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Edited Transcript of IMV.TO earnings conference call or presentation 10-May-19 12:00pm GMT

Q1 2019 Imv Inc Earnings Call

HALIFAX May 20, 2019 (Thomson StreetEvents) -- Edited Transcript of Imv Inc earnings conference call or presentation Friday, May 10, 2019 at 12:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Frederic Ors

IMV Inc. - President, CEO & Director

* Gabriela Nicola Rosu

IMV Inc. - Chief Medical Officer

* Pierre Labbé

IMV Inc. - CFO

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Conference Call Participants

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* David Novak

Raymond James Ltd., Research Division - MD & Healthcare Research Analyst

* Endri Leno

National Bank Financial, Inc., Research Division - Associate

* Mayank Mamtani

B. Riley FBR, Inc., Research Division - Research Analyst

* Pasquale Sansone

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Presentation

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Operator [1]

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Good day, ladies and gentlemen, and welcome to the IMV's First Quarter Results Conference Call. (Operator Instructions) As a reminder, this call may be recorded.

I would now like to turn the call over to Pierre Labbé, CFO. You may begin.

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Pierre Labbé, IMV Inc. - CFO [2]

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Thank you, Michelle. Thanks, everyone, for joining the call this morning. I'm Pierre Labbé, CFO at IMV. Joining me today on this call, we have Fred Ors, our CEO. And also, during the Q&A session, Gabriela Rosu, our Chief Medical Officer, will be available to answer your question.

Before we begin, I would like to remind you that except for historical information, this presentation contains forward-looking statements, which reflects IMV's current expectations regarding future events. These forward-looking statements involve known and unknown risks and uncertainties that could cause IMV's actual results to differ materially from those statements. Those risks and uncertainties include, but are not limited to, our ability to access capital, the successful and timely completion of clinical trials, the receipt of all regulatory approvals and other risks detailed from time to time in our ongoing quarterly filings and also in our annual information form. The forward-looking statements in this presentation are also based on a number of assumptions which may prove to be incorrect.

Forward-looking statements contained in this presentation represent views only as of the date of this presentation and are presented for the purpose of assisting potential investors in understanding IMV's business and may not be appropriate for other purposes. IMV does not undertake to update forward-looking statements, whether written or oral, that may be made from time to time by or on its behalf, except as required under applicable securities legislation.

Investors are cautioned not to rely on these forward-looking statements and are encouraged to read IMV's continuous disclosure documents, including its current annual information form as well as its audited annual consolidated financial statements, which are available on SEDAR at SEDAR.com and on EDGAR at sec.gov/edgar.

I will now turn the call over to Fred Ors, our CEO. Fred?

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Frederic Ors, IMV Inc. - President, CEO & Director [3]

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Thank you, Pierre, and good morning, everyone. I will start with an update on our clinical development and other business highlights, and then I will hand it back to Pierre for a review of our financial results for the quarter.

Our progress in this quarter includes promising initial data from the Phase II cohort of the DeCidE1 clinical study underscoring the potential of our products, DPX-Survivac monotherapy, receiving in collaboration with le Centre de Recherche du CHU de Québec-Université Laval, a grant to develop a first class dual target T cell therapy in bladder cancer and completing $29.46 million financing with Wells Fargo acting as lead underwriter that provided IMV with increased financial flexibility and expansion of our shareholder base.

The DPX-Survivac program continues to be a major value driver for us with a unique mechanism of action providing significant industry differentiation and potentially much-needed innovation for hard-to-treat cancers.

In the Phase II cohort of the DeCidE1 clinical study in ovarian cancer, we provided a clinical update indicating that on the first 6 patients receiving DPX-Survivac had reached the first CT scan assessment. 83% of those patients, 5 out of 6, showed stable disease, including 2 tumor regressions, and 80% of them with stable disease were subjects with a lower baseline tumor burden of less than 5 centimeters, which also included the 2 tumor regressions.

In earlier stages of this trial, durable clinical responses occurred after 140 days, and at the date of this latest update, they had lasted for 20 months or more. The amended Phase II cohort of the DeCidE1 trial focuses on patients with lower tumor burden and is targeting enrollment of at least 16 additional patients at sites in the U.S. and Canada. IMV will present additional data on the DeCidE1 study at the 2019 American Society of Clinical Oncology, ASCO, annual meeting.

In the Phase II study in combination with Keytruda in relapsed/refractory DLBCL called SPiReL, in April, we reported an update saying that 10 patients has been enrolled and treated across 4 different clinical sites in Canada and that additional patients are being screened, and IMV expect to report updated clinical data at the biannual International Conference on Malignant Lymphoma, which will be held in Lugano, Switzerland in June 2019.

