Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI) Q4 2022 Earnings Call Transcript

Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI) Q4 2022 Earnings Call Transcript March 22, 2023

Operator: Good day and thank you for standing by. Welcome to the Spectrum Pharmaceuticals 4Q 2022 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your speaker today, Michael Grabow, Executive Vice President and Chief Financial Officer. Please go ahead.

Michael Grabow: Thank you, operator. Welcome to Spectrum Pharmaceuticals full year 2022 earnings call. With me on today’s call are Spectrum’s President and Chief Executive Officer, Tom Riga; Executive Vice President and Chief Financial Officer, Nora Brennan; and Senior Vice President, Sales and Marketing, Erin Miller. Earlier today, Spectrum issued a press release detailing its financial results for the year ended December 31, 2022. This press release and a webcast of this call can be accessed through the Investor Relations section of the Spectrum website at sppirx.com. Before we get started, I would like to reference the notice regarding forward-looking statements included in today’s press release. This notice emphasizes the major uncertainties and risks inherent in the forward-looking statements that we will make this morning.

These statements are not guarantees of future performance and undue reliance should not be placed on them. Such forward-looking statements necessarily involve known and unknown risks and uncertainties, which may cause actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. We encourage you to review the company’s past and future filings with the SEC including without limitation the company’s annual report on Form-10K and quarterly reports on Form 10-Q which identifies the specific factors that may cause actual results or events to differ materially from those described in these forward-looking statements. A telephone replay will be available shortly after completion of this call.

The archived webcast will be available for one year on our website at sppirx.com. For the benefit of those who maybe listening to the replay or archived webcast, this call is held on March 22, 2023. Since then, Spectrum may have made announcements related to the topics discussed, so please refer to the company’s most recent press releases and SEC filings. And with that, I will turn the call over to Spectrum’s President and CEO, Tom Riga.

Thomas Riga: Thanks Mike. Good morning everybody and thank you for joining us on today’s call. As I begin the fourth quarter and full year of 2022 review I want to acknowledge the energy and enthusiasm we are experiencing within our company. Our earning launch trajectory of ROLVEDON has provided a very positive end to the year and the momentum has continued to build throughout the first quarter of 2023. The optimism within the company is certainly fuelled by the launch of ROLVEDON. Additionally, the company experienced a significant amount of change as we pivoted from a development focussed company into a fully operational, commercial organization. A key point of strategic focus throughout 2022 has been to right size the company while still meeting our core business objectives and investing in our growth drivers.

In 2021, our operating expenses were $147 million and in 2022 we are reporting operating expenses today of $81 million. The 45% reduction was intentional and necessary to focus our resources and capitalize on the launch of ROLVEDON. As we move into 2023, we are well positioned to continue investing in the launch trajectory and lifecycle management of the product while maintaining a very disciplined and lean operating structure. The combination of financial discipline and maximizing ROLVEDON’s launch will allow us to begin to realize our broader strategic vision. We are not complacent, we use single product company and aspire to commercialize and develop a portfolio of cancer treatments for patients in need. However, we understand and are motivated by the fact that our future optionality is largely predicated on the success of ROLVEDON.

Both commercially and through lifecycle management with our same day dosing study and to further differentiate the brand. Today, ROLVEDON’s launch is our primary focus, but we are keeping our eye on the horizon and we’ll be ready to use the product’s success as a springboard for future opportunities. Regarding the launch ROLVEDON is the first novel product to enter the long acting G-CSF sub space in over 20 years that is not a biosimilar. We launched ROLVEDON with a disciplined strategy based on the understanding of the oncology market and a team with significant experience in this exact space. In a few moments you’ll be hearing from Erin Miller our Senior Vice President of Sales and Marketing who will provide more color on the launch. Erin has extensive growth factor experience, has been on oncology for over 20 years and the Spectrum is fortunate to have her leading the charge.

The fourth quarter of 2022 was the first quarter ROLVEDON was commercially available, and we are pleased with the early reception from our customers. Net sales for the quarter were $10.1 million. As we think about the business, an important indicator of early success is measured by both breadth and depth of use. To set a solid foundation for an oncology launch, it’s important to see the largest customers being receptive to the product, along with a systematic increase in breadth of overall users. That said, we saw a total of 70 targeted accounts purchasing ROLVEDON during the launch quarter, including the top three community oncology networks. Those three networks alone represent approximately 22% of the total clinic market. While we are pleased with the early customer reception to ROLVEDON, we are also acutely aware that it’s just that early.

