Accelerate Diagnostics, Inc. (AXDX) on Q4 2021 Results - Earnings Call Transcript
Operator: Good afternoon, and welcome to the Accelerate Diagnostics, Incorporated Fourth Quarter 2021 Results Conference Call. All participants will be in listen-only mode. After today’s presentation, there will be a question-and-answer session. Please note, this event is being recorded. I would now like to turn the conference over to Laura Pierson of Accelerate Diagnostics. Please go ahead.
Laura Pierson: Before we begin, it is important to share that information presented during this call may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include projections, statements about our future and those that are not historical facts. All forward-looking statements that are made during this conference call are subject to risks, uncertainties and other factors that could cause our actual results to differ materially. These are discussed in greater detail in our annual report on Form 10-K for the year ended December 31, 2020 and other reports we filed with the SEC. Lastly, please note that today’s press release contains full financial statements and a reconciliation of non-GAAP to GAAP financial measures. It is my pleasure to now introduce the company’s President and CEO, Jack Phillips.
Jack Phillips: Thank you, Laura. Good afternoon, everyone. And welcome to our fourth quarter and full year 2021 earnings call. On today’s call, we will review our fourth quarter and full year financial results and discuss our plans for 2022. The addition of new contracts, clinically live customers and new prospects to our sales funnel made the fourth quarter, our most commercially productive quarter of the year. However, pandemic related issues led to a lower rate of new customer contracts and anticipated. Despite this headwind, recurring revenue still grew by 24% for the year. In R&D, we delivered on all of our product development milestones for the quarter and year. This included the midyear launch of a new AST test kit for our Pheno platform. We also completed development of the Arc system, our workflow aid for MALDI identification testing. And we advanced the development of our next-generation platform form Pheno 2. Later in the call, I will elaborate on how these products will improve our rate of growth and profitability as a part of our overall product strategy. Before providing additional details on our operational results for 2021 and our plans for 2022, I would like to hand it over to Steve to review our fourth quarter and full year financial results.
Steve Reichling: Thank you, Jack, and good afternoon, everyone. Net sales were $3.3 million in the fourth quarter and $11.8 million for the year. This compares to $3.1 million and $11.2 million for the same periods in 2020. This year-over-year sales increase was driven by 24% growth in recurring revenues, partially offset by a decline in one time capital revenue due to a large capital deal booked in 2020, which did not repeat in 2021. Cost of goods sold excluding non-cash one-time charges were $2.2 million in the fourth quarter and $7.7 million for the year resulting in gross margins of 35% for both the quarter and the full year. This compares to cost of goods sold of $2 million and $6.7 million or gross margins of 37% and 40% respectively. The decline in gross margins year-over-year, primarily resulted from ongoing pandemic related impacts to manufacturing costs. Selling, general and administrative expenses were $11.5 million for the fourth quarter and $49.2 million for the year. This compares to $11.2 million and $46.9 million during the same periods in 2020. When excluding non-cash stock-based compensation expense SG&A costs decreased by over $3 million from the prior year due to lower selling costs and other efficiencies. Research and development costs were $4.6 million for the fourth quarter and $21.9 million for the year. This compares to $5.1 million and $21.3 million during the same periods in 2020. This slight increase was the result of additional investment to conclude our development of our Arc platform and advance our Pheno 2 development program. On a non-GAAP basis, net losses for the fourth quarter and the year after excluding the impacts of non-cash stock based compensation expense. And one-time charges were $15.3 million and $51.1 million respectively. Net cash used excluding financing was $13.3 million for the quarter and $47.2 million for the year. Our focus in 2021 was improving the health of our balance sheet. During the year, we reduced our convertible debt by approximately a third and raised over $40 million in new financing. During the fourth quarter, we executed a $10 million draw down on our ATM facility. With these funds we ended 2021 with approximately $64 million in cash available to fund ongoing operations. We believe that these funds and other plans will allow us to achieve our near-term objectives. I will now hand it back to Jack to further review our fourth quarter and full year 2021 results and plans for 2022 in greater detail. Jack?
