Q3 2020 Intersect Ent Inc Earnings Call
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After todays presentation, there will be an opportunity to ask questions. Please note. This event is being recorded.
I would now like to try to go over to intersect Dante's Executive Vice President and CFO Randy Meier. Please go ahead.
Thank you and welcome everyone and thank you for participating in today's call.
Joining me today is Tom West President and CEO of intersect E N T.
Before we begin I would like to remind you that we will be making forward looking statements within the meaning of the federal Securities law actual results and timing of the events could differ materially from those anticipated in such forward looking statements as a result of those risks and uncertainties which include without limitation.
Outlook for financial performance sales force growth clinical studies approval of new products and indications and procurement of reimbursement codes and coverage, which are based upon our current estimates and assumptions as well as other risk details from time to time in the reports, which we file with the FCC.
We disclaim any obligation or undertaking to update or revise any forward looking statements contained herein.
Now I'll turn the call over to Tom.
Thanks Randy.
Thank you all for joining our third quarter 2020, earning call today.
We had a strong recovery in revenue in the third quarter with many notable accomplishments, which reflect our efforts to enhance our commercial execution and improve our market access capabilities and infrastructure.
These actions allowed us to benefit from a covenant related procedure backlog in July and rebound to get elected sinus procedures throughout the quarter, Despite rising kobin kinks rates and nationally and ongoing pandemic hot spots.
Our performance in the quarter saw revenue grow 132% sequentially versus Q2, 2020 and track to nearly 95% of the revenue generated in Q3 of last year we.
We believe these results demonstrate our commitment to execution and our ability to return to growth.
Our revenue results reflect a rebound for propel in July, but we were able to address pent up demand for pet that's procedures as many surgeries had been delayed in the early phase of the pandemic.
Addition, use of propel increased in office based procedures as physicians are using propel more frequently in conjunction with office space balloon Sinuplasty.
So I knew that we experienced increasing enrollments improving conversion success rates and shorter times between benefit verification and actual procedures, leading to record site neutral revenues in the quarter.
We also expanded our market presence by entering into an agreement with alliance Rx Walgreens Prime for National specialty pharmacy distribution outside knew that.
This marks a significant opportunity and helping to expand the ability of so I knew that.
To be procured by E N T positions and their patients behind Walgreens, greater national coverage and strong payer relationships take.
Taken together the performance of propel and try and do that in the quarter gives us confidence in our ability to return to meaningful growth in 2021 relative to our previous <unk> performance in 2019.
In addition in October we closed the acquisition of fees on AG Medical technologies with this transaction, we have purposely and strategically expanded our portfolio of E.M.T. product offerings and gain scale in key European markets, notably Germany.
Feagans existing and prospective product portfolio complements intersects core of propel and so I knew that sinus implants accelerates our entry into the adjacent balloon sinuplasty market and leverages, our existing physician relationships and commercial strengths.
Ill now touch on each of these achievements in greater detail, starting with our third quarter performance follow.
Following the dramatic downturn in sinus related surgical procedures at the end of the Q1 of this year propel rebounded nicely in the latter part of Q2 and throughout Q3.
Propel continues to gain momentum as it recaptures a broader share total fats sinus procedures, we estimate the propel is using between 15% to 20% of total U.S., that's procedures, leaving ample upside for growth and all settings of care.
Our current market development focus for propel is on augmenting our health economic evidence of benefit to expand propel specific payer coverage beyond the existing fess procedure code.
We have strong peer reviewed published data already supporting for instance, the substantial reduction the need for expensive post operative interventions, we are seeking to add to that by utilizing the American Academy of auto learned dollar G.'s registry database soliciting the direct support of state and National societies.
And pursuing our own prospective registry and evidenced trials.
In addition, propels Q3 performance was enhanced by separate reimbursement for propel using our J code Jay seven 401, which covers both propel and say do but in the office setting of care position.
Physicians are becoming more aware of both propels clinical utility of me office, particularly post sinuplasty and be available coverage specific to the implant as a result, we are seeing increased use of propel in the office propel office use grew 62% in Q3 2020 versus Q3.
2019, we.
We think the move towards a greater number of office and HFC based procedures away from the hospital will continue and we are seeking to capitalize on that trend with our broader portfolio enhance clinical evidence and increasing in plant specific payer coverage.
Our European sales of propel also benefited from a rebound in sinus surgery procedures throughout that summer. However, the recent uptick in European coded cases. This growth was offset by a slowdown in procedure volume in the last month of the quarter.
Turning to so I knew that with our efforts and investment in the first half of the year beginning to show results. So I knew that had a record revenue quarter, driven by increasing physician awareness and comfort with reimbursement improved conversion of identified patient candidates as well as the growing physician adoption and in some cases preference.
Or buy and bill procedure implant coverage.
In addition, signing but also benefits from the cobot accelerated shift of care from the hospital in a assay to the office setting, particularly as an offering that comes in lieu of revision surgery at a hospital visit.
Beyond the record results, we are tracking several encouraging metrics, which underscore our strong performance.
Enrollment is a prospective patients are up versus a year ago and are also up on a trailing three month basis conversion rates are improving significantly well benefit rate verification time is shortening.
This demonstrates that we are meaningfully reducing the sand in the gears that we had spoken about in the past with our market access programs and our so I knew the funnel.
With a two fold improvement in enrollments and conversion rates at our hub and with our specialty distribution partners. So I knew but disbursements and actual procedures are both up at an even greater rate.
Procedures in turn lead to replenishment in the channel with revenue shipments from us in Q3, we saw so I knew the revenue achieved $1.7 million up 53% versus Q3 of 2019.
It's our intention to share more of our funnel performance data and metrics in future calls as we gain greater have evidence of their predictive value.
Increased analytic rigor allows us to target and focus our clinical selling and marketing efforts to build the market for us I knew that these metrics highlight an accelerated level of physician demand, giving us confidence that should move up.
Kinda achieved significant future growth.
Even with this recent success conservatively, we estimate that we have penetrated less than 5% of the total available U.S. market force I knew about and alternative to revision surgery for suffers a chronic rhinosinusitis with polyps.
There were two further highlights first I knew then the quarter first we went live in July with our C code see nine one to two for pass through coverage I knew the for Medicare patients when treated in an ambulatory surgical setting.
[noise] pass through coverage is granted by CMS when they see a breakthrough procedure and want to ensure that the Medicare population has unencumbered access to the innovation.
