Earnings Call: Q4 2018

Mar 14, 2019

Good afternoon. This is the Chorus Call conference operator. Welcome and thank you for joining the Diasporin Full Year 2018 Results Conference Call. As a reminder, all participants are in listen only mode. After the presentation, there will be an opportunity to ask At this time, I would like to turn the conference over to Mr. Carlo Rosa, CEO of Diasporin. Please go ahead, sir. Thank you, operator. Ladies and gentlemen, welcome to the Diasporin year end results conference call. As usual, I will provide qualitative comments on the year and some on quarter 4. And then Mr. Pedro is going to get into discussing numbers in details. So in order to discuss how the business is performing, I will always make my comment at constant exchange rate. And specifically about certain geography, I mean, the say geographies in a way that is a little bit different from the way that is reported in the slides and presentation everybody has received. So let's start from quarter 4. At constant exchange rate, the quarter growth year on year is 3.6%. And that's a combination of different performances in different geographies. And let me remind you that when we met at the end of quarter 3 and we were discussing about guidance for year end, we qualified that there were certain elements of uncertainty in certain geographies that I will discuss right now. So let's start first from Europe direct. Europe direct means all the European countries where Diosorin is operating direct. And it's important to look at this geography because this geography is where we launch all the products without regulatory barrier. And this certainly includes QuantiFERON that if you remember, we have introduced this market in the beginning of quarter 4 of last year. So Europe Direct is doing very nicely as a result of that. Actually, we are growing 10% a little over 10% spread over all the geographies. Also, Germany that if you remember was has been at the beginning of the year in a situation where we're transitioning teams and we were actually going after conversion of the Eliza business. Also in Germany, we had more stabilization. So as far as Europe is okay, is concerned, results are good. The launch of QuantiFERON with the support of QIAGEN is working fine. Now let's go to U. S. A. U. S. Market in Q4 grew 3.3%. And then again, it's a combination of plus and minuses. Now let's talk about vitamin D. As discussed, we continue to see in the U. S. Decline on Vitamin D. We have all of us have seen the comments of some of the Light Labs, LabCorp, Quest and Sonic about certain uncertainties visavis vitamin D volume. We are monitoring this. We see that vitamin D is declining with these accounts. And but it's very difficult to understand what is going to happen and how this will affect 2019. In fact, so far, we only have visibility over a couple of quarter. I was noticing yesterday that one of the big labs, Quest, is saying that, yes, they see vitamin D increase in denial, and they're trying to structure agreement with insurance companies so they could directly bill or invoice patients. So we need to wait and see how the situation will stabilize. Clear ex Vitamin D, which is the rest of the catalog, is fine, is growing double digit. And so we continue the deployment of systems. And let me remind you that at the end of quarter 2, we got approval of the last assay that we are expecting Calprotectin. So now we have the full panel of products, H. Pylori and the collaboration through MRIdian, which is working fine. And now Calprotectin, we're just waiting for the 3rd product, which is the approval of QuantiFERON, and we'll talk about it later. Last but not least, the soy molecular is a combination of molecular and traditional products is growing mid single digit. So as far as U. S. Is concerned, where you all know, we have the liability of vitamin D, the quarter at the end of the story was not bad. Asia Pacific, 19.7% growth and this pretty much reflects the growth of China. China grew 18.7%. And we have deployed over 100,000,000 on XL in this geography. And as we said, we are picking up steam again in China after we have transition from certain or let me say, after we have parallel our current distribution network with other distributors that allow us strategically to move from the Class III base to the Class II base. We have discussed this several times, but we see the results of this. Now let's talk about the geographies that are underperforming. And this is in Latin America direct. And for us, Latin America direct is fundamentally Mexico and Brazil. Overall, these 2 geographies in Q4 declined 14%, But it has to be read properly. So we have Mexico growing and we have Brazil actually declining, but as a result of one event, which I think we have discussed before, which is the fact that there was a Zika tender that happened in 2017 And the 2nd installment, the 2nd shipment of that tender happened in Q4 2017 and this tender was waived. And so in 2018, we did not have the shipment. And this is why Brazil in quarter 4 really underperformed. If you actually take away the tender, this effect of the tender, Brazil is flat, which is under expectation, but it is explained by the fact that due to recent election and changes that are happening in the country, as reported by other companies, government deals are frozen today. So it's quite complicated today really to grow in that market until the government funds are reallocated and tenants are open. The area where we really underperform is export, and this was discussed and qualified in the last quarter. And if you remember in the last quarter discussion, we said we gave a head up regarding 2 specific situations. 