Q2 2020 TELA Bio Inc Earnings Call

And ladies and gentlemen, and welcome to tell about your second quarter 2020 earnings Conference call. At this time all parties. It sounds like Nobody said only mode. A question and answer session will follow the prepared comments as a reminder, this conference call is being recorded I would now like to turn the conference over to Mr. still work Anderson Vice President.

Corporate development and Investor Relations for Tele bio Sir the floor is yours.

Thank you Joanna and good afternoon, everyone earlier today Teleborder released financial results for the quarter ended June 30, 2020, a copy of the press releases are available on the company's website.

Joining me on todays call or Tony Coalition, President and CEO and nor Brendan.

Before we begin I'd like to remind you that during this conference call become people make projections and forward looking statements regarding future events.

We encourage you to review the Companys past and future filings with the FTC, including without limitation company forms 10-K filed on March Thirtyth 2020, and 10-Q filed on May 15, 2020, which identify the specific factors that may cause actual results or events could differ materially from those describe any forward looking statement.

These factors may include without limitation statements regarding product development, probably and potential the regulatory environment sales and marketing strategies capital resources operating performance or potential impacts of code at 19.

With that I'll now turn the call over to too.

Thank you Stewart and good afternoon, everyone.

We hope you're safe and healthy thank you for joining us.

Total revenue for the second quarter was 3.5 million an increase of 6% from the same period last year.

Our second quarter like many in the Med Tech space was a tale of two quarters with the second half being nothing like the first.

In early April when hospitals, where postponing many non emergent procedures, our daily sales fell precipitously.

For the full month of April our daily sales were more than 70% below our average daily sales prior to the beginning of the Colgate 19 pandemic.

However throughout May and June our debt at least the daily sales experienced steady improvement and in late June our volumes exceeded our pre Colgate 19 levels.

Well, we are very encouraged by the accelerating sales we experienced in May and June.

Situation remains fluid in the United States with several of our sales territories located in current Covidien 19 Hot zones, though our early read on our sales in the current quarter look similar to the trend we experienced in late June.

We have recently been hearing that several hospitals and these territories had limited or even start performing elective procedures.

The impact to our third quarter remains unpredictable with this recent resurgence of covert 19 cases, and the possibility of a second weighed in other regions.

Despite this uncertainty what remains clear is the strength of our team's commitment and our drive to push our initiatives forward as we scale EPS physician tele bio for growth into 2021 and over the long term.

To that end throughout the second quarter, our commercial team worked tirelessly to support our customers in patients continuing to cultivate and make meaningful progress on our strong surgeon pipeline.

We adjusted quickly and implemented to virtual sales solutions designed to educate surgeons about our product portfolio and clinical data.

First is the virtual version of our VIP tours, whereas previously brought surgeons to our facility here in Alvin to learn about our products and to discuss different use scenarios with our senior management and clinical team. We are now utilizing virtual solutions in an effort to achieve the saying experience.

Our second virtual solution is for K L. L. Seminars. This solution offers surgeons a platform to engage with Kale wells and importantly, discuss the growing clinical data and their case history using over decks and Overtax Prs.

I'm happy to report these settings had been broadly well received by the attending surgeons as well as with our K a wells in sales staff.

Through the end of July over 120 surgeons have attended our virtual VIP tours or our K, a well webinars among surgeons, who participated in the event in Q2, we have seen close to a 200% increase in average monthly revenue of our products due to the success of these solutions.

We will continue to use these strategies moving forward and are excited to introduce branding as our virtual approach to two two customer engagement, it's called Tele live leadership initiated virtual engagement.

We expect to continue to add to our suite of virtual programs and are actively exploring additional platforms to provide our customers with virtual support and case coverage as well, which we call virtual proctoring.

Our sales reps have done an excellent job, providing continuous support to their surgeon and hospital customers.

Hospital access environment continues to evolve throughout this pandemic and varies from hospital to hospital. Our sales team continues to adapt and comply with these various policies to mitigate disruptions and develop innovative solutions to meet customer needs and build their territories. While we are now generally seeing improved hospital.

Access our reps are flexible and remain ready to adjust as localized hotspot may arise within their regions.

On the clinical front, we recently announced the result of an interim analysis of our post market Bravo study.