Jack Phillips: Thanks, Steve. Despite the near-term focus on COVID, sepsis continues to be a major healthcare concern, causing significant death and morbidity with a cost burden to the health system of over $60 billion annually. With this incredible unmet medical need, there is no question that the $300 million ID/AST test market will convert to rapid testing. It’s just a question of having the right product strategy and time, and we’re convinced we have the right product strategy. First, we will continue to penetrate the market with our integrated Pheno rapid ID/AST solution and the recently launched AST test kit. Second, we will enter the untapped and sizeable market for rapid MALDI with Arc, an automated sample preparation system. And third, we will launch the Pheno 2 system, which will address the entire market for acute bacterial infections beyond positive blood cultures. In 2021, we made considerable progress in each of these areas. And in 2022, we will continue to focus on achieving commercial and development milestones to advance this three-pronged product strategy. First, on Pheno, in 2021, the number of Pheno systems running are integrated ID/AST tests clinically increased by 17%, which drove an increase in recurring revenues globally of 24%. This growth represents progress in our mission to convert the $300 million ID and AST test market to rapid testing. The benefits of rapid ID and AST testing are now well established dozens of studies, including our recently completed registry studies and over 100 Pheno customers, including thought leaders like Mayo Clinic demonstrate broad benefits derived from improvements in time to optimal antibiotic therapy. In the U.S., we contracted a total of 16 Pheno instruments with new customers in the fourth quarter. The fourth wave of the pandemic brought increases in hospitalization in many parts of the country and high rates of employee turnover and others. These factors limited our ability to close additional new business in the quarter. However, we continue to secure our customer base through long-term volume committed contracts. We also brought 13 instruments live in the U.S. during the quarter. This resulted in the U.S. revenue generating installed base of 313 instruments and a backlog of 81 instruments pending implementation. In addition, our implementation team successfully upgraded the majority of our live customers to our latest software version, which improves the performance and functionality of the Pheno system. Finally, in the U.S., we began commercialization of our new Pheno AST test kit for use on the Pheno system. We believe this test kit is a preferred option for customers who have an existing rapid identification system and want to leverage Pheno to deliver a full rapid ID/AST solution. We anticipate this new way to deliver rapid AST will be a meaningful component of our business going forward. In EMEA, we nearly doubled revenues and annuity per customer in 2021. This was the result of our strategy to focus on key geographies and attaining a minimum annuity per customer. In 2022, EMEA intends to capitalize on interest in the combined use of Pheno ID/AST and Pheno AST test kits at large regional hospitals, which typically run one shift. Having both kits available is ideal for these customers who will use Pheno AST during the day, when they have staffing, then use Pheno ID/AST for off shift coverage. Our second area focus is capitalizing on the new market segment in microbiology, rapid MALDI workflow. For a large segment of the market, MALDI is the preferred solution for bacterial identification due to its comprehensive library of organisms, accuracy and low cost to operate. 57% of our prospective customers have MALDI devices and this number is growing as smaller, lower cost MALDI systems come to market. MALDI has one major drawback. The 18 to 24 hours it takes to deliver an ID result. The art system automates the front end process to deliver rapid MALDI ID. The runtime is about an hour, which is a 90% reduction in time to result compared to the standard of care. Reportability and accuracy meet expectations for both gram positive and gram negative organisms. Given the solid performance, we remain on track to launch Arc in Q1 of this year. From a business perspective, our creates an entirely new razor blade revenue stream for Accelerate. The acquisition model will be a traditional capital and price per test model. This exciting market opportunity will also greatly benefit our ability to bundle Pheno with AST test kits. Considering, there are over 10 million positive blood culture ID tests performed globally at a targeted average selling price of $30. We’re actually creating a new $300 million market opportunity. With Arc plus Pheno AST test a new end-to-end rapid ID-AST workflow is a great option for those wanting to utilize MALDI for rapid ID. Arc is receiving enthusiastic interest and the funnel growth in the fourth quarter was substantial. Similar levels of interest are being seen in EMEA where the product will launch as CE-IVD device. Our new platform, Pheno 2 positions us to enter the entire rapid ID-AST space. Pheno 2 is designed to give customers the ability to run both positive blood cultures and all other isolates from any sample type on a single platform. Today’s microbiology lab relies principally on culture plates and decades old automation. The old platforms have complex workflows or labor intensive and produce slow results. We are confident Pheno 2 will take microbiology automation to another level. Pheno 2 is designed for random access in a variety of organisms across various sample types can be run simultaneously. Given the ever evolving nature of bacteria and antibiotic resistance, we have designed Pheno 2 to look deeper than ever before in just live cell biology. Pheno 2 extends our deep knowledge in imaging to deliver solid state 3D cell imaging. With our technology, we see antimicrobial response more quickly and more completely than other existing technologies. This will translate in best-in-class speed and accuracy across a broad AST menu and a myriad of sample types. In the long-term, we believe this technology will have applications ranging from pharma drug