midterm opportunity to go back to that. I don't think it causes quickly.

Are you seeing any stimulus in China across your businesses for any of the business?

We hear about it. I wouldn't say it has hit us at least.

I got it. Okay. So sample, I think you're guiding to down 2%, where I think it's down low single-digit growth is what we have written here after growing mid-single in the last few years. Is that just comps? Is that -- just kind of walk us through exactly why that business would be weaker this year?

Yes. No, I think, first of all, you have to make it comes, and what is -- it clearly had quite a significant COVID business also in the sample prep. So non-COVID sample prep last year was growing 6%. So it was clearly doing quite well. We are guiding a lower number this year that's shared, but it also has to do like an overall QIAGEN, we expect a different pricing increase, net-net, this year than last year. We typically do price increase every year. We, as many other companies, because inflation had larger price increases for the last 2 years. Last year, we had around about 300 points net-net price increase. For this year, we are planning around about 100 basis points. Similar things in sample prep that's the reason. So volume is still quite okay, probably a bit lower in the first half of the year, but going back to a normalized level similar to last year in the same part of the year as well.

So it just -- but it's also a comp then, I guess, because if you went from 6 -- if you took 2 points out of pricing...

Then 400 -- don't see where we answer yet.

Yes. Yes, so it seems like there's conservatism there. It feels like it.

But just to stop for a minute on our sample prep, that's the heart and soul of QIAGEN. That's the brand where every year, we're having 2 or 3 customers winning Nobel Prizes. If I think about the workflows you're seeing for all the companies that are up here, just for example, the one that was last here, they rely on our products to make their products work. This is this QIAGEN brand, ubiquitous, you find us in labs all over the world. And that's where we still see innovation opportunities with sample prep, especially on liquid biopsy. You'll hear more about that at our Investor Day in terms of what we're doing to enable that. And because sample prep -- liquid biopsy is really the sample prep set, how do you get circulating tumor DNA out of the cell, how do you get circulating tumor cells, how do you get the exosomes out of the blood sample to be able to analyze them? That's what we see as such a critical step. And then we're enabling all of these tests downstream. So that's a thing where you also see more and more about automation. I think that's one of the points we can talk about in terms of gross margin. The instruments we're launching, don't forget we've rejuvenated our sample prep portfolio there as well. So this is really a key part of QIAGEN.

Maybe just before we hit some of the other 5 pillars, just like, look, if you take the 5 pillars out like the rest of the businesses from QIAGEN, how would you characterize the -- it's a decent chunk of revenues there, Roland? What's the main stuff that sits in there? And has that business been reasonably steady? Or are there opportunities kind of in this other nonpopular area?

I would say this quite a good group of products, which are doing quite well. I think one we had recently had a bigger focus also to the outside on it, for example, our bioinformatics expansion, and it's a $100 million business, actually quite profitable. But clearly, also in a business area where consolidation is needed, right? And also our $100 million were driven by organic growth rate about or a number of acquisitions because a lot of this pieces customers are using are quite small, are very dedicated and they want to get it on one platform. And there's a nice opportunity to drive this consolidation. Again, bioinformatics overall is very profitable. I would say it's hard to find a bioinformatics product with the gross margin is not like 70, 80-plus percent. But of course, it requires certain R&D investments to build as it is a double-digit growth as it is for QIAGEN. And the challenge has changed in our industry, right? Like over the last 20 years, the problem was always like getting the information out of the biological sample, right? And now we have all this information, but the interpretation of this information, not only in oncology, but also many other areas becomes underlying issues, right? And that is something where we have a leading number one franchise and we really want to double up.

So QIAstat, like how is it doing head-to-head versus bioMérieux? Like give a sense of -- I'm sure you follow it very carefully. How is BioFire growing? How is -- versus the mid-teens growth or the, I think, the growth rate outlook for QIAstat this year and then obviously, you're getting meningitis and GI panel coming into the U.S., which is going to be a big -- hopefully, a big lift there. So just think about the overall environment and then the setup for '24?

I just think QIAstat, which is our decentralized PCR platform is doing very well. And I think it's also a good example of what we indicated also more or less over the last few years. There is a live post-COVID world. We have today more revenues than even on the peak of COVID. You can see, there is a good opportunity with the overall diagnostic industry to go into the decentralized market, which is far from being penetrated and offer tests which are closer to the patients, have results in 45 minutes, 60 minutes. And clearly, in our case, symptomatic testing. People want to know, right, and again, we all know 4 years ago, some knew about PCR testing. Now everybody knows about even what a CT value is. And that shows the power of this kind of technologies. And as you said, it is clearly our responsibility to expand the menu beyond respiratory. As you know, we have gastro and meningitis, in Europe. We will bring it to the U.S., hopefully soon. There's more to come in general terms, more on the Analyst Day. But again, there is clearly another opportunity. We place every quarter, 150, 200 machines, more or less what we did on the peak of COVID that speaks to the strength of the market.

