Q2 2020 STAAR Surgical Co Earnings Call

Good afternoon, ladies and gentlemen, and welcome to the store.

Surgical second quarter 2020 financial results conference call and webcast <unk>.

At this time, all participants are in listen only mode.

The speakers presentation, there would be a question and answer session to ask a question. During the session you would need to per store Wanna get telephone keypad and please be advised that today's conference is being recorded.

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I would now like they had a conference over to your speaker today Mr., Brian Moore you may begin.

Thank you Christine and good afternoon, everyone.

Thank you for joining us on the STAAR surgical conference call. This afternoon to discuss the Companys financial results for.

For the second quarter into July 3rd 2020.

On the call today, our care and Mason, President and Chief Executive Officer, and Patrick Williams, Chief Financial Officer.

The press release of our second quarter results was issued just after four PM Eastern time and is now available on Staars website at Www Dot Star Dot com.

Before we begin let me quickly remind you that during the course of this conference call. The company will make forward looking statements. We caution you that I used statement that is not a statement of historical fact is a forward looking statement.

This includes remarks about the company's projections expectations plans beliefs and prospects.

These statements are based on judgment and analysis as of the date of this conference call and are subject to numerous important risks and uncertainties that could cause actual results to differ materially from those described in the forward looking statements.

The risks and uncertainties associated with the forward looking statements made in this conference call and webcast are described in the Safe Harbor statement in today's press release as well as stars public periodic filings with the FCC.

Except as required by law STAAR assumes no obligation.

Update these forward looking statements to reflect future events or actual outcomes and does not intend to do so.

In addition to supplement the GAAP numbers, we provided non-GAAP adjusted net income and adjusted earnings per share and sales in constant currency.

We believe that these non-GAAP numbers provide meaningful supplemental information and are helpful in assessing our historical and future performance.

Hey table reconciling the GAAP information to the non-GAAP information is included in today's press release.

Following our prepared remarks, we will open the line to questions from publishing analysts.

We ask enlist limit themselves to two initial questions then re queue with any follow ups.

We thank everyone in advance for their cooperation with this process.

And with that I would now ill turn the call over to Karen Mason.

President and CEO of Star.

Thank you Brian.

Good afternoon, everyone and thank you for joining us on today's call.

Let me start by welcoming Patrick Williams, we are delighted to have him on board as our new Chief Financial Officer.

Welcome also to our two new board members Dr. Gil climber comp frenzy, who joined the board on shows first.

I'd also like to take this opportunity to express my sincere appreciation to the entire star team for achieving strong results and demonstrating operating discipline during a pandemic.

The outlook, we provided it may accurately assessed the market dynamics and stars ability to perform well in the midst of a pro lung shutdown of elective surgeries and most of the global markets we serve.

While refractive procedures for down significantly or came to a halt in April and May in much of North America, Europe, Latin America, India, and the Middle East.

Continuing recovery of growth were recorded in Japan, Korea and China.

In June year over year, I feel implant procedures recorded strong growth.

With units up 65%, Japan, 24% and the rest of Asia Pacific, 17%, Germany, 15% distributor markets in Europe, and 11% in Korea.

The positive trending continues in July with China experiencing stronger than anticipated demand as the peak season began in earnest.

While cobot 19 hot spots and government public health mandates may reoccur moving forward, we anticipate less business interruption and continued increased interest in our even though I feel lens based refractories solutions in Q3 in Q4.

Our team is squarely focused on generating significant growth by supporting our search and partners as they restart their practices, where the patient recruiting programs training and digital marketing.

As you know China is the largest market in the world for refractive vision correction.

The China peak implant season is underway and our team is pleased with the response by or search and partners and quickly moving to a digital platform of patient road shows engagement and education that it's also supported by marketing and social media campaign.

In fact, one virtual even though I see a roadshow campaign has the lofty goal of reaching 100 million visitors from 100 cities during Q3.

Refractive surgeons are increasing their hours and anticipated strong double digit growth in that summer month.