With the C code, we now had so I knew the specific coverage for nearly 80% of commercial lives at over 90% a public lives in the United States.
A second highlight in the quarter, what's the partnership we announced with Alliance Rx Walgreens Prime a nationwide leader in specialty pharmacy distribution.
This partnership will facilitate broader physician and patient access to say, new but by using the expertise and establish nationwide reach of alliance Rx Walgreens prior.
This will enable a patient's medical and pharmacy insurance benefit to be realized this efficient and scaled approach will further simplify product offering fulfillment and treatment processes for NTT medical practices and their patients.
As we stated last quarter, our ongoing commercial actions to develop to further develop our marketing and infrastructure are yielding positive results. We are seeing an increase in positions embracing buy and bill as our field based reimbursement team is accelerating at educating physicians and their office staff on the benefits.
A buy and bill to the physician and to the payer.
Our C code expands coverage for Medicare patients. In addition to alliance Rx, we continue working with other leading specialty pharmacies and specialty distributors to create and expand opportunities to improve enrollments conversion rates and buy and bill success, while delivering timely procedures.
Let's turn now to our strategic acquisition of FIA got feet.
The guidance, a German based leader in electromagnetic surgical navigation solutions.
Feagans navigation systems and suite of surgical tools are targeted to be empty surgical space their proprietary easy to use accurate and integrated surgical navigation solutions support both routine and complex BMT procedures, enabling surgeons to track the full range of instruments deployed.
During a functional endoscopic sinus surgery procedure.
In August feed on also received five 10-K clearance of its Ben shore balloon devices, new navigable and Standalone sinuplasty balloons. The venture balloons are sterile single use devices designed to remodel structures within the sinuses. The navigable balloon is designed for use in conjunction.
With the FDA guidance navigation system.
Larger then sure balloons are planned for next year importantly feedback on enables us to accelerate our entry into the balloon sinuplasty market as we continue to develop and anticipate the launch of our unique drug coated balloon.
Moreover, fee guidance integration allows us the opportunity to offer a more comprehensive suite of solutions across the continuum of sinus care inclusive. So I knew that propel balloon sinuplasty and sinus surgery navigation.
Integration activities are now well underway, that's part of the bulk of this process and I have asked ready to lead. These efforts we began integrating prior to closing which enabled us to hit the ground running upon closing on October 2nd well.
While we are very focused on the near term in the near term on us commercial activities that will help ensure the successful introduction and transition a few times installed base and existing customers over the next few quarters. We are also developing plans for expanding our European business as well.
The fees on acquisition is consistent with our goal of providing comprehensive value added an evidence based solutions for LNG physicians and the patients. They serve we expect this business to be accretive to top line growth in the first year post close with meaningful revenues beginning in the middle of 2021.
[noise] and integrating and accelerating commercial synergies with FIA gone, we believe that we will be well positioned to formally launch our new navigation and consumable tools product portfolio, including the venture balloon by the middle of the first half of 2021, thereby contributing to second half 2021 growth.
As we mentioned on the last quarter's call with the rebound in elective surgery procedures, we restarted manufacturing earlier than expected with our first post shelter in place production runs of propel Insightuba in July with the expected increase in demand, we are aligning manufacturing and supply chain activities to match the current environment.
While manufacturing remains below our pre coking capacity.
We are continuing to ramp up capacity and regained scale quickly.
We expect that production will be back to full capacity before year end.
With expanded demand in production, we expect to return to pre cobot gross margin run rate.
In the low 70% range by year end for our core products of propel and so I knew about.
Beyond our traditional production and manufacturing activities. The expertise we developed in conjunction with our own balloon design and manufacturing is enabling swifter collaboration with the field gone teams as we begin to ramp production of the then sure sinus balloons as well as expanding capacity for other products.
With regard to our R&D and clinical programs as I mentioned earlier, we've initiated and are planning on expanding follow on health economic studies and clinical trials for propel both inside and outside of the U.S.. We are integrating FIA got into our product development activities and reviewing and aligning our respective pipelines.
Which we anticipate will provide earlier access to global markets and enhance our ability to expand our overall product line.
Our objective as Weve stated previously is to provide a steady cadence of innovation to ensure our product lines remain compelling clinically back and top of mind among the physicians, we serve as we expand across the continuum of chronic rhinosinusitis care.
With respect to our drug coated balloon program, we continue to be in discussions with the FDA in developing an appropriate clinical trial design and PMA submission.
As a result of COVID-19, some interactions with the FDA had been delayed and at the same time, we remain cautious about initiating a pivotal trial with rising coding rising coded cases take.
Taken together this may impact the timing of RPM, a filing as our intended start of the drug coated balloon pivotal clinical trials with set for early 2021 with that in mind. We previously estimated a commercial launch of our drug coated balloon in late 2023. However in light of recent cobot related developments our potential.
State maybe push later by up to six months, we remain committed to the drug coated balloon program and are exploring the means to compress our timelines.
But we are also grateful for the near term alternative of the navigable conventional sinuplasty balloon venture from from fee a gun.
To recap we are pleased with the progress made in the quarter as we continue to scale, our business to deliver predictable and sustained growth positive momentum from our propel family of products and record quarterly revenues of side ULA has us on the right track.
Also expanding our commercial product portfolio and extending our international footprint with FIA guidance, where other big steps in achieving our goals. Despite coated we are in a much stronger position today than we were a year ago.
Looking ahead to the fourth quarter based on our surveys there as appropriate industry caution about where broader and general electric procedures will net out in the coming months due to the uncertainties related to the resurgence of the cobot pandemic demick.
The health care system is far better prepared to deal with rising cobot infection rates and to sustain the majority of elected surgical procedures.
Regardless of the risks associated with increased cases, we have the operational flexibility and structure in place to react under all circumstances, thanks, largely to our cost reduction actions and capital raise earlier in this year, we are well positioned financially, but we remain prudent in managing our costs.
For the fourth quarter, we expect revenues to increase on a sequential basis and are confident that our momentum will position us to see meaningful growth in 2021 relative to pre cobot 2019 levels.
At this time I will now turn the call over to Randy could take you through our financial results.
Thanks, Tom and good morning, everyone I'd like to start the financial overview with a summary of our top line results and then provide a little more detail on our income statement.
In the third quarter of 2020 intersect NT reported net sales of 22.7 million compared to $24.1 million in the same period of 2019, a decrease of 6% from the prior period.
