All Figures Refer to 2004 Group vs 2003 Core Unless Otherwise Stated
Aventis Q1 results confirm strong start to 2004
- Sales rise 6.4% on a constant exchange rate basis (or "activity
growth") to euro 3.946 billion (4.931 billion USD) (reported sales
declined by 0.6%)
- Total revenues, including co-promotion income, rise 7.1% on activity
growth to euro 4.025 billion (5.030 billion USD) (reported revenues
declined by 0.1%)
- Strategic brands and human vaccines sales rise 21.1% on an activity
basis (reported growth 12.3%)
- U.S. sales increase 8.7% on an activity basis to euro 1.355 billion
(1.693 billion USD), representing 34.3% of sales
- Net income up 14.6% to euro 556 million (695 million USD)
- Earnings per share up 16.5% to euro 0.71(0.89 USD) from last year's
Core EPS of euro 0.61 (0.76 USD)
Aventis delivers on submissions and approvals program in Q1
- FDA approves antibiotic Ketek in U.S. and rapid acting insulin analog
Apidra
- FDA Advisory Committee recommends approval of Sculptra
- Inhalable insulin Exubera submitted for EU regulatory approval
- Taxotere submitted for U.S. and EU approval for the treatment
of early-stage breast and hormone refractory prostate cancer
- Lantus OptiClik pen submitted for approval in U.S. and EU
STRASBOURG, France, April 29 /PRNewswire-FirstCall/ --
Aventis and Sanofi-Synthelabo agree to create Sanofi-Aventis
"Our first-quarter results are in line with our full-year targets and
guidance. In 2004, supported by the launch of several new key products,
Aventis should generate sales growth of six to seven percent with earnings per
share growing in the mid-teens," Igor Landau, Chairman of the Management
Board, said.
(Logo: http://www.newscom.com/cgi-bin/prnh/20000501/NYM197 )
"Regarding the future creation of Sanofi-Aventis, we are pleased to have
reached an agreement with Sanofi that recognizes the value of Aventis, our
growth potential, and the talent and expertise of our employees. Having a
balanced representation in the future management of Sanofi-Aventis, this
agreement provides the necessary conditions for the success and development of
the new group," Landau added.
CONSOLIDATED GROUP RESULTS
Aventis consolidated group sales were euro 3.9 billion (4.9 billion USD)
in the first quarter of 2004 compared to euro 4.2 billion (5.2 billion USD) in
the 2003 first quarter. The 2003 sales figure includes the consolidated sales
from the therapeutic proteins business Aventis Behring, which was completely
divested on March 31, 2004, and is being treated as a discontinued operation
in the 2004 results (and therefore excluded from consolidated sales). Group
net income was euro 556 million (695 million USD) in the 2004 first quarter
compared to euro 202 million (252 million USD) in the year-ago period, while
consolidated earnings per share (EPS) were euro 0.71 (0.89 USD) compared to
euro 0.25 (0.31 USD)
AVENTIS DELIVERS ON SUBMISSIONS AND APPROVALS PROGRAM
Aventis achieved a key approval in the U.S. in the first quarter for
antibiotic Ketek, already in use in major European, Latin American and Asian
markets, and with an estimated peak global sales potential of more than euro
1.5 billion (1.9 billion USD).
Aventis advanced its regulatory submissions program in the first quarter,
submitting the blockbuster oncology agent Taxotere for U.S. and EU approval in
March for the treatment of early stage breast cancer as well as for hormone
refractory prostate cancer earlier this year. A submission for gastric cancer
is planned for the second half of 2004.
In addition, Aventis, with partner Pfizer Inc., submitted the inhalable
insulin Exubera for EU regulatory approval. The companies are working with
the U.S. Food and Drug Administration (FDA) to determine the appropriate
timing for submission for U.S. approval. Also in the first quarter, Aventis
submitted its new OptiClik(TM) reusable pen for administering Lantus for
regulatory approval in the U.S. and EU. The cartridge for the pen has also
been submitted to the regulatory authorities in Japan.
In March, an FDA Advisory Committee voted to recommend, with conditions,
the approval of Sculptra, an injectable poly-L-lactic acid product, to correct
lipoatrophy in people with human immunodeficiency virus (HIV).
