Q1 2021 Organogenesis Holdings Inc Earnings Call
Please standby.
Good afternoon, ladies and gentlemen, and welcome to the first quarter 2021 earnings conference call for of Ganoe Genesis Holdings incorporated.
At this time, all participants have been placed in listen only mode.
Please note that this conference call is being recorded and that the recording will be available on the company's website for replay shortly.
Yes.
Before we begin I would like to remind everyone that our remarks today may contain forward looking statements that are based on the current expectations of management and involve inherent risks and uncertainties that could cause actual results to differ materially from those indicated including the risks and uncertainties.
These are described in the company's filings with the Securities and Exchange Commission, including item one a risk factors of the Companys, most recent annual and quarterly reports.
You are cautioned not to place undue reliance upon any forward looking statements.
The only as of the date made.
Although it may voluntarily do so from time to time the company undertakes no commitment to update or revise the forward looking statements.
As a result of new information future events or otherwise ex.
As required by the applicable securities laws.
This call will also include references to certain financial measures that are not calculated in accordance with generally accepted accounting principles or G. A a piece of it.
We generally refer to these as non G. A a P financial measures.
Reconciliations of those non-GAAP's financial measures to the most comparable measures calculated.
And presented in accordance with G. A a P are available in the earnings press release on the Investor Relations portion of our website.
I'd now like to turn the call over to Mr. Gary Ethical Hayden senior organic Genesis Holdings, President and Chief Executive Officer. Please go ahead Sir.
Thank you, Jeff and welcome everyone to Organogenesis Holdings' first quarter 2021 earnings conference call.
I'm joined on the call today by day Francisco, our Chief Financial Officer.
Let me start with the brief agenda of what we will cover today during our prepared remarks I'll start with an overview of our revenue performance in the first quarter and a review of the key drivers of the impressive growth our team delivered despite the challenging operating environment.
Share a brief review of our operating highlights for the first quarter and after my opening remarks, Dave will provide you with the more in depth review of our first quarter financial results and the formal guidance for 2021 that we updated in this afternoon's press release, and then we'll open the floor and the calls rather for for questions.
Beginning with the review of our first quarter revenue performance I am pleased to report that we had another strong quarter in which we delivered strong financial results, while making excellent progress advancing our strategic priorities. During the first quarter. We reported total revenue growth of 66% year over year, driven by 77 per <unk>.
Rent growth on our advanced wound care products and 13% growth in the sales of our surgical and sports medicine products compared to the prior year.
Our better than expected growth in Q1 reflects the continuation of the key drivers of our growth strategy.
Including the benefits of our comprehensive portfolio of products the investments that we've made to broaden our reach by expanding our sales force and the strong execution of our commercial strategy focusing on leveraging multiple channels, new product introductions and brand loyalty.
Let me provide some color on how each of these longer term drivers of growth contributed to the strong revenue performance in the first quarter.
First the sale of our amniotic portfolio were the largest contributors to our year over year growth in Q1.
While our broad portfolio of products and services remains a key differentiator for us the demand for our amniotic products from our advanced wound care customers was notable throughout 2020 and as expected the strong demand trends continued in the first quarter of 2021.
We are pleased with the growing awareness of our amniotic portfolio of differentiated features that our customers truly value.
Additionally, our efforts to increase the body of clinical evidence demonstrating the benefits of our amniotic portfolio continues to pay dividends not only in terms of increasing clinician awareness, but also in supporting our discussions with payers as we look to increase our commercial coverage in the coming years.
Second our strategy to broaden the reach of our products continues to drive value.
We have been focusing on expanding into new physician specialties multiple sites of care on on leveraging our new product introduction to fuel our growth and consistent with what we've experienced in the last quarter pure appliance performance in the first quarter of further validates the benefits of these strategic initiatives in the first quarter of pure plays sales increased 27 per.
The scent year over year, well ahead of our expectations and we are very proud of our Q1 results as we believe it reflects the strong execution of the strategy to navigate the loss of pure applied pass through status and the corresponding headwinds related to this change in reimbursement.
We have repositioned the product with additional clinical data additional sites of care and additional physician specialties plenish.
Clinicians continue to value of the products differentiation and we continue to see the number of accounts you utilizing pure apply.
Aided in part by strong sales of the five new products on line extensions introduced in 'twenty 'twenty four of which were launched in the fourth quarter.
Our office strategy is the third area of notable strength in Q1.
We have been working on penetrating the office market, primarily with channel specific product offerings and more recently further leveraging our channel expansion through the acquisition of C. P on bioscience.