On a sequential basis, our sales performance increased approximately 132% from second quarter levels as elective surgeries resumed an E. N T office based procedures increased as states east shelter in place restrictions.
Net sales for the first nine months of 2020 were 52.3 million a decrease of 32% compared to the $77.4 million in the same period of 2019.
Decrease resulted from the impact of hospital spending elective procedures and reduced Eattwenty office visits related to the COVID-19 pandemic primarily in the second quarter.
For the third quarter 2020, propel product family revenues were 21.1 million a decrease compared to the third quarter of 21 or 2019.
By Nuva generated record sales of 1.7 million, representing a 53% increase from the third quarter and 2019, resulting from improvements in reimbursement and our market access processes, and increasing awareness of and comfort with buy and bill with physicians.
Product mix for Protell was similar and the recent quarters with propel at 31% propel mini at 35% propel contour at 34%.
Overall propel family SP and the third quarter of 2020 was $845 per unit up 2% from a year ago and stable with the second quarter of 2020.
Gross margin for the third quarter of 2020, with 65% compared to 80% in the same period a year ago, we are seeing meaningful improvement sequentially up from 25% in the second quarter of 2020.
First nine months of 2020 gross margin was 59% compared to 81% last year.
The year over year decrease for both periods was driven by our decision to idle our manufacturing facility due to the COVID-19, pandemic, resulting an unfavorable impact of higher per unit manufacturing costs as well as an approximate $600000 idle facility expense in the third quarter.
We have since resumed our manufacturing activities in the third quarter.
Year to date idle facility charges were approximately 6.1 million and we have incurred and an inventory provision of approximately 800000, representing a total effect on our gross margin of approximately 13%.
Excluding the impact of COVID-19, and both the third quarter and the first nine months of 2020 gross margin was consistent with our original 2020 guidance.
Looking ahead to the fourth quarter, we expect production volumes to continue improving allowing our gross margins to return for a run rate in the low seventys by year end.
Total operating expenses for the third quarter 2020 were $26.3 million versus $32.6 million in the same period in 2019, a decrease of 19%.
Operating expenses in the first nine months of 2020 were $81.1 million a decrease of 19% over the $99.7 million in the same period a year ago.
The reduction in operating expenses were a dilutive direct result of our cost reduction measures put in place in response to the COVID-19 pandemic as well as the delay in certain clinical trials to later in 2020 and lower sales commissions.
For the third quarter, we continue to manage our costs, well and combined with our higher than expected sequential quarterly revenue growth, we achieved lower rate of cash use and expected.
We have significantly reduced our cost consistent with our previously announced cash savings target of $40 million in an effort to preserve cash and 2020.
We believe we will be able to achieve our cash targets through a combination of ongoing cost savings and working capital management improvements coupled with our higher than expected revenues in 2020.
These result of art.
Results of these efforts have already lowered our operating cash burn in 2020 and allowed us to maintain a high level of liquidity looking.
Looking ahead, we expect some of the reduction in operating cash burn in the fourth quarter will cover the incremental costs associated with the integration of FIA gone.
For the third quarter of 2020, we recorded an operating loss of 11.4 million and net loss of $11.5 million or a per diluted share loss of 35 cents compared to an operating loss of 30 13.4 million and net loss of 12.8 million.
Or a per diluted share loss of 41 cents in the third quarter of 2019.
The adjusted net loss, excluding the impact of fair value of embedded derivatives and the cost associated with the acquisition of via gone is $11 million or 34 cents per share.
The details of these adjustments are included in the reconciliation table in our press release.
For the first nine months of 2020, we recorded an operating loss of 50.4 million, a net loss of $52.1 million or a per diluted share loss of $1.60 compared to an operating loss of 36.9 million and net loss of $35 million or a per diluted share.
Loss of $1.12 cents and the first nine months of 2019.
Adjusted net loss for the first nine months of 2020, which also excludes the impact of embedded derivatives as well as the transaction and restructuring costs were $49.2 million or a $1.51 per share.
Now turning to our balance sheet cash cash equivalents and short term investments as of September 32020 totaled $130.7 million compared to $90.6 million at the end of 2019.
We continue to manage our working capital well and our cash balances benefited from both cost reduction actions. We took earlier this year and our improved revenue recovery.
As a result of the company's ongoing cost initiatives continued revenue recovery in growth and our $65 million capital raise in May of 2020. The company continues to believe it has adequate capital to operate effectively through 2022.
Turning to our outlook, while we cannot predict the extent or the duration of the impact of COVID-19 pandemic on our financial and operating results. We believe that a recovery and procedures will continue that most patients will return for treatment.
We demonstrated earlier this year that we can quickly adapt to the rapidly changing conditions and are prepared to do so in the future should these actions be necessitated again.
Based on our third quarter elective procedure volume and referral trends and as we disclosed in our Preannounced released we expect fourth quarter 2020 revenues to be 85% to 90% of fourth COVID-19, 2019 revenues look.
Looking to next year, we continue to believe the 2021 revenues should grow relative to 2019 levels. In addition, we believe gross margins will continue to improve returning to the low to mid 70% range for the full year 2021.
Now I'll turn the call back to Tom.
Thank you Randy.
It's a very exciting time in intersect empty as we are taking full advantage of the rebound in the lectin sinus surgery procedures to provide treatment solution to meet the pent up demand of patients that suffer from chronic sinusitis and to capture a greater portion of total sinus procedures.
By executing on our commercial and market access strategies. We are successfully further penetrating this large and underserved market with both our propel family of products and sign new the.
The record revenue quarter of say Nuva highlighted by the higher enrollment metrics and partnership agreement Little Alliance Rx Walgreens Prime combined with the shift towards office based procedures gives us confidence in our future growth potential.
Additionally, the integration of FIA got into our business is progressing well their navigation and complementary tools focus on sinus procedures and aligned with our core offerings, thereby enabling us to deliver a more comprehensive surgical solution across the sinus care sinusitis care continuum, regardless.
The site of care.
With the addition of their navigable then sure balloon device. We are thrilled to have entered the adjacent balloon sinuplasty market. We believe FIA gone will be an impactful addition to our growing product portfolio and are very excited that the talented fee a gun team part of our growing organization.
Supported by our experienced management team and NT industry, leading Salesforce I am confident that we will continue to benefit from the rebound in elective sinus procedures and further penetrate the market with our innovative line of commercial products designed to improve patient outcomes now I'd like to take the turn the call back over.
