Q2 2020 Repro Med Systems Inc Earnings Call
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Greetings and welcome to the current might be called.
Systems' second quarter 2020, <unk> results conference call at this time all participants are in listen only mode. A brief question and also session will follow the formal presentation, if im not sure <unk> operator assistance during the conference. Please press Star one zero on your telephone keypad as a reminder, this conference is being recorded.
It is now my pleasure to introduce your host Devin Sullivan Senior Vice President of the equity group. Thank you Mr. Sullivan you may now begin.
Thank you much out and good morning, everyone. Thank you for joining us for crude medical systems second quarter 2020 financial results Conference call. Our speakers for today's call or Don Pettigrew, President and Chief Executive Officer, and Karen Fischer Chief Financial Officer.
During this call we will discuss our business outlook and make forward looking statements. These comments are based on our predictions and expectations as of today actual events or results could differ materially due to several risks and uncertainties, including those mentioned in the associated slide presentation and our most recent filings with the FCC along with the associated press release.
We assume no obligation to update any forward looking statements. The associated slide presentation is posted to the Investor Relations section of our website Www Dot crew medical Dot com.
Charge listeners to have our press release in front of you, which includes our financial results as well as commentary on the core.
During the call management will discuss certain non-GAAP financial measures in our press release in slide presentation accompanying this webcast along with our filings with the FCC each of which are posted on our website.
We'll find additional disclosure regarding these non-GAAP measures, including reconciliations of these measures with comparable GAAP measures.
Our strategic plan goals incorporate the trends that we've seen today and what we believe today to be appropriate assumptions.
Our results are inherently unpredictable and may be materially affected by many factors, including the introduction of competitive products either availability of insurance reimbursement. The success of our research and development efforts acceptance of and demand for our new and existing products expanded market acceptance of the freedom system, the cost duration and ultimate outcomes of any but.
In addition, general economic and business conditions in the United States and abroad. The impact of Cobot 19, and other factors described in our filings with the FCC.
Therefore, our actual results could differ materially from the goal set forth in our plan for the benefit of those of you who are listening to the replay of this call was held and recorded on Wednesday August 15, 2020, approximately nine am eastern time.
Since then the company May have made additional comments related to the topics discussed. Please reference the company's most recent press releases and filings with the FCC.
With that said I'd now like turn the call over to Don Pettigrew, President and CEO COO Medical systems Donna. Please go ahead.
Thank you Devon, good morning, everyone and I appreciate you joining us today hopefully most of you have a power this morning.
I want to start by acknowledging Cora Medicals production staff for their continued commitment to our company.
I'm very proud of our team and the remarkable for to do their demonstrating in helping us navigate through the koby crisis as well as maintaining our manufacturing supply chain and serving the thousands of patients who rely on our products I.
I want to make sure you're aware of the Safe Harbor statement regarding forward looking statements and non-GAAP financial measures on slide two which also applied in my remarks today.
So let's start with slide three.
Before we begin discussing our results for the second quarter and for the benefit of any new investors and attendance I thought it'd be helpful to provide a brief summary of our business. So that our results and initiatives can be viewed with a deeper understanding inappropriate context.
Primary end market is primary immunodeficiency disease, or P.I.D., which consist of more than 350 chronic disorders of the immune system.
We have seen estimates regarding the undiagnosed or the end diagnosed P.I.D.D. patient population its highest 500000 in the U.S. at present, we estimate just 70000 patients had been diagnosed and are currently receiving.
Therapy of those 40000 are currently receiving their therapy intravenously, which we refer to as I've yaggi.
And 30000 are receiving their therapy subcutaneously or Sci Jake.
The majority of these s. yaghi patients are utilizing quarter medicals freedom integrated infusion system.
We're also addressing patients suffering from sea I'd be neurological disorder. This is a smaller patient population that P.I.D. of approximately 25000 patients.
He has been on the market.
Dominated by I've, yet you therapy.
