Cellectis Q4 2024 Earnings Call Transcript

There are 8 speakers on the call.

Operator

Good day, everyone, and welcome to today's Selectus Full Year twenty twenty four Earnings Conference Call. At this time, all participants are in a listen only mode. Later, you will have the opportunity to ask questions during the question and answer session. Please note, today's conference is being recorded.

Operator

I will be standing by if you should need any assistance. It is now my pleasure to turn the conference over to Arthur Strel. Please go ahead.

Speaker 1

Good morning, and welcome everyone to Selectus Fourth Quarter and Full Year twenty twenty four Business Update and Financial Results Conference Call. Joining me on the call today are Doctor. Andre Schulika, our Chief Executive Officer and Doctor. Adrienne Kille Cohen, our Chief Medical Officer. Yesterday evening, Selectus issued a six ks and press release reporting our financial statements for the twelve month period ended 12/31/2024, and a business update.

Speaker 1

The report and press release are available on our website at selectus.com. As a reminder, we will make statements regarding Selectus' financial outlook, including the sufficiency of cash to fund operations in addition to our manufacturing, regulatory and product development status, as well as product development status of our licensed partners. These forward statements, which are based on our management's current expectations and assumptions and on information currently available to management, including information provided or otherwise publicly reported by our licensed partners, are subject to risks and uncertainties that may cause actual results to differ from those forecasted. A description of these risks can be found in our most recent Form 20 F filed with the Securities Exchange Commission, SEC, and the financial reports, including the management reports for the year ended on 12/31/2024, and subsequent filings Selectus makes with the SEC from time to time. I would now like to turn the call over to Andre.

Speaker 2

Thank you. Thank you, Arthur. Good morning and thank you everyone for joining us today. 2024 has been an important year for Selectus. On the business development front, we were excited to announce the start of a research and development activities for three programs developed under our collaboration and research agreement with AstraZeneca.

Speaker 2

So far, we announced the start of one program of a nanogenic CAR T for a myelotological malignancies, one program of a nanogenic CAR T for solid tumors and the first of an in vivo gene therapy of a genetic for genetic disorder. We're thrilled to grow the strategic collaboration with AstraZeneca, a top leader of the pharmaceutical industry aimed at shaping the future of our next generation of cell and gene therapies. We're very excited about the huge opportunities this partnership will bring in the months ahead. Additionally, this year AstraZeneca completed the additional equity investment of $140,000,000 in Selectus. As part of the additional investment, AstraZeneca subscribed for 10,000,000 Class A convertible preferred shares and 18,000,000 Class B convertible preferred shares.

Speaker 2

In each case at a price of $5 per convertible preferred share. Giving effect to the conversion of Class A and Class B preferred shares and immediately after the closing of the subsequent investment, AstraZeneca would own approximately 44% of the share capital of Selectus and approximately 30% of the voting rights. We also drew down the two last tranches of the finance agreement signed in December 2022 with the European Investment Bank for up to EUR 40,000,000 credit facility. We're now confident that our cash runway allows us to fund operations into mid-twenty twenty seven. On the clinical side, we're thrilled to have Doctor.

Speaker 2

Adrian Kilcoyne join us as Selectus' Chief Medical Officer. Adrian is a

Speaker 3

huge leader

Speaker 2

and a strategic forward thinking drug developer who's passionate about delivering life saving therapies to patients. He joined us at a pivotal time as we're progressing in our core clinical programs. 2024 was an exciting year with a grant by the FDA to our product candidate, QCART22 of an orphan drug designation and rare pediatric disease, as well as an orphan drug designation granted by the European Commission for the treatment of relapsed or refractory acute lymphoblastic leukemia. These designations represent a step toward developing widely available allogeneic product for patient in need. Select this expect to present the Phase one data set and late stage development strategy for UCART UCAR T20x22 in relapsed or refractory non Hodgkin lymphoma, Selective continues to focus under enrollment of patients and expect to present Phase one dataset and late stage development strategy in late twenty twenty five.