Finally, in the basket -- in the Phase II Basket Trial in combination with Keytruda in multiple solid tumors, screening and enrollment of patients is ongoing at multiple clinical sites across the U.S. and Canada for 5 cohorts of patients with bladder, liver, ovarian or non-small cell lung cancers as well as tumors shown to be positive to the microsatellite instability high biomarker, MSI-H. The first patients have been treated in the ovarian, lung, and MSI-high cohorts, and IMV expects to report preliminary clinical results on several of the solid tumor indications before the end of 2019.

We are pleased with the steady progress we've made so far in 2019, and we look forward to leveraging our technology to improve immunotherapy treatment options, particularly in underserved cancers, and we are grateful for the continued support of our shareholders and partners and look forward to a very productive reminder of 2019.

With that as an update, I will now have Pierre review our financial results for the quarter. Pierre?

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Pierre Labbé, IMV Inc. - CFO [4]

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Thanks, Fred. Please keep in mind that all the numbers I will be discussing are in Canadian dollars.

The net loss and comprehensive loss of $5.9 million or $0.13 per share for the 3 months ended March 31, 2019, was $2.9 million higher than the net loss and comprehensive loss for the 3-month period of 2019 (sic) [2018]. The R&D expenses increased by $2.1 million, and it is mainly attributable to the increased clinical activity related to the Basket Trial for $1.2 million. We also made a milestone payment for the DLBCL study for $123,000, and it is also attributable to the manufacturing activities that we had to support the increased clinical activity, including the purchasing of raw materials and contract -- and CMO cost and also the increase in salaries because we have hired 11 new people in R&D since the beginning of 2018.

For Q1 2019, the G&A expenses, excluding salary, increased to -- by $670,000. This increase is mainly explained by $2,100 coming from stock-based compensation related to new position as well as the fact that in 2018 the grant option happened at the end of March compared to January 4, 2019. Small increase in salaries because of new position as well as an increase in the compensation of senior management explain part of the increase.

There is other items related to the NASDAQ listing in Q2 2018, that had an impact on Q1 compared to last year. We have an increase in insurance premium for $162,000 and also $64,000 related to regulatory fees following the NASDAQ listing.

As of March 31, 2019, we had cash of $34.2 million compared to $14.9 million as at December 31, 2018. For the quarter, our cash burn that we define as the net loss adjusted for operations not involving cash was $5.2 million. And with the cash that we have, we expect that we have enough cash to grow at least up to Q4 2020.

And as of May 9, 2019, the number of issued and outstanding common share was 50.6 million shares, and we had 2 million stock option warrants and DSU outstanding.

And as a reminder, you should be able to find our unaudited interim condensed financial statements for the 3 months ended March 31, 2019, on SEDAR and on EDGAR at www.sedar.com and at sec.gov/edgar.

So Michelle, we are now ready to take questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Our first question comes from David Novak of Raymond James. David, if your telephone is muted, please unmute. Our next question comes from Joseph Pantginis of H.C. Wainwright.

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Pasquale Sansone, [2]

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This is Pasquale Sansone from the line of Joseph. I was wondering for the DeCidE1 study, if you can tell us what kind of data should we expect at ASCO?

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Frederic Ors, IMV Inc. - President, CEO & Director [3]

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What we said is that this will be an update on the -- so if you remember, there was 2 parts in the Phase II study. There was a randomized part, which included 12 patients and some of them are being in the monotherapy arm and some others being in the combination with epacadostat, and we've already released preliminary data on that as per their first CT scan, so they will be an update on those patients. And we have also started enrollment of the next -- the other part of the trial, which is an additional 15 patients in our targeted population with lower tumor burden. So depending on the data available at the time of the presentation, you will definitely see some updates on the first 12 and potentially some additional update on the next 16 in the subpopulation.

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Pasquale Sansone, [4]

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Very helpful. Another question, if I may. So as for the enrollment, when do you expect to finalize patient enrollment for the DeCidE1 study, please?

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Frederic Ors, IMV Inc. - President, CEO & Director [5]

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It's always difficult, you understand, to provide a definitive answer on those type of questions just because enrollment is something that can vary over time. That being said, it's pretty -- we've already enrolled, as you know, from -- in the Phase Ib 53 patients and we added 12 and then another 16. So the remainder that we have to enroll is just a part of that last 16 patient cohort. So in comparison to what we've done before, it's relatively small. So we expect that we should be able to enroll the full cohorts very quickly. And definitively, at ASCO we'll provide an update on where we are in the enrollment of the last cohort.

