Q2 2020 AxoGen Inc Earnings Call
Welcome to extend incorporated second quarter 2020 conference call.
All participants are in listen only mode. A brief question answer session will follow the formal presentation.
A reminder, this conference is being recorded I would now like turn the conference over to your host Pete Mariani accident, Chief Financial Officer. Please begin Miss Mariani.
Thank you Devin and good afternoon, everyone. Joining me on todays call scares that array Axogens Chairman Chief Executive Officer President.
Karen will begin today's call with an overview of our second quarter performance.
Update on the ongoing recovery in our markets.
By a review of the recent announcement of our Recon study enrollment in our path to be Elyse mission.
I will then provide an analysis of our second quarter performance along with a summary of our recent recently announced that deal with Oberland capital.
Today's call is being broadcast live via webcast, which is available on the Investor section of Axogens website within an hour. Following the end of the live call a replay will be available in the investor section of the company's website at www dot oxygen <unk> dot com.
Before we get started me I'd like to remind you that during this conference call. The company will make projections and forward looking statements regarding future events.
We encourage you to review the company's past and future filings with the FCC, including without limitation, the company's forms 10-K, and Q, which identify the specific factors that may cause actual results or events to differ materially from those described and these forward looking statements.
These factors may include without limitation statements related to the expected impact of Kobin 19 on our business statements regarding product acquisition and our development.
So the regulatory environment sales and marketing strategies capital resources.
Operating performance.
And with that I'd like turn the call over to Karen Karen.
Thank you Pete and good afternoon, everyone.
Our total revenue for the quarter was $22.1 million, representing 17% decline versus the prior year period.
Well covert 19 out of material negative impact on total revenue, we saw steady improvement across the quarter as our customers reopened our surgical schedule.
Our second quarter performance reflects a recovery in our markets that were stronger than we anticipated.
Well the priority that surgeons and hospitals have placed a nerve repair with acted in products and the early stages of the recovery.
Our recovery also reflects the hard work and creativity of the entire accident team to support our customers and their patients in this difficult environment.
The recovery varied regionally based on the intensity and trends have koeppen 19 in local markets.
As elective surgeries resumed we experienced short term regional surges in nerve repair cases restart, reflecting the completion of deferred perjury procedures.
These recoveries third kids were typically followed by a return to more normalized levels for the territory.
Working interviews that we conducted confirm that nearly all sturgeon have experienced significant disruption to their practice and a reduction in surgical procedures due to carbonite team.
But many surgeons believed that there were already caught up with their current backlog of deferred procedure.
Hi, most others believe they would catch up by the end of this summer.
In addition to regional variation.
A recovery also varied by nerve repair application.
With our core trauma business meeting our recovery.
The recovery of procedures in our breath, and Ormats application as well as our emerging business and the surgical treatment of pain began later in the quarter.
Overall, we're encouraged by the execution of our team and the priority hospitals uncertain are giving to nerve repair with active products during the recovery.
However, we remain measured and our outlook for the remainder of the year.
That's most currently deferred procedures will likely be completed by the end of this summer and covert 19 may continue to negatively impact the incidence of trauma.
And regional surgical procedure volumes.
We therefore expect third and fourth quarter.
Revenue to remain below prior year levels.
In the area sales execution, we continue to strategically focused our sales representatives on extremity trauma and driving deeper penetration with our existing surgeon customers, Although kogan 19 required us to adjust our approach.
During April health care facilities broadly restricted vendor access and we directed our sales team to enter facility only when requested and necessary.
Our sales representatives remained in frequent contact their customers virtually and it worked together to provide effective case support remotely.
We also use this restricted time to provide six weeks of extensive product and skills training for our sales team.
We believe provided the benefits of keeping the sales team positively engage and improve their ability to support our customer.
On May 1st we released our sales team to begin reentering health care facilities, following local regional and national guideline and using contact tracing.
Well, our access to health care facilities has improved.
The ability to effectively support our customers remotely continues to be an important alert capability that our team has embraced and we believe our customers have appreciated.
We ended the second quarter with 112 direct sales represented an increase of three representative at an early in the quarter.
With our Florida sales headcount expansion this year, we minimize change and disruption to stabilize their sales territory and provide consistency of support to our customer.
Our direct sales channel was supplemented by 19 independent sales agencies, who generally cover geographies that are less impacted by coping my team during the quarter.
These geographies delivered better year over year performance, then those covered by our direct sales representatives.
