My name's Alec Stranahan. I'm a Senior Biotech Analyst here at Bank of America covering CG Oncology. Thanks for joining us for the session with CG and for joining the 2026 B of A Healthcare Conference. I'm pleased to be joined by Arthur Kuan, the Chairman and Chief Executive Officer of CG, and Ambaw Bellete, President & Chief Operating Officer. Thanks for being here, guys. Thank you. Thanks for having us. Yeah. Great. Well, maybe, just to tee up the conversation, Arthur Kuan, you guys had an update with your 1Q last week. Maybe you can just sort of run through at a high level, sort of what was new from that, and sort of what investors should be paying attention to over the next few months. Sure. As many of you know, we've been initiated our rolling BLA submission for our first indication last year. This year we're basically committing to complete the BLA submission by the fourth quarter of this year, this is in the BCG unresponsive high-risk NMIBC space. That's one of the key highlights of narrowing that guidance. The second update, you know, the guidance remains the same that we anticipate that in the first half of this year, our top-line data from the PIVOT-006 trial could potentially be available. We do continue to emphasize that it is an event-based trial, you know, it's always hard to pinpoint exactly when that will occur. As of now, we, you know, continue to maintain that guidance. Just later this week, we're also very pleased to, you know, present data from our CORE-008 Cohort CX trial. This is a trial that's studying creto plus gemcitabine in a combination in BCG exposed as well as BCG unresponsive patients. We have reason to believe that the combination could potentially be, you know, additive, and some of the early cut of that data is now available on the abstract. At AUA, we're gonna be presenting the full data set, you know, of the early initial responses. For that, you know, I think we can talk more about that later, but I think that's definitely one to look out for as in the past we've already shown that creto on its own can really have a robust response rate, both in CR as well as duration of response. Now adding on another intravesical agent that urologists are highly familiar with, we think that could potentially have, you know, a benefit to kind of shifting paradigm. Okay. Obviously a lot going on with the company, and a lot of different subtypes within Non-Muscle Invasive Bladder Cancer. I guess, you know, when you think about PIVOT-006, the cohort CX from CORE-008, the rolling BLA on track for completion this year, I guess, how do you sort of, manage sequencing of those readouts against the BLA completion? Just thinking if you've got the intermediate-risk data in hand, would a, you know, a strong result here maybe change the way that you approach your submission in the unresponsive setting? Yeah. As we've shared previously, both of those BLAs will have a lot of shared modules. For example, the manufacturing module will be shared across those two BLAs. Our current plan is still to complete the first BLA before sequentially filing a second BLA on PIVOT-006. We've also previously stated that we do need to wait for the 12-month response rate for all patients in PIVOT-006. Then there's of course the data cleanup and, you know, writing up the modules and preparing the package. As of now, we still anticipate that the PIVOT-006 BLA will be completed in 2027. Okay. Okay. Maybe we can go one by one, just on the BOND-003 BLA. This is in the high-risk BCG refractory population. You know, I guess in terms of what's left on the rolling submission, and sort of how we pair this with FDA's new CMC flexibility guidance, I think you've said in the past that this could maybe affect your sort of timeline calculus. I guess, where do the remaining gating items sit? Is it sort of on the facility inspection readiness, the CMC package, or anything about the clinical data itself? Sure. I think it's important to note that because creto has breakthrough therapy designation, BTD, it does allow us to have more frequent interaction with the agency. I think the press release from the FDA in January suggests that there is this willingness and openness for the FDA to rethink about manufacturing requirements for sponsors in the cell and gene therapy category, right? That's more of a general, kind of broad-based, you know, audience. I think in our recent communications with the FDA, you know, we basically got the alignment and clarity that's specific and relevant to our program, and with that, we're able to narrow down our BLA completion timing. You pointed out facility, you know, inspection readiness activities. That continues to be a key focus for us. In this CGT space, there's been a lot of manufacturing-related, kind of inspection, you know, issues. We're ultra-focused on that, especially around the facility that we just acquired last year that specializes in fill and finish. That's an area that we put a lot of attention to, but now that we have, you know, visibility into what is necessary. We believe everything is going on track and according to plan. Okay. The alignment with the FDA, would you characterize that as kind of in line with your expectations and what you were already kind of working towards? Or were there additional or less obligation from those? Yeah. I can't go into the play-by-play, but in general it's, you know, an alignment that's provided more clarity for us. You know, I think it's overall very helpful. Okay. Maybe when we think about the competitive landscape in the high-risk BCG unresponsive, your 24-month landmark CR data and kind of the durability piece is best in class from what we've seen versus J&J and Amgen and others. I guess what do you expect based on the ANKTIVA label would be the on-label sort of efficacy metrics? I think they had 12-month kind of CR rate there. Do you think that would make a competitive label for you? How would you sort of position that vis-a-vis the long-term data that you've acquired from a commercial rollout perspective? Yeah. Last year when that label became available, referring to the INLEXZO label, I think at the time of the initiation of our rolling BLA submission, we've, you know, already guided that we want to have a differentiated label on what could be a more durable response, since we have that benefit given our MOA that could potentially lead to a longer tail, and we've already shown that. I think anything beyond that 12-month durability label that, you know, INLEXZO has would be a great upside for us. I do think that in the commercial setting that's gonna play a role because we have, you know, something that the physicians and patients ultimately really care about, right? Which is that durability. That's a key component. You know, of course, beyond that, I think our strength in our AE profile continues to be a differentiation overall, which we can get into more details later. Yeah. Yeah. Well, maybe we can talk about sort of the commercial