But that change in 2018, when Icentra was approved to treat CDP subcutaneously.
We see the C I'd be market opportunity evolving and similar fashion a p. Eddie.
As such we are focused on supporting treatment conversions from Ivy I gene therapy to Subcu IC therapy.
We believe that P.I.D.D. and see I'd be offer significant growth opportunities at present, nearly 20 times or annual revenue in the U.S. alone. We also recognized that our freedom system as a platform technology with potentially broader applications and significant long term growth opportunities.
To this end, we're pursuing pursuing partnerships with pharma manufacturer is outside of the AG space to support the increasing trend toward subcutaneous drug delivery for a variety of disease states.
We also believe that cobot 19 is placed emphasis on the benefits and perhaps necessity of home health care to protect the most vulnerable among us I'd like to use the analogy of the growing adoption of tele health when discussing the potential for at home stuff do you I G.
A recent report by Mckenzie and company stated that in 2019, just 11% of patients use tele health to replace cancelled or in person health care visits today, 46% of patients are utilizing tele health with that jump driven by the pandemic physicians and other health care profession professionals are now.
50 to 170 times or 175 times, the number of patients via Tele health than they did before the pandemic.
This type of rapid adoption reflects how quickly behavior can change and more importantly begin evolving into a standard of care. It also shows in my opinion, how sometimes the obvious solution any problem is the most difficult to say.
We continue to manage the business towards our strategic plan goals of a $50 million run rate by year end 2022, improving our operating efficiencies to drive us towards our 70% gross margin goal and generating 20% plus organic revenue growth for each year.
As previously discussed we're focused on reducing Cogs as a comp or as a complement to rising sales as a means to achieve greater manufacturing efficiencies.
Our success is due in large part to an attractive economic model most of the patients that use the freedom integrated a fusion system or managing chronic conditions.
In other words their therapy as required for the rest of their lives.
We have experienced minimal patient share once a patient begins using the freedom system, they typically stick with it.
Because our products are used in conjunction with prescribed drugs, such as high Sandra and Zemba five.
Our sales and marketing expenditures are modest compared to other health care companies.
On slide four with that background lets move onto the overview of the second quarter.
We had a strong second quarter with increases across several metrics. We completed a successful offerings. The generated net proceeds of nearly $27 million and we settled longstanding litigation with a competitor. Our stock was also added to the Russell 3000 index in June.
Moving to slide five.
Our $7.7 million in net sales was a record for any quarter in our history with increases across our product portfolio. Our baseline annual sales growth target is 20%, but upside from clinical trial sales and anticipated.
Increasing adoption of Subcu I'd you therapy.
We certainly experience each of these in the second quarter with continued contribution from clinical trial activity and sales growth that aligned with industry trends both of which we expect will continue.
The unique aspect of this quarter sales was increased purchasing activity from specialty pharmacies likely in anticipation of higher demand for at home infusion therapy due to the pandemic.
It is difficult to determine at what level. This cold unrelated buying activity will continue for the balance of the year.
However, we expect that our 2020 sales will align with our previously announced financial goals, which are part of our strategic plan.
Gross profit rose by more than 41%.
You'll see that we reported a net loss of $1.1 billion, which is almost entirely due to the onetime noncash litigation settlement with our competitor. Excluding these costs. We operated profitably settling this matter has eliminated future associated litigation expenses, which totaled 3.4 million at 2019.
Okay and will allow us to allocate more of our resources to managing the business.
Adjusted EBITDA rose more than 18% to 1.8 million.
Slide six.
We believe that our freedom integrated infusion system has provided us with first mover advantages and chronically ill patients where the way to assume control over their lives and treatment of their disease, while delivering improved patient compliance enhanced outcomes and tangible quality of life benefits. We view this as a unique value proposition and these challenging times.
Our pumps are easy to use cost effective low maintenance and enable patients to self administer the therapy at home.
Takes just three simple steps to initiate an infusion.
Our precision flow rate tubing is available in a in a in a wide variety configurations.