development to real time reporting of emerging resistance trends. We continue to make very good progress with Pheno 2. In 2022, we will have our final instrument design completed and assay development will start. We anticipate conducting clinical trials in 2023 and are targeting a U.S. launch in early 2024. With Pheno 2, we will have a solution for the entire AST market in a single integrated platform. For Accelerate, Pheno 2 will bring higher instrument annuities at a higher gross margin. In summary, we made substantial progress on our goals for 2021. We grew our market share with 17% more Pheno instruments running patient samples than when we started the year. We launched Pheno AST, which provides flexible options for using Pheno and grew our funnel of prospective customers as a result. We completed development of Arc and have begun commercializing this product in anticipation of a successful launch in the coming months. Lastly, we completed feasibility for Pheno 2 across multiple sample types. In 2022, we anticipate revenues between $13 million and $14 million. We are optimistic with a broader and more flexible product offering and more normalized hospital access, we can significantly improve our rate of contracting. Additionally, we have several meaningful R&D milestones in 2022, which can dramatically enhance our future success. And finally, we will continue to carefully manage our resources to execute on our strategy. In closing, I would like to leave you with this. A new study recently published in The Lancet from the Gates Foundation found that antibiotic resistance bacterial infections played a role in approximately 5 million deaths in 2019. Experts agree that stemming over use of antibiotics through rapid testing is one of our first lines of defense against this worsening healthcare crisis. And Accelerate is best position and most committed to delivering this much needed change. I would now be happy to answer questions from our analyst. Should others on the call, have questions, not addressed, we would welcome you to send these questions or a request for a follow-up meeting to investors@axdx.com.
Operator: We will now begin the question-and-answer session. And the first question comes from Brian Weinstein with William Blair. Please go ahead.
Brian Weinstein: Hey guys, how you doing? Thanks for taking the question.
Steve Reichling: Hi Brian. Good afternoon.
Brian Weinstein: So just starting out on the guidance, if we can. Steve, can you give any kind of insight into kind of what’s in the guide maybe by kind of product or by geography just to get us a little bit more insight into kind of what’s the expectation for the year and making up to $13 million to $14 million between Arc, which is, I guess, launching here in the next few days. It sounds like the core ID-AST, the AST only, and then also geography.
Steve Reichling: Yes. I mean, most of our revenues and growth listed in that guidance is derived from our existing book of business and a significant portion of our backlog going live. So that represents a handful of AST customers that we sit here today, but mostly ID-AST business. What we would expect is that our number of AST only customers to be increasing from a contracting perspective during the year. And also in your point on Arc, we do expect Arc to launch here within the next month or so. And do expect that Arc is the type of sale that we could get capital revenue. And we do have some modest capital revenue in the budget in the current year from Arc. The final piece again on the kind of capital side of the equation is we continue to re-up customers for extended contract terms. And often when they’ve had an opportunity to embed the system in their processes and we approach them for new, there’s an opportunity to upsell them on capital as a part of that committed contract. So those are the major components of the breakdown between the $13 million and $14 million.
Brian Weinstein: And then, what are you assuming as far as access goes for driving new placements? You talked about the funnel many times on the call. So maybe two questions embedded there. First, can you give me a little bit more information about what that funnel looks like? I think you said that it was as strong as it’s ever been or something like that. And then what are you assuming as far as kind of your sales forces ability to get back to kind of normal access? Are you expecting kind of more traditional access? Or do you still expect that to be somewhat impaired through the year?
Jack Phillips: Yeah. So hi, Brian, this is Jack. I’ll take that one. So a couple things, one on the access piece I would say again, this is an absolutely fluid based on the rise and fall of hospitalizations due to COVID. The good news right now is access over the past three weeks has been continually improving. We’re getting many more meetings than we had before, face to face meetings, Zoom meetings as well, but nonetheless, a lot of very meaningful meetings going forward. And we expect that to continue. I mean, we’re optimistic about the rest of the year and it’s definitely trending now in the right direction. Clearly with Omicron that was a – that we took a step back there and with Delta as well, access, went up and down through that period. But it’s now trending in a very good direction. And as a result – now getting to the second point of your question. As a result, what we’re seeing is many more opportunities are being restarted. So these are opportunities that we’ve already had that were placed on hold that we’re revisiting. And then I would say the funnel is broken down into three very important areas. The three areas that we talk about, on a regular basis, one is ID-AST and our core complete integrated I-D-AST solution. The second one is, an AST configuration model. And then the third is really a combination of Arc. We’re getting a lot of good early interest in Arc. We are on track to launch this month and there’s a lot of good interest there and the funnels growing there and the funnels growing with Arc as well as customers that are interested in Arc and AST configuration to together. So it’s one fully integrated solution using rapid MALDI and then the Pheno for susceptibility testing.