We continue to believe that we will achieve a 20% share of the refractive procedure market in China by year end.

We resumed production at our California manufacturing facilities on April 27, following a voluntary six week Cobas 19 related pot.

We have had a very successful restarts and exceeded our expectations and anticipate that we will be able to meet the increased level of demand for both our sarokin torque evo lenses through the remainder of 2020 and beyond.

We're also moving forward once again with our plans to restart manufacturing in our Nieto, Switzerland facility in 2021.

And we are continuing our work to ready our Lake Forest, California facility for manufacturing, our eco Veeva presby optic lenses.

With respect to where do you as clinical trials for our evil family of Myopia Silences, all 14 of our clinical trial sites resume to patient recruiting screening and implants in mid may after various period, some delay due to elective surgery mandated closures in Q2 I.

Assuming no material change in the current operating environment, we anticipate that we will complete enrollment in the trial by the end of September.

When we then consider the subsequent six months patient follow up and time to prepare our data submission to the FDA. We believe we are on track for potential marketing approval and commercialization of vivo and the U.S. and the second half of 2021.

The U.S. is the second largest market in the world very attractive vision correction and we very much look forward to bring it or game changing able then to us surgeons and their patients.

Turning to Presbyopia, we're extremely pleased to now have CE mark approval for our extended depth of focus or eat off presbyopia lens that is designed to correct near intermediate and this is vision, where branding our innovative enough lens as Eva vivo veeva.

Gevo Veeva is a new treatment option for potential future consideration by the 1.7 billion people globally with presbyopia, who want to get rid of their reading glasses or frequent replacement contact lenses.

Veeva will initially targeted tens of millions device of opportunity for early Presbia ups ages 45 to 55 in the 31 countries recognizing that CE mark through a phased rollout beginning in Spain, Belgium and Germany.

We anticipate the first implants will occur in September following physician training and certification.

Aim with Tivo Veeva is to achieve high levels of patient satisfaction and true visual freedom.

Commercialization of vivo Veeva will be supported by consumer facing social media supporting our see young again and rewind to revision messaging.

Also clinical papers have already been submitted for peer review publication by our clinical trial surgeon principal investigators and medical monitor.

Looking ahead to the remainder of 2020 the impact on our sales related to covert 19 appears to be lessening, particularly outside the U.S. were starting generates more than 95% of its revenue.

Globally RF sounds like customers also expressed to us that they have no desire to Pos procedures again unless mandated to do so with many determined to work through the traditional summer holidays.

We are hot spots do occur, we expect any costs and refractive vision correction procedures to be brief and duration and limited in scope.

With that said the third quarter has historically been one of our strongest revenue quarters with China and other Asian countries, leading the way.

Our outlook for Q3 currently anticipates a sequential revenue increase of at least 20% from our Q2 results, which would then results in year over year double digit growth for the quarter.

At this point, we expect fourth quarter revenue will be very similar to third quarter as high volume seasonality tapers off in China, but we see traditional seasonal increases in our other markets.

It is my pleasure now to ask Patrick to report on our financial results.

Patrick.

Thank you for the warm welcome Karen and good afternoon, everyone.

Total net sales for Q2, 2020, or 35.2 million consistent with Q1, 2020, net sales and down compared to the 39.7 million for Q2 2019.

The year over year decline was associated with the various kobin related market closures Karen mentioned earlier.

In terms of product mix I feel sales represented 87% of total company net sales for the Q2 2020 and other products represented 13%, which is consistent with Q2 2019 results.

Gross profit for Q2, 2020 with $24.4 million were 69.4% of net sales as compared to gross profit of 24.8 or 70.4% of net sales for Q1, 2020, and 29.9 million or 75.4% of net sales for Q2 2019.

The sequential decrease in gross margin for the quarter is primarily due to approximately $1 million in period expenses related to a voluntary six week coven 19 manufacturing pod that did concluded at the end of April period costs associated with the manufacturing expansion projects and geographic sales mix.