And as a result, we continue to expand the number of customers in the office channel and we are seeing increasing utilization of our products from existing customers.
Additionally, the strong revenue results.
We are delivering on the advanced wound care business over the last year would not be possible without the strong execution of our commercial team. We've made significant investments to grow our team of direct representatives in the recent years and we believe our team of 290 direct reps represents a key competitive advantage for organogenesis.
Our first quarter revenue results clearly benefited from the investments we've made to grow our direct commercial team.
Finally, our first quarter of sales results benefited from better than expected sales of our surgical and sports medicine products, which increased 13% year over year in Q1.
We believe our Q1 sales results reflect strong performance considering the COVID-19 related headwinds that impact elective procedures, beginning in December and through the month of January.
While our surgical and sports medicine business face continued challenges in the operating environment. During the first half of the quarter. We're pleased to see improving trends as we move through the first quarter, culminating with very strong growth in the month of March, albeit against an easier comparison, given the impact of COVID-19 in the second half of March of 2020.
First quarter sales results in our surgical sports medicine business continued to benefit from early progress in our strategy to target new physician specialties, including the extremities and trauma areas, which had been more resilient to the COVID-19 related headwinds compared to the more elective procedures in this market.
With respect to the overall operating environment in the full first quarter, we continue to see pockets of relative strength and improving trends as well as areas that continue to experience more challenging trends related to the COVID-19 pandemic.
We continue to see the pace of recovery in our advanced wound care business outpace of surgical and sports medicine business, our wound care business showed signs of improving patient traffic in the first quarter. However, the pace of recovery continues to vary depending upon the region of the country and the sites of care.
Specifically, we saw better overall patient throughput in the office channel with customers in the hospital outpatient departments of wound care channels still continuing to operate below the pre COVID-19 levels.
Despite the continued headwinds from COVID-19, we were fortunate that our commercial strategy resulted in a broad of diversification of our revenue mix by product.
Panel physician specialty inside of care, including the growth we've experienced in the office channel all of which have contributed to having less exposure to the acute care or outpatient settings, which continue to see tougher COVID-19 related headwinds.
So in summary, we are very pleased with the revenue performance in the first quarter, where we reported 66% sales growth. Despite the continued challenging environment as the U S continues to recover from the pandemic.
We're also pleased with the significant improvement in our profitability in Q1 as evidenced by the 14% operating margins of $26 million improvement in year over year GAAP net income to more than $9 9 million an impressive growth in our adjusted EBITDA This quarter.
These financial results reflect the underlying profitability potential of our business in the years to come.
Before I turn the call over to Dave We wanted to provide some form of update on our thinking on the pending FDA enforcement deadline.
On April 21st the FDA reaffirmed that the period of enforcement discretion would would not be extended and would end on may 31st 2021 and.
At an industry meeting last week, Dr. Peter marks the Super set of directors stated that companies should not commercialized.
$3 51 products. After May 31, 2021 under an NDA as a result, we plan to take renew and new sell off the market effective June one.
With that let me turn the call over the day for a review of our financial results in the first quarter, our balance sheet and financial condition at the end of the quarter and review of the 2021 financial guidance. We updated in this afternoons press release day. Thank you Gary I'll begin with the review of our first quarter financial results unless otherwise specified all growth.
On <unk> referenced during my prepared remarks on a year over year basis the.
The Gary mentioned, we were pleased with our strong start to 2021 net revenue for the first quarter of 2021 was $102 6 million compared to $61 7 million last year, an increase of $40 6 million or 66%.
From advanced wound care products from the first quarter of 2000, 2021 was $90 7 million compared to revenue of $51 3 million last year, an increase of $39 4 million or 77%.
Revenue from our surgical and sports medicine products for the first quarter of 2021 was $11 8 million compared to $10 4 million last year, an increase of $1 4 million of 13% and lastly revenue from our pure play products from the first quarter of 2021 was $41 3 million compared to $32 5 million last year, an increase of $8 8 million.
<unk> or <unk> 27 per cent.
As of March 31, 2020, we had approximately 290 direct sales representatives compared to 300 at year end 2020.
To expect to end 2020, with approximately 340 direct reps.
Gross profit for the first quarter of 2021 was $77 1 million compared to $42 9 million last year on increase of $34 1 million or 79%.
Gross margin for the first quarter of 2021 was <unk> 75 per cent of revenue compared to 70% last year, an increase of 560 basis points year over year the.
