The Rise of Health System Investors and Corporate VC's | LSI USA '23

Transcription

Ashley Seehusen  0:06  

Great, thank you so much. Well, let me introduce our panel. Quickly here we have Colin Morrison, who is the director of business development and venture capital investments at Boston Scientific. David Kereiakes, Partner at Providence ventures, Oliver Keown at Intuitive ventures, and Sean Cheng, Managing Director at Ascension ventures. So, today our panel, there's been this evolution of health care systems and strategic companies, not just being interested in m&a, and consumers of innovation, but really taking on the role of investor helping to develop and figure out what we're going to commercialize. So that's what we're gonna talk about today. I'll start with the question to our two strategics. Obviously, you guys started with more m&a and business development and evolved into ventures. Can you tell us a little bit about that journey,

Oliver Keown  1:08  

Happy to start. And so Oliver Keown, managing director at intuitive ventures, as Ashley said, and Intuitive Surgical is my corporate parents leader in the field of surgical robotics, a space that's not just medical device and equipment, its digital ecosystem, its trading its services, so naturally in a broader field. And that requires partnership and working with a whole range of stakeholders across healthcare. I actually joined at the time when it was, you know, really directed towards the venture strategy and the company and leadership at the time. And this was four years ago, didn't have a venture arm, or a means to engage really, with early stage companies other than the traditional business development, licensing partnership, some m&a and when I joined leadership were interested in venture capital, they were interested largely out of how do we engage in a sophisticated manner with early stage companies, where they are independent of intuitive, they're pushing the boundaries in a much broader fashion, they represent the future of the ecosystem that we're in and potentially also disruptive and transformative trends in the field. And they were very open to what best in class venture capital could do corporate venture capital could do to achieve that. And so when I joined, you know, it was really about using the best practices of corporate venture capital, working with leadership to put in place a structure that could engage with these companies so that we could be a meaningful participant in that ecosystem, and but be very differentiated from business development in our goals and objectives. And I know we're, we're going to discuss some of that over the panel today.

Ashley Seehusen  2:47  

Yeah, absolutely. Colin, you want to comment on that a little bit as well?

Colin Morrison  2:50  

Yeah, sure. I think first of all, Colin Morrison, Boston Scientific ventures, great to be here this afternoon. I think this is going to be a great comparison, because it's a great example of how to street two strategics approach venture from very different angles. By comparison, we're a pure strategic investor. So we are much more narrowly focused within the current existing strategies of Boston Scientific, and the six divisions that are underneath that umbrella. We got into venture for very different reasons we started we'd call our current vintage in 2012. And the reason we really moved to ventures because at the time, as you can imagine, coming out of the financial crisis, there was just a need for capital to be able to be introduced to help companies develop and get to a point to where a strategic might want to acquire them. And so that is really how we started. And that's really been the DNA of our Venture Program for the last 11 years. Moving forward, and that still exists. Our primary objective is to put money into companies that we find are highly strategic to Boston Scientific, leverage our abilities across our organization to help support those companies develop and advance to a point where they may be ready for acquisition.

Ashley Seehusen  4:18  

Great. So David, and Sean, can you guys talk a little bit about why your health systems got into venture? I know it's been going on for a lot longer. But so were what were your reasons for getting in? And how have you sort of felt your relationship with innovation and early stage companies change?

Sean Cheng  4:36  

I can start so Sean Cheng great to meet everyone. I'm a managing director at Ascension ventures. We've been around for 20 years. And so I wasn't there when I got started. But if I were to channel the executives at the time, including Dug French, who eventually founded Sante, they were thinking about it obviously from a innovation point of view of You know, pushing the US healthcare forwards. But also, I think there was a financial element to this. And, you know, I been with Ascension for about a year or so prior to that I was with Philips on the corporate side. And what I didn't realize is, the returns for these nonprofit organizations really go back to fund the operating side, right. And so in a, you know, landscape where right now 70% of the US health systems are in the red and losing money becomes ever more important, where you have those checks that we get back from the exits, go straight to the clinicians, the nurses, the administrators, and operating the health systems. So those are really the main reasons and we've been at it for 20 years on to fund five right now. And continue to do that, moving forwards. So I'll hand over to David to kind of fill in the rest.