Photo by Tbel Abuseridze on Unsplash

Our team is motivated by the opportunities in front of us, and it understands the importance of sustained success over time. For more details on our launch strategy, progress and key drivers of the results, let me turn the call over to Erin.

Erin Miller: Thank you, Tom. I’m very happy to be here today to discuss the progress of the ROLVEDON launch. We’re launching with a focused strategy and maximizing market opportunities with a nimble and experienced team who are producing early results. As Tom mentioned, we had 70 target accounts at the end of Q4. That number has more than doubled in the first quarter, and the breadth of overall users continues to accelerate. Regarding depths, the top customers who began using ROLVEDON in Q4 have continued to appropriately grow utilization within their networks. A key factor in our early success is our highly knowledgeable and connected commercial team. There are 113 systems representing 50% of long acting G-CSF sales and we knew that our experience navigating those systems would allow us to connect quickly and pull through early sales.

Many of our customers are already recognizing the ROLVEDON value proposition and if proven highly receptive to our messaging and the suite of services that we’re offering. In a market with tremendous price instability, providers appreciate visibility. As a result, our strategy centers around a provider focus that delivers both short and long-term predictable value, which creates a great foundation for early adoption and continued growth. As we critically evaluate the early launch metrics, we’re finding that the results are aligned with our strategy. Prior to launch, we spent an extensive amount of time focused on understanding customer behavior in each of the three long acting G-CSF sub segments; community oncology clinics, 340B, and non-340B hospitals.

Our team is engaged with all segments of the business and is executed on our early poultry strategy with community oncology clinics who can make product decisions and implement change quickly. Moving forward, our plan is to continue to increase utilization in the clinic space while also capitalizing on opportunities within the hospital segment. For instance, in the first quarter, we’ve been able to expand utilization across specialty distribution networks and group purchasing organizations. Additionally, we’re in the process of contracting with our first hospital IBM System and anticipate expanded utilization across all segments. As a novel product that is not a biosimilar one of the unique features of ROLVEDON is independent reimbursement not tied to other products.

This gives us greater flexibility on pricing and contracting, which allows us to offer customers much needed visibility to make short and long-term business decisions. As I mentioned earlier, given the current market dynamics, customers are receptive to tailored contracting, and value stability and predictability of pricing and reimbursement over time. Additionally, the long acting G-CSF market requires customers to stock multiple growth factors and they’re accustomed to doing so. We believe the unique features of ROLVEDON, combined with the current market dynamics, offer our team an opportunity to grow appropriate utilization and solidify ROLVEDON’s position in the market. While early receptivity is positive, it’s not without its challenges.

In the long after growth factoring factor market, there are multiple options for customers to choose, and we knew there would be formidable competitors. One challenge we’ve encountered since approval is the fact that ROLVEDON claims are currently submitted with a miscellaneous J-Code. Customers prefer a permanent J-Code because claim submissions and documentation are simplified, offering more reimbursement certainty. In a competitive market, customers are more likely to choose the certainty of a permanent J-Code. ROLVEDON was recently assigned its own unique J-Code, which goes into effect April 1. This was an important milestone for the product, and it will be very welcomed by our current customers, and also remove barriers to utilization with potential new customers.

In Q4, we announced another important milestone when ROLVEDON was added to the National Comprehensive Cancer Network supportive care guidelines. The NCCN guidelines are a standard resource for determining the best course of treatment and include an inclusion will go a long way in in establishing brand awareness and building customer confidence. Approval in September, followed by the inclusion in NCCN guidelines in December, and a permanent J-Code on April 1. These are significant accomplishments for the brand and speak to the urgency and capability of our team. It’s been a very exciting quarter. We’ve executed our launch strategy, and established a strong foundation. We understand that we’re just at the beginning of our journey and look forward to building on our initial success.

With that, I’ll now turn the call over to Nora to discuss the 2022 financial results.