And how do you think that's doing versus BioFire?

Yes. They're not as good as we are in releasing numbers. So you should push them a bit more than us. But I do think there had opportunities to being early in a market. I don't think they are far ahead in terms of product replacements.

Got it. So you have the Investor Day coming up. You mentioned at the onset when we talked about the stock and the growth rate you launched these foreign products back in 2019, really kind of elevated the growth rate, like what -- how should we be thinking about the Investor Day, some of them are just updates on strategy goals. Others use as maybe more of a pivot point for some new initiatives, maybe some new products, I think you guys have talked about maybe a go-no-go on NeuMoDx at the Investor Day. Just any color about like what this investor day can mean?

We clearly want to talk about how we look on the next few years into the market, what are the markets we are focusing on, what we do expect in growth rate. We clearly will talk about profitability as well, why we believe that we also will have an above-average profitability growth. What is driving that because there's, I would say, a good set of opportunities. If you just look at this year, right, you said before, you're only growing in brackets 3% revenue growth, but at the same time, we're improving our EBIT margin by 100-plus basis points in EBIT margin improvement. So again, if you put it in a more normalized level going forward, it speaks about a couple of opportunities we see, and we want to give you some reasons to understand that as well.

So on margins, even though this year, having good growth, I think, with some of the investments in the instruments, that's kind of been dragging on gross margin, right? And you've invested heavily in R&D to support this innovation. What's the -- again, we'll find out more at the Investor Day. But I think that's one area maybe somewhat argue you've generated good top line growth, but maybe margin pull-through hasn't been as strong. Maybe not, but how do you think about like the commitment going forward to generating positive leverage?

I do think the one thing I have to really remind you and everybody on is going back to 2019, what we did in 2019. As I said, we launched 4 new platforms in the market, QIAstat, NeuMoDx, QIAcuity and sample prep. If you know launch one platform, we launched 4, what it means is you have a higher instrumentation share and you don't have a full utilization, only over time, you have a more normalized ratio between consumables and yearly pull-through and a better utilization in your production equipment. If I take all 4 platforms, all of my numbers as of today, our gross margin would be north of 70%. It's very normal because it takes time that the consumable pull-through ramps up, that's the reason why we also strongly believe that our gross margin over time, again, is going to normalize, but we probably also have seen a kind of an inflection point sometime this year and then we make bigger steps. It's also a reason why in brackets somewhat about margin improvement. Short-term is probably coming more on the operational side. Midterm probably with a larger contribution from the gross margin side for the given reason because it's no question that consumables also mid and long term, have a significantly higher gross margin than our instrument, any implementation business, while our implementation business still has some 40, 60 basis points of marginal 40%, 60%, it's a question of time.

So Thierry has talked before, he's been, listen, very open, like you're running the business, driving the -- as hard as you can, the growth of strategy, the margins, the cash flow and at the same time, obviously, it's a consolidating industry. You had the Thermo deal a couple of years ago that didn't go through. Basically, he's implied, listen, we're open for anything. We're going to run the business. We're not looking for a merger, if someone wants to come and pay a premium price, I don't know. What's -- how do you view the strategy going forward in the context of the Life Science industry, you're fit in the industry today, creating value for shareholders, either as a stand-alone company or maybe looking to hook up with a big suitor?

I think the view of QIAGEN hasn't changed more or less since then, right? Again, as you -- I think you know and to remind everybody, it wasn't the QIAGEN management declining the dealer, it was the QIAGEN shareholders pushing the deal off the table. Clearly, QIAGEN as of today is a very different company. I think we've built a good franchise with, as we said before, quite significant growth rate and profitability. Nevertheless, the fundamentals haven't changed, but we will clearly know about our responsibilities towards all stakeholders. If there's important proposals on the table, we will review them. I don't think there is any kind of something which is off the table. We are looking on one hand side on broader opportunities for QIAGEN. At the same time, if somebody comes forward with something where one-on-one gives a significant benefit for stakeholders. We are very much open to look at that as well, as the board is, of course.

So maybe what's the message you want to leave investors with today?

I think we will continue on what we started quite successful in 2019 and executing on our strategy. I think we are in all our work pillars are quite early in terms of market penetration. We are in the right market. Health care in general, diagnostic in specific is a great market opportunities, being a tool provider gives us a great opportunity to be, I would say, a very solid growth rate, very resilient. 85% consumable business. It's hard to avoid to do revenue growth because at the end of the day, as long as people go in the lab, they are going to use our product because otherwise, you can't work.

Thank you, Roland. Thank you, John. Thanks for today.

Thank you.