As a result, the indirect channels represented approximately 15% of our total revenue in the second quarter compared to an approximately 10% in the first quarter.
We had 789 active accounts in the second quarter and increased 4% from 760 to one year ago and down 4% versus the first quarter.
We have always reported our number of active accounts as an average for the quarter.
And the significant decrease in the number of orders from act from accounts in April and early May had a material impact on the average for the second quarter.
Our active accounts have continued to increase each month such that for the three months ending July 31st.
Our average active accounts has increased and it's more consistent with our Q1 average of 825.
We were pleased to large majority of our top surgeons and hospitals continue to use an order accident products for their patients. Despite the challenges of koeppen 19.
The top 10% of our active accounts continue to represent approximately 35% of our revenue.
Our sales team remains focused on our strategy of going deeper with current 13 customers and exited the second quarter well prepared for the second half of the here.
We continue to focus on building market awareness of accident and our product despite reduced in person access to surgeon and restrictions on certain traveled to scientific conferences.
In June we expanded our digital marketing capabilities, allowing us to more fully engage with surgeons electronically.
These digital efforts provide an enhanced long term capability to supplement the efforts of our sales team and help our sales reps engage with surgeons, where access to hospitals remains limited.
Our efforts to educate surgeons and develop advocate continued in the second quarter.
In March we canceled the remainder of EUR 2020 schedule in person surgeon and Fellows education programs.
And we sensed developed several virtual education programs led by certain experts in nerve repair.
In June we launched an invitation only program for early career upper extremity surgeons, who are passionate about advancing the field of nerve repair.
The program as an interactive six parts series led by an expert faculty.
Similarly, we launched a surgeon led extremity trauma Webinars series open to all of our surgeon customers.
We're also continuing our commitment that educating hand, and microsurgery fellows and they're launching an updated training program for the second half of 2020.
We previously discussed their plans to introduce new products and expand the application of our portfolio ended the surgical treatment of pain focused on symptomatic neuroma.
We launched Axoguard nerve cap in February and are pleased with our early results as we focus on expanding the nerve repair algorithm of our current surgeon customers.
Nerve cap. It's an important addition to our solutions portfolio designed to protect the peripheral nerve and separate the nerve from the surrounding environment to reduce the development of symptomatic or painful in the Roma.
With the addition of nerve cap, we now have a full portfolio of products for nerve connection nerve protection and nerf termination.
Increasing surgeon adoption of our product portfolio continues to be sort supported by a large and expanding body of clinical data.
We recently announced that our recon clinical study had reached its targeted enrollment of 220 subjects in July.
Recon is our phase three pivotal studies supporting our biologics license application or Billy.
Which will transition our Vance nerve graft for me.
61 tissue product to a section 351 biologic product.
We're pleased to reach this important milestone despite a challenging environment for clinical studies.
And we appreciate the dedication and commitment of our participating study team as well as our internal team of clinical professionals.
The recurring clinical study protocol requires a one year follow up assessment with the allowance for an additional three month window.
The final subject enrolled in July 2020, the last subject is expected to complete the study no later than October of 2021.
Weve increased our efforts to support completion of subject follow up visits during the covert 19 crisis.
By implementing an expanded home health visit program to allow follow up visits to be conducted by a train health care professionals outside of the clinic environment and with appropriate safety precautions.
We're working closely with our research Senator sensors to monitor fellow visit windows and minimize any potential disruption.
We anticipate providing a preliminary board of trial data in the second quarter of 2022 and expect to file the be delay in 2023.
In addition to the completion of enrollment of the Recon study.
Our Ranger registry now has over 2200 nerve injuries enrolled and we expect data from the study to be presented at clinical conferences and published in the second half of the year.
Enrollment in our Riposte studies ongoing repos is a prospective randomized controlled study evaluating the use of axoguard nerve cap and the management of painful in the Rama as compared to a standard nephrectomy procedure.
Seminary outcomes from the pilot phase of the repurposed study found that it's six month subjects reported meaningful improvement in pain and quality of life skills.
Weve completed the last subject follow up visits and data analysis is underway to support a repos study pilot phase manuscript well. This is a small pilot study we remain encouraged by the positive impact reported today and we'll continue enrollment of the comparative phase of the study a centers reopened to research subjects.
As we noted in our call in May we paused enrollment of our concession now clinical registry for the remainder of 2020, given the covert 19 related restrictions in our study centers.
We're pleased with the enrollment of 600 subjects in the registry and believe this will create a significant body of evidence around this important breast artist nation technique.