David Kereiakes  5:57  

Thanks, Shawn. Dave Kereiakes thanks to the team at LSI for including me here, it's I'm humbled to be included on this panel. I'm a partner with Providence ventures, our parent is Providence, St. Joseph health, one of the largest nonprofit providers of health care in the country based in Seattle, where I'm headquartered. And then we're the market leader in Seattle, Portland, and Los Angeles, Orange, Orange County. So hopefully, none of you have to see us while you're in town today. But it, there's some good sites down the street. So we got into it. Now for 10 years, I've been with Providence ventures 4 years, Providence has committed 300 million in the form of to growth equity vehicles $150 million each, for the very reasons Sean laid out, and then I'll add, because ascension was doing it. And health systems don't like to be the first but after the path is laid, in order to stay competitive, get access to innovation, and unique technologies, be viewed as an innovative leader. And then most importantly, drive investment returns. So finding new streams of revenue is a big important part of what we do. Again, those investment returns. And fortunately, we've been able to provide quite a bit back to Providence. And so the lights will stay on a little bit longer, at least for our fund. Go to fund the mission, which is caring for the poor and vulnerable, which is an increasingly negative margin, unfortunately. So that's the reason why we did it. It's been, we've got incredible support from the C suite and a commitment to continuing it. 

Ashley Seehusen  7:49  

It's great. Well, a question for all of you. Obviously, you're looking for returns, but how do you balance things that line up with your strategy, move your goals forward for your hospital for your company? How do you balance those things when you're looking at opportunities?

Oliver Keown  8:05  

I'll maybe start over for our fund where $100 million fund with that financial focus is going to first and foremost we're going to be measured. And as a team, we're aligned around the financial success of the deals we do are really clarifying an important factor for us as we navigate our startups or CO investors and get ourselves into deals and opportunities. The opportunity to win we're looking and trying to explore our goal is advancing the ecosystem, can we accelerate minimally invasive care. So we start there, we start with a strategic lens. And that that's kind of the ocean with which will hunt for exciting deals. So we start with the strategic rationale. And we've purposely cast that broad so that we can find best in class financial returns a win win within those. But we looked at ecosystem we understand where their opportunities in digital and therapeutics and diagnostics, areas that early stage companies are going to transform the patient journeys that might touch on minimally invasive care. If we identify a thesis there, we justify them. And then we can go out and find the very best companies that have market leadership that have best in class technology, the best teams and satisfy that financial returns benchmark that we're striving to and will only deploy capital when there is that win win. And it means that that's a significant differentiator for us from our business development colleagues, because they may have a strategic thesis and be out looking for opportunities. They don't need to reach that financial bar to be able to engage with a company if there's a strategic rationale. And it's an important differentiator for us because we will only deploy that capital when the finance has been reached.

Sean Cheng  9:43  

And maybe Doug meant that from the healthsome side, you know, we obviously have a closer link to the clinician. So, you know, the second call we make is, you know, to the service line leader or the new expert in that specific area and we do These listening tours throughout the year. Funt Five is representing 13 different health systems in addition to ascension. So, OSF Advent, OhioHealth. Know, Vaughn, to just name a few. They all have representatives as part of our investment committee. And so through those voices, they really drive, I would say, the health system zeitgeist, for us to think about things, I think what's probably changed now moreso is in talking to, you know, our purchasing groups, like the resource group at Ascension, cost has become much more of a top of mind than before, you know, I think we're in when folks are making purchasing decisions as health systems before it was a lot of KOLs that pound the table, and then you kind of get the latest and greatest widgets. And eventually, somehow it works to kind of break even or a little bit of deficit or profit. Now, it's a major driver around, you know, what is the price of this unit here? And is it you know, the best thing from our neck anomic point of view, in addition to outcomes, that that is probably, I would say a step before value based care. But certainly in that direction. That's driving a lot of our thinking. But I think returns, you know, like my colleagues here is table stakes. So we're still trying to drive that 20 to 40%, IRR and money back into the new investors. And so those are the things that are competing in our heads, as we think about investments.