1 is a tender in Korea that we have where we are working with a 3rd party, Siemens, is part of the heritage of the acquisition of the Siemens business. That tender was supposed to be awarded in Q4 and it was not. And it's been actually now moved to quarter 2 this year. But again, we are in the hands of from Siemens and distributors. So we continue to wait and see what happens is a sizable 10th of blood banking. The second geography where we said there was a risk is Iran. Now Iran is a different story because as far as the quarter, it was negative. It was negative because there were still uncertainties related to how to export to Iran as a result of the embargo of the U. S. The good news is that and I remind you that the problem per se has nothing to do with goods because we work with medical, but to find financial institutions that are available actually to support the transaction. The good news is that that situation has been resolved now in January. And so we will resume a shipment of goods in 2019. So but it did affect the last quarter because the amount of good that we were able actually to move to the country was far less than quarter 4 previous year. So all in all, I think that in all the strategic geographies, we are doing well as a result of new product launches. We launched 4 products last year for immunoassay and QuantiFERON, which is a key product for us in QIAGEN. And as a result of the fact that in certain geographies like China, now the distribution network is working fine. Now the net result of this mix, and so good performance in direct and the problem being export resulted, as you noticed, in a very favorable gross margin. In fact, if you compare year on year, the gross margin sorry, if you compare the quarters, Q4 2017 and Q4 2018, the gross margin improvement is over 200 bps. It's a combination of mix, but also of what we call operational excellence, which I think is what we already discussed few times. And so streamlining operations, closing and concentrating manufacturing and so forth. And that clearly also has resulted in a very favorable EBITDA margin in the quarter, which as you have seen from a percentage wise at constant exchange rate is close to 39%. So this is the way I believe results in Q4 should be read and interpreted. Now let me just move rapidly to guidance 2019. And let me first talk about the fact that in June 11 this year, we are going to have the meeting with analysts and presentation and investors and the presentation of the next 4 years plan. So it is the intention of the company now to explain what the strategy and implementation is going to be throughout 2022. So you're going to get much better color on some of the strategic projects during the presentation. However, if you look at guidance for 2019, you notice that we decided to provide a certain range, I remind you, between 5% 8% growth. With fundamentally, we commit to the fact that we'll be able to maintain a very favorable EBITDA margin percentage wise that we have today with the business. Now the wide range is determined by the fact that there are certain events that may affect growth this year. And let me again remind you what these events are. The first one, as we discussed few times, is vitamin D decline in the U. S, still watching and seeing what the big labs are doing vis a vis their volume and the way they are addressing the denial rate. So it's an uncertainty. The second one is to do with QuantiFERON. Let me remind you that we filed with the FDA QuantiFERON in Q4. Our plan and the current guidance foresees that we're going to get approval of QuantiFERON in quarter 2 is a strategic product and also in the EU for us in QIAGEN in the U. S, U. S. Per se represents roughly 60% of the total worldwide market for QuantiFERON. So for this one, we are in the hands of the FDA filing. The file is under review, but we will wait and see what happens. The 3rd element is what we discussed is the Korea tender. So the tender is in our numbers and but we need to understand how is that going to play out. As said, it is something that is not in the hands of the company per se, but is it with through the partnership with Cision. The 4th element is the fact that as we have discussed few times, we are under renewal of certain very large contracts in the U. S. And happy to report that the first one, which was actually inspiring in 2018, was in fact renewed. It was renewed for a long period of time, 5 years. It