build-out. Sure. When does this fall into place? I think you've described in the past maybe 75 field reps could cover, you know, 300 urology network sites, which is the majority of the volumes potentially. I guess how does this sort of compare against what J&J is building out for INLEXZO? Is there maybe an advantage to having them build out the initial market and having you come in one year or so later? Yeah, I mean, it's a good question. I think the way we see it is we've really tracked all the launches within this space, not just the INLEXZO launch. We've really seen where they've hit the mark in terms of physicians and patients, where perhaps there's still some questions outstanding. I think them really coming into the marketplace, we've seen how they've rolled out into the marketplace, how they've engaged accounts, which accounts they've engaged, where they're being successful, where they're not being successful. We're taking all of that and actually incorporating it into our launch strategy. Our launch team has been in place for a while now, our team of our field medical team, for example, has been out there engaging and having scientific dialogue and exchange with our future commercial customers now 18 months already, and we'll continue to do that as we head into the road to launch. The second piece I would say is, we also have a team of health system directors that are calling on the network leadership, for example, at those network sites that you mentioned, that are engaged and having dialogue and doing a lot of account profiling activities and understanding the nuances of the buying process in itself. That's what we're learning, also, is increasing. We've seen it with every incremental launch that bodes well when we're coming into that launch into that same similar optimal go-to-market strategy, and that continues to inform us of what to actually get on board. Those will be the first mover places that I think really identifying the types of patients that are newly diagnosed. Are there patients that are being switched from other therapies and so on? What are those types of patients? Because of cretostimogene's clinical data and safety profile, we think all of those are potential eligible patients. They're first right after BCG. The patient that may have failed TAR-200, the patient that may have failed Gem or gemcitabine, the patient that may have failed pembrolizumab, those are all patients that'll be eligible patients for cretostimogene. I guess when you think about the targeted rollout, you obviously, per label, it's expected that you'd have to step through BCG. Does that limit the potential prescriber set that you think about regional versus academic? Is there any, I guess, logistical considerations, especially when we think about kind of the exposed population as a TAM expander? Yeah. I mean, I would say the following: I don't think it, you know, whether it's in large academic setting or in the community setting, that really is a differentiated approach. We think there are eligible patients in the community we'll be able to go after in a similar fashion in the academic setting. In fact, some of the first movers were really more in the community setting just because they don't have the hurdle rate of a formulary, for example, getting through the various committees at a hospital. Therefore, they tend to be the first movers in new therapies, and that would be a target place for us to go after. Mind you also, a lot of them have already gained clinical experience with cretostimogene, for example, in the intermediate-risk trial, in the Cohort CX trial, or even in the BOND 3 trial, or even in our expanded access program trial. We've targeted really the top centers around the country for this deployment just because they see the patients that we're going after for those trials in itself. That in itself really creates an opportunity because there's already a pent-up demand already existing within those centers and facilities, and also clinical experience on how to adapt it into their clinical practice and armamentarium of treatment for their patients. Okay, great. That makes a lot of sense. Maybe we can just touch on the safety differentiation, versus TAR-200 or INLEXZO, which requires repeated cystoscope-based instrumentation. It's pretty invasive. We hear about, you know, pressure on the bladder from the pretzel. How does this sort of translate into a real-world competitive advantage for creto, and how are you framing that contrast in your physician discussion? Yeah, I mean, I think in terms of the physician dialogue and discussion is, you know, TAR-200 procedure is a cystoscopic procedure that actually patients have to undergo every three months. They're having to actually increase the number of cystoscopic examinations they're having to undergo. That's an invasive procedure. There's the pain from that procedure. There's the actual throughput of the account, the ability to actually do those types of procedures is an important element of the adoption of this type of therapy within the practice versus cretostimogene, which is very similar to the BCG experience they went through. It's intravesically delivered by a nurse or medical assistant. It is done in a room that doesn't require special equipment. You need a catheter that is placed into the patient's bladder, you know, DDM, followed by cretostimogene for about an hour, 45 minutes to an hour. It's truly a differentiated procedure versus a interventional procedure that may require a physician to actually administer the procedure, which in many cases it does, especially the removal. There are two aspects of this that you have to consider. It's not just the placement, but the subsequent removal requires kind of that two step. You're going in, grasping into a patient's bladder that's under local anesthesia, using a, you know, grasping device to grasp the old device out of a patient's bladder, pull that out, and put a new one in. There's two times that you're going in and out of that patient's bladder in itself. That, you know, and then you need a full kind of setup, camera system setup, and those types of things to do it. The requirement even to conduct the procedure in itself, that's an aspect that's kind of one of the hurdle rates in terms of that procedure. Okay. I guess, two potential points of pushback that I have heard is that with the pretzel, the physicians get to bill for the procedure as well, versus creto. That is one. The second is around the logistics of getting cretostimogene to patients. Is this still sort of a just-in-time? How do you think about five-step versus two-step on the initial label? Sure. You know, again, good question. Just getting back into the practice economics that you mentioned earlier, you know, most of the economics on this product are on the drug side of the equation. Most of really what a practice earns is really the ASP plus 6 or ASP plus 4.3, you know, depending on the setting or what they would get from