Speaker 2

In 2024, Selective's innovation team showcased promising CAR T strategies utilizing tail end gene editing technology to target solid tumors and over come their immunosuppressive tumor microenvironment. Preclinical data were presented at both AACR immuno oncology and SITC annual meetings and two scientific articles were published in Molecular Therapy and Science Advances. We're proud to collaborate with leading scientists in the gene editing field, who continuously pushes the boundary of innovation and are committed to cancer patients with unmet medical needs. This year, Selectus will continue to focus its efforts and expenses on advancing its core clinical trial, Bally01 and NATALY01 while building the next generation of genomic medicines to address area of high unmet medical needs within our partnership with AstraZeneca and within our proprietary preclinical pipeline. With that, I'd like to turn the call over to Doctor.

Speaker 2

Adrian Kilcoyne, our Chief Medical Officer, who will give you an overview of our clinical trials. Adrian, please go ahead.

Speaker 3

Thank you, Andre. As Andre mentioned, Selectus continues to focus its development efforts on the BALEO1 and NASALI-one studies. Recruitment in BALIO-one, a study evaluating UCART22 in relapsed refractory B cell acute lymphoblastic leukemia has progressed well. The study is addressing an important unmet need for patients who have relapsed following previous lines of therapy, including a CD19 bispecific autologous TAR T. We plan to share the full Phase one dose escalation data set in the third quarter of twenty twenty five with additional data presentation planned at the ASH Annual Conference in the fourth quarter.

Speaker 3

Regulatory interactions are planned with both FDA and EMA to align on our Phase II registration strategy. We are currently planning additional study sites in both The United States and Europe, including The United Kingdom in anticipation of an agreed registration path for our pivotal Phase two study. We expect the Phase two study to be open for recruitment in the fourth quarter of twenty twenty five. We also continue to enroll in the NASALI-one study of our dual CAR T asset UCART twenty twenty two in relapsedrefractory non Hodgkin's lymphoma. This study is addressing an important unmet need for patients who have relapsed following previous lines of therapy, including when available an autologous CD19 CAR T.

Speaker 3

As Andre mentioned previously, we will endeavor to share data for the Phase one program in late twenty twenty five at the ASH Annual Conference. Pending data assessment, we plan to transition to Phase two preparation in 2026. With that, I would like to hand the call over to Arthur Strills, Selectus' Chief Financial Officer and Chief Business Officer for an overview of our financials for the fourth quarter and full year 2024. Arthur, please go ahead.

Speaker 1

Thank you, Adrian. We are excited about our partnership and financing activities, which have been positively impacting our financial position. First, we completed the additional equity investment of $140,000,000 of AstraZeneca in Selectus. Giving effect to the conversion of all debt research shares, AstraZeneca would own approximately 44% of our ordinary shares and may exercise voting power with respect to approximately 30% of the voting rights outstanding with respect to our share capital. We are proud of counting AstraZeneca as a strategic shareholder.

Speaker 1

Second, thanks to the progress of our collaboration with AstraZeneca, up to year end 2024, dollars '40 '7 million have been paid to select this under the joint research and collaboration agreement, of which $25,000,000 upfront and $22,000,000 reached development milestones in addition to reimbursement of research costs incurred. Third, last year, we drew down the second tranche of EUR 15,000,000 and the third and final tranche of EUR 5,000,000 under the credit facility agreement entered with the European Investment Bank, EIB, in 2022. Following such activities are cash, cash equivalents, restricted cash and fixed term deposits classified as current financial assets as of 12/31/2024, amount to $264,000,000 compared to $156,000,000 as of 12/31/2023. This $108,000,000 increase is mainly due to $140,000,000 cash received from AstraZeneca as part of the second tranche of its equity investment in Selectus, dollars twenty million cash received from the EIB pursuant to the disbursement of the second and third tranches under the finance contract with EIB, forty three million dollars of cash in from our revenue, partially offset by cash payments from Selective to suppliers of $47,000,000 Selective wages, bonuses and social expenses paid of $40,000,000 the payments of lease debts of $11,000,000 and the repayment of the PGE loan of $5,000,000 You are invited to refer to our press release for figures related to consolidated net loss attributable to shareholders of Selective for the twelve months ended 12/31/2024.