Brian Weinstein: Got it. And the last one for me and thank you for those answers. But last one for me is on the cash used for the year. It appears that that would still be kind of fully funding your opportunities. I just want to make sure that there’s – as you guys are being cognizant of your cash position that there’s nothing that is sort of fallen by the wayside in terms of things that you would like to be doing in 2022, if not for a bit of a tighter cash situation. And any other comments that you want to kind of make about opportunities for financing or anything else related to the cash situation. Thanks guys.
Steve Reichling: Yes. Thanks for the question, Brian. As you know, we’re guiding to $45 million to $55 million in 2022. And the growth that we have over where we landed in 2021 is directly related those product launches. The work we’ve done over the past few years to tighten our spend and to focus on our areas of investment. I mean, this is what allows us to make meaningful progress in these key new product areas without dramatically increasing our overall rate of burn. So where we sit here, we feel pretty good about the money we have relative to our burn for the current year and will continue to evaluate our opportunities to bring on new cash when it makes sense to do so. And so that’s kind of the picture there.
Brian Weinstein: Okay. Thanks guys.
Operator: The next question is from Tycho Peterson with JPMorgan. Please go ahead.
Casey Woodring: Hi guys. This is Casey on for Tycho. Maybe just to follow up on the 2022 guidance questions. Can you talk about what’s embedded in there for EMEA and ex-U.S.? And how should we think about that business now kind of post the restructuring last year? Thanks.
Steve Reichling: Yeah. We were – as we mentioned we are very pleased to see the growth in EMEA strong growth in the Middle East through our EMEA entity. And I think we’ll see continued growth. I mean, right now the breakdown is roughly $2 million of the $12 million is in EMEA. So it’s not a significant portion of our business. But we welcome the growth and we expect continued growth from that geography.
Jack Phillips: Yes. I would just say, Casey, Jack here. Yes, I mean, we’re – the restructuring that we did last year was turned out to be very effective. I mean, we got focused. The reason for that restructure was twofold. One is to focus our efforts in places where we knew we could win and secondly, to manage our spend. And it’s been very effective. We’ve done very well in the markets that we focused in not only in Europe, but also we’ve had several good major wins in the Middle Eastern countries as well that we’ve been talking about.
Casey Woodring: Got you. That’s helpful. And then just thinking about the Arc product and the AST standalone, as we think about those products several years out, how should we think about the ramp? And curious as to why neither are really embedded into the 2022 guidance, just that a level of conservatism or are you kind of like soft launching these products? Any sort of color there?
Jack Phillips: Yeah. So I mean, Arc is going to be a – it’s going to be a very, very meaningful product for us as we go out. I mean, we look at the market, it’s about a $300 million market when you look at $30 a test and with 10 million test size, it’s going to be very meaningful. We’re being conservative about just the fact that we are launching as an RUO initially. We anticipate to submit for IVD this year. But with the FDA, we’re not sure when we’re going to get approval for that. And then also, as we come out of the pandemic, I mentioned, we’re getting a lot more activity. I want to give us a chance to build the funnel there, which it’s building nicely. And that’s why there’s not a lot built into that. And then on the AST side, on the kits – on the AST configuration side, there’s definitely, part of our guidance includes that. And that is partly included in our overall revenues for 2022, for sure.
Jack Phillips: Casey, do you have another question?
Casey Woodring: No, that’s it. Thank you.
Jack Phillips: Okay. Thank you.
Operator: The next question is from Mark Massaro with BTIG. Please go ahead.
Mark Massaro: Hey guys. Thank you very much for the questions. Yes, I guess just to sort of clarify, I think I heard you guys say that Arc is positioned to launch this month. But I also think I heard you say, it’s positioned to launch in the coming months. So I guess, curious if there is a delay there, if not, do you have inventory built and should we expect this product to start shipping in March?
Jack Phillips: Yes. So just to clarify, we are on track to, sorry, if we misspoke there, we’re on track to launch this month. And again, I do practically every day do a portfolio update on Arc and we’re on track to launch this month. And then the second part of your question is we are actively building instrumentation and at launch, we will have available instruments to ship.