The analysis included patient outcomes at several time points, including the all important 24 month follow up period.

90 days Postop, there were no recurrences re operations or implant removals, among the 85 patients analyzed.

At 12 months of the 57 patients that had been assessed only one patients experiencing a recurrence.

Notably this recurrence them in a location adjacent to the original repair in an area of dot abdominal weakness and the initial repair using overtax remain intact.

Of the 20 patients that reached 24 month follow up no unexpressed, a recurrence or long term complication.

This interim analysis continues to clearly demonstrate the effectiveness of overtaxed in improving patient outcomes in ventral hernia repair. These data have been submitted to a medical journal for publication and additional analyses of the data have been submitted to upcoming medical conferences as a reminder, that Bravo study.

As a post market study designed by televised and its investigators to evaluate postoperative complications and re herniates. Following the use of attacks in subjects with moderate to complex ventral hernias due to many hospitals limiting non essential visits because of covert 19, we are working very closely with our study locations.

To make sure all follow up visits can occur in a timely manner as much as possible.

Turning next to our operations during the first quarter call. We discuss several cash conservation strategies. We initially initiated in April including among other things are hiring freeze on the heels of our successful capital raise in June and the lifting of hospital moratoriums on performing elective procedure.

As yours, we are revisiting several of our capital conserved constant conservation measures.

In late June.

We began cautiously scaling up our salesforce in territories were not emergent procedures are being performed close to pre coded 19 levels and where we have hospital access to our existing IDN and GPO contracts.

These new sales territories are being added within our existing six regions. So each region will consist of approximately eight territories.

At a regional level, we are managing the business nimbly, employing both virtual and in person strategies as appropriate given the local situation related to covert 19.

We continue to actively monitor the situation make sure we move with our operational growth initiatives, while judiciously managing our cash.

Regarding our GPO contracts, we are in communications with supply chain and clinical resources within hospital systems about the favorable efficacy and economics of Overtax when compared to other natural repair technologies supply chain functions at hospitals have come online in recent months to engage with supply.

Buyers and we are focused on re initiating discussions to drive our implementation strategy within contracted accounts.

We also continue to make progress securing additional IDN and GPO contracts, but timelines are variable is each organization manages its priorities relative to the pandemic.

We are continuing to stay in front of the decision makers and support our business partners through this tough time.

Leveraging virtual solutions, where possible and look forward to updating you on our progress in the months ahead.

Lastly, we continue to make progress in the plastic and reconstructive surgery market with Overtax Prs products. Following a limited commercial launch period.

Where we solicited feedback from a core group of surgeons, we expanded our commercial launch in June our.

Our clinical development team has done an excellent job engaging plastic surgeons through that are tell a life program and we expect to continue to broaden our surgeon base over the coming quarters.

We also continued to work with plastic surgeons to identify opportunities to further refine and advance our overtax Prs portfolio and playing a similar approach to our over techs hernia portfolio expansion.

So now I'll turn the call over to Nora.

Thanks, Tony and Hello, everyone. Please refer to our press release issued earlier today for a summary of our financial results for the second quarter of 2020.

Revenue for the second quarter increased 6% year over year to three and a half Tonight.

So our revenue increase over the prior year period, it was impacted by lower than expected procedural volumes.

To hospitals and patient suffering elective procedures due to cook at 19 gross profit as a percentage of revenue improved in the second quarter compared to the prior year period, primarily due to a decrease in the charge recognized for excess and obsolete inventory as a percentage of revenue.

Second quarter gross margin increased to 59% from 50 extent in the prior year period.

Sales and marketing expenses were 4.1 million and the second quarter of 2020 compared to 3.9 million and the same period in 2019.

Increase is due to higher salaries benefits and commission costs as a result of our sales expansion activity. However, the increase was partially offset by the salary reductions lower travel and consulting expenses, resulting from the cost containment actions taken in Q2.

<unk> expenses for 2.1 million in the second quarter 2020, compared to 1.29. The same period in 2019 increase was due primarily to increase cost associated with operating as a public company.

R&D expenses for 1 million and the second quarter 2020, compared to 1.1 million and the same period in 2019, this slight decreases due to reduced.

Hi development expenses, and a lower level of laboratory spend.