The increase in gross profit resulted primarily from increased sales volume as well as the shift in product mix to our higher gross margin products.
Operating expenses for the first quarter of 2021 were $64 1 million $64 4 million compared to $58 million last year, an increase of $6 4 million or 11%.
<unk> operating expenses from the first quarter of 2021.
Given by a $5 6 million of increase in selling and general administrative expenses in the zero point $8 million increase in research and development costs compared to the prior year period.
The year over year increase in selling general and administrative expense was primarily due to a $9 4 million increase related to additional headcount primarily in our direct sales force and increased sales commissions due to increased sales, partially offset by a $4 $4 million decrease related to reduced travel and marketing programs of mid travel restrictions in place due to COVID-19.
The 19th.
The first part of 2020 one the operating expenses also included <unk> 9 million of restructuring costs associated with the closing of all of our La Jolla of office, which does not impact of prior year financial results.
The year on year increase in R&D expense was driven by an increase in product costs associated with our pipeline of products and an increase of clinical study and related cost necessary to seek regulatory approvals for certain of our products.
Operating income for the first quarter of 2021 was $12 6 million compared to an operating loss of $15 1 million last year on increase of $27 7 million.
The first quarter operating margin was 12% of sales representing a year over year improvement in margin of 37 percentage points.
Total other expenses for the first quarter of 2021 were $2 5 million compared to $1 2 million last year on it.
<unk> of $1 3 million per 107%.
This increase was primarily due to $1 3 million games the minutes of a litigation settlement in the first quarter of 2020, excluding this item from the prior period results. Our total expenses decreased by <unk> 3 million.
Or 7% of year over year, driven primarily by lower interest expense related to lower average borrowings compared to the prior year period.
Net income for the first quarter of 2021 was $9 9 million or seven cents a share compared to the net loss of $16 3 million of our 16 cents per share last year, an increase of $26 3 million or <unk> 23 cents per share.
Adjusted EBITDA of $16 million for the first quarter of 2021 compared to adjusted EBITDA loss of $13 1 million last year on increase of $29.
The Friday provided a full reconciliation of our adjusted EBITDA results in our earnings release issued this afternoon.
Turning to the balance sheet as of March 31, 2021, the company had 78 million of cash and restricted cash and $88 1 million of debt obligations of which $18 4 million were capital lease obligations compared to $84 8 million of cash and restricted cash and $84 8 million of debt obligations of which $15.
1 million were capital lease obligations as of December 31, 2020.
Turning to a review of our 2021 revenue guidance.
On our press release. This afternoon, we updated our fiscal year 2021 revenue guidance from the 12 months ending December 31 2021.
The company now expects net revenue of between $438 million and 454 million, representing an increase of approximately 29% to 34% year over year as compared to net revenue of $338 3 million of the 12 months ended December 31st 2020.
This compares to our prior revenue guidance range of $390 million to $405 million.
The 2021 net revenue guidance range assumes net revenue from advanced wound care products of between $409 million and $422 million, representing an increase of approximately 39% to 43% year over year.
Net revenue from surgical and sports medicine products of between $29 million and 32 million, representing a decrease of approximately <unk> 27 per cent of 34% year over year.
Lastly, given the strong growth on the pure play brand over the last few quarters, we're expecting net revenue from the sale of pure play products of between $179 million and $187 million, representing an increase of approximately 22% to 27 per cent per year.
In addition to the formal revenue guidance, we'd also like to provide a few considerations for investors to bear in mind, when evaluating our growth expectations for fiscal 2021.
This additional color is intended to help the investment community better understand the assumptions supporting our revenue expectations for 2021.
The largest contributor to our total company net revenue growth for fiscal year, 2021 will be sales of our amniotic products, which at the midpoint of our full year total revenue range now assumes amniotic growth of approximately 48% year over year and 2020 I'm on this.
It compares to our profit guidance guidance range, which assumes growth of at the midpoint.
Of approximately 43 per cent of year over year.
Second we expect sales of our remaining non pure apply non amniotic products, which collectively form the group the PMA and other income.
At the midpoint of the range of approximately 20% year over year in 2021. This compares to our prior the prior guidance range, which assumes growth of the mid point of approximately 18% year over year.
Third we see a steady improvement of COVID-19 related related headwinds as we move through 2021. However, our guidance full year continues to reflect stronger year over year growth in the first half of 2021 as compared to what the guidance reflects for growth in the second half of 2021.