And a wide array of high flow safety needle sets are safe comfortable and cover and can promote faster infusions.
Today, there are several subcu I'd products available that can be used but their freedom system icentra from CSL Behring CUVITRU from Takeda and newest entrance exemplify from peripherals and cuda quick from up to pharma.
We are supporting each of these manufactured in their commercialization activities via training sales and product support and education.
We expect to benefit as sales of those Prada of these products increase driven by treatment conversion from IBG to Subcu, I'd and anticipation by specialty pharmacies that the adoption of at home infusion therapy will continue to gain acceptance among patients physicians and payers.
We believe that a large factor of this growing acceptance are the meaningful benefits that subcu IBG offers patients when compared to IBG.
With respect December five which was launched in December of 2019, we believe that this product is still in the early stages of adoption as expected to have a very positive impact on subcu I'd availability.
Slide seven.
We believe that the foundation, we are creating will allow us to expand our commercial applications and drive our growth.
We intend to meet growing demand for Subcu edgy therapy for current indications and P.I.D.D. and see I'd be some of that driven by patient preferences.
Patient preference changes due to cope with 19.
As we appointed out in prior calls ripples as the market leader in the IB AG market and we feel their focus on their subcu formulation validates the more widely preferred and prescribed modality of subcu infusion versus Ivy infusion.
Well, we're aware of some plasma collection disruption driven by Kogut, especially as it relates to centers and your college campuses were seeing a significant ramp up of new collection centers incentives for returning donors and awareness campaigns.
Longer term ripples, CSL behring and Takeda have articulated plans to increase their global plasma collection and manufacturing capacity over the next several years.
With respect to awareness just last week, President Trump issued a national call to action and hosted a round table at Red Cross headquarters to encourage plasma collection, including convalescent plasma to treat Cohen.
The President stated that with the help of various government support initiatives nearly 50000 cobot patients have been treated with convalescent plasma.
One of the round table members was pulp ROE CEO of CSL limited, which manufactures icentra Mr. Perot talked about the promise of hyper immune plasma therapy, which is a treatment consisting of isolated antibodies from people who have recovered from coping 19.
He also stressed the importance of plasma donors not just for covert treatment, but in general because plasma as used to treat other rare diseases. This includes p. ITD and CDP.
Mr. Pearl went on to state that working jointly with the NIH. The made the major plasma manufacturers have designed a clinical trial.
That will be enrolling individuals in the month of August to investigate the efficacy of hyper immune therapy in the treatment of Koby 19.
We are very interested in helping to support other drug managed or drug manufacturing partners in whatever way, we can to help advance this important initiative.
We will pursue international expansion with respect to P., ITD and see I'd be.
International sales were 16% of our total net sales in 2019.
We believe that the simplicity of the freedom 60 provides an attractive alternative to legacy infusion devices that are popular in Europe, we expect growth outside the U.S. will have similar dynamics to those we've experienced in the U.S.
To this and we plan to leverage our relationships with pharma manufacturers to introduce our products in conjunction with their sales efforts.
Slide eight.
As you can see on this slide we are focused on supporting drug development activities.
Our freedom system is currently involved in multiple clinical trials associated with the potential expansion of AG and development of subcutaneous therapies for other disease States.
This includes a recently completed phase three trial in hematology that met its primary efficacy endpoint, we expected drug launch sometime in 2021.
Well, we cannot be specific for competitive reasons. Our current program development opportunity includes drugs from over 100 companies in over 10 therapeutic areas with at least 10 future candidates, we believe have high potential.
In addition to hematology, we've identified market opportunities and several other disease States. We estimate these programs have a total addressable market of approximately 40 million patients.
Our freedom system has a proven simple and cost effective delivery device that we believe positions core Roe to be the partner of choice for certain drug manufacturers as they pursue the development and commercialization of new therapies.
Slide nine.