Speaker 1

We believe that our cash, cash equivalents and fixed term deposits as of 12/31/2024, will be sufficient to fund our operations into mid-twenty twenty seven. In 2024, we're able to extend our cash runway through financing activities, the progress of our partnerships, as well as prudent cash management for our R and D pipeline and controlled SG and A expenses. We're focusing our spend on developing UCAR22 and UCAR20x22, potential new product candidates and operating our end to end cell and gene therapy manufacturing facilities in Paris and Raleigh, while research costs under the AstraZeneca collaboration are funded by AstraZeneca. We're very much looking forward to providing Phase one datasets for our wholly owned clinical product candidates in acute lymphoblastic leukemia and non Hodgkin lymphoma later this year. And now, I would like to turn the call over to Andre for closing remarks.

Speaker 2

Thank you, Arthur. To close out this call, I would like to reiterate that we are confident about the continued progress of our ongoing clinical trials in hematological malignancies, as well as how excited we are about our strategic collaboration with AstraZeneca. At Selectus, we strongly believe that our product candidates, our technologies and our in house manufacturing capabilities will lead us and our partners to a paradigm shift for patient with hard to treat cancer and genetic disorders, positioning us at the forefront of this promising medical and scientific field. As previously said, Selectus will hold calls only when there is a significant information to discuss or if there is a key update on the business activity, we invite you to refer to our press releases for quarterly earnings and remain available to address any question you may have. With that, I'd like to open the call for Q and A.

Operator

Thank you. We'll take our first question from Gena Wang with Barclays. Please go ahead.

Speaker 4

Thank you. Maybe this will be the last earnings call. With that, I wanted to ask the upcoming data for the UCAR22. You said that you will have a data in 3Q. Maybe could you give us a little bit more color in terms of amount of data, including patient numbers, the type of data point you'll be sharing with us in 3Q and in what kind of foreign you will share with us?

Speaker 1

Hi, Gina. Thank you so much for the great question. I'll hand it over to Adrian.

Speaker 3

Thank you, Jane. Yes. So as we have said over the last few minutes, we would plan to have the full Phase one dose escalation data set available in the third quarter. So again, a full data set, how we are planning on sharing that, Arthur can update you on. That's not to say we also won't have additional data being shared at ASH.

Speaker 3

And as you're aware, the cutoff for ASH is in August. So we'll be submitting data for ASH, but we will have a full Phase one dose escalation dataset available in Q3. Arthur, you move on to Axel.

Speaker 1

Yes. As for the specific event, I think we're likely that we'll give you a bit more update as the quarter moves on. But we're definitely targeting something that would be an ad hoc event follow-up at medical conferences, including ASH this year. But the data release is likely going to be at an ad hoc event. So stay tuned.

Speaker 1

We'll give more details very shortly.

Speaker 4

Thank you.

Operator

And our next question comes from Jack Allen with Baird. Please go ahead.

Speaker 5

Great. Thanks so much for taking the questions and congratulations on the progress. I guess maybe dovetailing on the question about UCAR22, I'd love to hear any thoughts the team has as it relates to other shaping up the internal bar for success as we move towards that third quarter readout. Maybe I'll start there and then I do have a few follow ups if I could.

Speaker 3

Yes, it's a great question, Jack. Thanks for it. We're confident in the data we have seen thus far. We have to put this in the context of what patient groups we're looking at here. And we're looking at very heavily pretreated patients, many of whom have been exposed, as we said in the earnings call earlier, exposed to CD19 therapy, including an autologous CAR T.

Speaker 3

With that in mind though, we're very encouraged by the data we're seeing thus far. So the broad question, while we can't share any data, Sreedharthi, do we have concerns over the quality of the data that would be able to surpass a regulatory requirements? We believe so, but we are we will have ongoing interactions with FDA and EMA in the coming months. And then once you see the data, we'll be able to you'll obviously see much more granularity to that.

Speaker 5

Great, great. And then just two quick follow ups more on the collaboration side of things. It sounds like the AstraZeneca programs are moving forward quite quickly. Any additional context around milestones you might expect there or when those programs could enter the clinic? And then how to think about these programs as it relates to the nobleness of the targets?

Speaker 5

Are these completely novel programs that are potentially me too kind of follow programs where auto has already shown proof of concept? I know it's a multi part question, but then one other one that I just wanted to throw in there too. Was there any updates around the Sevea discussions that you're having with your partner there? Or I should say maybe formal partner there as well?

Speaker 1

Thanks, Jack. I'll take the question. So I mean, share the excitement around the progress of the AstraZeneca partnership. I think what's interesting is that there's been a lot of very, very active discussion and work stream between the R and D teams of both companies over the last few months. And we've really cast a pretty wide net in terms of therapeutic areas and indication.