covers the existing products and is also adding up to these products a good chunk of molecular products. So it was a very positive and a negotiation that is actually allowing us to continue to supply to these very large labs, continue to be partners and provide them with the esoteric testing they need with a differentiating set of products. We have the other 2 contracts are actually in renewal in 2019. And we don't know what the effect of this renewal will be in terms of pricing and mix. So that's another uncertainty that can play in our numbers. And last but not least, which is not new for the ones that are actually covering our industry, is to do with the fact that the flu season is a very weak flu season compared to last year or actually last year was a very favorable flu season for the business. And this season, we are back to normal incidents of patients visiting emergency room and being tested. So we need to see how it goes. The flu season typically starts in Q4 in December and ends in April. But depending on that, which is a good chunk of business for us, it may impact the growth rate for 2019. Also, what I would like to anticipate is that we expect for what we have discussed right now, we expect growth to be unevenly distributed among the growth because there is where we expect the tender to be approved, the quantiferone to be approved and so forth. So at this point, I am going actually to move to leave the podium to Mr. Pedro, who's going to go through the specific comments and the numbers. Thank you, Carlo. Good afternoon, everybody. In the next few minutes, I'm going to walk you through the financial performance of DSR in 2018, and I will make some remarks on the contribution of the Q4. Before we start, let me please remind you that we began a report in the Siemens ELISA business from Q4 2017. And so the full year perimeter of consolidation is different from the one of 2017. So that I would like to start with what I believe are the main highlights of the period. We closed 2018 with a revenue increase for the previous year at constant exchange rate of 7.7% or about €49,000,000 Since the first half of twenty eighteen was hit by some material FX headwind, to be precise, almost €17,000,000 the full year growth as reported is 5% or €32,000,000 These effects headwind should turn into a tailwind in the 1st part of 2019, considering the current exchange rate of the euro against USD vis a vis the trend we had in H1 2018. 2018 full year EBITDA at €150 55,000,000 recorded an increase at constant exchange rate compared to previous year of 11.2% with a margin again at comparable rates of 38.5 percent vis a vis a result of 37.3 percent of 2017. 2018 net result at €150 8,000,000 or 23.6 percent of revenues record an increase compared to 2017 of 13 percent or EUR 18,000,000 Lastly, we keep confirming our ability to generate a very healthy free cash flow, €164,000,000 with an increase compared to 2017 of €32,000,000 or 24%. This allowed us to close 2018 with a positive net financial position of EUR 75,000,000 after having paying dividends to our shareholders for about €145,000,000 and after having completed a share buyback program for €65,000,000 Let's now go through the main items of the P and L. 2018 full year revenues at €669,000,000 grew by 5% or about €32,000,000 compared to previous year. Gross profit at EUR 456,000,000 grew by 5.5% compared to previous year, closing 2018 with a ratio of revenues of 68.1 percent and saw recording a slightly improvement visavis2017. In spite of dilutive effect of the semen sterilizer sales and of some price pressure on vitamin D. This performance, which is a touch better than what we originally expected, is mostly driven by higher manufacturing efficiencies, the operational excellence program Carl was mentioning a few minutes ago and better geographical mix. Q4 2018 gross margin improvement compared to 2017, 68.3 percent visavis66.5 percent is mainly the result of the different geographical mix Carlo just mentioned. And this in particular driven by lower export sales, down in Q4 2018 by 20% of €5,000,000 Again, the reasons have just been covered by Carlo. 2018 total operating expenses at EUR 245,000,000 or 36.7 percent of revenues have increased by 6% compared to previous year. Please remember that EUR50 1,000,000 perhaps has been driven by the depreciation of the intangible assets, now our customer list mainly coming from the Siemens, Eliza and Focus business acquisition. 2018 other operating expenses at €5,900,000 have decreased compared to previous year by about €10,000,000 This difference is mostly driven by the one off costs we booked in Q4 'seventeen related to the divestiture of the Irish manufacturing site, which is going to be completed by the end of Q2 2019. This variance is even more visible in Q4 since this is the quarter in which we accrued these costs in 2017. 