Her to the operator and open the call for your questions. Yes would you. Please open the lines I'm sorry, yes, yes. Thank you we will now begin the question and answer session.
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This time, we will pause momentarily to assemble the roster.
And the first question comes from Robbie Marcus with JP Morgan.
Oh, great. Thanks for taking the question good morning.
Yes.
I was hoping you could start off with the outlook puts I believe the last time.
We spoke the end of second quarter, you know your comments were a little more optimistic on where we could be in fourth quarter. How much of that is just a cautious tone striking against record new covert infection rates and shutdowns and how much is a difference in the recovery.
The business of what you thought last time around second quarter.
Yes, Thanks, Robbie I'll take a first crack at that and we had if you want to jump in I would say the majority of that is a cautious tone as we all look at.
Record.
Case rates and hospitalizations and while we feel confident that the healthcare system has learned how to.
Accommodate the pandemic in a much better way and continue to offer.
Elective procedures and kind of segregate the hospital environment between the coated wards and more more traditional.
Hospital care.
It is just looking at those numbers that gives us great pause and and and doesn't want us to push the boat out too far.
In terms of how we feel about the health of the business.
Obviously, we saw a nice recovery in July but that was some some backlog we saw sequential improvement from August to September on the propel business and a real rebound in the hospital based environment, which is the core of our business, while seeing new green shoots and what we're doing in the office environment and then.
Obviously I knew that it had a nice quarter. So we see we see positive momentum in the business. Our primary caution is predicated on the uncertainty around the pace and the depth of the pandemic re occurring.
Got it.
And maybe I'll just ask a couple of quick clarifying questions.
In the fourth quarter, how much revenue is assumed for FY <unk> guidance on was there any stocking in the snooping number in third quarter and if so how much and how much will be in fourth quarter and the comment on growth over 2019 is that inorganic expedia gone comment or is that in Q.
Looting that and should we be assuming this is not too far off the 11 million.
Revenue base it did.
In 2019 thanks.
I Love yelling era.
Yep.
Quite a few things there first let me take this I knew then so I knew the stocking in the third quarter.
There was a very small amount in the range of 50 to $60000 worth it.
As the initial units went in for Walgreens, but very modest.
And that's really it other than that it was really primary demand going through.
In terms of what to expect from FIA gone in the fourth quarter.
Near zero.
And I would also caution folks relative to that assumption on the $11 million.
In in.
2019 revenue.
That you just assumed again that was under the basis that existing distributor relationship.
With their partnership with Intel Us and Stryker.
Which has basically been idled for more than a year now.
So we view that the acquisition as really a technology acquisition, enabling us access to navigation as well as today.
Their own sinus balloon.
And that is business that we will need to build I think it will contribute nicely in the back half, but I think $11 million is a.
It is more value than that is there right now for us we will have to rebuild that business.
Got it helpful, but just let me just add.
A couple of things one just as you know.
With the acquisition, we acquired some relatively new technologies, obviously as Tom talked about and are.
Prepared remarks, the the venture balloon was just approved in August and they have an updated version of their navigation tool both of which we are scaling production right now so.
Not that there isn't current demand we're hearing a lot of real positive feedback from our docks. In fact, there is a couple of early orders that we are.
Trying to look to.
Phil but.
But we're ramping up production and those launch quantities won't really be prepared until we get into the mid first quarter. So its not that.
There is an enthusiasm for the product as Tom mentioned in his remarks, but theres just some timing of the increase of the inventory to prepare to sale. So just wanted to clarify.
Clarify that as as the reason that we're not expecting a whole lot of revenue in this quarter.
Thanks, I'll jump back in queue appreciate it.
Thanks Robby.
Thank you and the next question comes from Bob Hopkins with Bank of America.
Great. Good morning, Thanks for taking the questions.
Just I'm curious given how much the world has changed literally in the last like 10 days to two weeks just curious.
What you have seen over that time period have you actually seen things start to slow down.
In some of your core U.S. markets or is that not the case. Thanks.
Yes. Good question certainly there are hot spots that are materially impacted El Paso, Texas is the easy one to think of now I think what we've got to get used to is that they're going to be hot spots.
Across the country that will ebb and flow.
If we think about our Q2 call we were talking at the time about Florida, Texas, Arizona, and Southern California, now were talking about the Midwest.
And again pieces of Texas, I think that that is a bit of the new normal.
But its not at a pace that you know in.
In any way resembles what we saw in late March into April where it really went to a standstill almost on a national basis.
We're still seeing a very steady flow very predictable flow of volume and orders on both signed new the and propel.
Even through the last two weeks in which there is heightened awareness.
As a result of the media and probably enhanced even further with the election coming up tomorrow, so not a material impact, but again hot spots are going to develop.
And we certainly track that as we look at the performance of individual territories.
So okay. Thanks, Yeah, I know I don't obviously I don't think anyone expects from us to go back to where we were in.
Earlier this year, but there is still our expectations out there broadly for Q4 and for next year and so just wanted to get your sense for.
What we're seeing in the last couple of weeks to help inform you know that near term modeling.
So, but I, but I think I I think I hear the response.
Just to be clear and that's really and in relation to Robin's question. Our caution in Q4 is a function of looking at that and not wishing to push the boat out to four too far and Thats, why we indicated and guided to kind of 85% to 90% of year ago quarter.
Okay and also just to clarify Robby.
Robbie's question on 2021, and the comments that you'll grow I'm. Just curious are the comments that you grow.
Related to Snoop and propel.
Or or does that include some sort of acquisition growth. There just trying to get a sense for what your initial thinking is there because obviously the street's modeling 8% growth over 2019.
Yes, yes.
Clearly as I do that has great momentum now and should and should deliver meaningful growth.
Relative to 2019, that's off of a small base, we still see strong momentum in propel bedding.
But again as a more mature business I would not ascribe.
A particularly high growth rate against propel.
And yes, we do expect to get incremental value in the back half of the year as a result of the of the FIA gone acquisition, we haven't been more specific than that right now and I would like to hold off on that until we give more concrete guidance as we head into the new year.
Great. Thanks for taking the questions.
Thank you and the next question is from Richard Newitter with SCB Leerink.
Hi, Thanks for taking my questions.
Maybe the first one on via guidance.
You just hear what the what the strategy is and you know you're breaking into the balloon sinuplasty market, but not with a drug coated balloon now, but but with a more traditional but we try to price the offering some established players. There. So can you give us a little more on on what the what the competitive cell is.