Speaker 1

As you can see, we're not only in heme, which was our initial playground, but we're in solid tumors as well as in vivo gene therapy. So there's really a breadth and the targets and the selection of the targets have been the follow-up of numerous discussions with AstraZeneca. So we believe that each target under these programs has been very carefully selected and will be pretty exciting. We're keeping this under wraps for now. Progress is very good, but we want to be in a position where we present a comprehensive data set both from in vitro, in vivo proof of concept, line of sight to IND.

Speaker 1

And this is something that we could potentially disclose this year. So stay tuned, but we're very happy about the progress. And on the Servier arbitration story, as it is still an ongoing matter, I'm not going to be in a position to comment.

Speaker 5

Great. Thank you so much for taking all the questions. Maybe I'll hop back into queue, but congratulations again on the progress.

Speaker 2

Thanks, Jack.

Operator

Thank you. We'll next go to Salveen Richter with Goldman Sachs. Please go ahead.

Speaker 6

Hi, this is Lydia on for Salveen. Thanks so much for taking our question and congrats on the progress. Just another on UCART 22. Could you just discuss a different potential late stage development strategies and how the data might inform this decision? Thanks so much.

Speaker 3

So again, we are currently planning our interactions with both FDA and EMA. And of course, we cannot prejudge exactly how these conversations will go. So without us publicly sharing our data, I think it's very difficult for me to come further. However, we do believe, as we see our data, we believe there's a registration path. We believe that's a clear registration path.

Speaker 3

We're just over the next few months, will endeavor to get alignment with the regulatory authorities regarding that. So you will see again in Q3 when we share the data, I think again that added granularity will be helpful to you.

Operator

Thank you. And next we'll go to Sebastian Vanderscheid with Kempen. Please go ahead.

Speaker 3

Hi, Tim. Good morning and thanks for taking my questions. Wondering regarding the late stage and development. Can you comment a little

Speaker 4

bit on where you expect these registrational trials to be similar to what we've seen from the autologous protein? And could you also remind us for the partnership details with Allogene in the same cell? Thank you.

Speaker 1

Sorry, the line your line cut a little bit. Can you repeat the first part of the question?

Speaker 4

The first part is regarding whether the a potential registrational trial in Phase III will be similar to what we have seen from autologous CAR T in adult ALL for UCAR-twenty twenty two?

Speaker 3

I think as an allogeneic therapy, we've always said we our trials reflect the unique nature of allogeneic cell therapy. So I think but also we need to look at the previous autologous CAR Ts in this space were much earlier line therapy. So there is some subtle differences, but nonetheless, as these are what would be all cell therapies, we would expect a similar approach in terms from a regulatory perspective. But again, harnessing the unique characteristics of Allogene XL therapy. So again, as I've said to previous questions, once you see the data in Q3 and I would encourage you to come along to our event, I think that will become very clear.

Speaker 1

And I can take the question on Allogene. So I mean, we're very pleased about the progress of Allogene and the assets that we've licensed. So Semacel, which is licensed to Servier and sublicensed to Allogene and then AlloA-three sixteen, the CD17 renal cell carcinoma. I think Allogene has laid out a very, very interesting strategy in terms of leapfrogging autologous CD19 CAR T in the second line by going straight into first line consolidation. They have a clear line of sight with selected lymphodepletion mid this year, having an interim analysis in the first half of twenty twenty six and a potential BLA submission in 2027 per their guidance.

Speaker 1

And I think this will be very interesting if the trial is successful. That will be A, a very interesting read through into our platform and then B, obviously we're eligible to up to $410,000,000 milestones and low double digit royalties on this particular asset. And I think the progress of three sixteen also in renal cell carcinoma is very interesting. This is really the first alloCAR T that is making strides in solid tumors and in particular in renal cell. So we're also very excited to for Allogene to be sharing update on this hopefully.

Speaker 3

Okay, great. Thank you guys.

Operator

We'll next go to Silvan Turkin with Citizens. Please go ahead.

Speaker 7

Yes, good morning and congrats on the updates and thanks for taking my question. Maybe just coming back on the Allo collaboration you just outlined here. Do any of these near term, maybe the mid-twenty twenty five readout, trigger any milestone payments? Or is that expected rather towards the end when we get to interim EFS analysis? And then I have a follow-up.