As a reminder, this is driven by two factors one relates to 2020, the other relates to our guidance for 2021, specifically given the strong performance of the advanced wound care business in 2020, we expect to see our year over year growth trends over the second half of 2021 moderate as we lap of the 56% growth we reported on the second half of 2020.
As discussed on our fourth quarter earnings call. While we continue to expect an improving the operating environment in the second half of 2021, the benefit growth trends in our surgical and sports medicine business. Our 2021 revenue guidance assumes a significant headwind to sales in our surgical and sports medicine business related to the exploration of the Fda's Grace period on May 31, 2021.
Yeah.
Our 2021 revenue guidance continues to assume no contribution from the sales of renew and new cell products beginning June one 2021.
Continues to represent a headwind to growth over the last seven months of 2021 of approximately $18 million.
With respect to our expectations for financial performance in 2021, we expect to report positive GAAP net income and positive adjusted EBITDA for the full fiscal year 2021 period.
In addition to a formal financial guidance for 2021, we are providing some consideration for modeling purposes for the full year of 2021 period, we expect gross margins of approximately 75 per cent.
Total GAAP operating expenses to increase of approximately 25 per cent year over year. This compares to our prior expectation for an increase of approximately 22% year over year, which reflects the incremental selling expense related to the increase in full year of 2021 revenue expectations.
Note. Our 2021 GAAP operating expenses include approximately $4 9 million of restructuring expenses related to our La Jolla, California facility of which approximately 0.9 million occurred in the first quarter of 2021.
Interest and other expenses of approximately 9 million non cash G&A of approximately $9 million noncash stock comp of about approximately 3 million weighted average diluted shares of approximately $134 million and we expect our full year 2021, capex of approximately 36 million of which approximately two thirds is related to our growth and gross.
The improvement initiatives.
With that operator, I'll turn the call back to you.
Thank you Sir.
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<unk> to add yourself, the the keil again by pressing star one.
And our first question will come from the line of Matt <unk> from Credit Suisse. Your line is open.
Hi, good evening, thanks for taking the question.
And congrats on a really strong a strong quarter and revised outlook here.
I had one question on some of the top line trends and one follow up on the P&L.
So.
In terms of if I could ask maybe Gary if you could clarify.
On this.
Where the range I think the rate comes in.
The impressive and welcome of course.
More than the beat.
But.
The ability to raise I guess this much and also sort of filled confirm that youre really not going to be selling any of these these two products renew and do so.
On maybe talk a bit it's a pretty dramatic change from from.
Where are you maybe left Q4.
And maybe you can walk us through that again, the math just one one more time and what gives you the confidence to deliver that sort of the sort of upside to your tearfully the guidance at this point.
Sure.
So I think you'll like.
The pure play is probably the most of you know.
Important change in our guidance.
Obviously, you're a pure play performed extremely well in Q1.
And we had four product launches as you know right at the end of Q4 and it was one of the the areas that we focused on to see if those products would continue to grow as they as they did.
In Q1, and you know all trends right now are very positive for all of the five products that we put out in 2020 before the came out late in the fourth quarter and they're all growing extremely well so that gives us a lot of confidence that the brand continues to grow and continues to expand in multiple sites of care.
As we've discussed as part of our strategy. So that's given US a lot of confidence of our Amiens continue to grow.
The capacity you know our goal is to have two and a half times the capacity of affinity this year versus 2020.
And we're on our way to seeing that happen and so we're pretty comfortable right now that the amount of of affinity that we're able to produce will will be a meeting our goal of two five times. So I think the combination of those two and you know we're also seeing some positive trends in access, particularly.
Particularly at the end of the quarter and here in May.
Both in the outpatient setting for wound care and we started to see improvement in trends.
Depending upon the region in the surgical sports medicine area as well. So we've just got a lot of positive.
You know tailwind that of kind of pushing those along that's given us more confidence in the broader part of our business not just one.
One aspect of our business.
I don't know Dave.
Very helpful.
So you're absolutely right the minutes just the strength of pure play over the last two quarters really gave us the confidence to increase that by quite a bit and strike of the Ami on as well.
And just maybe before I go to the P&L just to clarify I mean, I think you've framed.
The last quarter that you know your guidance Didnt include the.
The the products that are at risk of enforcement or not really knowing which way. The FDA would act they have been more clear I guess and how they like the the industry to think about commercialization post may 31st is that where are we in here or whats the process going forward for these products.
Mentioned, they do of just one one quick follow up on the P&L, if I could no I think you've interpreted it correctly I think it ends for these products until you get through the BLA process. So certainly will be fewer products I assume in the market.