David Kereiakes  11:34  

Yeah, I think it's a critical component to what we do, and for the longevity of the fund that if, if you're only strategic money, you're gonna run out of it. If your returns aren't, in your view, the world in that regard, you just find the strategic value in a lot of these assets that we'll invest in and back I came from, it's been seven, eight years with another growth equity, a traditional institutional investment fund, which most of the team does. And I think that's an important feature to have. By being compensated and driven to maximize investment returns for the health system. And being good stewards of the capital, you find the strategic assets that are harder to rip out of the health system that stand on their own that are the end, you have to be careful not to put your bias or influence on these decisions. And we've stood up a very robust conflict of interest policy. So the technology device software service, is evaluated and stands entirely on the merits of its clinical and economic efficacy and what it can do for the health system. Then after that, I can go in and do an autopsy on the post mortem on the sales cycle, pull out the unique understandings of that. So what budget did it come from? What cycle? Who's the champion? What did they compare it against? Why, what was the real value proposition both from the sales side and from the supply chain from the clinician from the administrative team? Who had to say yes, and and who had to give approval? And how did they do it? aligning all of those and getting a better sense of how that unfolds, can really shorten the sales cycle and drive greater efficiency on the investment return as you go to other health systems, and having the credibility and access to peers within the system, who made that decision on their own, in a format as a KOL, can really help accelerate growth. And we've seen that. So Providence has made 27 investments. They're a customer of all 27 of those businesses. And there's a really nice case study across all of them to show that kind of growth and the unique perspective.

Colin Morrison  14:06  

So again, lots of admiration for the additional complexity that you all have to bring to the to your decision making criteria and having to look at it from both ways. I mean, because that does add some complexity. We certainly we look at our returns, but we look at our returns in hindsight, sort of more of a check to make sure we're being fiscally responsible. Are we exceeding our weighted average cost of capital, but it's a much, much more simplistic viewpoint from that. And again, it's it's purely strategic. It gives us a ton of flexibility and really aligns us well typically with management because the interests are completely aligned. The mutual goal is how do we make that company as successful as it can be? And we have a lot of flexibility, both financially but but also non financially functional expertise that we can bring to do that. And so that's really how we look at it.

Ashley Seehusen  15:08  

I mean, I think that brings up a really great point of the functional expertise, the operational expertise that you can all bring to the table. Do your companies appreciate your ability to kind of bring that and help them? Figure out what they're doing, commercialize, etc? Like, what kind of advantage does that give them?

David Kereiakes  15:29  

I hope so. They will continue to I mean, I haven't completely lost touch of all the entrepreneurs, they still answer that phone. So I do think it is valuable. And I can point to some examples of where we were able to uncover something that was unique. So for one of the companies, a company called border surgical, which was formerly known as just right, we were investors in that. And in our supply chain, we saw that it was able to get through supply chain because of unique label that it had that the other two big competitors who are dominant, massive med tech companies had blocked out everybody else. And because of that unique perspective, we were able then to say, and build out the label such that we can get into move from pediatric hospitals where it was a dominant player. But there's only one pediatric hospital in every city. And so the sales cycle, and Salesforce can be expensive to build, to make it applicable to the adult hospitals, and get on contract with them. So it does make a difference. I would also say it's important to know who your strategic is, and why they're advising you that way. And don't let it steer you entirely to only make decisions based on that, right. If you're designing something solely based off of the feedback that Providence is giving you, you're going to waste a lot of money, it's going to be a customized solution that works for a $28 billion integrated delivery network that isn't representative of the rest of the market. And, and the same thing goes for the corporates, too. You need to understand who you're designing something for who you're building something for. Another example was at Baron medical, where BTG was an investor, we often had to think, are we designing and investing in r&d so that it fits BTG's portfolio as an investor? Or are we designed this for the market. And I think you're all here because and we will all have long careers in the venture world, because big companies need to find r&d elsewhere. So

Oliver Keown  17:54  

I'd maybe just jump in to say, I think your point of where that advice is coming from the quality of advice is so critical, but the financial alignment going back to the structure of a corporate venture fund, when when Providence ventures invest, it's you providing that advice, it's not Providence, right, it's you as a partner that wants to see that value creation that success. And so you're able to translate maybe the Providence story and also highlight, hey, this is where that might differ from an Ascension. And this is where we've got it right, as a corporation. And we, you know, we managed to do that ourselves. When you were looking at a broad spectrum of areas that mentioned diagnostics, therapeutics, digital, every deal we do, we have to sell the best companies, you know, entrepreneurs that are taking a risk on a strategic investor, they need to know what value they're getting. It's it's not enough to be providing capital for any investor, let alone a strategic. And so, you know, it's important as we've structured our team that as individuals, we we will be out there battling for the next financing round, for that introduction, I will introduce them to a competitor, if that is independent value creation, and it's an opportunity to do so. And then beyond the individual level, I have a unique access, as we all do here to a set of resources in our instance, that might be regulatory reimbursement, commercial best practices for market development. It might be technical know how, and we will curate, you know what that level of value add could be, but I wouldn't say it's just kind of table stakes. It's so critical for us to do our jobs. Well, I think also and hopefully add value to the ecosystem.