As we continue to grow and evolve as a company. We also seek to hire and retain the best and brightest talent for our organization in July we were very pleased to announce the appointment of Josh benefit to the newly created position of Vice President Global commercialization.
Josh brings 20 years of health care management consulting experience to core medical including Baxter healthcare, where he focused on product and market development for various medical devices pharmaceuticals and biologics.
Josh brings abroad, and proven record of building marketing programs, and creating new sales channels domestically and internationally through product development commercialization and M&A.
Joined just at the perfect time, as we accelerate our pursuit of identifying new and adjacent market opportunities expanding the therapeutic in pharmaceutical applications of our freedom integrated fusion system and leveraging the significant advantages of self administered at home infusion therapy.
I'd now like to turn things over to Karen Fisher, our Chief Financial Officer, or a review of the quarter Karen.
Hi, good morning, everyone.
On slide 10, net sales rose, 44.1% to 7.7 million in the second quarter from 5.3 million in last year's Q, Kim with gross growth across our infusion product lines. We believe this is driven by continued demand increases that included clinical trial as well.
<unk> increased purchasing to support the trends towards the at home infusion therapy and in response to the uncertainties created by coded 19.
Gross profit in Q2 rose, 41.3% to 4.9 I am from 3.5 million in Q2 2019, primarily due to increased sales volume.
Gross margin was 63 point.
In Q2, 2020 as compared to 65% in Q2 2019.
Mostly due to an increase in overtime costs related to co then 19 absenteeism.
Gross margin was 65.4% when adjusted for this overtime.
Total operating expenses for Q2 2020 increased to 5.9 million from 3.4 million in last year's second quarter.
Selling general and administrative expenses were 3.2 million or 41.5% of net sales compared to 2.1 million or 38.3% of net sales in Q2, 2019th.
The increase is primarily due to the impacts of new hires in the second half of last year.
Severance a bonus for employee services during Kobin team pandemic increase consulting distributor fees and other miscellaneous administrative costs.
These are all partially offset by lower trade show and travel expenses due to the covert 19 related travel restrictions.
Higher litigation costs. In Q2, 2020 consists of 2.2 million noncash stock based expense associated with the negotiation on an entry into a litigation.
Agreement with a competitor and many of 2020.
We expect future expenses related to the competitor litigation will just continue because of the settlement.
Litigation expenses in Q2, 2019 were 1.1 million.
Our I've got a adjusted feedback.
Okay. Thanks, 18.1% to 1.8 million from adjusted EBITDA of 1.5 million in Q2.
Net loss for Q2 2021.
1.1, Marianne or three cents per share.
Included the 2.2 million litigation settlement expense.
Net income in Q2, 2019, with 78004 zero cents per diluted share.
On slide 11.
Moving to our balance sheet.
We ended the quarter with 38.1 million of cash [laughter] 32.2 million increase from December 31, 2017.
Yeah, all the increase was due to the 26.5 million of net proceeds from the recent capital raise along with the three and a half million dry gas the company's line of credit.
Cash provided by operations contributed 2.7 million net of an increase in inventory as we build to meet demand.
We ended the quarter with 43.9 million basic shares outstanding and a diluted share count a 48.1 million.
Here on Slide 12, you can see the reconciliation of net income to adjusted EBITDA, along with the metrics that comprises calculation.
I'll now turn it back over to dawn.
Thank you Karen.
Thank you all again for your continuing interest in quarter medical we can now open the call up for questions.
Thank you well now be conducting a question enough session.
I'd like to ask a question. Please press Star then one under telephone keypad.
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One moment, please while we'll pull for questions.
The first question comes from the line of Alex Nowak with Craig Hallum Capital Group. Please go ahead.
Great Good morning, everyone.
Hey, it's done I was just curious how is the supply of idea for pharmacy I mean, it certainly seems like a lot of people are trying to switch subcu edgy right. Now so is it some QST drugs supplied all constrained within the quarter.
So we hear a supply is as high as it's ever been Alex.
But we're also hearing about.