their private payer. That's where most of the economics is. In terms of actual admin, the admin side of the picture when you're looking at total reimbursements, or there's admin, there's drug, and there's final reimbursement. That's how reimbursement would work in this particular setting. When you're looking at the admin part, you're looking at about a $100 differential potentially in many instances. Again, most of the economics is on the drug. You know, TAR-200 is $690,000 per year or $69,000 a dose plus 6%. That's where the economics is. It's not on the $100 or $150. That's on that aspect of it. In terms of the actual in-practice adoption, so from a process of adoption perspective, you know, we intend to deliver on a just-in-time basis to centers, but there's a lot of flexibility with that. Once you receive the box, you can put it in a normal refrigerator for, you know, four weeks plus, okay? A normal refrigerator. You can leave it in the box till the patient comes for up to five days, and then take it out of the box. It takes about 15-20 minutes to prep and administer to a patient. Really, it does give you a lot of flexibility. Then the two step process, which we've shown data on the two step versus five step process, we think that that is going to be the process that's going to be in practice. We aim to have it in our label, but we know that majority of patients to date have actually undergone the two step process versus the five step process. For example, all of the patients in cohort CX, all of the patients in PIVOT-006, all underwent a two step process versus a five step process. There's a tremendous amount of body of clinical experience in the adoption of the two step process within the clinical practice setting. Okay, great. Well, I wanna shift gears. I'm gonna say pivot to PIVOT-006. Okay. This is your intermediate risk, NMIBC, phase III. First randomized phase III in this setting and enrolled nearly nine months ahead of schedule, with top line expected, and reiterated for the first half, so in the coming months. What I guess constitutes the clinically meaningful result here? You know, what is sort of the minimum RFS bar versus the result that lets you describe creto's kind of standard of care in this setting? Sure. Just to paint the picture, there currently is no FDA-approved therapy as an adjuvant for patients with IR-NMIBC really in the U.S. right now. You know, based on our conversations with physicians, really we've been very consistent that a 30% relative risk reduction is, you know, sort of the clinically meaningful minimum bar. We've not said too much about our own kind of internal expectations, but that's what we've been telling investors that that is a number to, you know, minimally that we, you know, would have to achieve. Yeah. Again, once you have an FDA-approved product in this space, it's really our chance to then shape and build that market, right? This is a chance where we're gonna be at least 18 to 24 months ahead of the next competitor. That really unlocks a huge population that's gonna be on label. Okay. I guess, you know, how is the event rate sort of been tracking against your expectations? What does that sort of tell you about the control arm, and is there maybe a good historical comparator? Obviously, cross-trial comparisons, carry their own caveats, but in terms of, control arm, is it like the SWOG study or ATLAS that you would think about? Yeah, you know, when it comes to the control arm, you know, we get that question a lot. I think the hard part is, no one has really enrolled the AUA/SUO definition of IR-NMIBC. I think we're one of the few companies who are the first to do this. We can only find, you know, proxies out there, and we've been pointing to the ATLAS, which is the UroGen ATLAS trial that had a control arm with just TURBT. Again, it's not perfect because they didn't allow for a single-dose perioperative chemo. Again, they've enrolled primarily ex-U.S. With those caveats, I think we're kind of maintaining our kind of view on this, that the control should be in that 50% range, around 12 to 15 months would be our own expectation. Again, there are a lot of caveats to that. Yeah. I think they had some difference in enrollment between, like, the T1 and just patients as well. Yeah. They excluded the high-grade patients as well, which we have in our trial. Yeah. Yeah. Maybe a little bit more, aggressive patient group as well. Just on the surface of it, 'cause they went for a low-grade IR, ex-U.S., I think in a U.S. population that includes high-grade IR patients, that could potentially be different. Okay. I guess have you guys given much thought in terms of how you're gonna update the markets once the study does read out? Would it be sort of a top line with a medical meeting for the full data? I think, again, because it's event-driven, obviously once we're ready to present that information, we'll promptly disclose it. You know, should it, you know, fall around a conference, that'll be great. If not, there will be a standalone release on that. Certainly, investors can expect the primary endpoint be reported. Beyond that, at least the median length of follow-up on these patients. Okay. You said even with the top line in hand, it'll obviously be 12-month RFS that you'll be submitting on. Even if you step through the event gating. Yeah. 12-month will come later. Yeah. It might be actually a few months later where we see the full. Sure. Correct. How everything's submitting. Okay. Okay. you know, when you think about, the sequential BLAs, how are you thinking about the pricing framework in intermediate-risk versus BCG unresponsive? I guess there could be maybe different dosing schedules as well. That is true. In BCG unresponsive disease, it's about 30 doses across three years. 18 the first year, obviously second year and third year. That's in the BCG unresponsive setting. In the intermediate-risk setting, it's 14 doses, just one year worth of therapy. The pricing will be based on a per dose basis, and this is an ASP product, we really are not looking at it You know, we're looking at it as a per dose, per indication, I would say, but not really as a totality for one indication. It's gonna be X price and Y price. On a dose basis itself, it will be inherently lower, intermediate-risk versus BCG unresponsive disease, I would say. Okay. Yeah. Okay. That's helpful. I wanna ask now about your upcoming presentations at AUA. Cohort CX, this is sort of your entry into the larger BCG-exposed population. What should we sort of expect at AUA in terms of, you know, patient number, follow-up, any sort of framing provide? Yeah. That study enrolled a little bit north of 50 patients, and initially, we set out to enroll just the BCG-exposed patients, but we ended up with some patients who are also BCG unresponsive. We'll probably not be breaking that out, but we will be commenting on the responses in those two categories. Really, one of the objectives of the study is to figure