Similarly, we paused enrollment in our rethink pain registry and our abide assist study.
We continue to monitor the recovery of activities that study centers and we're prioritizing the potential restart of these clinical programs based on our business needs.
We remain committed to providing meaningful and impactful clinical evidence on the utility of our nerve repair portfolio.
Despite ongoing public related challenges in the market.
We're encouraged by the performance of our accident team to creatively adapt and adjusted these challenges.
We've learned new skills and supporting our customers and continue to advance our strategy focused on extremity trauma and driving deeper penetration with our existing surgeon customer.
We remain as excited as ever with the opportunity in front of us and we believe we're well positioned to drive continued growth as we emerged from the pandemic.
Now I'll turn the call over to peak for a review of financial highlights Pete.
Thanks, Karen second quarter revenue declined 17% to $22.1 million our revenue decline for the quarter was the result of a 19% decrease in unit volume, partially offset by a 2% no benefit from changes in pricing and product mix.
Gross profit for the second quarter was $16.5 million compared to $22.5 million than the prior year.
Gross margin was 74.7% for Q2 compared to 84.1% in the prior year second quarter.
Gross margin was negatively impacted in Q2 as a result of increased periods in various cost.
So she added with the suspension of tissue processing during the quarter of $1.6 million and increases to inventory reserves.
We began a gradual restart of our tissue processing and soon are continuing to ramp in the third quarter and anticipate the gross margins will return to normalized levels of sales and production levels recover.
Total operating expenses in second quarter declined 18% to $24.8 million compared to $30.1 million in the prior year.
Total operating expenses in the second quarter included 2.2 million and noncash stock compensation compared to 2.7 million in the prior year.
Sales and marketing expense and second quarter declined 23% to $14.3 million compared to $18.5 million in the prior year.
This decrease was primarily due to reduced compensation expenses, including lower commissions.
A reduction in our surgeon education expenses after Kathleen and person education programs and lower travel expense as a result of the travel restrictions and counsel programs.
That's the percentage of total revenue sales and marketing expense decreased 60 or decreased to 65% for the three months ended June Thirtyth 2020, that's compared to 69% for the previous year.
Research and development spending on the second quarter decreased 5% to $4.1 billion compared to $4.3 million in the prior year.
Research and development costs include product development, including expenses in support of the B.L.A. for the advance nerve graft and clinical research.
Product development expenses represented approximately 50% of total R&D in the second quarter compared to 58% in the prior year, while clinical expenses represented the other 50% in the second quarter 2020 compared to 42% in the prior year.
As a percentage of total revenues research and development expenses were 18.4% Q2 compared to 16% in the prior year.
General and administrative expenses in second quarter decreased 13% to $6.4 million or 29% of revenue.
Compared to $7.4 million or 27.6% of revenue in the prior year.
The decrease was primarily related to the reduction in litigation and professional fees as well as lower compensation and travel expenses.
Net loss in the second quarter was $8.1 million or 20 cents per share compared to $7 million or 18 cents per share in the prior year, excluding the impact of noncash stock compensation as well as litigation and related charges adjusted net loss and loss per share in Q2 of this year was 5.9.
<unk> million dollars in 15 cents per share compared to $3.7 million.10 per share in the prior year.
Adjusted EBITDA loss from the quarter, which also excludes the impact of stock compensation litigation and related charges was $5.7 million compared to an adjusted EBITDA loss of $4.1 million in the prior year.
Turning to our balance sheet the balance of cash cash equivalents in investments on June Thirtyth was $109.9 million compared to a balance of $89 million in March 2020.
The net change reflects the receipt of net debt proceeds of $34.7 million, partially offset by capital expenditures totaling 7.7 million and net operating cash burn of 6 million during the quarter.
Capital expenditures in the quarter included 6.5 million related cost incurred for our daily biologic processing center prior to the suspension of construction in April and $1.2 million related to our new office and lab facility in town.
The pay completing our new campus facility in the third quarter and re starting construction on our Dayton biologic processing center in early 21.
On June 30, we announced a new seven year interest only financing agreement with the Oberland capital, which provides up to $75 million in total financing commitments with 35 million drawn at close the second throats, a $15 million can be drawn at the company's optum upon achieving two consecutive.
Quarters with revenue up at least $20 million and this second tranche can also be put to the company anytime biopolymer.
The third tranche of 25 million can be drawn by the company or at the company's option upon achieving two consecutive quarters with revenue of $28 million.
Overland cannot put the third tranche the accident.