In April, the FDA approved rapid-acting insulin analog Apidra, which will
complement an expanding diabetes portfolio, and Nasacort HFA Nasal Aerosol, to
treat nasal symptoms associated with seasonal and perennial allergic rhinitis.
AVENTIS SIMPLIFIES REPORTING STRUCTURE
Starting January 1, 2004, the consolidated financial statements are
reported at the level of Aventis Group, eliminating the split between core and
non-core business activities. For 2004, Aventis as a Group represents the
on-going core business activities in prescription drugs, human vaccines, the
Merial animal health equity joint venture and corporate activities. It also
includes the remaining non-core businesses whose sales are not consolidated
(equity stakes in the chemical companies Wacker and DyStar as well as an
investment in Rhodia). Any contribution of Aventis Behring to 2004 is treated
as discontinued operations. Following the completion of the divestment
Aventis Behring on March 31, 2004, the remaining non-core activities are
considered to be less material. As a result the performance of Aventis
presented as a Group in 2004 is compared with the 2003 Aventis core business
results.
BUSINESS OVERVIEW -- 2004 GROUP VS 2003 CORE BUSINESS
Aventis consolidated Group sales were euro 3.946 billion (4.931 billion
USD) in the first quarter of 2004 compared to euro 3.970 billion (4.961
billion USD) of sales for the core business in the year-earlier quarter.
Group net income increased by 14.6% to euro 556 million (695 million USD) in
the first quarter from euro 485 million (606 million USD) in core net income a
year earlier. Consolidated earnings per share (EPS) in the first quarter of
this year were euro 0.71 (0.89 USD) compared to core EPS of euro 0.61 (0.76
USD), an increase of 16.5% from the comparable period.
Q1 Q1 Total AVENTIS KEY FIGURES (1)
Group Core variance (in euro million, except EPS)
2004 2003 (3)
euro 3,946 euro 3,970 -0.6 Sales
+6.4% Activity variance(2)
euro 556 euro 485 +14.6% Net income
euro 0.71 euro 0.61 +16.5% EPS (in euro)
(1) Unaudited
(2) Excluding currency translation effects
(3) Percentages are calculated before rounding the data
Note: Unless otherwise stated, all references below to sales activity
growth are on a constant exchange rate basis.
Sales activity rose 6.4% to euro 3.946 billion (4.931 billion USD) in the
first quarter of 2004, while reported sales fell 0.6% due mainly to the
negative impact of the value of the euro against other currencies.
Sales of strategic products, which comprise strategic brands(1) and human
vaccines, amounted to euro 2.308 billion (2.884 billion USD) in the first
quarter of 2004, an activity increase of 21.1% from a year earlier, and
accounted for 58.5% of total Group sales. Strategic brand sales activity rose
22.6% to euro 1.942 billion (2.427 billion USD) in the first quarter, while
human vaccines sales activity increased 13.8% to euro 366 million (457 million
USD).
(1) The Aventis strategic brands are Actonel, Lovenox/Clexane, Ketek,
Lantus, Taxotere, Amaryl, Arava, Campto, Copaxone, Insuman, Nasacort,
Targocid, Tavanic and Delix/Tritace. As of January 1, 2004, Allegra
has been reclassified as no longer being a strategic brand and its
sales will be reported independently.
Sales activity of the seasonal allergy drug Allegra declined 11.9%
worldwide to euro 325 million (406 million USD), while U.S. sales activity
fell 12.0% to euro 241 million (301 million USD). The performance of Allegra
in the U.S. has been affected primarily by competing over-the-counter (OTC)
branded and private-label products as well as changes in reimbursement for
prescription antihistamines by managed care organizations.
Sales activity of other prescription drugs, which generally do not receive
marketing and promotional support, fell 10.3% in the first quarter, due mainly
to the ongoing negative impact of healthcare cost-containment measures in many
European countries. On a like-to-like basis, excluding divested products,
sales activity for this group of products declined 7.8%.
Bulk and toll manufacturing, which includes the production of active
pharmaceutical ingredients for third parties, reported a sales activity
decrease of 6.4% to euro 133 million (166 million USD) in the first quarter.