2018 EBITDA at €205,000,000 or 30.6 percent of revenues has increased compared to 2017 by 10.9 percent or €20,000,000 2018 tax rate at 22.6% is up compared to previous year by almost 1 percentage point. And it is in line with what we expected and disclosed during Q4 2017 call. The variance between 2018 2017 is mostly driven by the fact that in 2017, we booked the cumulative positive effect of the Patent Box agreement signed with Italian tax authorities, which covered also 2015 2016, whereas 2018 has profited of the impact of 1 year only. On the other side, though, let me please remind you that 2018 saw the positive impact of the U. S. Tax reform. 2018 net result at €158,000,000 or 23.6 percent of revenues is higher than previous year by €18,000,000 or 13%. This increase is the result of what described so far and of lower net financial expenses booked in 2018, mostly driven by a reduction in interest and the fixed losses, higher interest income and by the revaluation of the participation in our Indian subsidiary following the takeover of its full control from the local partner. Lastly, 2018 EBITDA at €255,000,000 is better than previous year by EUR 17,000,000 or 7.3%. The variance at constant exchange rate is positive by 11.2%. 2018 EBITDARATION revenues is 38.2% at current exchange rate and 38.5% at constant exchange rate. Please note that in order to have a fair comparison vis a vis 2017, we must remember that during Q4 of last year, as I said, we booked about €6,000,000 of EBITDA level of one off costs driven by the Irish manufacturing divestiture. Moving now to the quarter, Q4 EBITDA margin at 38.9% confirms the profitability recorded in the last periods. The increase compared to 2017 is mostly the result of the better gross margin as just discussed and of the timing of the Irish one off costs. Let me finally move to the net financial position and the free cash flow. We closed the period with a positive net financial position of €75,000,000 after having paid dividend for €145,000,000 and completed a share buyback program for €65,000,000 In 2018, the group generated €164,000,000 of cash flow vis a vis €132,000,000 in 2017, thus confirming recording an increase of EUR32,000,000 or 24%. Lastly, let me move to 2019 guidance at 2018 constant exchange rate. We expect revenues to grow between 5% 8% and to maintain an EBITDA margin at the same level of 2018. Before concluding, let me please remind you that the Australian financials are fairly sensitive to FX fluctuations and in particular to the U. S. Dollar. And that for every €0.01 movement of the dollar against the euro, the Australian revenues move by about €2,000,000 to EUR 2,500,000 on an yearly basis. Now let me please turn the line to the operator to open the Q and A session. Thank you. Excuse me. This is the Chorus Call conference operator. We will now begin the question and answer session. The first question is from Peter Welford with Jefferies. Please go ahead, sir. Hi. Yes, thanks for taking my questions. Firstly, just wondering if you can give us any more visibility on the U. S. Contract thing, both for 'eighteen, the contract you've renewed and also the 2 for 'nineteen, just particularly with regards to vitamin D. I appreciate you don't necessarily say much about this, but is there any push from the customers to give further on vitamin D pricing? Or perhaps can you give some sort of commentary on where vitamin D pricing is going in the U. S, given I think from your perspective, it's probably pretty much reached a floor at this point in time now? And also perhaps just with regards to now the potential for the menu, is QuantiFERON included within discussions at the moment you're having? Or is that potential upside or additional use beyond the current discussions that are happening? And then just 2 quick financial ones. The other non recurring expense seemed quite high in the Q4. I think there was almost €4,000,000 of charges, but equally there was quite a positive other operating income on a recurring basis in the Q4. I just wondered if you could possibly square that for us to help better understand that other operating line. And also just on FX, thanks for the clarity on the €2,000,000 to €2,500,000 impact on revenues. Is it possible to give us the impact on EBITDA of every $1.01 move? Thank you. Yes, Peter. Let me take the first two ones. As you can imagine on the big contracts, we said that we have 3 major agreements worldwide with 3 major lab chains, 2 in the U. S. And 1 global, and which I think without giving names, they are quite easily identified. And we also stated what we can state publicly is that one contract was expiring at the end of December 2018 and 2 contracts in between 2019, but also some part of the contract was extended in 2021. So as far as these contracts, one done, sealed, discussed. Obviously, with these very large customers, when a contract renewal is always associated with some sort of price concession. And it's not necessarily linked to vitamin D or specific products. It's simply a price concession that is discussed generally on the book of business. But what we have always been able to do so far has been to actually compensate the effect by adding more products to the catalog. And in this specific case, the compensation seems that