Under the terms of the agreement the option to draw both the second and third tranche expires on December 31st 2021.
Interest on this facility is calculated the 7.5% plus the greater of LIBOR or 2% leading to an interest rate of closing of 9.5%.
An additional quarterly royalty payment.
Calculated on up to 70 million of annual revenue will begin on September Thirtyth 2021, this royalty structure, resulting in approximately 1% per year of additional payment on the outstanding loan amount.
We believe the terms of this data grima allow us to strengthen our balance sheet and support the completion of the Dayton and sample facilities. The financing provides a manageable and flexible covenant structure and we believe the interest only provision for the full seven years provides a sufficient liquidity extension without diluting our shareholders.
That can support our continued growth through an uncertain environment and as we drive towards long term profitability.
On April 23rd we announced a cost mitigation initiatives designed to defer and reduce certain expenses and capital expenditures in response to the anticipated reduction of revenue caused by the ongoing Tobin 19 pandemic.
This initiative preserved our ability to support customers and patients in the second quarter and through the recovery and put us on a more efficient spending run rate.
The initiative, including the reduction of executive cash compensation and board fees by 20%.
And reduced cash compensation for all other exempt salaried employees by 10% to 15% we have restored pay levels for most employees as of August although our officers and the board have continued with a 20% pay cut for the time be.
Additionally, we were able to defer approximately 25 million to complete our Dayton, Ohio facility for up to a year.
While the path and pace of our business recovery continues to be uncertain. We are encouraged by the execution of our team and the trends into markets that we observed during the second quarter. We also believed that the strength of our balance sheet or cost mitigation initiatives and our continued commercial execution will allow us to emerge.
From this pandemic related downturn is stronger leaner organization and a lot of path to profitability and with that I'd like to hand, the call back over to Karen. Thank you Pete.
We're encouraged by the performance of our commercial team during the pandemic and believes that our renewed focus on the core trauma opportunity has supported the pace of a recovery.
And has positioned us well as we entered the second half of the year and continued to develop the nerve repair market.
We believe that the regional surges, we experienced a surgical cases reopened indicates that nerve repair with accident products ranked high among surgeons priority and provides additional evidence of our product clinical benefit and value proposition to patients surgeons and hospital.
At this point I'd like to open the line for question Devon.
At this time, we will be conducting a question answer session. If you look to US question. Please press star one on your telephone keypad confirmation to indicate your line is the question to.
You mean for starts to fuel the term of your question from the Q.
For participants using speaker equipment, and maybe the certain thing apprehensible for prisons turkeys one moment, please as we pull for questions.
Our first question comes a lot of Raj Denhoy with Jefferies. Please proceed with your question.
Hi, good afternoon.
<unk>.
I Wonder if I could start with D. the revenue lines.
You are pretty encouraging to see only down I think it was 17% for the quarter. After the negative 70% I think you talked about in April and so it does imply that you know very strong recovery in the second couple of quarters. That's a couple of months to the quarter, but you're still I guess pointing to that being mostly recovered procedures as opposed to underlying demand and so what I'm trying to get out is.
He is that underlying demand right now and you did talk about it thing still below 2019 levels in the back half of your answer maybe you could just grounded in terms of where you think we are.
On that metric.
Yes, so the recovery in the quarter with both it was both deferred procedures from the March time period that got rolled over into the Q2 time period as well as a current trauma that just happens day to day as surgical Oh ours opened up surgeons were able to do in real time.
And so we saw both of those occurring and driving the demand we definitely saw a surge or a spike as various regions opened up a and of course. This happened at different times as regions had different a time periods of the recovery as you can imagine some of the northeast.
You covered it either late June or even into July and other parts of the country started to recover and in may balanced by some of the pullback that we've seen in some of the a region as cobot starts up again, so so from any.
Impact to US overall, we feel that the incidence overall of trauma is still down somewhat not as much as it was during the full shutdown believed is believed that the overall incident is somewhat depressed we believe that from a deferred procedures are actually many of them were completed in the second.
Quarter. So those March procedures that didnt didn't happen got rolled over into March or excuse me into second quarter. A there are some deferred procedures that we'll still get wrapped up towards the end of summer, but really we think that's a again given the priority the surgeons placed on nerve repair they moved those procedures.
Pretty quickly into the O R and a and so we won't see a big surge from deferred procedures, but we do see the underlying demand I'm continuing to to stabilize.
Yeah. This I'm trying to understand what what level I know you, you're you're not giving guidance and I appreciate that you're operating under a pretty.