Speaker 1

Yes. Thanks, Sylvain. So we're not disclosing the specifics of the individual milestone payments. I think the only guidance I can give at this stage I can give two guidances. The first guidance I can give is the overall $410,000,000 milestones for SemSL are pretty well spread out across the development, registration and sales lifecycle of the products.

Speaker 1

I think that that would be the first guidance. And the second guidance, which I think is important for everyone is when we say that our cash runway is mid-twenty 27, we've pretty severely discounted any cash in we may receive from our partners, including Servia and Allogene. So this is we've been very conservative in the way we've accounted for cash in with the mid-twenty twenty seven runway.

Speaker 7

Great. That's very helpful. Thanks. And maybe if you could just break down your R and D spend and remind us of the terms with your AstraZeneca collaboration. Does AstraZeneca reimburse you for all of the expenses you incur with those three programs or just a portion of it?

Speaker 7

And how much is that of your total R and D spend? Thank you.

Speaker 1

Yes. It's a great question, Selvin. So basically, the way the AstraZeneca collaboration is structured is the research activities we're doing with AstraZeneca are fully reimbursed by AstraZeneca. And so when I gave the breakdown of the cash coming from our revenue, this is a mixture of obviously milestones we've received, but also reimbursement of R and D cost. And that has allowed us to partially offset our cash burn back in 2024.

Speaker 1

So in total, we had cash burn excluding cash in from partnership of a little bit over $100,000,000 but the net cash burn has been $60,000,000 So I would say it was roughly a forty-sixty split. Obviously, this is what happened for 2024. It is not necessarily a guidance for the later years. But I've mentioned, again, we've been very conservative in cash in when we think about the mid-twenty twenty seven runway and we've included expenses for potentially registrational trials for both 2022 and 2020 by 2022.

Speaker 4

I hope it helps.

Speaker 7

Yes, great. Thank you. Looking forward to the updates in the third quarter. Thanks.

Speaker 3

Thanks, Elvud.

Operator

And next we'll go back to Jack Allen with Baird.

Speaker 5

Great. Thank you again for taking all the questions. Just a few more, if I may. I know you mentioned that you're not going to comment on the Sevea litigation, but I guess to what I sent, are you willing to kind of comment on the potential outcomes here? What are you seeking from this arbitration?

Speaker 5

And how could that play out if you are able to acquire a positive outcome from your perspective?

Speaker 1

Yes. Jack, it's obviously great question. But I mean given this is an ongoing legal activity, we're not going to be commencing right now. Sorry about that.

Speaker 5

Yes. No worries. I have a backup question. So I wanted to ask about the recent discontinuation of Cargos CD22 targeted asset in post CAR T NHL. That's an autologous program.

Speaker 5

But I was wondering what if any read throughs you see as it relates to your UCAR20x22 program, which is an allogeneic product?

Speaker 1

Thanks, Jack. I'll give you just some thoughts on the competitive landscape and then I'll leave Adrian to discuss a bit more about the actual medical implications for this. I think from the competitive landscape, what was interesting in the cargo story and obviously it's an unfortunate setback for the field, but what has been interesting is that cargo really proved that there is a clear unmet need and market for a non CD19 CAR T in that space. I mean, obviously, CD19 has made a stride. They're now firmly entrenched in the second line.

Speaker 1

Allogene is trying to get them to the first line in the allogeneic version. But patients do relapse or can be refractory to CD19 and there's a clear unmet need and desire from physicians to be hitting other targets like 20 or 22. So I think what Cargill proved is that this is a clear market and a fantastic opportunity. Now again from a pure competitive perspective, the fact that the trial doesn't go through is really opening up an avenue for a non-nineteen CAR T asset, which we really want to be occupying with 20 by '22. And then I'll leave it to Adrian to give a bit more color on the medical front.

Speaker 3

Yes, it's a great question, Jack. So when we look at this decision, again, it is unfortunate for Carga. We do believe that CD22 is an important target in this space. But if we look at the rationale why, one is they had reasonably good CR rates and this is based on their data. So this is my interpretation of it.

