Steven

Steven asked about the anticipated length of Setrusumab treatment for OI, the potential for combination or cyclical use with bisphosphonates, and whether continuous Setrusumab use is expected. He also inquired about concerns regarding bone pain from switching off bisphosphonates.

Answer

Howard Horn, Chief Financial Officer, expressed a personal opinion that bisphosphonates would become obsolete for OI, as Setrusumab enables normal bone metabolism and chronic therapy is necessary to maintain gains. He noted FDA concerns about long-term bisphosphonate use and stated that Setrusumab is a chronic treatment designed to rebalance bone production and resorption. Joshua Higa, VP of Investor Relations, reiterated that Setrusumab represents the future for OI treatment.

Steven from ABL Investments asked about the sustainability of high gross margins, the expected margins on new MSA work, the reasons for the high tax rate, potential large contract bids, the impact of the Coronavirus, and the possibility of a share buyback or tender offer.

Answer

SVP and CFO Stephen Weary stated the gross margin target is 16% to 19%, while Chairman, President and CEO John Sottile reiterated that margins will vary quarterly due to project timing and startup costs. Sottile and Weary attributed the high tax rate to non-deductible expenses like per diem payments. Sottile confirmed the company is bidding on substantial new contracts, has implemented Coronavirus contingency plans, and is actively considering a share buyback as a use of capital.