Compared to prior year results. The decrease is primarily attributable to geographic sales mix and the afford mentioned manufacturing costs.

Moving into the second half of 2020, we would expect to see gross margin increased from here into the low 70% range as our production volumes scale backup to support the higher anticipated sales for the second half.

Now moving down the income statement total operating expenses for Q2, 2020, or 25.5 million slightly down compared to 25.9 million for Q1, 2020, and slightly up compared to Q2, 2019, and 25 point Threemillion as the company continued its cost containment measures related to non essential barrier.

Well costs, while expanding program designed to fuel growth and clinical excellence.

Taking a closer look at the components of operating expenses DNA expense for Q2, 2020 was 7.8 million compared to the 8 million for Q1, 2020, and 7.5 million for Q2 2019.

The decrease from prior quarter was due to a decrease in tax consulting costs and travel related expenses offset by higher head count and salary related spend expenses.

The year over year due to overall higher head count and salary related expenses, partially offset by a decrease in variable compensation and travel expenses.

Moving into the second half of the year, we expect Gina expense to move up slightly going into the third quarter as we ramp up some activities and then remained flat moving into Q4.

Sales and marketing expense was 10.3 million for Q2 2020 compared to 11 million for Q1, 2020, and 11.7 million for Q2 2019.

The decrease from prior quarter and prior year was due to lower Tradeshow expenses and travel expenses as a result of lower activities due to coded offset by an increase in advertising and promotional activities and salary related expenses.

As we move into our seasonally busiest quarter and with many of our markets beginning to open up from the Covance shutdown, we will be ramping up our sales and marketing investments and expect to see absolute dollar expense levels very similar by quarter to what we did in Q3 in Q4 of 2019, respectively.

Research and development expense was 7.3 million in Q2 2020 compared to 6.9 million for Q1, 2020, and 6.1 million for Q2 2019.

The increase in research and development expense was due to increased clinical expenses associated with our email clinical trial in the us and increased head count and salary related expenses, partially offset by lower variable compensation and travel expense.

As a percent of sales R&D has been running at approximately 20% of sales by quarter in the first half of 2020, and we would expect a similar percentage sales as we continue to enroll and follow up on our pivotal UN Evo clinical trial.

The operating loss in Q2, 2020 was 1.1 million compared to a 1.1 million operating loss for Q1 of 2020.

And an operating profit of 4.6 million for Q2 2019.

Net loss for the second quarter of 2020 was 1.2 million or three cents per share compared to 134000 or zero percent or zero cents loss per share in Q1, 2020, an income of $3.9 million or eight cents per share for Q2 2019.

On a non-GAAP basis adjusted net income for Q2, 2020 was 1.4 million or three cents per share compared to adjusted net income of 1.9 million or four cents per share for Q1, 2020, and $6.5 million or 14 cents per share for Q2 2019 a.

A table reconciling the GAAP information to the non-GAAP information is included in todays financial release.

Turning now to our balance sheet, our cash and cash equivalents as of July Threerd 2020 totaled 116.3 million.

5.4 million compared to $110.9 million at the ended the first quarter 2020.

The sequential increase is primarily attributable to proceeds from the exercise of stock options.

Before we open up the call your questions I would like to highlight several virtual investor meetings and conferences in the coming weeks, where I look forward to reengaging with many of you and meeting new investors.

Karen and I look forward to participating in these events with you first up we will be conducting virtual investor meetings with BTI gene next week on August 11.

Followed by the virtual Canaccord growth conference on August 12.

In the month of September start management is currently scheduled to participate in the Wells Fargo Healthcare Morgan Stanley Healthcare Sidoti and company virtual conferences, and the William Blair West Coast virtual field trip.

This concludes our prepared remarks, operator, we're now ready to take questions.

Ladies and gentlemen, as a reminder to ask a question you would need to press star one of your telephone keypad to withdraw. Your question you can press the pound Heskey. Please standby, while we compared to Q and a roster at this time.

Okay. Our first question comes from the line Chris Cooley.