Q1 2004 Q1 2003 Activity % share % share
Group Core variance (1) Group Core
sales sales sales sales
(in euro mln) (in euro mln) 2004 2003
euro 2,308 euro 2,055 +21.1% Strategic brands 58.5% 51.8%
and human
vaccines
euro 325 euro 418 -11.9% Allegra / 8.2% 10.5%
Telfast
euro 133 euro 148 -6.4% Bulk and toll 3.4% 3.7%
manufacturing
euro 1,165 euro 1,350 -10.3% Other prescrip- 29.5% 34.1%
tion drugs
(1) At constant exchange rates
In the United States, sales activity rose 8.7% to euro 1.355 billion in
the 2004 first quarter due to strong sales growth of the long-acting insulin
Lantus and the anti-thrombotic Lovenox/Clexane, which helped to offset lower
sales of Allegra.
In Europe, sales activity rose 2.1% as the ongoing expansion of strategic
brands (up 15.7% on an activity basis) was largely offset by the sustained
impact of governmental cost-containment efforts to curb healthcare spending.
France reported record sales of oncology products, particularly the
chemotherapy agent Taxotere, as well as continued strong sales of Lantus
following its launch in this market in 2003. In Germany, oncology and
thrombosis products also performed well, helping to offset lower sales of the
cardiovascular drug Delix/Tritace following the start of generic competition
in late 2003. Strategic brands accounted for 56.2% of total sales in Europe
compared to 49.6% in the year-ago period.
In Japan, first-quarter sales activity advanced 3.3% to euro 205 million,
due mainly to the excellent launch of the antibiotic Ketek in December 2003
and the continued success of Actonel in gaining market share. However,
Allegra reported a decline in first-quarter sales after the country
experienced one of its weakest allergy seasons within the last decade.
SELECTED SALES OF AVENTIS STRATEGIC BRANDS AND HUMAN VACCINES (1)
(in euro million)
Q1 Q1 Activity
2004 2003 variance(2)
440 389 25.3% Lovenox/Clexane global sales
261 242 25.7% U.S. sales
334 324 12.2% Taxotere global sales
152 178 -0.5% U.S. sales
224 241 -6.5% Delix/Tritace global sales
(Not sold by Aventis in the U.S.)
168 89 108.9% Lantus global sales
106 70 76.0% U.S. sales
46 26 80.4% Ketek global sales
(Not yet launched in the U.S.)
219 160 59.9% Actonel total Alliance sales(3)
62 33 89.6% Actonel sales consolidated by Aventis(4)
366 350 13.8% Human vaccines sales consolidated by
Aventis(5)
188 203 7.5% U.S. sales
(1) Unaudited
(2) Excluding currency translation effects
(3) Cooperation with Procter & Gamble
(4) Actonel sales as consolidated by Aventis, including sales in Japan
(5) Vaccines sales in Europe through the Aventis Pasteur MSD joint
venture are not consolidated by Aventis
N.S. Not significant
Lovenox/Clexane (enoxaparin sodium): The anti-thrombotic agent recorded a
global sales activity increase of 25.3% in the first quarter, while U.S. sales
activity rose 25.7% due to increasing penetration in key geographic markets
against unfractionated heparin, the main competitor, in the treatment of
medical patients at risk for deep vein thrombosis (DVT) as well as in patients
with acute coronary syndrome. U.S. growth has been driven by the doubling of
the U.S. sales force in 2003 to nearly 700 sales representatives and increased
marketing efforts to increase awareness about DVT.
Aventis has received the first official response from the U.S. Patent and
Trademark Office (USPTO) regarding Aventis' application for the reissuance of
U.S. Patent 5,389,618 (the '618 patent) covering Lovenox. The agency's
response, which is neither final nor unexpected, was a routine "office action"
advising Aventis of the initial rejection of the application and indicating
why it was not approved. An initial rejection is not unusual in reissuance
proceedings, which may include a number of rejections and responses before an
application is ultimately approved or denied. Aventis intends to respond to
the USPTO's comments in due course, and expects the reissuance proceeding to
continue. Aventis remains committed to moving the reissuance process forward
and continues to believe that, if the application is ultimately approved, the
'618 patent could be reissued in an amended version prior to year-end 2004.