Nora Brennan: Thank you Erin. Total net sales for the fourth quarter and for the year ended December 31, 2022 were $10.1 million. During the quarter and year ended December 31, 2022 the cost of sales was $1.8 million, consisting primarily of packaging costs, freight and royalties associated with the net sales of ROLVEDON and $1.1 million of start-up expenses associated with stability and bio-burden testing. This figure did not include any direct costs associated with the manufacture of ROLVEDON, which were previously expensed in research and development. Selling, general and administrative expenses for the quarter and year were $11.3 million and $38.8 million respectively, as compared to $18.9 million and $16.4 million for the comparable periods in 2021.

The decrease was primarily due to lower costs associated with personnel related expenses resulting from the reduction in workforce announced in January 2022, and decreases in professional services and other general expenses. Total research and development expenses were $8.7 million and $42.2 million for the quarter and year, respectively as compared to $18 million and $87.3 million for the comparable periods in 2021. The decrease was due to lower program activities for ROLVEDON. poziotinib, and early-stage compounds, personnel-related expenditures associated with the reduction in workforce during the strategic restructuring that began in January 2022, as well as a concession provided by Hanmi Pharmaceutical Limited for drug substance which had been accrued during 2021 and is no longer payable by us.

Net loss from continuing operations was $11.7 million or $0.06 per share for the quarter ended December 31, 2022 compared to a net loss from continuing operations of $39.8 million or $0.26 per share for the comparable period in 2021. Net loss from continuing operations for the year was $78.1 million or $0.43 per share, compared to net loss from continuing operations of $158.4 million or $1.02 per share for the comparable period in 2021. Operating cash burn was approximately $97 million in 2022 as compared to $119.5 million in 2021. The decrease in net cash use and operating activities was primarily due to the decrease in net loss, which was driven by our on-going strategic efforts to reduce the overall cash burn of the company offset by decreases and changes in working capital and non-cash charges.

We ended the fourth quarter with approximately $75.1 million in cash, cash equivalents and marketable securities. We have access to an additional $25 million of financing with SLR Capital Partners, assuming we achieved certain revenue milestones for ROLVEDON. The two remaining tranches are available for drawdown at our discretion at various points until November 15, 2023. With this financing and cash on hand, we believe that we have the resources reserves to fund company operations through 2024. With that operator, please open the line for questions.

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Q&A Session

Operator: Certainly. One moment for our first question. And our first question will come from Maury Raycroft of Jefferies. Your line is open.

Maury Raycroft: Hi, good morning. Congrats on the progress. And thanks for taking my questions. Just wanted to ask what you’re seeing pre J-Code and what are post April 1 expectations on predictability reimbursement? And do you think by having the J-Code in place through all of second quarter, would that enable you to provide guidance on your second quarter earnings call?

Thomas Riga: Hey, Maury thanks so much for the question. I think a big accomplishment for the brand was achieving that J-Code in the time because I think that’s the important measure here. Getting at April 1, I think just removes a barrier to customers using the product. And I think ultimately what that means at the customer level is the cycle time to payment. The clarity of the claim avoids things like additional documents required and delays in their payments. So I think from our perspective, one, seeing the early customer receptivity with the sales we recorded in the fourth quarter, despite the hurdle of the miscellaneous J-Code I think it fuels our enthusiasm for customer receptivity. And we anticipate with a permanent J-Code going into effect April 1, that’s just going to remove a barrier to utilization.

It doesn’t give us comfort giving guidance; we want to get a few quarters under our belt prior to giving you guidance. But all the measures that we’re seeing whether it be the ones that we shared today on NCCN and the J-Code, or the continued breadth and depth of our utilization are kind of fueling our excitement and our team’s energy as they’re out engaging with customers.

Maury Raycroft: Got it. Makes a lot of sense. And with the visibility into pricing that accounts are getting you mentioned longer term decisions and tailor contracting. Can you elaborate on what those contracts and contract durations look like?

Thomas Riga: Yes, so I think the I think the entire value proposition that’s, that’s central here is the fact that we are an independent BLA non-biosimilar. And I think what that means is, once our ASP is established, we are in direct control of our own discounts that we put into the market. So any impact to average selling price over time is at our sole discretion, we’re not reliant on anybody else’s decision. For example, how we handle third party payers, how we discount with end users, those decisions will be centrally made by us. And I think the early customer feedback is they appreciate the fact that we have a long view here to provide stability over time and I think that’s something that’s been needed because this marketplace, if you track the ASP has been anything but stable.