Thank you good afternoon.

Just taking the call and Patrick will come to a store it's good to work with you again.

I guess for.

Sure I guess for my from my too.

Hoping you could maybe just provide us a little bit more detail about what gives you confidence.

In the expected sequential essentially 20 plus percent growth step up in growth. So we think about the.

Third quarter versus second quarter. So you get to I'm, sorry, 20% increase in sales to gets closer that double digit growth rate.

In particular with.

China, and showing kind of a 24% growth. So I believe there in terms of units.

When I looked at the prepared remarks, and you mentioned obviously.

Much stronger as she came into July but maybe just.

Puts some additional color around that I think what gives you that confidence to threeq to step up and then I've got one follow up.

Sure. Thanks, Chris.

The confidence in the sequential growth, it's really built on multiple markets that either did not suffer greatly under cove. It in terms of shutdown and or have recovered very effectively since I would say early to mid June so as we've been looking.

And our July results.

We're very excited about what's going on it that in Japan in China and Korea.

In most of Europe.

A lot of the rest of Asia Pacific.

There are continuing challenges with many east in Latin America.

And we expect them of course to comment to recovery mode sometime but in the near term we're feeling very good about the real resurgence in July and the peak season in China has on several days has implantation records. So as results of that we feel that.

When show growth at 20%, which we will double digit growth over prior year, which was record grateful for the company is looking very good.

Okay. Thank you for that.

Just for my follow up as you talked a little bit about in your prepared remarks.

Tivo Veeva now launching.

Since Spain, Belgium in Germany first.

But obviously marketable to all the countries except to CE Mark.

Could you maybe just talk.

Directionally about the margin structure there as.

Those linzess will be manufacture to core some like for us to newdow coming back up in early 2001 for traditional.

You go Oh, I see ill I remember right. That's the sort of used to have higher purchase and the growth via so help us think about kind of the puts and takes there on the gross margin line as you ramp up for Veeva, and then get ready to start the Dol and of course, Monrovia goes back to normal production levels.

Thanks again.

Sure Chris Thank you for calling in.

With regard to our evil Veeva initial production will be out of that Rosia.

Our cost per units for blend well with our current evil buses.

So we would expect our gross margins to be in line.

In terms of the rollout the staggered rollout is designed to provide us the opportunity not only it's a very effectively work with our assertion partners to create excellent experience for patients and to manage patients expectations expertly, but also.

At the same time.

Two also put out a pricing strategy.

We believe with strong gross margins will give us have very nice profitability profile. Even ahead of the opening of Lake Forest in 2021.

Thank you.

Our next question comes from the line of Anthony Petrone from Jefferies.

Anthony you may begin.

If your line is on mute can you press star six to meet your line. Please.

Oh, Hi apologize for that was on mute. Thank you for taking my question isn't and good afternoon.

Karen.

A question on.

The the trends in China, you mentioned, 20% share Buddy into the year, maybe just to level set.

Where you ended the quarter in terms of share in that market and then maybe more specifically where you're seeing.

Gains on the patient and as it is still mostly hi Mayo.

Or are you seeing you know a fair amount of share gains also from from moderately helps.

So we definitely are seeing share gains from moderate my ups in order to get to 20% you really have to be going down the dives to occur because the percentage of very high mileage since about 10% of the total.

We're somewhere depending upon where have a really good graph of what the total refractive procedure market is in China right now only because the fact that we know there was a reduction for several weeks. So we have a pretty good idea, but we know we're somewhere in the 18% range. So we know we can get to 20% by year.

And then trailing 12 months were probably there.

Right.

That's helpful. In my follow up would be and I'll get back from Q is just as we look at.

The U.S. progression you mentioned second half flows.

21 potential launch.

How do you see that that rollout progressing within the first three years should we be thinking.

A similar ramp as as China post IYR or you know more moderate ramp just consider that it's a bit more fragmented. Thanks.

Right. So you point out the difference.