with this account, there is already a broad use of all our immunoassay products. We are actually able to get on contract with a significant number of molecular products, especially ASR because with very large accounts, we use components to develop NDT test. And so that actually worked very well also because for us, the ASR business is also a very profitable business. Now talking about vitamin D and vitamin D prices. Again, in general, again, nothing to do with the price specific percent, but renewal in this world means commitment and discount. And so if we talk about is there a floor price for vitamin E, there is never a floor price for anything because in our business, unfortunately, pricing is going down. And certainly, for certain commodities in vitamin D, as we discussed many times, is a commodity. The price is decline in general is steeper. However, again, we have a good mix of specialty assays with these labs that are less affected usually by this price pressure. So overall, I think that the magic here with this relationship has always been to make them comfortable with pricing and add business at least to compensate the concession. But this kind of business with the very large labs is fundamental for two reasons. One is that from a volume perspective, it sustains your the manufacturing side. And 2, from a visibility perspective, being one of the premium suppliers to GitLab is adding the credibility visavis all the other customers. Now I think then I will leave to PG's comments on your technical questions on financial items. Thank you, Carlos. Hi, Peter. So your first question on the second one actually was about the FX impact at EBITDA level. We said at the revenue level, dollars 1 movement means for us EUR 2,000,000 to EUR 2,500,000 lower or higher revenues. This translate at EBITDA level, give or take, to EUR 1,000,000 EUR 1,000,000. So EUR 2,000,000 to EUR 2,500,000 for revenues, about EUR 1,000,000 for EBITDA. Regarding the other non recurring expenses, Q4 last year was heavily hit by the fact that, that was the quarter in which we decided to shut down the Irish manufacturing site. And that is the quarter where we booked, give or take, €10,000,000 of costs related to the divestiture of that site. This year, you actually have a positive impact because on one side, we don't have the higher ratio, let me say, one off expenses. On the other side, we released some debt provision because we are very diligent in the way in which we manage our collection, our DSO pretty well, pretty good. And it came out that eventually we were a little bit too prudent, too conservative last year. And when reviewing the position at the end of this year, we released some bad debt provision because we actually were able to collect this money. That's great. Thank you. Thank you. The next question is from Daniel Baldini with Oberon Asset Management. Please go ahead. Hi, good afternoon. Thanks for taking my call. So it's a question again about these contracts. Back in November of last year, Quest had an Analyst Day and this fellow, James David, the EVP of Diagnostics, got up and said the following, and I'll just read from the transcript. He said there's about 73 distinct immunoassays in the company that we offer and we do that work on 6 different or 7 different platforms that we get from 6 different suppliers. You know these suppliers, it's Roche, it's Siemens, Ethnocculptor, it's Danahertz, DiaSorin. Now why did we go with 6 suppliers for all these tests? Well, it's how the industry evolved. And for example, the first vitamin D testing was done by DiaSorin and we had to buy their platform in order to do it. But as this industry has matured, Roche can now do everybody else's immunoassays. Can do a bunch of other folks' immunoassays. Pecanecoliter can do everybody else's immunoassays. So we don't need these 7 platforms anymore. So we run a competition. We're going to get it down to 1 supplier. We're going to save a lot of money as we work the competitive nature of the deal that we put in front of these suppliers. So let's assume that he's being truthful and that Quest is one of these contracts that's coming up. And they do, in fact, run this competition and they decide to go with someone else's, what they're calling, platform. Does that mean you lose all of the sales of immunoassays to Quest? I don't know. You are making you are asking a question and then giving yourself the answer. Yes, absolutely. But listen, no. Because he's saying that these basically these platforms are interchangeable now. Okay. If you decide to go with Beckman Coulter, can you still sell them your immunoassays? Okay. So without getting into the specifics, but as you know, we supply to the big labs vitamin D and 18 other products. And I think it's fair to say that vitamin D is a commodity. And vitamin D actually today can be offered by 7 suppliers in the U. S. It is true by the same token that all the other products are not really available on many other platforms. And in fact, these are the so called esoteric assays, which is good for us and good for the