Some allocation going on at this point. So my understanding is that specialty pharmacies are really trying to manage that transition.
From Ivy to Subcu IBG.
But for the most parts supply is as good as it's ever been and we feel that the addition of zombified to the market. It's had a positive a profound impact on total subcu supply.
And and staying on that Weve typically found that physicians and really patients. They typically don't switch from Ivy to subcu, especially if they're doing well on an ivy therapy, but with cold that are you hearing that more patients and physicians are now willing to actually switch a patient over.
It's a good question we.
We are hearing that and a lot of cases due to cover 19 patients just can't get into CFO position. They can get into a in acute setting or a IB IB center.
Or home infusion center, so they might not even have the option. So we're aware of initiatives by specialty pharmacies to actively encourage and push patients from from sub or from Ivy I could you just a few energy and we're also aware of the increased awareness from the patient perspective of this.
Option for Subcu therapy, So we're starting to hear more about patients actually requesting to move to Subcu energy.
Okay understood and then on the pipeline that you laid out it includes more than 10, a high potential future candidates are these all chronic diseases that would have economics for patients similar to the PND market or these are more acute illnesses I'm just gonna have different economics per patient.
Yeah. So it's a mixed but most of them have similar dynamics in terms of.
The razor Razorblade model. So we feel most of these are chronic diseases.
And would have similar dynamics to what we experienced with the Idmc IDBD.
Okay got it just last question for me on the clinical trial that you mentioned with Griffo CSL and Takeda for Platts Ministry Kogut is the freedom 60 pumping used in that trial.
So the trial is being defined and patients are being enrolled at August.
To be clear for convalescent plasma. These are for the most sick cobot patients that will typically but the lift be delivered in a hospital setting. So while we don't see this has opportunity for our freedom integrated fusion system, we see the increased awareness of IBG as well as.
The increase supply of AG.
Being good for the freedom system with that said, Alex we're looking to actively support studies.
The potentially look at Subcu I'd.
For treatment of Koby 19 as well.
Okay understood. Thank you congrats on the results.
Thanks for the questions.
The next question comes from the line of Matthew O'brien with Piper Sandra. Please go ahead.
Good morning, Thanks for taking my questions.
Just to new Donnie you put a little bit finer point around what you're seeing from a metric perspective.
In terms of the interest level on the Subcu side versus Ivy Agee No duty coded can you talk about you know the number of people that are inquiry and versus what you typically see the number of people that maybe your trainee virtually.
Just just maybe help us kind of ILLUMENATE.
Good benefit that you're seeing.
As a result of the the virus.
Thanks for the question Matt So.
We're very close to our specialty pharmacies, and we're helping to support with education items and training items for these.
Specialty pharmacies to promote the movement of patients to Subcu I'd.
We're finding is things such as remote training we're finding.
Initiatives from these specialty pharmacies too.
Better educated and.
Get these patients doing their treatment at home.
But in terms of upside we see this as as building upside. This is not in immediate impact. We see this is a long term sustainable impact.
But it's very real and.
Were there to support our specialty pharmacies and that conversion.
Okay and do you have any.
The visibility into number of patients maybe you know typically you have been a 100 in the final and just given what's going on you know you're at 100 and 120.
Versus what you typically see is there any way to kind of quantify that deal that kind of visibility.
You know what we do see is we look at the for example, like CSL Behring Icentra and look at a percent of their total energy sales that are attributed to Subcu IBG.
And we see.
We see about <unk> percent growth of that market share per quarter.
So that as a very good metric that kind of support some movement from from Ivy I urge you to Subcu IBG.
Got it Okay, and then just just to close up the plasma destruction commentary.
What would have to go on for you to be impacted in terms of your villas ability to supply the.
The market.
Because that's always a little bit of an x. factor that's difficult to just get your head around.
Yeah. So one thing I think a lot of people are not aware of is the plasma supply historically has been very low over versus demand.