In that in the U.S. market, we have mostly smaller clinical practices or change rather than the very large practices like higher and hospitals like higher both public and private in China. However, we've been doing a lot of work and these last several weeks, we actually implemented a program called.

Refractive free start, which I'll report on next quarter as we finish this program over the next couple of months.

This program in the United States offer too many surgeon practices, who will become a strategic partners are already were see opportunity to benefit their patients.

With a lens.

That is sold to them at no cost so that the surgeons could then provide their patients with an opportunity to get visual freedom at an important discount somebody surgeon was also able to improve their business.

So and we're up when you add lenses, we sold to lenses given away were up 65%.

Through this promotion up till now so we believe that this excellence, especially when we add the feature of evil without peripheral air it ought to be required.

We believe that we will have a very quick ramp up in the United States, maybe not at the extraordinary levels. When you have such a big provider like Iris some major initiator that I believe that many of the key kolašin the United States.

Are going to aggressively promote and aggressively and happily implant these lenses and many more patients.

Thanks, again I'll get back.

Thanks Anthony.

Thank you.

Our next question comes from a line or Brian Zimmerman.

Thank you you hear me okay.

Yes, Hi, Ryan.

Hi, Thank you Karen asset welcome.

Couple of questions for me just a follow up on the China commentary.

Joe I'm, just trying to reconcile some of the comments I think in the early part of your spread.

Called out that China.

It's continuing to recover it's the covering the gross let's just based on the filings I think it was down about 4% in terms of revenue for the quarter. So you just help me understand kind of when that inflection occurred.

Late in the quarter it seems like and then.

Just backing in to the during the math Asps were down a little bit on the units and so I'm. Just curious if you could comment on the trends for ASV expectations.

Over the balance of the rest of the year as you move into more moderate in low miles that may compete with one second then I've a follow up thank you.

Okay.

So we actually were up 6% in units in Q2 in China, but we definitely had way more lower diopters competing with laser vision correction procedures, we actually we had to base for the first time minus one.

For China, Theres, so much interest in getting rid of glasses or contact lenses literally the meeting rooms.

And the line since the hospitals go outside and around the building so there's tremendous interest and in comparison, though.

So last year, you may remember that we had another big spike in demand last year in China and as a result, we did sell more inventory in Q2 to prepare for Q3.

So even though China picked up very very well in the back half of Q2, we still have the comparison to prior year, where Q2, which very large and so as result of that the good news is issued in Q3 and a record in July in terms of.

Border and well, we see going forward is that will continue in through August.

And so our confidence in China is strong we do see mix being an important.

Actual predictor of his piece, but we see a is p. impact of less than a 4% for our entire product line, even though we're moving down quite aggressively to die after Chris to lower spherical price points.

Okay. That's very helpful. And then I want to ask a question on the trial in the U.S.

You know enrollment wrapping up by the end of September six months or so.

Get everything together.

Why.

It seems like a very rapid turnaround with the agency and I guess, what's your confidence there that you can hit that the back end of 2021.

In terms of getting that product of not only approved but then as you said commercially available again 2021. Thank you for taking the questions.

You're welcome so we really had exceptional meetings with the FDA when we got the I'd. He approved we clearly understand but the primary endpoints are that we need to achieve.

We are any safety study not an efficacy study and we need to the safety.

Yes.

Priority points for certain and if we do that we believe that's what's what is left for discussion. If we have a clean outcome will be on a relative basis.

Rick in terms of which was normally have if you were for example, trying to being a product into the U.S. market. Maybe you have 100 and plants you don't have an effectiveness records to speak of and you have a lot that has to be proven selling them relative basis.

One is the reason some with grateful to the FDA that we have a shortened timeframe is because you know immediately whether we're meeting safety endpoints. So that gives us confidence with all the excellent discussion we pass that we should have a to standard.

Meeting 100 day meeting and then hopefully really good follow up and approval thereafter.

Okay. Thanks for taking my question.

Thank you very much.

Our next question comes on line of Brian Weinstein.

Hi, Karen High Patrick O'brien.