Loss from operations was 5.2 million in the second quarter of 2020 compared to 4.3 million in the prior year period.

We ended the second quarter 2020, but $85.5 million in cash in late June we successfully closed our underwritten public offering a 3 million chair, increasing our cash position by approximately 45 million.

This additional capital will allow us to contain the other teams strategically.

I think clinical support and R&D and support our good initiative.

Based on these plans, we believe that our existing cash resources will be sufficient to meet our capital requirements and fund our operations for the long term.

Now turning to 2020 guidance.

Do they continued uncertainty from the impact of coping 19 enter business. We will continue the suspension of our full year 2020 guidance.

With that I'll turn the call ever to Tony.

Thanks Noah.

In closing I want to thank everyone again for your time this afternoon and for your interest in Tele bio.

I also want to thank our team.

Can you energy creativity and dedication to working as one to help patients and support our customers throughout these challenging times.

I'm confident in the fundamental strength of our business and I'm very optimistic that we will continue our success and achieve sustainable growth in the long term.

So I'll now turn the meeting back over to the operator and queue up.

Question.

Thank you speakers, ladies and gentlemen, if you have a question at this time MIEFE Granny Smith side than the number one key on your Touchtone telephone.

Question has been answered all your we should we move your shelf in MCU. Please press the pound once again, many press star one to ask a question. Please standby well, we compile dickey any roster.

Your first question comes from the line of Raj Denhoy from Jefferies. Your line is open.

Hi, good afternoon.

Ross.

So I wonder if I could maybe ask a little bit about you know how the business ended in June and how its look here now in July and in part of the way through August.

You gave that guidance for that update I should say kind of mid June about you every tracking kind of can two to one to one to two three ended up with three fives. So obviously very sharp recovery in the back half of the quarter I'm curious how that sustain now you've looked at July and August as it continued to ramp or or or what are you really seeing on the ground now.

Yeah. So you know keep in mind that our business is really quarterly as most medtech businesses are so you know we can see you know in perfect times without coded 40% to 45% of revenue.

I'm in for.

For a quarter in that last month. So you know in Q2, you know April was so low.

Little bit back in May you know, there's a distortion of those ratios right. So you know I would say that we came in a bit heavy at the very end of June I would say up better than pre co vid levels and I'd say in July we saw a continuation of that.

But maybe a little bit a moderation based on the fact that were just start.

Right so.

I don't think will really know if we're seeing that acceleration until we got through the full quarter, but I can tell you that if you use pre coated measures. We were right there at that pre covance level, maybe a little bit better you know.

Through July so we were very happy with where July started.

Almost relative to any other month, we've had but but I just slow those caveats out there as we went through the month of July.

I believe that was the first month, what we saw these flare ups in Texas and that kind of thing. So there was a little bit undulation in territories overall, our business. If you just looked at the top line number was great. It was fine for July.

But if you look at some of the underlying components that that add into that you know we did see some undulate actions and off a little bit you know by 8% cells or so in Texas, Arizona little bit in Florida. So you know we're treating this I guess philosophically.

Almost as a rolling brownouts right that were just gonna have to contend with not blackouts I think those days are behind us for sure. So in a brown out you know you're not going to see.

Elective procedures go to zero you may see a slowdown you may see a shift other facilities you may see all kinds of mitigating factors as hospitals fight and they will fight to keep the procedures going so our goal here is to almost create our own reality, where we operate agree.

Massively nimbly, an agile way into whatever each territories given us. So for example, if there's a rolling BLA BLA now than we go hit hard with tell alive.

We go virtual we drive those programs and we bank those new customers for you know for for the next couple of months, where its open we go hard right. So I think I focus the team on that lets control what we can control.

And let's just assume it's going to be rolling Brown out as we go forward off and on.

Maybe sometimes week to week adjusting.

Our goal is gonna be to grow through that and optimize through that so I feel pretty good that we've got to system in place and a team in place that can do all that so that's a long answer but that's it that's a bunch of color to thrown in bras.

Super helpful and maybe just as a follow up and I, just maybe difficult question to answer as well, but when one thinks about what drives your gross whether in this period. There is some level of deferral catch up versus underlying hernia demand.