Limited information, but yeah, we sat down 10% is it out 20, what level of lower demand are we talking about at this point and I do I. Appreciate you also have the ability to speak to July. So I don't know if you want to comment on that as well.
Well I think we saw good solid trends as we moved into the third quarter in in July we're encouraged by that but our hasn't and I'll. Just tell you my hesitation on giving you a depression of the incidence of trauma and the surgical repair of those procedures is because I still don't know what's going to happen regionally around.
Oh, good as it researches in different places and that's going to affect the trauma right and so.
I really I, just I don't feel like it's fair to give you a guidance number because it's going to be based on the resurgence of cove. It the underlying demand for the products remain strong and surgeons certainly are prioritizing getting those nerve repairs done.
Understood.
You are separate topic, you were just pretty encouraged by what you're seeing on your transition to more kind of digital or virtual training and even take support.
And I guess, what I'm asking.
Asking about is hoping that you think somebody's might be I mean is this something you could see playing out even once you know covert ABS and you can get back into the hospital does this represent some potential cost savings few longer term how do you see this playing out over the next couple of years.
Yeah, I think that we have learned we've been really nimble we've learned some new skills and build some new capabilities and I'm pretty optimistic that these are permanent additions to our skill sets.
Ah and capabilities and so when we think about the remote case coverage some of the virtual educational work that we've developed and the digital marketing tools that we've developed we think we're going to keep those and our tool belt for the long term. It we think they really are beneficial to us.
Hi, just stick to those replace things you were doing are those really additive in a sense. I mean is there the potential that lets you could see permanent reduction in your you're selling cost for instance from where you were pretty pre Toby.
Yeah, I think that they contributed to sales rep productivity and overall commercialization productivity. So I think there there. They are added tools that improve our overall productivity and make us more efficient.
Okay understood. Thank you.
Thanks.
Our next question comes a lot of David Turkaly with JMP Securities. Please proceed with your question.
Yeah, Hi, this is actually gain sat around for Dave has gone.
Yeah.
Okay, Great I'm, sorry, that's just going back to Roger's question. You mentioned that sales consists of both deferred procedures as well some current trauma or demand.
Could you give us anymore color on that how much contributed from both was it.
Mainly from recruit cases or any amount of detail you can go into that would be great well that by far. The majority is day to day trauma. The deferred cases that roll then where what was delayed in March. So we saw a procedure start to drop in the early part of margins and some of those obviously roll down.
And were deferred procedures, but trauma overall in the in the peak of April we estimated was down about 20%.
It has come back up from that again, it's it's highly affected by activity and activities affected by Covidien. The like towns in various regions associated with that we've come up materially from where we were at the low points, both and we believe the incidences of trauma.
As well as patients willingness to come into either hospitals or surgery centers to get that traumatic injury repaired.
Great and then just a follow up on that.
Has different regions reopened how much that headwind from the stay at home orders really went off what's it really.
You know pretty immaterial in June as construction and other activities were able to resume or do you think that's probably easier for the back half as well. Thanks.
We still see high regional very variation.
It definitely waned across much of the country, but we saw impact in Texas in South, Florida, and Southern California.
In the June time period, given the incentives to cope with it was happening there. It is tough to tell for us at this point, whether it's the incentives to trauma or whether its people's willingness to come or ability to come into a gets surgery completed.
But that's counterbalanced by the opening up of places in the northeast, which really Didnt happen until late June early July.
Great. Thank you guys.
Thanks, Howard our next question comes a lot of Richard Newitter, but as feeling please state your question.
Hi, This is Jamie on her at <unk>.
Jamie Jamie.
Hey, guys. So I just wanted to kind of come back to just the trends and what you're seeing could you potentially comment on it I got one way to think about it wouldn't be is there potential that you could hit that second tranche for the new on.
Financing agreement with overlain in three to kind of help I think you know if that's something that could be a possibility and then as you look into for Q.
Is it reasonable to think that there could be year over year stability or potential growth or just based on what you see and with the resurgence.
You're not thinking that that could be something that's on the table at this point.
We're still seeing or estimating and again this is trying to create our own crystal ball around the impact if covered on a nerve repair cases that we would remain below our prior year Q3 in Q4.
Which is right about where that overland points that Oh, the 20 million sorry, the 20 million.
We're already above and.
That would not be unreasonable to think about that the next tranche at 28 million.
Is.
[noise] would be aspiration.