Taxotere (docetaxel): Global sales activity of the chemotherapy agent rose
12.2% in the first quarter of 2004 from a year earlier. U.S. sales remained
robust, in spite of temporary challenges related to the less than favorable
U.S. Medicare Reimbursement policy currently in place. Compelling clinical
data in breast cancer that was presented in late 2003 helped to fuel Taxotere
sales in Europe. Aventis expects the sales growth of Taxotere accelerate due
to the two recent regulatory submissions in the U.S. and EU for adjuvant
breast cancer and hormone refractory prostate cancer. A third submission for
Taxotere in gastric cancer is expected to be submitted in the second half of
the year.
Delix/Tritace (ramipril): The cardiovascular drug recorded a sales
activity decline of 6.5% in the first quarter, due mainly to the
introduction of generic versions of the drug in Germany and the United
Kingdom. However, other European markets and Canada showed strong growth
rates, reflecting the benefits of the ACE inhibitor in treating patients with
hypertension and/or diabetes seeking to reduce the risk of cardiovascular
events.
Lantus (insulin glargine): Sales activity of the 24-hour insulin analog
remained strong, rising 108.9% worldwide in the first quarter of 2004 and
advancing 76% in the U.S., where the product remains the leading branded
insulin in terms of total prescriptions. Lantus is the largest brand in the
total insulin market (value) in France. In Germany, Lantus currently holds a
50% market share in the basal (long-acting) insulin market.
Ketek (telithromycin): Worldwide sales of the antibiotic, which
specifically targets upper respiratory tract infections, rose 80.4% due to its
launch in several new markets during 2003 and its use in more than seven
million patients to date. Ketek received FDA approval in April, and Aventis
is preparing to launch it in the U.S. in time for the start of the fall 2004
respiratory tract infection season.
Actonel (risedronate): Worldwide sales of the osteoporosis treatment
marketed through the Alliance for Better Bone Health with Procter & Gamble
totaled euro 219 million, a sales activity increase of 59.9% over the 2003
first quarter. Sales consolidated by Aventis were euro 62 million, an
activity increase of 89.6%. Aventis reported co-promotion income related to
Actonel of euro 75.3 million in the first quarter compared to euro 55.9
million in the prior year, an activity increase of 53.2%.
The vaccines business, Aventis Pasteur, generated sales of euro 366
million, an increase of 13.8% over the first quarter of 2003 on an activity
basis. This growth was derived from strong sales of pediatric vaccines, which
rose 20%, and adult booster vaccines, which advanced 60%, due to higher demand
from the public sector, especially in the U.S. and Canada. Sales in the
international zone were strong, growing 10% over the same period in 2003 due
to higher sales of polio and influenza vaccines. In Europe, sales by the
joint venture Aventis Pasteur MSD, which are not consolidated by Aventis,
reached euro 122 million, an increase of 9% due to the launches of new adult
booster vaccines in the UK and France.
In March, the American Academy of Pediatrics expanded its influenza
immunization recommendations to include healthy children between the ages of
six and 24 months. This is already having an impact on U.S. influenza vaccine
sales for the 2004 flu season.
FIRST-QUARTER PROFITABILITY ANALYSIS - 2004 Group vs. 2003 Core Business
Total revenues (which includes co-promotion income from Actonel and other
prescription drugs) rose 7.1% on activity growth to euro 4.025 billion. Net
sales totaled euro 3.946 billion compared to euro 3.970 billion (up 6.4% on an
activity basis).
Gross margin as a percentage of total revenues decreased to 73.7% in the
first quarter of 2004 from 74.5% in the first quarter of 2003, due mainly to
the negative currency translation impact. On a constant exchange rate basis,
gross margin was at substantially the same level as the prior year.
Selling, general and administrative expenses and other operating income
(expenses) were euro 1.312 billion in the first quarter (32.6% of total
revenues) compared to euro 1.304 billion (32.4% of total revenues) a year
earlier. Excluding currency translation effects, SG&A and other operating
income (expenses) increased 7.0%. Most of the increase came from higher
selling and distribution expenses, especially in the U.S. due to intensive
promotional investments in Lovenox and Lantus as well as higher costs related
to a sales force information systems project aimed at improving effectiveness.
Research and development spending totaled euro 594 million (14.8% of total
revenues) compared to euro 702 million in the first quarter of 2003 (17.4% of
total revenues). Excluding currency translation effects, R&D expenses were
down 9.6% compared to the first quarter of 2003. This decrease was mainly due
to the completion of major studies on Allegra and Ketek in 2003 and for which
a significant amount was expensed in the first quarter of 2003. In addition,
spending on Exubera and Apidra in the first quarter of 2003 was partly offset
by higher development costs related to VEGF Trap (developed in cooperation
with Regeneron Pharmaceuticals, Inc.), Lantus and Lovenox in the first quarter
of 2004.