Breast reconstruction as well, but sort of underlying demand and then also now opening up new accounts to sort of competitive wins. You know is there any way you can maybe parse out what what has been driving the recovery for you. Yeah. You are there any one of those that's maybe more important right now well you know like I said on our last earnings call rise we have solve many factors that are.

Have come together for us right, whether it's new products with Prs and LPR, whether it's the new data, it's the expanding Salesforce and now you know I'm Gonna say Hello life program has been a really great weapon for us so even if we look at Q2 right.

We had only a handful of new territories, I think 35 versus 31 in Q1, but you know our new reps that we hired in 2020 and look they've had no time in the field you know in the real world they've been doing it all virtually they contributed 11% roughly where.

All over 10% of revenue in Q2. So you know I think there's a few things going on here was there a little bit of a pent up demand.

You know in the second quarter, probably you know you could probably could spread a little bit of that June kick you know across April or may, but I think that gets overwhelmed by all the other factors that we have that you know and we also have you know diversity of procedure as well right. We've got.

We've got in a way of hernia procedures from complex to simple touches different types of surgeons and then we have the plastic and reconstructive you know, which touches a different type of surgeons. So theres a diversity of opportunity as I spoke about last quarter as well in terms of docs and procedures, but like I said you know we're creating.

Our own reality, we're going to maximize all the assets that we've built.

And make this thing go no matter what handed to US all we need is procedures somewhere right and I feel like we can you know we can make this thing happen.

No thats great appreciate it thank you.

Hi.

Your next question comes from the line of Matthew O'brien from Piper Sandy Matthews. Your line is open.

Afternoon. Thanks for taking my questions actually have a few if that's okay.

You know just for starters, Tony I think you did 1.3 million in last two weeks of June are you, saying you did you had a similar type you know you know first half from July 2nd half of July type of performance of that around a million dollars that into the first couple each of the first two weeks of Oh gosh the core.

Okay.

No what I'm, saying is keep in mind that the last month of a quarter is 40, 45% of revenue right. So what I'm, saying is July was very strong when compared to pre covidien levels right. So you know so we started Q3 off at a.

Very good place.

You know theres a lot of PEO clean up maybe there was some of that pent up demand that I. Just described you know thrown into the end of June to Matt. So you know if we saw the last two weeks of June now ramping to infinity, yeah, we'd be very very happy, but thats not the case, we're not there yet they're still these.

Rolling Brownouts patchy NIS.

Rep access is still you know hitter meth ER I think were smoothing that out, particularly with our tell alive program.

Which I think is very effective but you know I think I think we can I'll kick and grow through all of this and I think we'll we'll really know how we look in the last two weeks of this quarter when we compare that to the last two weeks of June right. So.

Looking forward to that in September, but nothing like the trend in July was excellent excellent in terms of where we started the quarter relative to Q2, you know even relative to Q1 I think so yeah, we're pleased with it.

Okay, and then you started giving us a little bit of a peak behind a behind the curtain as far as the performance of the Salesforce and I think you said.

But the reps you added 2020 are doing are doing about 10% or revenue in Q2.

We added.

I mean, I think you only added four reps and in the first quarter. So that'd be liked it there on a run rate for about a $100000 apiece, and just Q2, so that would seem like they're ramping very quickly.

Can you talk about why that might be or they focus on help trust and then you know this 200% increase in the docs that looked at it tell alive.

Just some of the things these cities other metrics that you're seeing underneath because the performance in the quarter.

You know, especially versus and I know, it's up a smaller base versus the rest of Medtech is it's quite good in terms of growth.

Everybody else contracting so just just other metrics that we can kind of get our head around as far as the better than expected performance for your business.

And then you know where that could go from here in new accounts et cetera.

Yeah. So so lets level set and now I'll just as Stuart to correct me, if I'm out of whack on the rep counts versus territories, but.

Free going into the IPO, we really had you know into 20, let's say and we really ended.

Last year 2019, with about 30, right, there and body about 35 30 reps.

And you know so I'm, including all of those reps you know when we got in there. So yes. There is a grouping of new reps I think they've been very successful really driven by the tell alive program right. So I mentioned one metric in my script monologue.

That we've seen about a 200% increase in avidly average monthly revenue among surgeons, who participated in a life program.