Colin Morrison  19:31  

Yeah, I'd say this is a question that I approach with a great deal humility, because as a corporate investor, as a corporate investor since 2012. Candidly, we as an organization, we've made every mistake as a corporate investor that you can make along the way. And we've tried to learn along the way I think a lot of that as much about education of our internal leader corporate leadership. And as Dave was saying, appreciation appreciating the separation between what is the pure strategic interests here? And what what's going to be the best path forward for the company, but also, how can we fit in this broader venture ecosystem in a way that works because because just along strategic investors, there's a ton of differences now introduced financial investors now and all the flavors that exist there, and all the different interests that gather around the boardroom table. So I think, I hope we've done a good job of really growing to appreciate that, and hopefully making us a better partner in the broader ecosystem.

Ashley Seehusen  20:50  

Let me ask you a touchy question. How do you feel when you see another strategic on the cap table? Does that? How does that influence your ability to invest? And, you know, when you're talking to entrepreneurs, and they're asking your advice on that, what do you say?

Sean Cheng  21:08  

I guess I can start seven, but I'm both the corporate side. And now the health system side, I think at the corporate side, there's probably more anticipated stigma from the founders about having multiple strategic on the cap table, then we felt that Philips at the time, of course, it could have changed in the last six months, but I doubt it. I like the earlier stage companies, we feel that it's perfectly okay to have multiple corporates on there, if you look at the statistical probabilities of acquisition, with how many, you know, names are on these new line items on cap tables, it's very low, I venture to guess that Philips has, you know, maybe less than 1% hit rate on those. And so I think it's, you know, it's more about learning innovation and helping push the field forwards as earlier, you get, of course, the later stage was near acquisition, that's a little bit different story. And, you know, I've always said, you know, row fence, probably good enough, and you don't need a row for it to do anything. On the acquisition side, health system, I think, you know, completely different perspective. Well, we probably struggle with is, you know, inter mountains already on a cap table, what is the value out of an Ascension ventures with them as an LP on it? And so sometimes there's probably a question of, you know, value accretion there. But, you know, we we don't see that as as a negative, you know, it's just an additional customer, if not many more, right. So.

David Kereiakes  22:47  

Yeah, for health systems that it's welcomed, I think you want as many is are interested, within reason you because they turn over, and they may not continue to be committed to it longer term. But you can get a better sense of market size and customer profile by having those investors along the table. On the corporate side. I think where historically, we probably would have advised and in my prior role as an institutional investor, without any strategic ties, I would have advised to is kind of what you need to have on your cap table. But since you have been in it for so long, attorneys have gotten very good at structuring and understanding where these risks are, that I don't see it as as much of a problem if at all anymore. And even giving a row for based on what the attorneys will advise you in you got to find a good one that's done it before. Putting a time limit on that can be helpful to and there's different ways that you can structure it such that you don't have that kind of risk. And it's been done 1000s of times already. So the risk of it to me as as an institutional investor, and as a customer strategic, I think is relatively small.

Colin Morrison  24:10  

So it's great question, very provocative, I think context is really important on this. First of all, if is is a situation where it's a last money in situation, there it short term, there may be some strategic rights attached to it. And that might make sense, the vast majority of our investments for at least the last four or five years, are Series A Series B, long runway to commercialization. We've tried it, trust me, and it just is really, really difficult. And we find less is more so we don't tend to ask for any strong strategic rights when we're making particularly early stage investments. And we've we've invested in over 60 companies He's and we've acquired nine of those already. And we've had nine others, though, exit. Thank you Veyron to Olympus. Nice, nice, nice exit on that. And so we've we've felt like we've had a good hit rate without having to burden everybody investors management with a bunch of complicated strategic REITs that just become very difficult to really follow up on down the road.