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Pasquale Sansone, [6]

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Congratulations for the data.

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Frederic Ors, IMV Inc. - President, CEO & Director [7]

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Thanks. Thanks for your questions.

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Operator [8]

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(Operator Instructions) Our next question comes from Endri Leno of National Bank.

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Endri Leno, National Bank Financial, Inc., Research Division - Associate [9]

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Just a quick clarification actually from me. So in the Q1 press release, in the Basket Trial, I mean, you mentioned ovarian, non-small cell lung and the MSI cohort. I mean, have we seen more than just the first patients, especially in the ovarian and the lung that they were initiated before? Or would it just be the same patients that we have discussed? Or do we have new ones there?

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Frederic Ors, IMV Inc. - President, CEO & Director [10]

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Well, the -- Endri, it's Fred. No, all the sites are open and the enrollment is ongoing. So there is new patients coming all the time in those indications. So what we've said in the Q1 report is that we are on time to report results on at least a number of the 5 solid indications before the end of the year. So the enrollment is going on time.

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Pierre Labbé, IMV Inc. - CFO [11]

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Yes. And there is no change in terms of milestone related to that trial.

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Operator [12]

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Our next question comes from David Novak of Raymond James.

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David Novak, Raymond James Ltd., Research Division - MD & Healthcare Research Analyst [13]

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Apologies for the technical difficulties there. I think the operator dropped me off the line previously.

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Frederic Ors, IMV Inc. - President, CEO & Director [14]

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Sorry, about that.

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David Novak, Raymond James Ltd., Research Division - MD & Healthcare Research Analyst [15]

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Not a problem. Just first off, on the DeCidE1 Phase II, with ASCO abstract set for release in the coming days, I was hoping you could help set expectation here. The last update we received from the company was kind of around the same time as the data cutoff date. So I guess, my question is twofold. First, how much more insight should we expect from the abstract versus what we already know? And second, what should we expect in the poster versus what we see in the abstract?

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Frederic Ors, IMV Inc. - President, CEO & Director [16]

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Okay. Thanks for the question, David. I think that is very good question, thanks for asking it. So the way it works at ASCO is that you do have to submit the abstract in February. So it's really what you have at that time that have to go in the abstract, you can always provide guidance that there's going to be some more data in the abstract basically, but the abstract are released on May 15, I think, if I'm not mistaken. And basically, that's a reflection of what you had in February and -- but when you make the presentation at ASCO, you give all the data that you have at that time, so this will be in June. So basically, what you're going to see in the abstract will be what we had in February, but what will be in the presentation will be all the data that's available when we do the presentation. So you can expect a significant update from what you've seen before.

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David Novak, Raymond James Ltd., Research Division - MD & Healthcare Research Analyst [17]

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Excellent. And I don't know if you can answer this, but would it be reasonable to assume that we might see a patient or a handful of patients that have been on study for that 140-day period?

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Frederic Ors, IMV Inc. - President, CEO & Director [18]

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Yes.

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David Novak, Raymond James Ltd., Research Division - MD & Healthcare Research Analyst [19]

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Excellent. Great. And last question from me, and apologies if this was asked previously when I got dropped off. But I was wondering if it'd be possible at all to be more specific with respect to the number of patients currently treated in the Basket Trial to date?

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Frederic Ors, IMV Inc. - President, CEO & Director [20]

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Well, like I said, we'll provide an update -- well, I don't know, Pierre, we will provide an update at the next quarter? Or...

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Pierre Labbé, IMV Inc. - CFO [21]

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Yes. Because right now, we are enrolling and it changes now more on a daily basis. So...

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Frederic Ors, IMV Inc. - President, CEO & Director [22]

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Yes. So we'll -- at the next -- I guess, at the next quarter release, we'll provide an update on where we are on the enrollment.

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Pierre Labbé, IMV Inc. - CFO [23]

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Yes. But just to say, David, that as you can see in our milestone, with the way it's going, we are so confident that we will provide initial data in most of the indication before the end of the year.

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Operator [24]

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Our next question comes from Mayank Mamtani of B. Riley.

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Mayank Mamtani, B. Riley FBR, Inc., Research Division - Research Analyst [25]

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Congrats on all the progress. Just 3 questions, a couple clarification and just one on the biomarker. So on the ovarian cancer monotherapy, obviously, excited about the ASCO readout, but could you just walk through what you expect to sort of be aware of before you make that decision to meet with the FDA again? Just kind of layout what that framework of things and activities that were agreed in the December meeting to basically go back in the second half. And then, second, could you also maybe talk about the DLBCL readout at ICML? And really what I'm looking for is the baseline characteristics of some of these patients. Are there exposure to RCHOP and some of the other treatment options that have been -- that are out there in the first or earlier line of disease? And then I have a biomarker question.