Post the BLA approval so.
You know our focus is to you know.
Get through the trial as quickly as we can and put as many resources as possible to make sure that it's a successful trial.
But I don't think.
I don't think there's any confusion or lack of clarity any longer the FDA has been clear $3 50 ones should not be sold post.
Third.
Okay fair enough, maybe raises the value of these products on the other side of that but we'll have to see how the.
Raise out the.
On the P&L.
This is an area where the high.
I could interpret your comments over the past couple of quarters the.
Growth has been at times really strong maybe too strong for you to sort of almost catch up with.
On the you know the spend behind that or in support of that.
You showed some outsized gains in EBITDA in the back half of last year, which you talked about moderating and the.
And then I think you.
Uh huh.
Sort of exceeded expectations again here in the first quarter, maybe help us understand the pace of of the growth.
Growth in spending or if there's any if theres a catch up if we should be thinking about here in Q2 of Q3 or how we should be modeling. This idea of the positive EBITDA number for the full year, but you know maybe some low shape to that the trend.
Yes. So we did give you some guidance about the 22% up for the full year, obviously Q1 was nowhere near that on a year over year basis, but recognize that we did still have COVID-19 savings. So we lap that next quarter and we expect to see some increased spending that will not continue on those savings standpoint, and then Additionally, we will continue to add reps and as we continue to growth.
The year will continue to have incremental commission expense.
And then also on the R&D side was a little light and so we expect to continue to push harder on those political spending and increased debt cadence as well.
Okay Alright.
Get back in queue. Thanks, so much thanks, Matt.
Your next question comes from the line of Brian Zimmerman from <unk>. Your line is open.
Alright, good afternoon, and congrats really impressive.
I wanted to ask maybe it's.
Bigger picture question Gary.
Two part question, but.
The longer term revenue outlook for organic Genesis I think initially it was around 10% to 15%. When you guys came public and then longer term I think it was in the mid teens.
Is your view of that outlook changed at all given how strong the performance has been and then.
The second part of that question that dovetails with it as you know if you could talk a little bit on the strength you're seeing this growth you're seeing here that we're seeing on the numbers.
Is this a reflection of share dynamics or are you seeing an uptick in market growth broadly in advanced wound care.
Just because it is pretty pretty astounded.
Sure. Thank you.
So as it relates to our long term growth.
I think we have guided recently to low to mid teens grower.
After this year, obviously the comp gets harder as the revenue continues to grow but we.
We think we're a little more bullish.
Bullish on the company's growth as a result of the success of our new product launches.
The first came out obviously those products, we're not in the market. So I think that's been very helpful. And we think low to mid teens grower over the next several years is still possible for the company.
I don't know David if you of any other thoughts I mean, there's an element of the law of large numbers to the right. So there could be a moderation from that standpoint as well.
And I think when we see the number of patients that we're treating in the number of accounts that we're acquiring as customers, we definitely feel that theres a margin of.
The market shift.
In our favor.
So we definitely see that happening in the market and some of the other dynamics from some of the other competitors seems to reflect that.
We also think with our expansion in the office channel were really are expanding the market.
There's a lot of offices that have dabbled in wound care and are now starting to.
Participate with the advanced wound care products and starting to get educated on advanced wound care products, starting to treat more patients and more types of wounds in the office and in that you know is something that we think will continue to grow so it's a combination of.
The market share shift and just expanding the market with multiple channels.
The physician specialties that we talk about often that we now serve.
We never had sold in some of those markets before and for indications that we've never sold to before so.
It's a combination of all of that debt is really helping to drive the revenue.
Okay.
Fair enough and then.
Thinking about pure play I mean.
You were facing headwinds.
Pretty significant headwinds on pricing.
Given the loss of pass through and you've you've clearly demonstrated the ability to work through that with the products introduced and so I was wondering if you could talk a little bit about kind of how you think about you know.
The adoption of per apply going forward.
In light of what is now two quarters of really strong you know.
Growth beyond in the face of these headwinds the these pricing headwinds from the loss of pass through.
Well with the multiple sites of care as you know that as I've mentioned, often you know we sell a lot of pure apply.
<unk> in the hospital today.
We sell it obviously in the office, we have multiple sizes for different types of wounds.
It is sold in different physician specialties. So the market is still young.
Young for this product the.
The procedures that could utilize this technology and the physician specialties that are getting introduced set of technology continues to advance. So we see you know pure play being a nice grower for us for many years to come.
Okay I'll hop back in queue of congrats again, guys very impressive.