Oliver Keown  25:30  

I'll make a brief comment, I'm fully supportive of you're bringing the right parties to the table to support the companies and I think goes down to syndicate and balancing what the company is trying to achieve and what advice or strategic value they're trying to get. Our baseline is, we want independent optionality and value creation for the companies that we invest in. So if there is a roofer, or there's some limitation on the optionality for the startup, we'll see that as a negative to their future financial success. And that will be a bearing in our decision whether or not we invest, we have used our kind of, you know, quote, unquote, founder friendly mindset on that to actually negotiate with other strategics that are in a deal to unwind some terms where we felt that that was limiting the future optionality. And I think that's important that there's an openness because I do think in this day and age, and obviously, it's a rapidly evolving day and age in the current market, but, you know, good companies have options, and they should maintain that optionality for as long as possible. I'll give two brief examples where I think quantity can be powerful. We co lead a deal last year with J&J and a medical device cybersecurity company. I think that was a deal. And to your point about context, where we felt that actually our kind of position across the table in the field of surgery in robotics, and working with an independent third party that will have an important role, we think, as an independent company to the medtech world, but it as a customer is medtech being customers to this, this player was really exciting and really opportune. So a few including Dexcom, who are here at venture group, and investing in that recognizing that there's an opportunity actually to do that. Another one of our portfolio companies called Flywheel, which is in the data and AI management space, they have investment from Intuitive year, we're bringing a surgical video and AI management kind of angle. They have Novartis that are bringing life sciences and pharma and digital pathology and Hewlett Packard on the software and the distribution, you know, different strategics bringing different components to a high quality syndicate. And so for me, it's it's it's got to be context specific. But we've got to think about the best interests of the companies we're investing in.

Ashley Seehusen  27:46  

So what do you what's your advice to companies that are looking for investment from strategics? And health systems? What are the best practices? What should they be aware of? What should they watch out for?

Colin Morrison  27:58  

Well, I think first you could tell from this conversation, find the right strategic that fits you and fits your needs. Because there's, there's great skill sets that I'm sure you know, we all bring in. And so it is more a matter of fit, perhaps then, hey, there's a best practice out there or do this definitely or don't do that. I think I don't want to repeat what I've previously said. So but best practices for us that we found through the years, less is more minimal strategic writes, how, you know, really been engaged as a board observer or a board member and and help between financings as much as you are helping at financings. I think, other you know, just standard information liquidation preferences, trying to be middle of the fairway on each of those terms. But, but otherwise, again, it's all individual, and each deal is going to bring its own different challenges and opportunities to navigate.

David Kereiakes  29:13  

At just said, you want to build a good business, first and foremost, and if you build something to be sold, it'll be sold. And you want to build a business to be bought, and to be bought at the opportune time where you're not chopping it or selling it. So if that means working with any one of us or any other capital provider, or even high net worths, or or angels. You want to build a business and do it in a way that efficiently that can return as much to the shareholders as possible and build that business to be bought.

Oliver Keown  29:48  

I would just add, you know, as entrepreneurs out here in the audience, and you're speaking to strategics, you hear the variation between certainly on the corporate side maybe less so on the the sophistication that the healthcare system VCs bring During do do your own homework, do your diligence, right understand what is motivating this group? What is success? For them? What is success for the platform for the individual what firewalls do they have in place? What information safeguards? What are the, you know, what, what will behaviors at the individual and platform level look like and certain future scenarios have have these conversations transparently, with your investors to understand, to your point, Colin, what what is this the right fit for where I'm at what I'm trying to achieve what my success as an entrepreneur looks like. And I think that is the great thing about the groups here. There's the transparency, and we've all optimized our structures, and to achieve, you know, the ends that we think are important, and I think it just is incumbent on entrepreneurs to understand that Well, up front, and, you know, to go into those conversations and negotiations open minded.

Sean Cheng  30:51  

Yeah, not much more to add, besides, I'd say, you know, inform us, we're very large organization. So there's conversations already happening, you know, with one of the health systems or hospitals or divisions of corporate, then you lead with that as part of the conversation. But also to David's point, if you build a good business, it shouldn't be relying on a single entity as a customer or benefactor. I think, you know, there's a lot of charity going on, if that's the case, and probably quite a bit of supplier or customer risk as we assess businesses. So it's a healthy balance between those two things.