And the demand has increased the specialty pharmacy isn't really try to manage the allocation of their IB product versus our subcu product.
And we see a significant increase in preference of prescription rates from from physicians that prefer subcu energy. So the other thing to note is the supply of of IBG has been better than that.
It ever has and the manufacturing process takes some 712 months.
So any major disruption to your point, you would probably see a supply challenge in 2021, but that assumes that you're not seeing ramp up efforts or awareness campaigns.
Two.
Makeup for loss times, and we're seeing the opposite right now with new collection centers, the awareness campaigns et cetera.
Okay. That's helpful. Just two more for me.
I know you've got some distributors out there and I think you had kind of in the last call. But you know there was some are so maybe pull forward buying that that that you thought maybe late in Q1 is there any any sense for inventory levels.
In the channel or just one time purchases or anything to call out and in Q2 here. That's just beyond you know what you're seeing on that clinical trial or even demand side of thing.
So the underlying fundamentals of our business you know remain the same and and if anything continue to promote.
Acceleration into the Subcu business, which is good for us.
But in terms of distribution, usually that's driven by increased demand from especially the larger specialty pharmacies.
And why we see a continued underlying demand of 20 plus percent growth.
We see what we what we see as the anticipated.
Increase and the Subcu atg market power patient population.
And see specialty pharmacies preparing for that.
Got it Okay. That's helpful last one for me.
Don I know Youre limited as far as which we can say on the drug partnership side, and you've talked a little bit more about hematology specifically, but.
Can you just just give us a sense or maybe a little bit of an update as far as the the partnerships.
How some of those are progressing or some getting to the point where.
You could start to talk about them more maybe later this year even into next year I mean should we expect another up an update on a new drug later this year or is it more 2021 event, where we get an update on one or two drugs. Just just any you know are.
Development. So you can call out there on the on the partnership side.
Yeah I appreciate the question and understand the interest so.
Right now we have.
We're engaged in clinical trials.
You know from phase one to phase three and different disease states and as they start to get through phase three and we start to do you get closer to commercialization line, we will communicate that.
But right now there's nothing else that would communicate in terms of expected upside from clinical trials outside of what I have communicated with hematology.
Got it thanks, so much.
Thank you Matt.
Your next question comes from the line of villain Kesha Yacktman with hate cheap vein right. Please go ahead.
Hi, This is bill by dialing in for around for Roger How are you doing.
Good how are you.
Yeah, I'm doing great I'm just a couple from me so what are your thoughts on HIF snow.
For 26 need to launch and can you provide more clarity.
The timeline pricing then.
I would cannibalize their revenue of existing metered front.
Yes, so we announced a.
In 2019, the five 10-K clearance for a Super 26 safety needle set.
This is essentially a product line extensions.
There's a growing preference in the market for faster infusions.
So this is in response to.
A patient and physician preference for these faster infusions.
Our strategy has been to get the clinical trial data.
Which we've we've done in a limited fashion.
We're trying to collect a larger patient population, which has been delayed by coping 19.
But we still plan to launch in Q4 2020.
But this is a product line extension, there's the potential for a small premium, but we're not expecting material impact to our.
To our revenues.
Okay, that's really helpful.
On the.
In terms of pricing. So our understanding is that every T.I.D. station brings a recurring revenue $750 per year for the company on indicates a few ATP for box is $200. So how should we be thinking about that revenue per patient in new indications that you're currently working on and maybe jumping the gun.
Little bit here, but is that a challenge for the revenue Corporation may go higher than 1500 in the new indications that you're working on.
So that's a very good question and has everything to do with frequency of therapy.
So in the case of a CDP patient they will be administering two to three times a week versus once a week for a Phd patient a lot of the therapies. We are pursuing have very similar dynamics. Some of them have slightly lower frequency of administration and somehow more frequent administration.
But for the most far we're looking to stay in the same.
Oh frequencies.
Okay, I think thats. It from me. Thank you so much.
Thanks for the questions.