Are you are you more focused on on the balloon are you more focused on the navigation differentiation.
In the NAV if your guidance solution are you going to use pricing.
Any color there would help thanks.
Yes, great question.
It's a little bit of all of it we feel this is a really good fit for us overall with the navigation capability.
Yes, you have.
Tools and the ability to participate in fact surgery with navigation and obviously the conclusion of the FES surgery, often leads to a propel implant.
On the balloon side, the same is true as well the traction that we're getting right now in the office setting of care is to use of propel contour.
At the conclusion of balloon Sinuplasty, so we're able to actually offer benefit across the continuum of care to the same physician audience that we've been calling on all along I think the key differentiator from a technology standpoint will be in in their Q navigation for two reasons.
Juan it's very simple and small footprint makes it.
A very strong candidate in the office setting of care in particular because.
Because it's not taking a great deal of space, It's an easy to use navigation system.
Has very strong accuracy in terms of how it performs relative to others.
And the piece that is most intriguing that we'll launch.
Mid first first half is there photo registration capability.
What you do in a traditional navigation system and you use tactile you'll have a pro then touch it on the face of an individual to almost characterize the topography of the face and what he had gone has developed is a photo registration that makes it much easier to scan the face and have increased accuracy with more.
Points, if you will from the photo registration they have that capability already they're they're they're enhancing it. So it can be used in a patient who is not lying down as you would have an in a hospital setting that can be used for on a patient who see ceded upwards, which would be more typical of an AMC or an office setting of care.
Combine all that together you are now across the continuum of care, you're leading into appropriate use of our implants post procedure.
As well as having a differentiated form of navigation and photo registration. We think we have a very strong offering again to the same docs, we've always called off.
That's great detail. Thank you, Tom maybe one follow up and on 2021 and bobbing Robby.
Question, Bob mentioned, the street's projecting about 8% growth off of 29 key.
You said don't expect too much growth out of propel and sign new but it's a big kind of incremental driver and then you have the inorganic decent feedback on so I guess just compared to the way you talked about 2021.
On our last update in July so we kind of think of this could you would you discussed growth versus 19, then too maybe a tempered back that's I knew but and propel expectation that touch given the incremental spend it surges and the conservatism warranted there and then the inorganic decent Egon kind of allows you to.
To get back to the same place and.
How do you feel about where the consensus is which is about 8% growth given those given those components is that it.
Meaningful growth in your view thanks.
Yeah again, we havent provided that specificity I think we're all looking to see what unfolds as the pandemic continues to rise.
Rise again I think.
I want to make sure that we deliver what we say and I and I'm trying very hard to do that in all of these calls.
So I Wouldnt take you off of current street guidance and I think there is appropriate.
Caution to be had around the core business because of the rising case rate from cobot. So I again without the specificity of it I think in general Thats the right Mark.
Yeah, Rich, let me just jump a little bit here to give us some color I think as Tom suggested we are continuing to believe that we can have.
Have growth relative to 2019, and as we've said since the second quarter.
We continue to see sequential improvement as our and our business we've demonstrated that in both the second and the monthly in the second quarter and it's clearly in the third quarter and that's what we're projecting in the fourth quarter and what we've said is that we believe we can leave 2020.
With on track to achieve organic growth in excess of.
The 2019 levels and that adding a small amount of incremental growth on that so that would make us comfortable with where the street is right now with that relatively speaking about 8% growth, but that sequential improvement through year end building to a point, where we believe organically we can access.
The 2020 excuse me 2019, and then FIA gone would layer in some incremental revenue growth on top of that.
Thanks.
Thank you and the next question comes from Christopher Squali with Guggenheim.
Hi, Thanks, One question Hey, Good morning, one question of propel in the office that wants a new book, so propel being up 62% year over year in the office very encouraging, but we don't really have a lot of context on the baseline there and where that piece of the business was a year ago. So can you tell us at all what percentage of propel volume or revenue in the.
Quarter came from the office setting.
Yes, I don't know that we break broken it out in that detail, it's still a relatively modest piece of business, but what's nice about it is you know again on what was at 2019 business of 105 million.
Yes, if we can grow $345 million on that business on an annualized basis that adds three to four points of growth and we were just talking about a total business growth of eight points. So we feel very encouraged albeit coming from a small base that we can.
Add add.
$1 million to $3 million of growth on the office space alone and we think that that will accelerate.
As we get into the office environment with our own balloon capability.
Okay.
And then the moment the momentum from Sun over this quarter. It was nice to see you've upgraded a lot of the elements of the distribution and reimbursement process for some news over the past year, where do you think the weak link in the chain is at this point are there still areas that need to be improved for that product to really.
To be able to flourish commercially or is there something else that you think is the gating factor to.
I would say that the piece that we've made a lot of progress on but still have further work to do it's just getting the E N T physician community comfortable with buy and Bill.
It's still.
About two thirds of reimbursement, maybe a little bit more is medical benefit and almost all of that is buy and bill.
And getting physicians comfortable that they actually have to put money out of pocket in advance of the procedure and then bill afterwards to be reimbursed.
Now it can it can depending on the payer be quite economically lucrative for the physician and some have begun to realize the benefit of that in terms of adding revenue into the office based environment.
But it's it's about building that comfort and that's changing behavior and I.
Really candidly overcoming some of our shortcomings from the first two years after launch when we didnt have all of that capability in place, but what I can say is in the in Q3, our conversion rate on buy and bill improved dramatically.
Still have further to go that's why I refer to the sand in the gears, but I think thats, it's much about getting physicians comfortable now that we have the payer environment locked up with 80% of commercial lot lives in 90% of public lives. Its just that building muscle and comfort, which I think will come with time.
Great. Thanks.
Yeah.
Thank you and the next question comes from add on major with Piper Sandler.
Hey, good morning, guys. Thanks for taking the questions.
One from me on gross margin.
Just in light of the feedback on deals so the legacy products, obviously carry very high gross margins.
Should we be thinking about gross margin over the medium to longer term with the few gone assets integrated into the business.
I guess that's question, one and then I'll follow up.
Sure.
Adam.
Gross margins are coming back pretty nicely now as we indicated earlier in the year, we had some high cost ended and Tory to burn through.
Because of the recovery in our revenue we burn through that.
We're starting to ramp up production. So a lot of what we've seen in the idle capacity costs.
Should be subsiding, and we should start to get back to what I'd characterize as more normal growth.