lab. Because let me remind you why these big labs work with diasore and they like us because we provide them essays where they make a lot of money, right? So my point is, as far as what Quest is commenting, is fair square that today they have different suppliers. It is certainly true that they are making an effort and is a public information to square their operation and make it more efficient. They are building a big site with automation. And as a result of that, they're going to consolidate suppliers. Mike, I mean, is there a story really going to lose all the business with them in a catastrophic event? I consider this possibility very remote. Is vitamin D up for grabs in this contract? Absolutely, it's up for great. But I think these labs look at diasering overall as its ability to provide a portfolio of products. Okay. So to make a long story short, I think we work 1 by 1. We have done one very well and now let's work on the other 2. But in a short answer, I think the risk is associated specifically with vitamin D. With the other products, I don't see the risk. Also because at the end of the story is what these labs are saying, I can use one platform for all is actually incorrect. I think it would be or incorrectly interpreted by the one that read the statement. It means that if you look at the neuro assay routine and you look at the high volume, today there are a number of companies that can provide it with the necessary throughput and that is certainly true that Beckman, Siemens, about Roche have the ability to compete for that bulk of volume. And funny enough, today, when you walk into this land, I'm not specifically Quest only, you find that they have platforms from the suppliers that do actually overlap, okay? But then when it comes to the esoteric, believe me, I think that it's not only diasporin, there are other companies in other specialty niches that are there and will stay there as to support the side of the business. Is that good enough for you as an answer? Yes, that's wonderful. Thank you. The next question is from Maja Pataki with Kepler Cheuvreux. Please go ahead, madam. Yes, good afternoon. Hi, Carlos. You were very specific on trying to give us an indication how you think about the lower end and the upper end of the guidance, and that's really helpful. I was just wondering, since you mentioned the TB test in Europe as a positive in Q4, Would you be able to give us a bit more understanding how big that was? Or how much of a difference it means for you if the QuantiFERON TB test would be only approved in the U. S, let's say, in Q4? Would that be meaningful on the guidance? And then the second question, just to get back on the question before with contract renegotiations. You have a very strong foothold with large but actually with good clients because of your specialty test. But I'm just trying to understand your thinking. So is there a level of pricing on vitamin D or pricing pressure on vitamin D where you would feel like, you know what, that's actually fine for us, we don't need to do that, but we're happy to supply you the specialty tests. Or is vitamin D still profitable for you that even another 10%, 20% discount or discount on the price would be totally fine for you to continue the business? Thank you. Okay, Maja. QuantiFERON, as you could appreciate the fact that it's a very sensitive product for Kaizen and for us. So cannot comment really on the amount. But what I'm saying is that the intention to work with QIAGEN was to increase the speed of adoption of blood testing versus skin testing. And again and the second thing was to try to decentralize this testing, which today is very centralized because of Eliza Technology. And that would be a win win for both companies because would be the decentralization means a higher price and more secure business. And more adoption means increasing volume. And this is what the 2 companies are working on, and it is working very well in Europe. Now let's talk about the U. S. U. S. Is even more so because, again, by nature of business, the way the U. S. Market is shaped, a lot of this volume today is actually sent out to the big labs simply because the hospital market doesn't want to do ELISA any longer, and it was more convenient than for them to just to send it up. So for the U. S, QuantiFERON for DASORIN is very strategic for a different reason. It's strategic because it will allow us to grow after the SendOut business and increase footprint in the hospital market that, as you know and we have discussed today, is the Achilles' heel of the Diasorin strategy because we have been very successful in centralized commercial labs, but we have been not so successful in addressing the optical market, which is a vast opportunity at this stage. And so again, you understand the strategic importance. The data shows, I cannot give you precise data, but you see that Europe is going well for us way above where everybody else. So quantifying is one of the drivers. As far as contracts, yes, indeed, we are esoteric suppliers and vitamin D was an esoteric