Your next question comes from one line of Kyle Rose with Canaccord Genuity. Please go ahead.
Great. Thank you. Thank you for squeezing me in here I was also a lot's been has done so.
More of a higher level question.
As we brought on a lot of talent, particularly focused on partnerships in future.
Development, They Oh, maybe help us frame out how your conversations with pharma manufacturers have trended over the last four to five months from a koby perspective, obviously, there's a lot of focus on shifting to the subcu space in AI Jie, specifically, but when you when you have those conversations how have.
Development priorities and timelines shifted from a pharma manufacturer perspective with respect to the broader trend of your subcu in moving to the home.
And then kind of the other part of that question is does coated impact any of those development timelines that you have ongoing difficulty running trials do analyzing data things of that sort of given given just the social socially distance aspect here.
So thanks, Kyle so for the most part when we look at our pharma manufacturers there theres been a net positive effect with our connection with these manufacturers so cobot 19 as Matt.
More availability. So we spent a lot of time with Webex training and things like that and connecting with their.
Our sales and marketing folks.
So it's really been trying to support the current business.
With that said, we know there's interest in expanding these therapies beyond P.I.D.D. and CDP into areas such as secondary immuno deficiency.
So we are engaged in discussions in support where we can any trials around these indication expansions.
With that said the cobot 19 impact we have seen a delay in certain initiatives, including some clinical trials.
That we hope to start accelerating again, but for the most part we feel that's then the biggest the biggest impact of Carbonite team.
Okay, Great and then.
When you think about the new drug launches.
And then Subcu in particular over the course less 12 to 18 months, how do you view of the overall size of the market this as far as.
More more sales and marketing dollars from the pharma perspective.
Is it driving growth in the diagnosis rate of P. I'd or is it really just more of a near term share shift from Ivy into Subcu.
The answer is both before kind of the trends there was a growing trend of movement of Ivy to subcu patients already.
But similar to the Tele health analogy I gave you are seeing.
And accelerated push towards that based on what's what seems to be obvious and logical.
So in terms of the size of the the subcu market and new entries into it.
We look at like exemplify.
From Griffith roles as having like I mentioned, a immediate a profound impact on the supply by GE. So as I kind of touched earlier on another question, we think that that increasing supply will help promote.
Awareness and prescriptions us up to you I Gee.
We also mentioned that the latest NIH estimates have roughly 500000 patients that are undiagnosed in the U.S., which is a larger number that we've communicated in the past. So we feel the addressable market has increased.
And for a large part of that is based on us.
Some new ample available as well as a.
Better awareness on Subcu energy.
Okay. That's very helpful. And then just last question is you had these long term targets in place for for.
Period of time now.
When you look at just overall execution since you put those those targets in place to be growing a bit magnitudes of what the implied long term growth rate is there I guess just trying to understand how are you still think about long term guidance.
As far as you know 2023, the revenue level and then the implied growth along the way.
And then if you're not going to make a change now maybe help us understand what type of event would need to happen in order for you to may be.
Expand that guidance or give us a different long term view.
Yeah. So so the guidance remains the same of exiting the year 2022, with a $50 million run rate as well as getting to 70% margins.
But doing so with year over year growth of 20% plus.
With that said changes in that trajectory would would really come from a new products.
Expanded indications and Ah.
Adjacent market expansion as well.
For the most probably thats going on Thats, an organic number.
And as we identify additional drug opportunities that would have the most immediate or the largest impact on that on the guidance we provided.
Okay, great. Thank you for taking the questions.
You bet. Thanks go.
There are no further questions at this time I'm glad to turn the floor back over to management for closing comments. Thank you.
Alright, thanks, everybody for the questions.
I want to close once again by thanking quarter Medicals production staff for their continued dedication and to all our stakeholders for their support.
We have several events planned for the fall and look forward interacting with you next week will be participating virtually at the Canaccord growth conference. Thank you again for your time and attention and I Hope you all have a wonderful day.
This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.
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