Maury Raycroft: Got it. Makes sense to me. Last question for me and I’ll hop back in the queue, but just wondering how initial conversations with payers have been going and how you think about pricing versus bio-similar as you negotiate with customers?

Thomas Riga: Yes, I think that I think they’re certainly an important stakeholder. Our strategy is, is centered around a provider centric strategy, but recognizing the importance of third party payers we have engaged them. I’ll let Erin give some color around the progress we’ve made.

Erin Miller: Thanks Tom. It’s a great question. And as Tom mentioned, payers are an important stakeholder in this market. We have engaged with 100% of our target payers, which represent 73% of total insured lives. What we’ve learned from that engagement is there will be payers that we will not do business with, because our strategic interests are not aligned. That being said, we do understand they’re an important stakeholder. We have three payer agreements in place. Those agreements align with our strategy, and the goal of providing additional access to providers, while also ensuring that we’re keeping our focus on predictability and stability within this market.

Maury Raycroft: Got it. It’s all helpful. Thank you very much.

Thomas Riga: Thanks Maury.

Operator: One moment for our next question. And our next question will come from Edward White. Your line is open.

Edward White: Good morning. Thanks for taking my questions. So the first question, Tom is just as you’re working your way through the launch, are you finding that your sales force is right sized? Or do you see that you have to make any additions? And how should we be thinking about SG&A expenses, perhaps directionally following the fourth quarter results?

Thomas Riga: Hey, Ed thanks for thanks for the question. Let me let me handle those one at a time. In terms of right size, we had a pretty disciplined strategy out of the gate. It was driven by two things. One is our understanding of the market and what we believed was going to be necessary to achieve success. And I think largely the sales that we’re seeing outside of the top line number, really speak to on strategy sales. So I think the team is executing quite well. But to your point, we are lean. And as we expand into other parts of the business, and we continue to expand our tentacles, we’ll evaluate it. I think as you think about 2023, we’re pretty comfortable with the size of the sales force that exists today. And I don’t anticipate significant growth that I would draw your attention to on that particular aspect of the SG&A line.

As you look at expenses, I think what you’re seeing here is the R&D line came in at $8.7 million in Q4. That’s largely associated with the de-prioritization of poziotinib that is largely included in that number. So I would expect to see 2023 expense line continue to reduce at the level of R&D with offsetting increases in SG&A. I think those are your two. And if there’s something else, let me know.

Edward White: Those, those were done. And then just speaking of R&D, what are your current goals in R&D and expectations? You had mentioned that you are looking at our portfolio of cancer treatments; maybe you can just give us your thoughts on potential internal R&D efforts or business development opportunities.

Thomas Riga: Yes, so through the change that we’ve driven in the company, we have maintained a lenient scalable R&D group. My expectation of their focus as we move into 2023 is really centered around two things. It’s around the same day dosing study and the pediatric PMR for ROLVEDON. So those activities will be central to how we execute. We intentionally kept this group scalable, because we’re obviously optimistic with ROLVEDON. And what I had mentioned in the prepared remarks is we do aspire to, to not just be a single product company and those decisions and discussions will happen over time. But I think it’s all starting and stopping with ROLVEDON success, which is our primary focus today.

Edward White: Great, Tom, thanks for taking my question.

Thomas Riga: Thanks, Ed.

Operator: One moment for our next question. And our next question comes from Reni Bennett Benjamin of JMP Securities. Your line is open.

Reni Bennett Benjamin: Hey, Tom and team thanks for taking the questions and congratulations on the launch. Maybe just, jumping straight in, I think in your prepared remarks you mentioned that in the first quarter that number of accounts has doubled. And I guess two related questions. So that is that would make about 140 accounts, is it? Can we think about this doubling of accounts, translating to a potential doubling of the revenues for the first quarter? Or, if not, what are the — what are the different factors we should be considering? And as we, as we think about this doubling of accounts, what’s the total number of accounts that you are, are targeting? And how much progress have we made towards that total number?