test. Today, vitamin D, our presence in this lab clearly has increased in strategic importance because we provide vitamin E and others. And this is why I'm not so concerned about being wiped out by the big labs because we will stay there with all these products. And just to give an example and also to answer to Peter, the we just got approval in the U. S. Of the the stool assays. These are very today, very concentrated products as a send out in the big labs. And we certainly are in discussion with them about bringing over to them this product. So which are esoteric specialty. So Jim Davis' comment, I think, is a general comment saying, hey, high volume routine has to be streamlined and brought together into in a more efficient way, and that's certainly true. Vitamin D is going to be up to us and up to them to decide whether it goes on the streamline or just stays in diasore as part of the package. As far as pricing of vitamin D, absolutely. I mean, there is a level where we are not able to go, but I'm not necessarily sure profitability, but it's a matter of company image because there are certain companies mainstream high volume that pretty much the VisitorME, it can be an add on at any price and is additional, it's stability, it's absorption in the big investment they need to make to provide all the hardware necessary to serve these big labs. But for us, it's a matter of there is a limit under which we don't want to go also because we send to everybody else at a different price. And so I don't understand why a specific account should be different. Thank you very much. The next question is from Bruno Permotti with Bancaini. Please go ahead, sir. Good afternoon. I have three questions. The first one relates to the QuantiFERON launch in the USA. I was wondering if which are the worries which you could have on possible approval by the Q2. So is there if you can update us on how the process is going and what are exactly your expectations? The second one relates to possible partnership on similar to that that you signed with Keyagena. I was wondering if you are considering possible collaboration with and so partnerships in your strategy. And if you see something going on possibly this year? And the third one relates to an update, if it is possible to the XS launch in the USA? Yes. So the concern I have with the FDA is the FDA, meaning that is a third party, there is a PMA, there is a process and there is a reviewer. And therefore, it depends on usually the reviewer. There is no file in my experience that goes through the FDA without questions. The problem usually is if these questions require experimental work and generation of data by the company to be addressed. And we don't know because the FDA after we file usually as 90 days to review the file and come back with comments, we are still not we're still within the 90 days period. So that's a concern. You don't control them. They decide what they will do with the file. So we need to wait and see and see if it's going to work within our expectations or not. As far as the excess launch, I think you're probably asking excess launch per se, not necessarily in the U. S. Because in the U. S, there is a delay 2020. So the instrument is commercialized in Europe and we have a big event when we launch the system, which is going to happen actually in Italy in May with over 1,000 customers spending and this is the commercial launch of the platform. And in the U. S, there is a delay because of regulatory constraints. The box has to be registered. It's a pipe and cane, not so complicated, but we expect registration launch to happen beginning of next year. Last but not least, partnerships. As we said, we have today, we have 3, 1 with drums PCT, one with meridians stool and then we have this new venture with QIAGEN. We don't have today and sorry, and certainly, we're back on. We don't have today any specific passion about partnerships because we are certainly very busy delivering on the existing ones. I think that what I need to comment is that the strategic nature of the relationship with QIAGEN because together the 2 companies after this initial effort, we understood that our platforms and our technologies work very well with the T cell with developing a T cell with a couple of products. And again, it's not a secret also because we're published by a German researcher that we're working on Lyme disease, which is a very sizable market. Just for your understanding, there are 5,000,000 tests on Lyme disease in the U. S. And almost EUR 15,000,000 that today are done with immunoassays. We own roughly 40%, 50% market share there with immunoassays. And certainly, that's a very nice business, fully incremental for diaspora and CAGR. So we are actively working together to try to bring this product to the market as soon as we can. And there is a commitment by both companies to extend the range of products that measure interferon and can be actually all put on the XL and the XS systems. Thank you. Mr. Rosa, there are no more questions registered at this time. Thank you, operator. Thanks, everybody.