out, you know, whether creto plus gem should be given concurrently or sequentially? There will be more color on that beyond what the abstract has shown. I think one of the key things, of course, is to look at the CIS data, which looks at complete response rate at early time points. That information will be, you know, shared later this week. Once we have that information, I think it's helpful to think about, you know, how does that kind of fit into this landscape? You know, can we put that into the right context? Our view is that the exposed market is 50,000 patients, which is roughly twice as large as our initial label. That is a population that currently has nothing on the label right now, right? I think, you know, following that data as well as long-term durability results, which I may call it 12 months from the initial data, that's gonna be available later in the year. Once we have that full picture, I think that's a direction that's very exciting for us to think about. Okay. you know, I guess what sort of efficacy signal would sort of give you conviction, assuming that you would need to run a larger randomized phase III in this setting? I think that's what J&J's doing as well, I guess. What would you wanna see to make that commitment? You know, I guess, how do you think about gemcitabine as the combination partner versus other agents? I think gem is something that, you know, water-soluble urologists are highly familiar with it, giving it as monotherapy, right? I think when we think about the bar for success in this category, first of all, when you think about BCG exposed and BCG unresponsive, it's a very fine line between the two, right? One of them is it recurrence within 12 months of your last BCG dose or after 12 months of your last BCG dose? You can see that the cut was made somewhat arbitrarily, right? We do, you know, think about, you know, kind of on the, on the worst cases, you gotta definitely be better than the agents in the BCG unresponsive monotherapy setting, right? That's one way to think about it. We do think that having two agents that could be given intravesically is really the key advantage here. With J&J's drug, there's only currently a monotherapy potential. They're really testing, you know, a longer duration gem versus gem, right, in their trial. I think we have an opportunity to test a combination approach, which, you know, hopefully will show, you know, a better response. Yeah. I guess on the topic of combinations, we've seen some, I guess, mixed data for the IO combination in terms of not really moving the needle as much as people would have thought in terms of efficacy. How do you think about the creto pembro potential combo, and which setting would that be most apt for? Sure. This was a study called CORE-001. We tested this in 35 patients. What you can see, at the time, we didn't know how good creto mono was going to be, right. The combo showed about a 50% or so two year CR rate, which is excellent. Now that we have creto mono data in hand, creto itself can do 42% at two years. Pembro on its own has about a 9% CR rate at two years, right. You can see that it's roughly additive, but then you carry all the systemic side effects with pembrolizumab. I think when it comes to an immune checkpoint inhibitor for this patient population, the bar is very high, right? Some other, you know, big pharma have tested PD-1 plus BCG. Some have met its endpoint, some haven't. Then, you know, for example, Pfizer has decided not to pursue, you know, their filing with that combination, right? The bar is definitely high when it comes to a checkpoint, which is why we wanna stay focused on just, you know, assets that could be combined and given intravesically in the urology clinic. Yeah. Okay. That makes sense. Maybe in the last minute or so, I wanna sort of end on, you know, resources at the company's disposal, how you sort of scale manufacturing both in the U.S. and how you're gonna approach the European infrastructure as well. Do you wanna do that yourself or a partner? What's sort of the calculus around sort of the capital allocation strategy? Sure. When it comes to manufacturing, you know, we previously have mentioned that at our current scale and capacity, we can supply up to 50,000 vials of cretos a year right now. We have been making plans and investments in this space really since the time of our IPO. That progress is ongoing, and it's going really well. The goal is eventually to scale that up 10x, right? Once we get there, I think, you know, building on the fact that we have a process that's highly robust and scalable, so that allows us to move this pretty rapidly around kind of different manufacturing network sites, right, that we're continuing to invest and expanding into. You know, we continue to think about how we can supply a larger market, which we're about to unlock, hopefully, with the Intermediate-Risk trial. Yeah. Perfect. Well, I think with that, we're right at time, so we'll have to end it there. Look forward to unpacking this more at our dinner tonight. Arthur, Ambaw, thank you so much for the great discussion. Thank you for having us. Thank everyone for attending. Thank you. Thank you for having us. Thanks. [Break] John Thomas, Vice Chairman from Healthpeak. We're going to talk a little bit about all the things that have been going on in the company. I would say you've been very busy. It's been a busy year, aren't we? You've been busy a couple of years is probably how I would characterize it here. You think about the transition in biopharma, you think about the merger with DOC, and then you did a big transaction this year. I think it's probably helpful to start with the most recent transaction, the carve-out of Janus into separate publicly traded company. Yep. It's interesting, I think, to for people here to understand why you did that, what the goals were, what led you to make that decision, and maybe comment a little bit on how you think about that business going forward. Yep. For those of you Again, I lost a bet. I thought we'd have five or less. We got six, which is great. We appreciate you taking the time. Now we got seven. We're setting a record. I paid Josh to come, though. We're one of the few real estate investment trusts that gets invited to this conference, and I always find it valuable. Healthpeak is a real estate investment trust. We invest in, counting Janus, and we'll talk about Janus in a minute, but in three classes of real estate. Outpatient medical buildings is our largest business, about 60% of our revenue. Lab life science buildings are about 30%, and then 10% with senior housing. Over the last couple of years, we are the largest owner of outpatient medical facilities in the country. HCA is our largest tenant. CommonSpirit is our second-largest. 