Mark Massaro: Okay, perfect. I’m curious, if you can comment on maybe the funnel for Arc and then thank you for the reminder about the $30 per test on Arc, I guess. Can you remind us what the capital – maybe the less price is and are you potentially willing to go into a reagent rental on that, or are you really going to pursue a capital sale upfront?
Jack Phillips: Sure. Average selling price on the Arc platform will be about $30,000. As I indicated, the average selling price on the actual kit will be about $30. The answer to your other question there, Mark is, yes, we will entertain a reagent rental model for sure. I mean, that’s obviously a important model for those customers that want to adopt this, that don’t have capital budgeted and that will also help with our ramp up as well. So if customers don’t have things budgeted. And then I would just, again, reiterate that the funnel is growing nicely there. There’s a lot of interest. There’s a lot of interest, frankly, with SEPC type of customers that already have a type of a rapid MALDI workflow, but it’s somewhat cumbersome. And it takes a lot of hands on time. Arc, as we’ve talked about is totally automates the process for the front end preparation of MALDI. And so there’s a lot of interest there. And again, this is a great example where through COVID, there’s been a lot of open – there’s been a lot of openings that have happened in microbiology and other parts of the laboratory with people leaving. And so resources are at a premium and the Arc – the Arc value per opposition really is well suited to address those challenges with regard to people in the labs and so forth, because we automate a very important process there.
Mark Massaro: Excellent. That’s helpful. And I guess, obviously Pheno ID AST is FDA cleared. Other ID systems in the space are FDA cleared, such as BioFire and Verigene and T2 and others. So I guess what are your expectations for how Arc will be deployed recognizing that it is RUO initially. Do you have a sense that clinicians will be able to administer this test on patients in a clinical setting? Or is it really just to maybe build interest ahead of an FDA cleared launch?
Jack Phillips: Yes, a couple comments there. Good question. So the answer is absolutely yes. Customers will – we absolutely are accounting on and we’re working the sales funnels now for customers that will adopt Arc as an RUO will appropriately validate that RUO in their laboratory. And then start running it for clinical use. That’s a very accepted practice. Some hospitals do not bring on RUO type products, but many do. And it’s just a matter of doing, going through their self validation which is pretty straightforward with Arc, I would say because it’s – again, the front end of the sample prep, it’s not actually producing the result, MALDI is producing the result. And then our initial target will be, obviously it’s for customers that already have a MALDI platform. And that are wanting to move from a two-day turnaround time for ID to a rapid ID that they can basically get same day results for in a couple hours get a full ID off of their MALDI and those are initial targets. And did I answer all your questions there, Mark?
Mark Massaro: Yes. Yes. That’s super helpful. Thank you for that. And then maybe just my last question obviously you guys have really put up some good growth in EMEA. But just for clarification, I think you – let’s say you added 16 contracted instruments in the quarter. I think 14 came from EMEA. So just making sure that implies two in the U.S. and I guess, can you just give us a sense for the funnel in the U.S.? I mean, I understand you have a strong backlog of about 81 in the U.S., but just give us a sense for maybe the interest level in the U.S. even outside of that backlog.
Steve Reichling: Mark, first of all, correction those numbers are incremental. So we did 16 in the U.S. and we did 14 in Europe, so those are incremental to each other.
Mark Massaro: Okay. Understood. Understood, okay. And then so just interest level in the U.S. would be super helpful outside of the backlog?
Steve Reichling: And then yes, so part of the question is the go live, so our backlog of 81 instruments to go live, I mean, we anticipate getting a significant number of those live this year. And then obviously add more to that with new contracted customers, both for ID AST and for Pheno AST as well. And we’ll be obviously building that funnel and we’re building that funnel now.
Mark Massaro: Okay. Thanks guys. That’s it for me.
Steve Reichling: Thanks Mark.
Jack Phillips: Thanks mark. Appreciate it.
Operator: The next question is from Alex Nowak with Craig-Hallum Capital Group. Please go ahead.
Alex Nowak: Great, good afternoon, everyone. Pheno originally had a lot longer go live times, but ultimately came down to be about six to nine months. Once the system was placed there to complete the validation of the lab, how long do you think a typical go live here is going to take with Arc initially?
Jack Phillips: We think it will be less than that. But less than – it’s not going to be – we don’t anticipate it’s going to be the 12-month, nine-month timeframe that we saw initially with Pheno, Alex. And really we anticipate it should be actually a lot quicker. I mean, and so I would say, three to six months, if I had to pick right now, we’re working through this relative to customers self validating, as I mentioned before. Customers will need to self validate the RUO. So some of that will be based on the customer at the ability for the – how fast the customer is willing to go, because they will be doing that upfront work versus Accelerate initially until we get FDA approval. But it’ll definitely be quicker and it’s definitely more streamlined. I mean, it’s a pretty simple process.