Right.
Yes.
Your next question comes from the line of Richard New meter from SBB Leerink. Your line is open.
Hi, Thanks for taking the questions and just the echo nice quarter Congrats on the performance.
Maybe maybe I can just start off on.
Hi.
The net.
The regulatory change and rather than so much what that means for you guys and stopping selling what does that mean for the industry and others you have to stop selling that potentially go away. My understanding there are a lot of smaller players that were selling.
Like this that are going to have to start maybe talk a little bit about what that means from you guys from an incremental share gain opportunity standpoint, and is any of that factored into your guidance increase.
No.
Well certainly none of it's factored into our guidance increase.
I haven't guided to it.
Any sales post may 31, but clearly there's going to be a change in the market and not everyone is going to be.
Moving down the BLA pathway, so there'll be fewer.
Products on the market on the other side, we think that's a positive thing.
Obviously, our expectation as we've certainly we'd like to be on the other side. If we're successful with our BLA. So we just think it's the it's a positive thing in the interim it's certainly a painful thing for us it's not as significant of.
Of a business for us today as some others. So I think it depends on the company of the pain will be a little different based on how much of that revenue.
No.
Part of the revenue mix for that particular company, but.
There's going to be fewer without question players in the market immediately.
And then.
Post BLA.
Thank you and then just thinking about pure playing of affinity in the past you said I believe that you thought the affinity could could eventually be as big if not bigger than pure apply.
Gary and share apply.
Your perp my outlook continues to creep higher.
Easily it looks like it'll be it'll be more than the $200 million product are based on our math.
'twenty two and beyond so I guess, one do you still.
Feel like that comment holds the relative to the.
The level of the tariff quiet periods to be reaching and then just on on affinity does the weather.
The capacity constraints this quarter such that demand was outstripping.
Supply and when does that that self correct.
And to your first question about affinity surpassing pure applied pure play certainly, making it more and more of a challenge for that to happen based on the success of the product, but yes, we do believe it still has the potential.
On to be our largest product over time.
Even with the success of pure play, though as I said pure play is making that debt a little bit more challenging.
<unk> had no issues with supply.
We were able to increase the amount of capacity and increased our yield.
So we're feeling pretty good about where we are today.
But it's important to note too that as we increase our capacity, we want to see that capacity to be stable before we allocate those units to our commercial organization, because we certainly want to be sure that.
On a reliable supplier for our customers so.
Our capacity is going up we're starting to increase allocations, but we're very cautious to make sure that that capacity is sustainable going forward.
Okay.
Thanks, a lot of congrats.
Thank you.
Again, if you'd like to ask the question. Please signal by pressing star one on your telephone keypad.
Yes.
Your next question comes from the line of Steven Lichtman from Oppenheimer. Your line is open.
Thank you hi, guys congratulations on the quarter.
Just wanted to touch base on.
On the Ami on.
You're right.
Debt to to build on affinity I believe later this year with Novo core.
Gary are you still on target to the launch that around year end.
How do you see novacor from building upon the success of your current franchise.
Sure, we do expect to be launching pure play excuse me of Novacor at the end of very end of the year.
It will be a contributor really until 'twenty two for sure of probably the second half of 'twenty. Two so as you may recall novacor. She is the manufacturing facility with affinity. So we're balancing the capacity of both of those products.
So we see Novacor is just being unique like affinity of the system product. It has unique properties, it's a little bit different than affinity. So it has a little more utility and certain wound types. So it gives us more flexibility and we think it will perform extremely well like of affinity does and it gives us the op.
<unk> and flexibility in both sites of care and types of wounds. So we're pretty comfortable and confident that novacor will be of strong contributor.
In 2022 and beyond.
Great and then just secondly, you.
Obviously, <unk> biosciences has been.
Solid acquisition for you guys I mean, given the the state of the business and the EBITDA should we be thinking about.
Potential of additional additions either on the.
On either side of your business is to bolster or opportunities for synergy.
<unk> ahead.
Certainly the always always looking for opportunities for products and channel expansion for sure.
And we're hoping that we will be able to add to our portfolio of this year.
Which will enhance not only the the office channel, but certainly in the surgical side of the business as well.
We're expanding our reach into the extremities and trauma area with our existing portfolio, that's a pretty exciting area for us and we'd like to continue to increase and strengthen our portfolio in that area as well.
Great Congratulations guys.
Very much.
We are currently showing no remaining questions in the queue.
At this time that does conclude our conference call for today. Thank you for your participation.
Thank you.
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