So so I think that has helped us out tremendously you know there's certain areas of the country, which we just didnt have reps then you know pre IPO and we do now and a you know those territories by enlarge have really started to produce you know and the only met mechanism available to us is tell alive a virtual.

And also through the contracting and we've we've made sure that weve overlap did overlap sorry, the the life programs in the contracted arenas now there's another thing going on here.

As well with the life programs, which I'm going to focus on and that is that if you know we're also doing these life programs for existing customers with the goal of expanding their personal usage you know, let's say they start off doing complex bench wells, we want to expand their usage into simple hernias.

Or there are perhaps a new customer around Prs, we use the life program. So with it and we also want to spread into more surgeons within a hospital. So we're seeing about a 60% increase in revenue from existing customers, who participate in a life program and right now and I expect this metric to get.

Better as time goes forward that were averaging over a 50% conversion.

Of new users of our products that have done I was alive virtual program since April and I think that we're going to see that ratio go up I think theres mitigating circumstances on why they may or may not be starting it could have been elective procedures. It could have been.

And just slowing down the vac process and getting going at the hospitals, what have you, but we're seeing virtually on every metric. These tell alive programs are having a positive impact.

And and the reason why that's possible is because of the access that we're seeing in house Frost and other IDN. So I think that's really what's working for us and that's really the concept of creating our own reality, we wired it would mastered it and now we got to just executed over and over and over again, we've been doing that were averaging well over 20.

90 of be lives lives a surgeon engagements per month.

Okay. That's really helpful lessons actually for nor nor was it the same kind at 90 10 split between hernia plastic this quarter and then the Opex came in you know I know you had signaled that was going to come down in Q2, but it was about 10% lower than I was expecting I know, you're adding a few reps here.

Should we expect you know levels that are slightly higher than Q2 anyway. Since we first thinking about Q3 Q4 or really go back to Q1 levels on Opex.

So.

It's roughly about 90 10 Gallatin split between of attacks in Paris with respect to hop back to me as Tony mentioned that you know, we're gonna start backing in our commercial program again it.

No as surgery come back for Gonna, we're going to spend a little bit more money and so we'll see it in the commercial as well within R&D, but we should see some increases in our spending.

Going forward certainly higher than Q2.

Got it very helpful. Thank you.

Thank you see Chris. Your next question comes from the line of Kyle's most from Canaccord. Your line is open.

Great. Thank you very much for taking the questions can you hear me all right.

Okay.

Good afternoon, so I had a coal.

Questions that don't gel in some of the other topics previously so maybe just to start you mentioned the pent up demand a couple of times. Obviously, you were really priming the pump with the tell alive programs.

But you already had some existing utilization with with your underlying core user base and maybe you think about the growth that you saw in May and June cater to try to tease out how much of that was just catch up versus some of these new accounts coming on board.

Yeah, I mean, it's hard for me to say there was any catch up in May or May was 50% pretty cove at levels, where.

We were scratching and clawing, but diligently executing these life programs right. So I think the only place I can point to where I feel like that there was a pent up demand, perhaps could have been yeah PEO clean up at the back end of June that's it.

So I don't think there was any kinda sustain pent up demand much more than a couple of weeks. So I think most of what we drove was through this alive stuff that we've been doing and keep in mind, we started doing it right at the very beginning in March April May you know it over and over and over again and so were.

Just starting to see the fruits of that you know given the a the timelines that it takes to get new customers up and running or you know just to go through the process and we didn't really have access.

To a lot of the supply chain Oh, our director.

People to get a you know to get the hospitals moving you know much beyond the surgeons until really the end of May early June so right now, it's just a little bit phase right. I think we're starting to see supply chain or direct or engagement started in June and is now picking up to more normal levels, albeit.

Virtual.

And then you know the surgeon side of things you know the case volume.

Really did not seen.

You know at good levels until you know until we started to get through June and into July but again, you know by July we started to see the this this rolling Brown out are catching us here and there. So you know I think overall most of what we drove here. So far is due to our own efforts in lives that's that's where.

That's where my head is that we just you know talk to so many surgeons, it's impossible for us not to be a big driver.

Okay. That's that's very helpful. And then I appreciate the breakout of overtaxed versus Prs I'm wondering if you could just give us a little more insight into the open text side there specifically around.