Restructuring expenses amounted to euro 53 million in the first quarter of
2004 compared to euro 19 million in the year-ago period. This increase
reflects the costs related to the productivity enhancement initiatives
launched in 2003 and 2004 in the prescription drugs business, which relates to
the reorganization of research and development activities, the continued
rationalization of industrial sites and the enhancement of operational
effectiveness in commercial operations.
Equity in earnings of affiliated companies amounted to euro 41 million in
the first quarter of 2004 compared with euro 39 million in the first quarter
of 2003, an increase of 7.9% excluding currency translation effects.
EBITA (operating income and equity in earnings of affiliated companies
before goodwill amortization) was euro 1.048 billion in the first quarter of
2004, versus euro 1.014 billion in the year-earlier period. At constant
exchange rates, EBITA rose by 15.3%. As a percentage of total revenues, the
EBITA margin rose 0.8 percentage points to 26.0% from 25.2% in the year-ago
period.
Miscellaneous non-operating income and expenses -- net amounted to a loss
of euro 38 million in the first quarter of 2004 compared to a loss of euro 77
million in the year-ago period. The first quarter 2004 amount includes
marked-to-market adjustments for an investment in Rhodia.
Income (loss) from discontinued operations (net of income taxes) amounted
to a loss of euro 4 million and relates to the therapeutic proteins business
Aventis Behring, which has been accounted for as a discontinued operation in
the first quarter of 2004 following the completion of its divestiture to CSL
Limited on March 31, 2004.
Net income rose 14.6% to euro 556 million in the first quarter from euro
485 million in the year-earlier quarter, while earnings per share (EPS) rose
16.5% to euro 0.71 from euro 0.61 in the first quarter of 2003. Costs incurred
in relation to the tender offer initiated by Sanofi-Synthelabo impacted EPS
negatively by euro 0.04. Excluding this impact, the EPS growth would have
been 23.5%. Before goodwill amortization, EPS rose 11.7% to euro 0.86 from
euro 0.77 in the year-ago period.
Aventis generated free cash flow of euro 673 million in the first quarter
of 2004 compared to euro 87 million in the year-ago period. Free cash flow
benefited from a reduced demand for industrial working capital, which was euro
253 million compared to euro 471 million in the first quarter in 2003, and
fewer non-recurring cash-inflows. The free cash flow included one-time
payments related to the non-core business (euro 111 million) and the negative
free cash flow provided by Aventis Behring (euro 67 million).
Aventis net debt at the end of March 2004 was euro 2.935 billion,
reflecting a decrease of euro 1.025 billion compared to the end of 2003. The
main cash transactions that led to the reduction were the strong free cash
flow, proceeds received from the divestment of Aventis Behring, which amounted
to euro 440 million and the divestiture of Azmacort for euro 160 million. The
decrease in net debt includes a payment of euro 327 million to Bayer related
to the adjustment of the original purchase price for Aventis CropScience,
which was divested in June 2002.
AVENTIS AND SANOFI TO CREATE LEADING PHARMA GROUP
On April 25, 2004, Aventis and Sanofi-Synthelabo agreed on the terms and
conditions of a substantially improved offer, including a balanced governance
structure for the new group, to be called Sanofi-Aventis. After reviewing
this new offer, the Management Board and the Supervisory Board decided to
recommend it to Aventis shareholders. This decision will pave the way for the
creation of Europe's number one and the world's number three pharmaceuticals
group by sales.
Under the revised offer terms, Sanofi-Synthelabo has offered 0.8333 of a
newly issued Sanofi-Synthelabo ordinary share and cash compensation of euro 20
for each Aventis ordinary share tendered (2003 dividend attached), and 1.6667
newly issued Sanofi-Synthelabo ADSs and a cash compensation of euro 20 for
each Aventis ADS. In the aggregate, the offer consideration consists of 71%
Sanofi-Synthelabo shares and 29% cash and would value one Aventis share at
euro 68.93 based on the unaffected share price of Sanofi-Synthelabo (one
month-average) prior to the launch of their initial offer on January 26, 2004,
which valued Aventis with euro 60.43 per share. The improved offer values
Aventis in total at euro 55.3 billion compared to euro 48.5 billion for the
initial offer, with the entire price increase being offered in cash.