You are on today.

Maybe if I could start I'm asking a question on sort of the funnel, they're saying signing up new partners and how if at all those conversations may have been impacted by the current cobot environment have you seen any sort of acceleration of activity with those partnerships given your growing share here.

What's really been.

Hardening and I think a great Testament to the partnerships is that we have not been asked to modify a agreements I mean, there have been a few situations here and there where we've made adjustments along the way, but just about everything we're doing is on track on schedule renegotiation.

Yes that are built on growth.

Not built on lack thereof, and so overall the funnel of partnerships goes up as we build more and more new partners around the world and really from Coven 19, we have not seen reticence hedge or to be fearful about volume commitment.

It's clear that based on the constant and open dialogue with our business partners of course surgeons and itself.

That we would work with them effectively and we have in certain markets like I mentioned, the U.S. and in Spain, where we have a program for first line workers.

In markets around the World. We also support in other ways and so those partnerships continue on with that kind of strong emphasis.

That's great. Thanks for that color and then I guess, Patrick maybe one for you recognizing that you are still pretty fresh and the chair, but I mean, obviously, Karen Debra and sort of the whole team there put together really nice strategy over the last several years, but I guess, maybe from your perspective can you talk about some of the areas of investment that you might have identified early on is it.

He is where you could really accelerate growth or press down more fully on that strategy.

Yes, I think it's probably a little early early for me to to put my neck out there to fire at this point, but I would say that what's really exciting to me is the overall size of this market and our best in class product in procedure that I believe has a real good opportunity. So I think anything that we can do to help commercialize this product as we move forward.

Okay, Eva Veeva in Europe, and then certainly with the clinical trial with Eva USA I think you could those are kind of the areas that we would certainly focused on as a company, which is very consistent to where the company has been talking about with the with you guys on wall Street for some time, but I'm super excited to be here.

Great. Thanks for taking my question.

Our next question comes from a line of Bruce Jackson.

Hi, good afternoon.

I agree loop.

So I'm looking at the of the Veeva rollout in Europe. So you spoke about focusing on patient satisfaction and having a controlled.

Rollout, maybe could give us a little bit more perspective on how that might look in terms of the trajectory over the next couple of quarters and what are some of the things aging specifically with the practices in terms of by training patient selection things like that and at what point do you think you can certainly keeps open to the entire market.

So at this point in time, we're finalizing all of the criteria the marketing materials that patient questionnaires, both pre and post implantation.

We are building on the success of the two clinical trials that we had the results of both of those trials will be published we believe.

In the next 30 days and taking what we've learned and at that adding with the initial surgeons and their experience. We will build what we believe will be a very strong playbook for 45 to 55 year old patients seeking visual freedom with our Eagle vivo less.

By I would say the end of first quarter of 2021, so that we would most likely be opening this market completely by mid year next year. So that's our goal it's very prudent with his extraordinary lens to do this very effectively no one can tell us better than the surgeons.

And the patients on a on a much bigger scale over the next several Oh, how this lens best place the narrow adaptation and the opportunities overtime. So we are we are very excited and were very ready to go but we're going to do this the right way and then open the doors.

Okay, that's great and.

And then longer term could you potentially then getting the situation where you would add in.

For example dress consumer advertising and on top of your your standard marketing campaigns.

We actually are doing direct to consumer advertising in many markets around the world where actually have been asked so often because it's hard to do channel checks or get recognition of what we're really doing around the world. So we are preparing a streaming video that we.

We'll be releasing in the coming not.

That will show every one what we're doing in markets around the world with regard to consumer marketing. This is everything from some exciting testimonials.

From from celebrities in multiple markets two extraordinary campaigns on very large outdoor then he is whether they be transportation venues or sporting venues et cetera. So we're doing quite a lot of that right now and we'll be expanding that overtime and I.

Think of course, when we bring evolved to the U.S.

Then you'll be able to see it up front and center here in the United States and frankly, we can't wait.

All right that's great. Thanks for taking my questions.