The minimally invasive and laparoscopic yeah, you know utilization yeah. That's an interesting that's a good interesting question right I mean last quarter.

We were thinking the complex eventual stuff was going to lead us out right and then the Prs and you know to a certain extent that was the case, but if we look at how the quarter sort of smoothed out you know it really wasn't that much different in terms of ratios of the different types of procedures in the hernia arena.

Pre cove. It. So we had you know a roughly 64% of our Q2 hernia cases, where ventral umbilical Paris Dalmo you know we pre coated when was that I'd say Q4, it was 63%.

And then on the inguinal side that actually grew in Q2 to 19% pre covert it was about 12% and then for some reason the high Aidells came down a bit we did about 22% high hurdles in Q4, 19 and about 13%. So you know it was a good mix and and and it was also a very consistent.

Next on open versus robotic versus laparoscopic roughly 60% of our procedures, 57% in Q2 were open and in Q4. It was 53% and then the robotic has actually been growing right. Our pre cultivated robotic ratio was about 27% robotic now it's 33.

8% robotic.

And then laparoscopic was 18, a and that you'd expect has come down a bit to 10 as the robot starts to take over so you know I think the ratios of procedures and types of Ah techniques as Dan you know has been pretty consistent as of Q2, which I think speaks to a.

Hey.

A pretty decent you know recovery on the hernia aside if not in total procedure volume at least in getting the patients that are cut that want to come back you know with an array of problems getting sick. So I think that's a positive sign all around.

I really appreciate the insights there and then just one last one then on if I can sneak one in its just.

Healthtrust I think I on the Q1 call you talked about being somewhat somewhere north of 65 accounts, but a lot of those a lot of those hospital administrators, and furloughed and kind of waiting to come back. So just how that has tried to promote.

Getting on contracted into those hospital standpoint, Yeah, you know our percent of revenue in Q3 from Health Trust accounts was about 30% and you know you look at pre coded that up a bit right from you know high Twentys or you know mid to high Twentys.

And if you look at the number of accounts you know, we we were pretty solid in Q2 at 55 HPV accounts.

You know Q1, if you think of in the first part of that quarter was really you know driving those new new accounts to come on and then fell off in March and really didn't recover you know like I said, we didn't have access to the supply chain folks until you know just starting in May little more so in June and July so.

We expect that this yeah. This is a HPG will go up what's really gratifying.

Because if you look at our GP show you know contracting strategy. Kyle is you know step one is implement healthtrust right. So you know I think we were doing fine. There you know co that has set us back, but we'll be back that's going well, but the good news is is that you know the second underlying strategy underneath that is to drive.

Large IDN and that's happening for example, you know we just got what amounts to almost the sole agreement at Allegheny Health network.

We're on contract at Mayo in Florida, and there's just a great pipeline of consignment agreements and RFP that are in motion. So you know this is a never ending process, it's going to be healthtrust implementation job. One job too is a this b to b process, that's really going to be focused on.

IDN and consignment you know we know that if this consignment inventory on the shelf, we can do cases, particularly with our virtual proctoring programs that are emerging you know and then as far as the other GP always go we're just going to.

Serve that wave and whenever those RFP has come up we'll do on a buffer the most part I feel like where we've got more than enough to work with year on the the GP on IDN front between the IDN strategy in the Healthtrust implementation. So were you.

We're really focused on making those parts of the business go now.

Great. Thank you for taking the questions all right now.

Your next question comes from the line of these start going Oh, Gee NP Securities, Steve You're 90 joking.

Great, Thanks, and congrats and pursue Christina.

[laughter] difficult quarter.

Tony just wondered maybe you for if you would there be willing to share with us or number of active users.

We have had a at the end of the quarter and then I'm just trying to get an idea around.

What percent were up and running and then maybe your guess what the person where are you seeing these brown airclic what percent of the business that is if possible yeah, well I mean, I'll, let me well Stewart scrambling to think about big numbers [laughter].

I'll I'll just give some commentary on on the rolling Brown out right. So.

We try to take up little block of what we'll call, Texas, Florida, Arizona.

And.

You know that ran about 25 those those three stage ran about a 25% for Q2 and you know in July that ran about.