Thomas Riga: Yes, thanks for the questions Ren. I think the first one; I would not equate a doubling of accounts to a doubling of sales because, as you know, Ren an account is not an account. Some of them just in the example, the top three networks within community oncology represent 22% of the sale. So I think the reason we wanted to share that particular metric, it’s one we really value and look at internally, because to be successful, for the long-term goals, you have to increase the breadth of utilization, both intra customer and intra segment and across segments for that matter. So we’re seeing those metrics go in the direction that we that we want to go. So to your question, do we expect growth? Absolutely, with those kinds of breath increases. But I don’t think you should be making revenue assessments based on those numbers.

Reni Bennett Benjamin: Okay. And I guess, just as we’re thinking about the various constituents, right, it’s in community 340B and an unfree 340B, by the end of the year, how are you kind of viewing what the penetration might be into the each of those segments?

Thomas Riga: I think we’re, we’re planning to be systematic. I think, as we’ve been, we’ve been very consistent with our research leading up to the launch. And it’s playing out largely as expected, that our strategy was to really start with community oncology given the speed of decision making and receptivity to the value proposition. I think I’m encouraged as Erin had mentioned in her prepared remarks. Our first hospital IBN is coming online here in the first quarter. So we are engaging all three of those segments. I think the challenge or the reality of launching a product is there’s timing of decisions within each of these segments, there’s decisions to either engage or not engage. So what we’ve tried to do is set up our strategy to enable ourselves to one, see if there’s an opportunity to gain initial interest in a really core segment of the community.

And while we work through the PNT process, the decision making process within each of the other hospitals segments, and you’re starting to see some of that come to fruition. As it relates to the end of the year, I would expect us to be infused through all three segments of the business. But I think the lead driver that’s going to — that’s going to be the place of greatest success early indicators are that’s going to be in the community followed by 340B. And then I think on the trail end would be the non-340B hospitals.

Reni Bennett Benjamin: Got it. And then just I guess one final one from us. Is there anything, I don’t think stockpiling takes place in this particular segment, with G-CSF but maybe I’m wrong. But is there anything that took place in the fourth quarter that that might be might have impacted the revenues obviously, in a positive way that we might not see in subsequent quarters. Just trying to get if there was anything that that if we should be thinking about the trajectory as up from the fourth quarter as opposed to any sort of seasonality or any sort of one time things that have occurred in that the first quarter of launch?

Thomas Riga: No, I think there’s dynamics that I point out to you to Ren in that number. So there’s always some initial stockpile, there’s not stockpiling of there’s initial purchases that happen at the wholesale level, when a product becomes available. To your point it’s not in the wholesalers interest or the customer’s interest to stockpile product. So we don’t see any abnormal purchasing patterns through that there’s tight governor’s at the wholesale level and the customer level for that. But there’s purchasing patterns in any buy and bill oncology product by just the pure met — the pure mechanisms by which things happen. So let me explain. ASP comes out the second week of the third month of the quarter. I think that a lot of decisions get made in that timing.

And I think when you’re dealing with contracted oncology; you inevitably see that the third month of the quarter will be larger than the previous two. And that’s a function of the mechanism of how rebates are paid and time cost of money. So I think this business, whether it be ROLVEDON, or any growth factor, you would typically expect to see the third month of a quarter be higher than the first two. And I think that will that will shrink over time. But I think the reality of the third month being the biggest will be across growth factor products, especially those that are contracted with a rebate component.

Reni Bennett Benjamin: Got it. Thanks for taking the questions.

Operator: One moment for our next question. And our next question will come from at Prakhar Agarwal of Cantor Fitzgerald. Your line is open.

Prakhar Agarwal: Hi, good morning team and congrats on the quarter. And thanks for taking my question. So first question, following up on the access question, I think the three bear agreements in place. So what percentage of covered lives do these represent right now? And where do you expect to be by the end of the year? And I had a quick follow up.

Thomas Riga: Yes, so let me let me try and, Erin if there’s something you want to add. So I think the way we think about the payer coverage is in the geographies where the receptivity is high, and there is a there is a want and a desire from the cost of the end user to increase the eligible population within their book that has a predominant payer, that is a driver for us to look to make those payer agreements. So it’s very much a provider centric strategy that enables us to engage the third party payer based on customer receptivity to the product. So in those agreements that Erin had mentioned, that we signed for payer agreements, it actually followed that exact pattern. So customers who engaged with the product who have started using the product and aspire to use it in a deeper concentration of their business, but it may have had a hurdle with one of their predominant payers.