70% of that business is leased to investment-grade health systems, so just very stable business. We collected 99% of our rent during COVID. Even though we used to be called medical office during COVID, we collect 99% of our rent. Our tenants always were in the buildings every day. We had to stop using the word office because of work from home and Wall Street's perception of office. When you say outpatient medical, that's that business. Very stable. 22 years of NOI growth, every year for the last 22 years. It's only one of two classes of real estate that can say that in commercial real estate. Lab business is 30% of our business. We're in the core markets in Cambridge, South San Francisco, and San Diego. About 12 million sq ft. We're the second-largest, we're on the verge of becoming the largest owner of that type of real estate. Great real estate for years, which causes others to get into the business on a spec basis. There was overbuilding after COVID. You know, fortunately, at Healthpeak, we made the decision four years ago to quit building any new space. Others did not stop building and just created a glut in supply. Lab's been affected by that excess supply. At the same time, Trump administration hasn't been helpful, at least from a sentiment perspective, fighting with universities over NIH grants, things like that. We've actually lost occupancy in the last two years in the lab business. We were 90% occupied three years ago. Today, we're 80% occupied. We've had two positive quarters in a row of net absorption. We believe we've either seen the bottom or we're close to the bottom and heading in the right direction. I said 10% of our business was senior housing. On the combined basis, those three businesses, our cash flow multiple embedded in our stock price was only about a 10. Historically, it's been more like a 20. While lab is only 30% of our business, our entire company was trading as if it was 100% lab. Outpatient medical on a standalone basis trades at a 14-15 these days. Senior housing trades at a in some REITs trades at a 30, 35, and 40 times multiple. Give Gray the credit. Last year, Gray and I were playing golf, and we were lamenting our stock price more than we were our golf game, which is pretty bad as well. Yeah. It gave us more time to talk about what the hell do we do to kind of create value. We couldn't grow the senior housing business because at a 10 multiple, we couldn't compete for assets. Couldn't grow outpatient medical or lab for the same reasons. Although we could sell outpatient medical, which is a very liquid market, and reinvest that capital accretively in lab, but not really senior housing. Greg came up with the idea of let's separate the senior housing from the other two businesses, and then IPO a portion of that. Instead of just spinning it all off at a low valuation, let's IPO part, let the public market value that business as a standalone business, and then see where we go from there. Fortunately, we completed that. We started that process in October. Worked very hard. The SEC was pretty slow in response, but finally got there and got that launched in March. IPO'd at $20. It was 15 times oversubscribed. We upsized it a little bit. Today it's trading, I don't know what I haven't looked today, but $27 or $28. Yeah. It's been a pretty good run for the last couple of months. You know, again, the pipeline, the IPO was all primary shares, so we raised about $900 million of new fresh capital for that, for just that business. We set it up with very little debt, so it's got a tremendous amount of opportunity both with IPO proceeds and debt capacity to grow that business very quickly and pretty dramatically. Yeah We took a 10 multiple business, turned it into a 30 multiple, you know, separate business. We're still managing both REITs, as one company. Healthpeak is starting to see the benefit of a asset that we own 80% of trading at a 30 multiple. Yeah, exactly. With all the opportunity for upside growth. Really a genius strategy that Bank of America. Don't mean to be a Bank of America person. Well, they're great. That's not why we're here. It's been fantastic. Yeah. We're starting to see the benefit on the Healthpeak side of the, of the stock price. Again, that's part of the ultimate goal. I think with Janus, it might be helpful just for a minute to talk about some of the unique characteristics, 'cause it's a little bit different, right? Yeah. It's a 100% management contract. There's no leases in it. It's CCRC, which is unusual. You've got this core base of assets with an attractive growth profile, and then an opportunity to build on top of that. Maybe just talk a little bit about the, what made it attractive other than the fact that it was seniors housing, some of the unique aspects of it, which are hopefully helping to drive what so far has been a good stock price performance. Senior housing, unlike outpatient medical, which thrived in COVID, senior housing was really devastated by COVID. You know, you know, in that business, you know, kind of average tenancy or occupancy or, well, weighted average length of tenure is about, you know, 18 months to two years generally across that industry. You're constantly having to replace tenants who, in most cases, move on to the next stage of life or the afterlife. It's a concept business, and you couldn't replenish beds as rooms became available during COVID, and you couldn't do showings, you couldn't do all the things necessary. They were hotbeds for COVID. That halted any new growth, created a huge expense cost issue for that business. It really was the, you know, business was dug in a hole. As I like to say, I didn't realize I was supposed to kill the outpatient business during COVID. Yeah. Cause we thrived, but senior housing really suffered. What that created was an opportunity for, once everything got back to normal, huge growth opportunity, just cash flow in your, in existing facilities. All development stopped. A lot of development projects in the senior housing world, almost all of them are, you know, done by private developers. A lot of bankruptcies, a lot of failures. There's no private debt capacity or equity available to build new buildings. It created this silver tsunami demand, supply-demand dynamic that over the last five years has really played out. That's what's happened with Welltower and Ventas and others that are more in the senior, pure play senior business. Janus is unique in that we're 100%, RIDEA, SHOP. We own the operating business. We can't manage it under the tax laws. We've partnered with the best management companies we believe, you know, in the senior housing space who have scale and bring the benefits of that scale to the management side. They grow NOI or revenue per bed, if you will, 10%-12% quarter after quarter after quarter. That's why you get that kind of 30 multiple on the. Yeah. On that type of cash flow. We still have this huge supply-demand imbalance. We will start seeing more development, but Janus is in a good position to help fuel that development. The other thing unique about nobody, no other public company is 100% RIDEA and SHOP. That's why we have a much better growth profile. RIDEA