You know, 19% so less than 20. So I think that's an example of one you know rolling ground out cluster of states. If you will and there's probably a bunch of those going on you know up and down all over the plays and even amongst that cluster is not homogeneous rights you know, Texas is shut down a certain counties, but there.

Trying to move procedures, Florida, you know some of the Healthtrust accounting, Florida have actually stop for now and then Arizona as kind of a mixed bag. So I think its week to week, it's not month to month with these rolling Brown out clusters, but that gives you just an example down 6% you know and.

Yes, theoretically those areas should have kept growing for us because they were you know rich in IDN and health Trust accounts. So on contract and also rich, particularly in Florida with the life programs and we saw some great growth you know out of the life programs in Florida, and then we've seen.

Thats sort of you know taper off a little bit so Stuart wrote down the number of customers about 270 customers in Q2 versus you know a little less than that to 65 or so in Q1. So yeah. We grew the customer base as well you know and that's I guess with people.

Starting and stopping so it's a good sign.

Okay. Thanks for all that detail I guess that.

Maybe just sort of a quick follow up just a pipeline I think you ever new LPR coming or anything else you'd highlight for us in the remainder of the year. Thanks a lot it.

Yeah. So we've got a bunch of new products in the pipeline that will talk about probably next year I'm some really good ones.

As I said in my remarks, you know our plan is to have a suite a portfolio of Prs product and then we've got some really interesting new robot specific.

Hernia based products that are in development you know, we got the bulk of our LPR product range out in Q1, so that's still finding its footing.

We're not going to really add to that for the rest of this year, a and then we're really not going to add to the Prs products that you know for this year as well. So we've lost a bunch of new products. This year. Our goal is to launch new products every year or so we're not ready to talk about next year, yet the timing of some of those influx.

You know given getting our folks into the labs and you know doing contract research animal studies et cetera, but you know, we're we're tracking well for all those new products will have more to say next year on that or maybe at the end of this year.

Thanks, a lot.

Right.

Thank you speak actually just how the follow up questions from Matthew O'brien from Piper Jaffray. Your Nigel Ben.

Okay. Thanks for the follow up just quickly on Prs you know I know you guys are circling the wagons right now on the hernia side, given what's going on with Kobe and so that's the focus how do we think about Prs over the next couple of years I know that was a meaningful growth track, we're heading into the IPO I'm sure I don't think the market opportunities huge but you know how do we think about that progression.

On that product, specifically now that things have gotten off to a little bit slower start because of kogut. Thanks, I think it's gonna be the same you know it I don't see a changing I you know I mean, if anything we've lost what two quarters right I think we've locked Q1 in Q2.

You know I'll be very darn happy if Q3 looks more like Q1 showed a lot.

And then you know I think you'd just spread it out going forward, Matt and you know, we keep Stepan if anything I am more I'm much more bullish on are all of our products based on how the surgeons react right. I mean, we've never had such a opportunity with his life stuff to talk.

The 20 to 25 surgeons a month.

And you know, it's really honing the way we present these products its honing the way we presented data its honing you know how we present all the science and work that went into them and it's also popping out a lot of new ideas and there is a huge opportunity on the Prs front.

To to have an array of two into products that are engineered for specific surgeons to lots of fees and types and things like that so if anything long term I'm more bullish on Prs you know given all of the flavors that I think we can roll out in the next three to five years with that portfolio.

So I think you know as we rollout flavors of hernia from hernia, where were we started in 2017, we've been launching new products every year and we'll continue to do so I think we're gonna have you know a similar looking portfolio overtime on the Prs side. So right now this is all really good.

Foundational work this live stuff is keeping us going allowing us to grow allowing us to be aggressive in a smart way without being a burden to to those that are on the front line.

But it's also just spinning gold mine engine for honing our messaging honing our commercialization talk track and then driving new product ideas. So you know we're going to keep going with this until.

You know until we know it was.

Okay. Much appreciate it thanks man.

[noise] thinking speakers I'm showing no further questions at this time I would like to turn the conference back to Mr., Tony Kamin, <unk>, President and CEO.

Thanks, everybody for your interest and we'll see you next time.

They thought there.

Right. Thank you think of speakers media can jump in and this concludes today's conference call. Thank you also joining you may now disconnect.

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