Gross margin run rate you know as we hit towards the end of the year positioning us well as we get into 2021.
Relative to FIA gone, we've actually been pleasantly surprised as we've committed had the opportunity to really.
Dig into third party manufacturers of you know what the fully loaded cost would be.
Across the portfolio.
So, we're probably a little bit more optimistic now into to what a consolidated gross profit margin would be as we go into.
2021, and probably the second half of the year, when we start to realize higher volumes relative to the balloon and the disposables.
Probably not enough to take us off sort of the low to mid Seventys target we have for the year.
But certainly.
We're optimistic about where we could end up.
As we start to get through 2021, and then longer term getting back to sort of higher 70% seventys kind of gross profit margin.
Okay. Thanks for that color there very helpful. And then just to the follow up I.
I wanted to ask about competitive dynamics, just wondering if you've seen.
Any changes from a competitive standpoint in recent weeks or months just from the the therapeutics compare.
Competitors. Thanks, so much for taking my questions.
So to answer that I mean, certainly.
Dupixent has picked up.
Overall difficult to say how much is directly attributed to polyposis in the empty space I think we're hearing a little bit more about it.
But we also know that the payer side of the equation.
Is looking at it very cautiously given the amount of expense associated with it so.
Certainly we believe that signing of a represents a far more cost effective alternative than dupixent.
Overall, but but I.
I would say that the monoclonal antibodies are having a bit of a pickup.
And overall adoption and we do believe that some of that is in the N.T. space as well.
Again, I think people are looking for alternatives other than having.
To go into hospitalization, which is exactly what's driving our office space business and the rise in our son Uva business.
But if I do I do believe that the monoclonal antibodies are meaningful in the space.
Thanks for the color.
Thank you and the next question comes from Ryan Zimmerman BTI Jay.
Great. Thank you can you hear me okay.
Yep.
All right. Thanks for taking the question just a follow up on Fig on first.
No I think Ravi alluded to the $11 million in and that was really driven by partnerships with companies like Stryker and I think previously Smith <unk> nephew so.
I guess the question for you around Fig on is and I don't think you're going to talk about kind of where its trending today, but.
But what does it take to get back to that similar run rate I mean in terms of timing what are you assuming for and it has the composition of revenue, let's say you get back to that 10 or $11 million is that all navigation is it partly navigation, partly balloon sales you could just help us understand kind of how you're thinking about the composition of revenues coming on.
Fig on as you integrate it and what the makeup is over time and then I have a follow up thank you.
Yes, sure it's going to be it's going to be a combat it I'll take a first crack Randy and then let turn it to you.
It's going to be a combination ultimately of consumables and when I say consumables that would be the disposable tools used in fast navigation as well as the balloon.
The the consumable tools will be likely kind of.
Earlier end first adopter as we get production ready for the.
The balloon and competitively at or in the balloon space.
There are and there is an installed base of existing instruments that are out there.
They are being competitively pursuit.
Bye Bye Stryker in particular, so we're eager to get out in front of the audiences that currently have access to feed on instrumentation.
But as Randy alluded to there is significant and meaningful upgrades to the NAV system coming.
So as we move into.
The new year, we'll be seeking to place those.
Certainly not trying in any way shape or form to play on price I think that was something one somebody alluded to before but rather playing on the strength of our NAV system and the and the breadth of our portfolio of balloons tools and even our sinus implants.
Yes, probably just add a little bit to that one at one of the things I'd, probably remind everyone as the portfolio of what we're we've acquired versus what was being partnered in 2018 and 2019.
Somewhat different back that it was just a older generation of navigation and disposables.
And certainly represented more of a global revenue.
Only about 67, 70% of that was U.S. based revenue well.
Well, we have going forwards as Tom indicated is sort of an upgraded navigation system.
A broader portfolio of multi use and single use disposables that go along with it and the balloon and we think as Tom indicated.
As we build up our inventories and begin to prepare for commercial launch in the first half of next year.
Yeah, we have a compelling offering, particularly when you think about office base propel and the use of those products with a.
In a sinuplasty, so we think Theres weekend.
Recapture that ground to get back to reasonable levels and certainly by year two.
Begin to exceed what was they've done in the past our FIA gone has done in the past.
Okay very helpful and then.
Good for you.
You guys made a lot of the initiatives around cost savings that is put in place during the pandemic and that's certainly reshape your cost structure, I guess I'd love to understand kind of the durability of those cost savings I mean as revenue recovers. My guess is you're going to expand your sales a bit more and spend more and in July.
Launched new products, So maybe talk a little bit about the durability of those savings and what can last versus maybe what you have what you can re initiate.
Given the recovery. Thank you.
Sure I think you know the third quarter, I'm really demonstrated getting back to pretty close to prior year levels that.
We can drive you know pretty good.
Top line revenue on on a much smaller.
Cost base, and we think that's just indicative of improving the productivity broadly in the organization.
You're right with with the.
The addition of FIA gone.
We will probably as we see sales grew at a very targeted way commercially, but we do think as we enter 2021 that our cost structure has been.
Changed for the better and that we can sustain that going forward.
There are some investments that we need to make up to scale the business as Tom indicated in certain related some market development areas.
Again to continue to open up certain markets.
And then just you know improving our ability to scale. The business you know in future years that will have to add too, but again all those are highlighting the opportunity for us to add productivity and efficiency going forward. So I think we will be able to sustain a much leaner organization as we grow the business going forward Tom.
I don't you any thoughts on that.
No I think I think you hit the Mark.
Ill.
In a curious way <unk>.
Coated.
Gave us an opportunity to restructure the business in a in a more efficient model overall and.
While while we expand on the revenue line, yes, there will be elements of costs that return.
In terms of commissions and the like we think we've got enough.
An appropriately sized sales force.
There will be some need for modest expansion around fee had gone to support navigation and navigation servicing.
But in terms of generating demand in the field, we feel we have a very efficient model and one that very.
Much matches up to the feedback on customer universe, and I think we benefit from a.
A leaner organization that is sustainable.
Okay. Appreciate that appreciate the color. Thank you.
Thank you and the next question comes from Ravi Misra spare and burn.
Hi, good morning, Thanks for taking the question. So just one other one on feedback on if I may.
How do you guys kind of look at the trend towards in office Slash assay procedures I mean, that's not been area historically, where the company has been very strong but you are buying this asset now that allows you to go.
Kind of deeper into that channel.