and SHOP, for those who aren't familiar with. Absolutely. It just means that you. Yeah. Participate after paying a management fee fully in the operational performance. Right. Up and down, but today it's largely up. Yeah. As opposed to a traditional net lease REIT, you've got significant growth associated with, or Janus has significant growth associated with that. What Greg's saying is if you own both sides of the operations and the real estate, you're getting Today 10%-15% quarter after quarter after quarter growth. If you just are a landlord to that operator or to that owner, you're getting 3% cash flow, you know, growth quarter after quarter. It's steady, but it's the difference between 3% and, you know, multiple teens. Janus is 100%, has that opportunity for that better upside growth, starting off at an asset base of $6 billion and with $1 billion of cash to go out and redeploy. That pipeline is well beyond that capacity today. The growth potential, the denominator's a lot smaller. We can do the same amount of business in a quarter that Welltower or Ventas does, and it's, you know, barely moves the needle for them. It may be a, you know, 100% growth for us. You know, and on an annual basis, if you think about it that way. A lot of growth opportunity, a lot of great potential. As the development cycle picks up, we're in a great position to help fund that development. Gray mentioned CCRCs. If you think about these are big campuses, and we call them life plans, kind of a better use of term. Yeah. Where you move in an independent living setting, and then you stay, and then you have the right to move into the assisted living once you need, you know, more help with your daily activities. Then there is some private pay, in a nursing care as well. As you move through this, you know, the last stages of life, you can stay on that one campus and the occupancy and the demand for that space is very high and, you know, continues to grow. That's where some of these growth opportunities are coming from as well because we own land around these campuses, and we can add more developments or new space to those buildings, to those campuses themselves. The M&A opportunity going forward, so you've got a good base of assets today. Acquisition pipeline, obviously, you raised $900 million in cash and put it on the balance sheet for M&A. Right. Which signals an intention to grow. Maybe talk about what you think that looks like? Yeah. I mean, our pipeline for growth is well beyond the cash available right now. Again, but we have a lot of debt capacity, the potential for growth this year, doubling, tripling the size of that business in the next, say, two years. There's a huge opportunity to achieve that kind of growth. Janus is, while we're, you know, kind of two REITs under one management team, capital decisions, allocation decisions, are all made, you know, by the Janus board, which is independent from the Healthpeak board. We want to really create that separateness. Healthpeak's alignment, we own 80% of that company, we want that growth, we want that stock price to go as strong as it can. Separately, hopefully, that embedded value shows up, and we're starting to see signs of that into the DOC side of the business of Healthpeak. If that helps generate a better cost of capital there, then we can get back on a more traditional growth cycle in the outpatient business and the lab business. Yeah. You own 80%. That's roughly $5 billion, give or take. Right. Your market cap at the parent company is just $11 or $12 today? Yeah, $12 billion. $12 billion today. That's pretty significant. How do you think about that going forward? Is the plan to hold it and watch it grow? Will you use that to fund other operations? Do you need funding? We'll just come to your other businesses in a minute. Yeah. Is it a source of funding for that? Yeah. I think at some point in the future, it's very likely, again, the growth prospects in the current environment for the next couple of years is so much stronger on the Janus side. Our $12 billion in the market cap, you know, half of which is today the stock value of Janus. The two businesses, you know, could easily become, you know, kinda equal weight over the next couple of years. It creates an opportunity for either, you know, spinning off the rest of that stock to our shareholders, monetizing that stock to fund Healthpeak operations. At some point, they become two independently operating businesses. At that point, just what's a good use of capital, or is it better to share that with our shareholders? I think, you know, the board will work through those decisions as those opportunities arise. That's been a huge success so far, and still early days. Maybe we talk about the largest business you have, the outpatient business. You touched on it briefly, but how do you see that? I guess there are a couple things. You did a large merger, did some asset rationalization. How do you think about your portfolio going forward? Are you happy with it? Are you still managing it? Then how do you think about acquisitions in that sector today, given, you know, your cost of capital? Yeah. I guess just the fundamental business, stability today. Yeah. Would be the last question. As Gray said on the biggest business we have is outpatient medical. We're the largest owner of those facilities. Think about where you go to the doctor, and more and more care is coming out of the hospital and moving into the outpatient setting. Today, five years ago, you needed a total joint replacement, you went to the hospital, you stayed a couple of days. Today, you go to an outpatient facility, and by 5:00 PM that afternoon, you're kicked out, and you're going home. It's a much better setting, much cleaner, safer, better place to get that joint replaced. And getting you up and on that joint or moving your shoulder, the sooner the better. It's just a better care model. It's also better for the payers, better for you from an outpatient, you know, cost perspective. It's really high margin revenue for the hospital. Even though it's moving out of the hospital setting, it's a much lower cost setting. The growth there has been tremendous. As we look to our client base, and again, what's evolved for us is we historically just outsourced the management, the property management, just day-to-day, you know, care of the buildings. With that much scale, we have 40 million sq ft. With that much scale, particularly in bigger markets, we're able to internalize that. It's a nice cash flow pickup, but it gets us closer to our tenants, closer to the hospitals and the physicians and the decision makers for where they rent space and where they need new space, who's gonna finance and own the development of that space. Right now, private markets value outpatient medical buildings at a more attractive valuation than they are sitting inside our public company. We can sell those assets today, pruning the portfolio just to make it better, and using that capital to