Thank you Bruce.

Our last question comes when a line of Cecilia for long.

Hey, Thanks for taking my questions I'm, Karen I wanted to ask just hearing your perspective on your consumer outreach in marketing campaign in China, just over the past few months I'm the impact that's been able to hubs.

Just given co bid and being able to perhaps target patients more direct more directly but then also just as you're thinking about China through Q3 in Q4, but just the potential impact of co bid on.

You're busy season in any kind of year over year changes either due to backlog of patients or different just situations for patients that I guess I'd just like your thought on that.

Sure so in China, wherein where that's very enviable position.

That our strategic partnerships the agreements that we signed and the work that we're doing together with everything from small clinics to our very largest hospitals, both public and private and I are as well is in partnership and so as a result.

With that that hundred million a participant.

In social out social consumer outreach and 100 cities and that is one of our partners doing extraordinary work because they have a very high desire to increase the number of refractive procedures when I see out with evil.

That is mirrored in a number of facility and a number of clinics, but what is really interesting is that the majority of what we're seeing is being done and produced by the doctors the marketing departments themselves always.

Same coordination, but they're doing hardware themselves we have in our video Library Harris star at over 100 videos of doctors, who have done outreach about the enthusiasm of even though.

We have one very famous hospital I don't want to embarrass, where all the doctors did a music video playing instruments and dancing to their enthusiasm about even though to appeal to their patients.

We also have our retail clinic partner.

Who now has standing room only in a very large Shanghai mall and in multiple other locations and so there's a lot of consumer outreach that social media, that's kiosk related special event related but we're talking about millions have touches each and.

Every week, so it's quite expansive with regard to covert 19, and China. What we're seeing right. Now is China is very well control if theres any outbreaks in certain areas. There quickly gotten too and there has been at this point in time since species and b.

Yeah, no disruption in our business and the amount of interest.

Literally.

Waiting rooms full.

Lines outside the door, there's just a tremendous enthusiasm forgetting visual freedom in light of a pandemic. There is no doubt that there is more interest as results of the challenges of contact lenses sunglasses with masks et cetera, So in China were saying.

I think some very excellent numbers at the beginning of busy season.

Great. Thank you Karen and I guess, two if I could just ask in Europe are falling eat off approval could you speak to the initial interest generated off of the approval and just as you as you look going forward. The impact do you think it can have on your broad business and the potential there really accelerate Eva.

Adoption overall.

Well I, yes, I think having even a family of Linzess definitely gives our search on the opportunity to expand from our typical 21 to 40 year old setting all the way to 55 to six year old should they choose to it also gives our church and see opportunity if someone would come in prior.

To evolve Viva and really want to get rid of their reading glasses same I'd have to give up their natural crystal in lands earlier than necessary refractive Lance exchange. So there's a lot of enthusiasm about not having to make that suggestion by our initial surgeons. So we see an up tick.

And individuals regardless of age where really interested in having full visual freedom and we also believe that in the early months, it's going to be more about the quality experience than the number of lenses that are placed into really being able to track multiple different.

Hi.

She wishes with individuals needs to site and lifestyles and desires and then being able to package all of that very easily for the surgeons. So the way we market lets say in second quarter of next year will probably be very similar but it will be much more specific in terms of recommendation. So I think.

Overall, you're going to see a lot more volume a lot more specificity aimed at the patient with much more confidence about what that outcome would look like so all in all we see volume going up and we also will make a situation where patients may end up having and.

And even lens in one night that would be there dominant I for distance and potentially a myopia lands and the other ride for reading. So there is also that combo there could potentially also occur in certain patient. So at the end today I think overall the evil family glass is becoming.

Much bigger part of the business model the refractive surgery.

Great. Thank you can.

Thank you see on the appreciate you're calling in.

There are no. So thank you for your participation on our call today, we look forward to speaking with many of you in the days and weeks ahead. We appreciate your interest and investment in STAAR surgical please take good care all the best all of you.

Thank you.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating and you may now disconnect.

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