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Frederic Ors, IMV Inc. - President, CEO & Director [26]

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Okay. I'll answer the first one, and Gabriela, I will ask you to provide the answer on the DLBCL patients, please. So really, if you remember, we amended a trial back in December. We had a meeting with FDA and really the goal for us, we strongly believe in the deep understanding of the mechanism of action and targeting a population that based on this understanding of the mechanism of action has the greatest benefits. We believe it's really something that is better for the patients, it's better for the health care system and it's better for the company because it means that the chances of us being able to design a Phase III registration trial with a good chance of success going to be higher.

So that trial was really designed to place the company in a position where we could have a follow-up meeting with the FDA and design the trial that will be in that targeted population with lower tumor burden. So providing further confirmation of that as monotherapy on the level of activity and the duration of clinical responses. And like we provided guidance in that before, we expect to have this data before the end of the year, and hopefully, be able to have that follow-up meeting with them as well. Gabriela, can you talk about the relapsed/refractory patients that we are enrolling in the trial?

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Gabriela Nicola Rosu, IMV Inc. - Chief Medical Officer [27]

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Yes, certainly. So the patient population that we are enrolling in the disease large B-cell lymphoma trial are relapsed/refractory that are not eligible for transplant. And so far, we have enrolled 10 patients out of the 25 that we have to enroll. And we expect -- we are on track with the enrollment. We will have an online abstract at ICML where we're going to have probably the number of patients that we're going to be -- we have been enrolled at the time of the ICML, and we hope to have a more comprehensive presentation regarding this trial at ASH in December.

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Mayank Mamtani, B. Riley FBR, Inc., Research Division - Research Analyst [28]

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Okay. Great. That's super helpful. And then on BTB, on the baseline tumor burden, is there any data that kind of lays out how that might overlap with the MSI-high biomarker? And also, like, is there any other way to look at like the tumor burden, specifically in terms of -- if you kind of have the correlation with an immune response. I know there are certain things like T cell -- a particular type of T cell infiltration to a tumor burden ratio that could be used maybe not in ovarian cancer, but other tumor types like melanoma. But could you just talk about your thinking on the biomarker a little bit more?

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Frederic Ors, IMV Inc. - President, CEO & Director [29]

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So the tumor burden is really for us -- I would start with your last comment, it's really related actually to the level of -- it's the balance between the number of T cells you have generated versus the number of cancer cells in a given tumor, and it's really this balance that is a determinant factor in the clinical response. So there's a number of CD8 T cells in a given human body, 40 billion, and there is a number -- out of the 40 billion, there is -- you can activate a portion of them against a tumor. I think, if I'm not mistaken, when you -- well, the way you can see it when you have a 10-centimeter, for example, tumor, this is 300 billion cells or 500 billion cells and that's -- and then you have -- when you enroll patients and you do a CT scan, you have 2 months. So in that period of 2 months, you have to overcome the number of cancer cells that are there with the number of T cells. And what IMV has really done a lot of work on is understanding in very great detail this mechanism and trying to understand what is the limit and trying to focus, again, the application of the product in patients that are at a stage where T cell therapy have a great chance to have a significant impact.

And what we like about this is that it's really a window. It's not necessarily eliminating patients, it's treating patients at the right time for a T cell therapy, and the right time is before the tumor gets to be. So that's really -- and I don't think that there would be a clear association with MSI-high because MSI-high, in my understanding, that's more related to the level of mutations that you have and the ability of the immune system to see those mutations and it has a huge impact for checkpoint inhibitors PD-1 because they basically make them visible.

For us, it's a very different mechanism of action. We send T cells into the tumor that are very targeted. So we don't rely so much on what's there. It's something new that's coming in. And we believe that this is explaining why we have activity in ovarian. Ovarian is known to be a low mutations and all of that and checkpoints have not been very successful with ovarian cancer. And I think the data that we're generating really highlights the fact that when you [rewrite] technology [as we can sell] a new population of T cell in the tumor, doesn't matter, we can still have an impact in the tumor independently of the initial number of mutations in the tumor.

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Operator [30]

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There are no further questions. I'd like to turn the call back over to Frederic Ors for any closing remarks.

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Frederic Ors, IMV Inc. - President, CEO & Director [31]

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Thank you. So we have -- we're expecting a very busy next 6 months. We are very excited about all the clinical results upcoming. I just want to thank you for taking the time to join us on the call this morning, and wish you a great day.

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Operator [32]

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Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program, and you may now disconnect. Everyone, have a great day.