That’s our signal to engage those contract negotiations with, with those payers. So as it relates to where we’ll end up with total covered lives at the end of the year, I think that’s largely going to be dependent on strategy. So as we continue to deepen our position within our customers, we will be critically evaluating the eligible population that have restrictions within that business, and then look to make payer agreements that are beneficial for the customer offs as well as the stakeholders, in this case, the payer. Erin, anything else?

Erin Miller: No, I just say that the focus that we have is predictability and stability within this market. So with payers that are willing to engage, have that discussion and understand that focus, we are absolutely willing to engage.

Prakhar Agarwal: Understood. And second question, what has been the receptivity in the hospital segment 340B and non-340B based on your initial discussions? Is it mostly a timing issue on the uptake with decision from PNT committees or any other barriers that you need to work through? And has there been any difference between 340B versus non-340B? Appreciate the questions. Thank you.

Thomas Riga: Yes, great question. I think one is timing. So that is very real. PNT is real. I think there’s other practical strategic challenges that one faces. We are never going to be the least cost alternative. And then there are hospital systems that a principal driver of decisions is least cost alternative. I think those are going to be a challenge. I think there are also a segment of hospitals, both 340B and non that are more value centric in their approach. Given the consolidation of many of the community clinics that have been have become hospitals over the years I think that thinking has infiltrated many of the large IDN systems. So I think the initial uptake in the hospital segment, certainly today is about timing. But I don’t think we have delusions of grandeur of the challenge that we’re going to face in that segment. And we’re going to be strategic in how we engage.

Prakhar Agarwal: Thank you

Operator: One moment. And our next question will come from Suhel Kazmi of . Your line is open.

Unidentified Analyst: Hi, good morning. This is asking a couple of questions from my end. So congrats on the quarter team, and I think a bunch of our questions have been addressed. But just curious on the same day dosing study, if you could provide us an update on enrollment and when we might hear some data from the study both either from the earlier expansion phase. I know this is open label, so any color you have from the initial would be great.

Thomas Riga: Yes, thanks for the question. We’re optimistic about this one. That study is up in running. We have a pre-specified interim review of safety and efficacy that’s that’s projected on the back half of this year. As you mentioned, we did do the expansion into the 30 minute only arm, so I think both the data and the practical realities of utilization fit that particular delivery mechanism. So 30 minutes post chemotherapy is the arm that we’re expanding. We’re expecting to have some visibility into that open label study in the second half of the year, and I think that’s going to largely inform if the product is performing in line with what we presented in Miami initially, and then the early data that was presented on what we believe the healthy drug could perform, so second half of the year.

Unidentified Analyst: Very helpful. Thank you. Maybe as a brief follow up, assuming we see some positive data here, can you talk about the impact across the different distribution channels be it the community oncology setting or the 340B, non-340B hospitals.

Thomas Riga: I think the first thing if your question specific has been the dosing, I think depending on the outcome, we would have more conviction on a path, whether that be going to chat with FDA about a regulatory path forward, whether it’s publication, it’s really contingent upon what we see in that data. So I think as it relates to distribution, commercialization today. we are focused and really pleased with what we’re seeing with what we have in the bag, and that is our non-inferiority label, given 24 hours post chemo. So I think here in the near term, we are executing that strategy. and that strategy alone, and then once we have visibility to the performance in the back half of the year, we could make a decision on what the appropriate next step of that strategy would be, and should the data be overwhelmingly positive, we would be aggressive in our approach, should it be underwhelming, we obviously take action there too.

But we’re obviously hoping that the data that’s produced is representative of what we’ve seen in the earlier work.

Unidentified Analyst: Excellent, thanks so much, and congratulations on all the progress.

Thomas Riga: Yes, thanks so much for the question.

Operator: And I’m showing no further questions. I would not like to turn the conference back to Tom Riga, CEO for closing remarks.

Thomas Riga: Hey thank you everybody for your participation on the call today as well as your interest in Spectrum. On the heels of a strong launch quarter, and EDSM is high at the company and with our customers, and we’re looking forward to the future. As always, if you have questions, feel free to reach out. Thanks for joining.

Operator: And this concludes today’s conference call. Thank you for participating. You may now disconnect.