Let's say, we emerge on the other side of the pandemic it.
Is this going to be the kind of new normal for where your your sales efforts our focus or do you think there's a reversion back to procedures being done in the hospital.
I think there will always be a strong hospital basis, particularly for.
The full on functional endoscopic sinus surgery that has been the wheel house of the propel business.
Yes, we had and we have seen a gradual migration pre coded towards a C. As a more cost effective center for the payer community I think that will continue.
I think theres enough involved in that surgical procedure that it doesn't lend itself.
To full on Fest surgery in the office setting but.
But the flip side to that is yes, there will be I think an increased level of activity of alternatives to fetch surgery that will increasingly take place in the office setting and may migrate up into the sea and we're seeing that with say nuva as an alternative to revision Fest surgery you are seeing.
That will balloon sinuplasty, which continues to have.
Roughly 5% growth rate.
And a nice size market that we wish to enter into and I think that what you are seeing in our and kind of green shoots of propel in the in the office and say you've in the office behind our J code.
He is an opportunity for physicians to be able to.
Have a separate.
You know implant code that reimburses rewards them.
Yes for conducting those procedures in the office setting, which again is with the grain. So I don't think its that we will ignore the hospital setting I think it is that the office setting will become increasingly valuable and we'll we'll focus on it. The other thing I would remind you is it's all the same dollar.
Yes, So you know a doc who's in the hospital setting it may have procedures, two or three days, where he's doing surgeries were she's doing surgeries and then be in the office setting for two or three days and that's where I think we get the efficiency of our salesforce and the caliber of our relationships with the physician community.
It makes the broader portfolio, our ability to help across the continuum of care, whether its a thats surgery or it's an alternative to revisit revision surgery.
We're now able to offer a much broader tool kit.
To the physician regardless of their setting of care.
Great and then maybe just two last ones for me.
Just the difference between the navigable and the non navigable balloon and then just how you're seeing that contour might.
The working in that.
Just just what would be the kind of use case between the navigation non and kind of is there a better adoption.
Adoption take for the propel product in one of those two and then and then last maybe just one for Randy on gross margin I just on the Fourq you commentary you know I think you're seeing exiting the year at low Seventys does that kind of imply for the full quarter or just kind of your exiting December at about that level. Thanks.
Yes, the that bad that you had I was just going to NAV versus mom NAV is literally just as it sounds is it connected to.
To the navigation system that allows the physician to be able to see.
On a screen, where where the instrument.
It's touching and what the kind of that geography of the sinus cavity is or is it non that where the physician is really just having a handheld instrument and without the benefit of navigation, placing the balloon in the sinus cavity and expanding it without.
Really looking at the the cat scan in order to be able to see where were the placement is and that's a matter of preference for different physician groups navigation is growing quickly as younger MTGE are coming into the marketplace, but it's about 30% to 40% is navigated today.
And this gives us the ability to perform either way depending on a physician preference there.
There's really no difference in terms of the application of contour.
Really the purpose of that as we think about it you expand the balloon it opens the nasal cavity and then by placing an implant the contour in there the radio for some extent helps to hold open and provide patency to that opening that you just expanded.
While at the same time, giving you localized drug delivery to reduce the inflammation and accelerate the healing process and that is as applicable whether that is navigated or non navigated.
So thats how that plays out but either one is complementary to a balloon sinuplasty.
[noise] ready, we're going to jump in on gross margin going on on.
On the gross margins I think does.
We're talking about sort of exiting the year not not the full quarter. Although I think we're depends on how quickly we ramp up production.
In the quarter, but it's really just sort of an ending the year in that fashion sort of the run rate.
Thanks.
Thank you and the next question comes from car Rose with Canaccord Genuity.
Great. Thank you for taking the question so.
Well, that's kind of been asked here, but I just wanted to ask.
Two maybe a question on the underlying themes that you've talked about today someone.
On say, new and then the other on the office growth on the office growth, obviously encouraging trends I understand it's off a small base line, but just help us understand maybe what that looks like I mean is this is a few accounts adopting in size.
Is it more dabbling across the account base are you seeing a lot more because of the CMS pass through just trying to understand maybe the specific driver of growth that you think is more durable from the office space side, and then on find move I realize.
Great quarter, but it's still relatively small patient volumes from a historic basis, but just any sense of your patients patient treatments. Here is are you seeing patients come back to be retreated.
Rather than potentially moving onto a revision procedure just try to understand your lifetime utilization and things of that sort.
Yeah.
So first relative to the office.
There was some office business previously when we had an S. code.
That supported propel at the time that the the J code was issued the S. code was repealed.
And that created some confusion in the marketplace and people were not aware that propelled could still be covered.
So we saw you know.
A roughly 2 million dollar office business at the time under the S. code very geographically specific primarily among heavy balloon audiences and more kind of aggressive treatment environments, Texas and Florida in particular, what we're now seeing with the J code use for Paul.
Well, it's a much healthier and broader use across many geographies and that's a very encouraging sign for us and we're out there selling against that and think that we can grow that to match kind of balloon utilization in particular, because that's really where contour is being used in the office setting is.
Post balloon Sinuplasty there are some other instances.
Were opposed to bring that they put a propel in there, but by and large the bulk of that office business is coming from post sinuplasty, but now much more geographically dispersed and that's what gives us confidence that we'll be able to grow that because we're seeing it on a broader basis.
On this I knew the truth question and that and the particular want around re treatment. Its a very insightful question. We are seeing in pockets, where physicians are using say new the on a retreatment basis, where somebody has come in are.
They had it for 90 days they may have a lag between then and now we insert.
Another sign new the later in the year that is still more cost effective than acquisitions.
Thats surgery. It certainly is more cost effective than a monoclonal antibody and we're starting to see some of that it had just contemplating whether or not we matched that with a clinical study.
In order to be able to improve our labeling and have.
The right kind of documentation against it.
But again, we're encouraged by our physician repeat use so we're now getting some physicians who are using more of the product not just selectively here and there, but where physicians are repeating across multiple patients, but where physicians are coming back again, a very positive sign that the adoption curve is improving.
Great. Thank you very much for that additional detail there and then one other question I. Just had is just the health of the underlying account base.
And just do you expect to add accounts in 2020, given all the moving pieces with Covidien Im just trying to understand what that account growth looks like on a go forward perspective. Thank you very much.
Yeah.
It's a good question, it's a little hard to tell right now, particularly because of cobot.