align with the bigger tenants, the bigger markets where we wanna grow. Our biggest markets are Dallas, Houston, Atlanta, Phoenix, Minneapolis, Seattle. We're growing in really all of those markets, and it's hospitals and physicians aligned with those hospitals making decisions, you know, where they wanna locate. Again, it's away from and outside of the traditional hospital setting, much more convenient for patients, much more convenient for physicians in their lifestyle, and it's a lower cost for UnitedHealthcare and Medicare. Everybody wants this care to be done in an outpatient setting. We can sell outpatient medical, you know, at a price and redeploy that capital at a better yield, you know, for our shareholders. We've got several hundred million dollars under construction right now, and these are all pre-leased buildings to investment-grade health systems. Very little, very low risk. The cost of that construction, everybody knows, has gone up. These are decisions made by health systems where the margin of the business they're gonna put in those buildings, they can afford the higher rents. One of the big trends in healthcare over the last decade has been this moving procedures out of the core hospital building into adjacent facilities and improving the overall patient experience. If you're building new facilities, is the footprint new? Are you different amenities? Are you different? It's obviously a different location. Yeah. Still on the hospital campus primarily or increasingly off hospital campus? Maybe just talk a little bit about how you're facilitating the, you know, the operations of the HCAs and the CommonSpirit Health as well. That's right. That's right. That's right. Think about it. The average hospital in the United States is 70 years old. It's not very well planned from the beginning and very cumbersome to go to get your care at a hospital. Take your wife, take your mother, take your father, you know, take your child to go to, you know, a big cumbersome, you know, hospital, particularly in a big market. You can go drive up to a valet at a building with a nice parking lot, a nice amenity. Might have a Starbucks, might have, you know, a Chick-fil-A next door or something like that, which generates more cardiac business for us. Hospitals are thinking about they've gotta have a more consumer mindset. They gotta be more convenient for the patient. They gotta be more convenient for the patient's family. They gotta have some amenities, particularly for, you know, where surgeries are being performed. Almost every building we're building today for health systems has some kind of surgical operation to it. Beginning three years ago, CMS and insurers started looking at cardiac like they did orthopedics and saying, "We can move more cardiac care out of a hospital into an outpatient setting as well." We're seeing more and more health systems wanting us to build facilities to move cardiac care out as well. If you're having cardiac care, you probably wanna be closer to the hospital. Clinically, that's the mindset. Buildings we're building on campus or really adjacent to hospital campuses may have either probably have some kind of oncology, cancer care or cardiac care or both closer to the hospital. Orthopedic care doesn't really need to be necessarily next to the hospital. Again, that tends to be in the, you know, better demographic suburbs where it's convenient for, again, both the patient and the physician. I want to pivot to labs in a second, but we have a question in the audience before we go there. Do you guys own or file for the certificate of need, or does that go with the hospital? Do you like to operate in the states you've operated in, and why? Yeah, that's a great question. The hospitals own the CONs. Sometimes the hospital, the CON is unique to a location. If we own the building there, the hospital can't move the CON, so it creates an alignment between the two. CONs are disappearing across the country. They really have. They made sense in the sixties when the government actually financed construction, even if it was somebody else owned the building. That's the whole reason CONs came about is to just avoid the government just continually paying for more buildings, whether or not the community needed it or not. Today, the government doesn't, you know, reimburse that as part of. Doesn't reimburse the capital to build buildings, so it's going away. Hospitals in states with CONs like it because it prevents competition. States like Texas, there, where there is no CON, Arizona, there's no CON, California, there's no CON, it's a free market as far as where hospitals compete, build buildings, and go from there. Georgia's kind of in a blended state and moving away from the CON. Florida has moved away from CON, so it won't surprise you. Plus, people are moving to Florida and places like Georgia and Texas, you know, away from California and other markets. It's Most of our new construction is in states without a CON. The one exception is Georgia, where it's just gotten much more liberal. Northside Hospital are a big client of ours. We're building a lot of buildings for them right now, as they grow and expand, you know, kind of away from downtown Atlanta, you know, into the suburbs with the growth there. Again, Florida's gotten rid of it, so we'll see more and more development there. It's where the population, particularly the aging population, is more common is where we're building buildings. Yes. When you do the building, do you normally CON with the hospital for the leasing or outpatient surgery center stays with the private, the chain of outpatient surgery operators? What is your understanding? Yeah. I know if you're owned by the hospital and leasing, there is a much more bigger reimbursement if the hospital is the ownership of the surgery center. Physical group owning or the private enterprise not affiliated with the hospital tends to get lower reimbursement. Right. The hospital. What is your? Yeah. Yeah, two or three questions there. The buildings we're financing and building for hospitals are heavily pre-leased, usually 75%-100% pre-leased. The hospital's got a plan in mind. The physician group that, you know, is gonna be part of that building, you know, has a plan in mind. We work with them to, you know, again, design and construct and price and provide the capital to build those buildings. Virtually all of them have surgery centers in them. On the reimbursement side, you referenced the hospital and the ASC, that's a hospital outpatient department rate versus a part B rate, which is if it has physician ownership. While HCA has both, again, both government policy and commercial insurance policy is pushing the HOPD rate down towards the part B rate, and maybe the part B rate can move up, you get some, kind of the whole idea is called site of service neutrality, and the government's really going to push that because it's a cost saver, right? The hospitals hate it, but the idea is you're in a