Ashley Seehusen  31:37  

So as you guys move beyond being consumers and acquires a technology, how do you feel like your relationship with innovation has changed in your contribution is changed to the ecosystem?

Colin Morrison  31:49  

Oh, I'll take first crack, I guess. So I think from our perspective, what has really helped is it's changed. If we came into this 10 years ago, from a very transactional approach, we were accustomed to m&a, and m&a is that net sum Zero game, so to speak. And what venture has taught us what we've learned is, obviously, that's the it's a totally different animal. And you can't bring an m&a approach to venture. And so I think that's first and foremost is understanding that it is not a win lose zero sum game. It's it's a relationship, and it doesn't end at the transaction. And when the check cuts, in fact, it begins at that point. So I think those are probably the two the two biggest areas and what we fully understand on the venture team, it may or may not, we may not be the right venture partner. But it also doesn't mean that we're not necessarily a good acquirer down the road, the two are completely separate conversations in our organization and our strategic approach.

David Kereiakes  33:05  

Yeah, in calling to what you said, and the reason why you all got into this is the void of capital that was present at that time. And I think we're running into that as cycles come and go. And it was great having you in the strategics in the market at that point in time to help the ecosystem continue to progress. With the health systems, I think we've matured to the point where we can start identifying the impact that we've had. So in the past four years, I've been in Providence, we've introduced over 400 companies, to over 200 different stakeholders within our system across all seven states and seven regions. And we made 12 or 13 investments. So the kind of impact on innovation and flowing that into the health system, helping administrative leaders understand and sort through best in class technologies, where they're being bombarded with kind of that next wave of how do I how do I bring AI and ML into my practice, and this, this company is pitching me and saying that they can do all of that what companies are using, and how can you help me understand this is a big role that we play. And so it really is, I think, influencing the way the way that care is being delivered in this country and having a material impact in alleviating the burden that's put upon the caregivers that are sacrificing so much to deliver care and allowing them to really just get back to practicing and have innovation come to them. In a way

Oliver Keown  34:37  

I would say the role that intuitive ventures played and I'm not on the the BD side. So we're very much separate but we get to be a front door for intuitive you know, we're a venture fund first and foremost in how we operate and how we deploy capital but we are a front door and we're connecting similarly to David's point hundreds and hundreds of companies every year and we're can be a trusted partner to those startups to NAV gait, who and when and why you might engage with intuitive proper, at the right time to facilitate a pilot or a collaboration or a commercial or licensing, or an acquisition or whatever that might look like. And we find ourselves as being a helpful conduit, not just for intuitive, but for the ecosystem to kind of navigate Intuitive is it, you know, bolsters its position in that field. And I think for Intuitive, we've become a partner in thinking through kind of what are those trends, those important areas, we're also thesis driven. So we get to go out and hunt and look for those exciting best in class startups in areas that traditionally haven't been part of the Intuitive roadmap. And that's, again, why you go back to this broad thesis in life sciences, we invest in biotech, we're looking at diagnostics, from liquid biopsy, to other areas, and hopefully, for the startups get to translate why that's important, why that's relevant. Why intuitive, is a surgical device company might have a role in these types of areas going forward. So for me, that's the role of the venture arm can be value added there.

Sean Cheng  36:05  

Yeah, and I think for us, over the last 20 years, there's probably been a crawl, walk, and then a, now a run type of model and sort of essential ventures 3.0, where we'd like to get more integrated into the LPs and their vast networks, you know, 460, acute care facilities. And not only, you know, help our portfolio companies, but any early stage companies and accessing these clinicians, and together create impact in the five to 10 year timeframe to really change US healthcare. In practice, we're also starting to have more communications with our purchasing groups, and other operational sides of things where, again, the cost side is becoming more important in understanding what are the top cost items and buckets where we can actually inject innovation and in a free market way, promote competition to drive down some of that pricing and increase the outcomes. And so we're getting, you know, you know, our ducks in a row here, and try to, you know, play chess at that level, too. And, you know, that's certainly why I'm excited about this and get up every day and to do it. So, so really excited for the next phase.

Ashley Seehusen  37:28  

Great. Well, we're almost at time. So thank you guys so much for your thoughts and sharing with our group hear how you're feeling about corporate venture and healthcare system venture. So thank you. 

Speaker 1  37:42  

Thank you. And thanks very much.