DIVIDEND RECORD AND PAYMENT DATES TO BE RESCHEDULED
As announced on April 26, Aventis has decided to postpone the Annual
General Meeting of Shareholders previously scheduled for May 19. No new date
for this meeting has been scheduled. As a result, the proposed record and
payment dates for the 2003 dividend are no longer valid and will be
rescheduled in accordance with the new date for the AGM. A public
announcement will be made once a new date has been chosen for the AGM.
OUTLOOK
Aventis expects to generate sales activity growth of six to seven percent
in 2004, with earnings per share growth in the mid-teens before defense costs.
About Aventis
Aventis is dedicated to treating and preventing disease by discovering and
developing innovative prescription drugs and human vaccines. In 2003, Aventis
generated sales of euro 16.79 billion, invested euro 2.86 billion in research
and development and employed approximately 69,000 people in its core business.
Aventis corporate headquarters are in Strasbourg, France. For more
information, please visit: http://www.aventis.com. The press releases, IR
presentation and links to live and on-demand audiocasts are available at
http://www.aventis.com/2004Q1.
Conference calls
Patrick Langlois, Vice Chairman and Chief Financial Officer of Aventis
will be available for a media conference call at 9:00 a.m. CET. An analysts
conference call will follow at 10:00 a.m. and 16:30 p.m. CET. The press
releases and a live and replay webcast of the press and analyst conference
calls will be available on the Internet at: http://www.aventis.com/2004Q1.
Definition of Basic Earnings Per Share (EPS) before goodwill amortization:
Basic EPS before goodwill amortization is an unaudited non-GAAP financial
measure that we define as our consolidated net income excluding goodwill
amortization divided by the unaudited number of our shares outstanding (at
year end). We have included basic EPS before goodwill amortization in
addition to the corresponding GAAP measure EPS which includes non-cash charges
for goodwill amortization, because we consider this non-GAAP measurement to
more closely reflect the underlying business performance of our operations.
Definition of EBITA: EBITA is an unaudited non-GAAP financial measure
that we define as operating income and equity in earnings of affiliated
companies before goodwill amortization. We have included EBITA in addition to
the corresponding GAAP measure operating income, which includes non-cash
charges for goodwill amortization because we consider this non-GAAP
measurement to more closely reflect the underlying business performance of our
operations. Additionally, we use this measure to assess our financial
performance
Definition of Free Cash Flow: Free Cash Flow is defined as Cash from
operational activities net of capital expenditures.
Statements in this news release containing projections or estimates of
revenues, income, earnings per share, capital expenditures, capital structure,
or other financial items; plans and objectives relating to future operations,
products, or services; future economic performance; or assumptions underlying
or relating to any such statements, are forward-looking statements subject to
risks and uncertainties. Actual results could differ materially depending on
factors such as the timing and effects of regulatory actions, the results of
clinical trials, the company's relative success developing and gaining market
acceptance for new products, the outcome of significant litigation, and the
effectiveness of patent protection. Additional information regarding risks
and uncertainties is set forth in the current Annual Report on Form 20-F of
Aventis on file with the Securities and Exchange Commission and in the current
Annual Report -- "Document de Reference" -- on file with the "Autorite des
marches financiers" in France.
Aventis shareholders are urged to read Aventis'
Solicitation/Recommendation Statement on Schedule 14D-9 filed by Aventis with
the Securities and Exchange Commission, as it contains important information.
The Solicitation/Recommendation Statement and other public filings made from
time to time by Aventis with the Securities and Exchange Commission are
available without charge from the SEC's website at http://www.sec.gov.
Brand names appearing in italics throughout this document are trademarks
of Aventis, and/or its affiliates, with the exception of trademarks that may
be used under license by Aventis and/or its affiliates, such as Actonel, a
trademark of Procter & Gamble Pharmaceuticals; Alvesco, a trademark of ALTANA
Pharma AG; Genasense, a trademark of Genta Inc.
Pursuant to Article 7 of the COB Regulation no. 2002-04, this press
release was transmitted to the Autorite des marches financiers before its
release.
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