Speaker 3

Good response rates early by three months, I think it was at an eighteen percent CR rate. So they were struggling with durability. But equally importantly, when you look at the tolerability profile with the ICHS, that was at about 18% greater than grade three. So clearly, they had that risk benefit wasn't adding up. And we look at everything in terms of risk benefit.

Speaker 3

So it was great that we saw that they had efficacy from the target. Yes, the durability wasn't what they probably expected, but also they had a toxicity profile. Now we do not believe that this toxicity is uniquely related to CD22 target. And that's certainly something that we haven't been seeing those kind of rates of ICHS in our programs. So overall, yes, it's disappointing for Cardinal, but I do think it is making us double down really because the commercial opportunity is now greater for us.

Speaker 3

And I do believe with our strategy, we want to improve on that level of durability certainly. So I think, yes, hopefully I've answered your question, Jack.

Speaker 5

That's great context. Thank you so much for that. Now I'll just throw one more out there. As you do mention the potential to improve on durability with an allogeneic CAR T product. I know it's been a key question in this field, how allyl compares to auto on durability.

Speaker 5

With that context in mind, I was just hoping you can provide any comments you wanted to make on the recent data updates on the ALLO-five zero one A semacel program from Allogene. It seems like you had some really strong durable responses out to four years plus.

Speaker 1

Yes, absolutely, Jack. I think this is very encouraging and thanks for flagging it. I mean, in addition to the progress and the roadmap they've laid out for ALPHA3 in the pivotal trial and the potential registrational indication. I think the data set that was published by Biologin back in February on the ALPHA, ALPHA2 trial are very interesting for two reasons. I think the first interesting takeaway is indeed the long term durability.

Speaker 1

And I think as you all know, there was this was the final question that Allogeneic Carti had to address is, can you get durability levels that are on par with autologous? And I think the long term data set is from Allogene, which again is coming from our own platform, is really giving a very interesting showcase that this is real and that you can get to these very durable responses with an allogeneic CAR T. I think the other interesting analysis that came from Allogene is really the fact that this is they've looked at patients with a lower burden of disease, which are likely patients that will come into the ALPHA3 trial because this is a first line consolidation story for MRD positive patients. And they've seen a very interesting outcome for the subset of patients. So I think all in all, it's definitely removing an overhang around durability of the assets, which I think is super interesting, but it's also paving the way for increased confidence into the outcome of the ALPHA3 trial.

Speaker 1

So thanks for flagging and I think it was a really, really interesting and promising data sets.

Speaker 5

Awesome. Great. Well, I always appreciate you guys' transparency and taking all

Speaker 7

the questions. Thanks so much.

Speaker 1

Thanks Jack.

Operator

We'll next go to Kelly Shi with Jefferies. Please go ahead. Hi, thanks for taking my question. This is Han Fei Fu for Kelly. Just a quick follow-up on your enrollment on the two program, UCART T22 and UCART T2022.

Operator

What is the enrollment progress there? And will we expect any recommended Phase II dose at your update and how many patients we're looking to? Thanks.

Speaker 3

Yes. Thanks for the question. Well, as you have probably understood by this at this time that we are at for '22 because we're planning our end of Phase one meeting. Clearly, this is at the end of Phase one. We had planned up to 40 patients within that cohort and we have hit what we needed to in relation to that.

Speaker 3

So hopefully that will give you an idea in terms of the number of patients you're likely to see at our Q3 update. In terms of the patient numbers for the clinical trials, I don't want to be to explain too much because those numbers are completely dependent on an agreed registration path with the regulatory authorities. However, we do believe we have a plan for what I would consider to be a realistic number of patients given that this is a smaller indication. We do believe that we can execute a Phase two program in reasonably quick time with the numbers we anticipate we will need.

Operator

Thank you. Thank you. And I'd like to now turn the call back over to Adrian Kilcoyne for any additional or closing remarks.

Speaker 3

I think we're going to hand that over to Andre Shulika.

Speaker 2

Well, thank you very much, Adrian, for handing this back to me. And thank you very much for everyone for participating to this conference. We're extremely excited by the 2025 outcome and further for the company. And we definitely look forward for the next update of the company and give you some guidance for third quarter this year. With that, I'd like to wish you all a great day.

Operator

Thank you. Ladies and gentlemen, that does conclude today's conference. We appreciate your participation. You may disconnect at any time.

Earnings Conference Call
Cellectis Q4 2024
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