lower cost setting, so you actually can get less revenue from that case, even with the physician ownership, but have a better margin and a better overall top-line revenue because of the volume that the surgeons will bring if they're aligned. It just depends on the market, depends on the situation. We don't make those decisions. We're helping to facilitate and provide the capital, tell them what the rent's gonna be and what the lease is gonna look like. Yeah, you have to build a facility. We're pretty good building and building to their designs. We're pretty good at recovering that. The retention of those buildings is very high. Again, they're newer, they're more convenient. Doctors wanna be there. We also, we don't need the capital, but some hospitals, and back to your CON question, some hospitals actually like it if the physicians can own part of the real estate as well. We'll let physicians buy in on a pari passu basis with us in those buildings. It just kind of aligns everybody's interest long term. Yeah. Go for it. Well, maybe this is for both of you. Can you comment on trends you're seeing in cap rates this year? The ASC to them and then now the, that are affiliated with hospitals and the number that there is. Yeah. Great question. Just overall, the market for MOB, outpatient medical facilities is in the high five to kind of low six range, again, depending on the quality. We generally won't buy a building unless it's got a hospital affiliation, you know, kind of being the anchor tenant. If it has an ASC, it's more attractive, so those are gonna drive to a, you know, to a higher price. The market is very liquid. There's 50 institutional buyers for outpatient medical buildings right now. I mean, we're the largest owner of that space, but, you know, we're one of 60 that actually invest in that space pretty routinely. There's a private company, actually that just bought all of Healthcare REIT, Welltower's outpatient building space, which is similar size, but they're private and you know, funded by private equity. We're friendly competitors, but we compete for the same thing. They buy more volume and are less concerned about kind of the long-term growth, whereas, you know, our kind of economic model, if you will, for a REIT is much more of a longer term owner. Just that drives, you know, pricing. You know, like everybody, real estate, you know, bigger markets, smiley face markets, the growing markets, you know, is where we wanna be. Growing market, Dallas, Atlanta building with a health system anchor tenant is gonna be in the five to six range on a cap rate basis. You can sell crappy buildings in rural America for a seven cap. All right. We got three minutes left. I don't wanna go an entire session without talking about labs. It's actually refreshing. Yeah, no, I'm sure it is. Yeah. I mean, there's a ton of alpha in the opportunity in Janus, but there's a lot of opportunity in the labs business. Yeah. You guys did a great trade, I thought, where you sold outpatient medical and redeployed the proceeds into first-class real estate in, I think it was South San Francisco. Right. Talk about that opportunity and what it takes because when the lab business turns, it's a very highly valued, very profitable business. Yeah. You got two minutes and 43 seconds. I'll cover it quickly. South San Francisco, we own about 5 million sq ft of just first-class, world-class lab, life science space. Surely the best market in the country for that space. One of our competitors was in a joint venture then, and had built some buildings adjacent to ours that were 60% occupied, but underperforming generally, and they were really in a cash crunch and needed to sell. We were able to work out a deal with them that effectively we replaced Again, we sold outpatient medical buildings, $600 million worth at a, at this. It's secondary, tertiary markets. Secondary, tertiary markets. We improved our portfolio. Yeah. Took that capital and bought those buildings from them as they were in a both a cash crunch and a time crunch to get that building out. It's very unique opportunity. One hand, you could say, you're buying more vacancy in a underperforming asset class and market. On the other hand, we made an even trade from a yield perspective with 40% upside, and we also paid $400 a foot for those buildings, and they cost $1,500 to $2,000 a foot today to build. It's incredible, you know, value opportunity for us. We're long-term holders. We've got long-term perspective. There's no debt on those buildings, it's all upside. You know, those will yield 10%+, you know, as we lease them up over the next couple of years. It's a pretty easy decision, you know, for us, the right long-term decision. You know, it's kind of this cliché is the best time to buy real estate is when nobody else wants it. This is world-class real estate that, you know, we trade at $2,000 a foot. I don't think it's widely known how much undeveloped real estate you have in South San Francisco and in the Cambridge area. That's probably worth a quick comment here at the end. Yeah. In West Cambridge, we have 65 acres of developable entitled real estate. We own 12 million sq ft of lab across the country today in those three markets. We can almost double the amount of that square footage in West Cambridge and in South San Francisco, again, as that market and demand for more of that space continues to grow. South San Francisco is recovering faster than Boston. There was just more overbuilding in Boston, a little bit more overbuilding in San Diego. South San Francisco, combined with a better political environment or the mayor, let's be very blunt, in San Francisco. AI is taking up all the office space in town that you can take up, which It's not really competing with us and what the tenant we're looking for, but it's creating a better dynamic about the market generally, you know, kinda bringing professionals back to that market to wanna lease space. Again, those in the lab or the research and the biopharma business, you know, wanna be on that campus, wanna be in our buildings. The amenities include very high-end bars and restaurants and golf simulators. Yeah. No, they're great Which is required. That's all we have time for today. Congratulations on a great couple of years, and we look forward to hearing more about it. Well, I wanna make one quick addition to that. Healthpeak has a 7% dividend yield today. It's got a 70% payout ratio, meaning we have a ton of cash flow on top of our dividend. Outpatient medical and lab is growing 3% cash flow. You're getting about a 10% cash flow growth, you know, off an investment in Healthpeak today. Then this underlying stock price has virtually nowhere to go but up. If you're getting 7% plus 3% to wait, then, of course, Janus has plenty of room to grow. Yeah. Embedded in that value, and that growth is also embedded in the value of DOC. It was cheaper two weeks ago. It was cheaper two weeks ago. Exactly. Sure. Thanks a lot for coming, guys.