Got it Okay and then just you know we've been hearing from a lot of other companies Cobain seems to be accelerating they're trying to ask season, I think we've kind of talked about this in the past, but can you just comment on how or potentially when you I believe that could impact your business.
And how you guys are <unk> or what you guys are potentially doing to capitalize on this at all make sure was as we talked about before they're worth it change and though do you Medicare reimbursement radio PPS rate for both outpatient surgery and ambulatory surgery centers that way.
Was favorable for nerve repair in general and in particular nerve repair with implants, either connector or or an allografts and and so we see that as a benefit for the long term a the majority of nerve repairs not actually Medicare patients.
I'll have to roll through commercial payers as they as surgery centers adjust their contracts with commercial pairs and we think that'll take a couple of years to roll through the system. We're seeing good interest in that but I would not say we've seen a material shift at this point, there's been certainly distractions in this quarter.
Matt I put that is a a lower priority of having said that one thing interesting thing that we did see again.
With the emphasis that surgeons really wanted to get their nerve repair patients in in those locations, where they were locked out of hospital are still in places for example in Texas as the resurgence happened they shut down elective procedures in hospital and what we saw with a very rapid shift of surgeons moving those patients.
The outpatient centers or the ambulatory surgery centers and still completing a cases, where we're at they thought that was reasonable on the right option for their patients.
And and so we do see them leveraging that Avenue.
And we think that bodes well for the future as the payment schedules are adjusted as well.
Okay Jamie.
Our final question comes a lot of Brendan folks with Cantor Fitzgerald. Please proceed with your question.
Hi, Thanks for taking my questions and congratulations on or [laughter] during the quarter Huh, maybe well [laughter] could you just elaborate a little bit on the final of patients you have been seeing quite the culture and with it spot and secondly can you just again elaborate on some of the positive shifts that have happened during <unk>.
With that you do you think will be tailwinds to your business wondering kind of fit and trying to realize world. Thank you.
Yeah brand I, just want to make sure I got your question comes in the first part it broke up a little bit the second part that I heard what's popular shifts thatll be tailwinds for us, but I didn't hear the first part.
I can you just elaborate on the funnel of patients Youre seeing in July.
Okay.
Well, what we have seen and never have been really pleased with is that the surgeon who were active users have.
Almost all frankly returned back to using accident products and so we don't have Oh leaky bucket in that respect of users continue to be users and is there a as their practices ramped back up a they ramped up in and using it the same rate or in some cases, even higher rates because.
There are we talking about benefits there are benefits in a cobot environment did you and allografts or advanced as compared to an autograph. It is a much shorter surgical procedure time, there's less exposure you can do wide awake surgery versus surgery, requiring anaesthesia in some cases, depending on the patient all of the.
Those are healthy benefits for the hospital workers.
While providing good care for the for the patients we think there's real benefits in doing and and allografts repair on advanced repair a in this environment I'm in terms of our funnel overall to go back to your first part. We also had new users start to use our products, particularly in our active sensor.
So that's where we have our reps mostly focused is developing a our footprint and in places that we already have a strong surgeon user we want to go deeper with that user and add in their partner.
We are still adding some new active center. So we'll see some of that in our pipeline, but the majority of our emphasis is going deeper in they centers that were already and so we feel is the pipeline is good and the remain strong interest in it and we certainly saw that with the virtual education programs that we set up.
With new and developing surgeon and and and actually.
Really outstanding a engagement from surgeons wanting to be a part of that educational program.
In terms of going forward in some of the benefits that we see from the environment. We have here I mentioned before the benefits of using advanced nerve graft as compared to an autograph that is there are safety benefits to the hospital staff.
Because of reducing our time and and in some cases being able to do wide awake surgery. They're also the learned benefits that we talked about in terms of the digital marketing the remote coverage. We think that those are really going to help us continue to expand our productivity of our existing sales team and that that they will pay but.
Benefits for the long term, allowing us to continue to grow and and at a cost effective manner.
That's very much that's very helpful.
Great. Thank you.
Yes, or no further questions within Q I would like to turn the call back over to current cetera for any closing remarks.
I think you Devin I wanted to make everyone for joining us on today's call. A we look forward to speaking with many of you at the upcoming virtual conferences, where attending including the Cannacord Genuity Gross conference August 11 through the 13 Morgan Stanley Global Health Care Conference September 14th of the 16, and the Cantor Fitzgerald Global Health care.
At September 15th through the 70, thank you.
This concludes today's teleconference. You may now disconnect. Your lines at this time. Thank you for your participation and have a wonderful day.
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