Alex Nowak: Okay. Got it. And then this is a bigger picture question, but I think it’s necessary just given the challenges we had with the Pheno launch going over the last couple of years. With all the feedback that you’ve now heard with Pheno, Pheno AST, do you think Pheno itself can still become that big successful item in the labs that we were originally thinking on? Or do you think we need to start to shift our expectations a bit over that Arc or perhaps Pheno 2.0 is going to be that shot that maybe Pheno never could really achieve partially given the pandemic.
Jack Phillips: Yes. Thank you for the question. I appreciate it. No, absolutely, Pheno will continue to be a major significant player in the area of rapid ID/AST and now AST configuration with our AST kit. Moving – if moving backwards before the pandemic, I mean, we were – we had a very strong 2019 just before the pandemic we placed or we contracted, I can’t remember the exact number here, but I think it was like about 300 units or so. And again, the value proposition is there, Alex, has just recently over the past couple weeks, we had yet another customer just publish a pace paper on the savings that they’re seeing. And so absolutely, Pheno is going to continue to be a very important element here in sepsis AMR and overall rapid ID/AST. That said, there is a reason for our strategy, which is Arc gives flexibility around ID for those customers that want a different solution for ID that’s coming this month. And that’s a very important part of our strategy. AST configuration was a very important part of our strategy that we launched, got approval for and launched in the middle of the pandemic in June. And then longer term Alex, what Pheno doesn’t do – is doesn’t do all the other sample types, high volume isolate testing that will be addressed with Pheno 2. And it’s – that is going to be an important part of our overall product strategy as well. That will allow us to capture a much bigger market than just positive blood culture that we capture today with Pheno. So I would say all of them are extremely important to our ongoing success and our ongoing mission to improve the lives of patients with serious infections. It’s going to take the entire portfolio.
Alex Nowak: I appreciate that, Jack. Very helpful. And then just last question, can you maybe just give us an update on some of the plans to deal with the upcoming capital requirements for the outstanding convertible debt, just what’s being done to work around that?
Jack Phillips: Yes, I mean, we’re spending – certainly, it’s a big focus of mine. I can’t share our specific plans at this time, Alex, but first on the capital raise front, we do have several options there. We have 40 million outstanding on our ATM. We’ll look to use that opportunistically, we’re blessed to have the continued support of our insiders. And then we’ve had a couple inbounds recently on our – on a new convertible debt issuance and interest in that given the lower stock price. So there’s a lot of options in front of us and we’re weighing the puts and takes on those and we’ll do what we need to do to continue to execute. On the debt front, luckily, the debt is closely held, so we’re keeping our debt holders very close. We talk to them frequently and are working on various plans with them to resolve the debt. So both are our focus and we have plans around.
Alex Nowak: Okay, appreciate the update. Thank you.
Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Jack Phillips for any closing remarks.
Jack Phillips: Thank you, everybody. And I appreciate the call today and thank you so much for the questions today. In closing, a couple things from my side, first of all, I wanted to just take a minute and thank our tremendous group of Accelerate employees for the continued dedication to deliver on our goals. They’re doing a great job and making great progress. So thank you to our employees, our customers who are just tremendous partners of ours. As we continue to move the needle here in rapid ID/AST testing, and thanks to our customers for all you do for those patients. And then finally, our shareholders, I greatly appreciate the commitment of our shareholders over the years, and especially over the past couple years, as it’s been clearly very challenging largely due to the pandemic. As we move our attention and we have now for several months to 2022, I would say, we have great optimism and there’s great reason for optimism here to Accelerate. As the health systems gradually return to a new normal, I would say that results in much greater access, sometimes different access with Zoom calls and a higher level of interest and more and more willingness to take on new initiatives to improve the patient outcome. That’s we’re very excited about that. And then as we couple that with our product strategy steady growth in our ID/AST and AST core business, we’re excited to launch, be able to launch Arc over the next couple weeks here in March. And then we continue to make in 2022 meaningful strides and beat meaningful milestones in the area of our Pheno 2 development project. We’re very excited and very optimistic about the year. I thank you all for tuning in, thank you for your interest in Accelerate. And if you have any further questions by all means, please reach out to Steve and I, best way to connect with us is at investors, investors@axdx.com. That’s it for now. Again, thank you very much and have a wonderful day.
Operator: The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect.