How to number of entities that have actually left the market they've retired they've they've closed shop and and yet at the same time, we do keep track of new accounts and we're still getting new accounts that we havent had before so its a little blow by the environment overall.
And it's you know it is a metric that we look at and as I said, it's hard it's hard to distinguish between folks exiting the market.
Consolidation of the market, which means you haven't lost a position, but they become part of a broader practice or an IDN, but we also are seeing.
No new patients new customer or I should say new customers new accounts coming on board.
So I don't have a I don't have as clean an answer on that as I would like other.
Other than to say that it does appear that the clearly the worst of April may as way behind us and the return to normalcy, Despite rising case rates.
Appears to be benefits in the data in terms of where we're shipping product to and the number of accounts that we to whom we ship.
Great. Thank you very much.
Thank you and the next question comes from Michael Knott with Oppenheimer.
Good morning, Tom rallied the Serrano sorry, my phone dropped off can you hear me all right.
Got you.
Perfect. So Tom a bunch of questions have been asked but maybe I can ask it from a different flavor there.
To get comfortable with let's say eight percentages growth for at least 21 does that also factor in that 2% roughly 2% PSB increase.
And that will source a part of that question. What are you seeing is conversion times for patients from diagnosis to intervention currently and moving forward.
Yes, so we haven't broken down all the components of the growth and I think it would be premature to do it now.
We have realized ASP improvement of 2% you're at your numbers are accurate there.
We have been able to sustain that ASP and slight ASP increase even in the face of some of the economic challenges brought on by coded.
So I think theres durability in it.
But in terms of that specific breakdown of the composition of our growth rate, we've not gone into that detail yet.
Yeah. Your second question was on.
Reversion to claim.
Just conversion times, you know new patient inflow and how soon are being converted what does the trend line you are saying.
Yes, so again Thats a most that question is most relevant to sign new though.
Yes in terms of a propel hospital based visit they're going to schedule. The time, it's going to be an element of hospital supply available in inventory at the the hospital setting, but so I knew but it is a different pathway because you're initiating drug therapy in a doctor's office, therefore, you need to get benefit.
Application in advance and then ensure that the specialty pharmacy delivers product on time and therefore, the procedure can can take place.
If it verification times are down dramatically, which is great. It shows that our hub is becoming a more comfortable and facile in determining benefit verification on what was a new category.
So I knew the.
And that our specialty distributors, particularly with the inclusion now of Walgreens Walgreens with its national reach and.
And increased sophistication.
Also is helping that time from start to stop we haven't shared that specific number but I would I would tell you.
It was.
Weeks previously it is still one yes.
In the one to two week range generally speaking from the moment that a physician office calls the hub to determine whether or not a patient has coverage to when they are suitable to be scheduled and brought in for the procedure.
Got it and Tom final question I, just wanted to tie it into one of the earlier questions asked about news new stores sales versus same store sales you propose contribution sort of toward roughly a third a third.
Seems very consistent and stable over the last.
In a few quarters, what does that tell us about utilization and the relative indications.
Because the contribution seems barely budged between.
Okay any color there would be greatly appreciated. Thank you for taking my questions.
The one thing I think Randy highlighted it.
It is roughly a third a third a third at a high level actually if you look at Q3 relative to Q3 2020 versus Q3 2019.
Both propel and propel mini were down year on year slightly, whereas propel contour was up slightly year on year and again, that's a reflection of that increased office utilization contour is most suitable for use in the frontal sinus cavity.
She is where your balloon Sinuplasty is also most effective which is why you see that slight difference.
The real key to cracking open.
The growth rate and change in propel will come from having additional health economic evidence to support a separate carved out.
For the propel implant separate from the surgical procedure code and.
And that's really when I spoke of the health economic evidence that we're seeking to build its really to actually break that open and demonstrate that a fast procedure with a.
Propel regardless of which one.
And you will use a different one depending on which sinus cavity you're talking about.
We'll break open that number and kind of get the stagnation done in the long run is the ability to have that separate carved out implant code. In addition to the overall procedure code, which is which is what's been been accomplished with other in implants in ophthalmology and in other segments.
Yes, sure I guess just to add some to go back to your original question about sort of growth as Tom has clearly indicated here. The the base propel business is continuing to recover very nicely and is very stable business with but.
But as Tom talked about when we made our original analysis a few gone we now have a variety of other opportunities to drive growth are certainly seeing.
So I knew but begin to start to pick up momentum and gain.
Growth opportunities year over year.
We've talked about propel in the office and the opportunity to continue to see growth.
Growth there, but when you think about it feel gone is going to create some incremental growth opportunities as well as the combination of our business and fumigant business in Europe also creates incremental growth opportunities. So while propel certainly provides stability and an opportunity to see that.
Engine continued to grow and in a fairly modest but consistent fashion theres a variety of other things that we would expect to incrementally.
Generate some growth for us as we get into 2021 and beyond.
Thank you. This concludes our question and answer session I will turn the conference back over to Thomas for any closing remarks.
Yes. Thank you and thank you all for taking the time to listen in today I really appreciate your continued interest in intercept as I said before I'm very optimistic about where we are and proud of what we've been able to accomplish over the course of the last year.
Justin reflecting on it I think about this call a year ago.
We still had not quite figured out the model on so I knew the and I think we've come a long way with a record quarter and now that becomes a vector for growth for us going forward, our propel business have been somewhat neglected and.
As distraction and taking people away from that business and the pace of our recovery in the hospital setting the green shoots that we see in its application in an increasingly important office setting.
And a clear path and what we need to do in terms of strengthening the health economic evidence in order to be able to improve the payer in coding environment for propel are very encouraging add on top of that a complementary business with our navigation acquisition of FIA gone.
The access to their consumable tools and also our early entry into the balloon market.
With a very competitive offering, but again complements our implants and also anticipates our differentiated drug coated balloon.
As well as a increased footprint in western Europe, where we had modest sales that had been growing on our implants now augmented by a larger presence that he is on brings if a year ago, we had to somewhat uncertain sources of growth I would say, we now have five very.
Interesting sources of growth it will still take us some time, we will still need to play through some of the uncertainty of the coated environment, but.
But we think we have a clear path and momentum for sustainable growth going forward. So again I. Thank you for your time today I look forward to speaking with all of you in the near future if not later today.
And again, thanks, very much take care.
Thank you. The conference has now concluded. Thank you for attending today's presentation. You now disconnect your lines.
[noise].